Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

Ultraflo filed suit against Pelican, asserting an unfair competition by misappropriation claim under Texas law. Ultraflo alleged that Pelican stole its drawings showing how to design valves and then used them to make duplicate valves. The court previously held that copyright preempts this Texas cause of action when the intellectual property at issue is within the subject matter of copyright. Ultraflo contends that its claim escapes preemption because its valve design, when separated from the drawing itself, is afforded no protection under the Copyright Act, 17 U.S.C. 101 et seq. Determining that Ultraflo did not waive its preemption challenge, the court concluded the district court correctly found that the state claim is preempted because copyright preemption prohibits interference with Congress’s decision not to grant copyright protection just as much as it protects a decision to provide protection. Accordingly, the court affirmed the judgment. View "Ultraflo Corp. v. Pelican Tank Parts, Inc." on Justia Law

BD and RTI are competitors in the market for syringes of various types and IV catheters. This appeal arises from a $340 million jury verdict (after trebling) entered against BD for its alleged attempt to monopolize the United States safety syringe market in violation of Section 2 of the Sherman Antitrust Act, 15 U.S.C. 2. BD was also found liable for false advertising under Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a)(1)(B). The district court, relying on principles of equity, held that the treble damage award subsumed BD’s liability to disgorge profits from the false advertising, but the district court enjoined BD to stop using those ads and notify customers, employees, distributors, and others about the false claims. The court concluded that the Section 2 claim for attempt to monopolize is infirm as a matter of law where patent infringement, which operates to increase competition, is not anticompetitive conduct; false advertising is a slim, and here nonexistent, reed for a Section 2 claim; and the allegation that BD “tainted” the market for retractable syringes while surreptitiously plotting to offer its own retractable a few years later is unsupported and incoherent. The court affirmed the Lanham Act judgment of liability for false advertising but reversed and remanded for a redetermination of disgorgement damages, if any. Accordingly, the court vacated and remanded the injunctive relief for reconsideration. View "Retractable Technologies, Inc. v. Becton Dickinson & Co." on Justia Law

After GlobeRanger, a software maker, obtained a $15 million judgment in a trade secret misappropriation trial against competitor Software AG, Software AG appealed. The court found that the trade secret claim is not preempted but that a dismissed conversion claim was preempted and supports federal jurisdiction. In this case, GlobeRanger’s trade secret misappropriation claim requires establishing an additional element than what is required to make out a copyright violation: that the protected information was taken via improper means or breach of a confidential relationship. Because the state tort provides substantially different protection than copyright law, it is not preempted. As the complaint alleged only conversion of intangible property for which there is equivalency between the rights protected under that state tort and federal copyright law, complete preemption converted the conversion claim into one brought under the Copyright Act, 17 U.S.C. 101 et seq., that supported federal question jurisdiction at the time of removal and supplemental jurisdiction after it was dismissed. On the merits, the court concluded that GlobeRanger’s evidence is sufficient to show that Software AG used the Navy Solution in developing its own product. Therefore, the court upheld the jury's finding of trade secret use. Finally, the court rejected Software AG's claims of error in regard to the damages award and affirmed the award. View "GlobeRanger Corp. v. Software AG" on Justia Law

SnoWizard and Southern Snow, sellers of flavored shaved ice confections, have been involved in litigation for the past ten years in state court, federal district court, and before the Patent and Trademark Office in the Federal Circuit. In this appeal, Southern Snow challenges the district court’s dismissal of its claims under Rule 12(b)(6) and SnoWizard cross-appeals the district court’s denial of its motions for sanctions against Southern Snow. Because the claims against SnoWizard are precluded, and because the claims against Morris and Tolar fail to satisfy the requirements for conspiracy, obstruction of justice, or malicious prosecution, the court affirmed the dismissal of all the claims. Given that Southern Snow advanced arguments that, although creative, were not “ridiculous,” the court affirmed the district court’s denials of sanctions. View "Snow Ingredients, Inc. v. SnoWizard, Inc." on Justia Law

DTC filed suit against JPMC and others, alleging willful patent infringement relating to electronic check-processing systems. JPMC was the first bank to reach a settlement agreement with DTC in 2005. As part of the settlement, JPMC entered into a consent judgment in which it admitted the patents were valid and enforceable and that JPMC had infringed them. It also entered into a license agreement permitting JPMC unlimited use of DTC’s patented technology going forward. At issue in this appeal is the district court’s interpretation of a most favored licensee (MFL) clause in the license agreement allowing JPMC to use DTC's patented check processing technology. JPMC invoked its rights under the MFL clause based on DTC’s granting a similar unlimited license to another entity for a lesser lump sum than JPMC paid. The court agreed with the district court that after comparing these two lump-sum license agreements, the later agreement is indeed more favorable, and JPMC therefore is entitled to a refund from DTC for the difference between the amount it paid for its license and the lesser amount bargained for in the later license agreement. Accordingly, the court affirmed the judgment. View "JP Morgan Chase Bank, N.A. v. Datatreasury Corp." on Justia Law

This dispute involves two Tejano songs: "Triste Aventurera" and "Cartas de Amor." Plaintiff filed suit against Hacienda alleging, inter alia, that Hacienda's release of "Cartas" infringed upon his "Triste" copyright. The district court ruled in favor of Hacienda as to each of plaintiff's claims. The court rejected plaintiff's contention that the district court erred in finding no reasonable possibility of access. In this case, the court concluded that plaintiff failed to show that the district court's access finding was clearly erroneous. The court also concluded that, absent evidence of uniqueness or complexity, and in light of the expert testimony at trial describing differences in the lyrics and music of the songs, the district court’s finding that "Cartas" and "Triste" are not strikingly similar was not clearly erroneous; the court rejected plaintiff's invitation to apply a novel "sliding-scale" analysis that would have lowered his access burden; and plaintiff waived his Digital Millennium Copyright Act (DMCA), 17 U.S.C. 1202(a), claim. Accordingly, the court affirmed the judgment. View "Guzman v. Hacienda Records and Recording" on Justia Law

SMI filed suit against BCS and ARGO, alleging violations of various Texas state law claims related to defendants' alleged theft of trade secrets in connection with a software program developed and sold by SMI. After removal to federal court, the district court denied SMI's motion to remand and subsequently granted defendants' motion for summary judgment. The court concluded that the district court was correct to consider only the Original Petition when deciding SMI’s motion to remand; held that state law claims based on ideas fixed in tangible media are preempted by section 301(a) of the Copyright Act, 17 U.S.C. 301(a), and that the technical trade secrets found within VaultWorks fall within the subject matter of copyright; affirmed the district court’s denial of SMI’s motion to remand and held that it properly exercised jurisdiction over this action as a result of complete preemption by the Copyright Act; concluded that it would not be reasonable for a jury to infer that defendants used SMI’s trade secrets and therefore, the court affirmed the district court’s dismissal of SMI’s claim of misappropriation of trade secrets; and concluded that SMI has waived its remaining claims. Accordingly, the court affirmed the judgment. View "Spear Marketing, Inc. v. BancorpSouth Bank" on Justia Law

This dispute over a commercial relationship stemmed from an agreement between Pennzoil and Miller Oil where Pennzoil agreed to loan Miller Oil equipment for use at Pit Stop. After Pennzoil discovered that Pit Stop was using mislabeled bulk oil that Pit Stop claimed was a Pennzoil product, Pennzoil filed a trademark infringement lawsuit. The district court concluded that Pennzoil's marks are valid and protectable, and that there was a likelihood of confusion between Miller Oil's marks and Pennzoil's marks, such that the use of the latter by defendants constituted trademark infringement. The district court considered Miller Oil's affirmative defense of acquiescence and ruled that Pennzoil had implicitly and explicitly assured Pit Stop that the use of the Pennzoil trademarks and trade dress were allowed, and that Miller Oil relied upon Pennzoil's assurances. The court concluded that, given Miller Oil did not establish undue prejudice, the district court's legal conclusion that Pennzoil had acquiesced was error. Allowing Miller Oil to continue to display Pennzoil's marks in light of an unchallenged determination of trademark infringement would be the type of "unjustified windfall" the court previously condemned. Accordingly, the court reversed the district court's finding of acquiescence and vacated the elements of the injunction allowing Miller Oil to use Pennzoil's marks. View "Pennzoil-Quaker State v. Miller Oil and Gas" on Justia Law

This appeal stemmed from litigation regarding the ownership of the composition copyright to the song Whoomp! (There It Is), writen and produced by Tag Team. The district court concluded that plaintiff owned the copyright and DM Records was liable for copyright infringement, and the jury awarded $2 million in damages. DM Records appealed on several grounds. In regards to DM Record's arguments related to the district court's interpretation of the Recording Agreement as assigning a single fifty percent interest to Alvert Music, the court concluded that none of the pieces of allegedly conflicting evidence cited by DM Records presents a factual issue, and Bellmark Records waived its right to bring a Rule 50(b) motion by not raising its second argument at trial. In regards to DM Records' challenge to the district court's denial of its Rule 60(b) motion for relief from judgment based on fraud and lack of standing, DM Records is not entitled to Rule 60(b) relief on the basis of the allegedly withheld Security Agreement because standing is determined at the time of suit and the 2006 Security Agreement does not establish that plaintiff did not own the copyright in 2002 when he commenced the suit. The court also concluded that the district court did not plainly err in instructing the jury and that the jury could have determined that plaintiff was properly awarded 100 percent of the royalties from which it could pay Tag Team its share. Finally, it was not plain error for the district court to allow plaintiff's closing statement and not to grant DM's motion for a new trial. Accordingly, the court affirmed the judgment. View "Isbell v. DM Records, Inc." on Justia Law

WWE seeks ex parte seizure and temporary restraining orders against unnamed defendants under the ex parte seizure provision of the Trademark Counterfeiting Act, 15 U.S.C. 1116. WWE alleged that defendants work as "fly-by-night" counterfeiters, setting up shop near WWE events and cannibalizing WWE's merchandise sales by purveying unauthorized products. The district court denied relief and certified its order for interlocutory appeal. The court concluded that, in this case, the persons against whom seizure would be ordered are readily identifiable as any non-affiliated person purporting to sell WWE merchandise at or near a live WWE event; WWE has met its burden under section 1116(d), and the orders sought here should issue; and the court did not address the validity of a provision of the proposed order purporting to deputize private citizens, leaving it to the district court to address in the first instance. Accordingly, the court vacated and remanded for further proceedings. View "World Wrestling Entertainment v. Unidentified Part" on Justia Law