Trademark Infringement Alleged by Horticultural Innivator

According to a complaint recently filed in the United States District Court for the Southern District of Alabama, Mitchell Ellis Products, Inc. (“Plaintiff”) is a “longstanding leader in the horticultural industry and has provided machinery specially developed for the nursery and greenhouse market since 1977.” Plaintiff further alleges that it has developed “innovative and revolutionary potting apparatuses” and that the defendants, Bouldin & Lawson, LLC and Bouldin Corporation, infringed upon a patent owned by Plaintiff when Defendants “chose to copy Plaintiff’s technology and innovative style” regarding Plaintiff’s potting machine “rather than innovate and develop [their] own technology.” Specifically, Plaintiff alleges that the Defendants “knowingly induced infringement and possessed specific intent to encourage another’s infringement which led to direct infringement by a third party by soliciting buyers, distributors and/or retailers to offer for sale and/or sell the infringing products, and by soliciting end users to purchase and use the infringing products, in this District and elsewhere in the United States.” The complaint requests a trial by jury and seeks to enjoin the Defendants from continuing to infringe upon Plaintiff’s patent. Plaintiff also seeks a monetary award to compensate for the alleged infringement and demands treble damages for any infringement found to be willful. The case is Mitchell Ellis Products, Inc. v. Bouldin & Lawson, LLC et al., Case No. 1:14-cv-0194-N, in the United States District Court for the Southern District of Alabama. The case was filed April 28, 2014.

The Powder Room Is On The Left

Originally published in Business Alabama.

Homebuilders guard their home plans like buried treasure. So not surprisingly, plans for “production homes”—those constructed according to stock plans rather than custom-designed—frequently end up as the subject of copyright infringement disputes.

Womble Carlyle attorney Mitch Tuchman explores the ways in which federal courts are resolving these copyright infringement matters in a new article for Business Alabama. In particular, the 11th Circuit (Alabama, Georgia and Florida) has developed a distinctive approach, turning to dissimilarities between plans to determine whether infringement exists.

Tuchman discusses the recent Jeff Belton Homes v. Alabama Heritage Homes Case, which may give guidance for how Alabama’s federal courts will handle future litigation.

Attorney Caine O’Rear at Hand Arendall LLC introduced Tuchman to the editor of Business Alabama.

Click here to read “The Powder Room is on the Left” in Business Alabama.

The Art of Football

In University of Alabama Board of Trustees v. New Life Art, Inc., 2013 WL 5442191 (ND Ala., September 2013), on remand from the Eleventh Circuit Court of Appeals, the court addressed issues of whether an artist re-issued products (prints depicting the university football team) in violation of licensing agreements that prohibited issuance without first receiving permission from the university and whether the artist failed to pay royalties with respect to those products.  The Eleventh Circuit Court of Appeals had already determined that “depictions of the University’s uniforms in [the artist’s] paintings, prints, and calendars did not violate the Lanham Act because [he] had a First Amendment right to include the University’s color, trade dress/uniforms, and trademark symbols in the artwork, prints and calendars that celebrated and commemorated the historic moments in Alabama football.”  On remand, the artist maintained that he had not breached licensing agreements with the university and that, even if he had, the university had acquiesced by purchasing and reselling the reissued products.  The district court found that the defendant had not violated four of five relevant licensing agreements because he had not reissued products depicting the university’s “indicia,” as prohibited by the specific terms of the agreements. While the district court found that the artist had breached the fifth licensing agreement by reissuing a certain print on certain products, it further held that the university had acquiesced in the breach by purchasing and reselling unlicensed products from the artist containing the print at issue and, thus, was barred by the equitable doctrine of acquiescence from recovering damages for the breach.

Patent Infringement Alleged Against French Corporation

In a complaint recently filed in the Northern District of Alabama, two Birmingham companies, Applied Ultrasonics, LLC and UIT, LLC  seek damages for the alleged infringement of a number of patents pertaining to ultrasonic impact technology (“UIT”).  The complaint asserts that Applied Ultrasonics is engaged in “the design, development and delivery of equipment and processes” for utilization of UIT in aerospace, mining, offshore drilling, shipbuilding, infrastructure, automotive, energy production and other industries.  UIT reportedly refers to metallurgical processes in which ultrasonic energy is applied to metals in a controlled manner for the purpose of “improving the structure and properties of metals and welded components.” 

The complaint alleges that defendants SONATS SA, a French corporation, and Empowering Technologies, Inc., an Alabama corporation, knowingly and willfully infringed plaintiffs’ patents by using, offering for sale, selling, importing into the United States, and distributing equipment and related software, including “Defendants’ so-called Stressonic ultrasonic impact treatment or needle peening solution and its StressVoyager solution.”  Plaintiffs further contend that the defendants’ products have “no substantial non-infringing uses,” that defendants’ customers are using the products in a manner that constitutes infringement, and that the defendants have both “directly infringed” and “contributed to and/or actively induced infringement” of the patents.

Plaintiffs contend that defendants’ conduct is causing irreparable injury and seek to permanently enjoin the alleged infringement and to recover monetary damages. 

The case is Applied Ultrasonics, LLC, et al. vs. SONATS SA, et al.,  Case No. 2:13-cv-01494-UNAS-CLS, in the United States District Court for the Northern District of Alabama, Southern Division, filed on August 13, 2013.   

Trademark Infringement Alleged By Donut Joe's Against Donut Chef

Donut Joe’s is a retail donut shop in the Birmingham, Alabama area. In a complaint recently filed in the Northern District of Alabama, Donut Joe’s contends that it registered its trademark “Donut Joe’s” name and its trademark logo (including a donut character wearing a chef’s hat) and that a competing establishment, Donut Chef, which also uses a donut character wearing a chef’s hat as part of its logo, has deceived the public into thinking that it is the same establishment as Donut Joe’s. Donut Joe’s specifically asserts that the Donut Chef name and logo are “colorable imitations” of plaintiff’s name and logo and constitute infringements on the same. The complaint also alleges that the operators of Donut Chef, who are also named defendants in the lawsuit, signed a “confidentiality and non-disclosure agreement” with Donut Joe’s owner in 2010 in furtherance of possible future business relations.

The complaint alleges that the operation of Donut Chef violates the agreement and involves use of confidential information obtained from Donut Joe’s. It further alleges that one of the operators of Donut Chef intentionally induced Donut Joe’s to provide confidential information with no intention of being bound by the confidentiality agreement, and that he used the information to establish his own donut shop as well as providing the same to his son and daughter-in-law, who opened their own donut shop, Heavenly Donut Co. The complaint names Heavenly Donut Co. and its owners as additional defendants and asserts that this third establishment is also using illegally obtained information “to unfairly compete with Donut Joe’s.”

Donut Joe’s seeks to enjoin and restrain the defendants from operating a donut business, from using confidential information, from infringing plaintiff’s trademark, and from using the words “Donut Chef” or “any other colorable imitation of Plaintiff’s registered trademark ‘Donut Joe’s’ or [plaintiff’s logo] in the sale of donuts or similar goods.” Donut Joe’s also seeks profits realized from the sale of Donut Chef products, profits realized through the wrongful use of confidential information, other damages allegedly sustained by plaintiff as a result of infringement, and treble damages under 15 U.S.C. Section 1117. The complaint also demands treble damages for fraud alleged to have been involved in the “accumulation and dissemination of confidential information.”

The case is Donut Joe’s, Inc. v. Werner, et al., Case No. 2:13-cv-01578-UNAS-VEH, in the United States District Court for the Northern District of Alabama, Southern Division, filed on August 26, 2013.

Trademark Infringement Filed by Culligan International Company against Former Culligan Franchise

Culligan International Company is a well-known global seller of water treatment products and services to residential, commercial and industrial customers, with over 800 franchise dealers and licensees to sell and distribute its products and who are licensed to use certain Culligan intellectual property. The defendant, Water Systems of Birmingham, Inc., is a former Culligan franchisee  which lost its franchise rights in 2010 due to alleged violations of its franchise obligations.

As of June 19, 2013, defendant’s website states it

…was an exclusive Culligan dealer for more than 16 years. In 2010, we decided to broaden our product lines and services to offer additional brands…Although we no longer are exclusive to the Culligan brand, we still offer repair and maintenance service to all of the many Culligan equipment customers that we currently have throughout Alabama.

In its complaint filed on June 7, 2013, in the U.S. District Court for the Northern District of Alabama, Southern Division, Culligan claims that the defendant has ignored several cease and desist letters from Culligan to stop using Culligan’s intellectual property and to stop falsely identifying itself with Culligan, allegedly causing mass confusion in the marketplace.

Culligan has also filed a separate lawsuit against the same defendant in the Circuit Court of Tallapoosa County, Alabama (Dadeville Division) that solely addresses state court actions regarding the defendant’s alleged unauthorized and illegal use of Culligan’s marks. That case is pending as of the date of this blog.

Culligan seeks compensatory and punitive damages, injunctive relief, attorneys’ fees and costs in its federal case.

The federal case is Culligan International Company, v. Water Systems of Birmingham, Inc., Case No.: 2;13-CV-01085. The case has been referred to Judge Virginia Emerson Hopkins.

Choice of Law Principles and Statute of Limitations Bar Plaintiff’s Trade Secret Claim

Alabama Aircraft Industries, Inc. (“AAI”) sued Boeing Co., Inc. in the U.S. District Court for the Northern District of Alabama, Southern Division, for, inter alia, misappropriation of trade secrets. AAI argued its trade secrets claim should be determined in accordance with Missouri law because the parties’ Non-Disclosure Agreement stated that the interpretation of the that Agreement would be governed by Missouri law, excluding it conflicts of law principles.

The Court rejected AAI’s argument in favor of applying Missouri law since the choice of law provision in the parties’ Non-Disclosure Agreement did not extend to subsequent written agreements between the parties. The significance of this case is the Court’s application of the  lex loci delicti rule.

AAI has its principle place of business in Alabama and the Court noted that any financial injury suffered by AAI would have been was suffered in Alabama. The Court held that a federal court considering diversity cases is compelled to apply the choice of law rules in the state in which it sits, citing Fitts v. Minnesota Mining & Manufacturing Co., 581 So.2d 819, 820 (Ala. 1991). In Alabama, the  long established choice of law rule of lex loci delicti governs tort causes of action and requires that the substantive law of the place where the tort occurred must be employed while procedural law of the forum state is to be applied. Therefore, the Court held that the parties’ trade secrets dispute was governed by Alabama’s Trade Secret Act (Ala. Code § 8-27-5).

The consequence of the Court’s application of Alabama law to the trade secrets dispute was that AAI’s claim was barred by the applicable Alabama two-year statute of limitation.

This case illustrates the fundamental importance of recognizing choice of law issues in both the contract negotiation phase as well as educating clients to alert counsel promptly after a plaintiff becomes aware of trade secret violations by a third party.

The case is Alabama Aircraft Industries, Inc. v. Boeing Co., Inc., 2013 WL 1178720, N.D.Ala., March 20, 2013 (No. 2:11-CV-3577-RDP, decided by District Judge R. David Proctor.