1st Cir. TM injunction case: eBay 4-factor test generally applies, but acquiescence and delay dispositive

In a fact-specific decision, the First Circuit recently held that eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006)—which confirmed that the traditional 4-factor injunction test applies to patent cases—also applies to trademark cases. But the circuit court declined to rule specifically whether eBay eliminates the familiar “presumption of irreparable harm” that automatically flows from a showing of trademark infringement.

The basis the court used to sidestep this precise issue was that the record showed that any such presumption was overcome by the movant’s delay and acquiescence. The court also touched on progressive encroachment without actually calling it that, rejecting the movant’s progressive encroachment argument by holding that the nonmovant’s recent changes were “not sufficiently qualitatively different” from the harm flowing from the prior infringement.

The case is Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc., No. 10-1396 (1st Cir. May 27, 2011).

3d Circuit: For waiver of privilege, timing makes a difference

If a third party is present during an otherwise privileged communication, the privilege is waived, right? Not exactly, said the Third Circuit today. If a third party is present when the privileged communication is made, the privilege doesn’t attach at all. That’s different from a true waiver situation where a communication that is privileged when made is later disclosed to a third party.

This distinction makes a practical difference when the party asserting waiver wants to see documents beyond the initial communication(s) via a “scope of waiver” argument. If the initial communication(s) was not privileged when made, then there could be no waiver and consequently no opportunity to seek other privileged communications on the subject via a “scope of waiver” argument. The party asserting waiver gets only the initial communication(s).

The case is In re Application of Chevron Corp., No. 10-4699 (3d Cir. May 25, 2011), and the initial communications at issue were made in the presence of filmmakers who were—at the behest of the plaintiffs’ lawyers—shooting a movie of a notorious Ecuadorian environmental case against Chevron (while the case was going on).

2d Cir. decision about injunction bonds, attorneys' fees, and the presumption of recovery

The Second Circuit today decided that a wrongfully enjoined party (1) is entitled to a “rebuttable presumption in favor of recovery . . . for provable damages” against a FRCP 65(c) injunction bond; and (2) such damages may include attorneys’ fees if they were fees that were “incurred in complying with the injunction.” (emphasis added).

As to the “presumption,” the Second Circuit indicated that the presumption attaches only after “the wrongfully enjoined party . . . first demonstrate[s] that the damages sought were proximately caused by the wrongful injunction” and “properly substantiate[s] the damages sought.” (This doesn’t seem to me to be much of a presumption, since it sounds a lot like what any injured party in any case needs to prove to obtain damages.)

The case is Nokia Corp. v. InterDigital, Inc., No. 10-1358 (2d Cir. May 23, 2011).

For those interested, the injunction—which was later vacated and therefore “wrongful”—required InterDigital to stay or terminate its ITC proceeding against Nokia and another company as to Nokia, based on an alleged arbitration agreement between InterDigital and Nokia. So instead of one ITC proceeding, InterDigital for a while had to arbitrate against Nokia while it litigated an ITC proceeding against the other company. InterDigital later claimed that it incurred substantial attorneys’ fees staying the ITC proceeding as to Nokia and having to incur duplicative fees and expenses litigating its claims against Nokia and the other company in two different forums.

3d Cir: Copyright Act permits prejudgment interest in disgorgement of profits cases

Prejudgment interest is normally associated with making an injured party whole by providing interest on monetary awards for past damages. In William A. Graham Co. v. Haughey, No. 10-2762 (3d Cir. May 16, 2011), the Third Circuit permitted prejudgment interest to be added to an award of the infringer’s profits as well, even where no damages were sought. The Court noted that: (1) nothing in the Copyright Act prohibits prejudgment interest on a disgorgement award; and (2) prejudgment interest and disgorgement serve the same interests (making the claimant whole and preventing unjust enrichment).

7th Circuit/Judge Easterbrook trademark decision on quality control/naked licensing/abandonment

Eva's Bridal Ltd. v. Halanick Enterprises, Inc., No. 10-2863 (7th Cir. May 10, 2011) contains a short but interesting discussion by Judge Easterbrook about the proper way to look at "quality control." The mark owner trusted the licensee and felt confident he was maintaining high standards, but the agreement between the parties contained no quality control provisions whatsoever and the owner took no steps to monitor the good and services or how the mark was used. Judge Easterbrook said that quality control doesn't mean feeling confident that the licensee is maintaining high quality. Rather, it's about the owner taking steps to insure that the quality is consistent and predictable.

The court affirmed the finding of abandonment through naked licensing.

9th Circuit (en banc): Copyright Act not preempt California implied contract claim based on submission of "idea" for TV show

The en banc 9th Circuit today held that copyright law doesn’t preempt a writer’s “implied contract” claim under California law that he submitted materials containing an idea for a TV show to a studio or producers with the understanding that he'd be compensated by receiving a share of the profits if the studio or producers use the idea.

The dissent argued that there’s a difference between state law claims that the writer: (a) sold the idea/concept with the implied understanding he’d be compensated (dissent says not preempted because it’s a classic implied contract); and (b) presented the idea with the implied understanding that he was retaining control over the idea unless the studio used it, in which case he’d be compensated (dissent says preempted because the writer is retaining control, which is closer to what copyright law protects). The dissent thought this writer’s claim was closer to (b).

The case is Montz v. Pilgrim Films & Television, Inc., No. 08-56954 (9th Cir. May 4, 2011) (en banc).