Solo Cup Co., a maker of plastic and paper tableware, won an appeals court ruling that may help consumer-goods companies fend off lawsuits over expired patents listed on their products.
Solo Cup didn’t mean to deceive consumers when it posted expired patent numbers on its cups and lids, an appeals court in Washington said yesterday, upholding a trial court’s ruling. The closely held company said it didn’t immediately swap out the molds that had the old patent numbers because each replacement would have cost about $500,000.
More than 100 lawsuits have been filed this year against companies including Pfizer Inc., Procter & Gamble Co. and Kimberly-Clark Corp. after a court in a different case in December said companies can face a penalty of as much as $500 for every item falsely marked as under patent protection. The Solo Cup case was brought by a San Diego patent lawyer.
Federal law for more than 150 years has made it an offense to list patents on products if they are expired or don’t cover the item and lets members of the public sue on the government’s behest and keep half of any proceeds.
The U.S. Court of Appeals for the Federal Circuit in December ruled, as part of a dispute over stilts used in construction, that each item is a separate offense. In yesterday’s decision, the Federal Circuit said a $500 penalty on each Solo Cup product would result in a $5.4 trillion claim by the government, enough to pay 42 percent of the national debt.
Solo Cup had about $1.5 billion in net sales in fiscal 2009, with 81 percent of its business from corporate customers including food distributor Sysco Corp., coffee-shop operator Starbucks Corp. and restaurant chain McDonald’s Corp., according to the Highland Park, Illinois-based company’s annual filing.
The Federal Circuit said companies can rebuff such suits if they can prove the expired patents were listed for reasons other than to deceive customers.
“It raises the bar on proving false marking and I think it will strengthen some corporations’ resolve against the tidal wave of false marking litigation that’s come down,” said Joseph Berghammer of Banner & Witcoff in Chicago, who has been studying the cases.
The appeals court case is Matthew A. Pequignot v. Solo Cup Co., 2009-1547, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Pequignot v. Solo Cup Co., 07cv897, U.S. District Court for the Eastern District of Virginia (Alexandria).
Hillenbrand Unit Seeks to Block Imports of Knockoff Coffins
Hillenbrand Inc.’s Batesville unit, the largest U.S. maker of coffins, filed a U.S. trade complaint to stop imports of what it deems are knockoff caskets from Mexico.
The complaint, filed yesterday with the U.S. International Trade Commission in Washington, said Ataudes Aguilares of Guadalajara, Mexico, is bringing caskets into the U.S. that infringe patents related to coffins with attached memorabilia compartments and a mechanism allowing funeral-home directors to swap out ornamental corner pieces.
Batesville said it has four manufacturing plants in the U.S. with about 3,300 workers. Sales of the patented caskets are expected to exceed $130 million this year, according to the complaint. Total sales were $577.1 million last year, or 89 percent of Hillenbrand’s revenue, Bloomberg data show.
The unit wants the trade commission to prevent closely held Ataudes Aguilares from selling its products in the U.S. and Puerto Rico.
“Ataudes Aguilares did not develop these caskets on its own,” Batesville said in the complaint. “Instead, in order to compete against Batesville in selling improved caskets, Ataudes Aguilares entered into contracts to import for sale in the United States caskets manufactured by Ataudes Aguilares, but copied from Batesville patent protected caskets.”
The memorabilia compartment is a drawer in which family members put mementos rather than in a box placed haphazardly in the coffin, Batesville said. In September, the unit sued funeral homes in Puerto Rico that received the Ataudes Aguilares caskets. Part of the case was dismissed last month, according to court documents.
The trade commission is a quasi-independent agency that investigates unfair trade practices, including patent infringement, and has the power to prevent products from entering the U.S. It typically completes its investigations within about 15 months of agreeing to consider a complaint.
The case is In the Matter of Certain Caskets, Complaint No. 2738, U.S. International Trade Commission (Washington).
Wal-Mart Sued for Infringing Two Patents for Vehicle Tracking
Wal-Mart Stores Inc., the world’s largest retailer, was sued for patent infringement for its alleged use of a vehicle position-tracking and communication system.
Vehicle IP LLC of Memphis, Tennessee, accused the retailer of infringing patents 5,694,322 and 5,970,481, which were issued in December 1997 and October 1999 respectively.
The patent owner claims that Wal-Mart’s use of a vehicle position-tracking and communication system made by San Diego- based Qualcomm Inc. together with software created by ProMiles Software of Bridge City, Texas, infringes the patent.
Neither Qualcomm nor ProMiles is listed as a defendant in the complaint filed on June 9 in federal court in Wilmington, Delaware. Wal-Mart was informed of the patents’ existence in April 2009 and refused to respond to repeated inquiries from the patent owner, according to court papers.
Codefendant with Wal-Mart is Werner Enterprises Inc., a transportation company based in Omaha, Nebraska. Vehicle IP claims Werner is selling systems that infringe the patents.
The patent holder asked the court to bar further infringement of the patents, and for an award of money damages, attorney fees and litigation costs. Vehicle IP asked that the damaged be tripled on the grounds that the infringement by both Wal-Mart and Werner is deliberate.
The case is Vehicle IP v. Wal-Mart Stores Inc., 1:10-cv- 00503-UNA, U.S. District Court, District of Delaware (Wilmington).
Bosch, Inverness Settle Patent Suits with Cross Licenses
The two companies exchanged cross licenses to each other’s patented technology, according to the statement, which didn’t disclose any financial details.
The suits, filed in September 2007 and November 2008, involved patents for computerized medical diagnostic and treatment systems.
One of the two cases is Health Hero Network Inc. v. Alere Medical Inc., 1:07-cv-05031, U.S. District Court, Northern District of Illinois (Chicago). The other case is Healthways Inc., v. Alere Inc., 1:08-cv-06337, U.S. District Court, Northern District of Illinois (Chicago).
Evart Enterprises Sues for Infringement of Annie Sprinkle Film
Evart Enterprises Inc., maker of the adult film “Inside Annie Sprinkle,” sued a Florida film distributor for copyright infringement.
The lawsuit stems from what Evart says is unauthorized reproduction and distribution of DVDs of the Sprinkle film by Mark Johnston Enterprises of Windermere, Florida.
The 1981 “docu-porn” film features Annie Sprinkle, a self-described “artist, sexologist, ecosexual, author, lecturer, educator and thespian,” according to her website. Sprinkle, who has a doctorate in human sexuality, appears in the film revealing her “taboo-defying sexual fantasies,” according to a promotional website.
Evart, which has released the film in a variety of formats, including a “platinum elite collection,” accused Johnston Enterprises’ Shocking Videos unit of selling infringing copies of the film.
The pirated copies even carry Evart’s copyright notice, according to the complaint filed June 1 in federal court in Manhattan. Evart claims the technical quality of the pirated copies is “substantially lower” than the technical quality of legitimate copies of the film.
Evart asked the court to bar further unauthorized reproduction, sale and distribution of “Inside Annie Sprinkle.” The company also seeks an order for seizure and destruction of all infringing copies, together with an award of money damages, attorney fees and litigation costs.
The film company is represented by Carter August Reich and K. Nicholas Goodman of New York’s Quirk & Bakalor PC.
The case is Evart Enterprises Inc. v. Mark Johnston Enterprises Inc., 1:10-cv-04337-SAS, U.S. District Court, Southern District of New York (Manhattan).
World Wrestling Entertainment Demands Takedown by Google
Google Inc., creator of the world’s most-used Internet search engine, received notice from World Wrestling Entertainment Inc. that some of its content was used without authorization on two Google users’ accounts.
Counsel for the Stamford, Connecticut-based wrestling group sent Google what is known as a “takedown” letter, remanding the offending content be removed, as specified in the Digital Millennium Copyright Act.
The June 7 letter was posted on the Chilling Effects website, a joint project of San Francisco-based Electronic Frontier Foundation and seven law schools. The website contains a searchable database of DMCA takedown letters.
Kodansha, Hachette Join Forces to Combat ‘Scanlation’ Piracy
Kodansha Ltd. Publishers and the graphic novel unit of Hachette Livre’s Hachette Book Group joined other publishing houses to combat what are known as “scanlations” and are threatening to sue the pirates, Publishers Weekly reported.
For-profit websites are hosting mainly pirated editions of scanned-in and translated manga, which are Japanese comics, according to Publishers Weekly.
These scanlations are causing the manga and graphic novel market in the U.S. to decline more than 30 percent, from a high of $210 million in 2007 to $140 million in 2009, Publishers Weekly reported.
Pirated manga also are showing up in applications developed for mobile phones and other wireless devices, according to Publishers Weekly.
World Cup Fever to Increase TV Piracy, Kenya Official Predicts
Kenya’s Information Permanent Secretary Bitange Ndemo predicted that unauthorized distribution of television programming will increase in his country during the FIFA World Cup matches, Kenya’s Daily Nation reported.
Ndemo said the number of complaints of television copyright infringement increases during major sports events, according to the Daily Nation.
A typical violation would be a radio station’s claiming to be broadcasting a game “live” with commentary by someone who is actually only watching the game on television, the Daily Nation reported.
Multichoice Africa’s DStv, a pay-television provider, has broadcast rights, as does the state-owned Kenya Broadcasting Corp.’s Radio Africa Unit, according to the Daily Nation.
PepsiCo’s SoBe Trademarks to Be Featured by CollegeHumor
The theme of the videos is “Mr. Vicarious,” with comedians Paul Scheer and Nick Kroll performing at the South by Southwest festival in Austin, Texas.
The videos are released to coincide with a redesign of SoBe’s Elixir and Tea products. Previously, Web videos with a competition theme that promoted SoBe Lifewater during the college basketball tournament received more than 200,000 hits, according to the statement.
Pillsbury Expands IP Practice With Mark Litvak From Reed Smith
Pillsbury Winthrop Shaw Pittman LLP hired Mark Litvak for its IP practice, the San Francisco-based firm said in a statement.
Litvak has an undergraduate degree from Hamilton College and a law degree from Northwestern University.