Oct. 2 (Bloomberg) -- The U.S. Supreme Court will hear two appeals that would make it easier for targets of patent suits to collect attorneys’ fees, agreeing to consider steps that some companies say would deter groundless litigation.
The court said yesterday it will hear arguments from Octane Fitness LLC, which is seeking $1.3 million in fees after defeating a patent suit over exercise equipment. The justices also accepted an appeal by Highmark Inc., a Pennsylvania insurer asking for $5 million from a company that unsuccessfully sued for patent infringement.
A White House report said more than 100,000 companies were threatened last year with infringement suits by businesses whose sole mission is to extract royalty revenue. Those entities, dubbed “patent trolls” by critics, filed 19 percent of all patent lawsuits from 2007 to 2011, according to the Government Accountability Office.
“With the average patent case costing millions of dollars to litigate, the threat of paying the prevailing party’s attorney’s fees is a powerful deterrent to frivolous claims and litigation mischief,” the Blue Cross and Blue Shield Association, a Washington-based trade group, argued in court papers urging the high court to intervene in the Highmark case.
The U.S. Patent Act says fees can be awarded “in exceptional cases.” Octane contends the federal appeals court that handles patent cases, the U.S. Court of Appeals for the Federal Circuit in Washington, has developed a “rigid and virtually insurmountable test” for implementing that statutory language.
Under the Federal Circuit test, a suit must be “objectively baseless” and have been filed in bad faith. Octane says trial judges instead should be able to award fees when a patent holder “unreasonably pursues a case having an objectively low likelihood of success.”
The Supreme Court will hear arguments and rule by early July in the two cases. The cases are Octane Fitness v. Icon Health & Fitness, 12-1184, and Highmark v. Allcare Health Management Systems, 12-1163.
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Guccione Collection Seeks Court Declaration It Owns Rights
Artwork created by the late publisher of Penthouse Magazine is at issue in a copyright suit between his estate and the purchaser of items bought in the wake of the publisher’s bankruptcy.
Guccione Collection LLC was formed to exploit artwork by Bob Guccione, who died in October 2010 at the age of 80. The collection has plans to auction some of the work through Christie’s International Plc later this year, according to court papers.
Additionally, the collection entered into an agreement with Vice magazine to feature some of the late publisher’s artwork, manuscript pages from his autobiography, and some of his erotic photography in its September issue. The collection is also working with Brooklyn, New York’s powerHouse Books to create a book that featured art that appeared in Omni, a science fiction magazine published by Guccione.
Beginning in September the collection, Vice magazine, and powerHouse Books received a series of cease-and-desist letters from counsel for the estate. The letters, sent by New York’s Pryor Cashman LLP, and appended to the complaint, claimed the estate owns the copyright to the artwork and demanded that the various publications halt.
The collection asked the court to declare that it’s the owner of all the rights to the artwork and other items that comprise the Guccione Collection, that it hasn’t infringed the estate’s intellectual property rights, and to order the estate to quit making infringement claims.
Additionally, the collection asked for awards of damages, attorney fees and litigation costs.
The case is Guccione Collection LLC v. Michael Linda, 12:cv-06949, U.S. District Court, Southern District of New York (Manhatttan).
‘Raging Bull’ Rights Fight Gets Hearing at U.S. Supreme Court
The U.S. Supreme Court agreed to hear a dispute over the rights to the 1980 Oscar-winning movie “Raging Bull,” accepting an appeal from the daughter of a man who worked with boxer Jake LaMotta to write the screenplay.
The justices said yesterday they will consider whether Paula Petrella waited too long to press her copyright claims against MGM Holdings Inc. units. Petrella is seeking damages for marketing and distribution starting in 2006. She is also suing a unit of Twenty-First Century Fox Inc., which has distribution rights for the film.
Petrella’s father, Frank Peter Petrella, was a longtime friend of LaMotta, whose life story was the basis for the movie. The two men produced a book and two screenplays, though the litigants disagree as to how much of a role each one played. They sold the rights to a production company in 1976 and an MGM unit later acquired the movie rights.
The film won two Academy Awards, including Best Actor for Robert De Niro, who portrayed LaMotta.
Under federal copyright law, Frank Petrella’s 1981 death meant his heirs had the right to renew the copyrights when the original 28-year-term expired. Paula Petrella filed a renewal application for the 1963 screenplay in 1991. Although her attorneys exchanged letters with MGM from 1998 to 2000, she didn’t sue until 2009.
A federal appeals court threw out the lawsuit, saying Petrella waited too long to assert her rights. The appeals court invoked a legal doctrine known as “laches,” which applies when a delay deprives the other litigant of a fair chance to mount a defense.
At the Supreme Court, Petrella says that laches shouldn’t apply and that she is limited only by the three-year statute of limitations in federal copyright law.
The case is Petrella v. Metro-Goldwyn-Mayer, 12-1315.
Oxford, Cambridge Publishers Urged to Drop Indian Copyright Suit
Jhatkaa, an Indian advocacy organization focusing on development and governmental accountability, has begun a petition drive asking academic publishers to drop a copyright suit related to photocopying textbooks.
Oxford University Press, Cambridge University Press and Informa Plc’s Taylor & Francis unit are suing Delhi University and a local photocopying service over the creation and sale of photocopied course packs.
In October 2012, in connection with this suit, the publishers obtained a court order barring the photocopying of these courts packs. In response students at the Delhi School of Economics created a group to oppose that order.
Jhatkaa has started a petition campaign asking the publishers to drop the suit, saying that without the course packs “people from less privileged backgrounds” won’t be able to obtain an education.
The organization said in a statement that last year more than 300 academics spoke out against the suit in an open letter. Included among the signatories are “33 of the very authors” whose works are published by the academic presses.
In the petition, Jhatkaa and its signatories ask that the academic presses “put the importance of education above royalties” and withdraw the suit.
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Houston, Washington Can’t Register City Seals as Trademarks
An appeal board at the U.S. Patent and Trademark Office properly refused to register seals of two U.S. cities as trademarks, a federal appeals court ruled.
Both the city of Houston, Texas, and the government of the District of Columbia had sought registration and had filed appeals of the board’s rejections of their applications.
The Washington-based U.S. Court of Appeals for the Federal Circuit said that the plain language of U.S. trademark law specifically bars registration of an “insignia of the United States, or of any state or municipality.”
The city of Houston argued that language in trademark law specifying that trademark registration is intended to protect the public from “pirates and cheats” should have permitted the registration.
The court rejected that argument, saying that the city would have other means of protecting against “pirates and cheats” using its seal, such as passing an ordinance prohibiting such activity.
The government of the District of Columbia tried to use U.S. treaty obligations to justify its registration. The appeals court said that while sections of what is known as the Paris Convention treaty require member countries to register as trademarks official insignia that can be registered in other countries, this section doesn’t apply to municipal-level insignia.
Because the District of Columbia isn’t a country that is a member of the union that signed the treaty, it isn’t entitled to use that treaty section to justify its trademark registration, the court said.
The cases are In re city of Houston 2012-1356 and In re the Government of the District of Columbia 2012-1418.
‘Woodpecker’ Brand Use Barred to Wholesaler Despite Trademark
Woodpecker Hardwood Floors Inc., a Canadian retail seller of hardwood flooring, persuaded the Supreme Court of British Columbia to bar a nearby wholesale flooring company’s use of the term “woodpecker” even though the other company registered the term as a trademark.
The court said that Woodpecker Hardwood Floors of Richmond, British Columbia, had used the term for at least 13 years. Wiston International Trade Co., also of Richmond, registered the mark with the Canadian Intellectual Property Office in January 2013, according to court papers.
Woodpecker then sent Wiston a cease-and-desist notice, requesting that the wholesaler quit using the name. Wiston refused, so Woodpecker filed suit, arguing its 13 years of prior use and Wiston’s knowledge of that use trumped the registration. Woodpecker also complained that the public was confused by the wholesaler’s use of the name.
The court, noting that the two businesses were located within a mile of each other, said Woodpecker would be harmed if the wholesaler were allowed to use the name. The court said the longer Wiston used the confusingly similar mark, the more difficult it would be to “unscramble” the resulting business losses.
Wiston is still able to carry on business under its original name, the court said, and having two Woodpeckers selling hardwood flooring within a mile of each other “would seem contrary to public interest.”
The case is between Woodpecker Hardwood Floors Inc. and Wiston International Trade Co Ltd., S136046, In the Supreme Court of British Columbia.
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