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Thelonious Monk Licensing Dispute
Goes Avant-Garde

I liked the opening riff played by the estate of Thelonious Monk in its dispute with North Coast Brewing Co. over the merchandising of Brother Thelonious Belgian Style Abbey Ale. It had a simple, effective hook—we licensed the jazz legend's likeness to appear on a bottle of ale, but not on t-shirts, neon signs, playing cards and other merchandise. It was catchy enough to survive North Coast's motion to dismiss earlier this year.

But now that we're getting into the improvisational part of the litigation, i.e. discovery, the tune seems to be getting lost, and a new, unexpected soloist has appeared.

North Coast's attorneys at McDermott Will & Emery have produced a 2013 social media post in which plaintiff and estate administrator T.S. Monk Jr. appears to be sporting a Brother Thelonious t-shirt and touting “the award-winning Belgian ale and all the wonderful things in the online store” that support the Thelonious Monk Institute of Jazz.

McDermott partner Robert Zelnick is pressing Monk to admit that he was aware of, and consented to North Coast's merchandising by that date—and while he's at, it to acknowledge potential income tax liability for all the licensing payments North Coast has made to the Monk Institute. Zelnick asked U.S. Magistrate Judge Donna Ryu for sanctions in an April 18 filing, saying that North Coast “has expended literally tens of thousands of dollars to try to secure answers” to about 80 such questions.

T.S. Monk's attorneys at Schneider Rothman IP Law Group say that whether their client knew and consented to the merchandising goes to the heart of the case and must be decided by a jury. As for taxes, “Neither Mr. Monk Jr. nor Mrs. Monk are tax lawyers or accountants (and neither is their counsel),” Schneider Rothman's Joel Rothman writes in the same filing. They don't understand “what undefined and unexplained 'potential tax liability' North Coast is referring to.”

Now the widow of the artist who created the illustration that the parties are haggling over has decided she wants in on this too. Joelle Signorelli sued North Coast on Thursday, also in San Francisco federal court. She alleges that back in 2005 when North Coast offered her husband, Eduardo Smissen, $3,000 for the artwork, he never formally accepted.

Signorelli apparently was not happy to learn a couple of years later that North Coast was donating $1 to the Monk Institute for every case of ale. After Smissen's passing in 2015, North Coast senior VP Doug Moody allegedly promised to “make things right,” and the company routed her $2,000 in 2016 and again in 2017. “Whether these amounts were to remain constant or stop at some point, was never explained by Doug,” David Rosenberg-Wohl of Hershenson Rosenberg-Wohl writes in the complaint. “These have been the only two payments that Joelle has received.”

So Signorelli registered the design with the Copyright Office in December, and this month notified North Coast that it “could no longer use the design without entering into a merchandising agreement with her.”

What's Brewing at the Supreme Court?

It's mid-May. The Supreme Court is expected to issue a ruling on patent damages in the WesternGeco case sometime in the next six weeks. That will wrap up IP at the Supreme Court for the 2017 term, so it'll be time to start looking toward what's in the pipeline next fall.

Topping the list of possibilities right now is Eve v. Mentor Graphics, another case about patent damages (and assignor estoppel), because the Supreme Court has asked the solicitor general to weigh in. But what else has a good shot at cert?

A reader has alerted me to a somewhat under-the-radar case that could get some attention. Return Mail v. Unites States Postal Service began as a suit against the U.S. government under 28 U.S.C. 1498(a) in the Court of Federal Claims. The government responded by obtaining covered business method review (CBM) at the Patent Trial and Appeal Board. The PTAB invalidated a chunk of Return Mail Inc.'s patent on Section 101 grounds, and the Federal Circuit affirmed by a 2-1 vote.

Return Mail's patent in question covers technology automating the processing of undeliverable mail.

Return Mail argues in its cert petition that the America Invents Act allows “a person”—not the federal government—to bring AIA proceedings. It quotes the very first paragraph of Justice Neil Gorsuch's opinion last month in SAS Institute: “The new procedure allows private parties to challenge previously issued patent claims.”

Return Mail further argues that CBM review is limited to persons who've “been sued for infringement,” and that a suit under Section 1498(a) is not technically a suit for patent infringement, but rather an eminent domain action for the taking of a patent license.

A Covington & Burling team led by partner Richard Rainey is representing Return Mail at the Supreme Court, as it did at the Federal Circuit.

A year ago I would have said a case like this is way too deep in the AIA weeds to interest the Supreme Court. But with the justices fresh off their crash course in all things PTAB, it seems like it's got a shot.

PTAB Revives Claims That ED-Tex Jury Killed

A couple of months ago I mentioned that Kayvan Noroozi of Santa Monica's Noroozi PC had persuaded the Patent Trial and Appeal Board to amend 55 patent claims that had been challenged by Apple Inc.

It looks as if Noroozi has pulled off another upset special for patent owner Realtime Data LLC. On Tuesday the PTAB confirmed the patentability of all challenged claims on a data compression patent, including two claims that an Eastern District of Texas of jury invalidated last year.

A host of tech companies, including Dell, HP and EchoStar, had joined forces to bring Dell v. Realtime Data before the PTAB. Litigating for them were Winston & Strawn; Baker Botts; Fish & Richardson; Klarquist Sparkman; Haynes and Boone; Latham & Watkins; and Wilmer Cutler Pickering Hale and Dorr.

The PTAB noted that the patent is being litigated in the Northern and Central Districts of California. That's in addition to the Eastern District of Texas case, where post-trial motions have been on hold pending the PTAB's decision.

“This outcome should have significant estoppel consequences for petitioners,” said Noroozi.

Sounds like an understatement.

Hiring: Unified Patents

Unified Patents is looking to hire a senior counsel with a background in “codec, coding, cryptography, compression, or other algorithmic subject matter.” Unified bills itself as “The Anti-Troll,” and is one of the top five filers of IPRs. If you like the idea of killing weak patents for a living, this might be one to explore.

Who Got the Work?

It may run auctions for pennies, but mobile shopping platform DealDash appears to be seeking millions of dollars for alleged trademark infringement from a well-funded competitor. Helsinki-based DealDash and U.S. affiliate DealDash Inc. are represented by San Francisco tech boutique Warren Lex, while Wish.com has backing from Cooley and Barnes & Thornburg. The case is pending before U.S. District Judge Maxine Chesney of the Northern District of California.

➤ The dispute: DealDash calls itself the longest-running penny auction site in the U.S., with 13 million registered users of its “fast-paced, gamefied shopping experience.” It claims to have invested tens of million of dollars on branding and advertising. ContextLogic Inc., a company co-founded by two former Google programmers, operates Wish, an online shopping site reported to have raised over $1 billion in venture funding. DealDash alleges in an April 18 complaint that Wish recently began offering a game called “Deal Dash,” using DealDash's registered mark and color scheme, but allegedly sending winners damaged or counterfeit goods.

➤ The attorneys: Warren Lex founder Matt Warren, partner Patrick Shields and attorney Erika Warren represent DealDash. Barnes & Thornburg partner Bradley Love, along with Cooley partner John Crittenden and associate Chantal Hwang, have entered appearances for ContextLogic.