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Clearplay, Inc. v. Nissim Corp. (4/2/08)

Clearplay makes DVD players and related products. In 2001, Clearplay began marketing a filtering program and membership service allowing customers to filter their DVD movies by skipping or muting objectionable content. In 2004, Thomson, Inc. began selling an RCA brand DVD player that incorporated Clearplay's filtering technology. Nissim sued Clearplay for patent infringement, misappropriation of trade secrets, and breach of contract in connection with Thomson's sale of these players. That matter was settled and the parties entered into a licensing agreement in which Nissim granted Clearplay a license to produce and sell a modified version of its filtering technology. In January 2007, Target placed its first order for Clearplay's DVD players. After learning of the foregoing, Nissim sent Target a letter alleging that such players were not covered by the license. Thereafter, Nissim published a press release on its website stating that Clearplay was violating Nissim's intellectual property rights by selling the players. Nissim later sent another letter to Target, again demanding that Target cease selling the players. Target then cancelled several large purchase orders for additional players.