Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

Merrill Primack v. Polto, Inc., No. 08 C 4539, Slip Op. (N.D. Ill. Jul. 8, 2010) (Dow, J.).

Judge Dow granted defendants' Fed. R. Civ. P. 12(b)(2) motion to dismiss this Lanham Act case over plaintiff's "Credit Lifeline" mark for lack of personal jurisdiction. Plaintiff did not claim general jurisdiction, relying only upon specific jurisdiction. Defendants' only Illinois contacts were the sale of 212 books unrelated to the Credit Lifeline mark into Illinois. And defendants' offer for sale of its Credit Lifeline book via an interactive website could not alone create specific jurisdiction. Similarly, injury to intellectual property alone did not create jurisdiction based upon the effects test. Harm to the plaintiff in the jurisdiction did not satisfy the test by itself. Defendant's actions must have been intentional, aimed at the forum state and defendant had to know that plaintiff's harm was likely to be suffered. But there was no indication that defendant was even aware of plaintiffs' Credit Lifeline mark, or of plaintiff, from defendant's first use of the mark in 2001 until, at the earliest, when plaintiff registered its mark in 2008.

Finally, the Court held that there was no persuasive reason that exercising personal jurisdiction would have comported with "fair play and substantial justice." 

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Rosenthal Collins Group, LLC v. Trading Techs. Int'l, Inc., No. 95 C 4088, Slip Op. (N.D. Ill. Jun. 29, 2010) (Kim, Mag. J.).

Judge Kim granted declaratory judgment defendant Trading Technologies ("TT") approximately $290,000 of $375,000 requested in fees and costs pursuant to Fed. R. Civ. P. 37(b)(2) in this patent case.* On March 14, 2007, the Court held that declaratory judgment plaintiff Rosenthal Collins Group's ("RCG") summary judgment motion was "misleading," "disingenuous" and "prematurely filed" – click here to read more about the opinion in the Blog's archives. The Court, therefore, found RCG's conduct sanctionable, struck the motion without prejudice, struck the supporting Buist declaration, and ordered RCG to pay costs for TT's software consultants, and attorney's fees and costs related to the sanction motion.

On July 17, 2008, the Court denied RCG's motion to vacate the sanction order and again ordered RCG to pay: 1) TT's consultant; 2) TT's deposition of the Buists; and 3) TT's prosecution of the sanctions motions. The Court also ordered the parties to comply with Local Rule 54.3 by trying to come to agreement on the issues.

Initially, the Court observed that "contentiousness and obvious material distrust" demonstrated by both sides had "leached" into the parties briefing. The Court awarded TT the full amount of its expert fees and costs because those fees and costs were specifically awarded by Judge Moran and because TT showed that all of the expert's work was impacted by or resulted from the misconduct. Those fees were approximately $52,000.

The Court also awarded TT's attorney's fees and costs of approximately $157,000 related to the depositions of the experts at issue. The only reduction was for a series of identical, cryptic time entries for "preparation of Buist witness kit". The court could not determine whether the fees were justified. The Court awarded TT its actual costs, instead of limiting the costs to the Fed. R. Civ. P. 54(d) limits because this sanction award was pursuant to Fed. R. Civ. P. 37 and, therefore, was not limited by Rule 54(d). The Court finally awarded $86,000 in fees and costs related to TT's sanctions motion. The Court generally found TT's fees and expenses reasonable, with limited exceptions. The Court limited fees for writing a "simple" two-page motion to two hours. The Court also deleted approximately $11,000 in apparently duplicative time entries.

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At the end of September, September 26-29, the Licensing Executives Society is hosting its annual meeting in Chicago at the Sheraton Hotel & Towers.  The meeting, themed "Deals, Deals and more Deals" will focus upon IP's critical role in business strategies and ways to use IP to maximize deals and profitability.  There are an impressive array of presentations and workshops, headlined by the following very impressive plenary sessions, as described by the Society:

• The SuperFreakonomics of IP Licensing – Do Patents Slow Innovation? - Steven Levitt, co-author of the New York Times best-seller Freakonomics and its recent follow-up SuperFreakonomics, will present a keynote address on the unintended impact of the patent system on innovation. He will also discuss his groundbreaking research on the effects of incentives on economics and market behavior as they relate to innovation. A book signing will follow Mr. Levitt’s presentation.
   
• Is the U.S. Patent System Under Siege: Congress, the PTO, the FTC and the Supreme Court -The Honorable Judge Paul Michel, retired Chief Judge of the United States Court of Appeals for the Federal Circuit will look at the many challenges facing the U.S. patent system including the reform legislation currently pending in Congress, the USPTO’s efforts to reduce backlogs and improve the quality of issued patents, and increased scrutiny by the Supreme Court and FTC.
   
• IP as a National Responsibility: A Global Outlook for Strategies, Policies and Laws - Economist and Former Vice Presidential Candidate Pat Choate, will join John Whealan, Associate Dean of Intellectual Property Law at George Washington University Law School and Suzanne Michel, Deputy Director of FTC’s Office of Policy Planning to discuss how the United States, Europe, Asia and developing countries might leverage IP to secure future wealth and what this could mean for commercial collaboration across national boundaries.
   
• IP100 Recap: IP Hot Topics 2010 - Over the course of 2010, LES has hosted innovative IP100 forums comprised of high-level IP leaders who have analyzed several hot IP topics. This panel will revisit the topics, review previous findings and discuss what we’ve learned from the world-class IP100 panels about best practices in licensing. Key ‘take-aways’ will be included in a white paper available after the meeting for attendees.

Click here for registration information.  I plan to attend, and hope to see you there.

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MPH Techs. Oy v. Zyxel Coms. Corp., No. 10 C 684, Slip Op. (N.D. Ill. Jul. 16, 2010) (Darrah, J.).

Judge Darrah granted defendants' 28 U.S.C. § 1404(a) motion to transfer this patent case to the Northern District of California. Venue was proper in both districts. Plaintiff's choice of forum was only given slight weight because the Northern District of Illinois was not plaintiff's home forum and had only a weak connection to the case. The convenience of witnesses weighted in favor of transfer. All of defendants' employee witnesses were in the Northern District of California and, more importantly, half of the non-party witnesses were in the Northern District of California. Three of plaintiff's four witnesses were in its home country – Finland. Access to proofs is given little deference in light of wide-spread use of digital discovery, but still leaned slightly in favor of transfer because defendants' documents were largely in California.

The situs of material events was neutral because it is largely irrelevant in patent cases. The convenience of parties weighed in favor of transfer. Plaintiff's inconvenience in traveling from Finland to Chicago or to Northern California was not significantly different.

The interests of justice weighed slightly in favor of transfer because defendants' employees had a greater interest in the case than Illinois citizens did. Otherwise, the Courts were similarly capable of handling patent cases and had comparable times to resolution, with only a few months difference in each category.

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Bone Care Int’l, LLC v. Pentech Pharma., Inc., No. 08 C 1083, Slip Op. (N.D. Ill. June 4, 2010) (Dow. J.)

Judge Dow construed the claims in this patent infringement action related to methods for preventing bone mass loss using vitamin D. As an initial matter, the Court held that the person of ordinary skill in the court was someone in the field of kidney disease with either a Ph.D. or an M.D., adopting plaintiffs’ construction. Defendants’ argued that both a Ph.D. and an M.D. were required, but the parties agreed that the definition did not impact their respective arguments. Of particular interest, the Court construed the following terms:

• The Court declined to construe “lowering” or “lowered” because the parties did not contest that the constructions impacted claim scope, and their ordinary meanings were sufficient.
   
• “Serum parathyroid hormone” was construed as “blood concentrations of parathyroid hormone.”
   
• “Suffer from” was construed as “having” consistent with its ordinary meaning. The dictionary drew a distinction between suffering from and suffering with, which is associated with pain or discomfort from a condition.
   
• “Hyperparathyroidism” was construed consistent with medical dictionaries as “increased (i.e., above normal) secretion of PTH by the parathyroid gland."
   
• “End stage renal disease” was construed as “a disease wherein the patients’ kidneys no longer function at a level necessary to sustain life and thus require chronic dialysis or kidney transplantation.”
   
• “Effective Amount” was construed as “an effective amount of 1a-OH-vitamin D2 to lower and maintain lowered blood concentrations of PTH with a lower incidence of hypercalcemia than is associated with the extant conventional Vitamin D3 treatments.”

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Chicago Kent has an excellent program coming up on September 30, 2010 at 1:00pm. Kent has gathered a very impressive group of experts to kick off its inaugural Supreme Court Intellectual Property Review. The Northern District's own Judge Zagel will be a featured speaker.

The program promises to address the big IP decisions from last year's Supreme Court: American Needle, Inc. v. NFL, Bilski v. Kappos, and Reed Elsevier, Inc. v. Muchnick. The event will also look at significant IP cases that await certiorari decisions, including Costco v. Omega, S.A., and Schwarzenegger v. Entertainment Merchants Ass’n.

In addition to Judge Zagel, the impressive panel includes:

• Donald Chisum, author of Chisum on Patents, Patent Law Digest and Chisum Patent Law Reference Guides;
• Roy T. Englert, Jr., of Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP (counsel for Costco);
• Randal C. Picker, Paul H. and Theo Leffmann Professor of Commercial Law at the University of Chicago Law School; and
• Paul M. Smith of Jenner & Block LLP (counsel for Entertainment Merchants Association and Entertainment Software Association).

Other speakers include: 

• Thomas C. Goldstein of Akin Gump Strauss Hauer & Feld LLP and publisher of SCOTUSblog;
• Deborah Jones Merritt, John Deaver Drinko-Baker & Hostetler Chair in Law at Moritz College of Law, Ohio State University (court-appointed amicus in Reed Elsevier);
• Jeffrey M. Carey, general counsel of American Needle, Inc.; and
• Scott E. Gant of Boies, Schiller & Flexner LLP.

The program is free of charge, but requires registration. Contact Patricia O’Neal at (312) 906-5128 or ipconference@kentlaw.edu for registration or more information.

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Chicago Mercantile Exchange, Inc. v. Tech. Research Group, Inc., No. 09 C 3895, Slip Op. (N.D. Ill. Jun. 28, 2010) (Castillo, J.).

Judge Castillo construed the claim terms in this patent case involving methods for tracking Rolling Spot Currency contracts. Here are constructions of note:

• The Court discounted the extrinsic evidence and focused on the intrinsic evidence to construe "principal market marker" as "an entity required to provide the following functions: (1) continuously maintain a two-sided bid/offer market of specified size and spread for its designated product(s); (2) maintain a public order book with respect to these assigned products; and (3) give priority to customer order execution over personal trading. As compensation for the fulfillment of these responsibilities, this entity is to receive priority volume benefits."
   
• Because "computer" had a very apparent ordinary meaning, the Court relied upon dictionaries to define "computer" as "a programmable electronic device that can store, retrieve, and process data."
   
• The preambles of each claim were limiting to the extent they identified a computer and the computer was not identified elsewhere in the claim. Where there was not a computer identified in the body of the claim, the preamble was a necessary aspect of the invention.
   
• "Execute" was defined consistent with its ordinary meaning as "to carry out fully and completely."
   
• The Court refused to define "receive" or "directly receive." But the Court held that doing so would improperly impart a claim limitation from the specification.
   
• "Bid," "offer," "trade," and "order", were all defined based upon their dictionary definitions.
   
• To sustain the validity of the claims, the Court defined "rolling spot" as how plaintiff's Rolling Spot Currency contracts were defined as of the effective filing date.
   
• "Currency futures" were construed based upon financial dictionaries as "contracts in the futures markets that are for delivery in a major currency such as U.S. dollars, British pounds, French francs, German marks, Swiss francs, or Japanese yen."

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Simonian v. Hunter Fan Co., No. 10 C 1212, Slip Op. (N.D. Ill. Jul. 8, 2010) (St. Eve, J.).

Judge St. Eve denied defendant Hunter Fan's motion to dismiss plaintiff's false patent marking case. Hunter Fan argued that the Court lacked subject matter jurisdiction because approximately four hours before this suit was filed, another plaintiff filed a separate suit in the Northern District of Texas accusing Hunter Fan of the same alleged false patent marking. The False Claim Act did have a first-to-file provision, 31 U.S.C. § 3730(b)(5), but the provision expressly limited its application to False Claims Act cases. Because false patent marking is part of the Patent Act, not the False Claims Act, the first-to-file limitation was not applicable. 

In reply, Hunter Fan argued that 35 U.S.C. § 292 allowed for only a single claim, and that the reasoning of the False Claim Act's first-to-file rule should have been applied to the false patent marking statute.  Hunter Fan, however, waived these arguments by failing to make them in its opening brief. 

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Golden Golf Lighting, Inc. v. Greenwich Indus., L.P., No. 07 C 1086, Slip Op. (N.D. Ill. Jun. 18, 2010) (Andersen, J.).

Judge Andersen denied defendant Clarin's Fed. R. Civ. P. 8(a), 9(b) and 12(b)(6) motion to dismiss this Lanham Act case regarding Clarin's allegedly fraudulent procurement of a trademark related to folding seats.

First, 15 U.S.C. § 1120 limited recovery to injuries sustained "in consequence" of a trademark registered by fraud or false reasons. The damages need not be to a trademark, as Clarin argued. Plaintiff's alleged damage because its folding chairs were seized at the U.S. border based upon alleged infringement of Clarin's trademark and plaintiffs allegedly lost business based upon the seizure. Those facts were sufficient to plead that Clarin was the proximate cause of plaintiff's alleged damages.

Plaintiffs pled fraud with sufficient particularity by incorporating by reference the fraud-related decision in Specialized Seating v. Greenwich Indus., L.P., 472 F.Supp. 2d 999 (N.D. Ill. 1999). Finally, Plaintiffs did not violate Fed. R. Civ. P. 8(a) or 8(d)(1) by combining two claims into a single count. Notice pleading did not require separate headings for each claim.

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Shop-Vac Corp. v. Alton Indus. Ltd Group, No. 10 C 1066, Slip Op. (N.D. Ill. Jun. 7, 2010) (Shadur, J.).

Judge Shadur sua sponte dismissed several of plaintiff Shop-Vac's affirmative defenses in response to defendant Alton's counterclaims as inappropriate, citing the Court's decision in State Farm Mut. Auto Ins. Co. v. Riley, 199 F.R.D. 276 (N.D. Ill. 2001). The Court dismissed one affirmative defense which was the equivalent of a Fed. R. Civ. P. 12(b)(6) challenge to the sufficiency of Alton's counterclaims.

The Court also dismissed two affirmative defenses that were proper pursuant to Fed. R. Civ. P. 8(c), but were not pled with sufficient facts. Shop-Vac was given leave to reassert them with additional supporting facts. The Court also dismissed two affirmative defenses that contradicted allegations in the counterclaim. Shop-Vac put those issues in contention by denying the facts.  

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This week I have the privilege of hosting the Blawg Review for the third time – I also hosted Reviews 133 & 173. For those who are not familiar with the Blawg Review, it is a roving, weekly round up of the prior week's legal blogs expertly orchestrated by the anonymous Ed. The Reviews are traditionally organized around a theme. For example, Securing Innovation's theme last week was Indigenous People's Day. This week's theme is my virtual day with Lord Stanley's Cup. For those of you who do not know, the Chicago Blackhawks (my Chicago Blackhawks) won the National Hockey League championship this year. The winner of the NHL playoffs gets the famed Stanley Cup. 

"Hockey in August?" you ask. Of course, not many people play hockey in August, even in Original Six towns. My local rink shuts down for the month of August and the Blackhawks are not even back in camp for a few weeks. But one of the many Stanley Cup traditions is that the summer after winning it, the players and key personnel from the winning team each get a day with the Cup. They take it home, eat Cheerios and even buffalo wings out of it, or whatever else they want. I grew up with hockey and have grown into a Blackhawks fan, although I grew up cheering for the winged wheel. Despite my efforts cheering for the Blackhawks, including attending much of the regular season and all but one home playoff game, the Blackhawks have not yet contacted me for my day with the Stanley Cup. I am sure the letter got lost in the mail. So, I am spending today with the Cup and sharing it with the legal blogosphere.

I will start the day with Chicago bloggers, who are presumably as excited about the Cup as me. At his Death & Taxes Blog, Joel Scheonmeyer is basking in the glow of the Cup and trying to get close to Hawks owner Rocky Wirtz to discuss pet trusts for the famous, hockey-loving Wirtz beagles. Brian Leiter questions U.S. News & World Reports' top law school rankings, but surely not the standings at the end of the Stanley Cup playoffs at his Law School Reports.  The Chicago Lawyer's Attorneys in Transition blog looks at writing sample issues for legal job applicants. An issue that many Blackhawks faced (well maybe highlight reels anyway) at the end of the season as the Hawks' Stan Bowman made the difficult decision to get next year's team under the dreaded salary cap.

Steven Tanner at the Chicago Family Law Blog asks whether California's same-sex marriage ruling will impact Illinois (or other states without such a ruling). No doubt as he takes his picture with the Cup he is proud of the Blackhawks for sending defenseman Brent Sopel to Chicago PRIDE Parade with the Cup. At the Becker-Posner Blog, Becker and Posner compare the US and German responses to the recession. No doubt this would help the Wirtz family who faced red ink this year despite a Cup win and a sky-rocketing franchise. Staying on the topic of the economy, Peter Zura looks at the recession's impact upon patent litigation at his 271 Patent Blog, while waiting his turn to kiss Lord Stanley's Cup.

Chicago lawyer Evan Brown at Internet Cases looks at copyright preemption issues in the context of a plagiarism database. Brown no doubt is confident that Patrick Kane did not steal his post-game-winning goal celebration from anyone. C-K Faculty Blog looks at an excellent law review article by IP professor David Schwartz regarding the citation of law review articles in judicial opinions. 

Leaving Chicago, Stephen Albainy-Jenei of Patent Baristas (go Blue Jackets?) looks at a Federal Circuit decision expanding drugmakers' protections against generics. Julie Fleming (an Atlanta Thrashers fan?) at the Life at the Bar blog no doubt appreciates the long journey these Blackhawks took to the Cup and the individual goals that propelled them to the peak of their craft as this week she compares legal business development to pioneers hiking the Oregon, California and Mormon Trails and challenges readers to create a list of twenty reasons you want to develop business. 

Kevin O'Keefe, at his LexBlog blog questions whether the ABA's leadership is ignoring their obligation to engage people through social media and is no doubt impressed by the Blackhawks very impressive and forward-thinking use of Twitter. And while Blawg Review is generally not about the host's analysis, if you want an example of an organization that has nailed using Twitter in both content and tone, check out @nhlblackhawks. At the [Non]billable Hour, Matt Homann (a fan of the dreaded Blues? Although I thank them for Red Berenson) takes social media advertising retro for an older crowd.

Vincent LoTempio stops cheering long for Buffalo's own Patrick Kane long enough for a very in-depth look at how inventions come about. Remaining in Buffalo, IP.com's Securing Innovation looks at the first U.S. patent in between conflicting feelings of pride for Kane and disappointment over the state of their Sabres.

Cordell Parvin at his Law Consulting Blog no doubt appreciates Stan Bowman's salary cap dance during the off-season and how it has kept hockey in the Chicago news when it would traditionally be preempted by baseball, as he suggests lawyers use bills to distinguish themselves with clients. And seeing the Cup is bittersweet for Parvin as goalie Marty Turco left his Dallas Stars this summer to defend Chicago's goal next year. As for me, I always welcome another Michigan Man to the Blackhawks. Staying in the south, Docket Report takes a comical look at the alleged false patent marking of a very old children's toy, but he agrees there was nothing false about these Blackhawks and their lightning fast offense.

From the south, we head to Canada, where hockey is religion. Eric Macramalla was too busy reviewing the legalities of the Kovalchuk contract arbitrator's decision at his Offside: A Sports Law Blog to spend any time admiring the Cup, but I suspect he may not be a Hawks fan. He does, however, offer some in depth analysis of the CBA and the arbitrator's decision. No doubt, Macramalla agrees that the Hossa contract is fine and that the NHL should not review that contract. At Law21, Jordan Furlong ponders how to kill a law firm. 

We dip back into the States to sip from the Cup with David Harlow who looks at the privacy and security of patient records at his HealthBlawg while he wonders if his Bruins can go all the way next year. And our final stop is also in Boston at Ilan Barzilay's District of Massachusetts IP Blog where he looks at an "IP soap opera" stemming from a jail sentence.  He does not have any comments on the Blackhawks free agency soap opera because like Harlow, he is preoccupied with how his Bruins are doing.

Next week's Blawg Review will be at Law is Cool, a blog focused on Canadian law schools where there are no doubt a few more hockey fans.  Blawg Review has information about next week's host, and instructions on how to get your blawg posts reviewed in upcoming issues.

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Banner & Witcoff's Tim Meece (from Chicago) and Ross Dannenberg (from DC), have created an intellectual property iPhone app that they call, "IP Lawyer."  At first, I have to admit I was skeptical, expecting it to be a more limited app heavy on promoting the firm.  I was wrong.  The app has easy to read and search versions of the necessary Federal Rules, as well as copies of all Local Patent Rules and the relevant sections of the U.S. Code, the MPEP and the C.F.R.  And in case that was not enough to get you to head to iTunes and download your (free) copy, it also provides the ability to search a database of U.S. patents and trademarks, as well as assignments for each.  This is an excellent resource that I expect to use frequently.

You can get IP Lawyer on iTunes (I searched Banner Witcoff and found it easily) or click here for more information at the firm's website.

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Be2, LLC v. Be2.net, No. 10 C 1650, Slip Op. (N.D. Ill. Jul. 12, 2010) (Shadur, Sen., J.).

Judge Shadur denied the individual defendant's letter request to alter the Court's default judgment. The Court attached the letter to the opinion to avoid any concerns that the defendant's communications were ex parte. And the Court left the judgment intact because the defendant's explanation did not warrant alteration or vacatur of the judgment.

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Next Monday, I have the honor of hosting my third Blawg Review.  For those that do not following Blawg Review, it is a weekly round up of the prior week's legal blog posts.  I follow an excellent review yesterday at IP.com's Securing Innovation.  It was a textbook Blawg Review incorporating legal blogs from all different specialties surrounding a them (International Indigenous People's Day).

If you want me to specifically consider your blog post for next week's Review, send it to me or click here for the submission page.

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Chamberlain Group v. The Lear Corp., No. 05 C 3449, Slip Op. (N.D. Ill. Jul. 13, 2010) (St. Eve, J.).

Judge St. Eve granted in part plaintiff Chamberlain's Fed. R. Civ. P. 26(c)(1) motion for a protective order in this patent case involving garage door opening systems. The Court denied a protective order as to defendant Lear's request for Chamberlain's financial information. While Chamberlain claimed the sales information was not relevant because Chamberlain did not seek lost profit damages, Chamberlain's interrogatory response said it did seek lost profit damages. Additionally, the financial information was relevant as it was reasonably calculated to lead to admissible evidence related to Chamberlain's commercial success and its lost profits. 

The Court granted a protective order as to discovery related to Chamberlain's new garage-door-opening algorithm. Chamberlain had not sold a product embodying the algorithm. So, it was irrelevant to a reasonable royalty calculation which looked to a hypothetical negotiation when infringement began. Furthermore, the algorithm was not relevant to an obviousness analysis. Finally, Chamberlain's decision to produce more information related to the same algorithm did not make the algorithm relevant. 

The Court also entered a protective order preventing further deposition of a Chamberlain employee. The employee had already been deposed twice – once for two hours and once for a full day. To the extent Lear wanted to depose the employee about the new algorithm, the Court had already determined it was irrelevant. And despite repeated warnings to stop, Lear had already repeatedly questioned the employee about the algorithm. 

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