Articles Posted in Trade Secrets

trade-dress-infringement-lawsuit-type-65-coupe-factory-five-kit-carroll-shelby.jpgLos Angeles, CA – In response to Carroll Shelby’s trademark and trade dress infringement lawsuit (details blogged here), Defendant Factory Five’s attorneys filed a motion to either dismiss the case or transfer venue to the District of Massachusetts (details blogged here). Co-defendant Internet Community Partners, LLC, dba, joined in Factory Five’s motion.

On February 23, 2009, after the parties’ oral arguments, the Honorable Christina A. Snyder granted Factory Five’s motion and transferred the case to the District of Massachusetts (read the order here), the location of the parties’ previous trademark and trade dress dispute in 2000.

In deciding a motion to transfer, the Court must consider the following three factors: (1) the convenience of the parties; (2) the convenience of the witnesses; and (3) the interests of justice. 28 U.S.C. § 1404(a); see Los Angeles Mem’l Coliseum Comm’n v. NFL, 89 F.R.D. 497, 499 (C.D. Cal. 1981).

Los Angeles, CA – Trademark attorneys for F.C. Kingston LLC and Storm Manufacturing Group, Inc. (“Kingston”) filed a trademark infringement, unfair competition, and trade secret misappropriation complaint, at the Central District of California (Los Angeles Division), against Kingtech LLC – a company operated by Daniel Marshall and Reed Ferguson, two former Kingston employees. Kingston designs and manufactures “metal valves and custom fittings serving many industries including compressed air, floor cleaning, automotive, medical/dental, industrial flow control, and food service.” Since 1908, Kingston has used the “Kingston” trademark and has obtained a USPTO trademark registration. And starting in 1970 it began stamping its products with a “K” in a circle mark, a trademark application for which is currently pending at the USPTO.

Kingston alleges that Marshall was hired in 2000 as a Quality Engineer and became a Senior Brand Manager in 2005, where, through his job duties, “Marshall had a close relationship with all of Kingston’s suppliers and customers, and was intimately familiar with all of Kingston’s suppliers and customers, and was intimately familiar with the branding of Kingston’s goods and its extensive use of the Kingston Marks.” Plaintiff alleges that Ferguson was hired in 2005 as the national sales manager and worked closely with Marshall “regarding customer acquisition, pricing, promotion, new product development and target market selection.” Both Marshall and Ferguson signed employment agreements in which they agreed that they would not disclose Kingston’s “confidential or proprietary information, including information concerning customer lists, pricing, drawings, and marketing data.” Marshall was allegedly terminated in January of 2008 and Ferguson resigned last June.

Kingston alleges that a few months before resigning, Ferguson asked for and received an Excel spreadsheet providing detailed information about every sale that Kingston had made in the past five years. “Such a compilation of information is obviously not available to the public, and permits its user to know not only who every one of Kingston’s almost 2,000 customers are, but exactly what they have ordered, when they ordered it, and the precise price paid…Ferguson then proceeded to email the entire spreadsheet from his work email account to his personal email account.” The complaint alleges that Ferguson shared the stolen spread sheet with Marshall, who had set up the competing Kingtech business.

Los Angeles, CA – Trademark attorneys for Red Bull filed a lawsuit at the Federal District Court in Los Angeles alleging trademark and trade dress infringement, unfair competition under the Lanham Act (15 U.S.C. § 1125), and trademark dilution. The complaint asserts that since Red Bull’s introduction in 1996, over four billion units have been sold in the United States and over one billion dollars have been spent on advertising, marketing and promoting the Red Bull energy drink. Red Bull has obtained trademark registrations at the U.S. Patent & Trademark Office for the its word marks in addition to the trade dress in its can designs.

trademark-attorney-in-los-angeles-fair-use-foosh.jpgThe Defendants manufacture and sell chocolate mint chews bearing the “Buzz Bites” trademark and mints bearing the “Foosh Energy Mints” trademark. Red Bull is not concerned about the word marks used by Defendants, but alleges that the Defendants’ use of Red Bull’s trademarks and trade dress in Defendants’ advertising and on Defendants’ website and vending machines “is likely to cause confusion before and during the time of purchase of defendants’ products because purchasers, prospective purchasers . . . are likely to be drawn to defendants’ products because they mistakenly attribute [defendants’] products to Red Bull.” Red Bull sent a cease and desist letter to Defendants, but Defendants have allegedly refused to cease the use of the Red Bull trademarks and trade dress. The case is titled Red Bull GMBH v. Vroom Foods, Inc. and Mad Dog Energy Products, CV08-04960 GAF (C.D. Cal. 2008).

PRACTICE NOTE: A competitor can assert the nominative fair use defense to protect its ability to use a trademark to refer to a trademark owner or its goods or services for purposes of reporting, commentary, criticism, and parody, as well as for comparative advertising. To qualify for the nominative fair use defense, the following three requirements must be met: (1) the trademark owner, product, or service must not be readily identifiable without use of the trademark; (2) the defendant must use only as much of the mark as is necessary to identify the trademark owner, product, or service; and (3) the defendant must do nothing that would suggest sponsorship or endorsement by the trademark owner. From the facts asserted in the complaint, the Defendants will probably interject a comparative advertising fair use defense, because they are comparing the caffeine content of their product and that of Red Bull. It appears that the first and third elements of the test are met, but the defense will probably turn on whether the second element of the test is satisfied – i.e. did Defendants use more of Red Bull’s trademarks/trade dress than was necessary to make the comparison?

Los Angeles, CA – A mother-daughter team founded The Little Giraffe, Inc. to manufacture baby and adult accessories, apparel and giftware under the trademarks, registered with the USPTO, of “Little Giraffe” and “Giraffe at Home.” The mother, Marcia Brower, and the daughter, Sharyn Brower Newberg, were each a 50 percent owner of the shares of the corporation. The complaint alleges that the daughter breached her fiduciary duty to the company and used company checks to “pay personal expenses, wiring funds from the corporate account to pay her credit card bills, selling Little Giraffe inventory for her own account, purging vital information from her computer at company headquarters, and removing vital fabric samples and company property.” The complaint continues that the daughter, “with the help of her co-defendants, secretly took steps to set up a company to compete against Little Giraffe under the name ‘Votre Luxe,’ intentionally copying the distinctive look and feel of Little Giraffe’s products,” including the trade Dress, trade secrets, and proprietary business information.

little%20giraffe.jpgPlaintiff asserts that its trade dress includes the appearance of its products, including “the shape and dimensions of satin trim to plush fabric,” “the color combinations of various fabrications,” “the texture of its plush or luxury fabrics,” “the patterns of Little Giraffe’s robes,” color coordinated pieces to the colors of the products of Little Giraffe, and the placement location of the Little Giraffe logo. Plaintiff also asserts that its trade secrets include “vendors and suppliers of fabric and trim, its know-how concerning the manufacturing process,” “the cutting and sewing contractors” it uses in the manufacturing process, its vendor lists, customer lists, and proprietary financial documents. Plaintiff alleges that her daughter, in association with co-defendant “Rosalie & Friends, Inc. has displayed and offered for sale Votre Luxe’s line of products that are confusingly similar to the products Little giraffe manufactures and sells.”

The complaint sets forth the following six causes of action: (1) Breach of Fiduciary Duty, (2) Trade Dress Infringement Lanham Act 43(a), 15 U.S.C. § 1125, (3) Trade Secrets Misappropriation, (4) Conversion, (5) Unfair Competition Under Cal. Bus. & Prof. Code § 17200, and (6) Injunctive relief. The case is titled: Marcia Brower v. The Little Giraffe, Inc., CV08-01111 PSG (C.D. California).

The trade secret and copyright infringement lawsuit filed by Symantec subsidiary Veritas against Microsoft is proceeding to trial in Washington, as we discussed here, when the Court denied Microsoft’s motion for summary judgment. Microsoft had also filed counterclaims in the Washington lawsuit against Symantec for breach of contract and for breach of the implied covenant of good faith and fair dealing. The agreement between the companies was for Symantec to provide source code in certain software to Microsoft for use with its operating software and servers; however, there were specific limitations on the use of the software which Symantec alleged Microsoft exceeded. The agreement also included the following jurisdictional provision:

VERITAS consents to jurisdiction and venue being solely in the state and federal courts sitting in the Western District of the State of Washington with respect to any claim or counterclaim brought by VERITAS in connection with this Agreement. MICROSOFT consents to jurisdiction and venue being solely in the state and federal courts sitting in the Northern District of the State of California with respect to any claim (including a counterclaim) brought by MICROSOFT in connection with this Agreement.

On summary judgment, the Court dismissed Microsoft’s contract-based counterclaims because of the unambiguous and express contractual language. The Court was not persuaded by Microsoft’s argument that enforcing the bargained-for forum selection clause would be unreasonable under the circumstances. Nor was the Court moved by Microsoft’s argument that Veritas had waived this defense by waiting to raise it on summary judgment because the defense was clearly stated in Veritas’ earlier filed Reply to Microsoft’s counterclaims. Click To Read The Order.

A lawsuit alleging trade secret and copyright infringement litigation was filed by Symantec security products subsidiary against Microsoft in 2006: Veritas Operating Corporation v. Microsoft Corporation, Case No. 2:06-CV-00703-JCC (W.D. Washington). The case arose from a 1996 agreement between Symantec and Microsoft, whereby Symantec had shared its source code in certain software products for Microsoft to uses in its operating systems and server software. Symantec alleged that Microsoft breached their agreement by modifying the software in ways that were exclusively reserved to Symantec and expressly prohibited, thereby running afoul of Symantec’s trade secret rights and copyrights. Microsoft filed for summary judgment of non-infringement of Symantec’s alleged trade secrets, copyrights, and other claims.

logo-symantec.gifOn February 4, 2008, the Court denied most of Microsoft’s requests. The Court ruled that it was not persuaded that Microsoft did not breach its agreement and that Veritas had presented enough evidence to establish its trade secret rights in the private interfaces and other information. The Court also noted that Veritas had provided credible evidence of bad faith, one in the form of an email summarizing a statement by one of Microsoft’s managers on the project, who admitted that:

his intention is to eventually get [Symantec] out of the box because he believes we should not rely on any 3rd party for core components. . . . He also says he doesn’t care a damn about the contract because he wasn’t involved, and we should just lie to [Symantec] that we are doing this for performance reasons[.]