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Chicago IP Litigation

Tracking Northern District of Illinois IP Cases

BitTorrent: Motion to Quash is Not a Proper Vehicle for Severing Does

Posted in Discovery

Site B v. Does 1-51, No. 13 C 5295, Slip Op. (N.D. Ills. Mar. 7, 2014) (Leinenweber, Sen. J.).

Judge Leinenweber denied Doe 39′s motion to quash a pre-discovery subpoena in this BitTorrent case involving the motion picture “Under the Bed.”  At the outset, the Court noted a split in the Northern District regarding whether a Doe had standing to quash a subpoena to its Internet Service Provider (“ISP”).  Regardless, a motion to quash a subpoena was not a proper vehicle for challenging misjoinder as Doe 39 did.  The proper method would be a Fed. R. Div. P. 21 motion to sever.

Recognizing its inherent authority to sever, the Court then considered Doe 39′s arguments to sever.  Noting a split across the country, the Court held that the Does need not all participate in the same swarm near in time to each other.  The six week period used by plaintiff Site B was sufficient.  The Court, however, stated that it was open to reconsidering the decision after the various Does become named defendants in the case.

Finally, the subpoena did not violate the Electronic Communications Privacy Act (“ECPA”).  The ECPA prevents knowing disclosure of the content of a stored message, but allows disclosure of customer records, such as customer identity, which is what the subpoena sought.  The fact that the subpoena failed to notify Comcast that the ECPA makes such disclosure voluntary, was not sufficient to quash the subpoena.  Suggesting that Comcast did not know its legal rights was “frivolous.”

Fair Use & Likelihood of Confusion Doom Lanham Act Claims

Posted in Summary Judgment

Sorenson v. WD-40 Co., No. 12 C 50417, Slip Op. (N.D. Ill. Sep. 9, 2014) (Kapala, J.).

Judge Kapala granted defendant WD-40 summary judgment as to plaintiff’s Lanham Act and related state law claims regarding plaintiff’s THE INHIBITOR and related design marks (the “Inhibitor Marks”) and WD-40′s Specialist product line.

WD-40′s use of the word “inhibitor” in connection with its Specialist products was fair use:

  • It was not used as a trademark, as evidenced by the emphasis of WD-40′s well know marks on the front of the product over the use of the term “inhibitor.”
  • Inhibitor was descriptive of the WD-40 product which was intended to inhibit rust.
  • There was a lack of evidence that WD-40 used the term in bad faith.

WD-40 was, therefore, granted summary judgment as to plaintiff’s Lanham Act claim.  WD-40 was also granted summary judgment that there was no likelihood of confusion:

  • Looking at the usage of the marks as a whole, plaintiff lacked sufficient evidence to show similarity of use.
  • Plaintiff’s oil products were not similar to WD-40′s Specialist products.
  • There was limited evidence of concurrent use, but not enough to weigh in plaintiff’s favor.
  • There was some evidence of a low degree of care by consumers, but it was mitigated by the strength of WD-40′s marks.
  • Plaintiff’s Inhibitor Marks were relatively weak because they were descriptive of the product.
  • There was not sufficient evidence of actual confusion.  The testimony by one individual that he believed that the products could be co-branded even if it were assumed to be evidence actual confusion, was insufficient because it was de minimus.
  • There was not sufficient evidence that WD-40 intended to pass off its products as plaintiff’s to support plaintiff’s burden.

Having granted summary judgment as to the Lanham Act claims, the Court granted summary judgment as to the state law claims based upon the Court’s likelihood of confusion analysis.  As an interesting side note, the opinion identifies evidence in the suit suggesting that four out of five people have used WD-40.  That is a pretty amazing statistic.

Final Invalidity Contentions May Not be Amended to Add Nautilus-Based Indefiniteness Claims

Posted in Local Rules

R-Boc Reps., Inc. v. Minemyer, No. 11 C 8433, Slip Op. (N.D. Ill. Cole, Mag. J.).

Judge Cole denied plaintiff R-Boc’s motions to amend its Final Invalidity Contentions with an allegedly new theory regarding the phrase “approximately perpendicular” based upon the Supreme Court’s Nautilus indefiniteness decision and related motion for summary judgment of invalidity based upon R-Boc’s new argument.

As an initial matter, the Court originally adopted the parties’ agreed construction of “approximately perpendicular” — “approximately 90 degrees.”  The agreed construction was initially proposed by R-Boc.  The Court noted that parties were bound by their strategy decisions in cases generally.  Furthermore, the Supreme Court’s Nautilus decision was about the phrasing of the indefiniteness test, not the meaning of words of approximation, which are common in patent claims.  R-Boc had also been stopped in two prior attempts to change its “approximately perpendicular” construction in the form of a summary judgment motion and a motion for judgment as a matter of law.

Finally, the Court also held that any prejudice to defendant could not be cured by the extensions that R-Boc offered to agree to because the case was over seven years old having been to trial and then gone to the Federal Circuit before returning to the Court.  At this point in the life of the case, any delay in getting to a final resolution would be prejudicial.

Prosecution History Requires Certain Method Steps be Performed in Order

Posted in Claim Construction

VendoNet, Inc. v. Redbox Automated Retail, LLC, No. 13 C 3475, Slip Op. (N.D. Ill. Sep. 15, 2014) (Shah, J.).

Judge Shah construed the claims in this patent dispute retarding methods of giving vending machine customers access to a computer network.  Of particular note, the Court held as follows:

  • The preamble was not limiting.  The fact that the terms “website,” “homepage,” and “database” derived antecedent basis from the preamble did not make the preamble limiting because it provided no further explanation of or limitation upon any of the terms.
  • “A plurality of physical items” was construed as “more than one item, whether or not they are of the same type.”
  • “Permitting the customer to access the Internet/world wide web via the communication network in order to retrieve and/or send information to said website, said home page or said database” did not require that the customer be able to choose his own website or “surf” the Internet.
  • The Court held that step 5 in the claimed method must occur before step 7, but that step 6 need not be sequential.  In order to overcome an obviousness rejection during prosecution, the patented stated that step 5 must occur before step 7.  Having disclaimed the two steps out of order during prosecution, patented was estopped from reclaiming the ground it lost during prosecution.

Plaintiff May Not Dismiss Claims in Response to Summary Judgment Motion

Posted in Summary Judgment

Beasley v. John Wiley & Sons, Inc., No. 12 C 8715, Slip Op. (N.D. Ill. Sep. 9, 2014) (St. Eve, J.).

Judge St. Eve, after previously deferring ruling to allow the parties to work out procedural disputes, granted defendant John Wiley & Sons’ motion for summary judgment as to plaintiff’s fraud and Digital Millennium Copyright Act (“DMCA”) claims, having previously granted plaintiff summary judgment of copyright infringement regarding its photographs.  Because plaintiff offered no evidence in response to the motion that would allow a reasonable jury to find that defendant misrepresented plaintiff’s copyright or removed copyright-management information from the photographs, the Court granted defendant summary judgment as to both claims.  Allowing plaintiff to dismiss those claims as it proposed would have been unfair to defendant because it would have prevented defendant from seeking fees as to the DMCA claim.  And plaintiff’s request was too late, coming late in the case and in response to a summary judgment motion.

Patent Exhaustion Applies Despite License Restrictions

Posted in Summary Judgment

Cascades Computer Innovation, LLC v. Samsung Elecs. Co., Nos. 11 C 4574 & 11 C 6235, Slip Op. (N.D. Ill. Sep. 14, 2014) (Kennelly, J.).

Judge Kennelly granted in part defendants Samsung’s and HTC’s motions for summary judgment of patent exhaustion based upon a prior settlement agreement that plaintiff Cascades Computer Innovation (“Cascades”) previously entered with Google, the parent of Motorola Mobility who was previously a defendant in a related suit.  This patent case involves a method for implementing software meant for one computer architecture on another computer architecture.  Defendants were accused based upon the alleged use of the Dalvik Virtual Machine.

The license covered:

“Google Products” including, among others, “all Motorola and Nexus devices, but . . . excludes mobile devices manufactured by third parties and running the Android OS except any Nexus-branded devices.

The license also provided a release and a covenant not to sue.  The release provided that:

Cascades releases and discharges Google, Motorola, Google Affiliates, Google Partners . . . from any and all claims, demands, debts, liabilities, actions, causes of actions or suits of whatever kind of nature, asserted or not asserted, known or unknown, arising out of the claims or matters that have been or could have been asserted by Cascades in the Actions relating to the same facts and circumstances therein, provided that such release and discharge shall not extend to any other defendant in the Actions. 

The covenant not to sue states that

Cascades covenants not to sue Google, Motorola, Google Affiliates and/or Google Partners for any infringement or any other violation of the Cascades Patents based upon any licensed activity, permitted pursuant to this Section, related to any Google Product; provided this covenant does not extend to any other defendant in the Patent Suit.

Google provided the Android operating system to numerous entities, including Samsung and HTC, as open source code, including the Dalvik Virtual Machine.  Looking to the Supreme Court’s Quanta decision, the Court held that because the license authorized Google to convey the Android operating system to others, including Samsung and HTC, the additional restrictions in the license grant were not allowed because they sought to “circumvent the patent exhaustion doctrine and reap multiple gains from a single sale.”

Having determined that there was an authorized sale pursuant to the Google license, the Court turned to the other patent exhaustion factors.  The Court held that there were no reasonable noninfringing uses.  While one Android version, KitKat, allied a user to switch off the Dalvik Virtual Machine in favor of Android Run Time, the Android website expressly warned users against doing so because making the switch runs the risk of malfunctions.  The Court, therefore, granted defendants’ motion for patent exhaustion from the date of the Google license forward.

The Court then turned to use before the Google license agreement was executed.  Holding that the release and covenant not to sue were personal to Google and Motorola and backward looking, the Court held that patent exhaustion did not flow from the release or covenant not to sue before the date of the Google license.  The Court did, however, note that some courts had disagreed holding that a backward looking covenant not to sue exhausted patents.

Related Party Bound to Agreement’s Arbitration Clause

Posted in Jurisdiction

FarmedHere, LLC v. Just Greens, LLC d/b/a AeroFarm Systems, LLC, No. 14 C 370, Slip Op. (N.D. Ill. June 16, 2014) (Holderman, Sen. J.).

Judge Holderman granted defendant AeroFarm’s Fed. R. Civ. P. 12(b)(3) motion to dismiss plaintiff FarmedHere’s Lanham Act and declaratory judgment patent claims related to the parties’ aeroponic, locally grown farming businesses because AeroFarm had filed for arbitration. AeroFarms entered a Distribution Agreement with CityPonics, but the principal of CityPonics never formed the entity, instead forming FarmedHere, allegedly to gain the benefits of the Distribution Agreement without the obligations.  The Distribution Agreement contains a mandatory arbitration clause.

This case was different than a typical arbitration clause because the Court had to make a threshold determination regarding whether FarmedHere was bound by the Distribution Agreement.  FarmedHere at least bound itself to the Distribution Agreement for the purpose of allowing the Court to decide whether it had jurisdiction over FarmedHere’s complaint.

The Court held that FarmedHere’s principal bound it to the Distribution Agreement for at least the following reasons:

  • The principal requested substituting FarmedHere for CityPonic in the Distribution Agreement;
  • The principal drafted a document attempting to formally allow FarmedHere to exploit the technology;
  • FarmedHere and CityPonic shared an address; and
  • FarmedHere chose not to provide any countervailing documents outside of its complaint.

Having found that FarmedHere was bound by the Distribution Agreement, the Court held it lacked jurisdiction based upon the arbitration clause.  The Court, therefore, dismissed without prejudice so that to the extent that the arbitration or a New York court proceeding refused to address all of FarmedHere’s claims, it could refile in this Court.

Trading Technologies: New Expert Opinions Doomed by Lack of Inclusion in LPR Final Contentions

Posted in Experts, Local Rules

The Court also struck some, but not all, of the experts’ opinions based upon trader usage. Trading Techs. Int’l, Inc. v. CQG, Inc., No. 05 C 4811, Slip Op. (N.D. Ill. Sep. 10, 2014) (Coleman, J.).

Judge Coleman granted in part and denied in part defendants’ (collectively “CQG”) motion to strike portions of plaintiff Trading Technologies’ (“TT”) expert reports that allegedly sought to introduce theories and analysis not contained in TT’s Final Infringement Contentions (“FIC”), which were tendered in November 2013. 

For certain independent claims, TT failed to supplement its FIC with manual re-centering elements as required by the Federal Circuit’s and the Court’s claim constructions.  It was not enough that dependent claims contained an identification of the manual re-centering elements in the accused products and that the “new” arguments for the independent claims were of the same scope.  The Court, therefore, struck TT’s experts new opinions as to those limitations.

TT did, however, sufficiently disclose its argument regarding modifying .ini files, even though in its FIC it refers to changing .ini files instead of modifying them.  The Court, therefore, denied the motion as to those theories. 

TT did not sufficiently disclose its copying arguments related to willfulness.  So, those arguments were struck.  TT was, however, allowed to have its experts testify as to certain deficiencies in CQG’s noninfringement opinion letters, although not that the letters were a basis for willful infringement.

The Court struck TT’s doctrine of equivalents theory regarding disabling the Market Window because it was not disclosed in the FIC.  TT’s argument regarding the state of the DOM Grid, however, was merely a refinement of an argument already in TT’s FIC.  So, the arguments were allowed.  The Court also struck an argument based upon the use of a ChartTrader and Price Hold features together because it was not sufficiently explained.

The Court also struck some, but not all, of the experts’ opinions based upon trader usage.

 

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.