Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.
1. The Ninth Circuit recently issued an opinion holding that discretionary attorneys’ fee awards under the Copyright Act (17 U.S.C. 505) are available in declaratory relief actions “that turn on the existence of a valid copyright and whether that copyright has been infringed … .” In this particular case out of the Central District of California, the late Hon. Manuel Real denied fees to a copyright owner that prevailed on summary judgment in the declaratory relief action, showing that there was no abandonment of copyright by the copyright owner. The sticking point in denying the award was that abandonment was not a copyright-specific defense, and it did not require “construction” of the Copyright Act (relying on language from Nimmer on Copyright). The Ninth Circuit reversed, finding that Judge Real did not read Nimmer in context and had, in fact, considered certain copyright issues in connection with abandonment. Therefore, fees were found to be available, and, in this case, warranted. The Ninth Circuit had not previously ruled on the issue of the availability of fees under the Copyright Act in declaratory relief cases.
2. The Federal Circuit recently issued an opinion reversing the grant of a motion to dismiss by the Northern District of California where the district court dismissed patent claims under Section 101/Alice. The Northern District of California found ineligible patent claims directed to an improvement in computer communication systems such as a keyboard or a mouse connected via Bluetooth to the computer. The Federal Circuit reversed, stating that, “we hold the claims at issue are directed to a patent-eligible improvement to computer functionality, namely the reduction of latency experienced by parked secondary stations in communication systems.” Thus, while Section 101/Alice remains a formidable hurdle, it is not an insurmountable hurdle. Therefore, continuing to file patent applications on software inventions that are improvements and innovations to the technology remains a wise move.
3. A recent jury verdict from the Southern District of Ohio in a trademark case between two fitness equipment companies was cut by the Court in post-trial motion practice. The jury found the infringement the trademark infringement to be intentional, and awarded the plaintiff $1 million in compensatory damages and $250,000 in disgorgement of the defendant’s profits. The Court cited law from a number of circuit courts that actual confusion was required for an award of compensatory damages, and then overturned the $1 million award of compensatory damages because there was no evidence of actual confusion shown at trial to support the award of compensatory damages. Because the jury found the infringement to be willful, the Court, in its discretion doubled the disgorgement damages (ostensibly because the defendant was evasive in discovery about its financials), and also found the case exceptional (based on the defendant not ceasing the accused conduct after the lawsuit was filed) and awarded $382,000 in attorneys’ fees. This case is another reminder to be prudent about cessation of allegedly infringing conduct, and also not to be evasive in discovery on a subject and then expect any leeway from the Court on that subject if one loses the case.