Premier Dealer Services, Inc. v. Allegiance Administrators, LLC

Court: US Court of Appeals for the Sixth Circuit

Docket: 23-3394

Opinion Date: February 26, 2024

Judge: SUTTON

Areas of Law: Civil Procedure, Copyright, Intellectual Property

In a case before the United States Court of Appeals for the Sixth Circuit, Premier Dealer Services, a developer and administrator of automobile dealers’ aftermarket products, sued Allegiance Administrators for infringing its copyright. The issue stemmed from Premier's creation of a Lifetime Powertrain Loyalty Program, which included a loyalty certificate that set out the program's terms and conditions. Premier had registered this certificate for copyright protection. When Allegiance started working with a former Premier client, it used Premier’s Lifetime Powertrain Loyalty Program certificates in its own plan, with minor modifications in the contact information.

In the lawsuit, the district court ruled that Allegiance had infringed Premier’s copyright, ordered Allegiance to give up any profits from using the certificates, and awarded Premier attorney’s fees. On appeal, the Sixth Circuit affirmed the decision of the lower court.

The appellate court held that Premier's certificate was "original" and thus protected by copyright. The court clarified that originality in copyright law has a low threshold, requiring only that the author independently created a work with some minimal degree of creativity. The court rejected Allegiance's argument that the certificates were scenes a faire—stock or standard phrases that necessarily follow from a common theme or setting, which are not protectable by copyright. The court found that Allegiance had not provided sufficient evidence that industry standards or other external constraints dictated the content of the certificates.

Regarding the disgorgement of profits, the court agreed with the lower court's calculations. It noted that Premier had successfully shown a reasonable relationship between Allegiance’s infringement and its gross revenues. The burden then shifted to Allegiance to demonstrate which part of its gross revenues did not result from the infringement, but Allegiance failed to fulfill this burden.

Finally, the court upheld the award of attorney’s fees to Premier, finding that the lower court did not abuse its discretion in characterizing Allegiance's arguments as unreasonable and contrary to settled law.

FRESHUB, INC. v. AMAZON.COM, INC.

Court: US Court of Appeals for the Federal Circuit

Docket: 22-1391

Opinion Date: February 26, 2024

Judge: Taranto

Areas of Law: Intellectual Property, Patents

In this case, Freshub, Ltd., and Freshub, Inc. (collectively, Freshub) filed a lawsuit against Amazon.com, Inc., and its subsidiaries (collectively, Amazon) in the Western District of Texas, alleging that Amazon infringed on its patents related to voice-processing technology. Amazon denied the infringement and asserted that the patent should be deemed unenforceable due to alleged inequitable conduct committed by Freshub's parent company, Ikan Holdings LLC. The jury found that Amazon did not infringe the asserted claims of Freshub's patents. Freshub appealed the verdict, and Amazon cross-appealed the court's finding that it failed to prove the asserted inequitable conduct.

The United States Court of Appeals for the Federal Circuit upheld the district court's decisions. The court held that substantial evidence supported the jury's finding that Amazon did not infringe the asserted claims of Freshub’s patents. The court also found that the district court did not abuse its discretion in denying Freshub's motion for a new trial based on alleged prejudicial statements made by Amazon at trial. Furthermore, the court agreed with the district court's determination that Amazon failed to prove by clear and convincing evidence that Ikan’s counsel made a false statement to the United States Patent and Trademark Office with the specific intent to deceive, thereby rejecting Amazon’s inequitable conduct defense.