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

Continental Datalabel, Inc. v. Avery Dennison Corp., No. 09 C 5980, Slip. Op. (N.D. Ill. Dec. 9, 2009 (Shadur, Sen. J.).

Judge Shadur ordered the parties to be prepared to discuss at a status conference why defendants' respective noninfringement and invalidity declaratory judgment counterclaims should not be stricken as duplicative of plaintiff's patent infringement claims. 

* Click here for more on this case in the Blog's archives.

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The annual Chicago IP Colloquium continues this Tuesday, February 9, 2010.  The Chicago IP Colloquium is jointly sponsored by Chicago-Kent College of Law and Loyola University Chicago School of Law  to discuss a range of issues in intellectual property and cyberspace law based upon papers by six nationally renowned intellectual property scholars.  The sessions are uniformly excellent, and well worth your time.  The next session will be Tuesday, February 9 from 4:10 pm to 5:50 pm at Loyola and will feature Professor Jeanne C. Fromer, Fordham University School of Law, discussing her paper District Courts as Patent Laboratories.

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 Chief Judge Holderman announced that the Northern District of Illinois has appointed three new magistrate judges to seven year terms.  All three new magistrates are former Northern District law clerks.  Here are the biographies of each new judge as provided by the Northern District (emphasis added):

• Jeffrey T. Gilbert received his law degree from Northwestern University (1980). He is a partner with Reed Smith in its Chicago office and is a member of the firm’s regulatory litigation group. Mr. Gilbert originally practiced with Sachnoff & Weaver, which combined with Reed Smith in 2007. Prior to entering private practice, Mr. Gilbert served as Law Clerk to The Honorable Marvin E. Aspen, U.S. District Court for the Northern District of Illinois. He has been recognized as an Illinois Super Lawyer by 2010. Mr. Gilbert is also an Adjunct Professor of Trial Advocacy at Northwestern University Law.
   
• Administrative Law Judge Young B. Kim was born in South Korea. He received his law degree from Loyola University of Chicago School of Law (1991). Judge Kim began his legal career as an Assistant Public Defender in Cook County, working in various misdemeanor courtrooms and in the Domestic Violence Division. Two years later, he served as Law Clerk to The Honorable Charles R. Norgle, Sr., U.S. District Court for the Northern District of Illinois. After his clerkship, Judge Kim joined the U.S. Attorney’s Office for the Northern District of Illinois, where he litigated both civil and criminal cases. During his seven-year service, Judge Kim focused on healthcare fraud, medical malpractice, and employment discrimination cases. In 2001, Judge Kim accepted an appointment with the United States Equal Employment Opportunity Commission as an Administrative Law Judge. Judge Kim is one of the recipients of the National Asian Pacific American Bar Association’s "2004 Best Lawyers Under 40" award.

• Sheila M. Finnegan received her law degree from the University of Chicago (1986) and currently co-chairs Mayer Brown’s Chicago litigation practice, handling civil and criminal trials.  In 2008, 2009, and 2010, she was recognized as one of the top 50 women lawyers in Illinois by Super Lawyers.  Prior to joining Mayer Brown, Ms. Finnegan served as Chief of the Criminal Division in the U.S. Attorney’s Office for the Northern District of Illinois. She also served for several years on the Financial Fraud Task Force. Ms. Finnegan served as Law Clerk to The Honorable Milton I. Shadur, U.S. District Court for the Northern District of Illinois, and is an Adjunct Professor of Trial Advocacy at Northwestern University Law School.

Welcome to the Northern District bench Judges Finnegan, Gilbert and Kim.  

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World Wide Sales, Inc. v. Church & Dwight Co., Inc., No. 08 C 1198, Slip Op. (N.D. Ill. Nov. 9, 2009) (Kennelly, J.).

Judge Kennelly granted defendant Church & Dwight (“CD”) summary judgment on each of plaintiff World Wide Sales’ (“WWS”) claims for trademark infringement, Lanham Act unfair competition and fraud on the Patent and Trademark office. WWS claimed that CD infringed and unfairly competed with WWS’s Forever Fresh for the Fridge trademark, used with a refrigerator odor elimination product, by using CD’s Fridge Fresh mark with its Arm & Hammer refrigerator deodorizer product.

Lanham Act

The parties stipulated that CD’s mark was protectable for purposes of this motion. The only issue, therefore, was whether there was a likelihood of confusion. Generally, a court would consider whether consumers believed CD’s mark referred to WWS’s product. But WWS relied upon a theory of reverse confusion, arguing that CD had so saturated the market with its junior mark that consumers believed WWS’s products were CD’s products. Courts apply the same likelihood of confusion factors in both reverse confusion and confusion cases, although the factors are weighted differently:

• Similarity of Products. The products had similar deodorizing uses, but they were presented so differently that there was little chance of consumer confusion.
   
• Degree of Similarity. Beyond both using “Fridge” and “Fresh” the marks were not similar. Among other things, WWS’s mark was surrounded by pictures of refrigerated food stored with or without its product, CD’s mark was against a yellow-orange background, similar to other Arm & Hammer products without any pictures of food. The factor weighed strongly in CD’s favor as it was “extraordinarily unlikely” that consumers would be confused.
   
• Use and Manner of Concurrent Use. The parties' distribution channels were vastly different. WWS offered no evidence of the products being sold in the same store or advertised in the same publication.
   
• Strength of Mark. WWS’s mark was descriptive and relatively little had been invested in promoting the mark. As a result, the Court held that the mark was relatively weak.
   
• Consumers’ Degree of Care. While the products at issue were relatively inexpensive, the Court still held that there was little chance consumers would confuse the products.
   
• CD’s Intent. Because the junior user does not seek to profit from the senior user’s mark in reverse confusion cases, CD’s intent was irrelevant.
   
• Actual Confusion. WWS offered no evidence of actual confusion.

Based upon the factors, the Court held that no reasonable fact finder could find a likelihood of confusion.

Fraud on the PTO

Because WWS’s registration disclaimed the exclusive use of “fridge” and “fresh,” no reasonable fact finder could have found that CD lacked a reasonable belief that “fridge” and “fresh” were unprotected words. And therefore, failing to disclose WWS’s "Forever Fresh for the Fridge" registration to the PTO during the prosecution of CD's "Fridge Fresh" mark was not fraud.

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Gabbanelli Accordions & Imports, L.L.C. v. Italo-Am. Accordion Mfg. Co., No. 02 C 4048, Slip. Op. (N.D. Ill. Sept. 21, 2009) (Zagel, J.).

Judge Zagel entered judgment on behalf of plaintiffs in the amount of $151,200 in lost profits after the Seventh Circuit affirmed the Court's judgment.* The Court also held defendants jointly and severally liable for $147,576.12 in plaintiff's attorneys' fees.

* Click here for more on this case in the Blog's archives.

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Card Activation Techs. V. Bebe Stores, Inc., No. 09 C 406, Slip Op. (N.D. Ill. Nov. 20, 2009) (Gottschall, J.).

Judge Gottschall stayed the case pending reexamination of plaintiff's patent. The fact that the asserted claims were not being reexamined did not weigh against a stay. The reexamined claims were narrower than the asserted claims. So, if the narrower claims were rejected the broader claims could be found invalid as well. And all of the claims used similar language. As a result, the reexam's prosecution history would, at a minimum, be pertinent to the case. And delay caused by a stay would not prejudice plaintiff because it could be compensated with money damages. Additionally, the Court allowed either party to move to begin full or limited discovery at a status conference eight months after the opinion issued, if the reexam was still pending at that time.

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The annual Chicago IP Colloquium returns this Tuesday, January 26, 2010.  The Chicago IP Colloquium is jointly sponsored by Chicago-Kent College of Law and Loyola University Chicago School of Law  to discuss a range of issues in intellectual property and cyberspace law based upon papers by six nationally renowned intellectual property scholars.  The sessions are uniformly excellent, and well worth your time.  The first session of 2010 will be Tuesday, January 26 from 4:10 pm to 5:50 pm in Room 305 at Chicago-Kent and will feature Professor Peter C. DiCola, Northwestern University School of Law,  discussing his paper: Sequential Musical Creation and Sample Licensing.

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When I wrote the title to this post it was difficult to capture how significant this story is to practitioners.  The Northern District of Illinois has introduced an online transcript ordering system that can be used to order transcripts from any judge and court reporter in the Northern District.  The Northern District believes this is the first system like it in the federal courts.  This simple form -- click here to access it -- transforms what used to be an individualized process that was often difficult to navigate for both practitioners and the court reporters themselves because it required identifying the particular court report and then trying to reach the reporter, who likely spends most of the business day in court or back at their office performing the complex task of turning the rough transcript into the record of the court's proceedings.  And it further simplifies the process by identifying the available delivery and timing options for the transcripts, so that the reporters do not have to explain the options to each attorney that calls them.

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My latest IP for Your Business column, published in the Southeast Texas Record, and its sister publications the West Virginia Record and the Madison (Illinois) Record, focused upon protecting your brand on Twitter and stopping Twitter squatters.  With the Record's permission I am reposting the article on the Blog.  Click here and here to read the column at the Record.  And if you are an executive or business owner that is reading this and thinking that you do not need to worry about Twitter, at least skim the article and then do a search for your company name on Twitter.  You will likely change your mind.   Here are five steps for leveraging and protecting your brand on Twitter:

More and more frequently, longtime clients call me with desperation and frustration in their voices.

In each case, we have a conversation that goes very much like this:

Client:  Dave, I just learned that someone is using my company's identity on Twitter [Twitter squatting]. They have thousands of followers and growing everyday. They have been tweeting for weeks [or even months], and we had no idea until someone told us.

Me:  We can take care of this.

Client:  But I already tried to contact them and they are anonymous.

Me:  They are not as anonymous as you, or they, think they are. I have a plan to resolve this, protect your brand and we can even build your business in the process.

Client:  Thank you. [Sigh of relief.]

Unfortunately, instead of my plan, too many lawyers and business owners throw up their hands, unsure how to proceed because Twitter issues have not been around long enough to be fully crystallized by law schools, case law or legal treatises.

And worst of all, many lawyers counsel their clients not to worry about Twitter because it does not matter and no one is paying attention to it.

In fact, Twitter has a massive user base - many estimates suggest 5 to 10 million users and growing quickly. Businesses that ignore Twitter are walking away from one of the most powerful marketing/referral systems in existence.

Here are five steps for protecting your brand on Twitter and stopping Twitter squatters:

1. Claim Your Names

Before you do anything else - in fact, today as soon as you finish reading this article - secure your names, trademarks and brands on Twitter.

Then strongly consider using one or all of the Twitter monikers to find and engage your customers. You can also use those accounts to warn people that a stolen Twitter moniker is not you or your company. This both locks in your Twitter identity and gives a place for your customers to communicate with and about you.

When your customers tweet praise or complaints using your Twitter name they are automatically added to a "Replies" list that you can access through your Twitter account. That allows you to know when anyone mentions you on Twitter, and to respond to them as appropriate.

2. Play Sherlock Holmes

Use the squatting account's description and website links to identify the squatter's address and identity.

If the account does not list a name, use a service like www.whois.com or www.godaddy.com to determine the registered owner of any listed websites. Often, the registrar will provide a real name, address, phone number or email.

If they do not, try using whatever information is provided to track down the individual's other identifying and contact information using any of various internet background checking and identity services, such as www.intelius.com.

If that does not work, review the squatter's tweets to see if they provide identifying information. The squatter will often disclose their geographic location by discussing favorite sports teams, regional news stories or favorite restaurants.

3. Get Your Name Back

If you think the squatting is unintentional, email, call or direct message (via Twitter) the squatter and ask them to drop the name. If they drop it, you can immediately register it as yours. This can be easily accomplished by having the squatter change its Twitter moniker.

Twitter will automatically change the squatter's moniker with all of its followers and on all of the squatter's past tweets. So there is minimal, if any, cost to the squatter and you can claim the name as soon as the squatter drops it.

In addition to changing the name, have the squatter tweet something like the following:

I have changed my name from @TRADEMARK to @squatter to avoid confusion with TRADEMARK.

If the squatting is intentional, asking does not work or if you just do not want to take the time to find out if it will work, send a strongly worded cease and desist letter backed with the threat of legal action.

The power of a stern letter from legal counsel threatening a lawsuit should not be underestimated. Just the letter will often get the Twitter moniker returned to you and the explanatory tweet sent.

Remember that just as you may be uncertain about the value and return on investment of Twitter, the squatter likely has similar questions and is not interested in an expensive legal battle.

4. Take Action

If asking and letters do not work, take action. If the squatter's moniker is a clear and direct infringement of a registered trademark, the action can be as simple as sending abuse@twitter.com an email explaining the infringement and asking that the account be suspended.

The only downside is that Twitter suspends infringing monikers rather than transferring them and they only do it for very straightforward infringements, they do not make judgment calls.

If the infringement is direct or if you want the moniker back, file a lawsuit. Depending on your particular circumstances, you can file claims for trademark infringement, passing off or various tortious interferences. This is the most drastic option, but it will show the squatter you are serious, protect your brand and act as a deterrent to future squatters.

5. Use Your New Twitter Identity

This is the step that can generate new business, increased customer satisfaction and even cash flow. Begin following your customers, potential customers, ideal customers and competitors. And run regular searches either on Twitter (where you can save searches to rerun periodically) or at sites such as search.twitter.com for your trademarks, your products, important customers and your competitors.

Use those searches to build followers and to begin engaging your customers, potential customers and even competitors.

Your searches will allow you to identify when a customer praises or complains about your products and services and respond to them. You can explain or resolve complaints or amplify praise be retweeting it in.

These five steps may seem simple in hindsight, but they make up a powerful and important program that is critical for most modern businesses. Too many business people underestimate the power and importance of social media tools like Twitter.

Businesses need to monitor Twitter just like they do other trademark use and media channels. And you must enforce your marks on Twitter just like you do in every other channel of commerce.

R. David Donoghue is a partner in the Intellectual Property Group of Holland & Knight in Chicago, Ill. He may be contacted at (312) 578-6553 or david.donoghue@hklaw.com.

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The Northern District of Illinois continued its historically busy intellectual property docket in 2009.  For the first time in several years, there was a slight decrease in patent case filings. Of course, that is not surprising in light of a difficult economy and patent filings being down across the country. And I suspect that the new Local Patent Rules* will result in an increase in patent litigation filings for 2010. Trademark cases bucked their downward trend over the last several years, and were up by about 10% over 2008. Finally, copyright cases continued a relatively steep decline.  But despite the decline, the Northern District maintains one of the most active copyright dockets in the country.  This chart shows the number of yearly patent, trademark and copyright cases filed in the Northern District during calendar years 2006 through 2009 (data gathered from the Stanford IP Clearinghouse and Pacer):
 

*  Click here for much more on the Local Patent Rules in the Blog's archives.

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The most popular posts on the Blog during 2009, in terms of both views and reader questions, were those on the Local Patent Rules.  Because of high interest, I have plans for additional analysis this year.  This is the first of those posts.  In late 2009, I had an article published in Bloomberg Law discussing why the new Rules will drive patent cases to the Northern District of Illinois.  Bloomberg generously allowed me to post a pdf version of the story -- click here to download it -- and to repost it on the blog.  Here is the article:

The Northern District of Illinois enacted Local Patent Rules ("LPR" or "Rules") on October 1, 2009. The purpose of the Rules is to normalize patent litigation in the Northern District of Illinois and to streamline the patent litigation discovery process. See LPR, Preamble. The rules also make clear that the court does not intend to become a "rocket docket." In fact, the Rules create a schedule that would have cases ready for trial in a little over two years, although cases would not necessarily be tried at that time. That is at most a modest change from the court's average time to trial for all cases—about twenty-seven months, according to the most recent Federal Court Management Statistics.

The Northern District of Illinois did not intend that its new Rules would drive patent cases to Chicago, as has happened when other courts enacted local patent rules, such as the Eastern District of Texas. But despite its intentions, the Northern District of Illinois's plan to normalize patent litigation practice and streamline discovery will significantly increase patent filings in Chicago. To understand why the Rules will increase case filings, it is important to understand the process created by the Rules, and then look at the impact specific Rules will have for both patentholders and accused infringers.

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On March 8, I will be speaking at the Publishing Business Conference & Expo in New York City with Camille Miller of Cozen O'Connor.  Our panel is titled Online Legal-ease: Fair Use, Copyright and Content Aggregation Issues in the Digital Age, and here is the program description:

With the advent of digital publishing, social networking and user-generated content, publishers are faced with a litany of new legal issues to consider. A pair of legal experts will arm you with strategies to protect yourself -- and your content -- in this increasingly litigious age.

We have a lot to cover in a one hour program, so it promises to be a lively discussion.  If you are interested in attending the premier conference for book and magazine publishers click here for registration information.

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Tomorrow, January 12, at noon, I will be participating in a panel discussion of the Bilski case as we await the Supreme Court's decision that could significantly change patentability of business method and potentially software patents.  Here is Northwestern's description of the panel:

Currently pending in the Supreme Court, the Bilski case stands to redefine the boundaries of what is patentable and has captured the attention of major software and technology giants like Microsoft and Google.  Practicing IP attorneys will discuss the potential ramifications of this case on patent law and the issues presented by patenting abstract business practices and innovations.
 

Joining me on the panel will be:
 

• Andrea Augustine from Foley & Lardner; and
   
• Thomas Donovan from Barnes & Thornburg.

The panel is open to the public, so please join us January 12 at noon in Northwestern Law's Room RB140.

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Aguila Records, Inc. v. Nueva Generacion Music Group, Inc., No. 07 C 3399, Slip Op. (N.D. Ill. Nov. 4, 2009) (Der-Yeghiayan, J.).

Judge Zagel granted in part and denied in part plaintiffs', collectively "Aguila Records") motion for a preliminary injunction in this trademark and copyright infringement dispute.  Aguila Records, a music management and recording agency, was in a dispute with defendants' musical group Alacranes Musical (“Alacranes”).  Based upon that dispute, Aguila Records sought a preliminary injunction preventing defendants' use of the Alacranes word mark and scorpion logo.

                                               Likelihood of Success

Because the parties agreed that the Alacranes marks were protectable and that there was a likelihood of confusion if two groups used the marks, the only likelihood of success issue was whether Aguila Records owned the marks.  The Court held that the proof of ownership was at best "in conflict" and that the agreements were contradictory.

                                               Irreparable Harm

The Court held that a preliminary injunction against performing using the Alacranes Musical mark would irreparably harm defendants who would be forced to negotiate with Aguila Records for rights to use the name or change their name, but it was undisputed that the band's success was intertwined with its name.  Alternatively, if the Court did not grant an injunction defendants would continue performing using the name and would likely continue to grow in popularity and earn additional income, which would be lost to Aguila Records.  But that harm would not be irreparable because it could be repaid financially. 

                                               Conclusion

While Aguila Records did not demonstrate a strong likelihood of success, it did demonstrate a "greater than negligible chance of winning."  The Court, therefore, enjoined defendants from using the marks on compact disks, other recording media and merchandise such as t-shirts and hats, all uses for which Aguila Records had trademark registrations.  But the Court did not enjoin the use of the marks for live performances because Aguila Records did not have registered marks for live performances and the balance of harms tipped in defendants' favor for live performances.

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Schrock v. Learning Curve Int’l, No. 08-1296, 2009 WL 3644331(7th Cir. Nov. 5, 2009).

The Seventh Circuit reversed and remanded Judge Shadur's decision in this copyright case.*  The Court held that plaintiff's photographs of defendant's Thomas the Tank Engine trains were derivative works, and that absent a contractual provision to the contrary, plaintiff had a copyright in the derivative work.  Because plaintiff had permission to create the derivate works, plaintiff had a copyright in his derivative works.  And the Court could not decide whether the agreements prevented plaintiff from getting a copyright in the derivative work because the agreements were not part of the appellate record.  Additionally, the Court pointed out that the requirement that a derivative work be "substantially different" from the original did not create a heightened originality standard for derivative works.  The Court noted that plaintiff's photographs of defendant's Thomas the Tank engines had sufficient originality.

*  Click here for more about this case in the Blog's archives.

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