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Chicago IP Litigation

Tracking Northern District of Illinois IP Cases

Alleged seeding of copyrighted material on BitTorrent is not Copyright Misuse

Posted in Pleading Requirements

Malibu Media, LLC v. Doe, No. 13 C 3648, Slip Op. (N.D. Ill. Jun. 9, 2014) (Kennelly, J.).

Judge Kennelly granted in part plaintiff Malibu Media’s motion to dismiss Doe defendant’s counterclaim and certain of its nineteen affirmative defenses in this BitTorrent copyright infringement case.

Doe’s counterclaim was not appropriate because it sought no affirmative relief, just a determination that its affirmative defenses were meritorious.  The counterclaim was, therefore, dismissed.

Doe did not properly plead copyright misuse.  Doe pled that Malibu made a business out of filing copyright litigations and that plaintiff Malibu Media seeded BitTorrent with its movies to generate copyright infringement.  But those allegations are not using the limited copyright monopoly to control something outside the bounds of the monopoly.

Doe did not properly plead estoppel.  The allegations that Malibu seeded its movies to encourage infringement does not meet the requirement that Malibu did something to mislead Doe into believing that Doe’s acts were condoned or otherwise legal.

Doe sufficiently pled unclean hands.  Doe alleged that Malibu created child pornography which would not be patentable and should not be enforceable. While it was unclear from the law whether the claim could stand, the Court allowed it at the early stage of the case until it could be further developed.

Doe sufficiently pled an implied license based upon Malibu’s alleged seeding of its copyrighted material.  It was not clear that the alleged seeding met each prong of an implied license defense, but at the early stage the Court allowed the defense to remain in the case.

Doe did not sufficiently plead the single satisfaction rule.  There was no case law suggesting that Malibu could only recover a single statutory damages award for a copyrighted work.  Rather, the law suggested Malibu could recover separately from each infringer.

Doe did not sufficiently plead mitigation of damages because it was irrelevant as Malibu had elected statutory damages.

Stay Pending Inter Partes Review Warranted by Plaintiff’s Delay in Filing Suit

Posted in Local Rules

Ignite USA, LLC v. Pacific Market Int’l, LLC, No. 14 C 845, Slip Op. (N.D. Ill. May 29, 2014) (Holderman, J.).

Judge Holderman granted defendant Pacific Marketing International’s (“PMI’s”) motion to stay plaintiff Ignite USA’s patent litigation case pending the results of PMI’s Inter Partes Review (“IPR”) seeking to invalidate Ignite USA’s asserted patent regarding a drinking container.

Ignite USA would not be prejudiced by a stay.  PMI promptly filed its IPR petition and the litigation was in its early stages.  Ignite USA’s own delay in filing the suit after learning of the alleged infringement — from March 2012 to April 2014 — suggested that Ignite USA would not be prejudiced by the delay. Additionally, Ignite USA’s failure to seek a preliminary injunction suggested that its claims of lost market share were not as severe as it claimed. 

The stay would streamline the case.  Patent Office statistics suggest an “82% probability” that the Patent Office will institute the IPR and a greater than 92% likelihood that at least one claim will be amended or cancelled outright.  In fact, even an IPR decision upholding all of the claims would simplify issues by reducing PMI’s invalidity arguments.  To avoid additional delay, the parties were required to report to the Court within seven days of the Patent Office’s decision on the IPR petition.

Finally, the reduced litigation burden counseled in favor of the stay.  Whatever the outcome of the IPR, it would reduce the scope of the case and the work required by the parties and the Court.

Permissible Repair Doctrine Applies Where Patentee Recommends Changing the Accused Part

Posted in Summary Judgment

Robert Bosch LLC v. Trico Prods Corp., No. 12 C 437, Slip Op. (N.D. Ill. May 21, 2014) (Grady, Sen. J.).

Judge Grady denied defendants’ (collectively “Trico”) motion for summary judgment of noninfringement with respect to Trico’s Duralast Flex Blade windshield wiper blade in this patent infringement dispute.  

As an initial matter, the Court held that a first sale in the United States is still required for patent exhaustion, even if a US first sale is not required for copyright exhaustion.  

To the extent that plaintiff Robert Bosch (“Bosch”) sold some wiper blades in the US, the Court addressed whether Trico’s acts fell within the doctrine of permissible repair.  The Court held that a consumer replacing the wiper blade in a wiper assembly with a Trico wiper blade was a permissible repair, noting that Bosch recommended replacing the blades every six months.  The Court also noted that there was an established market for replacement wiper blades.  But the Court withheld ruling upon the issue until there was a more developed record regarding the differences between patent claims that covered the entire wiper system and other claims that allegedly covered just the wiper blades, as well as related case law.

The Court held that there was not sufficient evidence that Bosch’s acquisition of Unipoint, from whom Trico purchased the accused products, prevented Bosch’s claims to pre-acquisition sales to Trico.  Trico failed to provide the relevant language of the acquisition agreements to determine whether the agreements prevented suits against customers.  And Trico did not support or sufficiently develop its theory that Bosch benefited from Unipoint’s pre-acquisition sales to Trico and therefore should be barred from suit.  The Court, therefore, denied the motion.

Claim Differentiation Informs Claim Construction

Posted in Claim Construction

Cumberland Pharms, Inc. v. Mylan Inst. LLC, No. 12 C 3846, Slip Op. (N.D. Ill. Feb. 26, 2014) (Pallmeyer, J.).

Judge Pallmeyer construed the claims in this patent infringement case involving an IV form N-acetylcysteine — used for treating acetaminophen overdoses.  Of particular note, the Court held as follows:

  • “Free From A Chelating Agent & “Free Of A Chelating Agent” were defined as “lacking one or more chelating agents.”  “A” in these terms limited adding chelating agents, not the existence of any chelating agent.  This was supported by dependent claims which specified chelating agents.
  • “Acetylcysteine” was defined as “the nonproprietary name for the N-acetyl derivative of the naturally occurring amino acid, L-cysteine (also known as N-acetyl-L-cysteine and NAC) and impurities associated therewith.”
  • “Stable Aqueous Pharmaceutical Composition” was defined as “a composition that exhibits minimal change over time relative to when it is manufactured,” consistent with its plain meaning.

Patent Eligibility Could Not be Decided on the Pleadings

Posted in Discovery

Vehicle Intelligence & Safety LLC v. Mercedes-Benz USA LLC, No. 13 C 4417, Slip Op. (N.D. Ill. Mar. 13, 2014) (Hart, Sen. J.).

Judge Hart denied defendant’s Fed. R. Civ. P. 12(c) motion to dismiss plaintiff’s patent infringement claims related to screening drivers for various types of impairment and “controlling operation” of the vehicle if the driver is impaired.  While the parties’ briefs showed likely issues of patentability, the Court could not decide whether the claims were patent eligible without further discovery regarding how and whether computers were used in the patent-in-suit.

Social Media Alone Does Not Create Personal Jurisdiction

Posted in Jurisdiction

Telemedicine Sol’ns LLC v. WoundRight Techs, LLC, No. 13 C 3431, Slip Op. (N.D. Ill. Mar. 14, 2014) (Dow, J.).

Judge Dow granted defendant WoundRight Technologies’ (“WoundRight”) Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction in this Lanham Act case involving plaintiff Telemedicine Solutions’ (“Telemedicine”)  & WOUND ROUNDS federal registration.  Despite no physical or sales contacts with Illinois, Telemedicine argued that WoundRight “expressly aimed” its alleged infringing activities at Illinois using Google Ad Words, its website and social media.

Of particular note, the Court held as follows:

  • “Express aiming” required more than an intentional tort to create jurisdiction from internet activity.  There must be some connection to Illinois.
  • Telemedicine’s residence in Illinois is not enough, unless without evidence that WoundRight knew that or otherwise directed its alleged harm at Illinois.
  • WoundRight, further, had not targeted Illinois or generated Illinois contacts except by “happenstance.”

Not Accepting Well-Pled Allegations is “Cardinal Sin” of Affirmative Defenses

Posted in Pleading Requirements

Sonic Indus., LLC v. iRobot Corp. No. 13 C 9251, Slip Op. (N.D. Ill. Feb. 28, 2014) (Shadur, Sen. J.).

Judge Shadur sua sponte struck portions of defendant iRobot’s answer and affirmative defenses, and allowed other portions to be repled.  Of particular note:

  • The Court struck iRobot’s noninfringement affirmative defense for committing the “cardinal sin” for an affirmative defense of not accepting plaintiff Sonic’s well-pled allegations.
  • The invalidity defense was stricken with leave to replead it in a “more particularized and fleshed-out form.”

Scheduling Delay Does Not Warrant Canceling the Deposition

Posted in Discovery

Cleversafe, Inc. v. Amplidata, Inc., No. 11 C 4890, Slip Op. (N.D. Ill. Jan. 11, 2014) (Cole, Mag. J.).

Judge Cole denied plaintiff Cleversafe’s motion for a protective order and sanctions preventing the deposition of Cleversafe’s CEO.  The CEO was a critical witness — one of two listed on Cleversafe’s initial disclosures.  And defendant Amplidata’s alleged delay in scheduling it did not warrant sanctions.  Furthermore, Cleversafe could point to no harm for the delay.  In fact, the CEO had enjoyed the benefit of not having to prepare or sit for a deposition.

“Growing Trend” That Bit Torrent Doe Defendants Need Not be Time-Related

Posted in Discovery

TCYK, LLC, v. Does 1-44, No. 13 C 3825, Slip Op. (N.D. Ill. Feb. 20, 2014) (Dow J.).

Judge Dow denied various Doe defendants’ motions to grant subpoenas to their respective ISPs in this BitTorrent copyright case involving the movie “The Company You Keep” with Robert Redford and Susan Sarandon.  Of particular note, the Court held as follows:

  • Noting a split of authority, the Court went with the “growing trend” in the Northern District that Doe defendants need not have been members of its same BitTorrent swarm at the same time to be joined in a single suit.  It was enough that the Does were members of the same swarm.
  • Subpoenas served on ISPs do not unduly burden the Doe defendants.
  • The fact that a Doe claimed they could not have downloaded the movie was not a sufficient reason to quash its subpoena.  That was an issue for discovery and the case.

Modifying the Innovation Act to Selectively Target the Patent Troll Problem

Posted in Legal News

The following is a blog post by Varun Shah, Aruba Network’s Director, Intellectual Property — full disclosure, I previously represented Aruba.  Shah has an interesting alternative patent reform proposal that seeks to target the patent troll problem.  It is interesting because it is under-inclusive.  On the one hand, that is less than ideal because it does not cover all trolls (or at least all entities that are arguably trolls).  On the other hand, it is intriguing because by being under-inclusive it minimizes the impact of the legislation outside of the troll world, which may make it easier to get it a vote in both houses of Congress.  Additionally, while Shah’s discussion focuses largely upon creating a heightened pleading requirement for a subset of patent troll cases, using the same definition of a potential troll, other requirements could be added to the legislation, for example fee awards or discovery limitations, as Shah notes.  So, while Shah’s proposal is not perfect, it is an interesting proposal and is, at a minimum, positive in that it is creating new discussion around patent reform.

With that, here are Shah’s thoughts: 

The Innovation Act was a great attempt at reducing the patent troll problem for the Information Technology industry. For example, the Innovation Act proposed regulating patent litigation practice by increasing pleading standards, placing limitations on patent discovery, and providing cost-shifting mechanisms. However, the Innovation Act is now stalled in Congress, in part, due to the rejection by the Pharmaceutical and Biotech industries of the new proposed regulations such as the limitations on discovery. A solution is needed that reduces the patent troll problem for the Information Technology industry while balancing the needs of the Pharmaceutical and Biotech industries.

I propose modifying the Innovation Act to limit discovery only if the current patent owner is not one of:

  1. The inventor
  2. The assignee, including subsidiaries and parent companies thereof, to whom the inventor was obligated to assign to at the time of filing an application for the patent
  3. An acquiring entity that acquired the patent in a sale of an established line of business originated by (a) or (b), the sale including all trademarks, copyrights, and patents related to the established line of business.

Additional criteria for qualifying as a sale of an established line of business (such as a minimum annual revenue for the established line of business) may be needed in order to ensure that patents are not held in shell entities for selling of patents to third parties and designing around this proposal.

Similar to the limited discovery example above, other sections of the Innovation Act may be considered for modification such that the rights and requirements related to patent assertion activities depend on whether or not the current patent owner is one of (a), (b), or (c) identified above.

This proposal reduces the patent troll problem for the Information Technology industry without reducing the patent assertion rights for the original patent Applicant. More generally, this proposal will protect the interests of all innovators that actually generate the ideas/patents while partially diluting the value of the patents if commoditized and transferred to others that are abusing and burdening the patent system. This re-structuring of patent value is in-line with the true goals of the patent system, i.e., the promotion of innovation.

– — – –

Mr. Shah is actively discussing the proposal with bill writers in Representative Goodlatte’s office to modify the Innovation Act.  If you are in support of the proposal, Mr. Shah suggests contacting the key policymakers: Representative Goodlatte, Senator Reid, Senator Leahy, Senator Cornyn, Senator Schumer, and the White House Office of Science and Technology Policy (OSTP).