What are the key differences in federal vs state courts intellectual property litigation? Patents and copyrights are exclusively federal rights, so those cases can only be filed in federal court. There is concurrent jurisdiction between the federal Lanham Act and state trademark and unfair competition laws, allowing cases to be filed in state or federal court. Trade secrets are protected by both the federal Defend Trade Secrets Act and state law. Other forms of IP, such as misappropriation and rights of publicity, are creatures of state law. And certain issues like contract law surrounding a patent or copyright assignment can still be determined by state law. So, the answer to the question is that it depends on the form of IP as well as the state. For example, in Texas, the test for the likelihood of confusion in a trademark infringement case is the same under state law as under the Lanham Act. But under Texas law, a plaintiff can recover exemplary damages, which are not available under the Lanham Act. So many plaintiffs will file trademark infringement cases in federal court pleading the Lanham Act and state law equivalent claims to take advantage of punitive damages. The Lanham Act allows for treble damages in exceptional cases as well as recovery of attorney’s fees, which are generally not available in Texas. Another consideration is the procedural aspects of the forum. Federal courts tend to move slower and rely on the written pleadings. In Texas state court, decisions are typically made at a hearing. If you are going to seek a temporary restraining order or ex parte relief, a state court may provide a quicker chance for that relief. What remedies are available to redress IP infringement? Generally, plaintiffs seek some form of monetary relief as well as injunctive relief. Monetary relief can come in the form of actual damages, the infringer’s profits, reasonable royalty, statutory damages, treble damages, and exemplary damages. Awards of attorney’s fees and costs are also routinely seen. Plaintiffs will also seek injunctive relief to prohibit further irreparable harm. In IP law cases, equitable relief can take many forms such as corrective advertising, collection and destruction of infringing articles, and an accounting of sales and profits. Each type of IP tends to gravitate toward certain types of remedies. In patent cases, the patent owner usually chooses a reasonable royalty over lost profits as the monetary relief. It likely will argue willful infringement and an exceptional case entitling it to up to three times damages plus an award of attorney’s fees and costs. A request for a permanent injunction is usually included. For certain kinds of competitor trademark infringement cases, the whole matter can be determined at the preliminary injunction stage, where if the plaintiff obtains the injunction, the case is likely over. If the plaintiff loses the injunction hearing, the case may also be over. Anti-counterfeiting or enforcement cases involving trademarks and copyrights often involve statutory damages where the plaintiff is not required to prove actual harm to recover damages. Where there is willful infringement or counterfeiting, the statutory damages can be substantial, such as $250,000 per work in copyright cases. 46 LAWYER MONTHLY MARCH 2024 In patent cases, the patent owner usually chooses a reasonable royalty over lost profits as the monetary relief.
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