Sundance Image Technology, Inc. vs. Cone Editions Press Ltd.

Holding:

In this case for copyright infringement, defamation, trademark infringement, unfair competition and business practices, and breach of contract, a jury, sitting before the U.S. District Court for the Southern District of California, issued a plaintiff’s verdict in the amount of $192,000 in favor of plaintiff Sundance Image Technology, Inc. (Sundance), a seller of inks used in computer printers. The jury likewise awarded defendant Inkjetmail.com, Ltd. (IJM) an amount of $30,975 for breach of warranty. Earlier, on May 8, 2007, the jury rendered a defense verdict in favor of IJM, a seller of ink and copyrighted software products, and determined that plaintiff R9 Corporation, the creator of and copyright holder for a software called PixelPicasso designed for “wide format” computer printers, would not recover any damages.

Detailed Summary:

In this case for copyright infringement, defamation, trademark infringement, unfair competition and business practices, and breach of contract, plaintiff R9 Corporation alleged that it was the creator and copyright holder for PixelPicasso software and the R9 plug-in, which were directed toward “wide-format” computer printers.  Plaintiff Sundance was engaged in the sale of inks designed to be used for the R9 software.  Professionals and aspiring amateurs in black-and-white photography were the users of these products (ink and software).

In December 1999, plaintiff R9 granted a license to defendant Jonathan Cone to sell through his company IJM the software and plug-in.  In February 2000, Cone entered into an exclusive agreement for the sale of Sundance’s Magma Inks, a brand of computer ink custom-made for the R9 software program.  Plaintiffs claimed that defendants had entered into an undertaking to develop continuous ink systems (CIS) employing plaintiff Sundance’s ink, which was placed in cartridges intended for one-time use only.  Plaintiffs likewise accused defendants of seeking to develop their own ink for use in the CIS, and then pass the blame for any defects on the Sundance’s inks.

In addition, plaintiff R9 accused defendant’s ink on causing “banding” on prints, which according to R9, destroyed the goodwill created by its copyrighted software.  R9 likewise accused Cone of failing to pay royalty fees under their software licensing agreement.  Plaintiffs similarly accused Cone of announcing that his ink could be used for R9’s protected software, that his ink was superior to that of Sundance’s ink.

On the other hand, defendants filed counterclaims, alleging that Sundance supplied ink in cartridges supposedly compatible with Epson computers, when in truth such inks were not compatible with Epson printers.

After bench trial, the jury issued a plaintiff’s verdict in the amount of $192,000 in favor of plaintiff Sundance. The jury likewise awarded $30,975 in favor of IJM for breach of warranty. Earlier, on May 8, 2007, the jury rendered a defense verdict in favor of IJM, and determined that plaintiff R9 Corporation would not recover any damages.

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