Mary Siceloff

Companies have a number of tools available to them to help protect their intellectual property, including trade secret and other proprietary information that give them a competitive advantage. Many employers utilize detailed provisions in their employee handbooks and employment agreements to protect this information. One key provision has been the use of coworker non-solicitation provisions that prevent a departing employee from seeking to “raid” his or her former coworkers to join him or her at their new place employment, usually a business competitor.

Generally, these provisions state that an employee agrees during their employment, and for some period after their employment ends (usually one year), that he or she will not solicit any former coworkers to seek employment with their new employer. Now, some recent case law has brought the use of these non-solicitation provisions into question as possibly violating section 16600 of California’s Business and Professions Code, which prohibits the use of non-compete provisions except in certain limited circumstances.

For years, California courts have recognized the right of employers to use non-solicitation provisions in employment agreements to prevent employees from “soliciting” their coworkers to join them at a new employer.  For instance, in 1985, a California appellate court in Loral Corp v. Moyes, 174 Cal.App.3d 268 (1985), held that a non-solicitation of fellow employees provision in an employment agreement was lawful because the co-workers were free to seek employment with a competitor, they just couldn’t be contacted first by the departing employee. (As opposed to non-solicitation provisions that have been routinely upheld, courts have held that “no-hire” provisions, i.e. that a departing employee could not hire a former co-worker, have been held unenforceable as an invalid non-compete in violation of section 16600.)

The enforcement of non-solicitation of co-worker provisions remained relatively consistent until November 2018 when a court in AMN Healthcare, Inc. v. Aya HealthCare Services, Inc., 28 Cal.App.5th 923, granted judgment against an employer who was attempting to enforce a co-worker non-solicitation provision against former employees. In AMN, the departing employees were recruiters for temporary nurses who left AMN to join a competitor in the industry. AMN sued the competitor and former employees claiming they had violated a contractual provision not to solicit or recruit their former co-workers, i.e. the nurses being hired for temporary nursing assignments.

The Court affirmed summary judgment in favor of the competitor and former employees, holding that the co-worker non-solicitation provision violated section 16600 of the California Business and Professions Code, which provides that agreements that restrain a person’s trade or profession are unenforceable.  The AMN Healthcare Court relied heavily on the California Supreme Court’s ruling in Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (2008), which broadly struck down non-compete agreements preventing employees from competing against their former employers.

It remained an open question following the AMN Healthcare decision whether other courts would follow its holding concerning the unenforceability of an employee non-solicitation provision.  For instance, would other courts limit the AMN holding and decline to follow it because:

(1) The former employees who were being sought to be restrained by AMN were recruiters such that any prohibition on solicitation would necessarily restrain them in their profession as recruiters; or

(2) The former co-workers they were targeting for recruitment were temporary nurses who served short assignments so that enforcing the non-solicitation provision could limit those employees’ ability to obtain new work after their temporary assignments ended.

We did not have to wait long to see what other courts would do. Two months after the AMN decision, another court followed the lead of the AMN Healthcare Court and is allowing a claim to go forward attacking a co-worker non-solicitation provision.  In Barker v. Insight Global, LLC (Jan. 11, 2019 N.D. Cal.), Judge Beth Labson Freeman recently reversed herself and granted the plaintiff-employee’s motion for reconsideration to allow him to state a claim as a class representative against his former employer for the use of co-worker non-solicitation provisions in its employment agreements.

Judge Freeman held that the recent AMN Healthcare decision (her initial order dismissing the claim came three months prior to the AMN Healthcare decision) was likely consistent with the current state of California law regarding these non-solicitation provisions, especially in light of the Edwards v. Arthur Andersendecision. She denied the defendant-employer’s motion to dismiss the former employee’s claim and ruled that plaintiff should be allowed to present a claim that the use of an employee non-solicitation provision in his employment agreement violated section 16600 and was therefore an unfair business practice.

The Barker case is still in the early stages but employers should be concerned that a court has decided to follow the holding of the AMN Healthcare decision. In light of these recent developments, employers should carefully review any non-solicitation provisions in their employment agreements with their attorneys to determine whether they are at risk at facing claims or a result similar to those in the AMN Healthcare and Barker cases.

As we previously wrote on this blog, Alfonso Ribiero, better known as Carlton Banks from the Fresh Prince of Bel Air filed suit against multiple videogame publishers, including the publisher of NBA 2K and Fortnite for featuring avatars that perform his signature “Carlton Dance.” Ribiero’s case, however, may have just encountered a dispositive roadblock.

Last week, a letter from Saskia Florence, a supervisory registration specialist with the US Copyright Office, to Mr. Ribiero’s attorney, was uncovered. There, Ms. Florence refers to the Carlton Dance as a “simple dance routine” that is “not registrable as a choreographic work.” Describing the choreography, Ms. Florence stated:

The dancer sways their hips as they step from side to side, while swinging their arms in an exaggerated manner. In the second dance step, the dancer takes two steps to each side while opening and closing their legs and their arms in unison. In the final step, the dancer’s feet are still and they lower one hand from above their head to the middle of their chest while fluttering their fingers.

Accordingly, Ms. Florence concluded, “The combination of these three dance steps is a simple routine that is not registrable as a choreographic work.”

Based upon this refusal, the defendants have filed motions to dismiss the complaint. Specifically, the defendants argue that the mark is not entitled to copyright protection, as Ms. Florence, whose conclusion on behalf of the Copyright Office is entitled to substantial deference, likewise concluded. Defendants also contend that Mr. Ribiero may not be the true owner of the work, as it was created for the Fresh Prince of Bel Air and again used on Dancing with the Stars, both of which raise questions regarding whether the network owns the copyright as a work made for hire. Accordingly, Defendants requested that the matter be dismissed with prejudice.

We’ll keep an eye on the docket and when Mr. Riberio files his opposition to the motion to dismiss, we’ll provide another update.

In Continental Circuits LLC v. Intel Corp. et al., case number 18-1076, the U.S. Court of Appeals for the Federal Circuit, in a precedential opinion, recently clarified the rules for the incorporation of a limitation from a patent’s specifications into the claims during claim construction.  In the case, Continental sued Intel Corp.; its supplier, Ibiden U.S.A. Corp.; and Ibiden U.S.A. Corp.’s parent company, Ibiden Co. Ltd. (collectively, “Intel”), for patent infringement on four patents in the District of Arizona.

All four patents at issue in the case share a common specification and are directed to a “multilayer electrical device . . .having a tooth structure” and methods for making the same.  According to the patents, multilayer electric devices “suffer from delamination, blistering, and other reliability problems,” especially when “subjected to thermal stress.”  The inventions of the patents purport to solve this problem by “forming a unique surface structure . . . comprised of teeth that are preferably angled or hooked like fangs or canine teeth to enable one layer to mechanically grip a second layer.”  The specification further explains that the increased surface area of the teeth improves the adhesion of the layers to one another.  The patents additionally “theorize[] . . . that the best methods for producing the teeth [are] to use non-homogenous materials and/or techniques . . . such that slowed and/or repeated etching will form teeth instead of a uniform etch.”  The specification then explains that “[o]ne technique for forming the teeth is . . . the swell and etch or desmear process, except that contrary to all known teachings in the prior art . . . a ‘double desmear process’ is utilized.”  It continues by explaining that “the peel strength produced in accordance with the present invention is greater than the peal [sic] strength produced by the desmear process of the prior art, i.e., a single pass desmear process.”  The specification then discloses that “[i]n stark contrast with the etch and swell process of the known prior art . . . a second pass through the process . . . is used” because it “make[s] use of [the] non-homogenaities [sic] in bringing about a formation of the teeth.”

All of the asserted claims include claim limitations regarding the “surface,” “removal,” or “etching” of “a dielectric material” or “epoxy,” and their construction depends on resolving whether they should be limited to a repeated desmear process.  The district court construed the “surface,” “removal,” or “etching” claims of the dielectric material to be “produced by a repeated desmear process.”  The district court concluded that Intel had “met the exacting standard required” to read a limitation into the claims.  Specifically, the district court found that the specification not only “repeatedly distinguishe[d] the process covered by the patent from the prior art and its use of a ‘single desmear process,’” but also characterized “the present invention” as using a repeated desmear process.  Additionally, the district court found that the prosecution history corroborated its construction.

In reviewing the claim construction, the Federal Circuit first noted that claim construction is ultimately a question of law that it reviews de novo.  Any subsidiary factual findings based on extrinsic evidence “must be reviewed for clear error on appeal.”  But “when the district court reviews only evidence intrinsic to the patent (the patent claims and specifications, along with the patent’s prosecution history), the judge’s determination will amount solely to a determination of law,” which the Federal Circuit will review de novo.

The Federal Circuit acknowledged the difficulty in drawing the “fine line between construing the claims in light of the specification and improperly importing a limitation from the specification into the claims.”  To avoid improperly importing limitations into the claims, “it is important to keep in mind that the purposes of the specification are to teach and enable those of skill in the art to make and use the invention and to provide a best mode for doing so.”  In contract, to disavow claim scope (or, in other words, limit the claims via the specification), “the specification must contain ‘expressions of manifest exclusion or restriction, representing a clear disavowal of claim scope.’”

The Federal Circuit then found that the district court erred in limiting the claims to require a repeated desmear process.  Based on its review of the specification, none of the statements relied upon by the district court rises to the level of “a clear and unmistakable disclaimer.”  Thus, absent “clear and unmistakable” language suggesting otherwise, the Federal Circuit concluded that the aforementioned statements do not meet the “exacting” standard required to limit the scope of the claims to a repeated desmear process.

The district court had also found that the prosecution history further supported its claim construction; however, the Federal Circuit disagreed that such a clear disavowal existed in the prosecution history.  Similar to disclaimers in the specification, “[t]o operate as a disclaimer, the statement in the prosecution history must be clear and unambiguous, and constitute a clear disavowal of scope.”  But, according to the Federal Circuit, the cited statements in the prosecution history do not clearly and unmistakably disavow any claim scope.

Next, in order to read a process limitation into a product claim, it must meet one more criterion.  Generally, “[a] novel product that meets the criteria of patentability is not limited to the process by which it was made.”  “However, process steps can be treated as part of a product claim if the patentee has made clear that the process steps are an essential part of the claimed invention.”  Thus, for the same reasons that the statements relied upon by the district court do not show that the patentee clearly and unmistakably disavowed claim scope, they also do not make clear that the repeated desmear process is “an essential part” of the claimed electrical device having a tooth structure.

Finally, in some instances, district courts are authorized “to rely on extrinsic evidence, which ‘consists of all evidence external to the patent and prosecution history, including expert and inventor testimony, dictionaries, and learned treatises.’”  However, “while extrinsic evidence ‘can shed useful light on the relevant art,’” it is “less significant than the intrinsic record in determining the ‘legally operative meaning of disputed claim language.’”  Here, the district court acknowledged that the extrinsic evidence, which consisted of documents authored by the inventors, was “not reliable enough to be dispositive,” but “provide[d] helpful corroboration.”  However, similar to the intrinsic evidence, those statements reflect use of the preferred embodiment but give the public no indication that they have any limiting effect.  Therefore, because the Federal Circuit already determined that the intrinsic evidence does not support reading a repeated desmear process into the claims, the “less reliable” extrinsic evidence, which even the district court acknowledged was “not reliable enough to be dispositive,” does not require otherwise.

Accordingly, the Federal Circuit determined the claim terms should not be limited to requiring a repeated desmear process, and instead, should be given their plain and ordinary meaning.

Generic trademarks are those which, due to their popularity and/or common usage, have become synonymous with the products or services. Such trademarks include Kleenex, Band-Aid, Jeep, Aspirin, and Cellophane. Such marks, generally, cannot be federally registered or protected under the Lanham Act due to the marks direct reference to the class of product or service it belongs to. In other words, it fails to distinguish the good or service from other goods or services in the marketplace.

Breaking ways with this long-standing body of law, the U.S. District Court for the Eastern District of Virginia reversed a Trademark Trial and Appeal Board (“TTAB”) decision denying trademark applications for BOOKING.COM. The plaintiff in that action previously filed a federal trademark application for BOOKING.COM for both travel agency services and for making hotel reservations for others in person and via the internet. Plaintiff already had an international trademark registration for the same services pursuant to the Madrid Protocol.

During the USPTO’s review the plaintiff argued that the marks had acquired distinctiveness, but the USPTO refused to register the mark due to its genericness. The plaintiff appealed the decision to the TTAB, which affirmed the USPTO’s refusal. In doing so, the TTAB stated that “.com” did not impact the genericness.

On appeal, the Eastern District of Virginia first examined whether BOOKING.COM is generic. In doing so, it first analyzed BOOKING and .COM separately before analyzing them in conjunction. The Court found that that BOOKING is generic for the relevant services. When analyzing BOOKING.COM as a whole, however, plaintiff argued that the combination of the generic word BOOKING and .COM created a unique designation of the source of the services.

The Court found that when combined with a second-level domain, top-level domains, such as .com, typically have source identifying significance. The Court further held that second-level domain and top-level domain combinations generally create descriptive marks that are protectable upon acquiring distinctiveness. The reasoning stemmed from the Court finding that a top-level domain plus a second-level domain equals a domain name, which is unique and can only be owned by a single entity.

Next, the Court analyzed whether BOOKING.COM had acquired distinctiveness. Finding that the plaintiff offered sufficient evidence that consumers identify BOOKING.COM with a specific source, not just a reference to services provided, the Court held that BOOKING.COM had acquired distinctiveness, but only as to hotel registration services, not travel agency services. Accordingly, the Court ordered the USPTO to register BOOKING.COM as to those services, and remanded the matter to the USPTO to determine whether the design and color elements in two of the applications, in conjunction with the protectable word mark, were eligible for protection.

So, what does this mean? In short, it means that although a party may be unable to register its generic mark alone, it may be able to combine the generic mark with a top-level domain to create a registrable trademark. But although this undoubtedly provides some benefit, such trademark owners should heed the Eastern District’s warning that such marks will not be according broad protection.

For those of you that watched the red carpet happenings at last year’s Golden Globe Awards, you may have noticed the “Fiji Water Girl”, a model standing ready to keep Hollywood glitterati hydrated with bottles of Fiji water, photobombing numerous shots of celebrities.  Her presence on the red carpet created a social media firestorm and the Fiji Water Girl – a model named Kelly Steinbach – garnered instant and substantial notoriety.  Now this notoriety has evolved into a lawsuit, pitting Steinbach against the very brand of water she was representing.  It appears that Fiji created numerous life-size cardboard cutouts of Steinbach from a photo of her on the red carpet at the Golden Globes holding a tray of Fiji water and placed them at grocery stores and at other retail point-of-sale locations.  In fact, People Magazine published a picture of John Legend leaving a Beverly Hills grocery store with the cardboard cutout of Steinbach in the background next to a display of Fiji water.  Steinbach claims that Fiji never had her permission to use her likeness in such a manner and such use by Fiji violates her right of publicity.

California Civil Code Section 3344 states, in pertinent part:

Any person who knowingly uses another’s name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods or services, without such person’s prior consent….shall be liable for any damages sustained by the person or persons injured as a result thereof.

The entire purpose of 3344 is to allow individuals to control any commercial interest they may have in their persona.  That said, every use of a person’s likeness in connection with a commercial product or service is not actionable.  Section 3344(e) states that:

[I]t shall be a question of fact whether or not the use of the person’s name, voice, signature, photograph, or likeness was so directly connected with the commercial sponsorship or with the paid advertising as to constitute a use for which consent is required.

The statute also contains a “safe harbor” for use in any news, public affairs, or sports broadcast or any political campaign.

Most contested right of publicity cases address the fine line between commercial use and a protected First Amendment use.  Although the Supreme Court provided guidance in Comedy III Prods., Inc. v. Gary Saderup, Inc. for determining the difference between protected First Amendment speech and the actionable usurpation of an individual’s right of publicity, balancing tests are never as clear as practitioners would like them to be.

Here however, it seems like a clear case, but like any good Hollywood movie, there’s always a twist.  Fiji claims that the lawsuit is frivolous and without merit.    Fiji claims that “[a]fter the Golden Globes social media moment, [it] negotiated a generous agreement with Ms. [Steinbach].”  Fiji even claims there is a videotape of Ms. Steinbach signing an agreement; Steinbach claims that the agreement was not really an agreement and the signing was a staged event.  Fiji claims that Steinbach “blatantly violated” the agreement between them and stated that it’s confident that it will prevail in Court.