Justia Contracts Opinion Summaries

In 1995, plaintiff, a popular psychic and astrologer, and defendant entered into a contract for production and distribution of materials featuring plaintiff's psychic and astrological services. Plaintiff granted defendant the right to use his trademark, name, and likeness. After a 2006 dispute led to litigation; a jury rejected plaintiff's claim that he had validly terminated the agreement, found that he had violated the agreement, and found that defendant owed him no compensation. In 2009, both parties sought injunctive relief to prevent the other party from using the trademark. The district court entered a preliminary injunction in favor of defendant, finding that plaintiff had assigned the trademark in perpetuity. The First Circuit affirmed. The district court did not abuse its discretion in issuing a preliminary injunction, based on its interpretation of the agreement and application of collateral estoppel, based on the prior litigation.

The issue before the Supreme Court was whether a claim under Colorado law for civil theft of a copyrightable work required a trial court to instruct the jury on principles of federal copyright law. Petitioner Steward Software hired Respondent Richard Kopcho to develop and market a new software program. Steward never entered into a written agreement governing the ownership of the software with Holonyx, Inc. (one of Respondent's multiple corporate entities) or Respondent. By the time the software was ready for testing, the relationship between the parties had become strained. Steward refused to make further payments and under Respondent's direction, Holonyx locked Steward out of the software code and refused to turn it over. Holonyx then filed a copyright registration for the software with the U.S. Copyright Office, listing the software's author a new corporation Respondent controlled called Ruffdogs Software, Inc. Steward sued Respondent for breach of contract and civil theft. Before trial, the parties tendered proposed jury instructions; one of Steward's proposed instructions pertained to the ownership and registration of copyrightable works. The trial court determined that copyright law did not pertain to Steward's civil theft claim and rejected the tendered instruction. Upon review, the Supreme Court agreed that ownership of the copyright in the code was irrelevant. The Court thus concluded the trial court correctly refused to instruct the jury on the principles of copyright law. The court reversed the appellate court and reinstated the trial court's opinion.

Plaintiffs DISH Network Corporation and DISH Network LLC (Dish) filed a diversity action in the District of Colorado seeking a judgment declaring that Dish's insurers had a duty under Colorado law to defend Dish in a patent infringement suit. The district court held that the underlying complaint did not allege an "advertising injury" under the policies issued to Dish by the five defendant Insurers. The court granted Insurers' motion for summary judgment, and Dish appealed. In its amended complaint, Ronald A. Katz Tech. Licensing (RAKTL, the Plaintiff in the underlying suit) alleged that Dish had infringed one or more claims in each of twenty­ three patents. Applying Colorado law, the district court concluded that a claim for patent infringement could "properly give rise to coverage, or even the specter of coverage, such that an insurer will have a duty to defend." For purposes of the summary judgment motion, the court ruled that RAKTL's reference to "customer service functions" in its complaint was sufficient to allege that Dish engaged in "advertising." The court granted summary judgment for Insurers without addressing the third element of its test-­- causation --or the additional arguments certain insurers had raised under their individual policies. Upon review, the Tenth Circuit concluded that the RATKL complaint potentially alleged advertising injury arising from the misappropriation of advertising ideas. The Court therefore reversed and remanded for further proceedings: "the scope of advertising injury coverage in this case is at least ambiguous with regard to patent infringement allegations. Although the cases are rare in which an allegedly infringed patent is itself an advertising idea rather than merely an advertised product, ... we hold that '[d]epending on 'the context of the facts and circumstances of th[e] case,' patent infringement can qualify as an advertising injury if the patent 'involve[s] any process or invention which could reasonably be considered an 'advertising idea.'"

This post-trial opinion determined the voting membership of GnB, LLC, a Delaware limited liability company. The parties disputed whether Firehouse Gallery, LLC, a Florida limited liability company, was a voting member of GnB. The parties also disputed whether GnB possessed an exclusive license to use the first-tier, generic domain name candles.com; held an option to purchase candles.com; and owned other assorted domain names relating to the candles business. The court held that Firehouse and plaintiff, who controlled GnB, each held a 50% voting membership interest; GnB owned the exclusive license and option to purchase candles.com and the other domain names; and plaintiff and defendant, the current principal of Firehouse, each breached their fiduciary duty of loyalty to GnB and must account for the profits and personal benefits they received. The court held that defendant was not otherwise liable to GnB or plaintiff. Because all of the litigants engaged in misconduct that could support fee-shifting, the doctrine of unclean hands applied with particular salience. Accordingly, the court held that all parties would bear their own fees and costs.

Synoran and e-Pin (appellants) appealed from the district court's confirmation of an arbitration award in favor of Wells Fargo, which had prevailed on its claims for breach of contract and for misappropriation of trade secrets. Appellants maintained that the district court lacked jurisdiction to confirm the award, erred in confirming the award, and abused its discretion in denying their motion to amend or terminate a permanent injunction issued as part of the award. The court rejected appellants' claim that Wells Fargo was a citizen of both South Dakota and California and concluded that the district court did not err in determining that it had subject-matter jurisdiction over the action. The court also held that the district court did not err in determining that appellants had waived their right to challenge the award of injunctive relief; in declining to vacate the award on the grounds that the arbitration panel exceeded the scope of its arbitral mandate; and in confirming the award of attorneys' fees against e-Pin. The court further held that the district court did not abuse its discretion in denying the motion to terminate or amend the permanent injunction. Accordingly, the judgment was affirmed.

The heirs of a composer, who died in 2003, sued a music publisher and a performance rights society, with which the composer had contracted in 1995 with respect to four songs. The defendants failed to supply royalty reports as required by the contracts. The district court award the maximum statutory damages for the copyright infringements pursuant to 17 U.S.C. 504(c)(1). The First Circuit affirmed, rejecting many of the defendants' arguments as not properly raised and, therefore, waived.

This appeal stemmed from numerous trademark and unfair competition claims over the name "Patsy's." Patsy's Italian Restaurant appealed, and Patsy's Pizzeria cross-appealed, from a judgment of the district court after a jury trial on claims brought pursuant to trademark and unfair competition law. The court upheld the district court's jury instructions; affirmed the district court's refusal to grant a new trial on the issue of whether Patsy's Pizzeria made fraudulent statements to the Patent and Trademark Office, as well as its refusal to vacate the jury's verdict that Patsy's Italian Restaurant did not fraudulently obtain its trademark registrations; affirmed the district court's refusal to reinstate Patsy's Pizzeria's trademark registrations; and upheld the district court's denial of attorneys' fees and injunctive relief. Accordingly, the court affirmed the judgment of the district court.

CollegeSource, Inc. (CollegeSource), a California corporation with its principal place of business in California, sued AcademyOne, Inc. (AcademyOne), a Pennsylvania corporation with its principal place of business in Pennsylvania, in federal district court for the Southern District of California, alleging that AcademyOne misappropriated material from CollegeSource's websites. AcademyOne moved to dismiss for lack of personal jurisdiction and the district court granted its motion. The court held that AcademyOne was subject to specific personal jurisdiction, but not general personal jurisdiction, in California with respect to CollegeSource's misappropriation claims. Under the doctrine of pendant personal jurisdiction, AcademyOne was also subject to personal jurisdiction in California with respect to the remainder of CollegeSource's claims. Therefore, the court reversed the district court's dismissal of CollegeSource's complaint and remanded for further proceedings.

Plaintiff ClearOne Communications, Inc. (ClearOne) filed suit against Defendant Biamp Systems (Biamp) alleging that Biamp misappropriated ClearOne's trade secrets by licensing a product from another company that incorporated those trade secrets. A jury found in ClearOne's favor on all of its claims against Biamp. The district court assessed damages for lost profits and unjust enrichment, and awarded ClearOne exemplary damages, attorneys' fees and nontaxable expenses. Biamp raised multiple issues on appeal pertaining to the trial court's application of the applicable statutory authority and in its award of damages. Upon review, the Tenth Circuit affirmed all aspects of the district court's judgment except for the lost profits and exemplary damages awards. The Court reversed and remanded the case for reconsideration of damages owed to ClearOne Communications.

Appellant, a Delaware corporation with its principal place of business in St. Louis, Missouri, sued appellee, a Spanish corporation with its principal place of business in Barcelona, Spain, for breach of contract and misappropriation of trade secrets in the United States District Court for the Eastern District of Missouri. At issue was whether the district court properly granted appellee's motion to dismiss for lack of personal jurisdiction, declined to reach the forum-non-conveniens argument, and denied the motion for failure to state a claim. The court held that the proper application of the five-factor test set forth in Johnson v. Arden supported hearing the present case in Missouri. Therefore, the court reversed the district court's decision to dismiss the complaint for lack of personal jurisdiction and remanded for further proceedings. As a preliminary matter, the court held that it would address the forum-non-conveniens argument because no additional facts were needed to resolve the issue. The court held, however, that because the plaintiff's choice of forum was entitled to significant deference and because the public-interest factors favor deciding the case in Missouri, the court did not find that the present case presented the exceptional circumstances necessary to invoke the doctrine of forum-non-conveniens. Therefore, the court denied appellee's motion to dismiss based on this ground. The court further held that in denying appellee's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the district court did so without analysis and without prejudice. Therefore, the issue should be left for the district court to consider on remand.