Justia Antitrust & Trade Regulation Opinion Summaries

Prime Home Care, LLC sought a permanent injunction pursuant to Neb. Rev. Stat. 87-217, part of the statutes governing the protection of trade names, and Neb. Rev. Stat. 87-303, part of the Uniform Deceptive Trade Practices Act, to prevent Pathways to Compassion, LLC from using the name "Compassionate Care Hospice." The district court granted Prime Home Care a permanent injunction and attorney fees. Pathways appealed, arguing that "Compassionate Care Hospice" was merely descriptive and had not acquired secondary meaning. The Supreme Court affirmed, holding (1) the name had acquired secondary meaning as it concerned Prime Home Care's hospice services; (2) the district court did not err when it granted Prime Home Care's request for a permanent injunction where confusion existed as a result of Pathways' use of Prime Home Care's protected trade name; and (3) the trial court did not err in granting Prime Home Care's request for attorney fees under either section 87-217 or section 87-303, and Prime Home Care was not entitled to additional attorney fees.View "Prime Home Care, LLC v. Pathways to Compassion, LLC" on Justia Law

Lexmark sells the only type of toner cartridges that work with its laser printers; remanufacturers acquire and refurbish used Lexmark cartridges to sell in competition with Lexmark’s new and refurbished cartridges. Lexmark’s “Prebate” program gives customers a discount on new cartridges if they agree to return empty cartridges to the company. Every Prebate cartridge has a microchip that disables the empty cartridge unless Lexmark replaces the chip. Static Control makes and sells components for cartridge remanufacture and developed a microchip that mimicked Lexmark’s. Lexmark sued for copyright infringement. Static Control counterclaimed that Lexmark engaged in false or misleading advertising under the Lanham Act, 15 U.S.C. 1125(a), and caused Static Control lost sales and damage to its business reputation. The district court held that Static Control lacked “prudential standing,” applying a multifactor balancing test. The Sixth Circuit reversed, applying a “reasonable interest” test. A unanimous Supreme Court affirmed. The Court stated that the issue was not “prudential standing.” Whether a plaintiff comes within a statute’s zone of interests requires traditional statutory interpretation. The Lanham Act includes in its statement of purposes, “protect[ing] persons engaged in [commerce within the control of Congress] against unfair competition.” “Unfair competition” is concerned with injuries to business reputation and sales. A section 1125(a) plaintiff must show that its injury flows directly from the deception caused by the defendant’s advertising; that occurs when deception causes consumers to withhold trade from the plaintiff. The zone-of-interests test and the proximate-cause requirement identify who may sue under section 1125(a) and provide better guidance than the multi-factor balancing test, the direct-competitor test, or the reasonable-interest test. Static Control comes within the class of plaintiffs authorized to sue under section 1125(a). Its alleged injuries fall within the zone of interests protected by the Act, and it sufficiently alleged that its injuries were proximately caused by Lexmark’s misrepresentations. View "Lexmark Int’l, Inc. v. Static Control Components, Inc." on Justia Law

Lexmark sells the only type of toner cartridges that work with its laser printers; remanufacturers acquire and refurbish used Lexmark cartridges to sell in competition with Lexmark’s new and refurbished cartridges. Lexmark’s “Prebate” program gives customers a discount on new cartridges if they agree to return empty cartridges to the company. Every Prebate cartridge has a microchip that disables the empty cartridge unless Lexmark replaces the chip. Static Control makes and sells components for cartridge remanufacture and developed a microchip that mimicked Lexmark’s. Lexmark sued for copyright infringement. Static Control counterclaimed that Lexmark engaged in false or misleading advertising under the Lanham Act, 15 U.S.C. 1125(a), and caused Static Control lost sales and damage to its business reputation. The district court held that Static Control lacked “prudential standing,” applying a multifactor balancing test. The Sixth Circuit reversed, applying a “reasonable interest” test. A unanimous Supreme Court affirmed. The Court stated that the issue was not “prudential standing.” Whether a plaintiff comes within a statute’s zone of interests requires traditional statutory interpretation. The Lanham Act includes in its statement of purposes, “protect[ing] persons engaged in [commerce within the control of Congress] against unfair competition.” “Unfair competition” is concerned with injuries to business reputation and sales. A section 1125(a) plaintiff must show that its injury flows directly from the deception caused by the defendant’s advertising; that occurs when deception causes consumers to withhold trade from the plaintiff. The zone-of-interests test and the proximate-cause requirement identify who may sue under section 1125(a) and provide better guidance than the multi-factor balancing test, the direct-competitor test, or the reasonable-interest test. Static Control comes within the class of plaintiffs authorized to sue under section 1125(a). Its alleged injuries fall within the zone of interests protected by the Act, and it sufficiently alleged that its injuries were proximately caused by Lexmark’s misrepresentations. View "Lexmark Int'l, Inc. v. Static Control Components, Inc." on Justia Law

LE, creator of the “5-hour ENERGY” energy shot, asserted that N.V.E., creator of the “6 Hour POWER” energy shot, infringed its trademark, under the Lanham Act. 15 U.S.C. 125(a). LE distributed a “recall notice” stating that NVE’s “‘6 Hour’ energy shot” had been recalled. NVE claims that the notice constituted false advertising in violation of the Lanham Act and anti-competitive conduct in violation of the Sherman Act, 15 U.S.C. 2. The district court first found that a likelihood of confusion did not exist between “6 Hour POWER” and “5-hour ENERGY” and held that the recall notice did not constitute false advertising or a violation of the Sherman Act. The Sixth Circuit reversed with respect to trademark infringement and false advertising claims, but affirmed with respect to Sherman Act claims. The “5-hour ENERGY” mark is suggestive and protectable, but the factors concerning likelihood of confusion were closely balanced, making summary judgment in appropriate. There were also unresolved questions of fact as to whether the “recall notice” was misleading, but there was no Sherman Act violation because it was relatively simple for NVE to counter it by sending notices that “6 Hour POWER” had not been recalled. View "N.V.E., Inc. v. Innovation Ventures, LLC" on Justia Law

in this trade secret misappropriation and breach of contract case, defendant Chance Mold Steel Co. (Chance) appealed from a permanent injunction and from a jury award of damages. The injunction, based on a finding of contract breach, prohibited Chance from selling, displaying, manufacturing, or assisting others in manufacturing a number of ergonomic computer mouse products. The injunction barred sale of specific products that were materially identical to products Chance had previously manufactured for Contour Design, Inc. (Contour) and a new product known as the ErgoRoller. Chance challenged the scope of the injunction and contended that the jury improperly awarded lost profits damages. The First Circuit Court of Appeals (1) reversed the injunction as applied to the ErgoRoller, holding that the record did not support the finding that Chance breached the contract in producing the ErgoRoller; (2) affirmed the scope of the injunction as applied to the other enjoined products; and (3) affirmed the damages award. View "Contour Design, Inc. v. Chance Mold Steel Co., Ltd." on Justia Law

Lexmark manufactures printers and toner cartridges. Remanufacturers acquire used Lexmark cartridges, refill them, and sell them at a lower cost. Lexmark developed microchips for the cartridges and the printers so that Lexmark printers will reject cartridges not containing a matching microchip and patented certain aspects of the cartridges. SC began replicating the microchips and selling them to remanufacturers along with other parts for repair and resale of Lexmark toner cartridges. Lexmark sued SC for copyright violations related to its source code in making the duplicate microchips and obtained a preliminary injunction. SC counterclaimed under federal and state antitrust and false-advertising laws. While that suit was pending, SC redesigned its microchips and sued Lexmark for declaratory judgment to establish that the redesigned microchips did not infringe any copyright. Lexmark counterclaimed again for copyright violations and added patent counterclaims. The suits were consolidated. The Sixth Circuit vacated the injunction and rejected Lexmark’s copyright theories. On remand, the court dismissed all SC counterclaims. A jury held that SC did not induce patent infringement and advised that Lexmark misused its patents. The Sixth Circuit affirmed dismissal of federal antitrust claims, but reversed dismissal of SC’s claims under the Lanham Act and certain state law claims. View "Static Control Components, Inc v. Lexmark Int'l, Inc." on Justia Law

In these parallel cases, separate petitions were filed requesting the district court to set a "reasonable" rate after ASCAP and BMI were unable to agree on licensing fees with DMX, a provider of background/foreground music. In both cases, the district court adopted DMX's proposals. The court held the Second Amended Final Judgment (AFJ2) permitted blanket licenses subject to carve-outs to account for direct licensing and the court rejected ASCAP's claim that a blanket license with an adjustable carve-out conflicted with the AJF2. The court concluded that the district court in both cases found that ASCAP and BMI did not sustain their burdens of proving that their proposals were reasonable; no legal error contributed to these findings and the findings supported by the record were not clearly erroneous; and in both instances, the district court had the authority to set a reasonable rate for DMX's licenses. Accordingly, the court held that the district court did not err in setting DMX's licensing rates with ASCAP and BMI and that the rates set by the district court were reasonable. View "Broadcast Music, Inc. v. DMX Inc.; American Society of Computers, Authors and Publishers v. THP Capstar Acquisition Corp." on Justia Law

This case involved a type of patent litigation settlement known as a "pay for delay" or "reverse payment" agreement. In this type of settlement, a patent holder paid the allegedly infringing generic drug company to delay entering the market until a specified date, thereby protecting the patent monopoly against a judgment that the patent was invalid or would not be infringed by the generic competitor. This case began when the FTC filed a complaint in district court alleging that the reverse payment settlements between the holder of a drug patent and two generic manufacturers of the drug were unfair restraints on trade that violated federal antitrust laws. The court's precedent established the rule that, absent sham litigation or fraud in obtaining the patent, a reverse payment settlement was immune from antitrust attack so long as its anticompetitive effects fell within the scope of the exclusionary potential of the patent. The court rejected the FTC's claims to the contrary and affirmed the judgment. View "FTC v. Watson Pharmaceuticals, Inc., et al." on Justia Law

This was an appeal of two consolidated suits brought under Indiana's and Missouri's trade secret statutes, involving information about the repair and overhaul of helicopter engines published by Rolls-Royce. The court held that the district court did not err in granting Rolls-Royce summary judgment on its trade secret claims where AvidAir was not entitled to the value of the proprietary revised documents, even if the new technical specifications were relatively minor in the context of the overhaul process as whole. Having concluded that the documents in question were protected trade secrets, the district court did not err in granting an injunction in favor of Rolls-Royce. Consequently, the court also affirmed the district court's grant of summary judgment for Rolls-Royce on AvidAir's antitrust and tortious interference claims. Accordingly, the judgment was affirmed. View "AvidAir Helicopter Supply v. Rolls-Royce Corp." on Justia Law

Apple brought this action against Psystar for copyright infringement because Psystar was using Apple's software on Psystar computers. The district court held that Psystar was infringing Apple's federally registered copyrights in its operating software, Mac OS X, because Psystar was copying the software for use in Psystar's computers. Psystar subsequently appealed the district court's rejection of Psystar's copyright misuse defense, the district court's order enjoining Psystar's continuing infringement, and the district court's grant of Apple's motions to seal documents on grounds of maintaining confidentiality. The court held that Psystar's misuse defense failed because it was an attempt to apply the first sale doctrine to a valid licensing agreement. The court affirmed the district court's order enjoining Psystar's continuing infringement and Digital Millennium Copyright Act (DMCA), 17 U.S.C. 1203(b)(1), violations and held that the district court properly applied the Supreme Court's four eBay Inc. v MercExchange, L.L.C. factors. The court held, however, that there was no adequate basis on the record to support the sealing of any Apple records on grounds of confidentiality and applied the presumption in favor of access, vacating the district court's sealing orders. View "Apple Inc. v. Psystar Corp." on Justia Law