Publications

In California Costume Collections, Inc v. Pandaloon, LLC, 2-21-cv-01323 (CDCA Apr. 7, 2022) (John W. Holcomb), the Central District of California recently considered whether a plaintiff plead an inequitable conduct claim with the required particularity concerning knowledge of materiality. In the case, Plaintiff California Costume Collections (“CCC”) filed its Complaint against Defendant Pandaloon, LLC (“Pandaloon”) for declaratory judgment of non-infringement, invalidity, and unenforceability of U.S. Design Patent No. D806,325 (the “D325 Patent”) for a “Pet Costume.” In response, Pandaloon filed a Motion to dismiss Count Three of the Complaint—in which CCC alleges that the D325 Patent is unenforceable due to inequitable conduct—on the ground that it fails to state a claim for relief under Rule 12(b)(6) of the Federal Rules of Civil Procedure.

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In California, an idea theft claim is based in large part on the California Supreme Court case of Desny v. Wilder. In Desny, the plaintiff Victor Desny wrote a script depicting the real-life story of Floyd Collins, a boy who made headlines after he was trapped in a cave eighty feet underground.  In an effort to market his script, Desny called Billy Wilder, a writer, producer and director at Paramount Pictures. Desny could not get through to Wilder and subsequently stripped his script to the bare facts so that Wilder’s secretary could copy it in short-hand over the phone.  After reading his synopsis, Desny told Wilder’s secretary that Wilder and Paramount could use the script only if they paid him a reasonable amount for doing so. Shortly thereafter, Wilder created his own movie script mirroring Densy’s. Because Densy’s script was based on historical facts, and because Desny only conveyed the bare minimum of those facts to Wilder’s secretary, both parties conceded for the purpose of the appeal that the synopsis was not sufficiently original to form the basis of a federal copyright claim. The Court, however, held that Densy stated sufficient facts to establish the existence of an implied-in-fact contract between the parties. The California Supreme Court explained that where an idea is furnished by one party to another, a contract sometimes may be implied even in the absence of an express promise to pay; a contract exists where “the circumstances preceding and attending disclosure, together with the conduct of the offeree acting with knowledge of the circumstances, show a promise to pay.

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We previously wrote about a lawsuit filed in the Northern District of California against Instagram regarding the use of Instagram’s embedding tools. The plaintiffs, in that case, are two photojournalists who captured images of the George Floyd protests and the 2016 election and posted them to Instagram. Various media companies embedded the photos using Instagram’s proprietary embedding tools. The photos, therefore, appeared on websites without any license from the original photographers.

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When entering into contracts, parties commonly include forum selection clauses to govern future litigation between the parties. When doing so, parties need to actively consider whether they intend that forum selection clause to prohibit filing petitions, such as petitions for inter partes review of patents, with the United States Patent and Trademark Office’s Patent Trial and Appeal Board (“PTAB”). The Court of Appeals for the Federal Circuit has generally recognized that parties can bargain away these rights, including through forum selection clauses in contracts. This issue recently arose in Nippon Shinyaku v. Sarepta.

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