MGA Finally Gets Some Good News
After being pummeled by a series of devastating rulings and Court decisions in their ongoing battle with Mattel over rights to the Bratz doll line, MGA Entertainment finally received a bit of good news. In a separate battle with Art Attacks Ink, again involving rights to the Bratz dolls, the Ninth Circuit Court of Appeals sided with the District Court and upheld a determination that Art Attacks had no right to the Bratz designs. While the Mattel claims were based on the creation timing and employment status of original designer of the Bratz dolls, Air Attacks had argued that their t-shirt designs of similar characters had served as the basis for the Bratz dolls even though the t-shirts were only sold from a booth at the fair and from a Web site with very limited access to the general public. Consequently, the District Court held that there was no proof that MGA was even aware of the Air Attacks designs let alone that there could be any relationship between them.
The moral of the story? Make sure your designs are well-known before you claim infringement or misappropriation.
David Baker
The Airsoft Lawyer
Thursday, September 17, 2009
Friday, September 11, 2009
ASR Bikinis
Just returned home after several days at the Action Sports Retail (or ASR) Show in San Diego. Our intellectual property seminar, entitled "Protecting Your Intellectual Property in Good Times and Bad Times" went well, but was about as lightly attended as the overall show. In years past, the aisles have been, quite literally, elbow-to-elbow. However, the trend since the winter show in 2008 (February to be more precise) has been for much fewer exhibitors and attendees. This year there was no Agenda Show (ASR's funkier cross-town rival) as it had moved to Huntington Beach in July (to coincide with the U.S. Surf Open) and the weak economy contributed to further weaken the show.
If we made one mistake, it was scheduling our seminar on Thursday afternoon. Based on conversations with exhibitors large and small, most arrived early Thursday with plans already made to get away Thursday afternoon and return home by Friday evening even though the show runs through early Saturday afternoon. Through 2008, the show ran through Sunday, but everyone, especially owners, were long gone by Sunday morning.
Overall, we had a nice crowd, many of whom were fairly knowledgeable about trademarks and copyrights, and the crowd interaction made for an enjoyable time. Of course, the real pleasure was walking the main floor and checking out the scantily clad bikini models. Unfortunately, my observations on that topic are best reserved for a completely different blog.
Look for us again at the ASR Show in February (and watch for our Webinars between now and then, especially the "hot topics in airsoft" Webinar coming up soon).
David Baker
The Airsoft Lawyer
If we made one mistake, it was scheduling our seminar on Thursday afternoon. Based on conversations with exhibitors large and small, most arrived early Thursday with plans already made to get away Thursday afternoon and return home by Friday evening even though the show runs through early Saturday afternoon. Through 2008, the show ran through Sunday, but everyone, especially owners, were long gone by Sunday morning.
Overall, we had a nice crowd, many of whom were fairly knowledgeable about trademarks and copyrights, and the crowd interaction made for an enjoyable time. Of course, the real pleasure was walking the main floor and checking out the scantily clad bikini models. Unfortunately, my observations on that topic are best reserved for a completely different blog.
Look for us again at the ASR Show in February (and watch for our Webinars between now and then, especially the "hot topics in airsoft" Webinar coming up soon).
David Baker
The Airsoft Lawyer
Wednesday, September 9, 2009
Trade Secret Cases Can Backfire
Trade secrets, by their very nature, can be a company’s most prized possession. And when employees make off with a former employer’s trade secrets, such as confidential prospect and customer lists, secret formulas, computer software code, and the like, it has not been uncommon for the employer to file a lawsuit to prevent the employee from using the trade secrets for their own financial gain and, if possible, to recover the secrets. However, a recent California Court of Appeal decision serves as notice that employees must be careful in how they proceed, particularly if they do so in “bad faith.”
In FLIR Systems, Inc. v. Parrish, 2d Civil No. B209964, 2009 WL 1653103 (Cal. App. 2d Dist. June 15, 2009), the Court of Appeals affirmed a $1.6 million attorney fee award to the defendants upon a finding that the action was brought in bad faith. The decision provides some insight into the various factors that may contribute to a determination of bad faith and highlights the importance of considering carefully whether to bring a misappropriation claim against former employees. This is especially true when there is little or no evidence of actual damage, or of actual misappropriation or threatened misappropriation.
In 2004, FLIR acquired the assets of Indigo, a manufacturer and distributor of microbolometers, devices used in connection with infrared cameras, night vision, and thermal imaging. Defendants Parrish and Fitzgibbons were officers of Indigo and continued to work there after the sale. After about a year, Parrish and Fitzgibbons decided to start a competing company based on a business plan originally developed by Fitzgibbons several years before FLIR acquired Indigo.
In 2006, defendants began negotiations with Raytheon Company and assured FLIR and Indigo that they would not misappropriate Indigo’s trade secrets. Not satisfied, FLIR and Indigo sued defendants on the theory that they must have misappropriated trade secrets in order to compete with FLIR by mass producing low-cost microbolometers. Raytheon promptly terminated the business discussions with defendants, forcing them to abandon their fledgling business and to sue FLIR and Indigo.
At trial in late 2007, the Court found there was no misappropriation or threatened misappropriation of trade secrets because it was undisputed that defendants received no funding for their business, never actually started their new business, had no employees or customers, did not lease any facility or develop technology, and did not design, develop or sell any infrared products. In successfully defending the FLIR and Indigo misappropriation of trade secrets and California Unfair Competition Act (Civil Code Section 3426.4) claims, the trial court ultimately denied permanent injunctive relief and awarded defendants $1,641,216.78 in attorney fees as the prevailing party.
In its June 2008 statement of decision, the Court held that plaintiffs had brought the action based on the doctrine of “inevitable disclosure,” essentially arguing that even though there was no evidence of actual disclosure it was likely there would eventually be disclosure of the FLIR and Indigo trade secrets. However, California courts have repeatedly rejected the “inevitable disclosure” doctrine and the Court found FLIR and Indigo to have brought the action in bad faith. In issuing its ruling, the Court considered the following factors significant:
• The absence of any economic harm.
• The absence of any evidence of misappropriation or threatened misappropriation of trade secrets.
• Evidence that the defendants had an anticompetitive motive in filing the lawsuit.
• Failure by the defendants to identify what trade secrets would be subject to the permanent injunction.
• The imposition of unnecessary settlement conditions during negotiations.
• Defendant’s experts admitted there was no scientific methodology to predict trade secret misuse and agreed that no trade secrets actually had been misappropriated.
The FLIR decision is a reminder to employers to exercise caution when deciding to file litigation against former employees for trade secret misappropriation, particularly where it appears the employer is merely fearful or suspicious of wrongdoing. In such cases, the employer risks not only dismissal of its claims but the possibility of significant monetary sanctions.
David Baker
The Airsoft Lawyer
Trade secrets, by their very nature, can be a company’s most prized possession. And when employees make off with a former employer’s trade secrets, such as confidential prospect and customer lists, secret formulas, computer software code, and the like, it has not been uncommon for the employer to file a lawsuit to prevent the employee from using the trade secrets for their own financial gain and, if possible, to recover the secrets. However, a recent California Court of Appeal decision serves as notice that employees must be careful in how they proceed, particularly if they do so in “bad faith.”
In FLIR Systems, Inc. v. Parrish, 2d Civil No. B209964, 2009 WL 1653103 (Cal. App. 2d Dist. June 15, 2009), the Court of Appeals affirmed a $1.6 million attorney fee award to the defendants upon a finding that the action was brought in bad faith. The decision provides some insight into the various factors that may contribute to a determination of bad faith and highlights the importance of considering carefully whether to bring a misappropriation claim against former employees. This is especially true when there is little or no evidence of actual damage, or of actual misappropriation or threatened misappropriation.
In 2004, FLIR acquired the assets of Indigo, a manufacturer and distributor of microbolometers, devices used in connection with infrared cameras, night vision, and thermal imaging. Defendants Parrish and Fitzgibbons were officers of Indigo and continued to work there after the sale. After about a year, Parrish and Fitzgibbons decided to start a competing company based on a business plan originally developed by Fitzgibbons several years before FLIR acquired Indigo.
In 2006, defendants began negotiations with Raytheon Company and assured FLIR and Indigo that they would not misappropriate Indigo’s trade secrets. Not satisfied, FLIR and Indigo sued defendants on the theory that they must have misappropriated trade secrets in order to compete with FLIR by mass producing low-cost microbolometers. Raytheon promptly terminated the business discussions with defendants, forcing them to abandon their fledgling business and to sue FLIR and Indigo.
At trial in late 2007, the Court found there was no misappropriation or threatened misappropriation of trade secrets because it was undisputed that defendants received no funding for their business, never actually started their new business, had no employees or customers, did not lease any facility or develop technology, and did not design, develop or sell any infrared products. In successfully defending the FLIR and Indigo misappropriation of trade secrets and California Unfair Competition Act (Civil Code Section 3426.4) claims, the trial court ultimately denied permanent injunctive relief and awarded defendants $1,641,216.78 in attorney fees as the prevailing party.
In its June 2008 statement of decision, the Court held that plaintiffs had brought the action based on the doctrine of “inevitable disclosure,” essentially arguing that even though there was no evidence of actual disclosure it was likely there would eventually be disclosure of the FLIR and Indigo trade secrets. However, California courts have repeatedly rejected the “inevitable disclosure” doctrine and the Court found FLIR and Indigo to have brought the action in bad faith. In issuing its ruling, the Court considered the following factors significant:
• The absence of any economic harm.
• The absence of any evidence of misappropriation or threatened misappropriation of trade secrets.
• Evidence that the defendants had an anticompetitive motive in filing the lawsuit.
• Failure by the defendants to identify what trade secrets would be subject to the permanent injunction.
• The imposition of unnecessary settlement conditions during negotiations.
• Defendant’s experts admitted there was no scientific methodology to predict trade secret misuse and agreed that no trade secrets actually had been misappropriated.
The FLIR decision is a reminder to employers to exercise caution when deciding to file litigation against former employees for trade secret misappropriation, particularly where it appears the employer is merely fearful or suspicious of wrongdoing. In such cases, the employer risks not only dismissal of its claims but the possibility of significant monetary sanctions.
David Baker
The Airsoft Lawyer
Thursday, September 3, 2009
Too hot for airsoft?
The Roughnecks battle on Saturday at Coppermine in Riverside County was fun, if altogether much too hot. The game began with its usual leisurely attitude and the standard start time of 9:00 a.m. sharp" rolled on in to the standard REAL start time of about 10:00 a.m. Late arrivals, the lengthy "safety briefing," the description of the operation, and generalized lallygagging all contributed to a game that began much later than it should have, particularly because of the intense, late summer heat. In fact, by the end of the battle, the temperature in the Tundra read a cool 111 degrees (not counting all the gear we were humping and the steep terrain we traversed).
Besides the oppressive weather, the operation itself left quite a bit to be desired. Again as usual, the op was weighted to the advantage of the Desert forces and Woodland was weighed down with new players, three (3) disparate objectives, a force ration of 2:3, and multiple, hidden components all necessary for victory, multiplied by Desert needing only to prevent Woodland from accomplishing one of its objectives and an overzealous Desert force that had Woodland force4s surrounded before action even began. Although I play on both sides, much of my time is spent on the more challenging Woodland force and I have yet to figure out why Desert, who proclaims to be the more professional group, virtually always insists on having grotesque advantages from the start of the scenario.
In any event, Woodland fought all day at a disadvantage, the heat having knocked quite a few players on their collective rears, first of which was Tristan (Reaver), and it seemed like we were figging uphill for most of the battle. Combined with Desert forces, proclaiming airsoft is a "game of honor," who had a really hard time acknowledging their hits, the conclusion was foregone. The only real question was how many real casualties we would absorb by the end of the day.
Don't get me wrong, heat, wonky scenario, and all, it was still a lot of fun. It's just that when players post their gripes on the Roughnecks forums, like most forums, they end up getting flamed and labeled as poor sports. Of course, I can't help wondering what we'll do that unknown Saturday in the future, when EVERYONE shows up wearing Desert. Then, who wins and who loses?
David Baker
The Airsoft Lawyer
Besides the oppressive weather, the operation itself left quite a bit to be desired. Again as usual, the op was weighted to the advantage of the Desert forces and Woodland was weighed down with new players, three (3) disparate objectives, a force ration of 2:3, and multiple, hidden components all necessary for victory, multiplied by Desert needing only to prevent Woodland from accomplishing one of its objectives and an overzealous Desert force that had Woodland force4s surrounded before action even began. Although I play on both sides, much of my time is spent on the more challenging Woodland force and I have yet to figure out why Desert, who proclaims to be the more professional group, virtually always insists on having grotesque advantages from the start of the scenario.
In any event, Woodland fought all day at a disadvantage, the heat having knocked quite a few players on their collective rears, first of which was Tristan (Reaver), and it seemed like we were figging uphill for most of the battle. Combined with Desert forces, proclaiming airsoft is a "game of honor," who had a really hard time acknowledging their hits, the conclusion was foregone. The only real question was how many real casualties we would absorb by the end of the day.
Don't get me wrong, heat, wonky scenario, and all, it was still a lot of fun. It's just that when players post their gripes on the Roughnecks forums, like most forums, they end up getting flamed and labeled as poor sports. Of course, I can't help wondering what we'll do that unknown Saturday in the future, when EVERYONE shows up wearing Desert. Then, who wins and who loses?
David Baker
The Airsoft Lawyer
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