Justia U.S. 4th Circuit Court of Appeals Opinion Summaries

Wudi Industrial (Shanghai) Co., Ltd. (Wudi) and Wai L. Wong, along with Wong’s business entity GT Omega Racing, Ltd. (collectively Wong), were involved in a trademark dispute over the use of the "GTRACING" and "GT OMEGA RACING" marks. Wudi registered the "GTRACING" trademark in 2017, and Wong initiated cancellation proceedings, claiming prior use of a similar mark. The Trademark Trial and Appeal Board ruled in favor of Wong in 2020. Wudi sought review in the Eastern District of Virginia, leading to a settlement agreement in 2021, which included geographic and product-based restrictions on Wudi’s use of the "GTRACING" mark, particularly in Europe.The district court granted a stay pending compliance with the settlement agreement. Wong later alleged that Wudi breached the agreement by violating social media restrictions within the European Carve-Out. The district court found Wudi in violation and ordered specific performance. Wudi appealed, and the Fourth Circuit remanded for further proceedings, requiring the district court to comply with procedural requirements for injunctive relief.On remand, the district court issued an injunction, finding that Wudi breached the settlement agreement by using prohibited terms on social media within the European Carve-Out. The court applied the eBay factors, concluding that Wong suffered irreparable harm, monetary damages were inadequate, the balance of hardships favored Wong, and the public interest supported enforcing the agreement.The United States Court of Appeals for the Fourth Circuit reviewed the case and affirmed the district court’s injunction. The court held that the district court had the authority to enforce the settlement agreement, the eBay factors were properly applied, and Wudi’s contentions regarding extraterritoriality, parol evidence, unclean hands, and attorney’s fees were without merit. The injunction was upheld, requiring Wudi to comply with the settlement agreement’s terms. View "Wudi Industrial (Shanghai) Co., Ltd. v. Wong" on Justia Law

Sysco Machinery Corporation, a Taiwanese company, accused DCS USA Corporation, a North Carolina company, of business torts related to their manufacturer-distributor relationship. Sysco alleged that after some of its employees left to form a competitor, Cymtek Solutions, Inc., DCS sold machines made by Cymtek using Sysco's confidential information. Sysco claimed these diverted contracts were worth millions of dollars.Sysco first filed suit in Taiwan, where it claims to have won a preliminary injunction against Cymtek. Sysco then filed a suit in the Eastern District of North Carolina, which it voluntarily dismissed, followed by a suit in the District of Massachusetts, which was dismissed. Finally, Sysco returned to the Eastern District of North Carolina, where it brought claims for trade secret misappropriation, copyright infringement, unfair and deceptive trade practices, and tortious interference with prospective economic advantage. The district court dismissed all claims under Rule 12(b)(6) for failure to state a claim and denied Sysco's post-judgment leave to amend its complaint.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court affirmed the district court's dismissal of Sysco's trade secret misappropriation claim, finding that Sysco did not plausibly allege the existence of a valid trade secret or that DCS misappropriated it. The court also affirmed the dismissal of Sysco's other claims, noting that Sysco did not sufficiently develop its arguments for copyright infringement, unfair and deceptive trade practices, and tortious interference with prospective economic advantage. Finally, the court upheld the district court's denial of Sysco's motion to alter or amend the judgment and for leave to amend the complaint, citing Sysco's repeated failure to state a claim and the potential prejudice to DCS. View "Sysco Machinery Corp. v. DCS USA Corp." on Justia Law

Brainchild Surgical Devices, LLC, a medical device developer, entered into a contract with CPA Global Limited for patent renewal services. Brainchild alleged that CPA overcharged it by marking up fees beyond the actual costs and sued for breach of contract and fraud. The district court excluded Brainchild’s expert witnesses, granted summary judgment for CPA on the breach of contract claim, dismissed the fraud claim, and denied leave to amend the fraud claim.The United States District Court for the Eastern District of Virginia dismissed Brainchild’s fraud claim for lack of particularity and denied leave to amend. The court granted summary judgment for CPA on the breach of contract claim, finding that Brainchild’s theories were inconsistent with the contract’s terms. The court excluded Brainchild’s expert witnesses, David Cass and John Keogh, for offering legal conclusions and lacking qualifications.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court affirmed the district court’s exclusion of Cass’ testimony due to lack of qualification and improper legal conclusions. The court also affirmed the exclusion of Keogh’s testimony for failing to disclose the bases of his opinions and offering legal conclusions but reversed the decision to disqualify him based on confidential information. The court agreed with the district court that Brainchild’s pass-through cost and implied covenant of good faith theories failed to overcome summary judgment. However, the court reversed the summary judgment for CPA on the theory that CPA applied Country Charges unrelated to the required personnel, infrastructure, and third parties for renewals in particular jurisdictions. The case was remanded for further proceedings on this theory. The court also affirmed the denial of leave to amend the fraud claim. View "Brainchild Surgical Devices, LLC v. CPA Global Limited" on Justia Law

Honeywell International, a Delaware corporation, and OPTO Electronics, a Japanese company, are competitors in the barcode-scanning equipment market. In May 2019, Honeywell sued OPTO for patent infringement, alleging that OPTO's barcode products infringed on seven of Honeywell's patents. The parties settled in January 2020 with a patent-licensing agreement, allowing OPTO to use Honeywell's patents in exchange for royalty payments. In March 2021, Honeywell audited OPTO and claimed that OPTO had underreported its revenues, leading to a dispute over the definition of "2D Barcode Products." Honeywell then sued OPTO for breach of contract in September 2021, alleging unpaid royalties.The United States District Court for the Western District of North Carolina handled the case. A jury found that OPTO's laser-scanning barcode readers were "2D Barcode Products" but awarded Honeywell only $859,741. The district court also rejected OPTO's counterclaim of patent misuse, concluding that Honeywell had not engaged in such conduct. Both parties filed post-trial motions, which the district court denied. Honeywell sought attorney's fees, and OPTO moved to set aside the jury verdict, but both requests were denied.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court determined that it could not reach the merits because the United States Court of Appeals for the Federal Circuit has exclusive appellate jurisdiction over the appeal due to the patent-related counterclaim asserted by OPTO. The Fourth Circuit dismissed the appeal, allowing the parallel appeal pending in the Federal Circuit to proceed. The main holding was that the Federal Circuit has exclusive jurisdiction over appeals involving patent claims and counterclaims, even if the primary dispute is over a contract. View "Honeywell International, Inc. v. OPTO Electronics Co., Ltd." on Justia Law

Westmont Living, Inc., a California corporation operating retirement communities and assisted living facilities, filed a lawsuit against Retirement Unlimited, Inc. (RUI), a Virginia corporation, alleging trademark infringement. Westmont Living claimed that RUI's use of the name "The Westmont at Short Pump" for its new facility in Virginia created a likelihood of confusion with Westmont Living's federally registered "Westmont Living" trademarks, violating the Lanham Act and related laws. Westmont Living sought an injunction and damages.The United States District Court for the Eastern District of Virginia granted summary judgment in favor of RUI, concluding that consumer confusion was impossible because the parties operated in entirely distinct geographic markets. The court relied on the Second Circuit's decision in Dawn Donut Co. v. Hart’s Food Stores, Inc., which held that no likelihood of confusion exists when parties use their marks in separate and distinct markets.The United States Court of Appeals for the Fourth Circuit reviewed the case and vacated the district court's judgment. The Fourth Circuit held that the district court erred by relying solely on the geographic separation of the parties' physical facilities without considering other relevant factors that might bear on the likelihood of confusion. The court emphasized that modern advertising and the national scope of both parties' marketing efforts necessitate a broader analysis. The Fourth Circuit remanded the case for further proceedings to consider the various factors relevant to determining the likelihood of confusion, including the parties' competitive marketing, the locations from which they solicit and draw customers, and the scope of their reputations. View "Westmont Living, Inc. v. Retirement Unlimited, Inc." on Justia Law

Jason and Kacie Highsmith hired Shelter, LLC to manage a home renovation project and later contracted with Design Gaps, Inc. to design and install cabinets and closets. The contracts required arbitration for disputes but did not specify completion dates. Design Gaps failed to meet multiple promised deadlines, leading the Highsmiths to terminate the contracts and hire another company. The Highsmiths shared Design Gaps' copyrighted drawings with the new contractor. They then filed for arbitration, alleging breach of contract and other claims, while Design Gaps counterclaimed for various issues, including copyright infringement.The arbitrator held a three-day hearing, during which the Highsmiths presented multiple witnesses, while Design Gaps only presented David Glover. The arbitrator found in favor of the Highsmiths, awarding them damages and attorney’s fees, and denied Design Gaps' counterclaims, including the copyright claim, citing fair use and lack of evidence for copyright registration.Design Gaps petitioned the United States District Court for the District of South Carolina to vacate the arbitration award, arguing the arbitrator disregarded the law and failed to issue a reasoned award. The district court denied the petition and confirmed the arbitration award, also granting the Highsmiths' motion for attorney’s fees.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court dismissed the appeal, citing lack of federal jurisdiction based on the precedent set in Friedler v. Stifel, Nicolaus, & Co., which held that federal courts do not have jurisdiction over motions to vacate arbitration awards unless there is an independent basis for federal jurisdiction beyond the Federal Arbitration Act. The court concluded that the petition did not meet this requirement. View "Design Gaps, Inc. v. Shelter, LLC" on Justia Law

Moke America LLC and Moke International Limited, along with Moke USA, LLC, are competing for the U.S. trademark rights to the "MOKE" mark, used for their low-speed, open-air vehicles. The U.S. District Court for the Eastern District of Virginia found that "MOKE" is a generic term for these vehicles, meaning it cannot be a trademark owned by either party. This finding was based on the history of the Moke vehicles, which were originally produced by the British Motor Corporation (BMC) and later by other manufacturers, and the term "Moke" becoming synonymous with a style of vehicle.The district court's decision followed a bench trial where Moke America failed to prove its priority of use. The court then considered whether the MOKE mark was distinctive or generic. Both parties argued that the mark was inherently distinctive, but the court found it to be generic based on the evidence presented, including the parties' marketing efforts and the testimony of a Moke America witness.The United States Court of Appeals for the Fourth Circuit reviewed the case and concluded that the district court correctly placed the burden on the parties to prove that "MOKE" is not a generic term. However, the Fourth Circuit found that the evidence was insufficient to either affirm or outright reverse the district court's finding of genericness. The court noted that more evidence is needed to determine whether "MOKE" is a generic term or an inherently distinctive mark that was abandoned by its original owner, BMC.The Fourth Circuit vacated the district court's judgment and remanded the case for further proceedings to gather additional evidence on the distinctiveness or genericness of the "MOKE" mark. The parties will continue to bear the burden of proving that the mark is not generic. The court suggested that appointing a disinterested expert witness might be helpful in resolving the issue. View "Moke America LLC v. Moke International Limited" on Justia Law

Simply Wireless, Inc., a Virginia telecommunications company, sued T-Mobile US, Inc. and T-Mobile USA, Inc. for trademark infringement, alleging that T-Mobile had infringed on its common law trademark "SIMPLY PREPAID." Simply Wireless had used the trademark from 2002 to 2008 and resumed its use in 2012. T-Mobile began using the same trademark in 2014 and applied to register it with the United States Patent and Trademark Office. Simply Wireless filed a competing application and subsequently launched a revamped website under the trademark.The United States District Court for the Eastern District of Virginia granted summary judgment to T-Mobile, ruling that Simply Wireless had abandoned the trademark due to nonuse from 2009 to 2011. The court found that Simply Wireless had not provided sufficient evidence to rebut the presumption of abandonment, which is triggered by three consecutive years of nonuse under 15 U.S.C. § 1127. Simply Wireless appealed, arguing that genuine disputes of material fact existed regarding its intent to resume use of the trademark during the period of nonuse.The United States Court of Appeals for the Fourth Circuit reviewed the case de novo and vacated the district court's summary judgment order. The appellate court found that Simply Wireless had presented sufficient evidence, including a detailed declaration from its CEO and corroborating documents, to create a genuine dispute of material fact regarding its intent to resume use of the trademark during the period of nonuse. The court emphasized that the intent-to-resume-use inquiry is an intensely factual question and rarely amenable to summary judgment. The Fourth Circuit also rejected T-Mobile's alternative argument that the statutory abandonment test does not apply to common law trademarks, affirming that the test is applicable.The Fourth Circuit vacated the district court's summary judgment order and remanded the case for further proceedings. View "Simply Wireless, Inc v. T-Mobile US, Inc" on Justia Law

The case involves Bacardi & Company Limited and Bacardi USA, Inc. (collectively, Bacardi) and the United States Patent and Trademark Office (PTO). Bacardi claimed that the PTO violated Section 9 of the Lanham Act and its own regulations by renewing a trademark registration ten years after it expired. The trademark in question is the "HAVANA CLUB," originally registered by a Cuban corporation, José Arechabala, S.A. In 1960, the Cuban government seized the corporation's assets, and by 1974, the U.S. trademark registrations for HAVANA CLUB rum had expired. Later, a company owned by the Cuban government registered the HAVANA CLUB trademark in the U.S. for itself. Bacardi, which had bought the interest in the mark from Arechabala, filed its own application to register the HAVANA CLUB mark and petitioned the PTO to cancel the Cuban government-owned company's registration.The PTO denied Bacardi's application due to the Cuban government-owned company's preexisting registration, and the Trademark Trial and Appeal Board (TTAB) denied Bacardi's cancellation petition. Bacardi then filed a civil action challenging the TTAB's denial of cancellation. Meanwhile, the Cuban government-owned company's registration was set to expire in 2006, unless it renewed its trademark. However, due to a trade embargo, the company was not permitted to pay the required renewal fee without first obtaining an exception from the Department of the Treasury’s Office of Foreign Assets Control (OFAC). OFAC denied the company's request for an exception, and the PTO notified the company that its registration would expire due to the failure to submit the renewal fee on time.The United States Court of Appeals for the Fourth Circuit reversed the district court's judgment that dismissed Bacardi's lawsuit for lack of subject matter jurisdiction. The court concluded that the Lanham Act does not foreclose an Administrative Procedure Act (APA) action for judicial review of the PTO’s compliance with statutes and regulations governing trademark registration renewal. The court found that the Lanham Act does not expressly preclude judicial review of PTO registration renewal decisions or fairly implies congressional intent to do so. Therefore, the APA’s mechanism for judicial review remains available. The case was remanded for further proceedings. View "Bacardi and Company Limited v. United States Patent & Trademark Office" on Justia Law

The case involves TBL Licensing, LLC, commonly known as Timberland, and its attempt to register certain features of its popular boot design as trade dress under the Lanham Act. The United States Patent and Trademark Office (USPTO) refused to register the design, concluding it was not distinctive. Timberland appealed to the federal district court, which agreed with the USPTO and added that the design was impermissibly functional. The district court granted the USPTO's motion for summary judgment.On appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The court held that the district court did not err in concluding that the subset of design features that Timberland sought to register lacked distinctiveness in the public's view. The court did not decide on the issue of functionality. The court emphasized that the question was not whether the public recognizes the entire product as Timberland's boot, but whether the specific design features that Timberland sought to register have acquired a distinctive meaning in the public's view. View "TBL Licensing, LLC v. Vidal" on Justia Law