Weekly IP Takeaways

Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.

1. For grunge music aficionados, you may be saddened to learn that there is a legal dispute regarding the copyright rights to 7 unreleased songs written by the late Chris Cornell, iconic singer of the band Soundgarden. A representative article on the dispute is here. Chris Cornell’s widow, Vicky, has sued Soundgarden and its members in federal court in South Florida for a declaration that she, not Soundgarden, owns the copyrights to the 7 unreleased songs written by Chris Cornell. She has also sued for unpaid royalties on Soundgarden music and conversion of some of Chris’s personal property. There are other allegations of Soundgarden’s intimidation tactics and otherwise. One takeaway from this, which occurs with some frequency in the music industry, is to make sure that ownership of the copyright rights are specified and documented. Another takeaway is that if the surviving members of Soundgarden are resorting to intimidation tactics by withholding royalties and other incidents to pressure Vicky Cornell into transferring copyrights to the band, then it taints the band’s image as one of the pioneers of grunge, and just a great band. If, on the other hand, Ms. Cornell’s allegations about the band’s action are played up, then that is not cool either. This is a case to watch.

2. On December 20, 2019, the Federal Circuit denied Apple’s petition for writ of mandamus to transfer a case filed against it in the Waco Division of the Western District of Texas (Judge Albright). Fintiv, a company owning patented technology that allegedly covers portions of the Apple Wallet functionality, sued Apple in Waco. Apple moved to transfer the case either to the Austin division of the Western District of Texas or the Northern District of California. Judge Albright transferred the case to Austin because the parties each have a presence there and some witnesses appear to work there. Apple petitioned for mandamus to have the case transferred to the Northern District of California. The Federal Circuit, noting the district court’s discretion on the transfer issue, and Apple’s previous statement that Austin was more convenient for both parties, affirmed the intradistrict transfer to Austin. One point of note on motions to transfer venue is to make sure to connect material witnesses in the preferred district to important facts in the case as a means of bolstering one’s position on venue.

3. In a recent case out of the Ninth Circuit Court of Appeals, the Court reversed a portion of a district court order dismissing with prejudice a plaintiff’s claims for trademark infringement, trademark dilution, and unfair competition. The history of the case is a civil procedure nerd’s dream, so bear with me. In a nutshell, the plaintiff in the case (who claimed to own the three marks at issue) filed a Notice of Opposition in the Trademark Trial and Appeal Board (TTAB), which was dismissed with prejudice against the plaintiff in the case because of a failure to respond to an Order to Show Cause in the TTAB as to one of the marks at issue (the ‘654). Then, after all three marks had registered, the plaintiff in the case filed a Petition to Cancel the registrations of the three marks in the TTAB. At the same time, the plaintiff filed its infringement case in the Eastern District of California. The TTAB dismissed the cancellation action as to the first registered mark (the ‘654) based on claim preclusion (the previous dismissal in the Notice of Opposition). The TTAB allowed the petition to cancel to proceed as to the other two registered marks. The plaintiff in the case attempted to appeal the dismissal of the cancellation as to the ‘654 mark to the Federal Circuit, but the Federal Circuit dismissed the appeal for lack of appellate jurisdiction (i.e., no final judgment on which to predicate the appeal – there were two other marks in the cancellation action that had yet to be decided upon by the TTAB). Now, in the district court, the Court dismissed the entire action with prejudice based on claim preclusion from the TTAB as to the ‘654 mark, and for non-opposition of the motion to dismiss as to the other two marks, and denied leave to amend the complaint as to the first mark regarding a possible fraud claim. The Ninth Circuit affirmed the dismissal of the second and third marks for non-opposition and waiver. As to the first mark, the Ninth Circuit reversed the dismissal and denial of leave to amend. In essence, the Ninth Circuit stated that while the elements of claim preclusion (i.e., res judicata) appear to be satisfied, because the scope of a TTAB proceeding is limited to the question of registrability, and cannot address infringement, dilution, unfair competition, injunctive relief, or damages, there is an exception to the applicability of claim preclusion/res judicata. The Ninth Circuit remanded the case, noting that issue preclusion (i.e., collateral estoppel) may still apply to the registrability question, but that the issue was not addressed by the district court and not ripe for appellate review. The Ninth Circuit also reversed the denial of leave to amend for fraud because the futility ground asserted by the district court as the basis to deny leave to amend was incorrect based on the exception to claim preclusion. So, as to the ‘654 mark, this case is headed back to the district court. Issue preclusion may apply and afford the defendant the desired relief. A few takeaways here: (1) respond to Orders to Show Cause, and (2) do not fail to oppose something you want to oppose because you want an appellate court to address the issue (Slip Op. at 5).