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Technology and IP Case Watch

on Wednesday, 2 October 2013 in Technology & Intellectual Property Update: Arianna C. Goldstein, Editor

Eighth Circuit Vacates Attorney’s Fees in Trade Secrets Misappropriation Case

Mayo Clinic v. Elkin, Case No. 11-2959 (8th Cir. August 27, 2013).
This Eighth Circuit case arose out of a trade secret dispute between the Mayo Clinic and Dr. Peter Elkin over medical records software developed by Elkin while he was employed by Mayo. Upon leaving his employment with Mayo, Elkin deleted the source code for the software – leaving one executable copy in Mayo’s possession – and subsequently began attempting to sell copies of the software at conferences and speaking engagements. Mayo sued Elkin for trade misappropriation, among other things. After a trial, Elkin was found liable. The district court found that Elkin’s trade misappropriation had been willful and malicious and ordered him to pay nearly $2 million in attorney’s fees to Mayo. Elkin appealed and the Eighth Circuit reversed this award, calling it “staggering.” The Eighth Circuit found that the district court failed to appropriately distinguish between work performed by Mayo’s attorneys on the trade misappropriation claim and Mayo’s other claims. In light of this, the Eighth Circuit vacated and remanded the district court’s order granting Mayo attorney’s fees.

Yummy v. Yummi: No Likelihood of Confusion

Hero Nutritionals LLC v. Nutraceutical Corp., Case No. 8:11-cv-01195-AG-MLG (C.D. Cal. August 16, 2013).
This case from the Central District of California involved a trademark infringement dispute between Plaintiff’s registered “Yummi Bears” mark used in connection with children’s vitamins and Defendant’s use of the term “Yummy Gummy,” also in connection with children’s vitamins. Plaintiff sued defendant arguing that the terms were confusingly similar and, thus, constituted a trademark infringement of the “Yummi Bears” mark. Despite noting that Plaintiff’s registration was “incontestable” under the Lanham Act (meaning that the mark had been used consistently in commerce for at least five years from its registration date), the district court found that there was little to no likelihood of confusion in this case because the “Yummi Bears” mark was “weak.” The district court based this conclusion on finding that (i) the term “Yummi” is clearly meant to denote that Plaintiff’s product is delicious and therefore takes little imagination on the part of the consumer to understand the significance of the reference; (ii) extensive use by third parties of similar marks with children’s vitamins reduces the commercial strength of Plaintiff’s registered mark; (iii) Plaintiff produced no evidence – such as a consumer survey – showing how strongly the market recognizes its marks or that consumers found the marks to be confusingly similar; (iv) the terms “Yummi” and “Yummy” were spelled, colored, and capitalized differently; and (v) consumers of these children’s vitamin products are likely to take time to distinguish between such products. Accordingly, the district court found no likelihood of confusion and denied all of Plaintiff’s requested relief.

Southern District of New York Dismisses Trade Dress Claim

Brainteaser v. Andrews McMeel Publ’g, L.L.C., Case No. 1:12-cv-07987-PAC, (S.D.N.Y. August 1, 2013).
This case involved trade dress, unfair competition, and copyright infringement claims relating to two puzzle and game books, each of which utilized the classic “hangman” puzzles. Plaintiff had been publishing books utilizing this puzzle for twenty years, and Defendant’s game books utilizing the “hangman” puzzle entered the U.S. market in 2005. Plaintiff sued, arguing that defendant’s books incorporated the entire feel, concept, and design of Plaintiff’s books and therefore take their overall appearance and trade dress. Defendant moved to dismiss all of Plaintiff’s claims. This motion was both granted in part and denied in part. The district court granted Defendant’s motion to dismiss Plaintiff’s trade dress infringement claim because it found that Plaintiff failed to plead non-functionality as required when bringing such a claim. The district court, however, refused to dismiss Plaintiff’s unfair competition and copyright claims. The district court found that Plaintiff’s unfair competition claim was not preempted because it required an assertion outside the scope of federal copyright law and that Plaintiff’s copyright claims involved questions of fact for the jury such as whether the overall feel of Defendant’s puzzle games were substantially similar to Plaintiff’s. In light of these conclusions, the district court denied Defendant’s motion to dismiss these two claims.


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