Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Boor and Edson owned Brava, which had intellectual property and technical knowledge related to composite roofing. Wildhawk inquired about purchasing Brava. Boor proposed “an exclusive license for manufacturing current roofing products” with “a right of first refusal on all new product [d]evelopments.” The parties executed asset purchase and license agreements. Wildhawk paid $4 million and obtained an automatic license to “any Improvements” to the technology, whether patentable or not. Before executing the agreement, the parties removed a “New Product” section as required by Wildhawk’s lender but entered into an oral agreement for a right of first refusal. Wildhawk retained Boor and Edson as paid consultants, with non-compete agreements.Boor notified Wildhawk: “As per our handshake agreement” we offer you first right of refusal “on the below products.” The parties entered into a confidentiality and nondisclosure agreement regarding “possible R&D ‘new or enhanced product’ agreements.” They negotiated but failed to reach an agreement. Boor and Edson formed Paragon while Boor was still employed by Wildhawk. Paragon began producing the new products.Wildhawk sued. The district court granted Wildhawk a preliminary injunction, prohibiting Paragon from manufacturing or selling composite roofing. The Eighth Circuit vacated. Wildhawk had a fair chance of proving the defendants violated the agreement but the district court erred in rejecting an equitable estoppel defense. Wildhawk waited until Paragon had been producing the products for 10 months before making its claim, failing to show either reasonable diligence or harm that cannot be compensated by damages. View "Wildhawk Investments, LLC v. Brava I.P., LLC" on Justia Law

The Eighth Circuit dismissed, based on lack of jurisdiction, plaintiffs' appeal of a district court order staying a federal action for trademark infringement and unfair competition pending resolution of common trademark license issues in a long-pending state court litigation between the parties. The court concluded that the stay order is neither a final order under 28 U.S.C. 1291 nor a collateral interlocutory order that may be appealed. In this case, the district court did not abuse its discretion in concluding that if the Lomax Parties prevail on their broad allegations in state court, then the state proceedings will fully dispose of the claims in federal court. View "Window World International v. O'Toole" on Justia Law

Designworks filed suit alleging that defendants violated its copyright in the registered design of a two-story home. The district court granted summary judgment for defendants, concluding that defendants' home design was not a copy of the original Designworks home.The Eighth Circuit affirmed, concluding that the district court did not err in granting defendants' motion for summary judgment because the works were so dissimilar that reasonable minds could not differ as to the absence of substantial similarity in expression in the designs. The court explained that there was no direct evidence of copyright infringement and there was no evidence of a substantial similarity of expression in the designs. In this case, the district court's order emphasized how unreasonable Designworks' litigating position had been, from completely failing to address the "significant objective differences" between the designs to producing nothing more than speculative evidence that anyone associated with defendants had accessed the Designworks house. The court also affirmed the district court's award of attorneys' fees and costs to defendants. View "Designworks Homes, Inc. v. Thomson Sailors Homes, LLC" on Justia Law

Charles James and Designworks filed suit against real estate companies, as well as their affiliates and agents, claiming that defendants infringed their copyrights when they created and published certain floorplans without authorization. The district court granted defendants summary judgment on the infringement claims, as well as on plaintiffs' claims for contributory and vicarious copyright infringement.The Eighth Circuit held that the copyright statute, 17 U.S.C. 120(a), does not provide a defense to a claim of infringement for real estate companies, their agents, and their contractors when they generate and publish floorplans of homes they list for sale. The court reasoned that the terms Congress used in section 120(a) have a certain quality in common—they all connote artistic expression. The court explained that floorplans, like the ones here, serve a functional purpose. The court noted that its decision does not preclude the district court on remand from considering whether some other defense might apply or whether plaintiffs have demonstrated a claim of copyright infringement in the first place. Accordingly, the court reversed the district court's grants of summary judgment to defendants on the primary infringement claim as well as on the claims for contributory and vicarious infringement, vacated the district court's orders awarding defendants costs and attorney's fees, and remanded for further proceedings. View "Designworks Homes, Inc. v. Columbia House of Brokers Realty, Inc." on Justia Law

Plaintiffs are the owners of the heavily advertised Select Comfort and Sleep Number brands of adjustable air mattresses and defendants are online retailers of their own brand of lower-priced adjustable beds. Plaintiffs alleged that defendants used similar and identical marks in several different capacities online to sell competing products, and that defendants compounded internet-related confusion by making fraudulent misrepresentations and failing to dispel confusion when consumers contacted defendants' call centers. After a trial resulted in a mixed verdict, both sides appealed.The Eighth Circuit reversed and concluded that the district court erred by finding as a matter of law that the relevant consumers were sophisticated and that a theory of initial-interest confusion could not apply. Therefore, the court concluded, based on Insty*Bit, Inc. v. Poly-Tech Indus., 95 F.3d 663, 671–72 (8th Cir. 1996), that limiting the infringement instruction to require confusion at the time of purchase was error. Given the strength of plaintiffs' evidence on the issue of confusion, the court cannot conclude that the summary judgment and instructional errors were harmless.In regard to the false advertising claim, the court concluded that the district court erred by instructing the jury in a manner that shifted the burden of proof on the materiality element based on a finding of literal falsity. Furthermore, based on the specific jury forms returned in this case, the court did not find the error to be harmless as to those claims where plaintiffs prevailed. Accordingly, the court reversed and remanded for a new trial on the seven false advertising claims on which plaintiffs prevailed. In regard to the remaining issues, the court concluded that the district court did not abuse its substantial discretion in refusing to permit amendment of the counterclaim after the close of discovery and on the eve of trial; the court noted that an expert's testimony as to the structure and meaning of survey evidence or other factual matters generally should not usurp the court's role in defining the law for the jury; the court concluded that any infirmities as to the demonstration bed go to the weight rather than the admissibility of the evidence; and the jury instructions did not impermissibly shift the burden of proof on defendants' cross claim seeking a declaration that plaintiffs held no trademark rights in the phrase "NUMBER BED." View "Select Comfort Corp. v. Baxter" on Justia Law

FEI, Crop Venture's successor-in-interest, filed suit alleging that the individual defendants took proprietary information they developed at Crop Ventures after they left the company and co-founded Farmobile (the corporate defendant). Specifically, FEI alleges that the individual defendants' behavior constituted a breach of explicit or implicit contracts with the company; defendants were obligated to assign to their employer the ownership rights of products they worked to develop; the individual defendants breached their duty of loyalty to their employer; and the individual defendants misappropriated trade secrets. The district court denied in full FEI's motion, and granted in part and denied in part Farmobile's motion.The Eighth Circuit affirmed and held that because no contract bound the parties during Defendant Nuss' term of employment, Nuss was not in breach of an explicit contract; FEI has not shown that any of the individual defendants was similarly "specifically directed" during their product-development process, so no implied contracts were created under the hired-to-invent doctrine; FEI failed to show the individual defendants breached their duty of loyalty to their employer; FEI cannot maintain a trade secret claim under the Nebraska Trade Secrets Act (NTSA) or the federal Defend Trade Secrets Act (DTSA); and the remaining claims are unpersuasive. View "Farmers Edge Inc. v. Farmobile, LLC" on Justia Law

MPAY, a Massachusetts corporation that develops and owns payroll-processing software that it licenses to its customers, appealed the district court's denial of its motion for a preliminary injunction against appellees. MPAY claimed that it was entitled to such relief based on its copyright-infringement and trade-secrets-misappropriation claims.The Eighth Circuit affirmed in part and vacated in part, holding that appellees demonstrated that their copying, disclosure, and possession of the source code were authorized by the Software Development and License Agreement that MPAY signed with its business partner. Therefore, MPAY has not shown a likelihood of success on the merits of its copyright infringement or trade-secrets-misappropriation claims, and the district court did not err in so concluding. The court also held that MPAY's assertion, that the district court erroneously concluded MPAY's harms were compensable with money damages and so were not irreparable, lacked merit. Furthermore, the balance of the equities and the public interest do not favor an injunction. The court remanded for further proceedings on the question of whether the contractors wrongfully sublicensed use of the software. View "MPAY Inc. v. Erie Custom Computer Applications, Inc." on Justia Law

The Eighth Circuit affirmed the district court's findings of fact and conclusions of law in this trademark infringement case over the word mark "Lawn Managers." In this case, the licensing agreement was the result of a divorce and provided that husband and wife would, in effect, operate parallel, almost identical companies using the same name and similar equipment and vehicles but in different zip codes.The court agreed with the district court that Progressive has not met its high burden of proving that Lawn Managers abandoned its mark through naked licensing. Therefore, the district court properly found that wife could reasonably rely on husband's own quality control efforts and thus met the duty of control as licensor. The court held that the terms of the licensing agreement, combined with the couple's successful operation of the Lawn Managers business for over 17 years and the lack of any evidence of quality deviations at Progressive, were sufficient to support the district court's finding of reasonable reliance. Furthermore, the court held that the district court was within its discretion to conclude that the Lawn Managers mailer did not support Progressive's unclean hands defense. Finally, the district court did not clearly err in its damages award. View "Lawn Managers, Inc. v. Progressive Lawn Managers, Inc." on Justia Law

The Eighth Circuit affirmed judgments against DatabaseUSA for copyright infringement and Vinod Gupta for breach of contract. After Gupta founded Infogroup, he and the company entered a separation agreement. Then Gupta found DatabaseUSA two years later.The court held that a reasonable juror, based on the evidence at trial, could have found Infogroup owned a valid copyright; a reasonable juror could have concluded that DatabaseUSA copied the original elements of Infogroup's work; and, because of spoliation, DatabaseUSA's two arguments against copying fail. Finally, the court affirmed the $11.2 million award for the copyright infringement claim and the $10 million award for the breach of contract claim. View "Infogroup, Inc. v. DatabaseUSA.com LLC" on Justia Law

Safeway and its proprietor filed suit against DPB and its owner, alleging federal trademark infringement under the Lanham Act and deceptive trade practices under Minnesota state law. Safeway claimed that DPB infringed two unregistered description trademarks -- "Rent My Party Bus" and "952 Limo Bus." The district court permanently enjoined defendants from using the trademarks or related domain names, keywords, or hashtags in connection with the advertisement, marketing, or sale of transportation services. However, the district court denied plaintiffs' requests for disgorgement of profits and attorney's fees.The Eighth Circuit affirmed, holding that the district court's finding of no actual confusion and thus, no unjust enrichment, was not clearly erroneous; the district court did not erroneously place the burden of proof on Safeway to prove unjust enrichment; and Safeway bore the burden of proving DPB's sales. The court also held that the district court's findings, when taken in their totality, support its conclusion that Safeway is not entitled to a disgorgement of profits based on deterrence. In this case, the district court actually found that DPB held a good faith belief in its right to use the trademarks. Finally, the district court did not abuse its discretion in denying Safeway's request for disgorgement of profits, and did not abuse its discretion in denying Safeway's request for attorney's fees. View "Safeway Transit LLC v. Discount Party Bus, Inc." on Justia Law