New IP Enforcement Actions
Newly formed patent troll makes vast claim to Web video, sues 14 big media companies
Mystery company owns a patent created by an IP lawyer and a serial litigant.
These days, it seems like software patents are falling down right and left. Hundreds of them have been invalidated by US federal judges since the Supreme Court’s 2014 Alice Corp v. CLS Bank. decision, and more patent-holders are getting sanctioned for their behavior in court. The economics of the patent-trolling business are changing in fundamental ways, and lawsuits are down. When you need help with lawsuits then contact Truitt Law Office, and you get professional help.
It’s tempting to think the whole mess is going to dry up and blow away—but the lawsuits coming from companies like Bartonfalls LLC show that some patent lawyers are going to keep on partying like it’s 2009. Bartonfalls is a shell company formed in the patent hotspot of East Texas, and it sued 14 big media companies on October 11 over US Patent No. 7,917,922.
Bartonfalls is unusual in a couple ways. The company got a high-profile shout-out from a lawyer at The New York Times. The newspaper’s associate general counsel, David McCraw, became a newsroom celebrity for a day when he wrote a sharply worded letter to Republican presidential candidate Donald Trump, who threatened to sue the newspaper when it published a story about two women claiming they were sexually assaulted by Trump. McCraw’s response letter explained that the paper was protected by the First Amendment and that if Trump believed “the law of this country forces us and those who would dare to criticize him to stand silent or be punished, we welcome the opportunity to have a court set him straight.”
McCraw’s letter went viral, becoming the most-read and most-e-mailed story for a few days. Earlier this week, he published a first-person account entitled “I Hardly Expected My Letter to Donald Trump to Go Viral.”
Which leads us back to patent trolls. “I wrote the letter in about 45 minutes on Thursday morning, between a meeting on the company’s emergency operations plan and a conference call about a new patent suit we have in Texas,” wrote McCraw. In a parenthetical aside, he wrote, “Is somebody really claiming to have invented a method for switching from watching one video to watching another?”
If you’re reading this, you likely already know the answer to McCraw’s question is “yes.”
TV patent, meet Internet video
On October 11, Bartonfalls filed patent lawsuits against Ziff Davis (the owners of PC Magazine), Viacom, Advance Publications (over the website for GQ; GQ and Ars are both owned by Condé Nast, which is in turn owned by Advance Publications), Scripps Networks (HGTV), Bloomberg, Allrecipes.com, NBC Universal, Turner Broadcasting, the New York Times Company, Forbes, ABC, Discovery, CBS, and Consumers Union (Consumer Reports).
Five of the nearly identical complaints are linked above. Each claims that websites owned by these large publishers violate the ‘922 patent because when a viewer is done watching an online video, their video players cue up another video and automatically start playing it when the first video ends. Love this feature or hate it, it’s an extremely common way of serving up online video. If Bartonfalls convinces courts it “owns” this feature, the number of video-makers it could sue is endless. The biggest online video company of all, YouTube, has an autoplay feature.
The ‘922 patent, filed in 1997, doesn’t talk about Web video or the Internet at all. Rather, it talks about switching between different video inputs when changing television programs: in other words, a TV setup where Channel 2 was connected to a cable subscription, Channel 3 would flip back to broadcast, and Channel 4 might lead to a viewer’s pre-recorded programs. The only independent claim describes “a method of automatically changing from a first TV program to an alternate TV program.” After a very long back-and-forth with the patent office, Michigan-based inventors Barry Schwab and John Posa got their patent in 2011.
Posa, a patent lawyer in the Ann Arbor office of the Dinsmore law firm, didn’t recall much about his invention when reached by Ars. He’d never heard of Bartonfalls, and he didn’t know about the lawsuits filed on October 11.
“We transferred some rights in this patent, and apparently [Bartonfalls] is the party that acquired these rights,” said Posa. “I’m also a patent attorney, so I have a lot of things going on,” he added, saying he owns more than 30 patents.
“They have the right to go forward”
Posa said he has known Schwab for more than 20 years. “He was a client of mine a long time ago,” explained Posa. “He had some ideas, I had some ideas. We sort of hooked up and shared some ideas and jointly own some IP.”
“Sometimes litigants feel they have an interpretation that should be honored,” Posa said when asked how his television patent could be used to sue so many different Internet video players. “They have the right to go forward with that interpretation.”
Schwab didn’t respond to phone calls asking about his patent. Public records indicate that Schwab is involved in a large number of lawsuits. A company called Hawk Technology LLC, which says in court papers that it was formed “to commercialize the inventions of its founder, Barry Schwab,” has filed more than 100 patent lawsuits against big companies, non-profits, and even local governments.
Another company armed with a Schwab patent, Multi-Format Inc., used it to sue Apple, Amazon, and Motorola. Those cases all settled.
The attorney representing Bartonfalls LLC, Jean-Marc Zimmerman, also didn’t respond to interview requests. Zimmerman has represented many patent-holding companies over the years. Several years ago, he was sanctioned for his representation of a company called Eon-Net, and the US Court of Appeals for the Federal Circuit upheld those sanctions in 2011.
Corporate documents show that Bartonfalls was formed as a Texas LLC in August. Its business office is a virtual office in Plano, a city that’s just inside the borders for the Eastern District of Texas, the venue that it filed its lawsuits in. The only listed manager of Bartonfalls is a paralegal at a small Texas law firm, Stoddard and Welsh.
Today, it’s far more rare to see a “non-practicing entity” like Bartonfalls take on a group of large companies with a broad Web patent. That’s because patent defendants have some new case law that favors them. In addition to the Alice Corp. precedent, there’s Octane Fitness, which made it easier to get sanctions against patent plaintiffs who bring questionable cases. At least one defendant says they’ll be fighting this one.
“We are in the process of hiring counsel and will vigorously fight this claim,” said McCraw in an e-mailed statement to Ars. “We plan to work with the other companies that were sued to challenge the patents.”
The following YouTube video clip does a good job of capturing the issue:
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Texas Roadhouse suing NWI’s Texas Corral for trademark infringement
Texas Roadhouse in Portage. The chain is suing Michigan City-based Texas Corral for trademark infringement.
There’s only room in this town for one Texas-themed steakhouse, a big national chain asserts.
Texas Roadhouse, which is actually based in Louisville, Kentucky, is fighting a court battle with the much smaller Northwest Indiana-based Texas Corral over alleged trademark infringement in the U.S. District Court, Northern District of Indiana.
Founded in Southern Indiana in 1993, Texas Roadhouse now has 460 locations in the United States and five more in the Middle East. It’s suing Texas Corral, a Northwest Indiana-based chain that dates back to 1996 and has 10 locations in southwest Michigan and Chicagoland, including in Highland, Merrillville, Michigan City, and Portage. The lawsuit contends that Texas Corral and the Amarillo Steakhouse in Schererville are too similar to Texas Roadhouse in name, logo, street signs, menu, website design and even the look of their buildings.
Texas Roadhouse filed the federal lawsuit against various companies that own Texas Corral franchises, including Texas Coral Restaurants Inc. of Highland, Crown Point-based Switzer Properties, Texas Corral of Michigan City, Schererville-based Chicago Roadhouse Concepts, and Texcor, which runs the Portage and Merrillville steakhouses.
The Kentucky-based steakhouse chain alleges Texas Corral is violating its registered service mark on a design that includes an outline of the state of Texas wearing a cowboy hat inside a circle. Texas Roadhouse argues in the federal lawsuit that Texas Corral copied its signs, buildings, interior design and even jukeboxes.
“Texas Corral’s use is likely to cause confusion, cause mistake, or deceive consumers, prospective consumers and the public as to whether Texas Corral’s services are endorsed by, sponsored by, or somehow, affiliated with Texas Roadhouse or whether Texas Corral has permission from Texas Roadhouse to use the infringing names, marks, logos and designs,” Texas Roadhouse’s lawyers argued in the lawsuit, which was first filed in Michigan in 2014, but was transferred to Indiana earlier this year. “Upon information and belief, the actions of Texas Coral were undertaken with an intentional, willful, or malicious intent to trade upon the goodwill associated with the Texas Roadhouse marks.”
The international steakhouse chain is asking a judge to order Texas Corral to stop using its name, logo, and other service marks that could be confused with the Texas Roadhouse brand. Texas Roadhouse is also asking for damages and “all profits” associated with use of its name and look.
After the case was moved to federal court in Hammond earlier this year, Texas Corral owners asked for lawsuit to be dismissed against individual defendant Paul Switzer, who’s listed as the owner of Texas Corral steakhouses in Benton Harbor and Kalamazoo, Mich. Texas Corral contended Texas Roadhouse failed to “allege factual allegations which rise above a mere ‘speculative level,'” and that statutes of limitation have expired.
Late in September, Texas Corral owners filed a motion asking the case to be broken up since there are 10 different defendants.
“Given the large number of issues and parties involved in this case, the discovery and disposition of the issue of liability, alone, will require a burdensome amount of discovery,” Texas Corral’s lawyers argued.
Texas Roadhouse is fighting against that motion, arguing the owners of the 10 steakhouses in Northwest Indiana, Illinois and southwest Michigan work in tandem.
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Trademark battle between MasterCard and 2017 World Masters Games
Trademark war between MasterCard and 2017 World Master Games.
One of the world’s largest credit card companies has failed to prove an international multi-sport event copied part of its logo.
MasterCard International Inc challenged the colour and words of the 2017 World Masters Games, to be held in Auckland, claiming it was too similar to its own logo.
However, the Intellectual Property Office of New Zealand ruled MasterCard had no grounds to oppose and allowed the registration of 2017 World Master Games’ logo.
MasterCard argued the event’s name and logo was “likely to deceive or cause confusion” and was too similar to the credit card company’s name and logo. World Masters Games disagreed.
World Masters Games said there was no confusion, or even allegations of confusion, despite the parties’ respective marks co-existing in new Zealand since at least March 2014.
In her decision, Trade Marks assistant commissioner Natasha Alley said the opposed mark – that of World Masters Games – was “visually, aurally and conceptually dissimilar to the MasterCard word marks”.
“They convey very different ideas and look and sound different.”
Alley noted the word “master” was used in both logos, however said the event logo was “masters” – not “master”.
She also pointed out there was a commonality in colour with the “yellow and redish /pink colours”, however, she did not consider that to be a significant similarity.
MasterCard has the right to appeal.
World Masters Games is a multi-sport event which is held every four years.
The ten-day event was first held more than 30 years ago.
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EDTX motions to transfer grant rate rises to 57%
ImageGood article by Wei Wang, Gregory H. Lantier, Derek Gosma, and Mindy Sooter in WilmerHale’s Eastern District of Texas Newsletter this month on motions to transfer in the district.
In it, they note that the number of motions to transfer filed in EDTX cases dropped over half from 2014 to 2015, from 135 to 63, while at the same time success rates rose from 34% to 43%. They note that filings of motions to transfer are up somewhat this year so far, which I in turn note makes a lot of sense when you consider that the motions to transfer in the large number of Thanksgiving Specials that were filed in late November of last year would have been in 2016. But, importantly, thus far in 2016 the success rate for motions to transfer has leaped again, to 57%. That’s a 60% increase in the grant rate over just two years ago.
They conclude that the higher success rate is the result of better-supported motions, and not because the standard the Court has applied has changed – which I’d agree with. But I’d also note that as with rulings on 101 motions, motions to dismiss and motions for summary judgment it also reflects the significant bubble of relatively weaker cases filed in 2014 and especially 2015 which largely dissipated locally after the eDekka 101 and 285 rulings around the end of last year and the beginning of this year. (More in this in real terms soon). Also, the standards for venue motions in patent cases filed in courts applying Fifth Circuit law have been pretty stable for several years now, so the variations aren’t because the law has changed or was changing during the period, as I’d argue was the case in 2009-2012-ish.
In short, the variable wasn’t the judges or the law – it was the quality of motions and the quality of the facts they were based on.
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National Marks: Who Owns the Trademarks to America’s Famous Landmarks
In September 2015, a seemingly innocuous contract dispute was filed in the United States Court of Federal Claims (“CFC”) that could lead to the United States losing the trademark rights to some of its most popular national attractions.1 Though the suit is ostensibly based on failed contract negotiations between private national park concessionaire DNC Parks & Resorts at Yosemite, Inc. (“Delaware North”) and the United States Department of Interior (“National Park Service”), the damages claimed by Delaware North directly implicate whether a private entity should—or even can—own trademark protection for national landmarks like The Ahwahnee Hotel and even Yosemite National Park itself.
The National Park Service regularly administers guest services operations within its national parks through private companies, awarding “concession contracts” to these various entities. Delaware North was selected as Yosemite National Park’s official concessionaire in 1993, and came to operate over 1,500 hotel rooms, 25 food and beverage stands, and nearly 20 retail establishments.2 During its tenure, Delaware North also registered several trademarks for places traditionally associated with Yosemite National Park, including THE AWAHNEE, CURRY VILLAGE, WAWONA, BADGER PASS, and YOSEMITE NATIONAL PARK.3
As part of the concession contract renewal process, the National Park Service agreed that any successor concessionaire would be required to pay Delaware North “fair value” for its Yosemite-related property. In the dispute, Delaware North argues this should include at least $44 million in compensation for the Yosemite trademarks. The National Park Service, however, contends the trademarks are likely invalid and, thus, “fair value” is more accurately estimated at $3.5 million. In fact, in response to this lawsuit, the National Park Service filed a Consolidated Petition for Cancellation before the United States Patent and Trademark Office’s Trademark Trial and Appeal Board (“TTAB”) in an attempt to cancel Delaware North’s various Yosemite-related trademarks.4 That TTAB proceeding was suspended, however, because of the action already pending at the CFC. Accordingly, the court will likely be forced to wrestle with whether Delaware North’s trademarks are valid as the civil action seeks to determine if Delaware North was properly compensated though the parties vehemently dispute the value of the relevant intellectual property.
Of note, another concessionaire giant, Xanterra, filed a series of similar trademark applications in October and November 2014, for landmarks related to Grand Canyon National Park—EL TOVAR, HERMITS REST, LOOKOUT STUDIO, BRIGHT ANGEL LODGE, and PHANTOM RANCH.5 These applications came during a similar contract dispute with the National Park Service, though each was expressly abandoned in March 2015 after Xanterra was awarded a temporary, one-year contract.
Arguments for Cancellation
As part of the cancellation analysis, it is important to remember a trademark is entitled to protection only where it is functions as “a source identifier.”6 Through this lens, the U.S. Government argues that Delaware North’s trademarks should be cancelled because they falsely suggest a connection to the National Park Service. Delaware North counters that some of these marks have been in use by Yosemite’s concessionaires for nearly 100 years, with The Ahwahnee Hotel, for example, having been established by Delaware North’s predecessor in 1927. The PTO Examiner agreed with the National Park Service, initially, denying Delaware North’s original application for YOSEMITE NATIONAL PARK because of its false suggestion of a connection and descriptiveness.7 That office action was traversed, however, when Delaware North submitted a heavily redacted version of its 1993 concessionaire contract, allegedly establishing the necessary connection, and a declaration of acquired distinctiveness.
Legislative Efforts
In response to this high profile case, legislatures have taken to banning the registration of trademarks related to popular outdoor destinations. At the federal level, for example, Congress recently enacted a statute intended to prevent similar disputes.8 54 U.S.C. § 302106 prevents the trademark registration of a name historically associated with “buildings and structures on or eligible for inclusion on the National Register (either individually or as part of a historic district), or designated as an individual landmark or as a contributing building in a historic district by a unit of State or local government.” This language would have precluded almost all of Delaware North’s registrations and may prohibit any future attempt to register Xanterra’s presently-abandoned applications.
At the state level, California (home to the most national parks) recently adopted a similar bill that prohibits state park concessionaires from registering or obtaining any ownership interests in “the name or names associated with a state park venue.”9
Overall, these statutory proscriptions appear to embody the notion that parks—national, state, and regional—are held in the public trust, for all people, and thus, their associated property (including trademarks) should be part of that trust, too.10
Moving Forward
The future of this dispute is unclear. In its Opposition to suspend the TTAB proceeding, the National Park Service argues that Delaware North’s CFC complaint intentionally avoids mentioning issues of trademark validity or infringement, though such issues are arguably implicated by Delaware North’s claim for damages. Thus, the Government contends, these issues may not even be addressed.
The National Park Service has also argued the CFC is an inappropriate venue for the trademark dispute because it does not have jurisdiction to either (a) hear Lanham Act claims, or (b) cancel trademark registrations.11 The National Park Service specifically noted cases in which the CFC, itself, proclaimed “we have no jurisdiction over claims for trademark infringement”12 and “this court does not have jurisdiction over plaintiff’s claim for [trademark] cancellation.”13 Delaware North responded to these claims by asserting the CFC has jurisdiction by virtue of its “authority to decide incidental legal issues that arise in the course of deciding a claim within its Tucker Act jurisdiction, even if those issues would be outside the Court’s jurisdiction if asserted as standalone claims.”14 Thus, the issues of trademark validity and infringement may or may not be appropriately raised before the CFC.
Alternatively, the parties may simply come to a settlement, similar to that seen in the National Park Service’s dispute with Xanterra, though the Yosemite contract-at-issue has already been awarded to a different concessionaire. We await further developments.