Thursday, February 18, 2016

Uber in Gainesville? Not So Fast...

This will be my first post on a case from outside the Middle District of Florida, but instead comes from the Northern District.  I'll let the Judge provide the intro:
You live in Gainesville and need to book a party bus, or perhaps a non-party bus or a limo to take a number of people to an event. You run a Google search for “Gainesville party bus” and, not satisfied with any of the offerings on page one of the results, turn to page two. There is a listing there for “Uber Promotions.” Thinking that perhaps this is somehow affiliated with Uber, a nationally known taxi-like service that has recently come to town, you click on the link. You are taken to a webpage with a bright green and purple “├╝ber PROMOTIONS” logo. The crux of this trademark infringement case is (roughly speaking) whether you could reasonably conclude that Uber Promotions and Uber the taxi- like service are in some way connected. 
This case pits a Gainesville, Florida company (Uber Promotions, Inc.) ("Promotions") against the nationally known Uber Technologies, Inc. ("Tech"), an on-demand car service.   Tech began in a few cities, but has exponentially expanded over the last few years.  Tech's first foray into Florida was in Tampa [ed - thus the Middle District of Florida connection!] during the Republican National Convention in 2012.  

Promotions has been operating in Gainesville since 2006. Concerned that the junior user (Tech) was encroaching into its space in Gainesville, Promotions filed suit seeking a preliminary injunction to prevent Tech from operating in Gainesville.  This is an interesting case for showing a senior user relying on common law rights in a particular geographic area to fend off or stop a junior user relying on federal trademark rights (and the respective zones of natural expansion of the two rights holders).  The Court described the respective sizes of the companies in colorful language:
Elephants don't look out for gerbils when they plow through the bush.
Apparently Tech has unveiled a new service, called UberEVENTS, that allows you to purchase a ride for others that can be used at a particular time in the future.   It was this new service that the Court decided was preventable (at least pending trial), as a broader injunction seeking to stop Uber altogether in Gainesville was too broad.  Again, the Court used useful prose:
Arming Squirrels with Bazookas
The Court addressed the preliminary injunction factors and ultimately concluded that a narrow  injunction was proper to requiring Tech to:
  • stop using the UBER mark (or any variant thereof) in connection with the UberEVENTS service in the Gainesville market (Alachua County) until further notice
  • not advertise the UberEVENTS service in Alachua County or cause it to be advertised in Alachua County until further notice.  A posting promoting UberEVENTS placed on the Facebook wall or page of an entity with its principal place of business in Alachua County is an advertisement.  A posting promoting UberEVENTS placed on the Facebook wall or page of a real person whose usual place of abode or residence is in Alachua County is an advertisement.
  • ensure that if a person attempts to book an event in Alachua County through the UberEVENTS webpage, that booking is not allowed to be completed.
  • set up a 352-area-code phone number to handle phone calls
  • make sure that internet searches for the phrase "Uber Gainesville phone" or "Uber Gainesville phone number" returns Defendant's 352-area-code number along with words clearly indicating that the results are clearly Defendants
(The injunction further required Tech to buy Google AdWords (or similar products) if necessarily to accomplish the injunction search result obligations.)  

I'm certain this case is far from done.  Stay tuned...


Monday, February 15, 2016

Is The Relative Emphasis in Marketing Materials of the Accused Technology a Reliable Basis for Apportioning Damages?

No.

Omega Patents has sued CalAmp for infringement of a number of patents relating to vehicle control systems.  CalAmp offered expert opinion explaining the amount of certain damages that should be at risk.  Specifically, CalAmp's expert began his damages calculation by first determining profits for sales of the accused devices.  But the accused devices included a number of features, only some of which are alleged to infringe the patents.  So the expert attempted to allocate the amount of this profit that was attributable to the patented features.  The Court described this allocation methodology:
Here, Dr. McDuff analyzed two of CalAmp's marketing brochures to conduct a word count of certain key words and phrases.  He describes the methodology as follows:  "Next, I apportion to the contribution of the accused functionality as alleged to be commercialized within [the accused products].  I utilize the relative marketing emphasis of various phrases relating to the contributions of the accused data bus and vehicle tracker functionalities."  Explained more simply, Dr. McDuff counted the total words in certain sections of the marketing brochures and then selected certain words which related to the accused patents.  He then counted the number of chosen words and calculated the proportion of these words to all words to assign a value to solely the patented features in the Accused Devices.
Needless to say, Omega objected to this novel approach. And the Court did not allow it:
Neither Dr. McDuff nor CalAmp has been able to point the Court to this type of methodology being accepted by or even utilized by other courts or experts in this field.  Dr. McDuff himself acknowledged that there was no way to calculate an error rate using this methodology.  
The Court went on to exclude this testimony as unreliable.

The decision also provides interesting analysis on attempts to use expert reports and testimony to alter or adjust claim construction positions after Markman determinations.  For example, CalAmp's invalidity opinion analyzed fifteen references as supporting its invalidity positions.  But the report also included the following:
In addition to the references discussed above, I also considered a number of additional prior art references that also disclosed the elements claimed by Omega's patents.  For reasons of brevity, they were not included in the detailed discussion which follows.  However, it is my opinion that these references also disclose all of the elements of each asserted claim of the Omega patents, and could be used alone, in combination with themselves, or in combination with references disclosed above to show additional reasons why the asserted Omega patents are not valid in view of the prior art.
Omega asked to exclude these additional opinions.  The Court obliged:
The Court finds the violation of Rule 26, as it pertains to the ten prior art references identified in Mr. Andrews' report, to have resulted in substantial prejudice to Omega such that the only proper remedy at this late date is the exclusion of Exhibits 24 through 33 along with the testimony relating to how the prior art references relate to Mr. Andrews' opinions.
Motion to Exclude Expert Testimony, Granted in Part and Denied in Part.  Motion to Exclude Damages Testimony, Granted.

Omega Patents, LLC v. Calamp Corp., Case No. 6:13-CV-1950 (M.D. Fla. Dec. 23, 2015) (J. Byron)




Thursday, February 4, 2016

Does a Patent Plaintiff's Unsuccessful Belief That It Can Enforce A Patent Render A Case Exception?

No.

Sweepstakes Patent Company ("SPC") acquired a license to use U.S. Patent 5,569,082 in certain fields.  SPC later sued a number of defendants for infringement.  But the license agreement provided:
[Patent Owner - not SPC the licensee] shall, in its absolute discretion, instittute or not institute proceedings or defend or not defend proceedings ... as [it] shall deem fit, provided, however, where [Patent Owner] decides not to institute or defend any proceedings, it shall advise [SPC] of same and in such circumstance, [SPC] shall have the right at its own cost and expense, to institute or defend such proceeding. ...
* * * 
Subject to the foregoing, neither the Licensee nor any sublicensee shall under any circumstances whatsoever, institute or respond to ay claim or legal proceeding of any third party relating to the Inventions or any of the Patents without first obtaining the prior written consent of the [Patent Owner] 
SPC did not receive Patent Owner's written permission to file the lawsuit, and thus did not have standing to assert a patent infringement claim.  The Court dismissed the claim on that ground.  Defendants also pursued a motion to sanction SPC on this theory.  That sanction motion was denied, as the Court found that SPC made "colorable arguments" on the issue.

Defendants (after appellate confirmation of the dismissal) attempted to recover their fees by asking the Court to find the case exceptional pursuant to 35 U.S.C. § 285.  The Court presented the law:

A district court may award attorney’s fees pursuant to § 285 of the Patent Act. 35 U.S.C. § 285; Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S.Ct 1749, 1753 (2014). According to that provision, “[t]he court in exceptional cases may award reasonable attorney’s fees to the prevailing party.” Id. The Supreme Court’s holding in Octane Fitness makes clear that § 285 imposes only one restriction on the imposition of attorney’s fees: “that the power is reserved for exceptional cases.” Octane Fitness, 134 S.Ct at 1756. The Supreme Court clarified that “exceptional” is defined according to its ordinary meaning, as one that “stands out from others with respect to the substantive strength of a party’s litigating position . . . , or the unreasonable manner in which the case was litigated.” Id. The court may, in the exercise of its discretion, consider the totality of the circumstances and make a case-by-case determination. Id. District courts may look to a “nonexclusive” set of factors, including “frivolousness, motivation, objective unreasonableness . . . or the unreasonable manner in which the case was litigated. NXP B.V. v. Blackberry, Ltd., 58 F. Supp. 3d 1313, 1317 (M.D. Fla. 2014). The party moving for an award of attorney’s fees must demonstrate by a preponderance of the evidence that the case is “exceptional.” Id. A case is not exceptional merely because a party has a good faith belief that there is standing to sue but is ultimately incorrect. Clouding IP, LLC v. EMC Corp., No. 13-1355-LPS, 2015 WL 5766872, at *2 (D. Del. Sept. 30, 2015). The focus is the “substantive strength of the party’s litigating position . . . , not the correctness or eventual success of that position.” See SFA Sys., LLC v. Newegg, Inc., 793 F.3d 1344, 1348 (Fed. Cir. 2015)
The Court then analyzed (and rejected) Defendants' arguments that SPC's claims were so weak as to warrant an exceptional case finding:
The undersigned Judge agrees with the Magistrate Judge that Clouding IP stands for the proposition that an ultimately unsuccessful belief as to standing that is brought in good faith does not render a case exceptional.  In the present case, the Court has not found that SPC had any improper motivations other than a good faith, but ultimately incorrect, argument that it had standing based on its interpretation of the License Agreement.
Renewed Motion for Attorneys' Fees, denied.

Sweepstakes Patent Co. v. Chase Burns, Case No. 6:14-cv-151 (M.D. Fla. Feb. 2, 2016) (J. Conway)