Justia Civil Procedure Opinion Summaries

EscapeX IP, LLC brought a patent infringement suit against Google LLC, alleging that Google’s YouTube Music product infringed its ’113 patent. After Google responded, pointing out factual deficiencies in EscapeX’s claims and highlighting that the accused features either did not exist or predated the patent, EscapeX amended its complaint to target a different Google product. Google repeatedly notified EscapeX that its claims were baseless and requested dismissal, but EscapeX did not respond. The case was transferred from the Western District of Texas to the Northern District of California. Meanwhile, a separate court found all claims of the ’113 patent ineligible under 35 U.S.C. § 101, which EscapeX did not appeal.Upon transfer, EscapeX attempted to file a joint stipulation of dismissal without Google’s consent, misstating that both parties would bear their own fees. Google demanded withdrawal, and a corrected stipulation was later filed. Google moved for attorneys’ fees under 35 U.S.C. § 285, arguing EscapeX’s claims were frivolous and that EscapeX had unreasonably prolonged litigation. The United States District Court for the Northern District of California found Google to be the prevailing party, determined EscapeX’s case was exceptional due to its lack of adequate pre-suit investigation and frivolous claims, and awarded Google attorneys’ fees and costs. EscapeX then moved to amend the judgment under Rule 59(e), presenting new declarations as “new evidence,” but the district court denied the motion, finding the evidence was not newly discovered.Google sought additional attorneys’ fees under 28 U.S.C. § 1927 for costs incurred opposing EscapeX’s Rule 59(e) motion. The district court found EscapeX’s motion frivolous and sanctioned EscapeX and its attorneys jointly and severally. On appeal, the United States Court of Appeals for the Federal Circuit affirmed all of the district court’s orders. The main holdings were that the case was exceptional under § 285, supporting an award of attorneys’ fees, and that sanctions under § 1927 for frivolous litigation conduct were appropriate. View "ESCAPEX IP, LLC v. GOOGLE LLC " on Justia Law

After separating from his wife Monique in 2016, Brett, a sculptor, was ordered in a dissolution proceeding to pay spousal and child support. Brett accumulated approximately $2 million in unpaid support obligations and, according to his own testimony, held no assets apart from a copyright in certain works associated with Michael Jackson. Monique moved to have a receiver appointed and to compel Brett to assign the copyright to the receiver for purposes of monetization to satisfy the outstanding support debt.The Superior Court of Los Angeles County granted Monique’s request, appointing a receiver and ordering Brett to assign his copyright to that receiver. Brett did not dispute his debt or the fact that his copyright was his only asset but argued that existing law did not authorize courts to compel the assignment of a copyright, contending that such authority existed only for patents. He timely appealed from this order.The California Court of Appeal, Second Appellate District, Division One, reviewed the case. The court held that, under Code of Civil Procedure section 695.010, subdivision (a), all property of a judgment debtor, including copyrights, is subject to enforcement of a money judgment unless a specific exception applies. The court found no exception for copyrights. It further reasoned that although no published California case had previously addressed forced assignment of copyrights, statutes and past cases regarding other intellectual property, such as patents, supported the trial court’s authority. The court also found persuasive support in analogous federal and out-of-state decisions. Consequently, the Court of Appeal affirmed the trial court’s order compelling Brett to assign his copyright to the receiver and denied Monique’s request for appellate sanctions. Respondent was awarded costs on appeal. View "In re Marriage of Strong" on Justia Law

The dispute centers on allegations by a manufacturer of semiconductor wafers that it developed a novel porous silicon technology in 2018 and entered into a non-disclosure agreement with a group of semiconductor companies and their executives. The parties discussed a potential collaboration, during which the manufacturer claims it disclosed proprietary trade secrets. While negotiations were ongoing, the semiconductor companies filed a series of patent applications, which the manufacturer alleges incorporated its confidential technology without crediting its inventors. The negotiations ultimately failed, and the manufacturer was not included as an inventor on any of the resulting patents.The manufacturer filed suit in the United States District Court for the Central District of California, asserting federal claims for trade secret misappropriation and correction of inventorship, as well as several California state law claims, including trade secret misappropriation and interference with economic advantage. The defendants moved to dismiss and also filed a special motion to strike the state law claims under California’s anti-SLAPP statute, which is designed to quickly dismiss lawsuits targeting protected speech or petitioning activity. The district court granted in part and denied in part the motion to dismiss, and denied the anti-SLAPP motion to strike. The defendants appealed the denial of the anti-SLAPP motion.The United States Court of Appeals for the Federal Circuit held that the denial of a California anti-SLAPP motion to strike is immediately appealable under the collateral order doctrine as a matter of Federal Circuit law. The court found that the district court erred by conflating the two steps of the anti-SLAPP analysis, improperly considering the merits of the trade secret claims at the first step. The Federal Circuit vacated the district court’s denial of the motion to strike and remanded for further proceedings consistent with its opinion. View "IQE PLC v. NEWPORT FAB, LLC " on Justia Law

Several physicians who were employed by an anesthesia practice left their positions and became employees of a hospital with which their former practice had a service contract. The physicians had previously sold their ownership interests in the practice to another entity, and their employment contracts contained restrictive covenants, including non-compete and non-solicitation provisions. After the hospital indicated it might not renew its contract with the practice, the physicians and hospital administrators began discussing future employment arrangements, retaining legal counsel and entering into a common interest agreement. The hospital ultimately sent notice of nonrenewal, and the physicians resigned and signed employment contracts with the hospital. The anesthesia practice and its parent company sued the physicians and the hospital, alleging breach of contract, tortious interference, misappropriation of trade secrets, breach of fiduciary duty, and civil conspiracy. The hospital also sued the practice, seeking to bar enforcement of the restrictive covenants.The Hillsborough County Superior Court (Northern District) issued several orders during discovery, compelling the hospital and physician defendants to disclose certain communications they claimed were protected by attorney-client privilege and the common interest doctrine, and ordering their counsel to sit for depositions. The court found that the crime-fraud exception to privilege applied to alleged breaches of fiduciary duty and tortious interference, and limited the application of the common interest doctrine to communications after litigation was pending. It also ordered disclosure of some privileged communications under a theory of necessity.On interlocutory appeal, the Supreme Court of New Hampshire held that the crime-fraud exception to attorney-client privilege does not apply to claims of breach of fiduciary duty or tortious interference with contractual relations. The court affirmed the trial court’s ruling that the common interest doctrine did not apply until litigation was pending, but vacated the orders permitting depositions of counsel and requiring disclosure of privileged communications under a necessity theory, remanding those issues for further proceedings. The disposition was affirmed in part, reversed in part, vacated in part, and remanded. View "Atl. Anesthesia, P.A. v. Lehrer" on Justia Law

A patent owner brought two infringement lawsuits in the United States District Court for the Western District of Texas against a semiconductor company, alleging that certain integrated circuit products infringed three patents related to electronic circuitry and power-saving features. The accused products included specific chips that allegedly implemented a particular feature. After the lawsuits were filed, the defendant challenged the cases on grounds including improper service, lack of personal jurisdiction, and failure to state a claim. During the litigation, the plaintiff produced a licensing agreement with a third party, and subsequently entered into another agreement covering the accused products. Shortly thereafter, the plaintiff voluntarily dismissed both cases without prejudice.Following the dismissals, the defendant moved for attorneys’ fees, costs, and sanctions, arguing that the lawsuits were baseless. The district court denied the defendant’s motions for attorneys’ fees under 35 U.S.C. § 285, costs under Rule 54(d)(1), and sanctions under Rule 11 and 28 U.S.C. § 1927, but converted the voluntary dismissals to dismissals with prejudice as a sanction. The court also denied the defendant’s discovery requests related to confidentiality and access to certain materials.On appeal, the United States Court of Appeals for the Federal Circuit held that the district court erred in denying fees under § 285 and costs under Rule 54(d)(1), because the defendant became a prevailing party when the dismissals were converted to dismissals with prejudice. The Federal Circuit vacated those portions of the district court’s decision and remanded for further proceedings. The appellate court affirmed the district court’s denial of Rule 11 sanctions and fees under § 1927, finding no abuse of discretion. It also affirmed the denial of the remaining discovery request, concluding that the district court did not abuse its discretion in applying the protective order. The judgment was thus vacated in part, affirmed in part, and remanded. View "FUTURE LINK SYSTEMS, LLC v. REALTEK SEMICONDUCTOR CORPORATION " on Justia Law

Two business compliance companies entered into a partnership to develop a software product, with one company providing “white-label” services to the other. The partnership was formalized in a written agreement, but disputes arose over performance, payment for out-of-scope work, and the functionality of the software integration. As the relationship deteriorated, the company that had sought the services began developing its own infrastructure, ultimately terminating the partnership and launching a competing product. The service provider alleged that its trade secrets and proprietary information were misappropriated in the process.The United States District Court for the Eastern District of Pennsylvania presided over a jury trial in which the service provider brought claims for breach of contract, trade secret misappropriation under both state and federal law, and unfair competition. The jury found in favor of the service provider, awarding compensatory and punitive damages across the claims. The jury specifically found that six of eight alleged trade secrets were misappropriated. The defendant company filed post-trial motions for judgment as a matter of law, a new trial, and remittitur, arguing insufficient evidence, improper expert testimony, and duplicative damages. The District Court denied these motions.On appeal, the United States Court of Appeals for the Third Circuit reviewed the District Court’s rulings. The Third Circuit held that the defendant had forfeited its argument regarding the protectability of the trade secrets by not raising it with sufficient specificity at trial, and thus assumed protectability for purposes of appeal. The court found sufficient evidence supported the jury’s finding of misappropriation by use, and that the verdict was not against the weight of the evidence. The court also found no reversible error in the admission of expert testimony. However, the Third Circuit determined that the damages awarded for trade secret misappropriation and unfair competition were duplicative, and conditionally remanded for remittitur of $11,068,044, allowing the plaintiff to accept the reduced award or seek a new trial on damages. View "Harbor Business Compliance Corp v. Firstbase IO Inc" on Justia Law

Ripple Analytics Inc. operated a software platform for human resources functions and originally owned the federal trademark for the word “RIPPLE®” in connection with its software. In April 2018, Ripple assigned all rights, title, and interest in its intellectual property, including the trademark, to its Chairman and CEO, Noah Pusey. Meanwhile, People Center, Inc. began using the name “RIPPLING” for similar software, though it abandoned its own trademark registration effort. Ripple later sued People Center for trademark infringement and unfair competition, claiming ownership of the RIPPLE® mark.The United States District Court for the Eastern District of New York reviewed the case. During discovery, Ripple produced the assignment agreement showing that Pusey, not Ripple, owned the trademark. People Center moved to dismiss under Federal Rule of Civil Procedure 17, arguing Ripple was not the real party in interest. The district court dismissed Ripple’s trademark infringement claim with prejudice, dismissed its unfair competition claims without prejudice for lack of standing, and denied Ripple’s motion to amend its complaint, finding the proposed amendment futile because it did not resolve the standing issue.On appeal, the United States Court of Appeals for the Second Circuit affirmed the district court’s judgment. The appellate court held that Ripple was not the real party in interest for the trademark infringement claim, as ownership had been assigned to Pusey, who failed to ratify or join the action. The court also held that Ripple lacked standing to pursue unfair competition claims under federal and state law, as it no longer had a commercial interest in the trademark. The denial of Ripple’s motion to amend was upheld because the amendment would not cure the standing defect. The court further found that the district court’s interlocutory order allowing People Center to amend its answer was not properly before it on appeal. View "Ripple Analytics Inc. v. People Center, Inc." on Justia Law

A trading company and a base oil manufacturer entered into a sales agreement in 2016, under which the manufacturer would serve as the exclusive North American sales representative for a high-quality base oil product distributed by the trading company. The agreement included noncompete provisions and was set to expire at the end of 2021. In late 2020, suspicions arose between the parties regarding potential breaches of the agreement, leading to a series of letters in which the trading company accused the manufacturer of selling a competing product and threatened termination if the alleged breach was not cured. The manufacturer responded by denying any breach and, after further correspondence, declared the agreement terminated. The trading company agreed that the agreement was terminated, and both parties ceased their business relationship.The trading company then filed suit in the United States District Court for the Southern District of Texas, alleging antitrust violations, breach of contract, business disparagement, and misappropriation of trade secrets. The manufacturer counterclaimed for breach of contract and tortious interference. After a bench trial, the district court found in favor of the manufacturer on the breach of contract and trade secret claims, awarding over $1.3 million in damages. However, the court determined that the agreement was mutually terminated, not due to anticipatory repudiation by the trading company, and denied the manufacturer’s request for attorneys’ fees and prevailing party costs.On appeal, the United States Court of Appeals for the Fifth Circuit affirmed the district court’s finding that the trading company did not commit anticipatory repudiation and that the agreement was mutually terminated. The Fifth Circuit also affirmed the denial of prevailing party costs under Rule 54(d) of the Federal Rules of Civil Procedure. However, the appellate court vacated the denial of attorneys’ fees under the agreement’s fee-shifting provision and remanded for further proceedings on that issue. View "Penthol v. Vertex Energy" on Justia Law

Quintara Biosciences, Inc. and Ruifeng Biztech, Inc. are both DNA-sequencing-analysis companies that had a business relationship from 2013 to 2019. In 2019, the relationship deteriorated, with Quintara alleging that Ruifeng locked it out of its office, took its equipment, and hired away its employees. Quintara then filed suit, asserting a claim under the federal Defend Trade Secrets Act (DTSA), alleging misappropriation of nine specific trade secrets, including customer and vendor databases, marketing plans, and proprietary technology.The United States District Court for the Northern District of California, referencing a California state law rule, ordered Quintara to disclose its alleged trade secrets with “reasonable particularity” at the outset of discovery. Dissatisfied with the specificity of Quintara’s disclosures, Ruifeng moved to strike most of the trade secrets under Federal Rule of Civil Procedure 12(f). The district court granted the motion, striking all but two of the trade secrets and effectively dismissing Quintara’s claims as to the others. The case proceeded to trial on the remaining trade secrets, and a jury found in favor of Ruifeng.The United States Court of Appeals for the Ninth Circuit reviewed the district court’s actions. The appellate court held that the district court abused its discretion by striking Quintara’s trade secrets at the discovery stage. The Ninth Circuit clarified that, under the DTSA, whether a trade secret is identified with sufficient particularity is a question of fact to be resolved at summary judgment or trial, not at the outset of discovery. The court reversed the district court’s order striking the trade secrets, affirmed the denial of a mistrial, and remanded the case for further proceedings. The main holding is that DTSA claims should not be dismissed at the discovery stage for lack of particularity except in extreme circumstances, and Rule 12(f) does not authorize striking trade secrets in this context. View "QUINTARA BIOSCIENCES, INC. V. RUIFENG BIZTECH, INC." on Justia Law

John Snyder, after working for Guardian Life Insurance Company and obtaining a national customer list (the Guardian Broker List), was employed by Beam Technologies, Inc. Snyder claims that Beam induced him to join and disclose the list, promising compensation. While at Beam, Snyder created state-specific broker lists derived from the Guardian Broker List and inadvertently included the full list in emails to several Beam employees. He did not mark the lists as confidential, restrict access, or inform Beam of their confidential nature. After his employment ended, Snyder did not attempt to recover the list or notify Beam of its confidential status, and he later confirmed to Beam’s CEO that the disclosure was intentional.Snyder sued Beam in the United States District Court for the District of Colorado, alleging misappropriation of trade secrets under federal and state law, as well as several state law claims. The district court granted summary judgment to Beam on the trade secret claims, finding Snyder failed to show he “owned” the Guardian Broker List. The court also granted Beam’s motion to exclude Snyder’s damages expert under Federal Rule of Evidence 702 and, in doing so, barred Snyder from presenting any evidence or witnesses on lost wages for his remaining claims. Snyder’s motion to reconsider this order was denied, and the parties settled or dismissed the remaining claims, leading to a final judgment.The United States Court of Appeals for the Tenth Circuit affirmed summary judgment on the trade secret claims, holding that Snyder failed to take reasonable measures to maintain the secrecy of the Guardian Broker List, a requirement under both the Defend Trade Secrets Act and the Colorado Uniform Trade Secrets Act. However, the Tenth Circuit reversed the district court’s Rule 702 order to the extent it excluded all evidence and witnesses on lost wages, finding that such a dispositive ruling required notice and the procedural protections of summary judgment. The case was remanded for further proceedings on that issue. View "Snyder v. Beam Technologies" on Justia Law