Justia Contracts Opinion Summaries

Wine & Canvas (W&C) hosts “painting nights.” Patrons, following a teacher’s instructions, create a painting while enjoying wine. W&C operated in Indianapolis, Bloomington, and Oklahoma City. Muylle signed a license agreement, moved to San Francisco, and opened a W&C operation. W&C’s executives were present and taught the first class, worked with Muylle to approve paintings for use, gave Muylle company email addresses, and advertised the San Francisco operation on the W&C website. Disagreements arose. Muylle gave notice to terminate the agreement, changed the business name to “Art Uncorked,” and ceased using the W&C name and marks. W&C alleged trademark infringement, 15 U.S.C. 1051. Muylle’s counterclaims invoked California franchise law, federal trademark cancellation. and Indiana abuse of process law. Plaintiffs failed to meet discovery deadlines, despite being sanctioned three times. The Seventh Circuit affirmed: dismissal of the California law counterclaims; W&C's summary judgment on Muylle’s trademark cancellation counterclaim; Muylle's summary judgment on trademark dilution, sale of counterfeit items, unfair competition, bad faith, tortious conduct, abuse of process, breach of contract, fraud, and a claim under the Indiana Crime Victims Act; and Muylle's partial summary judgment on trademark infringement. Through November 18, 2011, W&C impliedly consented to Muylle’s using the marks. On claims of trademark infringement and false designation of origin (for any use after November 18, 2011), and Muylle’s abuse of process counterclaim, the court affirmed awards to Muylle of $270,000 on his counterclaim and $175,882.68 in fees. View "Wine & Canvas Development, LLC v. Muylle" on Justia Law

In 2009, RNB and GAF entered into an agreement under which GAF would promote RNB’s “Roof N Box” product, a three-dimensional roofing model, to building construction contractors affiliated with GAF. The agreement required the parties to submit disputes “arising under” the agreement to arbitration. GAF terminated the agreement after about a year. In 2016, RNB, together with its founder and president, Evans, brought suit against GAF based on GAF’s activities in marketing its own product that competes with the Roof N Box. The complaint alleged design patent infringement, trade dress infringement, and unfair competition. GAF moved to dismiss or stay the action pending arbitration. The district court denied that motion. The Federal Circuit affirmed, stating that GAF’s assertion that the arbitration provision covers the claims stated in the complaint is “wholly groundless.” The complaint challenges actions whose wrongfulness is independent of the 2009 agreement’s existence. View "Evans v. Building Materials Corp." on Justia Law

Plaintiff entered an original song and music video to a variety of companies affiliated with Sony Music Entertainment (Sony) as part of a songwriting contest sponsored by Sony. Plaintiff later sued Sony alleging contract and intellectual property claims. The district court entered an order compelling arbitration and dismissed Plaintiff’s case with prejudice, concluding that the claims were subject to mandatory arbitration under the Federal Arbitration Act and that Plaintiff failed to make a cognizable claim under Fed. R. Civ. P. 12(b)(6). Plaintiff appealed, arguing that the district court erred in ruling that he failed to allege sufficient facts to support his claims. The First Circuit affirmed, holding that because the district court’s rulings that Plaintiff’s claims were subject to mandatory arbitration provided an independent basis for dismissing his claims, the Court did not need to address Plaintiff’s challenge to the district court’s decision to dismiss his complaint on factual sufficiency grounds. View "Cortes-Ramos v. Sony Corp. of America" on Justia Law

Illumina’s 794 patent, covering DNA assay optimization techniques, issued in 2011. In 2010-2011, Ariosa provided Illumina, as a prospective investor, with information on its efforts to develop a noninvasive prenatal diagnostic test. Seven months after the 794 patent issued, Illumina agreed to supply consumables, hardware, and software to Ariosa for three years, providing Ariosa with a non-exclusive license to Illumina’s “Core IP Rights in Goods,” specifically excluding “Secondary IP Rights … that pertain to the Goods (and use thereof) only with regard to particular field(s) or application(s), and are not common to the Goods in all applications and fields.” The agreement’s arbitration clause excluded “disputes relating to issues of scope, infringement, validity and/or enforceability of any Intellectual Property Rights.” Illumina never indicated that Ariosa needed to license the 794 patent . Ariosa launched the Harmony Prenatal Test, using materials supplied by Illumina. Verinata and Stanford sued, alleging that the Test infringed other patents. Illumina later acquired Verinata and accused Ariosa of breaching the supply agreement by failing to license Secondary Rights. Ariosa filed counterclaims, asserting invalidity and non-infringement; breach of contract; and breach of the covenant of good faith and fair dealing. The district court concluded that the counterclaims were not subject to compulsory arbitration. The Federal Circuit affirmed. The counterclaims depend on the scope determination of licensed intellectual property rights, which is expressly exempt from arbitration. View "Verinata Health, Inc. v. Ariosa Diagnostics, Inc." on Justia Law

DTC filed suit against JPMC and others, alleging willful patent infringement relating to electronic check-processing systems. JPMC was the first bank to reach a settlement agreement with DTC in 2005. As part of the settlement, JPMC entered into a consent judgment in which it admitted the patents were valid and enforceable and that JPMC had infringed them. It also entered into a license agreement permitting JPMC unlimited use of DTC’s patented technology going forward. At issue in this appeal is the district court’s interpretation of a most favored licensee (MFL) clause in the license agreement allowing JPMC to use DTC's patented check processing technology. JPMC invoked its rights under the MFL clause based on DTC’s granting a similar unlimited license to another entity for a lesser lump sum than JPMC paid. The court agreed with the district court that after comparing these two lump-sum license agreements, the later agreement is indeed more favorable, and JPMC therefore is entitled to a refund from DTC for the difference between the amount it paid for its license and the lesser amount bargained for in the later license agreement. Accordingly, the court affirmed the judgment. View "JP Morgan Chase Bank, N.A. v. Datatreasury Corp." on Justia Law

In 1997 Seagate recruited Dr. Shukh, a native of Belarus, to move to the U.S. Shukh executed Seagate’s standard Employment Agreement, assigning to Seagate all “right, title, and interest in and to any inventions” made while at Seagate. Seagate prohibited employees from filing patent applications for their inventions. During his employment, Shukh was named as an inventor on 17 patents. Shukh’s time at Seagate was tumultuous. His performance evaluations indicated that he did not work well with others due to his confrontational style. In 2009, Seagate terminated Shukh and 178 others. Shukh has not yet secured employment and claims that he was told that he would never find employment at certain companies with his reputation. Shukh alleges that Seagate wrongfully omitted him as an inventor from several patents relating to semiconductor technologies; that Seagate discriminated against and terminated him based national origin and in retaliation for complaining about discrimination. He sought correction of inventorship of the disputed patents under 35 U.S.C. 256. The district court held that Shukh had no interest in the patents based on the assignment; dismissed claims for rescission of his Employment Agreement, breach of contract, breach of fiduciary duty, and unjust enrichment; and rejected claims of reputational harm, retaliation, fraud, and discrimination on summary judgment. The Federal Circuit vacated with respect to correction of inventorship, but otherwise affirmed. There is a genuine dispute of material fact as to whether Shukh’s negative reputation is traceable to Seagate’s omission of Shukh as an inventor from disputed patents. View "Shukh v. Seagate Tech., LLC" on Justia Law

Konig’s SRI Employment Agreement, stated: I agree ….To promptly disclose… all discoveries, improvements, and inventions, including software … during … my employment, and … to effect transfer of ownership … to SRI . . . . I understand that termination of this employment shall not release me from my obligations. While employed by SRI, Konig started generating documents relating to a personalized information services idea called “Personal Web” and formed a company, Utopy. Konig left SRI and filed a provisional patent application in 1999; the 040 patent issued in 2005. In 2001, Konig asked an SRI scientist to test the Utopy products. The 040 patent was eventually assigned to PUM. Konig filed another patent application in 2008. PUM was the assignee; the 276 patent issued in 2010. In 2009, PUM sued Google, asserting infringement. PUM provided interrogatory responses that asserted that the conception of the inventions was while Konig was still at SRI. Google had acquired “any rights” that SRI had and counterclaimed breach of contract. The court stated that no reasonable juror could have found that the injury was “inherently unknowable,” applied the three-year limitations period for contracts claims, and granted PUM judgment on the counterclaim. The court also entered judgment of invalidity and noninfringement. The Federal Circuit affirmed, noting that the claim construction had no effect on the outcome and declining to issue an advisory opinion. View "Personalized User Model, LLP v. Google, Inc." on Justia Law

Best designs and markets exit signs and emergency lighting. Pace manufactured products to Best’s specifications. Best’s founder taught Pace how to manufacture the necessary tooling. There was no contract prohibiting Pace from competing with Best. By 2004, Best was aware that Pace was selling products identical to those it made for Best to Best’s established customers. Several other problems arose between the companies. When they ended the relationship, Pace was in possession of all of the tooling used to manufacture Best’s products and the cloned products, and Best owed Pace almost $900,000 for products delivered. Pace filed a breach of contract suit. Best requested a setoff of damages for breach of warranty and counterclaimed for breach of contract, tortious interference, misappropriation of trade secrets, conversion, and fraud. Pace claimed that Best had misappropriated Pace’s trade secrets and had tortiously interfered with Pace’s contracts. The district court found that Best had breached its contractual obligations by failing to pay, but that Pace was liable for breach of warranties, breach of contract, tortious interference, misappropriation of trade secrets, conversion, and false designation of origin and false advertising under the Lanham Act. The Sixth Circuit affirmed that Pace is liable for breach of contract and tortious interference, but reversed or vacated as to the trade secrets, Lanham Act, conversion, and warranties claims. View "Kehoe Component Sales Inc. v. Best Lighting Prods., Inc." on Justia Law

At issue in this case was whether Florida law recognizes a “bright-line rule” that distinguishes an assignment from a sublicense. This complex commercial litigation involved an agreement wherein a licensee transferred its entire interest in a patent license agreement except for one day. A federal district court concluded that the agreement was a prohibited assignment and not a sublicense. On appeal, the Eleventh Circuit certified the question of whether a “bright-line” rule could be applied to determine whether the licensee’s transfer of its interest constituted an assignment or a sublicense. The Supreme Court answered the certified question in the negative, holding that this legal determination depends on a multiple of factors, and the ultimate resolution of whether the transfer of the licensee’s interest constitutes an assignment or a sublicense is a mixed question of law and fact. View "MDS (Canada) Inc. v. Rad Source Techs., Inc." on Justia Law

In 2001, ASC and Paragon entered into a contract to develop and support computer software for the Chicago Tribune. This software, called the “Single Copy Distribution System” (SCDS) would allow the Tribune to manage and track newspaper deliveries and subscriptions. Tensions emerged and Paragon terminated the contract in 2003. ASC successfully sued Paragon in Ohio state court, obtaining a declaration that ASC was the sole owner of the SCDS. In federal court, ASC alleged copyright infringement, trademark infringement, breach of contract, conversion, tortious interference with a business relationship, unjust enrichment, and unfair competition based on Paragon’s alleged copying of the SCDS software to use in its DRACI software, developed in 2004 for another newspaper. After eight years of litigation, the district court granted summary judgment to Paragon on all claims. The Sixth Circuit affirmed, stating that ASC had never submitted any evidence identifying the unique protectable elements of SCDS, and that there was insufficient evidence to generate even an implication that DRACI is substantially similar to SCDS. View "Automated Solutions Corp. v. Paragon Data Sys., Inc." on Justia Law