• INTELLECTUAL PROPERTY LAWS

United States Seventh Circuit

Nightingale Home Healthcare, Inc. Vs. Anodyne Therapy, LLC (Decided on 23.11.2010)

Lanham Act claim to demonstrate an abuse of process-Nightingale Home Healthcare, a home healthcare services provider's suit against a seller of infrared lamps-District court awarded attorneys' fees to prevailing parties based on 15 U.S.C. section 1117(a) of Lanham Act suits, as it was found an "exceptional case''- Claim was that Anodyne's sales representative had falsely represented that the lamp had been approved by the Food and Drug Administration for treatment of peripheral neuropathy. The device was intended for the treatment of peripheral neuropathy, and though the FDA had not approved it for that purpose this did not preclude a physician or other healthcare provider.

Held, Not only did the Lanham Act claim have no possible merit (which would not by itself demonstrate an abuse of process), but the District judge found that Nightingale had made the claim in an attempt to coerce a price reduction from Anodyne. Nightingale would have been content to continue buying Anodyne's lamps, as indicated by its purchasing lamps that were subject to the same limited FDA approval and advertising them the same way. The fact that the FDA had not approved Anodyne's lamps for treatment of peripheral neuropathy was thus of no consequence, for neither had it approved for that purpose the lamps that Nightingale bought to replace Anodyne's. To bring a frivolous claim in order to obtain an advantage unrelated to obtaining a favorable judgment is to commit an abuse of process. The judgment of the District court was affirmed and Anodyne's motion for fees and costs pursuant to Rule 38 of the appellate rules was granted.

United States Ninth Circuit

Freecycle Sunnyvale Vs. The Freecycle Network (Decided on 24.11.2010)

Trademark Licensing Dispute- FreecycleSunnyvale ("FS") is a member group of The Freecycle Network ("TFN"), an organization devoted to facilitating the recycling of goods. FS filed a declaratory action against TFN arising from a trademark licensing dispute, alleging noninfringement of TFN's trademarks and tortious interference with FS's business relations.-FS moved for partial summary judgment on the issue of whether its naked licensing defense to trademark infringement allowed it to avoid a finding of infringement as a matter of law-TFN argued that it had established adequate quality control standards over its licensees' services and use of the trademarks to avoid a finding of naked licensing and abandonment of its trademarks. The district court granted summary judgment to FS.

Held, It was found that TFN engaged in naked licensing and thereby abandoned its trademarks It was also held that Defendant TFN i) did not retain express contractual control over FS's quality control (ii) did not have actual controls over FS's quality control measures, (iii) was unreasonable in relying on FS's quality control measures. District court's grant of summary judgment in favor of FS and against TFN was affirmed.

• CIVIL LAWS

United States Seventh Circuit

Nat'l Spritual Assembly of the Baha'is of the U.S.A. Under the Hereditary Guardianship, Inc. Vs. Nat'l Spiritual Assembly of the Baha'is of the U.S.A. (Decided on 23.11.2010)

Civil-contempt - Appeal alleged violations of an injunction entered more than four decades ago. It arose from an underlying suit involving a trademark and property dispute between two religious organizations.-District court's denied the contempt motion on the ground that all nonparties to the original lawsuit lacked privity with the original defendant.

The National Spiritual Assembly argued that the District court committed legal error by rejecting the First Circuit's holding in Merriam that a key officer or employee of an enjoined but later dissolved corporation can be "legally identified" with the corporation and therefore personally bound by the injunction.

Held, although the District court should have applied Merriam, which held that a former employee of an enjoined corporation had such a key role in the company and in the underlying litigation that he could be "legally identified" with the enjoined corporation and therefore held in contempt for using a newly formed company to circumvent the injunction. The judge's findings are thorough enough to resolve the privity question without a remand. Here, the Respondent nonparty religious groups and their principals are not sufficiently identified in interest with the original Defendant to permit a conclusion that they had their day in court back in 1966.