Toddle Inn, a franchisor of educational and day care service, sued former franchisee KPJ Associates in 2018, asserting breach of contract, Lanham Act unfair competition and trade secret misappropriation in connection with KPJ’s continuing use of the Toddle Inn marks and materials. The parties were ordered to arbitration pursuant to the franchise agreement. On March 31, 2020, following completion of the arbitration process, Judge Levy confirmed the arbitration award and deemed it a final judgment. A writ of execution to enforce the judgment was entered on May 7, 2020, followed a day later by KPJ’s filing of an emergency motion to quash the writ and asserting that the judgment was not yet final, in that the time to appeal had not yet passed. Judge Levy granted KPJ’s motion. He determined that General Order 2020-2, which the Court had issued on March 18th in response to the COVID-19 pandemic and which extended all deadlines in civil cases by thirty days, applied to deadlines for appeals to the First Circuit. This pushed the deadline for KPJ to appeal from the original April 30, 2020 date to May 30th, making the writ premature. He rejected Toddle Inn’s contention that any extension of the deadline for appeal must originate from the First Circuit, noting that Fed. R. App. P 4, which governs the time for appeal, expressly permits district courts to extend the deadline. Further, under that Rule, if a party moves to extend the deadline for appeal within 30 days of its passing and demonstrates excusable neglect or good cause, the deadline can be extended regardless of whether General Order 2020-2 automatically did so. KPJ orally requested extension at a May 12th videoconference hearing, within 30 days of the initial April 30th deadline, and demonstrated good cause in that the plain wording of the General Order supported KPJ’s belief that the deadline had been extended. Thus, either way, KPJ’s motion to quash the writ of execution would be granted.
Note – While this blog has thus far focused exclusively on intellectual property in the United States District Court for the District of Massachusetts, I am expanding the scope to cover northern New England (Vermont, New Hampshire and Maine) as well. The name of the blog will remain the same.
Endobiotics accuses Design Standards Corporation (DSC) and Medrobotics Corporation of infringing U.S. Patent No. 7,147,650, as well as trade secret misappropriation, violation of the Defend Trade Secrets Act, unfair competition, breach of contract, tortious interference, unjust enrichment and conversion. Endobotics’ predecessor in interest, Cambridge Endoscopic Devices, developed and patented a surgical instrument that improved the manipulative ability of tools affixed to the end of the instrument. Cambridge Endoscopy contracted with DSC to validate the design and manufacture of the instrument. Endobotics alleges that this agreement provided that Cambridge Endoscopy would exclusively own all products, inventions and designs arising from this work, and that the agreement included confidentiality and non-disclosure clauses that protected Cambridge Endoscopy’s trade secrets, although Endobotics acknowledges that it does not have a copy of the agreement. When Cambridge Endoscopy declared bankruptcy, Endobotics acquired the patent as well as Cambridge Endoscopy’s trade secret and know-how related to the instrument. In 2010, Endobotics executed an NDA with Medrobotics to explore producing the instrument for Medrobotics. According to the complaint, Medrobotics ultimately declined to enter into an agreement with Endobotics, and instead approached DSC directly to manufacture a competing system that improperly utilized Cambridge Endoscopy’s trade secret information. Endobotics discovered the Medrobotics system at a 2017 trade show, and further investigation resulted in this lawsuit. The case is before Judge Saylor.
FabriClear, LLC developed a spray for treating bed bug infestations, and reached an agreement with Harvest Direct by which Harvest would advertise and sell the product, which was known as “FabriClear.” FabriClear asserts that, after several years of complying with the agreements with FabriClear, Harvest began re-labelling the product as “X-Out” and failing to pay FabriClear on sales of the same. FabriClear identifies several examples in which the “X-Out” label was simply superimposed directly over the “FabriClear” label. The complaint further alleges that Harvest essentially copied FabriClear’s label, packaging, website and advertisements for X-Out, including an advertisement in which the FabriClear bottle remained in several segments. FabriClear asserts breach of contract, trade secret misappropriation, and false designation of origin, as well as unfair competition. Magistrate Judge Hillman has the case.
(Note – I filed this complaint on behalf of FabriClear. As I always do when reporting on cases in which I and my firm are involved, I blog about the issues presented in the pleadings or orders, and avoid adding any “insider information.”)
RMS sued Anker Play Products and Leon Summers, RMS’ former CEO and Anker’s present CEO, for copyright and trade dress infringement, unfair competition and trade secret misappropriation in connection with RMS’ “Dino Operation” game. The game is a take-off on the classic “Operation” game in which players try to remove bones from the dinosaur without touching the sides of the hole in which the bones are located.
RMS (whose game is on the left, above) developed the game and began selling it in 2014, while Summers was the CEO of RMS, and registered copyright in the game, although they do not appear to have a registration on the trade dress of the game. Anker sells games called “Dino Operation” and “Dino Dissection” that each utilize a dinosaur caricature and bone play parts that are nearly identical to the RMS game. RMS asserts that Anker would not have been able to have replicated these components without access to RMS’ technical drawings, which Summers would have been able to obtain while he was with RMS. RMS suggests that such slavish copying is Anker’s business model, noting the existence of five similar lawsuits filed against Anker in the last three years. The trade secret claim seems uncertain – RMS’ conclusorily assert that they treated the trade secret in the design files confidentially and did not allow access unless authorized, with no real description of the actual steps they took, and the notion that the publicly-available game could not have been replicated without access to the design files seems questionable – but it will be difficult to deny that the appearance of the games are very similar.
DogWatch, a Natick company that makes electronic pet restraint systems such as the “invisible fence,” accuses its former Florida dealer DogWatch of Sarasota (“DoS”) of trademark and trade dress infringement, trade secret misappropriation, breach of contract, passing off, unfair competition, tortious interference with contractual relationships, and unjust enrichment in connection with DoS’ continued use of DogWatch’s name and proprietary information following termination of their business relationship. DogWatch has had a federal registration to its name since 1993, and asserts (with no real evidentiary support) that the name is famous. DogWatch further asserts trade dress protection in some combination of its order forms, yard flags, letterhead, stationary, internet web pages, URL’s van graphics and other unspecified materials. DogWatch further asserts trade secret protection in pricing information, draft marketing and promotional material, and business strategy and plans, and it asserts that the exclusive dealer agreement with DoS included an implied covenant not to use or disclose these purported secrets. Late last year, DogWatch notified DoS that they were terminating the exclusive dealer agreement, for reasons not specified in the complaint. Despite this, they assert that DoS continues to hold itself out as a DogWatch dealer and to use the trademark, trade dress, and trade secrets of DogWatch. The breach of contract count cites acts of DoS that occurred following termination of the agreement – there is no suggestion that DoS did anything wrong prior to termination. Judge Saris has this case.
Magnesium Elektron (“MgE”) filed suit against Applied Chemistries, Inc., Brian St. Pierre and Mark Pellerin, accusing them of misappropriating trade secret processes for making etching additives used in the graphic arts industry. According to the complaint, St. Pierre and Pellerin both worked for U.S. Fluids, MgE’s contract manufacturer of etching additives, where they were exposed to the trade secret technology. Each executed a non-disclosure agreement with U.S. Fluids, and each was responsible at some point during their employment with maintaining the secrecy of the technology. St. Pierre now runs Applied Chemistries, who recently began marketing chemicals alleged to be substantially the same as MgE’s proprietary additives, and Pellerin is employed by Applied Chemistries. MgE further asserts that Applied Chemistries is selling photo engraving developer solutions under MgE’s RED TOP and HYRDO-SOLVE trademarks. MgE brings trade secret claims under the federal DTSA and the new Massachusetts trade secrets statute, as well as trademark infringement and unfair competition claims, and claims under 93A.
DiscoverOrg, a company that provides business-to-business marketing data, sued Timlin Enterprises for copyright infringement. DiscoverOrg provides its marketing information to customers through a password-protected on-line user interface. According to the complaint, a Timlin employee accessed the database while employed by a licensed company, downloaded the data, and took it with him when he moved on to work for Timlin. A second person, meanwhile, who worked with the first accessed the database from their new, licensed company, and the data made its way to the first employee now working for Timlin. DiscoverOrg asserts that Timlin knowingly used the misappropriated data in marketing efforts. In addition to copyright infringement, DiscoverOrg asserts federal and state trade secret misappropriation (the state claim under Washington law, as DiscoverOrg is a Washington-based company), unjust enrichment, tortious interference with contractual relations, negligence for failure to properly train and supervise its employees regarding misappropriation of trade secrets, and violation of Ch. 93A. The case was assigned to Judge Zobel.
B. Luxe, a Medway hair salon, accuses Belmont’s B Luxe Aesthetics and Bianca Jacqueline Paraison of infringing its registered “B. LUXE” trademark in connection with hair and skin products and services. While the complaint does not clarify, it seems that Ms. Paraison is the owner of B Luxe Aesthetics. In addition to federal trademark and unfair competition claims, B. Luxe brings counts for state and common-law trademark infringement and unfair and deceptive trade practices under 93A.
In August, Governor Baker signed a new law governing trade secrets, broadening the types of information that can qualify as a trade secret and setting up protections for trade secrets during litigation. By the passage of this law, Massachusetts joins the vast majority of states in adopting the Uniform Trade Secrets law. Governor Baker also signed a law placing significant restrictions on non-compete clauses in employee agreements, including limits on scope and time and requirements that an ex-employee be compensated during the time the former employee is restricted. A summary of these laws can be found here.
Judge Saylor granted in part SiOnyx’s renewed motion to compel in this patent infringement, correction of inventorship, and breach of contract case. SiOnyx had entered into an agreement with Hamamatsu to explore a possible business relationship surrounding laser-textured infrared-sensing silicon photonic devices. The business relationship never came to fruition, and Hamamatsu subsequently applied for patents directed to similar technology. A discovery dispute arose over whether SiOnyx could obtain information on products that were textured by some means other than a laser, with Hamamatsu taking the position that the infringement contentions did not accuse such products and the former SiOnyx founder now working for Hamamatsu did not contribute to the invention of non-laser-textured devices. SiOnyx’s initial motion to compel was denied without prejudice, because at the time there was insufficient evidence to support a charge of infringement; since then, SiOnyx was able to develop sufficient information that the products infringe, and that an offer for sale of the accused products has been made that, if accepted, would generate significant sales. Judge Saylor found that SiOnyx’s evidence related to the breach of contract and use of confidential information claims (that the Hamamatsu engineers who were exposed to this information developed the non-laser-textured products) was insufficient to overcome the significant differences in the resulting textures that negate an inference that they were developed using SiOnyx’s confidential information. Because the motion was granted only with respect to the patent claims, Hamamatsu was compelled to produce information relating only to U.S. sales or imports.