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November 2014
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Music Choice v. Copyright Royalty Bd

In 2013, the Judges of the Copyright Royalty Board issued a determination setting royalty rates and defining terms for statutorily defined satellite digital audio radio services (SDARS) and preexisting subscription services (PSS). SoundExchange, an organization that collects and distributes royalties to copyright owners, appeals the Judges’ determination, arguing that the Judges arbitrarily set SDARS and PSS rates too low. SoundExchange also contends that the Judges erred in defining “Gross Revenues” and eligible deductions for SDARS. Music Choice, a PSS that provides music-only television channels, also appeals the determination, arguing that the Judges arbitrarily set PSS rates too high. Concluding that the Judges acted within their broad discretion and on a sufficient record, we affirm the Copyright Royalty Judges’ determination of royalty rates and terms for both SDARS and PSS.

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Isbell v. DM Records, Inc.

The popular song Whoomp! (There It Is) was released in 1993. For more than half of the song’s existence—since 2002—the parties to this action have been litigating the question of who owns the composition copyright to the song. After an eleven-day trial, the district court ruled that, as a matter of law, Plaintiff-Appellee Alvertis Isbell owned the copyright and DefendantAppellant DM Records, Inc. was liable for copyright infringement. The jury awarded over $2 million in damages. DM Records appeals these and several other district court decisions. We AFFIRM the district court in all respects.

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Stan Lee Media v. Walt Disney Company

Over the course of the last three-quarters of a century, Marvel Enterprises created a comic universe of unparalleled proportions. With comic-book legend Stan Lee at the helm as editor-in-chief of its comic-book division, Marvel constructed a fictional landscape of imaginative superheroes, elaborate narratives, and overlapping storylines. During this time period, the commercial popularity of these comic-book characters, including iconic figures like Spider-Man and the Avengers, intensified, steadily gaining devoted followers eager to consume the product. Eventually, Marvel, which is now indirectly owned by the Walt Disney Company, parlayed the success of this comic universe into a multi-platform, billion-dollar empire with blockbuster motion pictures, merchandising, and live productions.

Not surprisingly, such success breeds litigation, sometimes a lot of it. And rivaling the size and scope of Marvel’s make-believe universe is a burgeoning mass of very real litigation over the ownership of the intellectual properties in the many characters comprising the Marvel portfolio. A repeat participant in these ownership disputes is Stan Lee Media, Inc.

Stan Lee Media claims to own intellectual-property rights in a number of popular Marvel characters. Its claims derive from a 1998 contractual agreement with Stan Lee, in which he transferred all of his ownership rights in characters he created while working at Marvel to Stan Lee Media in exchange for salary and other benefits. That ownership interest is the predicate for the claim of copyright infringement that Stan Lee Media brings here against Disney. Disney ended up with the Marvel characters when it acquired Marvel’s parent company in 2009. Disney disputes whether Stan Lee Media has any interest whatever in the Marvel characters.

Although the ownership question might be complex, we need not consider it here because the Ninth Circuit recently provided an answer in Stan Lee Media, Inc. v. Lee, No. 12-56733, 2014 WL 5462400 (9th Cir. Oct. 29, 2014) (Stan Lee Media v. Lee), finding that Stan Lee Media’s statement of ownership of the copyrights to the pre-1998 characters failed to plausibly allege a claim for relief. In other words, Stan Lee Media could not even allege any right to ownership of the disputed properties. And under well-settled legal principles, the Ninth Circuit’s decision on the ownership issue is entitled to collateral-estoppel effect in subsequent cases involving claims for relief premised on that issue.

Thus, because Stan Lee Media is precluded from alleging ownership of the at-issue intellectual properties, Stan Lee Media’s copyright-infringement claim fails as a matter of law. We therefore AFFIRM the district court’s decision granting Disney’s motion to dismiss.

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In re: St. Helena Hosp.

St. Helena Hospital (“St. Helena”) appeals from the decision of the Trademark Trial and Appeal Board (“the Board”) in In re St. Helena Hosp., Serial No. 85/416,343, 2013 WL 5407267 (T.T.A.B., June 25, 2013). The Board affirmed the examiner’s rejection of St. Helena’s application to register “TAKETEN,” under 15 U.S.C. § 1052(d) (2012), as likely to cause confusion with the mark “TAKE 10!” shown in United States Registration No. 2,577,657 (“the ’657 Registration”). Because the Board erred in its determination of likelihood of confusion, we reverse and remand.

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Univ. of Ut. Research Found. v. Ambry Genetics Corp.

Plaintiffs are the University of Utah Research Foundation, The Trustees of the University of Pennsylvania, HSC Research and Development Limited Partnership, Endorecherche, Inc., and Myriad Genetics, Inc. (collectively “Myriad”). Myriad owns U.S. Patent No. 5,753,441 (“the ’441 patent”), U.S. Patent No. 5,747,282 (“the ’282 patent”), and U.S. Patent No. 5,837,492 (“the ’492 patent”), which cover compositions of matter and methods relating to the BRCA1 and BRCA2 genes. Defendant is Ambry Genetics Corporation (“Ambry”), a company that sells medical kits designed to test for the presence of gene mutations linked to breast and ovarian cancer.

Myriad sought to, inter alia, enjoin alleged infringement of six claims of three patents: claims 7 and 8 of the ’441 patent, claims 16 and 17 of the ’282 patent, and claims 29 and 30 of the ’492 patent. Myriad appeals from a decision of the District Court for the District of Utah denying Myriad’s motion for preliminary injunction. Because we hold that these claims are directed to ineligible subject matter under 35 U.S.C. § 101, we affirm and remand.

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ABB Turbo Sys. AG v. TurboUSA, Inc.

In this action, ABB Turbo Systems AG and ABB Inc. (collectively ABB) allege, among other things, state-law torts of misappropriation of trade secrets and conspiracy to misappropriate trade secrets. Before discovery was conducted or an answer filed on those allegations, the district court dismissed the complaint, under Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim on which relief can be granted. We reverse, concluding that the district court relied on judgments about the merits that go beyond what is authorized at the complaint stage. We remand for further proceedings. We do not rule on the defendants’ arguments for upholding the dismissal on grounds that the district court did not adopt.

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Promega Corp. v. Life Tech. Corp.

Life Technologies, Applied Biosystems, LLC, and Invitrogen IP Holdings, Inc. (collectively, LifeTech) appeal from the district court’s grant of a motion for summary judgment that the asserted claims of United States Patent Nos. 5,843,660 (’660 patent), 6,221,598 (’598 patent), 6,479,235 (’235 patent), and 7,008,771 (’771 patent) (collectively, the Promega patents) are not invalid for lack of enablement and obviousness. Promega Corp. and MaxPlanck-Gesellschaft zur Förderung der Wissenschaften E.V. (collectively, Promega) appeal from a grant of a motion for judgment as a matter of law (JMOL) that LifeTech’s accused products do not infringe either the Promega patents or U.S. Patent No. RE 37,984 (the Tautz patent), a motion that resulted in the vacatur of a jury’s verdict of damages and willful infringement. Finally, LifeTech appeals from the district court’s oral ruling that it is not licensed for all uses of the asserted patents under a license agreement with Promega (2006 Cross License).

For the reasons discussed herein, we conclude that the asserted claims of the Promega patents are invalid for lack of enablement. We also find substantial evidence that LifeTech is liable for infringement of the Tautz patent under both 35 U.S.C. § 271(a) and 35 U.S.C. § 271(f)(1). Finally, we affirm the district court’s finding that the 2006 Cross License does not cover all of LifeTech’s sales of the accused products. We therefore reverse the grant of LifeTech’s motion for JMOL and remand to the district court for a determination of damages based on LifeTech’s infringement of the Tautz patent.

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Derma Pen v. 4EverYoung Limited

Two companies, Derma Pen, LLC and 4EverYoung, entered a sales distribution agreement. Under the agreement, Derma Pen, LLC obtained the exclusive right to use the DermaPen trademark in the United States. 4EverYoung had a contractual right of first refusal, allowing purchase of Derma Pen, LLC’s U.S. trademark rights upon termination of the distribution agreement. Derma Pen, LLC terminated the agreement, and 4EverYoung wanted to exercise its contractual right of first refusal. The parties reached an impasse, and 4EverYoung started using the DermaPen trademark in the United States.

Derma Pen, LLC sued and requested a preliminary injunction to prevent 4EverYoung’s use of the trademark in the United States. The district court declined the request, concluding that 4EverYoung was likely to prevail. This appeal followed, and we must ask: Is Derma Pen, LLC likely to prevail on its claims of trademark infringement and unfair competition by proving a protectable interest in the trademark? We conclude that Derma Pen, LLC is likely to prevail by satisfying this element. Thus, we reverse.

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Japanese Foundation for Cancer Research v. Lee

The United States Patent and Trademark Office (“PTO”) appeals from the decision of the United States District Court for the Eastern District of Virginia granting the Japanese Foundation for Cancer Research’s (“the Foundation”) cross-motion for summary judgment that the PTO acted arbitrarily and capriciously, and abused its discretion, when it refused to withdraw the terminal disclaimer on U.S. Patent No. 6,194,187 (“’187 patent”). For the reasons stated below, we reverse.

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Memorylink Corp. v. Motorola Solutions, Inc.

Memorylink Corp. (“Memorylink”) appeals from the decisions of the United States District Court for the Northern District of Illinois (i) granting summary judgment in favor of Motorola Solutions, Inc. and Motorola Mobility, Inc. (collectively, “Motorola”) on the contract and patent infringement claims, Memorylink Corp. v. Motorola, Inc., No. 08 C 3301, 2013 WL 4401676 (N.D. Ill. Aug. 15, 2013) (“Summary Judgment Opinion”), and (ii) dismissing various tort claims as barred by the statute of limitations, Memorylink Corp. v. Motorola, Inc., No. 08 C 3301, 2009 WL 464338 (N.D. Ill. Feb. 23, 2009) (“Dismissal Opinion”). Because we conclude that the district court did not err in granting summary judgment or in dismissing the tort claims, we affirm.

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