Intellectual Property Bulletin
April 1, 2009
In this issue:
Running on Empty: Delaware Court Dismisses IP Suit Between Rival Car Sales Web Sites
A declaratory judgment action by Edmunds Holding Company against a competitor, patent owner Autobytel Inc., was dismissed when the district court in Delaware held that Autobytel did not “manifest intent to imminently enforce its rights,” despite making public statements of its intent to do so and despite prior enforcement actions brought by Autobytel (Edmunds Holding Company v. Autobytel Inc., 2009 WL 424250 (Feb. 20, 2009 D. Del.)). Given Autobytel’s history of enforcing its patent in the online car sales market, Edmunds sought to preempt a potential infringement suit and challenged the validity of Autobytel’s patent. The court, while noting that “an overt, specific act toward [Edmunds] is not required,” nevertheless held that proof of past infringement actions and public statements of the patent owner’s intent to bring an action were not sufficient to show the existence of an actual controversy or the imminence of an infringement action. Edmunds, 2009 WL 424250 at *3.
The Wire on Fire: "Hot News" Applied to Online Content in AP Suite
In the first decision to recognize the “hot news” doctrine as applicable to online content, the U.S. District Court for the Southern District of New York denied a motion to dismiss filed by defendant All Headline News Corp. in a copyright infringement action brought by the Associated Press (Associated Press v. All Headline News Corp., 2009 WL 382690 (Feb. 17, 2009 S.D.N.Y.)). Contrasting the information collection and dissemination methods of plaintiff and defendant, the Court noted All Headline News Corp. pulled Associated Press’ on-line stories, and prepared them for republication, occasionally without altering the text. In finding that the AP had shown a cause of action for misappropriation, the court cited the landmark Supreme Court decision International New Service v. Associated Press, 248 U.S. 215 (1918), which held that breaking news is quasi-property subject to protection, quoting, “another [may not] endeavor to reap where it has not sown." Because the “hot news” doctrine will now apply to online content, purveyors of online news must be careful not to reap unauthorized rewards where other news organizations have sown.
Staples Folds Up a Folding Cart Patent
Office supply retailer Staples, Inc., was granted summary judgment in February in a patent infringement action brought by dbest products, Inc., over a folding office crate manufactured and sold by Staples. The case turned on whether dbest, a consumer products development company, withheld knowledge of prior art in its patent application for a folding cart with a lid similar to the lid on Staples’ “Deluxe Folding Crate.” (dbest products, Inc. v. Staples, Inc., No. 07-cv-04895 (C.D. Cal. Feb. 25, 2009)). The U.S. District Court for the Central District of California held that dbest withheld information about competing products in the marketplace when filing for its patent, undermining its claim of originality. The court invalidated dbest’s patent, finding the design for the company’s cart “obvious” in light of Staples’ patent. In its motion for summary judgment, Staples emphasized dbest’s “unmistakable intent to deceive the Patent Office” by withholding its knowledge of prior art, which sealed dbest’s fate. To borrow a phrase from the Staples advertising campaign: Winning a case when your opponent withholds prior art? That was easy!
For further information, please contact Marc S. Friedman (mfriedman@sonnenschein.com or 212-768-6767), other lawyers in our Intellectual Property & Technology Group, or your regular Sonnenschein contact.
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