Virginia IP Law : Virginia Intellectual Property Lawyer & Attorney : Troutman Sanders Law Firm : Technology & Patent Litigation

On April 9, 2012, the Fourth Circuit handed down its decision Rosetta Stone v. Google, clarifying the legal standard to be applied in a trademark infringement claims based on the purchase and use of another’s trademark as a keyword to trigger sponsored link advertising on search engine websites. In this ABA Roundtable Luncheon, we will review Rosetta Stone and discuss its expected impact on keyword advertising specifically and on trademark law in general.

Please join us on May 18th, 2012 at the Richmond Troutman Sanders office for a free luncheon to discuss the Rosetta Stone v. Google decision.  CLE currently pending. 

To RSVP or for more information, please click here or contact Natalie Toalson.

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Today, the Federal Circuit once again granted a mandamus petition to reverse a decision from the Eastern District of Texas – this time reversing the refusal to sever patent infringement claims against multiple unrelated defendants. In re EMC Corp., Decho Corp. and Iomega Corp., Misc. Dkt. No. 100 (Fed. Cir. May 4, 2012) (found here). Coincidentally, the Federal Circuit also appears to endorse the recent decision by the Joint Panel on Multidistrict Litigation (which we blogged about here) consolidating patent claims against multiple defendants in an MDL proceeding. 

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As a follow up to our earlier post on this case (found here), Bear Creek successfully convinced a MDL panel to grant its motion to subject the fourteen actions it filed in three districts (Virginia, Delaware, Pennsylvania) to consolidation under 28 U.S.C. § 1407.  In granting the motion, the MDL rejected the defendants' arguments that such consolidation was precluded by the America Invents Act's limitation on joinder of multiple defendants in a single action "based solely on allegations that they each have infringed the patent or patents in suit."  35 U.S.C. § 299(b).  The MDL panel explained that:

Transfer under Section 1407 does not transmute all transferred actions into a single action,thereby joining all defendants. Instead, the separate nature of actions transferred to an MDL is preserved throughout each action’s pendency whether the actions proceed in a coordinated or consolidated manner....  In contrast to Section 1407's express focus on transfer for pretrial proceedings, the second portion of Section 299(b) focuses on consolidation for trial. There is no overlap between these concepts or these statutes.

 Id. at 2-3 (a copy of that decision, as posted by PatentlyO, can be found here).  The MDL panel concluded that "[t]he plain meaning of the AIA’s joinder provision simply does not implicate Section 1407 transfer."  Accordingly, the MDL panel held that the District of Delaware is an appropriate transferee district for pretrial proceedings and that all pretrial matters should be heard by Judge Gregory M. Sleet. 

The MDL Panel's decision may have wide-ranging impact and opens a window where the AIA appears to close the door.  With the availability of MDL consolidation, plaintiffs are (again) able to pull multiple defendants into a single action for pretrial proceedings.  However, given the multiple steps required for plaintiffs to take advantage of this procedure and the lack of consolidation for trial, many plaintiffs may conclude that the price of admission is too high and the resulting benefits to low to warrant pursuing MDL.  Of course, only time will tell....

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Our colleagues in California, headed by IP pro Matt Murphey, have launched a California-centric IP Blog.  The announcement is set forth below and the blog itself is found  http://www.californiaintellectualpropertylaw.com/.  We will follow them with interest.

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Erick Cherdak brought claims for patent infringement, patent interference under 35 U.S.C. 291 and antitrust violations against several defendants, including Apple and Nike, based on his patent for an “Athletic Shoe with Timing Device.”   On motions to dismiss, Judge Liam O’Grady of the Eastern District of Virginia dismissed all the claims except the patent infringement claims. Cherdak v. Vock, et al., Case No. 1:11CV1311, 2012 U.S. Dist. LEXIS 57511 (Apr. 23, 2012) (found here).

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            The Supreme Court has asked Nike to respond to a cert petition which addresses whether a federal district court is divested of jurisdiction once a defendant in a trademark case promises not to assert its mark against the plaintiff's then-existing commercial activities.  On appeal from the Second Circuit, the case arises from Nike's lawsuit against YUMS LLC in 2009 for trademark infringement, unfair competition, and dilution under both federal and New York state law. Nike alleged that the design of YUMS' sneakers infringed on the design of Nike's Air Force 1 shoe. YUMS counterclaimed seeking to cancel Nike's registration pursuant to 15 U.S.C. § 1119. Prior to any decision on the merits, Nike gave YUMS a covenant-not-to-sue, which stated that YUMS' actions no longer infringed or diluted Nike's trademark. While Nike dismissed its case, YUMS wanted to maintain its counterclaim, arguing that Nike's mark continued to improperly chill its innovative marketing efforts. The district court dismissed YUMS' case, however, finding that the covenant not to sue left no ongoing case or controversy to allow it to continue to assert its jurisdiction. The Second Circuit affirmed, holding that 15 U.S.C. § 1119 does not provide federal courts with an independent basis for jurisdiction absent an actual case or controversy between the parties.

            YUMS' petition argues that the Second Circuit's ruling allows litigants to avoid unexpected resistance by delivering a covenant not to sue and evading any test of the validity of the asserted registration. In early March, Nike had waived it right to file a response to the petition.  Nike has until May 4 to respond to the petition.  

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In a recent client advisory, our colleagues Mark VanderBroek and Mike Hobbs discuss the Fourth Circuit's decision Rosetta Stone v. Google that can be found here and is reprinted below.  A copy of the decision can be found here.

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In Rosetta Stone v. Google, the U.S. Court of Appeals for the Fourth Circuit recently clarified the legal standard to be applied in a trademark infringement claim based on purchase and use of another’s trademark as a keyword to trigger sponsored link advertising on search engine websites. The Court held that the likelihood of confusion analysis in these cases is governed by traditional trademark legal standards, rather than by specialized standards adopted by the district court, which, among other things, had held that use of a trademark as an advertising keyword was protected by the “functionality doctrine.”  

This precedent will apply to trademark infringement claims filed against a competitor who purchases a plaintiff’s trademark as a keyword to trigger sponsored advertising links, as well as to claims against a search engine provider.

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A patentee's settlement negotiations with other parties can be very important information to an accused infringer, and plaintiff-patentees will typically fight to avoid disclosure of those negotiations.  In a ruling of first impression earlier today, the Federal Circuit granted a victory to accused infringers in this area, rejecting any “settlement negotiation privilege” protecting such negotiations from discovery. In re MSTG, Inc., Misc. Docket No. 996 (Fed. Cir. April 9, 2012) (found here).

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As we predicted here, the Federal Circuit has reversed Judge Jackson’s refusal to stay Verizon’s payment of sunset royalties during Verizon’s appeal of the $115 million jury award in favor of ActiveVideo. ActiveVideo Networks, Inc. v. Verizon Comm’s., Inc., et al., Case No. 2:10CV248 (Fed. Cir. April 2, 2012) (found here).

Rule 62(d) entitles a party to a stay of a money judgment upon posting of a supersedeas bond, but Judge Jackson concluded that the sunset royalties were a condition of the temporary stay and not an award of damages subject to Rule 62(d).

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