Monday, June 30, 2014

Copyright infringement, insurance coverage, mortgage foreclosure limitations of actions, and farm-raised duck grilled with lavender honey

Copyrights -- Infringement -- Exclusive right to perform copyrighted work publicly -- Transmit Clause -- Seller of service that allows its subscribers to watch television programs over Internet at about same time as programs are broadcast over the air infringes copyright owners' exclusive right to perform their copyrighted work publicly -- Infringer “perform[s]” copyright owners' works “publicly” as those terms are defined in Transmit Clause of Copyright Act

Forfeiture -- In rem civil forfeiture -- Seizure of substitute assets -- Seizure of bank accounts as substitute assets where no link is established between alleged criminal activity and bank accounts -- Section 932.703(5), Florida Statutes, does not authorize the seizure of substitute assets prior to a forfeiture hearing -- Statute is intended to be used once a forfeiture has been ordered
SATISH B. PATEL, Appellant, v. STATE OF FLORIDA, etc., Appellee. 5th District.

Insurance -- Fire -- Ordinance or law coverage endorsement -- Provision of ordinance or law endorsement which provided that insurer would not pay for increased cost of construction due to enforcement of ordinance or law unless repairs or replacement are made within two years after loss was a forfeiture provision, and was waived by insurer -- Insurer waived the provision by failing to bring the provision to insured's attention despite knowing that insured expected the entire claim to be paid and by continuing to adjust the entire claim after the two-year period expired

Mortgage foreclosure -- Limitation of actions -- Trial court properly dismissed complaint to cancel mortgages which alleged the statute of limitations had run on their enforcement since the time mortgagee had originally filed suit to foreclose for default, and during which time mortgagee voluntarily dismissed foreclosure complaint -- Each payment default that is less than five years old still creates a basis for a subsequent foreclosure action; hence, the note and mortgage remain a valid and enforceable lien -- Voluntary dismissal was not an adjudication on the merits and therefore will not support a claim of res judicata

Mortgage foreclosure -- Standing -- Claim that mortgagee failed to prove standing due to an undated endorsement on the note -- Unavailable transcript -- Because a transcript of the proceedings is not available for review, and witnesses may well have testified at the non-jury trial that the note was acquired by mortgagee prior to institution of the suit, trial court is entitled to presumption of correctness in its entry of final judgment of foreclosure -- Civil procedure -- No merit to claim case was not properly set for trial as case was at issue and trial court provided proper notice of its sua sponte setting the case for trial -- Nothing in the record shows mortgagor objected to trial court's setting the case for trial; hence, even if meritorious, the issue was not preserved

Real property -- Bert J. Harris, Jr., Private Property Rights Protection Act -- Settlement agreement -- Trial court was without jurisdiction to review and approve settlement agreement which was entered into more than four years after property owners had filed suit seeking compensation under Bert Harris Act -- Settlement agreement did not comply with presuit settlement timeline set forth in statute, and presuit settlement procedures were not available to parties at time they entered into agreement

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Wednesday, June 25, 2014

Contracts, liquidated damages, summary judgment, and bison pot roast with rosemary, root vegetables, and purple potatoes

Contracts -- Limitation of actions -- Equitable estoppel -- Action by owner of unit in commercial condominium against condominium association, alleging that association failed to pay for damage to plaintiff's unit caused by hurricane -- Doctrine of equitable estoppel did not preclude consideration of defendant's statute of limitations defense where nothing in defendant's conduct prevented plaintiff from timely asserting claims -- Because plaintiff had all information necessary to file action at time cause of action accrued, and plaintiff was not deprived of ability to bring suit prior to running of statute of limitations, equitable tolling doctrine is inapplicable -- Trial court erred in refusing to consider defendant's statute of limitations affirmative defense
OLEAN MEDICAL CONDOMINIUM ASSOCIATION, INC., a Florida corporation, Appellant, v. ALI A. AZIMA, Trustee of that certain Living Trust Agreement dated April 17, 2006, Appellee. 2nd District.

Contracts -- Shareholder agreement -- Jurisdiction -- Non-residents -- Error to deny non-resident defendant's motion to dismiss action alleging she breached an agreement that required her to perform duties in Florida when she failed to provide certain information which she was required to share with other shareholders -- Where language of contract did not explicitly require defendant to perform any act in Florida whatsoever, defendant's alleged breach was not of an act that was “required by the contract to be performed in this state,” and long-arm jurisdiction cannot be properly invoked over her under section 48.193(1)(g) -- Undisputed evidence did not support finding of general jurisdiction under section 48.193(2) -- Defendant had not been Florida resident since 1974, owned no property in Florida, and traveled to Florida only irregularly to visit friends -- Status as director of Florida corporation, filing of annual reports, or service as trustee in now-defunct Florida trust were insufficient to establish general personal jurisdiction -- Mere fact that defendant previously availed herself of Florida courts is insufficient where there was no information regarding defendant's choice of Florida as forum, including whether Florida was mandatory or permissive or whether defendant purposefully availed herself of Florida's privileges and protections -- Plaintiffs have not provided any legal authority to support claim that defendant's employment of Florida counsel to assist her in execution of contract was sufficient to invoke general jurisdiction over defendant
DEBORAH R. OLSON, Appellant, v. DANIEL ROBBIE and TIMOTHY H. ROBBIE, Appellees. 4th District.

Dissolution of marriage -- Alimony -- Modification -- Trial court properly dismissed with prejudice husband's petition to terminate or modify alimony obligation on grounds the wife's needs had decreased, because the marital settlement agreement unambiguously limited the ability to modify alimony to situations involving the deterioration of the husband's health or business, conditions not raised in husband's petition
ROBERT F. ELBAUM, Appellant, v. DENISE J. ELBAUM, Appellee. 4th District.

Dissolution of marriage -- Attorney's fees -- Trial court erred in awarding wife attorney's fees without specific findings as to number of hours expended by wife's attorney and whether those hours are reasonable
ROBERT MITCHELL, Appellant, v. CYNTHIA Y. MITCHELL, Appellee. 1st District.

Dissolution of marriage -- Child custody -- Relocation of child -- No error in denying mother's motion for temporary order permitting relocation of child to another county or in granting father's emergency motion for return of child -- Order did not change parenting plan, but instead required mother to return child to county, consistent with previously ordered parenting plan
MELISSA KERSHAW, Appellant, v. VICTOR KERSHAW, Appellee. 4th District.

Dissolution of marriage -- Marital debts -- Where terms of marital settlement agreement clearly and unambiguously required husband to assume wife's credit card debt for certain cards and balances, it was error to enter order requiring wife to pay credit card debt before husband would be required to reimburse her
SHARON R. WHITE n/k/a SHARON R. BUNN, Appellant, v. STEPHEN F. WHITE, Appellee. 4th District.

Dissolution of marriage -- Trial court erred in including in order on wife's motion for temporary relief a requirement that parties comply with “Notice to Litigation Parties with Minor Children,” which concerned husband's financial affairs and the minor child, including contact, parenting, and other aspects of his relationship with the child, where issue of compliance with Notice was not mentioned in wife's motion or at hearings on her motion -- Husband's due process rights were violated when court mandated compliance with Notice without notice to husband
JEFFREY S. GROVE, Appellant, v. KAREN B. GROVE, Appellee. 2nd District.

Garnishment -- Interest in limited liability company -- Trial court erred in entering writ of garnishment upon debtor's interest in a limited liability company -- Statute provides that a charging order is sole and exclusive remedy by which judgment creditor may satisfy a judgment from judgment debtor's interest in or distributions of LLC
DARLENE A. YOUNG, Appellant, v. LESLIE COUTURE LEVY and WEAR IT'S AT, LLC, Appellees. 4th District.

Injunctions -- Order enjoining resident of subdivision from using roads within subdivision to transport or deliver equipment, material, or personnel to improve adjacent property was deficient for failure to specify the reasons for entry of the injunction -- Order granting temporary injunction reversed and remanded for further proceedings
JOHN McCUE and McCUE HOLDINGS, LLC, Appellants, v. HERITAGE FARMS PROPERTY ASSOCIATION, INC., a Florida not-for-profit corporation, Appellee. 2nd District.

Landlord-tenant -- Contracts -- Leases -- Early termination fee -- Liquidated damages -- When a tenant and landlord execute an addendum choosing remedy of liquidated damages or early termination fee pursuant to section 83.595, the remedy is enforceable if the addendum is executed at the same time as the lease, which does not make provision for the remedy, as part of the same transaction -- Trial court erred in concluding that addendum is unenforceable if lease does not include a similar provision
RAISSA WILSON, Appellant, v. WILLIAM TERWILLINGER, Appellee. 5th District.

Negotiable instruments -- Promissory notes -- Civil procedure -- Summary judgment -- Supporting affidavit -- Best evidence rule -- Plaintiff's failure to file original note at least 20 days before summary judgment hearing in action on promissory note was not fatal to application for summary judgment -- Best evidence rule applies to proceedings wherein evidence is introduced, and a summary judgment hearing is not such a proceeding -- Even assuming best evidence rule applies in summary judgment context, presentment of original note at or before the hearing satisfies the rule -- Although original note must be surrendered before judgment may be entered unless it is properly established that instrument is lost or destroyed, it is not necessary that original note be attached to affidavit in support of summary judgment in order to satisfy surrender requirement so long as it is surrendered to court before judgment is entered on note
SIA-MACK ALAVI AND VALERIE ALAVI, Appellants, v. FRANCISCO A. GARCIA, Appellee. 5th District.

Partnerships -- Corporations -- Dissolution -- Trial court did not err in dissolving partnership which leased a medical office building from a corporation owned by the same parties who own the partnership upon finding that the partners have engaged in conduct which has made it not practical to carry on the business of the partnership -- Court erred in failing to also dissolve the corporation which owned the property where the shareholders are unable to break a corporate deadlock, and absent such a break, the property would continue to decline, resulting in the frustration of the purpose of the corporation

Torts -- Contracts -- Evidence -- Settlement agreement -- In action by Airport District against construction management contractor alleging negligence and contract claims arising out of installation of improper-sized sand in stormwater retention pond, it was error to admit evidence of District's settlement with another defendant -- Settlement agreement was not an improper Mary Carter-style agreement where the settling defendant did not agree to remain a party to the trial -- Airport District's appeal was not rendered moot because it failed to appeal judgment on defendant's counterclaim

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Tuesday, June 17, 2014

Equitable distribution, settlement agreement enforcement, red light cameras, and bison stew with plums, mustard seed, and cumin over fresh pasta

Dissolution of marriage -- Equitable distribution -- Although six-month delay in ruling on equitable distribution issues would not, without more, require reversal, new trial is warranted on equitable distribution where there were indications that trial court either forgot or confused central issues at trial
THOMAS D. CARNICELLA, Appellant, v. SHERI D. CARNICELLA, Appellee. 5th District.

Judges -- Disqualification -- Ex parte conference -- Fact that judge conducted ex parte conference constitutes legally sufficient basis for disqualification -- Petition for writ of prohibition granted
RACHEL BERRY, Petitioner, v. BRETT BERRY, Respondent. 1st District.

Mortgage foreclosure -- Settlement agreement -- Enforcement -- Trial court properly denied motion to enforce settlement agreement where parties had not agreed on a material term of the contract -- Trial court properly determined that amount of and to whom a broker's commission would be paid on sale to third party which underlay the settlement agreement was, in this case, a material term of the contract and precluded a meeting of the minds on the settlement
MONIQUE A. LEVI & ASSOCIATES, INC. and J.F.G. LEVI, Appellants, v. SPCP GROUP V, LLC, a Delaware limited liability company, Appellee. 4th District.

Municipal corporations -- Ordinances -- Red light cameras -- Ordinances imposing penalties for red light violations detected by devices using cameras were preempted by state law prior to effective date of Mark Wandall Traffic Safety Act
RICHARD MASONE, Petitioner, vs. CITY OF AVENTURA, Respondent. Supreme Court of Florida.

Public records -- Mandamus -- Petitioner for writ of mandamus to compel city to produce public records had standing to bring action where petitioner had sent city an e-mail request for the records -- City could not properly condition disclosure of public records to then-anonymous requester on filling out city's form on its web page and giving an address or other identifiable source for payment of associated costs -- Trial court erred in dismissing mandamus petition for lack of standing
JOEL EDWARD CHANDLER, Appellant, v. THE CITY OF GREENACRES, Appellee. 4th District.

Real property -- Lis pendens -- It was improper to deny motion to dissolve lis pendens where there was no showing of a fair nexus between the title to property and the lawsuit -- Trial court directed to discharge lis pendens, as well as the bond that court ordered property owner to post
NOBE BAY HOLDINGS, LLC, Petitioner, vs. LAZARO MIGUEL GARCIA, M.D., Respondent. 3rd District.

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Monday, June 9, 2014

Federal preemption, settlements and releases, patent and copyright infringement, and Texas chili with grass fed beef, cumin seed, oregano, organic tomatoes and peppers, and Chipotle chiles

Bankruptcy -- An explicit general release in favor of debtor's principal on behalf of all parties with claims against debtor, contained in confirmed plan of reorganization which was never appealed, is binding on a creditor that had adequate notice of plan terms and opportunity to object where the language of the plan and confirmation order covered the claim
In re: FFS DATA, INC., LIVE DATA GROUP, INC., Debtors. U.S. Bankruptcy Court, Southern District of Florida, West Palm Beach Division.

Banks -- Settlement of checks -- Federal preemption -- Class action alleging that out-of-state state bank's act of charging a fee to cash a check presented in person violated Florida statute providing that a financial institution “may not settle any check drawn on it otherwise than at par” -- Florida statute is preempted by regulations promulgated by Office of Comptroller of the Currency pursuant to National Bank Act -- Claims of unjust enrichment premised on same facts are also preempted -- District court did not err in dismissing complaint
DEREK PEREIRA, CAMILA DE FREITAS, individually and on behalf of all others similarly situated, Plaintiffs - Appellants, v. REGIONS BANK, an Alabama Banking Corporation, Defendant - Appellee. 11th Circuit.

Bond v. United States
Docket: 12-158
Opinion Date: June 2, 2014
Judge: Roberts
Areas of Law: Constitutional Law, Criminal Law

Bond sought revenge for her husband’s affair by spreading toxic chemicals on Haynes’s car, mailbox, and door knob, in hopes that Haynes would develop a rash. Haynes suffered a minor chemical burn that she treated by rinsing with water. Federal prosecutors charged Bond with violating the Chemical Weapons Convention Implementation Act, which forbids any person knowingly to possess or use "any chemical weapon,” 18 U.S.C. 229(a)(1). A “chemical weapon” is “[a]toxic chemical and its precursors, except where intended for a purpose not prohibited under this chapter.” A “toxic chemical” is “any chemical which through its chemical action on life processes can cause death, temporary incapacitation or permanent harm to humans or animals … regardless of their origin or of their method of production, and regardless of whether they are produced in facilities, in munitions or elsewhere.” “[P]urposes not prohibited by this chapter” is defined as“[a]ny peaceful purpose related to an industrial, agricultural, research, medical, or pharmaceutical activity or other activity,” and other specific purposes. Bond pleaded guilty but reserved the right to appeal. On remand, the Third Circuit rejected her Tenth Amendment argument and an argument that section 229 does not reach her conduct. The Supreme Court reversed. Section 229 does not reach Bond’s simple assault. Seeing “no need to interpret the scope of the international Chemical Weapons Convention,” the Court stated that Bond was prosecuted under a federal statute, which, unlike the treaty, must be read consistent with the principles of federalism. There is no indication that Congress intended to reach purely local crimes; an ordinary speaker would not describe Bond’s feud-driven act of spreading irritating chemicals as involving a “chemical weapon.” The chemicals at issue here bear little resemblance to those whose prohibition was the object of an international Convention. Pennsylvania’s laws are sufficient to prosecute assaults like Bond’s, and the “global need to prevent chemical warfare does not require the Federal Government to reach into the kitchen cupboard.“

Breslow v. Wells Fargo Bank, N.A.
Docket: 12-14564
Opinion Date: June 5, 2014
Judge: Tjoflat
Areas of Law: Communications Law, Consumer Law
Plaintiff, individually and on behalf of her minor child, filed suit alleging that Wells Fargo violated the Telephone Consumer Protection Act of 1991's (TCPA), 47 U.S.C. 227(b)(1)(A)(iii), prohibition on autodialing cell phones without the express consent of the called party. Wells Fargo had called the cell phone number used by the child to collect a debt from a former customer who had listed the phone number on a Wells Fargo account application. Wells Fargo was unaware that the cell phone number was no longer assigned to the former customer and the former customer never revoked his consent or requested that Wells Fargo cease calling the number. The court concluded that "called party," for purposes of section 227(b)(1)(A)(iii) means the subscriber to the cell phone service or user of the cell phone called. Accordingly, the court affirmed the district court's grant of partial summary judgment in plaintiff's favor.

Broadcast Music, Inc. v. Meadowlake Ltd.
Docket: 13-3933
Opinion Date: June 6, 2014
Judge: Sutton
Areas of Law: Copyright, Entertainment & Sports Law

Rafters Bar and Grill, a golf-course restaurant in Canton, Ohio, offers music and dancing, sometimes turning on a recording, sometimes bringing in live performers, but it hosts performances of the music without getting the copyright owners’ permission. BMI, an organization of songwriters and composers that licenses music and collects royalties on behalf of its members, sent Rafters more than a score of letters, warning the restaurant not to infringe its copyrights and offering to license its music. It got no response. BMI sued for copyright infringement. Roy, the owner of Rafters, argued that he did not perform any of the copyrighted music. The bands that played at the restaurant and the people who turned on the recordings did that. The district court granted BMI summary judgment. The Sixth Circuit affirmed, noting that a defendant becomes vicariously liable for a direct infringement of a copyright “by profiting from [the] infringement while declining to exercise a right to stop or limit it.” A defendant’s ignorance about the infringement or the performances does not negate vicarious liability.

Eastham v. Chesapeake Appalachia, L.L.C.
Docket: 13-4233
Opinion Date: June 6, 2014
Judge: Grifin
Areas of Law: Contracts, Energy, Oil & Gas Law

In 2007, the Easthams entered into a five-year lease with Chesapeake, granting the right to extract oil and gas from the Easthams’ 49 acres in Jefferson County, Ohio. The Easthams were granted a royalty of one-eighth of the oil and gas produced from the premises. Until a well was commenced on the premises, the Easthams were entitled to “delay rental” payments of $10 per acre annually. The lease stated “Upon the expiration of this lease and within sixty (60) days thereinafter, Lessor grants to Lessee an option to extend or renew under similar terms a like lease.” In 2012, Chesapeake filed a notice of extension with the County Recorder and sent the Easthams a letter stating that it had extended the lease on the same terms for an additional five years, with a delay rental payment for $490.66. The Easthams later claimed that they did not read and did not understand the lease, but were not pressured into signing it. They filed a class action, seeking a declaration that the lease expired and that title to the oil and gas underneath the property be quieted in their favor. They claimed that the agreement did not give Chesapeake the option to unilaterally extend, but required that the parties renegotiate at the end of the initial term. The district court entered summary judgment for Chesapeake, concluding that the lease’s plain language gave Chesapeake options either to extend the lease under its existing terms or renegotiate under new terms. The Sixth Circuit affirmed

In Re: Deepwater Horizon
Docket: 12-30883
Opinion Date: June 4, 2014
Judge: Benavides
Areas of Law: Energy, Oil & Gas Law, Environmental Law

BP and Andarko appealed the district court's grant of summary judgment in favor of the the government on the question of their liability for civil penalties under 33 U.S.C. 1321(b)(7)(A). Section 1321(b)(7)(A) imposes mandatory penalties upon the owners of facilities "from which oil or a hazardous substance is discharged." The court found no genuine dispute as to defendants' liability for civil penalties where the well's cement failed, resulting in the loss of controlled confinement of oil such that the oil ultimately entered navigable waters. Therefore, the well is a facility "from which oil or a hazardous substance was discharged""into or upon the navigable waters of the United States." Andarko and BP "shall be subject to a civil penalty" calculated in accordance with statutory and regulatory guidelines and this liability is unaffected by the path traversed by the discharged oil. Nor is liability precluded by any culpability on the part of the vessel's owner or operator. Accordingly, the court affirmed the judgment of the district court.

In re: Thomas
Court: U.S. 6th Circuit Court of Appeals
Docket: 13-8048
Opinion Date: June 3, 2014
Judge: Humphrey
Areas of Law: Bankruptcy, Family Law

Thomas and Jennifer married and purchased a family home with a first mortgage, then obtained a second mortgage. In a 2003 divorce consent decree, Thomas agreed to relinquish any interest in the home. Jennifer agreed to assume and hold him harmless from the obligation to pay both mortgages. Thomas agreed to pay child support. The couple remarried in 2004, but, in 2007, this marriage also ended in divorce. The 2007 consent decree waived spousal support; Thomas again agreed to give up any interest in the house, which he had never conveyed under the 2003 decree. Jennifer agreed to assume the first mortgage. Thomas's child support obligation was reduced and they agreed to split the second mortgage obligation. Thomas deeded his interest in the house. A $8,082.37 judgment lien was not addressed in the 2007 decree although it attached to the property before the second divorce. Jennifer sold the house in 2008. The first and second mortgage debts were satisfied. Jennifer negotiated release of the judgment lien for $5,000.00 and paid $836.14 to close the transaction. The state court entered an order in the 2007 divorce proceeding, requiring Thomas to reimburse Jennifer $7,500.00 for the second mortgage and $5,000.00 for the judgment lien. Thomas filed a petition for Chapter 13 bankruptcy relief, listing an unsecured priority claim for child support and a $15,000.00 unsecured claim on Schedule F. Jennifer asserted a priority unsecured claim for “[a]limony, maintenance, or support” of $12,500.00 for the second mortgage and judgment lien debts. Thomas objected, arguing that the claim was “satisfied when the real estate was sold,” and not a domestic support obligation. The bankruptcy court applied the Calhoun test and found Jennifer’s claim was in the nature of “alimony, maintenance or support.” The Sixth Circuit Bankruptcy Appellate Panel affirmed.

Limelight Networks, Inc. v. Akamai Techs, Inc.
Docket: 12-786
Opinion Date: June 2, 2014
Judge: Alito
Areas of Law: Intellectual Property, Patents

Akamai is the exclusive licensee of a patent that claims a method of delivering electronic data using a content delivery network (CDN). Limelight also operates a CDN and carries out several of the steps claimed in the patent, but its customers, rather than Limelight itself, perform a step of the patent known as “tagging.” Under Federal Circuit case law, liability for direct infringement under 35 U.S.C. 271(a) requires performance of all steps of a method patent to be attributable to a single party. The district court concluded that Limelight could not have directly infringed the patent at issue because performance of the tagging step could not be attributed to it. The en banc Federal Circuit reversed, holding that a defendant who performed some steps of a method patent and encouraged others to perform the rest could be liable for inducement of infringement even if no one was liable for direct infringement. The Supreme Court reversed. A defendant is not liable for inducing infringement under section 271(b) when no one has directly infringed. The Federal Circuit’s contrary view would deprive section 271(b) of ascertainable standards and require the courts to develop parallel bodies of infringement law. Citing section 271(f), the Court stated that Congress knows how to impose inducement liability predicated on noninfringing conduct when it wishes to do so. Though a would-be infringer could evade liability by dividing performance of a method patent’s steps with another whose conduct cannot be attributed to the defendant, a desire to avoid this consequence does not justify fundamentally altering the rules of inducement liability clearly required by the Patent Act’s text and structure.

Lotes Co., Ltd. v. Hon Hai Precision Industry Co.
Court: U.S. 2nd Circuit Court of Appeals
Docket: 13-2280
Opinion Date: June 4, 2014
Judge: Katzmann
Areas of Law: Antitrust & Trade Regulation, Business Law

Plaintiff filed suit under the Sherman Act, 15 U.S.C. 1,2, alleging that defendants, a group of five competing electronics firms, have attempted to leverage their ownership of certain key patents to gain control of a new technology standard for USB connectors and, by extension, to gain monopoly power over the entire USB connector industry. The court held that, under principles articulated in a line of recent Supreme Court decisions extending from Arbaugh v. Y&H Corp. to Sebelius v. Auburn Regional Medical Center, the requirements of the Foreign Trade Antitrust Improvement Act (FTAIA), 15 U.S.C. 6a, are substantive and nonjurisdictional in nature. Because Congress has not clearly stated that these requirements are jurisdictional, they go to the merits of the claim rather than the adjudicative power of the court. In so holding, the court overruled the court's prior decision in Filetech S.A. v. France Telecom S.A. The court also concluded that, although the FTAIA's requirements are nonjurisdictional and thus potentially waivable, the court rejected plaintiffs' argument that defendants somehow have waived them by contract in this case; foreign anticompetitive conduct can have a statutorily required direct, substantial, and reasonably foreseeable effect on U.S. domestic or import commerce even if the effect does not follow as an immediate consequence of defendant's conduct, so long as there is a reasonably proximate causal nexus between the conduct and the effect; the court rejected the interpretation of "direct...effect" advanced by the Ninth Circuit in United States v. LSL Biotechnologies in favor of the interpretation advocated by amici curiae the United States and the FTC and adopted by the Seventh Circuit in its en banc decision in Minn-Chem, Inc. v. Agrium, Inc.; and the court need not decide, however, whether plaintiff here has plausibly alleged the requisite "direct, substantial, and reasonably foreseeable effect" under the proper standard. Accordingly, the court affirmed on alternative grounds the judgment of the district court dismissing plaintiff's claims.

Nautilus, Inc. v. Biosig Instruments, Inc
Docket: 13-369
Opinion Date: June 2, 2014
Judge: Ginsburg
Areas of Law: Intellectual Property, Patents

A patent specification must “conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as [the] invention,” 35 U.S.C. 112. The 753 patent involves a heart-rate monitor used with exercise equipment; it asserts that prior monitors were often inaccurate in measuring the electrical signals accompanying each heartbeat (ECG signals) because of the presence of other electrical signals generated by the user’s skeletal muscles that can impede ECG signal detection. The invention claims to improve on prior art by detecting and processing ECG signals in a way that filters out the interference. Claim 1 refers to a “heart rate monitor for use by a user in association with exercise apparatus and/or exercise procedures.” The claim comprises a cylindrical bar fitted with a display device; electronic circuitry including a difference amplifier; and, on each half of the bar, a “live” electrode and a “common” electrode “mounted ... in spaced relationship with each other.” The exclusive licensee alleged that Nautilus, without obtaining a license, sold exercise machines containing its patented technology. The district court granted Nautilus summary judgment on the ground that the claim term “in spaced relationship with each other” failed the definiteness requirement. The Federal Circuit reversed, concluding that a patent claim passes the threshold so long as the claim is “amenable to construction,” and, as construed, is not “insolubly ambiguous.” The Supreme Court vacated. A patent is invalid for indefiniteness if its claims, read in light of the patent’s specification and prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention. Section 112’s definiteness requirement must take into account the inherent limitations of language. The standard mandates clarity, while recognizing that absolute precision is unattainable. The Federal Circuit inquired whether the claims were “amenable to construction” or “insolubly ambiguous,” but such formulations lack the precision section 112 demands. To tolerate imprecision just short of that rendering a claim “insolubly ambiguous” would diminish the definiteness requirement’s public-notice function and foster the innovation-discouraging “zone of uncertainty.” The Court remanded so that the Federal Circuit can reconsider, under the proper standard, whether the relevant claims in the 753 patent are sufficiently definite.

Riva v. Pella Corp.
Court: U.S. 7th Circuit Court of Appeals
Docket: 13-2133
Opinion Date: June 2, 2014
Judge: Posner
Areas of Law: Class Action, Consumer Law, Legal Ethics, Products Liability

A 2006 class action against Pella, a window manufacturer, alleged that certain windows had a design defect that allowed water to enter behind exterior aluminum cladding and damage the wooden frame and the house itself. The district judge certified a class for customers who had already replaced or repaired their windows, seeking damages and limited to six states, and another for those who had not, seeking only declaratory relief nationwide. Initially, there was one named plaintiff, Saltzman. His son-in-law, Weiss, was lead class counsel. Weiss is under investigation for multiple improprieties. The Seventh Circuit upheld the certifications. Class counsel negotiated a settlement in 2011 that directed Pella to pay $11 million in attorneys’ fees based on an assertion that the settlement was worth $90 million to the class. In 2013, before the deadline for filing claims, the district judge approved the settlement, which purports to bind a single nation-wide class of all owners of defective windows, whether or not they have replaced or repaired the windows. The agreement gave lead class counsel “sole discretion” to allocate attorneys’ fees; Weiss proposed to allocate 73 percent to his own firm. Weiss removed four original class representatives who opposed the settlement; their replacements joined Saltzman in supporting it. Named plaintiffs were each compensated $5,000 or $10,000 for their services, if they supported the settlement. Saltzman, as lead class representative, was to receive $10,000. The Seventh Circuit reversed, reversed, referring to “eight largely wasted years,” the need to remove Saltzman, Weiss, and Weiss’s firm as class representative and as class counsel, and to reinstate the four named plaintiffs.

Source Vagabond Sys., Ltd. v. Hydrapak, Inc.
Docket: 13-1270
Opinion Date: June 5, 2014
Judge: Wallach
Areas of Law: Civil Procedure, Legal Ethics, Patents

Source manufactures water reservoirs in which drinking water can be stored inside backpacks for use during outdoor activities and is the assignee of the 276 patent, which focuses on a reservoir with a hermetic seal to prevent leakage and a wide opening for easier cleaning and filling. Attorney Yonay prosecuted the 276 patent application. Yonay and his partner signed the complaints in an infringement action against Hydrapak, which also manufactures a flexible hydration reservoir, the Reversible Reservoir. Hydrapak served a sanctions motion under Federal Rule of Civil Procedure 11, which allows the party against whom the sanctions will be sought 21 days to withdraw the offending claim. Source declined to withdraw its amended complaint. The district court granted Hydrapak summary judgment and sanctions, stating that there was “nothing complicated or technical” about the claim limitation “slot being narrower than the diameter of the rod,” and that none of the words of this limitation “requires definition or interpretation beyond its plain and ordinary meaning.” The court determined that in Hydrapak’s products the slot is larger than the diameter of the rod, even under Source’s proposed construction. After the Federal Circuit affirmed and denied Hydrapak sanctions for a frivolous appeal, the district court imposed a sanction of $200,054.00. The Federal Circuit affirmed.

STC.UNM v. Intel Corp.
Docket: 13-1241
Opinion Date: June 6, 2014
Judge: Rader
Areas of Law: Civil Procedure, Patents

The 321 patent, titled “Method for Manufacture of Quantum Sized Periodic Structures in Si Materials,” resulted from contributions of Brueck, Zaidi, Chu, employed by UNM, and Draper, employed by Sandia, and issued in 1998. In 1996, the four executed an assignment to UNM that defined all assignors as employees of UNM. UNM executed an assignment to Sandia to correct Draper’s assignment. While the 321 application was pending, in 1997, Brueck and Zaidi filed the application that led to the 998 patent, titled “Method and Apparatus for Extending Spatial Frequencies in Photolithography Images.” The application incorporated the 321 patent by reference, but did not claim priority to any earlier application. Draper was not listed as an inventor and had no inventive contribution. UNM obtained assignments from Brueck and Zaidi. During prosecution the PTO rejected claims for double patenting. UNM filed a terminal disclaimer, which specified that “any patent granted on this instant application shall be enforceable only for and during such period” that the 998 and 321 patents “are commonly owned.” UNM stated that it was the owner of a 100 percent interest in the application. The 998 patent issued in 2000. In 2008 successfully sought a certificate of correction indicating that the 998 patent is a continuation-in-part of the 321 patent. In 2010 UNM filed an infringement suit concerning the 998 patent. Although Sandia had an ownership interest since the Draper Assignment, Sandia had never claimed any interest in the 321 patent. The district court dismissed for lack of standing. The Federal Circuit affirmed. Sandia did not voluntarily join as a co-plaintiff and could not be involuntarily joined. All co-owners must ordinarily join in an infringement suit .

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