Brooks Brothers Inc. must face legal claims that the closely held apparel chain marked its bow ties with expired patent numbers, a court decision that may bolster similar lawsuits against more than 350 companies.
The U.S. Court of Appeals for the Federal Circuit in Washington said yesterday that lawyer Raymond Stauffer can pursue his claim against the New York-based clothier. It’s illegal to mislabel products with the wrong patent numbers, and the U.S. lets individuals sue on the government’s behalf and keep half of any penalties, which can be as much as $500 for each item.
Brooks Brothers got Stauffer’s lawsuit thrown out in May 2009 by a judge who said the New Jersey lawyer didn’t have the standing to bring the case. The overturning of that decision today may give new life to the hundreds of false-marking lawsuits against companies including Pfizer Inc., Procter & Gamble Co. and Kimberly-Clark Corp.
“This decision is only going to encourage additional lawsuits,” said Michael Bregenzer of Pittsburgh’s Reed Smith LLP, who is defending companies in three cases. “These are errors based on a change in packaging that just isn’t on their radar. These companies aren’t out there trying to deceive anybody.”
A lawyer for Brooks Brothers declined to immediately comment, while a telephone message for Stauffer wasn’t returned. Brooks Brothers is controlled by Enfield, Connecticut-based Retail Brand Alliance Inc.
The Federal Circuit, in a June decision involving disposable tableware maker Solo Cup Co., said companies can fend off such lawsuits by proving they didn’t mean to deceive customers when posting the expired patents.
“No one snuck into their factories in the middle of the night and surreptitiously marked their products with patent numbers,” said Daniel Ravicher of the New York-based Public Patent Foundation, which has a lawsuit against Johnson & Johnson over Tylenol labeling. “The fact that there is a patent marking on their products is 100 percent their own fault. They have to come in and prove they did that without an intent to deceive.”
More than 350 cases have been filed, according to Allen Arntsen, a patent lawyer with Milwaukee-based Foley & Lardner LLP. Some of the cases had been put on hold awaiting yesterday’s decision.
The lawsuits largely started after the Federal Circuit, in a case in December, said companies can face a penalty of as much as $500 for each item falsely marked as under patent protection.
The case is Stauffer v. Brooks Brothers Inc., 2009-1428, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Stauffer v. Brooks Brothers Inc., 08cv10369, U.S. District Court for the Southern District of New York (Manhattan).
Estee Lauder Sued for Infringing Wrinkle-Repair Patent
Estee Lauder Cos. was sued for patent infringement by the inventor of an anti-wrinkle compound.
Belfer Cosmetics LLC owns patent 7,566,646, which is for the use of a combination of amino acids and an extract from the Acmella oleracea plant to repair facial wrinkles. The inventor listed on the patent, issued in July 2009, is William A. Belfer of Ocean, New Jersey.
The Acmella plant, which is commonly known as the “toothache plant” and is used to flavor chewing tobacco in India, is a rapid-acting muscle relaxant, according to the patent.
The plant’s extract is known from its Botox-like effects of minimizing the appearance of facial wrinkles, according to a number of skin-care websites.
In the complaint filed Aug. 30 in federal court in Houston, Belfer says Estee Lauder makes a product that infringes the patent. Also accused of infringement are Kalologie Labs LLC of Santa Monica, California; McPherson Labs Inc. of Stafford, Texas; and Viva Texas MedSpas LLC of Houston.
Belfer claims New York-based Estee Lauder was notified of the patent shortly after its issuance. “Despite such notice” Estee Lauder has “continued its infringement” and the infringement is “willful and deliberate” Belfer said in court papers asking that damages be tripled.
The case is Belfer Cosmetics LLC v. Estee Lauder Inc., 4:10-cv-03123, U.S. District Court, Southern District of Texas (Houston).
Numis Sued for Failing to Disclose Patent-Infringement Suit
Six investment funds sued a unit of the independent banking and research firm Numis Corp. for not disclosing a lawsuit against Rock Well Petroleum Inc. before accepting more than $95 million in investments on behalf of the oil driller.
Numis Securities Ltd. persuaded the funds, including three owned by Fidelity Investments, to buy into Rock Well’s private share placement in 2007. The Calgary-based oil company was seeking to raise $150 million and then conduct an initial public offering within a year to allow the funds to sell their shares at a profit, according to the lawsuit, filed this month in London.
The IPO was abandoned after London-based Numis disclosed that Rock Well faced an intellectual-property lawsuit by Omega Oil Co. In the suit, Omega alleged it owned a patent that Rock Well relied on for oil recovery, the funds said in their court filing.
Rock Well wasn’t able to procure financing after the failed IPO and filed for bankruptcy protection in Canada. The funds’ investments were “totally lost,” according to the lawsuit.
Numis said it will defend itself against the suit.
“Numis believes that the allegations are entirely spurious and unfounded,” the company said yesterday in a statement.
The case is CQS Convertible and Quantitative Strategies Master Fund Ltd. v. Numis Securities Ltd., case no. 2010/968, High Court of Justice, Queen’s Bench Division (London).
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UC System, Nature Publishing Group Mend Fences Over Licensing
A proposed boycott of Verlagsgruppe Georg von Holtzbrinck GmbH’s Nature Publishing Group unit by scientists from the University of California system won’t take place after the two sides reached an agreement, according to a joint statement from the school and the publisher.
Terms of the agreement weren’t disclosed. The parties “agreed to work together in the coming months to address our mutual short and long-term challenges, including an exploration of potential new approaches and evolving publishing models,” according to the statement.
In June, the university system’s California Digital Library circulated a letter to faculty members calling for a possible boycott after the publishing group raised prices of its journals 400 percent, beginning in 2011.
The increase would have wiped out “all of the recent cost- saving measures” taken by the library and increased the cost of the publications by more than $1 million per year for the university system, according to the June 4 letter. At that time, the University of California system was spending more than $24 million a year for online journal licenses.
Faculty members were encouraged to resign from editorial and advisory boards of journals published by Nature Publishing, and cease submitting papers to the publisher.
Among the publishing group’s journals are Nature, Nature Cell Biology, Nature Immunology, Nature Structural & Molecular Biology, the American Journal of Gastroenterology, the European Journal of Human Genetics, Immunology and Cell Biology, and the Journal of Parinatology.
The university’s scientists were instead encouraged to submit their research papers to the California Digital Library’s open-access repository service or other open-access journals. The library system also considered canceling subscriptions to all titles from Nature Publishing.
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Samsung Electronics Begins Anti-Counterfeit Program in Zambia
Samsung Electronics Co., the Gyeonggi, Korea-based maker of consumer and industrial electronics, began an anti- counterfeiting campaign in Zambia it plans to operate in other African countries, according to the Times of Zambia.
Other potential targets of the Samsung operation are Democratic Republic of Congo, Mali and Congo Brazzaville, according to the Times.
Zambia was chosen initially because of the support of the Zambian government, which loses tax revenue when cheap fakes are sold instead of genuine merchandise, the newspaper reported.
The aim of the campaign is the arrest of suspects and identification of sites where fakes are made and stored, according to the Times.
Ashton Sues Internet Retailer for Trademark Infringement
Ashton Optical Imports Inc., a Los Angeles-based company which does business as Optical Shop International, sued a New York company for trademark infringement.
Ashton makes and sells luxury eyewear and is the exclusive licensee for the Chrome Hearts trademarks. The Chrome Hearts brand, developed 22 years ago, is used for luxury products including sunglasses.
Chrome Hearts sunglasses can sell for upward of $1,000 a pair, and are worn by celebrities including Christy Turlington, Cher, Naomi Campbell, Madonna and Keith Richards, according to the complaint filed Aug. 25 in federal court in Los Angeles.
The Los Angeles optical company sued eMalish Corp., two of its employees and 10 unidentified defendants for trademark infringement. According to the complaint, authorized sellers of Chrome Hearts sunglasses aren’t permitted to sell them on the Internet or for resale by unauthorized third parties.
According to court papers. eMalish is selling the sunglasses through its www.decormyeyes.com website. An eMalish employee told Ashton it would continue to sell the Chrome Hearts sunglasses through the site, Ashton said in its complaint.
None of the named defendants are authorized Chrome Hearts distributors, so Ashton says the products they sell bearing the Chrome Hearts mark may be counterfeit.
Ashton claims it’s damaged by the sale of fakes and the public is likely to be confused about the source of the sunglasses sold by the defendants. The company asked the court to order the defendants to stop selling Chrome Hearts products and using the marks. It’s also seeking attorney fees, litigation costs and money damages, including profits derived from the alleged infringement.
Ashton requested that the damages be tripled to punish defendants for their actions, and that extra damages be awarded for the same purpose.
The company is represented by Brent H. Blakely and Cindy Chan of the Blakely Law Group of Los Angeles.
The case is Ashton Optical Imports Inc. v. eMalish Corp., 2:10-cv-06355-ODW-SS, U.S. District Court, Central District of California (Los Angeles).
EU Study Minimizes Damages Knockoffs Cost the Fashion Industry
Designer knockoffs may actually help rather than harm holders of famous trademarks, according to a European Union study reported by the U.K.’s Telegraph newspaper.
Professor David S. Wall of the University of Leeds, one of the study’s authors, said that fashion knockoffs can help “by quickening the fashion cycle and raising brand awareness,” according to the Telegraph.
The report found that as many as 3 million consumers annually buy fakes bearing such labels as Burberry, Gucci, Yves Saint Laurent or Louis Vuitton, and they are rarely fooled by the knockoffs, the Telegraph reported.
Wall told the Telegraph that the cost to the fashion industry from fakes may be only one-fifth the previously calculated figure, sometimes estimated to be as much as 1.3 billion pounds ($2 billion) in the U.K.
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Paul Hastings Expands IP Practice With Kirkland & Ellis Hire
His pharmaceutical clients have primarily been the makers of branded products he has represented against generic-drug makers.
He has an undergraduate degree from Yale University and a law degree from Harvard University.