12 FOR 2012

Here is a link to the materials from last night's IP presentation at the Brewhouse.

Thanks to all those who came, and especially to those who helped close it down.

Upcoming IP Seminar in Norwalk, CT

I will be hosting a seminar at The Brewhouse Restaurant - 13 Marshall Street, Norwalk, CT, Thursday, February 2, 2012, 6:00 PM – 7:30 PM

The program is entitled:

12 for 2012: 12 Things Every Business Needs To Know About IP This Year -

12 key factors to consider in your IP strategy for 2012. Summarized in 12 slides within 48 minutes, with a 12 minute Q&A.

Complimentary cocktails and hors d'oeuvres.

Topics will include:

The impact of the America Invents Act on IP Strategy;

The advantages and disadvantages of IP licenses and sales;

How to adapt to 2011 case law hostile to rights owners;

The powerful branding trick used by the world’s most successful brand owners;

The real reason copyright registration is important; and

What to expect now that SOPA is dead.

If you are interested, please register at :www.foxrothschild.com/events/eventDetail.aspx

I look forward to seeing everyone there.

 

 

POST-LICENSE USE OF TRADEMARK IS COUNTERFEITING

A former trademark licensee’s continued use of a trademark after termination of the license constitutes trademark counterfeiting. That is the holding in a recent District of Indiana default judgment case, Century 21 v. Destiny Real Estate. The court explained:

If an unrelated entity had created an identical trademark and provided authorized goods or services (or the kind provided by the owner of the mark) under that mark, there would be no question that there was counterfeiting. The Court can conceive of no reason why an ex-franchisee should escape liability for counterfeiting simply because that person had access to a franchisor’s original marks because of the former relationship and therefore did not need to reproduce an identical or substantially similar mark.

Other courts have come to differing conclusions on this issues, in various contexts. In a 1997 case, the 6th Circuit held that a franchisee’s holdover use of a trademark was not counterfeiting. The 9th Circuit held that the licensee’s holdover was counterfeiting in a 2005 case involving continuing use of the Idaho potato certification mark.

The significance is that pursuant to 15 U.S.C. § 1117(b), if he is found to be a counterfeiter, the former licensee can be liable for statutory damages(up to $2 million in cases of willful counterfeiting), and will be liable for three times profits or damages, whichever amount is greater, together with a reasonable attorney’s fee unless the court finds “extenuating circumstances.” If he is merely an infringer, statutory damages are not available and treble damages and attorneys’ fees are less certain to be awarded. They may be awarded “subject to the principles of equity.”

The Century 21 court’s damage, injunction and individual liability analyses also are noteworthy. Century 21 sought its actual damages plus treble damages. The court held that such an amount would be quadruple, rather than treble damages, one multiple too many. The court further reduced the award to two times damages, on the ground that the liquidated damages provided for in the license agreement and awarded by the Court coincided with the actual damages, and therefore to awarded treble damages in addition would again result in quadruple recovery.

On a cheerful note for trademark owners, the Court granted a permanent injunction, finding that “the injury especially justifying injunctive relief is the loss of control over and harm to its valuable name and trademark, in which it has invested substantial effort and money over time to develop goodwill.” If that is going to suffice under Ebay, trademark owners may not need to be as concerned that injunctions against infringers will be harder to come by.

The court declined to impose liability on Destiny Real Estate’s principal. After surveying the law on individual liability for corporate trademark infringement, the Court found that Century 21’s allegations that the individual was President of the company and authorized or approved of the misconduct were not sufficient bases to hold the individual liable for the corporation’s infringement.
 

TAMING THE E-DISCOVERY BEAST

The Federal Circuit’s proposed Model Order on E-Discovery offers a number of good suggestions that should help reduce the burden of electronic discovery in patent cases, and some that merit further consideration and debate. Among the best ideas are the following three:

1. Requiring separate requests for email, rather than permitting email to be included in requests such as “all documents and electronic information” (¶6). This will sharpen the focus on just what types of email communications are relevant. We should consider whether all types of electronic information should be requested separately, and indeed whether to require that specific types of “documents” (correspondence, memoranda, drawings, etc.) should be specifically requested rather than encompassed with omnibus terms.

2. Limiting the metadata parties are required to produce to that revealing times of sending and receipt and the distribution list (¶5). There are times when creation and edit dates are important, so perhaps that also should be included. Most other metadata is typically irrelevant.

3. Presumptive limits of 5 custodians and 5 search terms (¶¶ 10-11). Those limits obviously will not be suitable in all cases, but at least we have a low-number starting point. The suggestions about how to treat conjunctive and disjunctive combinations of terms, and encouragement of the use of narrowing search criteria, are excellent.

Three ideas that merit more careful thought are:

1. The blanket exemption of disclosures of privileged esi from the usual rules concerning waiver, and prohibition on use of allegedly privileged material to challenge the privilege (¶¶ 12-14). One might consider whether we should go that far. Exclusion of material based on privilege is an obstacle to the discovery of truth, and examination of the privileged material itself is the best way to see if it should be privileged. Particularly since the model rules require that requests specify custodians and search terms and limit data to senders and recipients, it should be easier to identify privileged materials and therefore we may not need to be so tolerant of inadvertent disclosures.

2. The extent to which the proposed rules rely on cooperation among counsel (¶¶ 2, 9-11). Not all patent litigants and litigators are particularly cooperative, and one might argue that we are better off just ringing the bell and allowing the parties to come out fighting rather than asking them to make nice first. The idea that parties will jointly agree to modify presumptive limits strikes me as fantastic. One side or another will always think it is in its interest to have less discovery rather than more and vice versa.

3. The decision not mandate initial disclosure of basic documentation about the patents, prior art, accused products and relevant finances (¶ 8). Why not?

The premise and impetus for the proposed model rules cannot be disputed. Far reaching electronic discovery can be tangential to the real issues in a patent case, and collecting volumes of electronic data with the idea that one will run key searches later is expensive and inefficient. The proposed model rules for patent litigation offer possible ways to address those concerns that merit serious examination, not just for patent cases, but for all intellectual property cases.
 

THE CASE FOR SOFTWARE VERSIONS, REGISTRATIONS AND RECORD-KEEPING

A recent case from the First Circuit underlines the utility, from a copyright perspective, of delineating versions of software, registering each version, and keeping copies. That is not always so easily done, because unlike other copyrightable works, such as a novel, software is never “done.” There is always another bug to fix, feature to add or compatibility issue to address. But to effectively employ copyright protection, it is a necessity.

The concern is proof. In order to prove infringement, the copyright owner must first prove what it is that is copyrighted, and that a copyrighted work was registered. That is generally simple enough, but with an evolving work, such as software, it becomes less so. That was the case in Airframe Systems v. L-3 Communications. In that case, Airframe accused L-3 of unauthorized copying of its software between 1997 and 2003.

The court’s opinion reports that Airframe had some pretty damning evidence, particularly a comment in the L-3 code that said “I do not know what this code is used for so I will leave it here anyway.” The problem was, Airframe did not have a copy of the software as it existed in those years and hadn’t registered a version during those years. Airframe attempted to prove infringement by comparing the L-3 code to an updated version of the Airframe software from 2009. The court held that without a copyright registration for the software as it existed during the years in question, and without a way of proving exactly which portions of the 2009 code were present in the version L-3 was accused of copying, Airframe could not prove infringement. The opinion reviews a number of cases in which copyright claims failed because of the plaintiff’s inability to prove the contents of the work allegedly infringed, and discuss the applicability of the best evidence rule in this context.

It seems that Airframe may not have registered any version of its software between 1988 and 2003. That is too long. Software developers and makers of other evolving works should anticipate the need to prove the state of their products at different times and take and register “snapshots” that will enable them to prevail when infringements come to light.
 

COPYRIGHT IDEA/EXPRESSION: TOWARD A BRIGHTER LINE?

A recent decision from the District of Connecticut in Scholz Design v. Sard Custom Homes holds that for architect to sue successfully for infringement of his drawing, the copied drawing must convey sufficient information to allow construction of the building depicted. In Scholz Design Because the allegedly copied drawings were not sufficiently detailed to enable one to construct a building using them, the court dismissed the copyright claims.

Of all the tricky issues in copyright law, one of the trickiest is distinguishing between idea and expression. Copyright law prohibits copying the expression but permits copying the idea. Determining where to draw the line between the two often involves a close judgment call. The Scholz Design decision arguably makes the call easier in the context of architectural works, because it offers a clear standard: information sufficient to allow construction. Copyright jurisprudence has, however, generally rejected such strict rules. It remains to be seen whether the Scholz Design decision signals a shift in the paradigm.
 

COPYRIGHT - DAMAGES BETTER, INJUNCTIONS WORSE

Copyright litigants would be wise to focus early on available infringement remedies in light of recent decisions. Following the Supreme Court decision in Ebay v. MercExchange and the Second Circuit Decision in the Salinger v. Colting case, litigants need to plan that they will need to prove irreparable injury to get an injunction, the presumption of irreparable harm is no longer available. That could make injunctions tougher to get in some cases. At the same time, litigants should plan that pre-judgment interest, dating back to the beginning of the infringement, is available based on the Third Circuit's recent decision in the Haughey case. Pre-judgment interest could significantly increase damages in certain cases.  So it might be harder to make 'em stop, but you might make 'em pay more.
 

PATENT LITIGATION GETS EVEN HARDER FOR PATENTEES

Although indisputably correct, the Federal Circuit ruling earlier this year that patentees could not rely on the “25% rule” in calculating damages can only serve to increase billings for experts and litigators, and raise costs for patentees. The 25% rule was an accepted “rule of thumb” that a reasonable patent license fee would typically be 25% of the profits earned from sales of the infringing product. In situations where damages were difficult to quantify, and comparable license fee figures were not available, patentees would use the 25% rule as a basis for their money demand. So long as courts accepted that, patentees could sometimes avoid the extremely difficult, if not actually impossible task of quantifying damage when good data was not available.

The Federal Circuit in Uniloc v. Microsoft exposed the absence of sufficient statistical foundation for the 25% percent rule in most situations. Moreover, the court explained that even if the rule had statistical validity, courts should not make damage awards based on results in other circumstances. The court’s message to patentees is that they will not be permitted to cut corners on their damage proof; to prove damages patentees are going to have to do the often extremely hard work.

That, of course, will lead to more hours billed by experts and litigators. Experts to dig for more data and create defendable formulae. Litigators to argue over whether the experts have done it successfully. Although intellectually correct, rejection of the 25% rule further increases the expense of patent litigation and further cements its inaccessibility to many individuals and small businesses.
 

WE HAVE AN INJUNCTION, WHY CAN'T WE GET CONTEMPT?

It is not always the case that once a court issues an injunction prohibiting further patent infringement , any further infringement will be punishable by contempt. That is often a disappointment for patent owners, but the recent Federal Circuit en banc opinion in Tivo v. Echostar explains how this can occur.

A two part inquiry is required to determine whether the enjoined party may be found in contempt. The first question is whether there are “colorable differences” between the enjoined product and the re-designed product. The crucial question for determining whether there are colorable differences is: what are the differences between the features relied on to determine infringement and the modified features? If the differences are “colorable” or “significant” there can be no contempt, even if the re-design still infringes the patent. If, on the other hand, any differences are not colorable, the court must then determine whether the re-design infringes the patent. The enjoined party should be held in contempt only if the differences are non-colorable and the re-design infringes.

On a motion for contempt, the patentee bears the burden of proving both the absence of colorable differences and the continuing infringement by clear and convincing evidence. It is no defense, however, that the enjoined party did not intend to violate the injunction, although the court may in its discretion consider diligence and good-faith efforts for purposes of mitigating the punishment.

The Court rejected Echostar’s argument that it should not be held in contempt because the injunction was vague and overbroad. The Court emphasized that the time to challenge the clarity of the injunction is when it issues; a party cannot act first and then complain about ambiguity or breadth when it is caught.
 

DON'T COUNT ON GETTING ATTORNEYS' FEES IN PATENT CASES

It isn’t easy to recover attorneys’ fees from one’s adversary in patent cases, and it does not happen often. In the American system overall, the presumption is that each side pays its own attorneys’ fees. Patent cases are not really an exception, notwithstanding the fact that the Patent Law, 35 U.S.C. § 285, grants the court discretion to award attorneys’ fees in “exceptional cases.”

In two recent cases, Old Reliable Wholesale v. Cornell Corp. and iLOR v. Google, the Federal Circuit reiterated that the exceptional case standard is an “exacting” one. Absent misconduct in the course of the litigation or in securing the patent, sanctions may be imposed against the patentee only if both (1) the litigation is brought in subjective bad faith, and (2) the litigation is objectively baseless.” Brooks Furniture Mfg., Inc. v. Dutailer Int’l, Inc., 393 F.3d 1378, 1381 (Fed Cir. 2005).

Patent litigants are sometimes seduced by the prospect of recovering attorney’s fees, and sometimes threaten to seek fees in an effort to intimidate their opponents. But in patent litigation the costs and the stakes will inevitably be high for both sides, and it is more likely than not that the parties will bear their own costs.
 

A FUN COPYRIGHT CASE TO LITIGATE

Does the new Olympic logo for the Rio de Janiero games infringe on one used by The Telluride Foundation? There was a story by Chris Chase on Yahoo! Sports yesterday comparing the two logos and also a painting by Matisse that has similarities to both.  If this one ends up in litigation it could be very interesting.

The works involved are below, Olympic logo first, followed by the Telluride logo and then the Matisse painting.  I think we can safely assume Matisse didn't copy from the other two, but what about the Telluride logo?  Is it based on Matisse?  Is the Rio Olympic logo more likely copied from Matisse or Telluride or neither?  What do you think?

Rio Olympic Logo

 


 

Foreign Company Liable for U.S. Infringement Despite Shipping F.O.B.

For purposes of determining whether U.S. copyright law applies to sales of infringing goods to Unites States customers, the method of shipping is irrelevant. That is the holding in recent decision from the Northern District of Illinois in Zimnicki v. General Foam Plastics and Nixan Int’l.

Some readers of this blog may remember the difference between a contract that provides for delivery to a shipper “Free On Board” or “FOB” and delivery "Delivery Ex Ship" or "DES."  When goods are delivered FOB, title passes to the purchaser when the seller delivers them to the shipper at the port of departure, and the purchaser bears the risk of loss thereafter. In a DES contract, the risk of loss remains with the seller until the goods are actually delivered to the buyer at the port of arrival.  Perhaps the best news about the Zimnicki decision is that copyright lawyers can forget all this.

In Zimnicki, the copyright owner brought suit for violation of U.S. copyright against the both the U.S. distributor, General Foam, and the overseas manufacturer, Nixan. Nixan received the order in Hong Kong, manufactured the goods in Hong Kong, and then shipped them to Yantian China, where General Foam’s shipper shipped them FOB to General Foam in the U.S.  Nixan argued that it could not be liable for U.S. infringement because its only activity was in China, where title passed when the goods were shipped F.O.B.

The court rejected that defense, declining the invitation to exalt form over substance for fear that it would “encourage gamesmanship." The court held that the sale and delivery to the U.S. took place in one seamless transaction and constituted a distribution by sale in the U.S., regardless of whether title passed F.O.B.
 

Dead and Buried

LimeWire died this week. Enjoined out of existence like Napster, Grokster and Aimster before it. Its legacy is that it helped fuel contempt for the copyright law in a substantial segment of the population.

 Here’s what you will see if you go to the LimeWire site.

Legal Notice
This is an official notice that LimeWire is under a court-ordered injunction to stop distributing and supporting its file-sharing software. Downloading or sharing copyrighted content without authorization is illegal.


Good.
 

No Secrets in IP Litigation

One of the things that seems to surprise and offend many IP litigants is the invasiveness of discovery under the Federal Rules of Civil Procedure. Parties often are surprised to learn how much they must disclose about their business in discovery. Understandably, they are offended when their adversary is given the opportunity to inspect sensitive business information, particularly product development and financial information.

Agreed upon protective orders often provide a measure of comfort by limiting the number of people who will have access to the disclosed information, but they are a double edged sword. Once a protective order is in place, one can almost guarantee that arguments that disclosure of possibly relevant evidence should not occur because of the secrecy of the material will fail.

A recent opinion that illustrates the point comes from a patent case in the Northern District of Illinois, Jab Distributors v. London Luxury. Jab sought discovery of London Luxury’s sales and financial information pertaining to the allegedly infringing product. London Luxury opposed production of such information generated prior to the time Jab began marking its product with the patent number, on the ground that such information was irrelevant because London Luxury could not recover damages prior to marking, and on ground that disclosure to a competitor would be harmful.

The court required production. It found that the profitability of the infringing product pre-marking would inform the calculation of a reasonable license fee (a measure of damages), and also relevant to the alleged obviousness of the patent. The Court rejected London Luxury’s argument that disclosure would be inappropriate because the information in question was the subject of a confidentiality agreement with a third party, and held that the protective order, which included an “attorneys eyes only” provision, provided adequate safeguards against disclosure of sensitive information to a competitor. The court noted that London Luxury offered only attorney argument and failed to submit sworn declarations or affidavits explaining the need for secrecy.

The take-away here is that parties involved in litigation should be aware of the presumptive expansiveness of federal court discovery, and that they will be fighting a steep uphill battles to keep even sensitive competitive information from their adversaries. If there is information that should not be disclosed, parties should first determine whether a suitable protective order can provide adequate protection. If so, more often than not courts are receptive to those. If not, parties should prepare early to resist disclosure and provide the best possible admissible evidence of the need for secrecy, but be aware that the odds are against them.
 

Delete the Musicologists

Interesting work going on at NYU’s Music and Audio Research Laboratory. They’ve developed software that graphs the various elements of a musical recording and then can compare each to any other recording. They’re working with NYU’s library to add the NYU collection to the musical database. There already is other software available that is capable of comparing digital audio files to determine if one sound recording is identical to another (useful in sampling and file sharing cases).

Until recently if one wanted to make this type of comparison, one would need to engage a human musicologist to perform a similar analysis, often using a privately assembled database to identify similarities among prior art. The tremendous potential utility of this software for music plagiarism litigation is obvious. Soon, our musicologists may be more statisticians than musicians.

How Fast Can I Sue?

If one discovers infringement of an unregistered copyrighted work, one needs to consider the forum of the potential infringement litigation to determine whether one can sue immediately after the Copyright Office receives the completed application, or must wait for the certificate to issue before suing.  The implications are obvious, particularly for one who wants to seek a TRO or preliminary injunction.

In Cosmetic ideas v. IAC/InteractiveCorp, the Ninth Circuit weighed in on whether the pre-litigation registration requirement in Section 411 of the Copyright Law requires that the Copyright Office actually register a work before one can sue for infringement, or it is sufficient for the completed application to have been received by the Copyright Office.  Courts have been split on this issue.  The Ninth Circuit opinion lists the courts in each camp.  Notably the Fifth and Seventh Circuits have held that submission of the application is sufficient, and the Tenth and Eleventh Circuits require issuance of the registration certificate. The Ninth Circuit held that submission of a completed application is all that is required.

Where this is likely to matter is in cases involving what one might call non-monetized copyrighted works, works that generally earn the author no direct revenue and therefore generally go unregistered, like this blog or maybe a sales brochure, flyer, catalog or Web page. It may not be worthwhile to register those as a matter of course, but if a competitor copies any of them, one might want to sue. 

A Faster End to Frivolous Copyright Infringement Cases?

Defendants in copyright infringement cases may find comfort in the Second Circuit’s recent decision in Peter F. Gaito Architecture v. Simone Development Corp. The Second Circuit blessed what has become an increasingly common practice in the Southern District of New York: that of dismissing copyright infringement cases in which the works are obviously dissimilar at the pleading stage, rather than requiring a trial or motion for summary judgment.

The case involved alleged infringement of an architectural design. The Second Circuit affirmed the district court’s decision dismissing the case based on the court’s comparison of the two works at issue, holding that such dismissal was proper because the absence of similarities in copyright protected elements made it impossible for the plaintiff to allege “substantial similarity” between the two.

Notwithstanding prior case law endorsing this approach, comparison of the works at issue on a motion to dismiss previously seemed to be of questionable legitimacy. The Second Circuit itself acknowledged that the question of substantial similarity is inescapably a question of fact. As a result, even where the case for infringement seemed weak, it seemed the more prudent course for defendants to answer the complaint and then seek summary judgment rather than moving to dismiss under Rule 12(b)(6).

Now, defense counsel should consider very seriously moving to dismiss immediately. The potential litigation cost savings for defendants could be significant. Inevitably, on the other hand, the process will be abused and defendants in cases that really do pose issues of fact will make frivolous motions to dismiss.

An odd aspect of the decision is the district court’s finding, repeated by the Court of Appeals, that certain of the similarities identified by the plaintiff concerned “generalized concepts and ideas that are common to countless other high-rise residential developments.” It is unquestionably proper to exclude ideas from the comparison because they are not protected by copyright, but then it should not matter whether such ideas are common. So why the reference to commonality? And how would one know at the pleading stage, and without expert testimony whether certain elements are “common to countless other high-rise residential developments?” A judge living in New York City may have significant exposure to urban architecture, but the determination of commonality would seem to require evidentiary support.
 

Design Patent Infringement- No Experts Please

There is some concern about a recent decision from the Southern District of Ohio in which the court, with little evidentiary analysis, relied on an expert opinion to bolster its own analysis that summary judgment should not be granted for the defendant because a jury could find infringement. Fortunately, a better view, that expert opinion should not be permitted on the issue of infringement, has been expressed in two other recent cases.

The test for determining infringement in design patent cases is the “ordinary observer” test, from the decision of the Supreme Court in Gorham Co. v. White 81 U.S. 511 (1871), more recently vindicated by the Federal Circuit in Egyptian Goddess v. Swisa, 543 F.3d 665 (Fed. Cir. 2008). The test as written by the Supreme Court is “if in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantial the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.”

The Ohio court accepted the expert’s opinion that the ordinary observer would be deceived. That raises the obvious question “how could the expert know what an ordinary observer would think? He couldn't. That’s why the courts in HR U.S. LLC v. Mizco Int’l and Chef’n Corp. v. Trudeua Corp. excluded such testimony.

Excluding testimony concerning the ordinary observer test is consistent with the way similar issues are treated in copyright and trademark law. In copyright cases, expert testimony is not permitted on the issue of whether an ordinary observer would find the works in question “substantially similar.” Nor do we permit expert opinions concerning the “likelihood of confusion” of the typical consumer in trademark cases; we permit only surveys of actual consumers.


 

Think Before You Sue For Infringement of Marketing Materials

Copyright can be a effective tool for preventing competitors from copying a business’ marketing materials. Before asserting a copyright infringement claim, however, one should thoroughly understand the limits of what can be achieved in litigation, and the possible costs. Each year, when preparing the update for Substantial Similarity in Copyright Law, I am struck by the number of cases involving catalogs or brochures that seem to waste resources that could be better invested in improving the product or promoting it more effectively.

Damages caused by the copying of marketing materials are difficult to prove. Businesses typically generate their profits from sales of the products and services promoted, not from the marketing materials themselves. Tying any particular product sales, or lost sales, to such materials is often difficult. Whether one may recover attorneys' fees is a matter of the court's discretion, and by no means a certainty. That often leaves statutory damages as the only means of recovery. Statutory damages are limited to $150,000 even in the case of willful infringement ($30,000 in cases where deliberate copying cannot be proved). That may seem like a significant sum, but when one factors in the cost of legal services, and the cost of company employee time and effort, the result may be only a Pyrrhic victory.

In most cases, the defendant challenges the plaintiff’s copyright, alleging that the material lacks sufficient originality to be copyrightable, or was itself copied from other materials. Such a challenge can immediately put the copyright owner on the defensive, and require efforts from those involved in creating the materials to prove originality, disruptions the plaintiff may not have considered at the outset.

Some of the questions one should ask before bringing a claim for copyright infringement of marketing materials, in addition to the likelihood of success and the likely cost are: How much of the motivation for bringing the suit is real damage, as opposed to insult? Who can better withstand the cost and disruption of litigation? And, is it worth it if the recovery is less than the cost of litigation?
 

Connecticut Unfair Trade Practices Preempted

Connecticut, like many other states, decades ago enacted a "mini-FTC" Act, modeled after the federal law, 15 U.S.C. § 45(a)(1), prohibiting unfair trade practices. The Connecticut version is the Connecticut Unfair Trade Practices Act ("CUTPA"). Most states that have enacted such laws have either in the statutes themselves or in case law, narrowed their applicability to discourage unfair trade practice claims in ordinary business disputes. In Connecticut…not so much. As David Belt discussed in a Connecticut Bar Journal article roughly a year ago, assertion of CUTPA claims is commonplace in business litigation in Connecticut, and Connecticut seems to have more litigation by far concerning its state unfair practice laws than any other state in the country. CUTPA is particularly attractive to plaintiffs because it permits recovery of punitive damages and attorneys’ fees.

Recent cases remind us, however, that the preemption provisions of the Copyright Law and judicial interpretation of Article 4 of the Constitution with respect to the Patent Law restrict CUTPA claims in the intellectual property arena. The garden-variety patent or copyright infringement case (to the extent there is such a thing) cannot be asserted as a CUTPA claim. In a case decided this past October, RCE Nice Bearings v. Peer Bearing Company, Judge Vanessa Bryant of the District of Connecticut dismissed the plaintiff’s CUTPA claim insofar as it relied on accusations of wrongdoing pertaining to copyright infringement. Also this fall, Judge Stefan Underhill of the District of Connecticut dismissed, without prejudice, a CUTPA claim that he found did not include sufficient allegations beyond those necessary to prove patent infringement.

Unlike the copyright and patent laws, the federal trademark and unfair competition laws do not preempt state law claims based on similar facts.  Connecticut plaintiffs in trademark infringement cases can continue to include CUTPA counts in their complaints.  Diageo (maker of Johnny Walker Black Label) did that in a complaint it filed recently against the makers of the Johnny Barker Black Label product for dogs.

Courts have discretion in copyright and patent cases to award attorneys’ fees and increase damages. Before one asserts a CUTPA or other state unfair trade practices claim in a copyright or patent infringement case, one should expect that a motion to dismiss is possible.  One should weigh the likelihood and potential benefits of additional recovery of punitive damages and attorneys’ fees under CUTPA, against the potential costs and delays of such a motion.