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

Articles Posted in Intellectual Property
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In this case, Sony Music Entertainment and numerous other record companies and music publishers sued Cox Communications, alleging that Cox's customers used its internet service to infringe their copyrights. The plaintiffs argued that Cox should be held accountable for its customers' copyright infringement. A jury found Cox liable for both willful contributory and vicarious infringement of over 10,000 copyrighted works owned by the plaintiffs and awarded $1 billion in statutory damages.The United States Court of Appeals for the Fourth Circuit held that Cox was not vicariously liable for its customers' copyright infringement because Cox did not profit from its subscribers’ acts of infringement, a legal prerequisite for vicarious liability. However, the court affirmed the jury’s finding of willful contributory infringement because Cox knew of the infringing activity and materially contributed to it.The court vacated the $1 billion damages award and remanded the case for a new trial on damages, holding that the jury’s finding of vicarious liability could have influenced its assessment of statutory damages. The court did not vacate the contributory infringement verdict. View "Sony Music Entertainment v. Cox Communications, Incorporated" on Justia Law

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In a dispute between SmartSky Networks, LLC and DAG Wireless, Ltd., DAG Wireless USA, LLC, Laslo Gross, Susan Gross, Wireless Systems Solutions, LLC, and David D. Gross over alleged breach of contract, trade secret misappropriation, and deceptive trade practices, the United States Court of Appeals for the Fourth Circuit ruled that the district court did not have the jurisdiction to enforce an arbitration award. Initially, the case was stayed by the district court pending arbitration. The arbitration tribunal found in favor of SmartSky and issued an award, which SmartSky sought to enforce in district court. The defendants-appellants argued that, based on the Supreme Court decision in Badgerow v. Walters, the district court lacked subject matter jurisdiction to enforce the arbitration award. The Fourth Circuit agreed, noting that a court must have a basis for subject matter jurisdiction independent from the Federal Arbitration Act (FAA) and apparent on the face of the application to enforce or vacate an arbitration award. The court concluded that the district court did not have an independent basis of subject matter jurisdiction to confirm the arbitration award. As such, the court reversed and remanded the case to the district court for further proceedings. View "Smartsky Networks, LLC v. DAG Wireless, LTD." on Justia Law

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In this case, professional concert photographer Larry Philpot brought a copyright-infringement claim against news website Independent Journal Review (IJR) after IJR used his photograph of musician Ted Nugent in an online article. IJR sought summary judgment, arguing that its use of the photo constituted fair use under the Copyright Act and alternatively arguing that Philpot's copyright registration was invalid. Philpot also sought summary judgment, contending that his registration was valid and that IJR's use was not fair use. The district court granted summary judgment to IJR on fair use grounds and denied Philpot's motion.On appeal, the United States Court of Appeals for the Fourth Circuit reversed and remanded the decision. The court held that IJR's use of the photograph did not constitute fair use because it was non-transformative and commercial, and it adversely affected the potential market for the photograph. It also found that Philpot's copyright registration was valid because the photograph was not published before Philpot registered it as an unpublished work. The court concluded that IJR was not entitled to summary judgment on its fair use defense and that Philpot was entitled to summary judgment on the validity of the copyright registration. View "Philpot v. Independent Journal Review" on Justia Law

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Two companies that operate in the real estate development industry have spent years embroiled in a dispute over their shared name: “Dewberry.” Dewberry Engineers sued Dewberry Group to quell the latter’s use of several new insignias it developed as part of its rebrand. Dewberry Engineers owns federal trademark rights to the “Dewberry” mark and claims Dewberry Group’s rebranding efforts infringe that mark and breach an agreement struck between the sparring corporations over a decade ago. The district court sided with Dewberry Engineers in the proceedings below, assessing a nearly $43 million profit disgorgement award against Dewberry Group for its infringement, enjoining it from further breaches of its agreement with Dewberry Engineers, and ordering it to pay attorneys’ fees for forcing Dewberry Engineers to litigate an exceptional case of trademark infringement.   The Fourth Circuit affirmed. The court explained that the parties share an identical, arbitrary dominant word and disclaim different suffixes (and prefixes in some cases) in the marks at issue. The record shows they also employ those marks in related, overlapping, and complementary services. Those details go some distance toward creating a likelihood of confusion as to the origin of either party’s “Dewberry” mark. Moreover, the court explained that despite Dewberry Group’s failure to calculate exact figures or provide evidence of deductions from infringement revenues for losses and expenses, the court equitably reduced the requested award by twenty percent to $42,975,725.60.  The court finds no error of fact or law suggesting the district court’s conclusions were an abuse of its discretion. View "Dewberry Engineers Inc. v. Dewberry Group, Inc." on Justia Law

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Plaintiff Wudi Industrial (Shanghai) Co., Ltd. Challenged two adverse rulings made by the district court in favor of defendant Wai L. Wong and his business entity, GT Omega Racing, Ltd. (collectively “GTOR”). Wudi and GTOR are Asian-centered business entities that compete in the marketing of video gaming chairs and other products. In March 2017, Wudi obtained from the United States Patent and Trademark Office (“USPTO”) a registration for the stylized word mark “GTRACING.” For its part, GTOR claimed that it already owned an earlier use of a similar word mark — that is, “GT OMEGA RACING” — and challenged Wudi’s registration of the “GTRACING” word mark in cancellation proceedings before a USPTO component called the Trademark Trial and Appeals Board (the “Board”). In June 2020, the Board ruled in favor of GTOR, concluding that Wudi’s use of the “GTRACING” word mark encroached on GTOR’s earlier use of its own “GT OMEGA RACING” word mark.   The Fourth Circuit vacated the challenged rulings and remanded. The court agreed with Wudi’s primary contention that the district court’s challenged rulings constitute awards of injunctive relief in favor of GTOR and against Wudi. Secondly, the court also agreed that the challenged rulings failed to comport with the applicable Rules of Civil Procedure and controlling precedent. The court emphasized that the First Order possesses all of the necessary attributes and thus qualifies as an injunction order. That is, the First Order contains “clear, enforceable directives” and threatens Wudi with contempt for noncompliance. View "Wudi Industrial (Shanghai) Co., Ltd. v. Wai Wong" on Justia Law

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Appellants are a Swiss consortium, Interprofession du Gruyère (“IDG”), and a French consortium, Syndicat Interprofessionel du Gruyère (“SIG”) (together, “the Consortiums”), who believe that gruyere should only be used to label cheese that is produced in the Gruyère region of Switzerland and France. Seeking to enforce this limitation in the United States, the Consortiums filed an application with the United States Patent and Trademark Office (“USPTO”) to register the word “GRUYERE” as a certification mark. Appellees, the U.S. Dairy Export Council, Atalanta Corporation, and Intercibus, Inc. (together, “the Opposers”), opposed this certification mark because they believe the term is generic and, therefore, ineligible for such protection. The USPTO’s Trademark Trial and Appeal Board (“TTAB”) agreed with the Opposers and held that “GRUYERE” could not be registered as a certification mark because it is generic. The Consortiums filed a complaint challenging the TTAB’s decision in the United States district court. The district court granted summary judgment for the Opposers on the same grounds as articulated in the TTAB’s decision.   The Fourth Circuit affirmed and concluded that that the term “GRUYERE” is generic as a matter of law. The court explained that the Consortiums have not brought evidence bearing on whether, at an earlier point in history, the term “GRUYERE” was in common use in the United States. But even assuming that was the case, this argument still fails. In sum, the Consortiums cannot overcome what the record makes clear: cheese consumers in the United States understand “GRUYERE” to refer to a type of cheese, which renders the term generic. View "Interprofession du Gruyere v. U.S. Dairy Export Council" on Justia Law

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Dmarcian, Inc. (dInc) and dmarcian Europe BV (dBV)—and a broken business relationship. The original dmarcian, dInc, is a Delaware corporation with headquarters in North Carolina. Its corporate homonym, dBV, is a Dutch entity based in the Netherlands. The two companies negotiated an agreement authorizing dBV to sell dInc’s software in Europe and Africa. The license was done on a handshake, and the parties now dispute its terms. Among other allegations, dInc accuses dBV of directly competing for customers, which prompted dInc to bring claims of copyright and trademark infringement, misappropriation of trade secrets, and tortious interference. The district court exercised personal jurisdiction over dBV and declined to dismiss for forum non conveniens. The district court also issued a preliminary injunction limiting dBV’s use of dInc’s intellectual property. The district court later held dBV in contempt for violating the injunction, and dBV appealed.   The Fourth Circuit affirmed except as to one aspect of the contempt order, which the court vacated and remanded for further proceedings as to the proper amount of sanctions. The court explained that the district court did not err in exercising personal jurisdiction, in declining to dismiss for forum non conveniens, and in issuing a preliminary injunction. Further, the court held that the district court was also justified in issuing a contempt sanction; but the court  requires a more thorough examination of the sanction amount. While the preliminary injunction may not be the final word on the merits, its entry was also not an abuse of discretion considering the weighty interests and detailed findings discussed at length above. View "Dmarcian, Inc. v. Dmarcian Europe BV" on Justia Law

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Defendants, VSL Pharmaceuticals, Inc. and Alfasigma USA, Inc., appealed the district court’s order finding them in contempt of the court’s permanent injunction. The injunction prohibited Defendants from suggesting in promotional materials that their probiotic contained the same formulation as one marketed by Claudio De Simone and ExeGi Pharma, LLC.   On appeal, Defendants (1) their statements weren’t contemptuous, (2) their statements didn’t harm Plaintiffs (3) the district court improperly awarded attorneys’ fees, and (4) VSL and Alfasigma shouldn’t be jointly liable for the fee award. The Fourth Circuit affirmed the district court’s order.   The court explained a party moving for civil contempt must establish four elements by clear and convincing evidence, relevant here are the last two: that the alleged contemnor by its conduct violated the terms of the decree, and had knowledge (at least constructive knowledge) of such violations; and that the movant suffered harm as a result.   Defendants emphasized that consumers couldn’t access the Letter from Alfasigma’s home page. That’s true, as De Simone and ExeGi showed only that consumers could access the Letter by searching “vsl3 litigation” on Google. But the way in which consumers could access the Letter is irrelevant to Alfasigma’s constructive knowledge that it remained on the website.   Further, under the Lanham Act, “commercial advertising or promotion” is “commercial speech . . . for the purpose of influencing consumers to buy goods or services.” Here, Defendants’ press release’s final sentence emphasizes VSL#3’s commercial availability, so the district court reasonably viewed the message as an attempt to realize economic gain. View "Claudio De Simone v. VSL Pharmaceuticals, Inc." on Justia Law

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The waiver language in 15 U.S.C. 1071 relates only to the choice of review options for the decision appealed from. The Fourth Circuit held that a party seeking review of a subsequent Trademark Board decision may seek review in either the Federal Circuit or the district court, even if the Trademark Board's initial decision was reviewed by the Federal Circuit.In this case, the parties' dispute concerns the registration of the mark "PRETZEL CRISPS." Plaintiff sought to register the mark in 2004, but the trademark examiner denied registration. Plaintiffs reapplied for registration in 2009, but Frito-Lay opposed the registration and argued that "PRETZEL CRISPS" was generic for pretzel crackers and not registrable. The Trademark Board sided with Frito-Lay in 2014. Plaintiffs opted for the section 1071(a) route and appealed the Trademark Board's 2014 decision to the Federal Circuit. The Federal Circuit agreed with plaintiffs in 2015, remanding to the Trademark Board. On remand in 2017, the Trademark Board again concluded that "PRETZEL CRISPS" was generic, and alternatively concluded that "PRETZEL CRISPS" lacked distinctiveness. Plaintiffs sought review of the Trademark Board's 2017 decision, but the district court dismissed the case without prejudice for lack of subject matter jurisdiction. The Fourth Circuit reversed the district court's judgment dismissing the case for lack of subject matter jurisdiction and remanded for further proceedings. The court explained that the statutory text of the Lanham Act, while ambiguous, favors plaintiffs' argument in favor of jurisdiction. Furthermore, this conclusion is bolstered by legislative history, the court's sister circuits' holdings in similar cases, and policy considerations. The court remanded for further proceedings. View "Snyder's-Lance, Inc. v. Frito-Lay North America, Inc." on Justia Law

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Fleet Feet filed suit against NIKE, alleging that NIKE's advertising campaign with the tagline "Sport Changes Everything" infringed on Fleet Feet's trademarks "Change Everything" and "Running Changes Everything." Fleet Feet also sought a preliminary injunction, which the district court granted, enjoining NIKE's use of the tagline and any designation "confusingly similar" to Fleet Feet's marks.While NIKE's appeal was pending, NIKE ended its advertising campaign and disavowed any intent to continue using the tagline. Therefore, the Fourth Circuit dismissed the appeal as moot because NIKE no longer has a legally cognizable interest in the validity of the preliminary injunction. The court explained that, at best, NIKE's argument that the "confusingly similar" language in the preliminary injunction order presents only a potential controversy, which cannot sustain this appeal. In regard to NIKE's contention that the injunction bond is a live issue, the court agreed that the bond keeps the case as a whole from being moot but it does not do the same for the appeal. In this case, if the district court ultimately finds that NIKE's "Sport Changes Everything" campaign infringed on Fleet Feet's marks, the preliminary injunction will have been, at worst, harmless error. If it does not, NIKE may recover on the bond. Either way, the court explained that the district court must be the first to resolve NIKE's challenge on the merits. The court found no good reason to vacate the district court's order and opinion granting a preliminary opinion, remanding for further proceedings as necessary. View "Fleet Feet, Inc. v. Nike, Inc." on Justia Law