Politics, trademark infringement don’t mix in Hershey suit

From Westlaw Journal Intellectual Property:

The Hershey Co. sufficiently stated a claim for trademark infringement against a Maryland politician who the candy company said unlawfully used its protected trade dress in his campaign materials, a federal judge has ruled.

U.S. District Judge William D. Quarles Jr. of the District of Maryland refused to dismiss Hershey’s complaint against Republican state Sen. Steve Hershey.

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6th Circuit reverses dismissal of whistleblower suit under public disclosure bar

From Westlaw Journal Health Care Fraud: The 6th U.S. Circuit Court of Appeals has ruled that a lower court erred when it concluded the public disclosure bar deprived it of jurisdiction over a whistleblower suit by a former employee of a Tennessee hospital.

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Suit over Time Warner rate hike preempted, California appeals court says

Customers unhappy with rate hikes by Time Warner Cable Inc. cannot sue the company for unfair competition because Federal Communications Commission regulations preempt their state law claims, a California appellate court has ruled.

The 2nd District Court of Appeal affirmed the dismissal of a class action filed by four Time Warner subscribers after the cable company raised its rates in order to carry channels that broadcast Los Angeles Dodgers and Lakers games.

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The Time Warner Cable office is shown in CarlsbadAccording to the opinion, in 2011, Time Warner paid the Lakers $3 billion for the licensing rights to televise the team’s basketball games for 20 years.  In 2012, it paid the Dodgers $8 billion to obtain the licensing rights to televise the team’s baseball games for 25 years.

The cost of bundling the channels that carried the games resulted in subscription rate hikes of $5 per month for carrying the Lakers games and another $4 per month when Time Warner began carrying the channel that televised the Dodgers games, the opinion says.

Plaintiffs Sherry Fischer, Stewart R. Graham, Todd Crow and Gavin McKiernan filed a class-action suit in Los Angeles County Superior Court in June 2013 against Time Warner, the Lakers and the Dodgers, claiming that the carriage arrangements violated California’s unfair-competition law, Cal. Bus. & Prof. Code § 17200.

The complaint alleged that more than 60 percent of the population did not follow sports and would not pay separately to watch Dodgers or Lakers games, and that there was no valid reason for bundling the sports stations into the enhanced basic cable tier instead of offering them as part of a sports channel package.

A majority of Time Warner subscribers were forced to pay an extra $9 per month for unwanted programming, the plaintiffs said.  The two teams knew that the cable company would pass the increased costs on to unwilling subscribers and were the intended beneficiaries of the arrangements, the suit said.

Time Warner countered that federal law provided a “safe harbor” against unfair-competition claims by expressly permitting the bundling of channels.

The trial court agreed, sustaining Time Warner’s demurrer on the safe-harbor ground and finding that federal laws governing the cable television industry expressly preempt state unfair-competition laws.

The court also sustained the two teams’ demurrers because there could be no claim against them in the absence of a claim against Time Warner, according to the opinion.

The plaintiffs appealed, and the appeals court concluded that Federal Communications Commission regulations preempt the suit.

According to the appellate opinion, the Supremacy Clause of the U.S. Constitution allows Congress to enact federal laws that preempt state laws if it believes preemption is necessary.

Through the Cable Television Consumer Protection and Competition Act of 1992, 47 U.S.C. § 521, commonly referred to as the Cable Act, the FCC regulates cable television service.

A provision of the Cable Act, 47 U.S.C. § 543, prohibits cable companies from engaging in “negative option billing,” meaning that subscribers may not be charged for any service or equipment that they have not affirmatively requested, according to the opinion.

In its regulations implementing Section 543, the FCC carved out an exception, providing that negative option billing did not include the addition or deletion of a specific program or channel from the service, or the adjustment of rates as a result of such a change.

According to the appellate opinion, the regulations also provide that states and local governments may not enforce consumer protection laws that conflict with the exception so long as the proposed changes “do not constitute a fundamental change in the nature” of service.

The Court of Appeal agreed with the trial court’s conclusion that the addition of three sports channels did not fundamentally alter the nature of the existing tier, so that the plaintiffs’ action was expressly preempted by the FCC regulations.

Fischer et al. v. Time Warner Cable Inc. et al., No. B254863, 2015 WL 752430 (Cal. Ct. App., 2d Dist. Feb. 23, 2015).

 (Click here for the opinion on Westlaw Next.)


Former Florida hospital exec claims retaliation for helping in state’s fraud probe

A former vice president of a St. Petersburg, Fla., hospital has filed a retaliation lawsuit under the federal False Claims Act, alleging her employer effectively fired her for helping a Florida state agency investigate bogus Medicare and Medicaid billing.

Brenda Farnsworth sued Galencare Inc., doing business as Northside Hospital, and parents HCA Inc. and Healthtrust Inc., in the U.S. District Court for the Middle District of Florida.

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PTO’s decision on review procedure can’t be appealed

From Westlaw Journal Intellectual Property: A decision by the U.S. Patent and Trademark Office to institute an “inter partes review” proceeding created by patent reform legislation is not appealable, a federal appeals court has ruled.

The U.S. Court of Appeals for the Federal Circuit said it lacked jurisdiction to review the PTO’s decision to institute IPR, a procedure established by the America Invents Act to challenge the validity of patent claims.  President Barack Obama signed the act in September 2011, and it went into effect in March 2013.

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Wrestlers file $5 million class-action suit over concussion injuries

From Westlaw Journal Entertainment Industry:  Two former professional wrestlers have filed a putative federal class-action suit in Philadelphia, alleging World Wrestling Entertainment Inc. knowingly subjected them to concussion injuries “under the guise of providing entertainment.”

The suit, filed in the U.S. District Court for the Eastern District of Pennsylvania, follows similar concussion injury actions filed by the National Football League, the National Collegiate Athletic Association and the National Hockey League.

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Judge’s claim construction leads to patent victory for Jaguar, Ford

From Westlaw Journal Intellectual Property: Based on a judge’s construction of the seemingly simple term “page,” automakers Ford Motor Co. and Jaguar Land Rover have defeated patent infringement claims filed against them by Vehicle Interface Technologies Inc.

U.S. District Judge Richard G. Andrews of the District of Delaware sided with Jaguar and Ford regarding the meaning of the term in VIT’s patent for its “user interface systems and methods for a vehicle.”  The judge granted summary judgment to the defendants.

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Appeals court affirms longer sentence for doctor in kickback scheme

From Westlaw Journal Health Care Fraud:  The sentence for a doctor convicted for his role in a kickback scheme was appropriately increased because he held a position of public trust, the 3rd U.S. Circuit Court of Appeals has ruled.

While the standard for analyzing whether a defendant abused a public trust was well-settled, the appeals court said, the question of whether the standard was properly applied under the facts of the case involving Dr. Ashokkumar R. Babaria presented the court with an issue of first impression.

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Whistleblowers’ suit barred by first-to-file rule, appeals court says

From Westlaw Journal Health Care Fraud: A federal appeals court has affirmed the dismissal of a False Claims Act suit by two whistleblowers against a pharmaceutical company because the claims were too similar to ones resolved in an earlier suit by a Florida pharmacy.

Allegations by Linnette Sun and Greg Hamilton that Baxter Healthcare Corp. defrauded the federal Medicare and Medicaid programs by inflating its drug prices to obtain higher reimbursements were barred under the first-to-file rule, the 1st U.S. Circuit Court of Appeals said.

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Supreme Court hears 2 trademark cases

From Westlaw Journal Intellectual Property: The U.S. Supreme Court has heard oral argument in two trademark infringement cases asking it to decide the preclusive effect of a Trademark Trial and Appeal Board ruling and whether “tacking” of a trademark is a question of law or fact.

In the first case, B&B Hardware Inc. argued Dec. 2 that an Arkansas federal court and the state appeals court failed to give preclusive effect to a TTAB decision not to register Hargis Industries’ Sealtite trademark because of the likelihood of confusion with B&B’s Sealtight mark.

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