Copyright Suit Against Microsoft Is Precluded by Earlier Patent Suit
The Ninth Circuit ruled that both suits by Media Rights Technologies were based on the same nucleus of facts about alleged software misappropriation. That precludes all copyright claims that accrued before the filing of a 2013 patent suit.
May 02, 2019 at 07:03 PM
4 minute read
An unsuccessful patent litigant can be precluded from bringing copyright claims that arise from the same allegations of IP theft, the U.S. Court of Appeals for the Ninth Circuit ruled Thursday.
The court ruled that Media Rights Technologies Inc. (MRT) cannot sue Microsoft Corp. for copyright and Digital Millennium Copyright Act violations that could have been included in its 2013 patent suit against the tech giant.
“These claims all arise from the same events—Microsoft's alleged misappropriation of MRT's software—as the prior patent infringement claims,” Judge Ronald Gould wrote for a unanimous panel. “They merely offer different legal theories for why Microsoft's alleged conduct was wrongful.”
But the court ruled MRT is still free to bring copyright claims based on alleged infringement that occurred after it filed its 2013 suit.
Though the ruling is case-specific, the narrative pleaded by MRT is a familiar one in the tech industry. The company contends it developed a pioneering digital rights management technology for preventing music piracy in the early 2000s. The company marketed it as BlueBeat Secure Player.
During confidential negotiations in 2004, Microsoft offered $50 million for a controlling share of the company, MRT alleges. MRT declined the offer. Microsoft then allegedly developed its own version of the software using MRT's technology. MRT says it can prove that Microsoft copied its source code because it embedded a digital watermark that shows up in a variety of Microsoft products.
MRT sued for patent infringement in 2013, asserting four patents, but dropped the suit after one of the patents was found invalid in a separate action. A year later, in 2017, it brought the present copyright and breach-of-contract suit in the Northern District of California. U.S. Magistrate Judge Sallie Kim ruled that all of the claims, accruing both before and after the patent suit, were precluded.
Before the Ninth Circuit, Feinberg Day Alberti Lim & Belloli partner Ian Feinberg argued that the copyright claims were “wildly different” from the patent claims and involved a different set of accused products. “Discovering that somebody has copied your code is wholly different from discovering that they may have infringed your patents,” he told the court.
The Ninth Circuit noted that under copyright law, a discrete claim arises each time an infringing work is reproduced or redistributed. Therefore, all of the alleged infringement that occurred after MRT brought its 2013 suit is fair game, the court concluded.
But the court found MRT should have been aware of the copyright violations by 2013, so all of the earlier claims are subject to claim preclusion. “Although the legal theories differ and the complaint here is more detailed, the factual basis for MRT's patent infringement claims in MRT I and its pre-filing copyright infringement claims here is the same,” Gould wrote. “That the two actions 'relate to the same set of facts' favors preclusion.”
That echoed the argument Fish & Richardson partner Jonathan Lamberson made for Microsoft before the court: “Copying is central” to the patent complaint, he told the judges.
Moreover, Gould wrote, the patent and copyright claims form “a convenient trial unit that discloses a cohesive narrative,” which the Ninth Circuit has also found to favor preclusion.
“Indeed, patent infringement and copyright infringement claims are often tried together, including in large, complex cases,” Gould wrote, though he stressed that other patent and copyright suits will not always be preclusive of one another.
Ninth Circuit Judge Marsha Berzon and U.S. District Judge Frederic Block, visiting from Eastern District of New York, concurred.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllPre-Internet High Court Ruling Hobbling Efforts to Keep Tech Giants from Using Below-Cost Pricing to Bury Rivals
6 minute readAs AI-Generated Fraud Rises, Financial Companies Face a Long Cybersecurity Battle
'A Never-Ending Nightmare': Apple Sued for Alleged Failure to Protect Child Sexual Abuse Survivors
Trending Stories
- 1As Second Trump Administration Approaches, Businesses Brace for Sweeping Changes to Immigration Policy
- 2General Warrants and ESI
- 3GC Pleads Guilty to Embezzling $7.4 Million From 3 Banks
- 4Authenticating Electronic Signatures
- 5'Fulfilled Her Purpose on the Court': Presiding Judge M. Yvette Miller Is 'Ready for a New Challenge'
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250