We are big Macintosh evangelists around here. I’ve used a Mac in my personal life since 1990, and Karl has used them here at the office as long as I can remember. For a small firm like ours they make total sense, since they do not break and allow technical amateurs like us to run our own servers, website, blog, email, etc. So, needless to say, Karl and I were both extremely excited when Steve Jobs and Apple announced the iPhone earlier this week. The iPhone, which will not be released until this summer, will be Apple’s version of the blackberry or treo or other handheld “smartphone”. It will be a cellphone/mp3 player/web browser/camera/mini-computer. It was executed in typical Apple fashion, which means it looks beautiful, has a stunning GUI, and will probably be buggy until version 2 or so. In other words, Apple hopes it will be to smartphones what the iPod is to mp3 players. Problem is, and this is where the lawyers come in, in 2000 Cisco Systems purchased a company which had, back in 1996, obtained a registration for the iPhone trademark from the USPTO. Apple, of course, knew this, and apparently attempted to acquire Cisco’s mark for years. Cisco was unwilling to license or sell it, since it was using it, according to them in direct competition with the product Apple launched earlier this week. According to a lawsuit (link is to .pdf file) Cisco filed yesterday, Apple and Cisco were on the verge of working out a deal which would have allowed Apple to use the mark when Apple quit returning calls and launched the product anyway. This irritated Cisco; we’ll leave it to you to read their petition. In an interesting twist, since Apple could apparently not obtain a trademark from the PTO for iPhone in the normal manner, given that Cisco got there first, the company, via a wholly-owned subsidiary called “Ocean Telecom Services LLC,” registered the mark in March in Trinidad and Tobego. Ocean Telecom then filed an application to register the mark as a foreign mark, in other words asking for a simultaneous registration. I do not know what legal effect this will have on Cisco’s case. Given that we read both legal blogs (“blawgs”) and technology blogs around here, it has been interesting to see the fallout from both perspectives. Consensus seems to be that this is simply a stunning display of Steve Jobs’ hubris. Perhaps most exciting about all of this is Cisco’s on approach to managing the press surrounding their lawsuit. Cisco’s general counsel has his own blog and posted his version of the whole story. Whether or not it’s a truthful account, it feels candid and it thus gives the blogger, and hence the company, credibility, at least within the blogging community. For what it’s worth, numerous blogs have embraced Cisco’s version of events, simply because its GC posted candid-feeling comments free from typical press-conference mealy-mouthed verbiage (see, for example, posts from Scoble and Dave Winer). Finally, two other common comments: 1) given the ferocity with which Apple has defends its own i_____ trademarks, Apple’s behavior clearly irritates many who are watching this story; and 2) iPhone is kind of a lousy name for this product anyway – the whole point of the device is the fact that it functions as much more than a phone. It will be interesting to see how the litigation shakes out. Selfishly, I certainly hope Cisco is not successful in enjoining the release of a product I really want to buy, although it certainly seems that Apple is wantonly infringing on their mark. I am most interested, however, to see what, if any, impact the bloggers are able to have on the perception of those of us who love Apple’s products but are sometimes wary of their corporate approach (thank goodness, for example, their products’ generally high quality means we are not often at the mercy of their awful customer service). As a lawyer, Apple’s involved attempts to obtain rights in the mark acknowledge, it would seem, their acceptance that Cisco’s ownership of the mark is (or ought to have been) an impediment to what they want to do with it. Perhaps the timing of the release has something to do with it. Announcing a product that is not ready to ship for six months is highly unusual for Apple; perhaps they simply assume that they can get something hammered out by the time they’ve actually built a mess of the things. Or, maybe they are happy to just sell their iPhone in Trinidad and Tobego (and the other myriad nations where they’ve also registered the mark). At any rate, one would think the company has too much invested now to risk not working out some kind of deal, but I guess we’ll have to wait and see. Technorati Tags: litigation, law, iPhone

This morning, the Third Court of Appeals issued a memorandum opinion that is useful for practitioners who file, respond to or appeal Special Exceptions. The opinion, written by Justice Patterson, affirms a trial court decision (by Judge Davis) to dismiss Plaintiffs’ lawsuit with prejudice when they failed to re-plead within 45 days of the Special Exceptions having been sustained. Significantly, the Third Court did not consider whether or not the Special Exceptions were sustained properly or not in the first place, Justice Patterson being of the opinion that the appealing Plaintiffs waived that issue by not briefing it. That being the case, according to the Court, the Plaintiffs could not challenge the dismissal other than by making a showing that they did in fact re-plead (which apparently they did not, according to the opinion). In other words, without challenging the actual act of sustaining the special exceptions, the Appellants could not meaningfully challenge on appeal the trial court’s subsequent decision to dismiss the lawsuit with prejudice. So, even though the opinion was not reported, it states a critical rule anytime a practitioner is in the business of appealing a case involving special exceptions: you must challenge not only the aftermath of the special exceptions, but the special exceptions themselves. Perry, et al. v. Cohen, et al.

On December 22, 2006, the Supreme Court came down with the opinion quoted below. The opinion is significant in two important respects: 1. The opinion demonstrates the Supreme Court holding exemplary damages “constitutionally excessive” even though the exemplary damages are within the Chapter 41 limit of $200,000.00. Therefore, this is a case where the constitutionally excessive defensive pleadings came into play. The court holds that it has the power to decide whether the exemplary damages are “constitutionally excessive”. If the court holds that the exemplary damages are excessive (here for fraud in the inducement), then the remedy is a remand to the court of appeals to set a remittitur amount. 2. Even more importantly, this case makes a large change in the law with broad impact. The court changes the burden on a party seeking to recover attorney’s fees. In the past, if P sued on theory A that allowed fees, and on theory B that did not allow fees, P’s most often claimed that the fees were “intertwined” and thus they could recover all. Blister’s opinion here changes the burden of recovery for attorney’s fees. Much more attention must be paid by the Plaintiff to the recovery of attorney’s fees. This is a significant (but subtle) change in current law. Blister’s Opinion says: Accordingly, we reaffirm the rule that if any attorney’s fees relate solely to a claim for which such fees are unrecoverable, a claimant must segregate recoverable from unrecoverable fees. Intertwined facts do not make tort fees recoverable; it is only when discrete legal services advance both a recoverable and unrecoverable claim that they are so intertwined that they need not be segregated. We modify Sterling to that extent. Tony Gullo Motors v. Chapa, ___ S.W.3d ___ (Tex. 2006) (Cause No. 04-0961) Technorati Tags: litigation, Texas Supreme Court, law

The Texas Supreme Court has in the past year or two emphasized that non-signatories to arbitration agreements can still be required to arbitrate certain disputes. (see prior blog posts here, here, and here). This morning, the Court analyzed circumstances in which a non-signatory can actually compel arbitration pursuant to a contract to which the non-signatory was, of course, not a party. The majority opinion, written by Justice Hecht, continues the trend of judicial empowerment of arbitration contracts. In this case, a jilted potential purchaser of a Ford dealership sued Ford, the dealership, and the eventual succesful purchaser when Ford exercised a right of first refusal and caused the purchase and sale agreement (“PSA”) between first purchaser and the dealership to be terminated. The PSA was a contract between the dealership and the first purchaser; Ford and the eventual purchaser were not parties. The first purchaser sued based on a theory that Ford’s right of first refusal was not valid and did not allow Ford to terminate the PSA or allow the dealership to get out of the PSA. The first purchaser also sued the eventual purchaser for interfering with the PSA. The PSA, which, again was between only the dealership and the first purchase, included an arbitration clause. However, in what could be described as the “flip side” of the normal fact pattern, Ford and the eventual purchaser, who were never parties to the PSA, moved to compel arbitration, based on the PSA’s arbitration clause. The trial court and the Court of Appeals refused to compel arbitration, but the Supreme Court saw the issue differently. According to Justice Hecht, since the plaintiff-first purchaser’s claims against Ford and the eventual purchaser were completely intertwined with its claims against the dealership, and since a arbitration agreement did exist between it and the dealership, equitable estoppel requires that all the claims be arbitrated. In her dissent, Justice O’Neill argues that this claim for tortious interference with a contract could not be so intertwined with a claim for breach of that contract to support equitable estoppel, especially since the arbitration clause itself was not a traditional sweepingly broad clause. The opinion discusses in detail the doctrine of equitable estoppel as it applies to the enforcement of arbitration agreements, and it continues a powerful trend in Texas jurisprudence making arbitration clauses extremely difficult to avoid. Meyer v. WMCO-GP, ___ S.W.3d ___ (Tex. 2006) (Cause No. 04-0252) Technorati Tags: arbitration, ADR, Texas Supreme Court, law