Blog Intellectual Property
March 8, 2010
Motorized Recliner is Confiscated and Sold on EBay: But Not
Without Trademark Controversy
It is doubtful that Dennis Anderson was thinking about the
trademark implications when he crashed his recliner into a parked
car on his way home from the bar. Anderson built the
recliner with a lawnmower engine and drove it around his hometown
in Minnesota. Unfortunately for Anderson, the DWI laws in
Minnesota cover all motorized vehicles, even the padded reclining
type. Anderson was arrested for driving while
intoxicated and the police confiscated his motorized recliner and
listed it for sale on eBay®.
Are you wondering yet what this has to do with trademark law?
Trademark owners must be diligent in protecting misuse of their
trademarks in a way that might cause the trademark to become
generic. Escalator was once a brand name. Now, it is
generically used to describe any moving stairs. The
concern over becoming generic is why Kimberly-Clark is so careful
about calling their tissues Kleenex® brand tissues and why it is
not good for the Kleenex® brand when you ask someone to hand you a
"kleenex." They would much prefer that you ask for a
tissue. Well, it is also not a good idea to refer to a
recliner as a "La-Z-Boy," especially when it is not a La-Z-Boy®
brand recliner.
The Minnesota police, not being particularly savvy about trademark
law, offered the chair on eBay® under the listing "La-z-boy DWI
Chair, Motorized." The bid was up to $40,000 when eBay
terminated the auction after La-Z-Boy, Inc. submitted a complaint
to eBay® using eBay®'s internal procedures. The police
re-submitted the item for auction without using the La-Z-Boy®
trademark, but the item under the new listing only sold for
$10,000.
November 23, 2009
Social Media website usage is up - What is your business doing
about it?
According to Alexa.com, the industry standard for tracking
website usage, seven of the top twenty websites in the United
States are social media sites. These sites include
Facebook (the third most trafficked website in the U.S.),
MySpace (#5) and Twitter (#13). It's not
just frivolous visits to these sites that is up,
however. A recent survey of nearly 3,000 North
American professionals by Business.com revealed that there is
a shifting trend among businesses in capitalizing upon the increase
of the business professional's use of social media. One
particular point suggested by the survey is that while there
typically exists corporate policies to restrict access to social
networks while at work, that trend should be re-examined in light
of the business value of social media. The numbers are
telling - among survey respondents using social media for business
purposes, 55% search for business information on websites such as
Facebook and Twitter. In light of this increased
usage of social media by businesses, an increasing number of
lawsuits have emerged within the past few years. To avoid
having your business encounter such a problem, if your company is
considering recalibrating its work-based internet and/or social
media policies to address the increased business applications of
social media, we suggest that you consult with your attorney first
to create a structured written policy regarding internet usage in
the workplace.
June 1, 2009
You can't sue the thief for stealing a trade secret you don't
own.
Jasmine Networks and Marvell Semiconductors have been battling
over stealing trade secrets for nearly eight years. Both companies
produce semiconductors, specifically telecommunications chips.
Marvell offered to buy a few trades secrets and engineers from
Jasmine. Jasmine accepted, with some conditions. The relationship
went south when an attorney at Marvell called and left a message at
Jasmine. This attorney forgot to turn off the speakerphone and then
proceeded to discuss with his Marvell clients how Marvell was
planning to steal some of Jasmine's trade secrets and
employees.1
Initially Jasmine's inevitable lawsuit against Marvell was
dismissed because of Rico v. Mitsubishi Motors Corp., 171
P.3d 1092 (2007) (holding that inadvertently disclosed attorney
work product can not be used in litigation). During the initial
suit, the attorneys at Jasmine used the recorded voicemail of
opposing counsel to try to prove their claim. The California
Supreme Court dismissed Jasmine's case after they ruled on
Rico. 2
The second attempt by Jasmine was dismissed with prejudice for
lack of standing on Wednesday, June 3, 2009.3 As it turns out,
while the litigation against Marvell was ongoing, Jasmine filed
bankruptcy and sold many of its assets, including the trade secrets
at issue in the litigation with Marvell. Standing is a basic and
fundamental consideration in any lawsuit. If you are not the party
that suffered harm, you have no standing to sue the entity that
caused the harm. Since Jasmine no longer owned the intellectual
property rights to the trade secret, they, in effect, sold their
standing to sue for trade secret misappropriation. This decision
will most likely be appealed as this is a new and novel issue for
the California courts.
This case has interesting implications for future trade secret
litigation, and possibly other areas of intellectual property
litigation as well. If an owner or licensee's rights are violated
but they sell their intellectual property before litigation
concludes, then the [now] former owner or licensee would lose the
right to recover damages. For example, let's say a company, Oke,
has a super secret formula to a soft drink that is the number one
soft drink in the country. Oke's number one competitor, Epsi,
discovers the secret formula and threatens to expose it, which
would destroy Oke and the trade secret status. Oke sues Epsi for
trade secret misappropriation. Before Epsi settles or the trial
concludes, Oke sells the formula to another company but at a price
significantly below market value because of the risk Epsi may
expose the formula. Oke has clearly suffered harm by Epsi; however,
under the Jasmine decision, it would be unable to recover
because Oke now lacks standing to sue Epsi.
If this case is upheld, it is important to remember that selling
any property that is the subject of litigation is risky. Any
business with assets like trade secrets should be careful they
don't sell away its legal protections and recourses.
1 Jasmine Networks, Inc. v. Marvell
Semiconductor, Inc.,
2 Jasmine Networks, Inc. v. Marvell Semiconductor,
Inc., 76 Cal. Rptr. 3d 172, 172 (2008).
3 Zusha Elinson, "IP Suit Against Marvell
Semiconductor Dismissed for Lack of Standing", The Reporter,
available at: Law Jobs Article, last visited June 4, 2009.
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