Justia U.S. 2nd Circuit Court of Appeals Opinion SummariesArticles Posted in Intellectual Property
JLM Couture, Inc. v. Gutman
In the dispute between fashion designer and social media influencer Hayley Paige Gutman and her former employer, JLM Couture, Inc., the United States Court of Appeals for the Second Circuit considered the preliminary injunction and contempt order issued by the United States District Court for the Southern District of New York. The lower court had awarded JLM control of two social media accounts previously managed by Gutman and enforced a five-year restrictive covenant that prohibited Gutman from identifying herself as a designer of certain goods. The court also held Gutman in civil contempt for posts on Instagram that it deemed as marketing, violating an earlier version of the preliminary injunction.The Court of Appeals dismissed Gutman's appeal from the contempt order due to lack of appellate jurisdiction. It affirmed the district court's refusal to dissolve the preliminary injunction based on the law of the case. However, the Court of Appeals vacated the district court’s order that modified its preliminary injunction. The court found fault in the lower court's determination of the ownership of the disputed social media accounts and its failure to evaluate the reasonableness of the five-year noncompete restraint on Gutman. The case was remanded for further proceedings consistent with the opinion of the Court of Appeals. View "JLM Couture, Inc. v. Gutman" on Justia Law
Vans, Inc. v. MSCHF Product Studio, Inc.
In the case between Vans, Inc., VF Outdoor, LLC (collectively "Vans") and MSCHF Product Studio, Inc. ("MSCHF"), the United States Court of Appeals For the Second Circuit affirmed the district court's decision to grant a temporary restraining order and preliminary injunction against MSCHF. MSCHF had created a sneaker, the Wavy Baby, which appeared to mimic Vans' Old Skool shoe. Vans sued MSCHF for trademark and trade dress infringement. MSCHF argued that its use of Vans' marks was protected by the First Amendment. However, the Court of Appeals applied the recent Supreme Court decision in Jack Daniel's Properties, Inc. v. VIP Products LLC, which held that special First Amendment protections do not apply when trademarks are used as source identifiers. The Court of Appeals concluded that Vans was likely to prevail in arguing that MSCHF's Wavy Baby shoes used Vans' marks and trade dress as source identifiers, and that there was a likelihood of confusion as to the source of the Wavy Baby shoes. The court also affirmed the district court's decisions requiring MSCHF to escrow its revenues from Wavy Baby sales and not requiring a bond determination because MSCHF never requested security. View "Vans, Inc. v. MSCHF Product Studio, Inc." on Justia Law
Pauwels v. Deloitte LLP
Defendants Bank of New York Mellon Corporation, LLP and its subsidiary, The Bank of New York Mellon (collectively, “BNYM”), retained Plaintiff as an independent contractor to work on an investment valuation project. Plaintiff developed the so-called Pauwels Model. At various times between 2014 and the end of his working relationship with BNYM in 2018, Plaintiff shared spreadsheets derived from the Pauwels Model with various employees and executives at BNYM. In 2016, BNYM retained Defendants Deloitte LLP, Deloitte Tax LLP, and Deloitte USA LLP (collectively, “Deloitte”) to take over the work that Plaintiff had been performing for BNYM. Plaintiff alleged that Deloitte used the spreadsheets to reverse engineer the Pauwels Model and was using the model to conduct the services it provided to BNYM. Plaintiff brought suit against BNYM and Deloitte, alleging, among other claims, that the Pauwels Model embodied a trade secret that they misappropriated. The Second Circuit reversed and remanded the district court’s judgment insofar as it dismissed Plaintiff’s unjust enrichment claim. The court affirmed the remainder of the judgment. The court explained that misappropriation is not an element of a claim for unjust enrichment under New York law. Therefore, a plaintiff’s claim for unjust enrichment does not necessarily rise or fall with a claim of trade secret misappropriation. The court explained that because Plaintiff’s theory of liability is distinct from those underpinning Plaintiff’s claim for trade secret misappropriation, his claim for unjust enrichment should not have been dismissed as duplicative of his claim for trade secret misappropriation. View "Pauwels v. Deloitte LLP" on Justia Law
Syntel Sterling Best Shores Mauritius, Ltd., et al. v. The TriZetto Grp.,
Plaintiffs appealed from a final judgment entered in favor of Defendants The TriZetto Group, Inc. and Cognizant Technology Solutions Corporation (collectively, “TriZetto”) after a jury trial in district court. Relevant here, the district court ordered and entered judgment that (1) Syntel misappropriated 104 of TriZetto’s trade secrets in violation of the Defend Trade Secrets Act (“DTSA”) and New York law; and (2) TriZetto’s $284,855,192 compensatory damages award was proper under the DTSA. On appeal, Syntel challenges the district court’s judgment with respect to liability and damages. The Second Circuit affirmed and vacated the judgment of the district court and remanded. The court held that the unambiguous terms of the Amended Master Services Agreement (MSA) are clear, and so is the extrinsic evidence: TriZetto did not authorize Syntel to use TriZetto’s trade secrets to compete with TriZetto. Thus, Syntel misappropriated TriZetto’s intellectual property in violation of the DTSA and New York law. Accordingly, the court affirmed the district court’s denial of Syntel’s Rule 50(b) motion on this issue. The court concluded that, as a matter of law, an unjust enrichment award of avoided costs was unavailable under the specific facts of this case. Syntel’s unjust gain was fully “addressed in computing damages for [TriZetto’s] actual loss,” and TriZetto suffered no compensable harm beyond that actual loss. Thus, the court remanded the case for the district court to address the propriety of the two jury awards based on TriZetto’s damages theory of awarding a reasonable royalty: (1) the $142,427,596 New York trade secret misappropriation award and (2) the $59,100,000 copyright infringement award. View "Syntel Sterling Best Shores Mauritius, Ltd., et al. v. The TriZetto Grp.," on Justia Law
ABKCO Music, Inc. v. Sagan
A collection of music publishers alleged infringement of their copyrights in 197 musical works when a series of live concert recordings was made available by Defendants for download and streaming on their websites. Plaintiffs sought damages and a permanent injunction pursuant to the Copyright Act. The district court held on summary judgment that Defendants had no valid licenses and therefore infringed each of the musical works and that the principal was personally liable. The district court denied Plaintiffs’ request for a permanent injunction. Defendants appealed from the district court’s summary judgment order and the order granting fees and costs. Plaintiffs cross-appeal from the district court’s denial of a permanent injunction, several evidentiary rulings, and the denial of a new trial. The Second Circuit affirmed the rulings in the summary judgment order to the extent they: (a) held that Defendants failed to obtain a license for any of the audiovisual recordings, and therefore infringed the audiovisual works; (b) concluded that Defendants had no valid affirmative defense, and (c) declined the Publishers’ request for a permanent injunction. The court vacated the ruling in the summary judgment order that Defendants infringed the musical works used in the audio-only recordings by failing to comply with Section 115’s substantive requirements. The court reversed the ruling on summary judgment that Defendant was liable for direct infringement. The court rejected the challenges to evidentiary rulings. The court affirmed the order denying the motion for a new trial. Finally, the court vacated the award of attorneys’ fees. View "ABKCO Music, Inc. v. Sagan" on Justia Law
Melendez v. Sirius XM Radio, Inc.
Plaintiff appealed from the district court’s judgment granting Defendant Sirius XM Radio, Inc. (“Sirius XM”)’s motion to dismiss Plaintiff’s claims with prejudice for violations of his right of publicity under California common and statutory law because his claims were preempted by the Copyright Act, 17 U.S.C. Section 301. The claims arise from Melendez’s performance under the moniker “Stuttering John” on The Howard Stern Show (the “HS Show”) from 1988 until 2004. On appeal, Plaintiff asserted that Sirius XM’s use of excerpts of him from the archival episodes in its online and on-air advertisements promoting the HS Show violates his right of publicity under California common and statutory law because his name and likeness have been exploited for Sirius XM’s commercial gain without his permission. The Second Circuit affirmed the district court’s judgment. The court held that Plaintiff failed to plausibly allege any use of his name or likeness that is separate from, or beyond, the rebroadcasting, in whole or in part, of the copyrightable material from the HS Show’s archives and, thus, his right of publicity claims are preempted by the Copyright Act. Moreover, because Plaintiff has failed to articulate any allegations that he could add in a second amended complaint that overcome preemption in this case, the court concluded that the district court correctly determined that any leave to re-plead would be futile and properly dismissed his claims with prejudice. View "Melendez v. Sirius XM Radio, Inc." on Justia Law
Seife v. FDA, et al.
After the district court granted summary judgment in favor of two government agencies and a pharmaceutical company in this Freedom of Information Act ("FOIA") case. Plaintiff, a science writer and journalism professor, sought records from the government agencies relating to the pharmaceutical company's successful application for accelerated approval of a drug for the treatment of a neuromuscular disease. The agencies produced over 45,000 pages of documents, some of which were redacted under Exemption 4 of FOIA. The district court granted summary judgment for the agencies and the pharmaceutical company on the basis that the redacted information fell within Exemption 4 and publication would either cause foreseeable harm to the interests protected by Exemption 4 or was prohibited by law.Plaintiff appealed and the Second Circuit affirmed the district court’s ruling. The court held that the interests protected by Exemption 4 are the submitter's commercial or financial interests in the information that is of a type held in confidence and not disclosed to any member of the public by the person to whom it belongs. Defendants' declarations show that the release of the information Plaintiff seeks would foreseeably harm the pharmaceutical company’s interests and Plaintiff does not raise a genuine dispute as to that showing. View "Seife v. FDA, et al." on Justia Law
Horror Inc. v. Miller
The Second Circuit held that, for Copyright Act purposes, the screenwriter Victor Miller was an independent contractor of the film production company Manny, Inc., in 1979, when Miller wrote the screenplay for the landmark horror film Friday the 13th, released in 1980. Manny argues primarily that Miller's membership in the Writers' Guild of America, East, Inc. (WGA), and Manny's participation in the producers' collective bargaining agreement with the WGA in the same period establish that Miller was Manny's employee for Copyright Act purposes.The court concluded that copyright law, not labor law, controls the "work for hire" determination here. The court explained that because the definition of "employee" under copyright law is grounded in the common law of agency and the Reid framework and serves different purposes than do the labor law concepts regarding employment relationships, there is no sound basis for using labor law to override copyright law goals. Furthermore, there was no error in the district court's refusal to treat Miller's WGA membership as a separate Reid factor. The court applied the Reid factors and concluded that Miller was an independent contractor when he wrote the screenplay and is therefore entitled to authorship rights. The court also concluded that the notice of termination that Miller gave under section 203 of the Copyright Act is effective as to Manny and its successors. The court found that the Companies' remaining arguments did not provide a basis for reversal and thus affirmed the district court's grant of summary judgment to Miller. View "Horror Inc. v. Miller" on Justia Law
Hamilton International Ltd. v. Vortic LLC
Hamilton filed suit against Vortic and its founder for selling wristwatches that featured restored antique pocket watch parts with Hamilton's trademark. The district court entered judgment in favor of defendants, finding that Vortic's use of the mark was not likely to cause consumer confusion.The Second Circuit confirmed that a plaintiff in a trademark infringement suit bears the burden of proving that a defendant's use of its mark is likely to mislead consumers, even when Champion Spark Plug Co. v. Sanders, 331 U.S. 125 (1947), is implicated, and that no particular order of analysis is required, provided that the district court considers all appropriate factors in light of the circumstances presented. The court affirmed the district court's judgment in this case, concluding that the district court properly placed the burden of proving trademark infringement on Hamilton, and correctly analyzed the relevant considerations under Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir. 1961), and Champion. Furthermore, the district court correctly applied Champion and Polaroid to these factual findings to conclude that there was no likelihood of consumer confusion. Finally, the district court properly concluded that defendants were entitled to judgment on the remaining claims. View "Hamilton International Ltd. v. Vortic LLC" on Justia Law
The Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith
The Second Circuit reversed the district court's grant of summary judgment to the Foundation on its complaint for a declaratory judgment of fair use and the district court's dismissal of defendant's counterclaim for copyright infringement. This case involves visual art works by Andy Warhol based on a 1981 photograph of the musical artist Prince that was taken by defendant, Lynn Goldsmith, in her studio, and in which she holds copyright.The court concluded that the district court erred in its assessment and application of the fair-use factors and that the works in question do not qualify as fair use as a matter of law. In this case, the court considered each of the four factors and found that each favors defendant. Furthermore, although the factors are not exclusive, the Foundation has not identified any additional relevant considerations unique to this case that the court should take into account. The court likewise concluded that the Prince Series works are substantially similar to the Goldsmith Photograph as a matter of law. Accordingly, the court remanded for further proceedings. View "The Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith" on Justia Law