July 2018 Update
The California Supreme Court approved revisions to the Rules of Professional Conduct, effective November 1, 2018. Among other changes, the rules have been renumbered, and the new numbers have been added to citations in this book. See https://newsroom.courts.ca.gov/news/supreme-court-approves-first-comprehensive-revision-to-attorney-rules-of-professional-conduct-in-twenty-nine-years. See also §§1.2, 1.4, 1.6, 3.14, 7.1, 7.80, 7.83, 11.67, 11.94.
A district court’s “protective order” prohibiting the defendants in a trademark case from making public statements prior to and during trial on the merits of their case or from posting on social media was an unconstitutional prior restraint on speech that posed no clear and present danger or imminent threat to the plaintiffs’ interests in a fair trial. Dan Farr Prods. v U.S. District Court (9th Cir 2017) 874 F3d 590. See §2.7.
The California Supreme Court found that an Unfair Competition Law (UCL) claim premised on Cal/OSHA violations was not preempted by the federal Occupational Safety and Health Act of 1970, because the violations were of standards in a state plan approved by the federal government. Solus Indus. Innovations, LLC v Superior Court (2018) 4 C5th 316. See §3.7.
The California Legislature enacted Lab C §925, which, for contracts made on or after January 1, 2017, prohibits an employer from requiring a California-based employee either to agree to adjudicate disputes outside of the state or to give up the “substantive protection” of California law. See §3.18.
In People v Overstock.com, Inc. (2017) 12 CA5th 1064, the court held that the 4-year statute of limitations of the UCL governs a district attorney’s action for penalties under the statute, notwithstanding the 1-year period in CCP §340(b) for governmental penalty actions in general. See §3.37.
The Defend Trade Secrets Act of 2016 (DTSA) does not apply retroactively to misappropriations that occurred before its effective date of May 11, 2016. Agilysys, Inc. v Hall (ND Ga 2017) 258 F Supp 3d 1331. See §4.3A.
Several courts have recently found that the DTSA may apply to misappropriations that began before its effective date and continued thereafter. Teva Pharm. USA, Inc. v Sandhu (ED Pa 2018) 2018 291 F Supp 3d 659; AllCells, LLC v Zhai (ND Cal, March 27, 2017, No. 16-CV-07323-EMC) 2017 US Dist Lexis 44808; Brand Energy & Infrastructure Servs., Inc. v Irex Contracting Grp. (ED Pa, March 24, 2017, No. CV 16-2499) 2017 US Dist Lexis 43497; VIA Techs., Inc. v ASUS Computer Int’l (ND Cal Feb. 7, 2017, No. 14-cv-03586-BLF) 2017 US Dist Lexis 17384. Other courts have found that it does not. Space Data Corp. v X (ND Cal 2017) 123 USPQ2d 1514; Avago Technols. U.S. Inc. v NanoPrecision Prods., Inc. (ND Cal, Jan. 31, 2017, No. 16-cv-03737-JCS) 2017 US Dist Lexis 13484. See §4.3A.
A defendant who enticed a plaintiff to disclose confidential information to the defendant and third parties at a meeting by misrepresenting the real purpose of meeting could not rely on the plaintiff’s disclosure to those third parties to argue that the plaintiff failed to take reasonable precautions to protect a trade secret. BladeRoom Group Ltd. v Facebook, Inc. (ND Cal 2017) 219 F Supp 3d 984. See §§4.39, 4.52.
Merely convincing a trial court that a claim of trade secret misappropriation has sufficient merit to survive a summary judgment motion does not preclude a subsequent finding that the claim was made in bad faith. Parrish v Latham & Watkins (2017) 3 C5th 767. See §4.70.
A Northern California federal district court dismissed a UCL claim as preempted because the plaintiff had not distinguished in its pleading between trade secret and non-trade secret information and could not use the UCL claim as a fallback for any information that failed to qualify for trade secret protection. Waymo LLC v Uber Technols., Inc. (ND Cal 2017) 256 F Supp 3d 1059. See §4.76.
In an antitrust case brought under Clayton Act §4, the Ninth Circuit held that because the defendant was a distributor of smartphone apps who sold them directly to purchasers through its app store, the plaintiffs had standing to sue the defendant for attempting to monopolize the sale of the apps. Pepper v Apple Inc. (In re Apple iPhone Antitrust Litig.) (9th Cir 2017) 846 F3d 313. See §5.20.
In a antitrust case alleging tying agreements, the Tenth Circuit noted a circuit split over whether a tying case examined under a rule of reason analysis presents a situation in which a specific and detailed showing of market power may not be necessary and listed cases on both sides of the split. Suture Express, Inc. v Owens & Minor Distrib. (10th Cir 2017) 851 F3d 1029, n5, cert denied (2017) 138 S Ct 146. See §5.65.
In In re Lipitor Antritrust Litig. (3d Cir 2017) 855 F3d 126, the Third Circuit discussed the components of a Walker Process claim in an antitrust case involving a monopoly position in the relevant market, as set forth in Walker Process Equip. v Food Mach. & Chem. Corp. (1965) 382 US 172, 86 S Ct 347. See §§5.74, 8.112, 8.138, 8.139.
In a trademark action under the Trademark Act of 1946 (Lanham Act), the court held that reverse confusion is not a separate claim that must be specifically pleaded. Marketquest Group, Inc. v BIC Corp. (9th Cir 2017) 862 F3d 927. See §6.9.
The yellow color of a Cheerios cereal box is not entitled to trademark protection. General Mills IP Holdings II, LLC (TTAB 2017) 124 USPQ2d 1016. See §6.41.
In Matal v Tam (2017) 582 US ___, 137 S Ct 1744, the Supreme Court struck down as unconstitutional the “disparagement provision” of Lanham Act §2(a), which barred registration of trademarks that may disparage or create contempt for any person, living or dead. See §6.33.
The Lanham Act applies extraterritorily if the alleged violations create some effect on American foreign commerce, the effect presents a cognizable injury to the plaintiffs, and the interest of American foreign commerce with the other nation is strong. Updateme Inc. v Axel Springer SE (ND Cal, Mar. 7, 2018, No. 17-CV-05054-SI) 2018 US Dist Lexis 37592. See §6.72.
An action under the Lanham Act requires that the defendant acted within the state sufficiently to give rise to personal jurisdiction under state law. Ariel Invs., LLC v Ariel Capital Advisors LLC (7th Cir 2018) 881 F3d 520. See §6.78.
In a trademark action, a plaintiff’s actual damages include (1) profits lost on trade diverted to the infringer; (2) profits lost on sales made at reduced prices in response to competition by the infringer; (3) harm to the plaintiff’s reputation and good will; and (4) the cost of advertising needed to prevent or dispel customer confusion. Yah Kai World Wide Enters. v Napper (D DC, Feb. 21, 2018, No. 11–CV-2174 (KBJ)) 2018 US Dist Lexis 27646. See §6.86.
Under Lanham Act §35(a), reasonable attorney fees may be awarded to the prevailing party in a trademark action in exceptional cases. Tobinick v Novella (11th Cir 2018) 884 F3d 1110; Sazerac Co. v Fetzer Vineyards, Inc. (ND Cal, Dec. 7, 2017, No. 3:15-CV-04618-WHO) 2017 US Dist Lexis 201909; Direct Fitness Solutions, LLC v Direct Fitness Solutions, LLC (ND Ill 2017) 281 F Supp 3d 697; Abbey Dental Ctr., Inc. v Consumer Opinion LLC (D Nev, Aug. 10, 2017, No. 2:15-CV-2069-GMN-PAL) 2017 US Dist Lexis 126776; Hamdan v Tiger Bros. Food Mart Inc. (MD La, July 14, 2017, No. CV 15-412-BAJ-EWD) 2017 US Dist Lexis 109542. See §6.91.
The AntiCybersquatting Consumer Protection Act (ACPA) establishes civil liability for cyberpiracy when a plaintiff proves that the defendant registered, trafficked in, or used a domain name; the domain name is identical or confusingly similar to a protected mark owned by the plaintiff; and the defendant acted with bad faith intent to profit from that mark. Go Daddy Operating Co. v Ghaznavi (ND Cal, Feb. 28, 2018, No. 17-CV-06545-PJH) 2018 US Dist Lexis 33002. See §6.94.
In Disney Enters. v VidAngel, Inc. (9th Cir 2017) 869 F3d 848, the Ninth Circuit found that the defendant violated the Digital Millennium Copyright Act (DMCA) when it purchased discs containing copyrighted movies, copied them, and resold versions of them to customers. See §§6.113, 7.7, 7.97, 8.14, 8.17.
Nonuse of a trademark for 3 consecutive years is prima facie evidence of abandonment under the Lanham Act. Fabick Inc. v Fabco Equip., Inc. (WD Wis, Nov. 8, 2017, No. 16-CV-172-WMC) 2017 US Dist Lexis 185446. See §6.128.
The Ninth Circuit found that the public’s use of the word “google” to mean “search the internet” has not reached a sufficient level of generic use to support cancellation of the trademark. Elliot v Google, Inc. (9th Cir 2017) 860 F3d 1151. See §6.135.
The Ninth Circuit also found that the Copyright Act of 1909 governed an infringement case over a song composed before January 1, 1978, and affirmed the jury’s finding on appeal that the defendants’ song infringed on the copyrighted song with respect to several elements involving the style and feel of the song. Williams v Gaye (9th Cir 2018) 885 F3d 1150. See §§7.3, 7.69.
A pornographic video website was entitled to safe harbor protection under the Digital Millennium Copyright Act (DMCA) because the operators had no knowledge that their site included infringing video clips. Ventura Content, Ltd v Motherless, Inc. (9th Cir 2018) 885 F3d 597. See §7.7.
An Internet-based retransmission service that captured copyrighted works broadcast over the air and then retransmitted them to paying subscribers through the Internet without the consent of copyright holders was not a “cable system” eligible for a “compulsory license” under 17 CFR §111. Fox TV Stations, Inc. v Aereokiller, LLC (9th Cir 2017) 851 F3d 1002. See §7.8.
The Ninth Circuit found that publicity rights claims challenging the display, reproduction, and distribution of copyright photographs fell within the subject matter of copyright law and were preempted by it. Maloney v T3Media, Inc. (9th Cir 2017) 853 F3d 1004. See §7.32.
The Eleventh Circuit found that copyright registration of works being prepared for commercial distribution is not effective until the registrar takes action on the application. Fourth Estate Pub. Ben. Corp. v Wall-Street.com, LLC (11th Cir 2017) 856 F3d 1338. See §7.51.
The Ninth Circuit found that a monkey owned “selfies” it had allegedly taken of itself and thus had constitutional standing to bring a lawsuit for infringement, but that the animal lacked statutory standing to do so. Naruto v Slater (9th Cir, Apr. 23, 2018, No. 16–15469) 2018 US App Lexis 10129. See §7.56.
Of the two elements of an infringement action, ownership and unauthorized copying, the second element has two distinct aspects: (1) copying and (2) unlawful appropriation. Rentmeester v Nike, Inc. (9th Cir, Feb. 27, 2018, No. 15–35509) 2018 US App Lexis 4817. See §§7.66, 7.68, 7.69, 7.70, 7.71.
The Ninth Circuit affirmed a rare summary judgment for the plaintiff when it found that the district court had correctly applied the subjective intrinsic test for substantial similarity in a copyright case by detailing various objective factors and elements that were common between plaintiff’s fabric design and defendant’s dress, including complex patterns with nearly identical orientation, spacing, and grouping of complicated florets and feathers, and, despite slight variations in colors, use of similar shades and use of colors in similar ways for highlight and contrast). Unicolors, Inc. v Urban Outfitters, Inc (9th Cir 2017) 853 F3d 980. See §7.71.
A United Kingdom company’s mailing of a copyright infringing newsletter to ten California residents did not subject the company to personal jurisdiction in California. Axiom Foods, Inc. v Acerchem Int’l, Inc. (9th Cir 2017) 874 F3d 1064. See §7.118.
In 2017, utility patents comprised 90.7 percent of the issued patents. Reissued patents were 0.1 percent; design patents were 8.8 percent; and plant patents were 0.4 percent. See §8.2.
In Return Mail, Inc. v US Postal Serv. (Fed Cir 2017) 868 F3d 1350, the Federal Circuit held that claims were ineligible for patent protection when they recited only routine, conventional activities, such as identifying undeliverable mail items, decoding data on those mail items, and creating output data. See §§8.2A, 8.20, 8.95E, 8.95F.
The US Patent and Trademark Office (USPTO) issued its 2018 guidance, which includes links to six sets of examples of subject-matter eligibility for patent protection. https://www.uspto.gov/patent/laws-and-regulations/examination-policy/subject-matter-eligibility. See §8.2A.
To recover lost profits, a patentee bears the burden of proof to show a reasonable probability that, “but for” the infringement, it would have made the sales that were made by the infringer. Presidio Components, Inc. v American Tech. Ceramics Corp. (Fed Cir 2017) 875 F3d 1369. See §8.22.
As of March 1, 2018, the fee for requesting supplemental examination of a patent is $4400 for large entities, with additional fees for any reexamination ordered as a result of the supplemental examination. See §8.95A.
As of March 1, 2018, base fees for requesting nonstreamlined ex parte reexamination of a patent application is $12,000 for large entities. The fee for a streamlined ex parte reexamination is half that amount. 37 CFR §1.20(c)(1). Additional claims can raise the fees significantly, but the usual 50 percent and 75 percent discounts are available for small and micro entities. Third-party filers are not eligible for the micro entity fee. See §8.95B.
In an inter partes review of a patent under 35 USC §§311–318, the petitioner has the burden of proving all propositions of unpatentability, including invalidity of any amended claims. Aqua Prods., Inc. v Matal (Fed Cir 2017) 872 F3d 1290. See §8.95C.
In two cases decided by the United States Supreme Court in April 2018, the Court held that inter partes review of patent claims does not violate Article III or the Seventh Amendment of the US Constitution, and that once the USPTO institutes an inter partes review, it must decide the patentability of all the claims the petitioner has challenged. Oil States Energy Servs., LLV v Greenes Energy Group, LLC (Apr. 24, 2018, No. 16–712) 2018 US Lexis 2630; SAS Institute Inc. v Iancu (Apr. 24, 2018, No. 16969) 2018 US Lexis 2629. See §8.95C.
For purposes of venue under 28 USC §1400 for a patent infringement action, a domestic corporation “resides” in the state of incorporation. TC Heartland LLC v Kraft Foods Grp. Brands LLC (2017) ___ US ___, 137 S Ct 1514. See §8.142.
When a person who has anonymously posted statements on the Internet files a motion to quash a plaintiff’s subpoena seeking his or her identity, the plaintiff is required to make a prima facie showing of the elements of the plaintiff’s claim. ZL Technols., Inc. v Does 1–7 (2017) 13 CA5th 603. See §§9.57, 11.120.
An employer could not compel a third-party publisher’s disclosure of an anonymous online poster’s identity absent a prima facie showing that the poster had breached the parties’ nondisclosure agreement. Glassdoor, Inc. v Superior Court (2017) 9 CA5th 623. See §9.57.
Federal copyright law preempts a right of publicity claim if a photograph is exploited in a noncommercial manner. Maloney v T3Media, Inc. (9th Cir 2017) 853 F3d 1004. See §10.18.
In Roy Allan Slurry Seal, Inc. v American Asphalt South, Inc. (2017) 2 C5th 505, in which contractors alleged that they had submitted the second lowest bid on a public contract and would have been successful but for the low bidder’s wrongful conduct, the court determined the complaint did not state a claim for intentional interference with prospective advantage since there was no existing economic relationship. See §11.12.
The Seventh Circuit held that a person who alleges that she experienced employment discrimination on the basis of sexual orientation has put forth a case of sex discrimination for purposes of Title VII of the Civil Rights Act of 1964 (Title VII) (42 USC §§2000e—2000e–17). Hively v Ivy Tech Community College of Ind. (7th Cir 2017) 853 F3d 339. See §13.14.
The California Legislature has revised discrimination protections of the Fair Employment and Housing Act (FEHA) (Govt C §§12900–12996) slightly to provide that religious dress practice and religious grooming practice include certain elements of dress and grooming that are part of an individual observing a religious creed. Govt C §12926(q). See §13.19.
The Ninth Circuit held that an employee could bring an action under the Fair Labor Standards Act (FLSA) (29 USC §§201–219) against his employer’s attorney for attempting to have him deported in retaliation for filing a workplace violation claim against the employer, because the FLSA’s retaliation provisions do not require that a defendant be the plaintiff’s employer. Arias v Raimondo (9th Cir 2017) 860 F3d 1185. See §13.21.
The California Supreme Court held that a predispute arbitration agreement that waives the right to seek public injunctive relief under California’s Unfair Competition Law (UCL) (Bus & P C §§17200–17210) and false advertising law in any forum is against California public policy and unenforceable under California law. McGill v Citibank, N.A. (2017) 2 C5th 945. See §13.79A.