Microsoft, Corp. v. Motorola, Inc.

We live in an age in which the interconnectivity of a wide range of modern technological products is vital. To achieve that interconnection, patent-holders often join together in compacts requiring licensing certain patents on reasonable and non-discriminatory (“RAND”) terms. Such contracts are subject to the common-law obligations of good faith and fair dealing.

At issue in this appeal are two patent portfolios, formerly owned byAppellants Motorola, Inc., Motorola Mobility, Inc., and General Instrument Corp., (“Motorola”), both of which are subject to RAND agreements. Appellee Microsoft, a third-party beneficiary to Motorola’s RAND commitments, sued Motorola for breach of its obligation to offer RAND licenses to its patents in good faith. Motorola, meanwhile, brought infringement actions in a variety of fora to enjoin Microsoft from using its patents without a license.

We previously upheld, in an interlocutory appeal, an antisuit injunction preventing Motorola from enforcing in a German action any injunction it might obtain against Microsoft’s use of certain contested patents. Microsoft Corp. v. Motorola, Inc., 696 F.3d 872 (9th Cir. 2012) (“Microsoft I”). We did so after determining that there was, in the “sweeping promise” of Motorola’s RAND agreements, “at least arguably[] a guarantee that the patent-holder will not take steps to keep would-be users from using the patented material, such as seeking an injunction, but will instead proffer licenses consistent with the commitment made.” Id. at 884.

After our decision, a jury determined that Motorola had indeed breached its RAND good faith and fair dealing obligations in its dealings with Microsoft. In this appeal, we address (1) whether the district court overstepped its bounds by determining, at a bench trial preceding the jury trial on breach of contract, a reasonable and non-discriminatory rate, as well as a range of rates, for Motorola’s patents; (2) whether the court erred in denying Motorola’s motions for judgment as a matter of law on the breach of contract issue; (3) whether the court erred in awarding Microsoft attorneys’ fees as damages in connection with Motorola’s pursuit of injunctions against infringement; and (4) whether the district court abused its discretion in two contested evidentiary rulings.

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Fifty-Six Hope Road Music v. A.V.E.L.A.

The panel affirmed the district court’s judgment after a jury trial on claims under the Lanham Act and Nevada state law regarding the use of Bob Marley images on apparel and other merchandise.

Affirming the denial of defendants’ post-trial motion for judgment as a matter of law on a false endorsement claim, the panel held that sufficient evidence supported the jury’s finding that defendants violated the Lanham Act because they (a) used Marley’s image (b) on their t-shirts and other merchandise, (c) in a manner likely to cause confusion as to plaintiffs’ sponsorship or approval of these t-shirts and other merchandise. The panel held that defendants waived several defenses. It rejected the argument that allowing a plaintiff to vindicate a false endorsement claim based on the use of a deceased celebrity’s persona essentially creates a federal right of publicity.

The panel held that the district court did not abuse its broad discretion in determining the profits for three defendants. There was sufficient evidence to find that defendant Freeze willfully infringed plaintiffs’ rights. The Seventh Amendment did not require that a jury calculate these profits. The panel held that the district court did not abuse its discretion by ordering three defendants to pay attorneys’ fees to plaintiffs because (1) plaintiffs were prevailing parties, and (2) the case was exceptional, as these defendants’ conduct was willful.

The panel affirmed the district court’s grant of summary judgment to defendants on a right of publicity claim under Nevada law.

The panel held that there was sufficient evidence to support the jury’s finding that three defendants interfered with plaintiffs’ prospective economic advantage.

The panel held that the district court did not err in granting defendants’ motion for judgment as a matter of law on the issue of punitive damages.

Concurring in part and dissenting in part, Judge Christen concurred in the result but did not join the reasoning in Subsection I.B.2 of the majority’s opinion, addressing likelihood of confusion. Judge Christen wrote that the narrow holding in Part I, concluding that the evidence presented at trial was sufficient for the jury to find that defendants violated the Lanham Act by using Marley’s likeness, was dictated by the standard of review on appeal, and by the defenses actually pursued by defendants.

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Cellport Systems v. Peiker Acustic

In October 2004, Cellport Systems, Inc. (“Cellport”) and Peiker Acustic GMBH & Co. KG (“Peiker”) entered into an agreement concerning Cellport’s technology for the hands-free use of cellphones in vehicles. In 2009, Cellport filed suit against Peiker, alleging breach of that agreement and seeking royalties for seven Peiker products. The district court awarded Cellport royalties on only two of the products, interpreting an acknowledgment in the license agreement as “a rebuttable presumption.” Cellport appealed, and Peiker filed a conditional cross-appeal. We affirm in part, reverse in part, and remand.

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Jang v. Boston Scientific SciMed Inc.

Viewing all the facts in the light most favorable to Jang, two of his claims are sufficiently colorable to survive judgment on the pleadings: (1) that BSC breached § 7.3(c), because the cash offset qualifies as a “recovery of damages”; and (2) that BSC violated the implied covenant of good faith and fair dealing by structuring a settlement to thwart the agreed purpose of § 7.3(c). The District Court thus erred in finding Jang’s claims barred as a matter of law and granting judgment on the pleadings for BSC. We will reverse the judgment and remand the case for further proceedings.

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Magi XXI, Inc. v. Stato della Citta del Vaticano

Sublicensee to an agreement allowing reproductions of the Vatican library collection brought action against the licensee, the licensee’s president, and the Vatican State, alleging breach of contract and related torts. The United States District Court for the Eastern District of New York (Mauskopf, J.) dismissed the claims against the Vatican State based on forum selection clauses contained in sublicense agreements. We hold the Vatican State may invoke the forum selection clauses in the sublicense agreements because the licensee and the Vatican State were “closely related” parties and it was foreseeable that the Vatican State would enforce the forum selection clauses. Accordingly, the judgment of the district court is AFFIRMED.

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Yellowbook Inc. v. Brandeberry

This case involves a trademark dispute over the right to use the “AMTEL” name and marks for phonebooks in various Ohio counties. In 2002, Defendant Steven Brandeberry sold his phonebook business, operated under the name AMTEL, to Barney White, who in turn sold the business to Yellowbook, a national publisher of yellow-pages directories. In 2009, Brandeberry decided to start a rival phonebook under the AMTEL name. Yellowbook brought this trademark-infringement suit; we must decide whether exclusive rights to AMTEL were transferred in the sale to White (and thus to Yellowbook). The district court found that when Brandeberry initially purchased the rights to the AMTEL mark the rights were transferred to both him individually and his corporation, American Telephone Directories, Inc. (“American Telephone”). The court then reasoned that since the sale to White did not involve Brandeberry in an individual capacity, Brandeberry retained his individual rights, and White received only a non-exclusive right to use the mark. Yellowbook argues that the contract should be read to have transferred the entire ownership of the mark and that in any case Brandeberry abandoned his right to the mark. However, the initial contract cannot be read to create joint ownership, and trademark law would not permit joint ownership under the facts in this case. As a result, the contract with White transferred exclusive ownership of the mark and, even if it did not, Brandeberry’s rights were abandoned. Therefore, the judgment of the district court is reversed and remanded for grant of injunctive relief and determination of damages. In addition, the district court’s decision to deny attorney’s fees to Yellowbook is reversed and remanded for at least a partial grant of fees, because the deficiencies in Yellowbook’s motion are not sufficiently egregious to warrant complete denial.

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Rates Technology v. Speakeasy

Plaintiff-appellant Rates Technology Inc. appeals from a judgment granting defendants-appellees’ motion to dismiss entered by the United States District Court for the Southern District of New York (Denise Cote, J.) on May 10, 2011. We hold that, under the Supreme Court’s decision in Lear, Inc. v. Adkins, 395 U.S. 653 (1969), a clause in a settlement agreement that bars a patent licensee from later challenging the patent’s validity is void for public policy reasons if the settlement was entered into prior to the initiation of litigation between the parties. We accordingly AFFIRM the district court’s judgment.

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Vernor v. Autodesk, Inc.

Timothy Vernor purchased several used copies of Autodesk, Inc.’s AutoCAD Release 14 software (“Release 14”) from one of Autodesk’s direct customers, and he resold the Release 14 copies on eBay. Vernor brought this declaratory judgment action against Autodesk to establish that these resales did not infringe Autodesk’s copyright. The district court issued the requested declaratory judgment, holding that Vernor’s sales were lawful because of two of the Copyright Act’s affirmative defenses that apply to owners of copies of copyrighted works, the first sale doctrine and the essential step defense.

Autodesk distributes Release 14 pursuant to a limited license agreement in which it reserves title to the software copies and imposes significant use and transfer restrictions on its customers. We determine that Autodesk’s direct customers are licensees of their copies of the software rather than owners, which has two ramifications. Because Vernor did not purchase the Release 14 copies from an owner, he may not invoke the first sale doctrine, and he also may not assert an essential step defense on behalf of his customers. For these reasons, we vacate the district court’s grant of summary judgment to Vernor and remand for further proceedings.

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F.B.T. Prods., LLC v. Aftermath Records

This dispute concerns the percentage of royalties due to Plaintiffs F.B.T. Productions, LLC, and Em2M, LLC, under their contracts with Defendant Aftermath in connection with the recordings of Marshal B. Mathers, III, professionally known as the rap artist Eminem.1 Specifically, F.B.T. and Aftermath disagree on whether the contracts’ “Records Sold” provision or “Masters Licensed” provision sets the royalty rate for sales of Eminem’s records in the form of permanent downloads and mastertones. Before trial, F.B.T. moved for summary judgment that the Masters Licensed provision unambiguously applied to permanent downloads and mastertones. The district court denied the motion. At the close of evidence, F.B.T. did not move for judgment as a matter of law, and the jury returned a verdict in favor of Aftermath. On appeal, F.B.T. reasserts that the Masters Licensed provision unambiguously applies to permanent downloads and mastertones. We agree that the contracts are unambiguous and that the district court should have granted summary judgment to F.B.T. We therefore reverse the judgment and vacate the district court’s order awarding Aftermath its attorneys’ fees.

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