Huhtamaki Lifts Cup of Victory Over Dixie Trade Dress Claim

Dixie Consumer Products sued its competitor Huhtamaki Americas in the Northern District of Georgia, claiming a trade dress violation by Huhtamaki over the Dixie Insulair Cup.  Dixie claimed that the bottom white portion of the cup was entitled to trade dress protection.  Judge Timothy Batten disagreed, granting summary judgment to Huhtamaki. The Insulair Cup (pictured, top) has three layers, an inner cup layer which extends to the bottom, a middle insulating layer, and a paper layer outside.  Dixie claimed that the positioning of these layers, creating a white band at the bottom, constituted protectable trade dress.   Dixie started selling the Insulair Cup in 1997.  In 2008, Huhtamaki began selling the competing Comfort Cup.  The Comfort Cup (pictured, bottom) also is comprised of three layers similarly positioned, creating a white band at the bottom. 

Huhtamaki's summary judgment motion raised one major argument, that the element of the cup for which Dixie sought trade dress protection was functional, and under the law there can be no trade dress protection for design elements serving a functional purpose.  As the party seeking protection, Dixie bore the burden of proof because the trade dress at issue was not registered on the principal register.  Dixie pointed out that on February 16, 2010, more than a year after filing, the USPTO approved the mark for publication in the Official Gazette for opposition.  Dixie argued that this was a decision entitled to deference from the court because in reaching that decision the USPTO had rejected Huhtamaki arguments on functionality.  Because no published reasoning from the USPTO was available to support that decision, the court declined to give it any weight, citing a Massachusetts district court opinion, Accord TriMark USA, Inc. v. Performance Food Group Co., 667 F. Supp. 2d 155 (D. Mass. 2009). 


Huhtamaki's claim of functionality relied heavily on the fact that the Dixie Insulair Cup is the subject of several utility patents, especially the Patent No. 6,085,970 (the "'970 patent").  In TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 29, 121 S. Ct. 1255 (2001),  the U.S. Supreme Court held that a  utility patent is "strong evidence" that the features claimed to be trade dress are functional.  Furthermore, the court was not moved by the Dixie argument that the trade dress at issue was ornamental.  The court stated that Dixie's argument came down to the assertion that a functional cup added with a functional insulating sleeve resulted in an ornamental feature.  The court rejected this notion, relying on a Ninth Circuit case which held that, where the whole is simply an assemblage of functional parts, where even the arrangement of parts is designed for superior performance, it is semantic trickery to say that there is still some sort of overall appearance that is nonfunctional.  Leatherman Tool Group, Inc. v. Cooper Indus., Inc., 199 F.3d 1009 (9th Cir. 1999).  Ultimately the court decided that the utility patents covered the feature at issue.  This finding was sufficient for summary judgment in favor of Huhtamaki. 

Notwithstanding the sufficiency of the utility patent issue's sufficiency for summary judgment, the court addressed and rejected Dixie's argument that Huhtamaki could have selected numerous alternative non-infringing cup designs, rendering the feature in question nonfunctional.  Huhtamaki demonstrated to the court's satisfaction that the alternative designs proposed by Dixie would cost more or affect the quality of the Comfort Cup.  The court noted also that there are several other examples in the market of insulated cups with a bottom white band below an insulating sleeve. 

Lowe's Wins Copyright Battle over Light Fixtures

Lowe's won summary judgment against claims brought by a light fixture company over fleur-de-lis shaped light fixtures in the Northern District of Georgia in a ruling by Judge Thomas W. Thrash, Jr.  Bel Air Lighting, Inc. v. Progressive Lighting, Inc., 2010 U.S. Dist. Lexis 23468 (NDGA), decided March 15, 2010.  In this case Progressive claimed that Lowe's had violated Progressive's copyrighted fleur-de-lis light fixture design.  Despite the registered copyright, Judge Thrash found the work to be noncopyrightable, holding that the utilitarian aspects of the fixture were inseperable from the sculptural aspects. 

The facts showed that Progressive had hired a nationally-acclaimed designer of light fixtures, who had come up with a feur-de-lis design for residential light fixtures.  The design was a success, but consumers soon complained that the same fixtures were available at Lowe's for less.  The designer registered a copyright for the design, at first rejected by the Copyright Office, and then granted after reconsideration.  Lowe's had gotten its design from Bel Air Lighting.  In its motion, Lowe's contended that the light fixture design was not copyrightable because the light fixture is a useful article whose artistic features were inseperable from its utilitarian features. 

Progressive admitted that the light fixture was a useful article, which is normally not copyrightable unless its design incorporates artistic features seperable from the utilitarian aspects of the object.  There are two types of seperability, physical and conceptual.  Progressive attempted to argue that the arrangement of the features that create the apperance of a fleur-de-lis was conceptually seperable.  Judge Thrash relied heaviliy on the Eleventh Circuit case Norris Indus. Inc. v. International Tel. & Tel. Corp., 696 F.2d 918, 923 (11th Cir. 1983) in making his decision. 

The court noted that Norris held that conceptual seperability does not extend to functional components of utilitarian articles no matter how artistically designed.  Examples of such features are artistically designed watch faces or a wheel cover that simulates a wire wheel (the object at issue in Norris).  In the opinion, the court cited deposition testimony of the fixture designer admitting that the arms of the fleur-de-lis were used to thread wire through to the light source.  Also, the court quoted the Copyright Offiice Compendium opining that the mere fact that the shape of a useful article is analogous to a work of sculpture or could have been designed differently does not create conceptual seperability, and that therefore in that instance the fact that a light fixture might resemble abstract sculpture would not transform the fixture into a copyrightable work.  Progressive attempted to distinguish Norris by the fact that the object in Norris did not have a registered copyright, and the object in this case did have one.  The court rejected this, noting that a certificate of copyright registration is only prima facie evidence of the validity of the copyright.  The court felt that Lowe's had successfully rebutted the presumption of validity attached to the registered copyright, and granted Lowe's summary judgment motion. 

Book Review: The Secrets to Winning Trade Secret Cases

This is a great book for lawyers seeking to learn about trade secrets litigation written in accessible language, and also for experienced practitioners who might learn some new tactics.  While it covers all of the basics, such as the elements of a claim, what is a trade secret, and the like, it is chock full of helpful tips that any IP litgator can appreciate.  For example, the first chapter contains "Ten Keys to Winning" trade secret cases.  This  goes through some basic information, but also contains a nice explanation for the reason why a company might want to forget about making a trade secret claim at all and instead pursue other remedies.  The book also contains examples of "killer crosses" that help show how to execute the  advice given.  One sample cross examination appears in the first chapter, going through a line of questioning designed to show how companies try to protect too much information by stamping documents confidential that end up being distributed outside the "need to know" group.  The cross shows how the overreaching approach could confuse employees as to what is a trade secret and what is not.  After all, if the company is stamping as confidential documents that it clearly did not keep confidential, how is the employee supposed to know what is really a secret?

The book is helpful for both those suing for misappropriation of trade secrets, and those defending the claims.  For most of the points made in the book, a helpful case in point example is inserted, with a brief description of the case and the holding.  These are not only great citations but also handy real world examples of the results of the tactics in use.  The book also stays on the cutting edge of trade secrets law with a splendid chapter on inevitable disclosure.  Another great chapter is the section on the determination whether misappropriation is criminal in nature, and a very frank explanation of the dilemma between pursuing criminal charges versus civil remedies.  An advanced section details the use of clean rooms to reverse engineer the alleged secrets, and  others explain the intersection of trade secrets with (1) patent law and (2) noncompetes. 

Of course, trade secrets law is a state by state subject for the most part, although the Uniform Trade Secrrets Act has been adopted widely.  Thus, the book by necessity does not delve deeply into the conflicts between states, and sticks to practical advice that applies to all cases.  It is not a hornbook or a treatise.  True to its title, it is a litigation guide.  There is a fantastic appendix with a sample complaint, protective order, and TRO order.  A great section on packaging a criminal case for prosecutors is also included.

However, the book could spend more time on the preemption issues with the UTSA that often arise with multi-count complaints.  Also, the book contains sample jury instructions, but only for six states that seem to be randomly selected, such as Arkansas and Ohio. One wonders how Arkansas made the cut but not Georgia. 

I know of no other book in the market that gives such practical and comprehensive advice about how to effectively litigate trade secrets cases.  In my opinion it is a must-read for any lawyer serious about becoming successful in the trade secrets litigation practice.  Now, how to be a winner in trade secret cases is no longer a secret.  

GET LUCKY Brand Has Good Fortune at Trial against Liz Claiborne dba Lucky Brand

A jury in the U.S. District Court for the Southern District of New York returned a $580,000 verdict in favor of Miami-based Marcel Fashion Group Inc. and the GET LUCKY line of apparel following a federal trademark infringement trial against New York-based Liz Claiborne Inc. The case was tried before Judge Laura Taylor Swain.  GET LUCKY was in fact the counterclaimant, having been sued by Lucky Brand first. 

In the verdict, which followed five days of trial, jurors found that Liz Claiborne and Lucky Brand sold garments that infringed the "GET LUCKY" trademark owned by Marcel Fashion, owner of GET LUCKY. The jury also found that the companies' infringement amounted to unfair competition under federal law. The jury awarded $300,000 in actual damages and punitive damages of $280,000.

Lucky Brand originally sued Marcel Fashion and its licensee Ally Apparel for trademark infringement in 2005, but evidence showed that Marcel Fashion had registered and used the trademark "GET LUCKY" years before Lucky Brand was even formed. Last year, the Court sanctioned Lucky Brand, represented by Greenberg Traurig, for its repeated discovery violations and awarded partial summary judgment on some of Marcel's trademark counterclaims and breach of a 2003 settlement agreement with Marcel Fashion. McCool Smith represented the GET LUCKY brand owners.  The case is Lucky Brand Dungarees Inc., et al. v. Ally Apparel Resources LLC, USDC SDNY.  Case No. 1:2005cv067.

Dr. Renee Kaswan Settles Dispute with UGA Research Foundation, Prepares to Shift Focus to IP Advocate

The Wall Street Journal Market Watch is reporting that Dr. Kaswan, inventor of the drug Restasis,
settled litigation with the UGA Research Foundation ("UGARF") regarding a contract that UGARF entered with pharmaceutical company Allergan to market an ophthalmic formula including cyclosporine.  The contract was negotiated without the involvement of Dr. Kaswan, after a deal had already been struck with Allergan to market the drug.  For some reason, UGARF agreed to reduce the amount received for the drug, costing Dr. Kaswan, and the state of Georgia taxpayers, millions of dollars.  Ultimately, UGA ended up suing Dr. Kaswan as part of the long dispute. 

Dr. Kaswan has launched a non-profit, IPAdvocate, to help university researchers more freely translate inventions into publicly useful products.  “I fought for 20 years to patent, license, and gain FDA approval for my invention – a treatment for chronic dry eye, which can cause blindness,” said Dr. Kaswan. “But once approval came, the lawyers attacked and turned what had been a cooperative relationship between university and inventor into a contentious legal battle that lasted seven years. That is not the way to inspire innovation.”

According to published reports,  in late 2002, UGARF agreed in writing to assign Dr. Kaswan the patents for her dry-eye treatments. Contracts were being drafted when the FDA surprised everyone by approving Allergan’s Restasis for use on humans on Dec. 24, 2002. University officials immediately reneged on their promise and initiated a pitched legal battle against Kaswan and her company, KB Visions.
Litigators intercepted and stopped all direct communications between UGARF and Dr. Kaswan. They initiated a series of bad faith claims against Dr. Kaswan and KB Visions, falsely alleging that she was acting against their instructions and outside of the terms of the licensing agreement. They announced intent to retract her patent license agreement, and suspended royalty payments to Dr. Kaswan from January 2003 through July 2005, and September 2008 until the recent settlement.

UGA President Michael Adams secretly and falsely instructed the university’s Board of Regents and IP Faculty Oversight Committee that Dr. Kaswan had elected litigation and forfeited her rights under UGA's non-legal dispute resolution procedures. This move by President Adams forced Dr. Kaswan to defend her IP equity rights in court, where Adams had the ability to exhaust her finances. “This litigation was a smokescreen to conceal the secret dealings with Allergan, which resulted in the loss of $220 million to the university and to the taxpayers of Georgia,” said Dr. Kaswan.

Dr. Kaswan eventually filed a countersuit against UGARF and Allergan, claiming, among other things, that Allergan tortiously interfered with her employment contract and fiduciary relationship with UGA, and that UGARF and Allergan fraudulently conspired to convey her property for an unreasonably low price. After seven years of litigation, Dr. Kaswan settled and received her inventors' share of royalties minus the legal fees UGARF deducted for suing her.

About IP Advocate

IP Advocate (www.IPAdvocate.org) is a non-profit organization that educates and empowers faculty researchers on patent rights and the process of commercialization – helping inventors protect their rights during the complex process of moving their inventions from the lab to the public marketplace. IP Advocate is a robust resource of information and best practices related to the commercialization of intellectual property. IP Advocate was founded by Dr. Renee Kaswan, inventor of Restasis® and a former research professor at the University of Georgia; and is led by executive director Rhaz Zeisler, an internationally recognized interactive media brand strategist, and former Walt Disney producer and IBM creative executive. IP Advocate is a 501(c)(3) organization, based in Atlanta.

Happy World Intellectual Property Day

Today is World Intellectual Property Day.  If you are like me, your firm has not yet grasped the significance of this sacred day and you are at work, hopefully contributing to the rule of law for intellectual property somewhere in the world.  The US Chamber of Commerce has released a study claiming that 60% of US exports come from intellectual property "intensive" industries.  The debate over fair use versus strict regulation continues, but the competition in the marketplace of ideas and expression will continue forever. 

Court Has Dark View of Lanham Act Claims Brought by Design Company

Judge Forrester of the Northern District of Georgia recently granted summary judgment against claims brought by a lighting design company against a former employee.  PHA Lighting Design, Inc. v. Kosheluk, 2010 WL 1328754 (N.D. Ga.), Decided March 30, 2010.  Lighting design is a specialized aspect of architecture that involves the creation of lighting plans for commercial buildings.  Defendant Kosheluk worked for PHA from 2000-2007, and then left to form his own company, Archiluce International.  After leaving PHA Kosheluk created a Power Point marketing presentation that was sent to potential customers.  The introduction stated that "The selected project images herein were all designed and/or completed under his direction while at PHA Lighting Design."  The hundred page presentation went on to displays photos of lighting in many different buildings.  Kosheluk admittted copying from PHA's server some of the photos in the presentation, PHA's master contact list, lighting cut sheets, expense reports, a shop drawing stamp template, lighting fixture specifications, and proposals.  PHA brought claims for Lanham Act violations, Georgia Uniform Deceptive Trade Practices Act, unjust enrichment, and statutory interference with property. 

PHA's Lanham Act claims were two-pronged:  (1) a claim for false designation of origin, also known by the unwieldy term "reverse passing off", and (2) false advertising.  Reverse passing off  happens when the party misrepresents the victim's goods or services as his own.  The elements of the claim are (1) the item at issue originated with the plaitniff, (2) the defendant falsely designated the origin of the work, (3) the false designation was likely to cause consumer confusion, and (4) the plaintiff was harmed.    PHA alleged several falsehoods.  PHA claimed that the statement that the selected project images were "all designed and/or completed under his direction while at PHA Ligthing Design" was false.  PHA argued that none of the projects were "under his direction" because the design is a collaborative process, and that Kosheluk did minimal work on a few of the projects.   Also, PHA complained that the fact that Archiluce's logo was on every photo but that not all of them made specific reference to PHA created a false impression of origin.  Finally, PHA argued that a few of the items were false because not all of the designers that contributed to some of the projects were listed, only some of them. 

The court rejected PHA's argument, holding that PHA had adduced no evidence that, even though the representations in the presentation may have been somewhat inaccurate, PHA had not come forward with any actual evidence that there was a likelihood of confusion.  Plaintiff had merely asserted that the defendant had passed off PHA's services as his own.  Secondly, the court threw out the claims because it stated that PHA had not come forward with any evidence that it was harmed by the presentation at issue.  PHA argued that the fact that ten recipients of the presentation had hired Archiluce was enough to infer harm, but the court disagreed, noting that there was no reference to the presentation by these customers in the record. 

Citng the same alleged inaccuracies in the presentation, PHA also claimed false advertising.  False advertising occurs under the Lanham Act when the following elements are satisfied:  (1) the advertisements of the defendant were false or misleading; (2) the advertisements deceived, or had the capacity to decieve, consumers; (3) the deception had a material effect on purchasing decisions; (4) the misrepresented product or service affects interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false advertising.  Under the first element, the plaintiff must show that a statement is literally false, or if literally true, conveyed a false impression, is misleading in context, or likely to deceived consumers.  If literally false, deception is assumed.  PHA claimed that all of the inaccuracies pointed out were literally false and thus deception was automatic.  The court disagreed, finding that at most, the claims made in the presentation were ambiguous as to Kosheluk's role in the projects at issue.  Because some evidence was presented that Kosheluk was not involved at all in some of the projects, the court found some evidence of one literal falsehood.  However, the court stated that, even if deception is presumed, the plaintiff has to present evidence of materiality to maintain a claim.  The court found that PHA had not provided any evidence that the possible falsity of some of the claims made in the presentation would affect the consumer decision.  Therefore, the court granted Kosheluk summary judgment on all of PHA's claims.