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

Se-Kure Controls, Inc. v. Vanguard Prods. Group, Inc., No. 02 C 3767, 2007 WL 781250 (N.D. Ill. Mar. 12, 2007) (Cole, Mag. J.).

Judge Cole denied plaintiff's motion to exclude plaintiff's document as a Rule 37 sanction for defendants' failure to identify its potential reliance upon the document and the person who created it.  During the discovery process, plaintiff produced a "Contact Report" listing calls made by one of its sales employees (who eventually left plaintiff's employ).  Defendants sought to rely upon the document as part of their 35 USC Section 102(b) on sale bar defense (similar to the issue in the Court's last opinion in this case).  Plaintiff argued that defendants should not be allowed to rely upon the document because:  1) defendants failed to identify the Contact Report in their responses to plaintiff's invalidity interrogatory; and 2) defendants did not identify the Contact Report's author (plaintiff's former employee) in their Rule 26 disclosures.  As with plaintiff's previous Rule 37 arguments, the Court denied them because defendants made plaintiff aware of the documents during discovery.  The Court noted that plaintiff was arguing defendants should be barred from relying on a document plaintiff produced for failure to identify plaintiff's document to plaintiff.  The Court was not swayed by defendants' failure to identify the Contact Report's author because he was plaintiff's ex-employee and because he had passed away and, therefore, would not be brought as a witness.  Finally, the Court explained that while a party has a right to be apprised of an opposing party's evidence, but not necessarily the weight or significance the opposing party places on that evidence.

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Google, Inc. v. Central Mfg. Inc., No. 07 C 385, 2007 WL 789418 (N.D. Ill. Mar. 12, 2007) (Kendall, J.).

Judge Kendall denied third party Leo Stoller's motion to intervene pursuant to Fed. R. Civ. P. 24 -- Stoller also filed a motion to interplead and various motions to suspend the proceedings for various reasons.  Plaintiff Google brought the instant suit alleging civil RICO violations based upon defendants' alleged scheme of falsely claiming trademark rights to extort money from legitimate trademark holders.  Defendants' opposed Google's application for its "Google" mark based upon allegedly fraudulent claims of common law rights in the mark in order to settle the dispute.  Stoller subsequently filed a Chapter 13 bankruptcy case, which was converted to Chapter 7.  The property of Stoller's estate included wholly-owned interests in defendants.  The Court denied Stoller's motion to intervene as of right because Stoller had no "direct, significant legally protectable" interest in the case.  To the extent Stoller was involved in the underlying actions, it was as an employee of one or more of the defendants and/or acting as defendants' representative, not in his individual capacity.  Similarly, the Court denied Stoller permissive intervention because of the Court's determination that adding Stoller would unduly delay the case.  The Court noted that the parties had entered a settlement contemplating Google's release of its monetary claims, contingent upon an entry of a permanent injunction and final judgment, a settlement the be "frustrate[d]" by Stoller's intervention.

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Murata Mfg. , Ltd. v. Bel Fuse, Inc., No. 03 C 2934, 2007 WL 781252 (N.D. Ill. Mar. 8, 2007) (Cole, Mag. J.).

Judge Cole held that plaintiff's inequitable conduct defense did not waive its privilege and, therefore, denied defendant's motion to compel privileged documents.  Defendant asserted that plaintiff engaged in inequitable conduct by failing to disclose an allegedly material piece of prior art during prosecution of the patent-in-suit.  Defendant's defense was essentially that their counsel and inventors fully understood their disclosure obligations and chose not to disclose the alleged prior art because  it was not material or even similar to the patent-in-suit.  Defendant argued that plaintiff waived its privilege when its 30(b)(6) deponent testified that:  1) he had been told that plaintiff's in-house counsel instructed its prosecuting attorneys to disclose all relevant prior art to the PTO; and 2) that he was confident that the inventors understood their duties of disclosure based upon their past experience as patentees and the fact that they had each had several conversations with plaintiff's prosecution counsel.  But the Court held that disclosure of the occurrence of these conversations, without disclosing any of the contents did not act as waiver.   The Court noted that if disclosure of the existence of these conversations without elaboration constituted wavier, then the exchange of privilege logs would also constitute waiver.

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Se-Kure Controls, Inc. v. Vanguard Prods. Group, Inc., No. 02 C 3767, 2007 WL 781253 (N.D. Ill. Mar. 7, 2007) (Cole, Mag. J.).

Judge Cole denied plaintiff's motion to exclude two defense witnesses as a Rule 37 sanction for failing to properly disclose the witnesses.  During the discovery process, defendants identified two witnesses, through declarations signed by the witnesses, as having knowledge of a 35 USC Section 102(b) on sale bar.  Although defendants provided plaintiff the witnesses' declarations and otherwise identified the witnesses to plaintiff, defendants failed to add the witnesses to their respective Rule 26 disclosures and they failed to supplement their respective responses to plaintiff's interrogatory seeking details of all of defendants' invalidity defenses.  Plaintiff argued that these failures led to plaintiff's decision not to depose the witnesses and that defendants' should be barred from relying upon the witnesses for failure to update their Rule 26 disclosures and interrogatory responses.  The Court, however, held that while nondisclosure would generally result in exclusion, exclusion was not warranted in the instant case because defendants did disclose the witnesses in writing.  As a result, "[s]upplementation would have availed nothing required by the [Federal] Rules and was thus unnecessary."

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Chicago Kent Professor, and former Fed. Cir. clerk, Tim Holbrook has published a very interesting article at the Washington University Law Review's Slip Opinions blog.  In the article, Holbrook attempts to sort out obviousness and poses a new obviousness standard which he argues takes the best of the current Federal Circuit approach and the Graham v. John Deere standard created in the 1960s.  Holbrook's article is especially relevant as we await the Superme Court's KSR v. Teleflex opinion.  Here is an excerpt from the article:

Unfortunately, the debate and briefing at the Supreme Court have resulted primarily in a bifurcated world – those who agree with the Federal Circuit’s approach versus those who think we should return the state of the law to 1966, the year that the Supreme Court decided its seminal case Graham v. John Deere. The law of obviousness is not limited to this dichotomous world, however. This Essay posits a methodology that best balances the Federal Circuit’s concerns with certainty in the law with the concern of its critics that the obvious standard has been set too low. I propose a rebuttable presumption approach to obviousness, which best balances these concerns and is consistent with the Supreme Court’s approach in previous intellectual property cases.

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Rowe Int'l. Corp. v. Ecast, Inc., __ F. Supp.2d __, 2007 WL 831772 (N.D. Ill. Mar. 19, 2007) (Kennelly, J.).

Judge Kennelly held that plaintiff Arachnid waived its privilege as to a limited scope of information and held that Arachnid's related uses of the information did not rise to the level of the crime-fraud exception, even if they may have been inequitable conduct.  Arachnid filed a motion seeking the return of three inadvertently produced, privileged "patent reports."  Defendants filed a cross-motion to compel production of privileged materials arguing that Arachnid waived the privilege as to the three documents and that the crime-fraud exception destroyed the privilege to the extent it was not waived.  The Court agreed that the patent reports were inadvertently produced, but still held the privilege was waived on a limited scope of information.  In 1999, a former Arachnid employee testified that he learned from Arachnid's attorneys that "the only way we would receive [one of] the patent[s-in-suit] was if we included that information."  While a former employee cannot waive the privilege, Arachnid's attorneys attended the deposition in question and failed to object to the question or the answer.  Additionally, Arachnid later turned the transcript over to the PTO during prosecution of a subsequent application and to defendants during production in the instant case.  These actions combined to waive the privilege as to the specific information discussed by the ex-employee, the inclusion of figure 2 in the patent.

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Timebase Pty Ltd. v. Thomson Corp., No. 07 C 460, 2007 WL 772946 (N.D. Ill. Mar. 9, 2007) (Lindberg, Sen. J.).

Judge Lindberg transferred this patent case to the District of Minnesota because all of the relevant documents and witnesses reside within that district or its subpoena power, while the dispute has no apparent unique connection to Illinois.  The software at issue, Westlaw's PastStat Locator, was researched, designed and developed in Minnesota and the related documents were still there.  Additionally, although the PastStat Locator can be accessed in any state, including Illinois, the hardware and software necessary to operate it are located in Minnesota.  Finally, 24 of the 25 witnesses identified as related to defendant are within the D. Minn. or its subpoena power.  And plaintiff's witnesses are in Australia, so whether they flew to Illinois or Minnesota was a minor difference to them at most.

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Hickory Farms, Inc. v. Snackmasters, Inc., No. 05 C 4541, 2007 WL 772919 (N.D. Ill. Mar. 8, 2007) (Kennelly, J.).

Judge Kennelly held that plaintiff's "Beef Stick" and "Turkey Stick" marks were generic and canceled the Beef Stick mark, plaintiff had already let its "Turkey Stick" registration lapse.  Plaintiff alleged that defendant infringed its marks by marketing defendant's beef and turkey snacks in stick forms and labeling them "Beef Sticks" and "Turkey Sticks," respectively.  But defendant countered with evidence that numerous companies use the terms to refer to meat products sold sell in stick form.  For example, Trader Joe's, Flat Iron, Jimmy Dean, Slim Jim and Tombstone all sell meat stick products using the marks.  The Court held that the terms were generic because they name a class of goods -- meat packaged in a stick form.  The Court also noted that "it [was] difficult to imagine what else a seller would call a beef or turkey product packaged in stick form."

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Ty, Inc v. Softbelly's, Inc., No. 00 C 5230, 2007 WL 734394 (N.D. Ill. Mar. 6, 2007) (Lefkow, J.).

Judge Lefkow granted plaintiff's, Ty, motion to make the case exception and grant it attorneys' fees and expenses.  A jury previously returned a verdict against defendant, Softbelly's, for violations of the Lanham Act and common law unfair competition.  The Court held that the case was exceptional because "Softbelly's made an aggressive, uncounseled, and persistent endeavor to trade on the success and reputation of Ty's marks."

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Adventus Ams. Inc. v. Innovative Envtl. Techs., Inc., No. 06 CV 3267, 2007 WL 704938 (N.D. Ill. Mar. 5, 2007) (Manning).

Judge Manning dismissed one plaintiff for lack of standing and transferred the case to the Eastern District of Pennsylvania.  Plaintiff EnviroMetal Technologies ("EnviroMetal") had an exclusive license to the patent-in-suit from the University of Waterloo in Canada.  The Court held that EnviroMetal's license was sufficiently exclusive to create standing because, among other things, it expressly gave the right to make use or sell and EnviroMetal had exclusive sublicensing rights.  Plaintiff Adventus Americas ("Adventus"), however, was a non-exclusive sublicensee of EnviroMetal and the Court held it had no standing.  Defendant also argued that the Court lacked personal jurisdiction, but the Court held that defendant's sales contacts with Illinois were sufficient to create personal jurisdiction.

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AutoZone, Inc. v. Strick, No. 03 C 8152, 2007 WL 683992 (N.D. Ill.  March 1, 2007) (Hart, J.).

Judge Hart denied plaintiffs' motion for a Fed. R. Civ. P. 54(b) entry of final judgment on plaintiffs' Lanham Act and related state law trademark infringement and dilution claims, which the Court dismissed in this opinion.  The Court denied the motion on two grounds.  First, plaintiffs notified the Court of their intent to file the motion 30 days after the Court's order dismissing the claims, but only entered it 37 days later.  The Court noted the Seventh Circuit standard is that a district court generally abuses its discretion by entering a Rule 54(b) judgment when the motion was filed more than 30 days after the underlying order was issued.*  Second, the Court denied the motion on substantive grounds.  Defendants' counterclaims, which were the only claims remaining in suit, involved overlapping factual issues with plaintiffs' dismissed claims.  Defendants sought cancellation of plaintiffs' Zone mark, one of the marks plaintiffs alleged defendants infringed in the dismissed claims.  Additionally, defendants' remaining claims alleged infringement of their Oil Zone mark, a mark that plaintiffs' dismissed claims alleged infringed their AutoZone and Zone marks.

*  The Court also noted that some litigants have argued that the Seventh Circuit standard is no longer good law, but stated that district courts throughout the Seventh Circuit continue to follow it with a string cite.

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Bucciarelli-Tieger v. Victory Records, Inc., No. 06 C 4258, 2007 WL 684047 (N.D. Ill. Mar. 1, 2007) (Moran, Sen. J.).

Judge Moran held that the parties' contract was not exclusive and, therefore, granted in part and denied in part defendants' Rule 12(c) motion to dismiss.  Plaintiffs are members of an Ohio-based band called Hawthorne Heights (collectively "HH").  HH entered into a contract (the "Agreement") with defendants to produce and promote four albums.  The first album was created and promoted seemingly without incident, but just before release of the second album the relationship soured.  HH sent defendants a letter which purported to terminate the Agreement and listed several ways that defendants had allegedly harmed HH.  This suit arose from that dispute.  Plaintiffs allege breach of contract, as well as copyright and trademark infringement for promotions and sales after the date of HH's letter allegedly terminating the Agreement and related state law claims.  The Court held that the Agreement was not exclusive because it did not contain any exclusivity provisions, which meant that HH was free to record other songs or records with another company during the life of the Agreement.  The Court also held that the only way HH's songs can be considered a work-for-hire owned by defendants is if HH were defendants' employees.  But the Court was unable to decide that issue on the pleadings.  As a result, the Court also could not decide HH's copyright and trademark infringement claims on the pleadings because whether defendants could have infringe requires a determination of whether HH or defendants own the marks.  The opinion also contains a very detailed analysis of Illinois choice of law issues for the related state law claims.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, 2007 WL 704525 (N.D. Ill. Mar. 1, 2007) (Moran, Sen. J.).

Judge Moran granted plaintiff Trading Technologies' ("TT") motion to compel production of documents and answers to interrogatories regarding defendant eSpeed's patent licenses (more on this case in the Blog's archives).  The Court held that the licenses could be relevant to three of the Georgia Pacific factors:  1) Rates paid by the licensee for patents similar to the patents in suit; 2) customary royalty rates in the industry; and 3) the royalty that would have been agreed upon in an arms length negotiation.  The Court acknowledged that the eSpeed licenses were not for the same technology as the patents in suit, but held that the fact that the patents were all for technology within the futures trading industry was sufficient to make them potentially relevant.  And the Court noted that if the eSpeed patents are ultimately not comparable to the patents in suit, the licenses covering the eSpeed patents will not be given weight in the final determination.

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Allied Ins. Co. v. Bach, No. 05 C 5945, 2007 WL 627635 (N.D. Ill. Feb. 27, 2007) (Leinenweber, J.).

Judge Leinenweber granted declaratory judgment defendants/counter-plaintiffs (collectively "defendants") summary judgment DJ plaintiff/counter-defendant's ("plaintiff") duty to defend defendants against Lanham Act and related state law claims.  Defendants were sued by third party Acushnet which accused defendants of willful and intentional violation of Acushnet's marks related to its Titlest Pro VI golf ball based upon defendants' alleged marketing of counterfeit golf balls.  Defendants sought defense and indemnification from plaintiff, their insurer.  Defendants' insurance policy covered, among other things, defendants' infringement of third party marks or copyrights in defendants' advertising so long as the infringement was not done with knowledge or intent of the infringement.  Although the Complaint charges defendants' with willful and intentional violations of the marks, the Lanham Act provides claims without regard to intent.  Because not all of Acushnet's claims require intent, plaintiff has a duty to defend defendants' against the suit.  The Court did note, however, that should Acushnet prove that defendants' acts were willful and intentional, plaintiff would have no duty to indemnify.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, 2007 WL 611258 (N.D. Ill. Feb. 21, 2007) (Moran, Sen. J.).

Judge Moran denied plaintiff Trading Technologies ("TT") motion for clarification of the Court's claim construction or in the alternative for reconsideration (more on the claim construction and the case generally here).  TT sought clarification of the Court's construction of "static" and a correction to the Court's construction of "plurality."  The Court defined "static" relative to a "price axis" as a line that does not change position unless it is manually re-centered.  TT sought clarification as to whether a product that had a "static" "price axis" for periods of time in between automatic re-centering would fall within the definition of "static" at least for part-time infringement.  The Court denied to clarify the construction as TT requested and held that for something to be "static" it must have "a permanent lack of movement."

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Abbott Labs. v. Mylan Pharms., Inc., No. 05 C 6561, 2007 WL 625496 (N.D. Ill. Feb. 23, 2007) (Kendall, J.).

Judge Kendall denied plaintiff's, Abbott, Fed. R. Civ. P. 12(b)(6) motion to dismiss defendant's, Mylan, antitrust counterclaims.  Mylan alleged that two Abbott employees submitted declarations and/or testimony stating the weight and structure of certain oligomers related to the patented invention, despite their knowledge that the tests they relied upon were known to be incapable of measuring the oligomers at issue.  Mylan further alleged that based upon these fraudulent statements, the USPTO issued certain of the patents-in-suit which then prevented Mylan from entering the market with a generic version of Abbott's pharmaceutical Depakote.  Abbott relied upon a prior Northern District ruling against third party Torpharm which held that Abbott's conduct before the USPTO was not inequitable.  But the Court held that while that ruling prevented a sham litigation claim, it did not estop Mylan's inequitable conduct allegations because Mylan was not a party to the prior case and, therefore, had no opportunity to present its evidence and argument.  Additionally, the Court held that Mylan adequately alleged antitrust injury by stating that it prepared to enter the market with generic Depakote, but was prevented from doing so by Abbott's alleged inequitable conduct.

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Tech Law Forum Blog (N.D. Cal.)

If you know of other regional IP blogs, post a comment or send me an email (david.donoghue@dlapiper.com) and I will add them to the list.

*The Florida IP Blog is another blog developed and hosted by LexBlog just like this Blog and, as usual, it is a great looking site with easy navigation.

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Days Inns Worldwide, Inc. v. Lincoln Park Hotels, Inc., No. 06 C 2960, 2007 WL 551570 (N.D. Ill. Feb. 22, 2007) (Der-Yeghiayan, J.)

Judge Der-Yeghiayan granted plaintiff summary judgment on its trademark infringement and Illinois Deceptive Trade Practices Act ("IDTPA") claims, among others.  Plaintiff owns various marks relating to its Days Inn chain (the "Days Inn Marks").  Plaintiff licensed defendants Lincoln Park Hotels, Inc. and Richard Erlich (collectively "LPH") to use the Days Inn Marks in connection with the operation of a hotel in Chicago's Lincoln Park neighborhood.  In 2005, LPH sold the hotel to defendant Gold Coast Investors ("GCI") without informing plaintiff, in violation of the parties' license agreement.  GCI continued operating the hotel using the Days Inn Marks without licensing the rights to the marks from plaintiff.  As a result, plaintiff brought the instant action against defendants alleging that, among other things, GCI infringed plaintiff's Days Inn Marks and LPH contributorily infringed plaintiff's Days Inn Marks by selling the hotel to GCI with the knowledge that GCI intended to continue using the Days Inn Marks and without informing plaintiff of the sale or removing the Days Inn Marks from the hotel, as required in the parties' license agreement. 

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Black & Decker Inc. v. Robert Bosch Tool Corp., No. 04 C 7955, 2006 WL 3883286 (N.D. Ill. Dec. 18, 2006) (St. Eve, J.).*

Judge St. Eve granted judgment as a matter of law for plaintiff, holding that the jury's findings of invalidity and obviousness were not supported by legally sufficient evidence.  At trial, defendant introduced an article describing a prior art radio as 102(b) prior art using its expert.  But the expert testified that one of the claim elements was missing.  Defendant argued that pictures of the radio that were not used in the article, showed the device.  But the Court held that defendant could not piece together the article, testimony and pictures to prove that the article disclosed all elements of the claimed invention.  The jury's obviousness finding was not supported by legally sufficient evidence because defendant did not present clear and convincing evidence of a motivation to combine its obviousness prior art references.

* You can find much more on this case in the Blog's archives.

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Sheppard Mullin's Intellectual Property Law Blog (another LexBlog creation) has an excellent post on The Top Ten Ways Copyright Law Can Mess Up Your Transaction.  The post will go a long way towards keeping any company or individual out of the Northern District for copyright infringement issues.  But it does not address one of the biggest copyright dangers -- not addressing the use of potentially copyrighted materials within an organization.  Every modern business relies upon information, often that information is gathered from copyrighted sources, for example the internet, television, books or newsletters and magazines.  It is important to educate your employees to respect the copyrights covering their information sources and to set up corporate policies to make it clear that the company respects copyrights.  The fix for this problem is inexpensive and quick, but it can head off very expensive mistakes -- statutory damages for copyright infringement can be astronomical.

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Abbott Labs. v. Andrx Pharms., Inc., No. 05 C 1490, 2007 WL 551551 (N.D. Ill. Feb. 20, 2007) (Brown, Mag. J.).*

The Court denied defendant's motion to compel production of attorney-client privileged documents pursuant to the crime-fraud exception.  Defendant argued that plaintiff's failure to disclose full results from two studies with conflicting results (for and against the applications' claims) to the USPTO, both of which were material to the claims, was both inequitable conduct and fraud.  The studies were conducted during the pendency of one application and prior to two others.  Additionally, three of the named inventors co-authored a journal article detailing the results.  And during her deposition, prosecution counsel admitted being aware of the studies during prosecution of the applications.  The Court held that the evidence warranted in camera review of selected documents from plaintiff's privilege log to determine whether there was evidence of intent.  But after its review, the Court found no direct evidence of intent to defraud the USPTO.  The Court noted that "[n]one of the documents . . . contained a 'smoking gun' or anything close to it."  Furthermore, while intent can be inferred based upon circumstantial evidence, there most be more evidence than failure to disclose to support the inference. 

* You can see more on this case, in particular, various preliminary injunction opinions here and here.

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In January, Cisco's General Counsel Mark Chandler gave a speech at Northwestern's Securities Regulation Institute that made major headlines.  Because several in-house friends and colleagues have mentioned it to me recently, I thought it was worth a post.  Anyone involved in the private practice of law should take the time to read it.  It highlights an issue that is critical to achieving a client's desired results and to developing a strong relationship between a client and its outside counsel -- aligning the interests of the counsel to those of the client.  Chandler's speech resonates with me because when I was in-house, I struggled to align my outside counsel's interests with those of my company.  It seems that it should be an easy task, but many outside counsel do not get it. 

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Chamberlain Group, Inc. v. Lear Corp., No. 05 C 3449, 2007 WL 551579 (N.D. Ill. Feb. 20, 2007) (Moran, J.).

Judge Moran granted in part defendant's motion for reconsideration regarding the Court's construction of "binary code."  In its prior claim construction opinion -- discussed here -- the Court defined "binary code" and "trinary code generator," among other terms.  In its discussion of its "binary code" construction, the Court explained that the claims do not limit binary code to a binary number and, therefore, the term encompasses "other numerical and character languages, including trinary code."  Defendant argued that binary code could not be defined as trinary code and that, therefore, the Court should modify its construction to make clear that trinary code cannot be part of binary code.  The Court agreed with defendant that binary code cannot encompass trinary code and, therefore, clarified its explanatory sentence.  The Court explained that binary code could not include trinary code, but that it could include trinary numbers.  But because the Court's actual construction did not mention trinary code, it declined to revise the construction.

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