by Lee Gesmer | Oct 27, 2005 | Trademark
Office Depot, the office supply giant, has filed a lawsuit against arch rival Staples in U.S. District Court in West Palm Beach, Florida. Office Depot’s complaint alleges that Staples has engaged in trademark infringement, unfair competition, false advertising, and deceptive trade practices by buying VIKING, a trademark owned by one of Office Depot’s subsidiaries, as an advertising keyword from Google. Google has successfully defended its right to use third party trademarks in its keyword advertising program in a number of recent suits, including the recent GEICO v. Google case that we first discussed here, and reported settled here, but this is the first time that a trademark owner has bypassed Google and gone directly after the company actually buying the keywords.
Assuming this case doesn’t settle, we expect that Staples ultimately will prevail, as keyword advertising on the Internet these days is analogous to the completely legal practice of Burger King putting up a billboard next to a McDonald’s in the brick-and-mortar world. However, at the present time a search of VIKING does not return a paid advertisement for Staples, suggesting that Staples may be negotiating a settlement with Office Depot, or is attempting to mitigate future damages.
by Lee Gesmer | Oct 10, 2005 | Business Lit. Session, Courts
The Massachusetts Bar Association held an outstanding conference on the BLS in Boston on September 29, 2005. Several interesting documents distributed at the conference are linked below.
Here are a few observations on the conference.
First, the question foremost on everyone’s mind is whether Judge Allan Van Gestel will be “recalled” once he reaches the mandatory retirement age of 70 in December. In the eyes of most business lawyers in Massachusetts Judge Van Gestel is synonymous with the BLS. He was the first and only judge in the session five years ago, and although the session has had several other judge rotate through a second session (BLS2), its hard to imagine the BLS without Judge Van Gestel at the helm.
Moreover, Judge Van Gestel has created a Superior Court jurisprudence in the BLS which gives an unprecedented level of predictability to Superior Court practice. A quick Westlaw search on “Van Gestel” during the last five years results in over 250 written decisions.
It’s common knowledge among members of the bar that Judge Van Gestel is eager to be recalled after he turns 70 at the end of the year. Judge Van Gestel confirmed this over lunch with several lawyers on September 29th. However, as the Judge told the lawyers at his table, although many Appeals Court judges have been recalled in recent years (owing to an inadequate number of judges to handle the caseload on that bench) it has been twenty-five years since a Superior Court Judge has been recalled.
While Judge Van Gestel appeared to be optimistic that he would be recalled, recall requires action by both the Chief Justice of the Supreme Judicial Court and the Chief Administrative Judge of the Superior Court, and we can’t assume that this is a done deal until it actually happens.
Second, the judges (and some of the speakers, many of whom did a tremendous amount of work for this conference), made a few interesting points:
- The BLS is the court where many employers try to enforce non compete agreements. One speaker who had reviewed all of the BLS decisions in this area reported that preliminary injunctions in this area succeed only 30% of the time. Listening to Judges Van Gestel, Gants and Burns discuss their attitudes on the enforceability of non competes left me with a distinct impression: although this special session of the Superior Court wants to be known as the Business Litigation Session, it does not want to be known as the “Pro-Business Litigation Session,” and businesses shouldn’t assume that they have an edge in enforcing non compete agreements before this court. In fact, just the opposite may be true.
- The judges noted how rare jury trials are in the BLS. Many Massachusetts lawyers have attended “View From the Court” programs where trial statistics are discussed by the Chief Administrative Judge, and hear the discouraging (to the ear of a trial lawyer) statistics: approximately 96% of all civil cases settle, and the few that don’t tend to be tort cases. It’s no surprise, therefore, to hear that trials are even scarcer in the BLS, where (one would hope) emotions play a minimal role and rationale business people objectively assess their chances before wading into the unpredictable waters of jury trials.
by Lee Gesmer | Sep 15, 2005 | Patents
Is this the end of an era in patent law? Or just the dropping of the other shoe? Last week in Symbol Technologies, Inc. v. Lemelson Medical, Education and Research Foundation, LP, the Court of Appeals for the Federal Circuit (practically the court of last resort in patent matters, since the Supreme Court rarely takes a patent case) ruled that a number of machine vision patents of inventor Jerome Lemelson were unenforceable due to the patentee’s “unreasonable delay” in prosecuting the underlying patent applications before the U.S. Patent and Trademark Office. The ruling comes too late for various companies who had already paid millions of dollars to license these patents from Lemelson.
Read full post …
by Lee Gesmer | Sep 14, 2005 | Miscellaneous
“The thing to fear is not the law, but the judge”
Russian Proverb
Non Compete Agreements. The need to “spin” a litigation outcome to try to persuade the public that you won appears irresistible to large corporations. However, it’s hard to keep a straight face reading Microsoft’s pronouncements about the Seattle state court’s September 13th decision in Microsoft’s suit against Google and Dr. Kai-Fu Lee, until recently “the face of Microsoft in China.” Believe me, when your former employee is able to show up to work for your competitor the day after the decision on your preliminary injunction motion to enforce a non compete agreement, you have not won.
The fact is, a preliminary injunction seeking to enforce a non compete agreement is always highly uncertain. Some judges view non compete agreements as just another contract, to be enforced as written. Other judges have an almost philosophical antipathy to non competes, and will bend over backwards to find any reason not to enforce them. They believe that people should be free to work wherever they wish, and they rule accordingly.
The Seattle judge appears to fall into the second camp. Microsoft learned this when it tried to enjoin Dr. Lee, now the President of “Google China,” from establishing and staffing a Google development facility in China.
Although the Washington State judge initially entered a temporary restraining order against Google and Dr. Kai-Fu Lee in late August that prevented Dr. Lee from working for Google in any of the areas in which he had worked for Microsoft, on September 13, 2005, after a two day hearing, the judge entered a substantially narrower injunction that leaves Dr. Lee free to:
engage in recruiting activities relating to Google’s planned research and development facility in China . . . including establishing facilities, hiring engineers and administrative staff, interacting with public officials regarding the facilities and recruitment, meeting with university administrators and professors regarding recruitment, and offering general, non-technical advise to Google about doing business in China
What can’t he do? Recruit from Microsoft or use any confidential information from Microsoft.
How did the court reach this outcome given the fact that Dr. Lee’s one year non compete agreement with Microsoft prevents him from working in areas competitive with “products, services or projects” that he worked on at Microsoft, and his new job with Google puts him in a position where he runs an operation that is directly competitive with his former job at Microsoft? Because Dr. Lee’s work for Microsoft in China was primarily recruiting, his activities were not a “product” or “service.” Were they a “project”? One might think so, but the judge interpreted the word “project” to exclude recruiting efforts, freeing Dr. Lee to recruit for Google. A judge more inclined to enforce non compete agreements could easily have interpreted the non compete agreement against Google and Dr. Lee.
Although this case is scheduled to go to full trial early next year, we expect that it will settle quickly. As a practical matter the preliminary injunction is both the battle and the war in these kinds of cases.
A few other interesting observations about the case:
First, Dr. Lee’s lawyers were savvy enough to anticipate this suit and require Google to agree to pay Dr. Lee’s salary even if he was enjoined from working for Google for a year. We rarely see this, but Dr. Lee was well represented in this regard.
Second, Microsoft had Dr. Lee sign a boilerplate noncompete agreement when he began working for Microsoft in 1998, and then forgot all about the agreement until it came time to enforce it, at which time the agreement fell short. We’ve seen this time and time again. Where employees’ jobs change and success or failure can rest on a single word, it’s essential to revisit these agreements from time to time.
Third, it appears that before leaving Microsoft Dr. Lee may have begun advising Google and may have transferred confidential Microsoft documents to Google. This is the worst mistake an employee in this situation can make, and it’s often enough to tip a decision against the employee. Here, it wasn’t.
Fourth, according to the New York Times, immediately following the preliminary injunction decision Microsoft’s General Counsel announced to the press that it was prepared to settle this case on the terms of the preliminary injunction order entered that day. Google responded that this was the first it had heard of this. Why Microsoft would attempt to negotiate via the press in this manner is anybody’s guess, but it is highly unusual, and suggests that Microsoft considers this case a lost cause and wants to both save face and cut its losses as soon as possible.
by Lee Gesmer | Sep 14, 2005 | Trademark
Trademarks/Domain Names. Why did Jerry Falwell lose and Bill Cosby win?
Bill Cosby prevailed this week in a domain name dispute involving FATALBERT.ORG (William H. Cosby, Jr. v. Sterling Davenport). This dispute was resolved in an ICANN arbitration, which requires that the complainant prove both that the domain name was registered and used in bad faith in order to succeed. The arbitrator found that Mr. Davenport had no legitimate interest in the domain name, that he had registered it solely with the intention of trading on the fame of Cosby’s Fat Albert character, and that he sold sexually explicit products and drugs on the site, which the arbitrator found particularly offensive since the Fat Albert mark is so closely associated with children. Mr. Davenport’s for-profit conduct clearly constituted bad faith use and registration of the domain name, and he was ordered to transfer the domain name to Cosby.
Compare this with The Reverend Jerry Falwell’s attempt to gain control over FALLWELL.COM, a “gripe” site highly critical of Falwell’s conservative beliefs (Lamparello v. Falwell). In this case the US Court of Appeals for the 4th Circuit rejected Reverend Falwell’s trademark infringement claims, finding that there was no likelihood of consumer confusion, the standard for finding infringement, between Falwell’s web site and Mr. Lamparello’s gripe site. The court held that the registration and use of a domain name must be viewed in the context of the content on the entire web site, and in this case, it was clear that no one would believe that Falwell had sponsored the site, which was highly critical of him.
In rejecting Falwell’s anticybersquatting claims under the federal Anticybersquatting Consumer Protection Act, which, like an ICANN arbitration, requires a showing of bad faith registration and use of a domain name, the court found that Lamparello’s intent in registering FALLWELL.COM was for the purpose of social commentary and criticism, not to divert visitors from Falwell’s own site. Moreover, Mr. Lamparello did not profit financially from the site. As Mr. Lamparello had a legitimate basis for registering FALWELL.COM and as his use of the domain name was non-commercial, the court found no evidence of bad faith conduct on his part. The site remains active.
- Read the FATALBERT.ORG opinion here.
- Read the FALLWELL.COM opinion here
Thanks to Susan Mulholland for assisting with this post.
