Justia U.S. D.C. Circuit Court of Appeals Opinion SummariesArticles Posted in Intellectual Property
Klayman v. Judicial Watch, Inc.
Klayman founded Judicial Watch in 1994 and served as its Chairman and General Counsel until 2003. Klayman claims he left voluntarily. Judicial Watch (JW) claims it forced Klayman to resign based on misconduct. During negotiations over Klayman’s departure, JW prepared its newsletter, which was mailed to donors with a letter signed by Klayman as “Chairman and General Counsel.” While the newsletter was at the printer, the parties executed a severance agreement. Klayman resigned; the parties were prohibited from disparaging each other. Klayman was prohibited from access to donor lists and agreed to pay outstanding personal expenses. JW paid Klayman $600,000. Klayman ran to represent Florida in the U.S. Senate. His campaign used the vendor that JW used for its mailings and use the names of JW’s donors for campaign solicitations. Klayman lost the election, then launched “Saving Judicial Watch,” with a fundraising effort directed at JW donors using names obtained for his Senate run. In promotional materials, Klayman asserted that he resigned to run for Senate, that the JW leadership team had mismanaged and the organization, and that Klayman should be reinstated.Klayman filed a complaint against JW, asserting violations of the Lanham Act, 15 U.S.C. 1125(a)(1), by publishing a false endorsement when it sent the newsletter identifying him as “Chairman and General Counsel” after he had left JW. Klayman also alleged that JW breached the non-disparagement agreement by preventing him from making fair comments about JW and that JW defamed him. During the 15 years of ensuing litigation, Klayman lost several claims at summary judgment and lost the remaining claims at trial. The jury awarded JW $2.3 million. The D.C. Circuit rejected all of Klayman’s claims on appeal. View "Klayman v. Judicial Watch, Inc." on Justia Law
United States v. Shi
Drill riser buoyancy modules (DRBMs) are the high-tech equivalent of water wings for the miles of steel pipe that extend from drillships to the ocean floor and carry oil from natural deposits tens of thousands of feet below the surface. In 2012, only four major companies in the world produced DRBMs. CBMF was sponsored by China to develop DRBM technology. CBMF partnered with Shi, a Ph.D. with 25 years of experience in offshore structural design. Shi visited factories where DRBM was being produced; the manufacturers took precautions to protect their information. Shi hired former employees of those companies, making clear that they were to provide their former employers’ nonpublic information. CBMF was successful in duplicating the technology. At a pitch meeting by Shi to representatives of a company Shi believed to be Lockheed Martin, FBI agents arrested Shi.Three coconspirators pled guilty to conspiracy to commit theft of trade secrets, 18 U.S.C. 1832; one absconded, and a CBMF employee remained in China. CBMF never appeared, leaving Shi as the only defendant at trial. The D.C. Circuit affirmed Shi's conviction as supported by substantial evidence. The information at issue was not publicly available; it came from a competitor. Shi joined an agreement to acquire and use trade secret information and believed the documents he received contained trade secrets. View "United States v. Shi" on Justia Law
Music Choice v. Copyright Royalty Board
Under the Digital Millennium Copyright Act (DMCA), a lower grandfathered royalty rate is paid by some music services that were early providers of digital music transmissions. Music Choice, a digital broadcast music service that consists of several cable television channels, challenges the Board's final determination, which excludes Music Choice's internet transmissions from the grandfathered rate and also adopts more stringent audit requirements.The DC Circuit held that the Board's categorical exclusion of Music Choice's internet transmissions from the grandfathered rate conflicts with the unambiguous language of the DMCA. The court explained that, pursuant to the DMCA, Music Choice's internet transmissions are eligible for the grandfathered rate to the extent they were part of its service offering on July 31, 1998. However, the Board retains discretion to determine whether parts of Music Choice's current service offering, which includes mobile applications and internet-exclusive channels, should be excluded from the grandfathered rate. The court also held that the Board acted arbitrarily and capriciously in altering the audit standards applicable to Music Choice. Therefore, the court vacated the relevant parts of the final determination, remanding for the Board to determine whether Music Choice's internet transmissions qualified for the grandfathered rate and to reconsider the amended audit procedure. View "Music Choice v. Copyright Royalty Board" on Justia Law
Johnson v. Copyright Royalty Board
In these consolidated appeals, appellants challenge the royalty rates and terms established by the Board for the period of January 1, 2018 through December 31, 2022. Appellants challenged numerous aspects of the Board's final determination: the Streaming Services argue that the Board's decision impermissibly applies retroactively; the Streaming Services challenge the Board's rate structure and the specific rates applicable under that structure; the Streaming Services and the Copyright Owners each object to the Board's definition of certain terms; and songwriter George Johnson challenges the Board's acceptance of the Subpart A settlement, as well as its adoption of the final rate structure.The DC Circuit rejected the Streaming Services' retroactivity objection and the challenges brought by the Copyright Owners and George Johnson. However, the court agreed with the Streaming Services that the Board failed to provide adequate notice of the final rate structure, failed to reasonably explain its rejection of the Phonorecords II settlement as a benchmark, and failed to identify under what authority it substantively redefined a term after publishing its initial determination. Accordingly, the court affirmed in part, and vacated and remanded to the Board in part because it failed to give adequate notice or to sufficiently explain critical aspects of its decisionmaking. View "Johnson v. Copyright Royalty Board" on Justia Law
Independent Producers Group v. Copyright Royalty Board
IPG, an agent for royalty claimants in these proceedings, filed suit challenging Copyright Royalty Judges' denial of most of its clients' royalty fee claims for programming in the devotional and program suppliers' categories that was retransmitted by cable during specific years. IPG lost the right to pursue many of its clients' claims as a result of a discovery sanction and ultimately failed to establish for certain claims that it was a duly appointed agent pressing valid claims.The DC Circuit affirmed the Judges' decisions as to IPG's challenge to the revocation of the presumption of validity where the Judges did not abuse their discretion in withholding the presumption based on false testimony and where IPG received constitutionally adequate due process; affirmed as to IPG's challenge to the imposition of discovery sanctions where the sanction, while harsh, was not arbitrary and capricious and did not violate due process; and affirmed as to IPG's challenge to the final distribution of royalties where the Judges' distribution methodology decisions were well within a zone of reasonableness. View "Independent Producers Group v. Copyright Royalty Board" on Justia Law
Imapizza, LLC v. At Pizza Limited
IMAPizza, which operates the "&pizza" chain of restaurants in the United States, filed suit under the Copyright and Lanham Acts as well as D.C. common law against At Pizza, operator of the "@pizza" restaurant in Edinburgh, Scotland.The DC Circuit affirmed the district court's dismissal of IMAPizza's Copyright and Lanham Act claims, holding that IMAPizza failed to state a claim under the Copyright Act because it did not allege an act of copyright infringement in the United States. The court declined to extend the Copyright Act beyond its territorial limits lest U.S. law be used to sanction what might be lawful conduct in another country. The court also held that IMAPizza failed to state a claim under the Lanham Act because it failed to allege some plausible effect — let alone a significant or substantial effect — upon U.S. commerce. Finally, the court held that IMAPizza's trespass claim fails for want of any unauthorized entry into its restaurants, and the district court did not abuse its discretion in denying IMAPizza's motions for leave to file a surreply and to exercise supplemental jurisdiction over the U.K.'s "passing off" claim. View "Imapizza, LLC v. At Pizza Limited" on Justia Law
SoundExchange, Inc. v. Copyright Royalty Board and Librarian of Congress
Plaintiffs challenged the Copyright Royalty Board's most recent determination for rates noninteractive webcasters must pay to play recordings over the Internet under a statutory copyright license. The DC Circuit sustained the Board's determinations in all respects and held that the Board's acceptance of the Pandora and iHeart benchmark agreements was not arbitrary and capricious; the court applied Chevron deference to the Board's adjustment downward of SoundExchange's proposed benchmark; the Board adequately and reasonably explained its decision to set different rates for ad-based and subscription noninteractive webcasting services; and the court rejected SoundExchange's challenge concerning the Board's decision to amend a license term setting forth the requirements to qualify as an auditor that can verify royalty payments. Finally, the Board rejected a pro se appellant's challenge concerning the constitutionality of the Board's determination. View "SoundExchange, Inc. v. Copyright Royalty Board and Librarian of Congress" on Justia Law
Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A
This appeal stemmed from a dispute between a paleta company in Mexico (Prolacto) and a paleta company in northern California (PLM) over a phrase "La Michoacana" and an image of a girl in traditional dress holding a paleta ("Indian Girl"). At issue was whether Prolacto or PLM owned the contested phrase and image and which paleta company unfairly competed or otherwise infringed the other's trademark rights.The DC Circuit held that Prolacto's false-association claim failed because Prolacto failed to establish a right to the "La Michoacana" mark or injury from PLM's use sufficient to establish false association in violation of Section 43(a) of the Lanham Act. Therefore, the court affirmed the district court's judgment for PLM on that claim. The court also affirmed the district court's conclusion that Prolacto failed to establish that PLM's use of the Tocumbo Statements and other advertising materials constituted false advertising in violation of Prolacto's rights under section 43(a)(1)(B). Finally, the court affirmed the district court's conclusion that Prolacto infringed PLM's use of its registered marks. The court found no merit in Prolacto's remaining arguments. View "Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A" on Justia Law
American Society for Testing v. Public.Resource.Org, Inc.
The district court granted summary judgment to the Standards Developing Organizations (SDOs) on their claims of direct copyright infringement, finding that they held valid and enforceable copyrights in the incorporated standards that PRO had copied and distributed, and that PRO had failed to create a triable issue of fact that its reproduction qualified as fair use under the Copyright Act. The district court also concluded that ASTM was entitled to summary judgment on its trademark infringement claims, and issued permanent injunctions prohibiting PRO from all unauthorized use of the ten standards identified in the summary judgment motions and of ASTM's registered trademarks.The DC Circuit reversed and held that the district court erred in its application of both fair use doctrines. The court remanded for the district court to develop a fuller record regarding the nature of each of the standards at issue, the way in which they were incorporated, and the manner and extent to which they were copied by PRO in order to resolve this mixed question of law and fact. View "American Society for Testing v. Public.Resource.Org, Inc." on Justia Law
Spanski Enterprises, Inc. v. Telewizja Polska, S.A.
Where a foreign broadcaster uploads copyrighted content to its website and directs that content onto a computer screen in the United States at a user's request, the broadcaster commits an actionable domestic violation of the Copyright Act. The D.C. Circuit agreed with the district court's finding, based on supportable factual findings, that TV Polska was liable for infringing Spanski's copyrights in fifty-one episodes of certain Polish-language television programs that TV Polska transmitted into the United States via its online video-on-demand system, and concluded that damages of $60,000 per episode were appropriate in light of the circumstances. Therefore, the court affirmed the district court's judgment as to both liability and damages. View "Spanski Enterprises, Inc. v. Telewizja Polska, S.A." on Justia Law