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

Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Jul. 24, 2008) (Moran, Sen. J.).*

Judge Moran granted defendants’ (collectively “eSpeed”) motion to stay judgment pending appeal without requiring a supersedeas bond for the full amount of the judgment, pursuant to Fed. R. Civ. P. 62(d). Plaintiff Trading Technologies (“TT”) argued that the volatility and instability of the financial industry warranted a bond. But the Court held that the evidence proved that eSpeed was currently financially sound and had more than sufficient funds available to make payment, such that the cost of a bond would be a waste of money. The Court noted that eSpeed (which recently merged with an affiliate, BCG Partners) had $340M in first quarter revenues, $150M in shareholder equity and $200M in cash or cash-equivalents on hand. The Court did, however, note that TT could monitor eSpeed’s financial situation and return to the Court if eSpeed later looks like it might become unable to pay.

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

• Email This
• Print
• Trackbacks
• Share Link

Judge Castillo dismissed some defendants for lack of personal jurisdiction (the wrong defendants) and denied defendant Strategic Commercial Solutions (“SCS”). Fed. R. Civ. P. 12(b)(6) motion to dismiss. Plaintiff Medline alleged that defendants violated its trademark and related federal and state laws by selling “Medline Savings” packages with telemarketers.

Personal Jurisdiction

The Court did not have personal jurisdiction over the Wong defendants. The Wong defendants, all individuals, did not direct any of their allegedly infringing and fraudulent calls to Illinois residents. Their only contacts with Illinois were calls to and from Illinois banks regarding processing payments and refunds. These secondary contacts were not sufficient to create personal jurisdiction.

SCS similarly did not have sufficient contacts with Illinois. But Fed. R. Civ. P. 4(K)(2) provided for national, and therefore, there was personal jurisdiction in Illinois because SCS argued it was not subject to jurisdiction in any U.S. state or territory.

Telemarketing and Consumer Fraud and Abuse Act

SCS argued that Medline could not bring its Telemarketing and Consumer Fraud and Abuse Act claim because it was not a “private person” that was “adversely affected” by the telemarketing as required by the Act. But the Court held that while Medline was not an aggrieved consumer, the alleged unfair use of Medline’s trademarks could have caused Medline the harm it alleged.

Trademark Infringement

The Court noted that it was not aware of a similar case in which a party was accused of trademark infringement for using marks in telemarketing. But SCS’s alleged use of Medline’s marks was a use in commerce.

• Email This
• Print
• Trackbacks
• Share Link

Rosenthal Collins Group, LLC v. Trading Techs. Int'l, Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Jul. 17, 2008) (Moran, Sen. J.).

Judge Moran denied declaratory judgment plaintiff Rosenthal Collins Group's ("RCG") motion to vacate the Court's March 14, 2007 order awarding declaratory judgment defendant Trading Technologies' ("TT") Fed. R. Civ. P. 37 sanctions – click here to read the Blog's post about that opinion and click here to read much more about this case and the related cases. In that earlier order, the Court held that RCG's motion for summary judgment of invalidity was "somewhat misleading" and possibly "disingenuous." Instead of dismissing the case as TT requested, the Court struck the declaration underlying RCG's motion, denied RCG's summary judgment motion with leave to refile a motion "supported by proper evidence" and awarded TT its costs and attorneys fees associated with the Rule 37 motion, as well as its software expert's fees.

In this motion, RCG argued that the Court should vacate that sanctions order because the Court held that TT had not proved by clear and convincing evidence that RCG acted willfully or with bad faith. But the Court held that Rule 37 sanctions could be based upon willfulness, bad faith or fault. Fault went to the reasonableness of the party's content, not necessarily intent. And the Court held that RCG's actions met the standard for fault. Furthermore, while clear and convincing was the burden of proof for dismissal, clear and convincing proof is not required for lesser sanctions.

Finally, the Court held that the categories of fees and costs sought by TT were within the scope of the Court's order, but ordered the parties to brief the reasonableness of the specific fees sought by TT, using the Local Rule 54.3 requirements (a rule usually used for post-judgment fees and costs).

• Email This
• Print
• Trackbacks
• Share Link

Blawg Review # 170 is up (actually it went up yesterday,* a day early) at Simple Justice, a New York blog with a criminal defense focus -- click here for the Review.  This week's theme is the due process and equal protection rights granted by the Fourteenth Amendment.  As the son of a criminal defense attorney, I have a soft spot for the due process clause.  And Simple Justice does not disappoint, providing a varied look at last week's legal blog posts.

Blawg Review returns here in three weeks, after visiting the IP ADR Blog and the Ohio Employer's Law blog over the next two weeks.

*  Who says Blawg Review does not get any link love?  Actually, Ed. does, but I cannot imagine it is true.

• Email This
• Print
• Trackbacks
• Share Link

• Email This
• Print
• Trackbacks (1)
• Share Link

LimitNone v. Google, Inc., No. 08 C 4178 (Manning, J.).

Last month I posted that LimitNone, a Chicago company, sued Google for trade secret misappropriation seeking $1B -- click here for that post.  Earlier this week, Google removed the case to the Northern District, arguing that LimitNone's Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA") claim sounded in copyright and, therefore, was preempted by the Copyright Act creating federal question jurisdiction (click here for Google's removal papers). 

In its complaint, LimitNone alleged that Google entered a nondisclosure agreement with LimitNone to review LimitNone's gMove software -- software that helps Microsoft Outlook users migrate data to the Google platform.  Google allegedly assured LimitNone that it would not offer a competing product.  But after receiving LimitNone's trade secrets, including its software code, and promoting the $19 gMove software, Google allegedly began offering a free, competing software package which allegedly used LimitNone's trade secrets.   LimitNone has not filed any responsive papers or pleadings yet, but I will keep you updated if LimitNone challenges the removal.

• Email This
• Print
• Trackbacks
• Share Link

Judge Moran denied declaratory judgment defendant Trading Technologies' ("TT") contempt motion and, instead, provided declaratory judgment plaintiff Rosenthal Collins Group's ("RCG") two weeks to produce the previously compelled documents and to schedule the ordered deposition of third party declarant Walter Buist, the creator of the alleged prior art trading software Wit DSM. RCG previously filed a motion for summary judgment of invalidity of TT's patents based upon a declaration by Buist regarding his Wit DSM software that he developed, at least partially, more than a year before TT filed its patent applications. In a previous opinion, the Court held that RCG's motion was "somewhat misleading" and possibly "disingenuous," but refused to dismiss the case (you can read the Blog's discussion of that opinion here, as well as more on this case generally in the Blog's archives). 

• Email This
• Print
• Trackbacks
• Share Link

• Email This
• Print
• Trackbacks (2)
• Share Link

• Email This
• Print
• Trackbacks
• Share Link

Blawg Review #169 -- click here to read the review -- is available at Whisper, a brand strategy consulting blog.  The review is loosely themed around, no surprise, branding and marketing, with a large variety of blogs and subject matter it is wroth a read.

The Review also links to the July Carnival of Trust at Bossa Blog (click here to read the Carnival), which discussed a Law21 post lamenting the reputation of of lawyers as shifty or untrustworthy, and answering the question, can you trust your lawyer?  As I would, Law21 answers "Yes!":

Lawyers have a choice to make, too. We can reinforce this reputation as skilled and dangerous weapons to be deployed and applied as needed, at a time when trust is becoming intrinsically important to business and consumer relationships; or we can make a real effort to reinvigorate the role of trust in our professional culture, giving it to and expecting it from each other and our clients.

What’s most disheartening about our poor reputation for trust is that lawyers are amazingly trustworthy as individuals, possessing (in my perhaps biased view) more courage and moral fiber than can be found in many other walks of life. And this doesn’t evaporate upon human contact: many lawyers have thriving direct relationships of trust with both colleagues and clients.

The problem is that our professional culture has come to view trust as just too risky — the fear of exploitation and disappointment has had a disproportionate impact on our willingness to trust, and that has damaged the standards to which we hold ourselves and each other. Every lawyer thinks he or she is trustworthy, but for some reason is reluctant to extend that belief to others.

• Email This
• Print
• Trackbacks
• Share Link

Judge Norgle dismissed plaintiff’s copyright infringement case for lack of personal jurisdiction, pursuant to Fed. R. Civ. P. 12(b)(2). The Court agreed with plaintiff that the alleged injury was suffered in Illinois because plaintiff was an Illinois resident. But that was not enough to create personal jurisdiction. Plaintiff identified no supported facts showing that defendants intended to impinge upon an Illinois interest or otherwise purposely availed themselves of Illinois.

And the individual defendants’ contract with plaintiff in Illinois did not create personal jurisdiction either. All of the individual defendants’ contracts occurred before the corporate defendant was incorporated. And after incorporation, the defendants did no business in Illinois or with Illinois residents. Defendants did maintain a website, but plaintiff’s evidence regarding the website was insufficient.

• Email This
• Print
• Trackbacks
• Share Link

Here are a couple of new IP entries in the legal blogosphere:

• The Green Patent Blog is written by Eric Lane of Luce Forward in San Diego.  Lane covers, no surprise, environment-related patent issues.  It is a very timely and well written blog.
  
• Trading Secrets* is written by a number of attorneys from Chicago's Seyfarth Shaw (although most of the attorneys reside outside Chicago).  The blog covers trade secrets and non-compete issues generally, areas that are a bit underrepresented in the IP legal blogosphere. 

Welcome to the conversation Green Patent Blog and Trading Secrets.

*  Another blog expertly designed and kept by LexBlog.

• Email This
• Print
• Trackbacks
• Share Link

James Sweeney, a prominent member of Chicago's IP bar, passed away last week -- click here for the Sun Time's obituary.  Sweeney graduated from Northwestern Law in 1956, after serving in the U.S. Navy aboard a submarine from 1950-1953.  He practiced law most recently with Barnes & Thornburg.  In 2000, at the request of the State Department, he traveled through Malaysia with his wife speaking about IP counterfeiting and piracy.  Sweeney also organized and directed John Marshall's Center for Intellectual Property Law:

The John Marshall Law School hired Mr. Sweeney in 1998 to run its Center for Intellectual Property Law because of his extensive background and his many contacts, said John E. Corkery, dean of the school. Mr. Sweeney retired in 2003.

"Jim was a big, gregarious fellow and he knew many, many people in the legal profession and particularly in intellectual property," Corkery said. "It was hard to walk down the street with Jim Sweeney and not have him say hello to someone he knew.

                                                                        * * *

"He organized and directed the program and hired the practicing lawyers who would come to the law school and teach for us."

• Email This
• Print
• Trackbacks
• Share Link

Mike Atkins at the Seattle Trademark Lawyer has an interesting post -- click here for the post -- about a pending Chinese trademark infringement suit, in which plaintiff seeks monetary damages and a public apology to be published in newspapers.  IP Dragon follows up Atkins's post, explaining that an apology is a Chinese trademark remedy and that an apology is a punishment in a "face saving culture," as IP Dragon describes China and Japan, the nationalities of the two entities involved in the suit.  Click here for IP Dragon's post.

But punishment or not, this raises an interesting question for US trademark law.  It seems to me that a public apology (or acknowledgement of the infringement) would be a more powerful tool for the consumers that trademark law intends to protect than just monetary damages and an injunction.  An acknowledgement of the infringement would warn consumers who might still unwittingly purchase items based upon the infringing marks after the injunction is in place.  Maybe it is time to amend the Lanham Act.

• Email This
• Print
• Trackbacks
• Share Link

• Email This
• Print
• Trackbacks
• Share Link

The Chicago Tribune had two interesting legal stories earlier this week:

• The Tribune's Jamie Herzlich wrote a good article explaining the basics of trademarks, including why and how to file them -- click here for the article.  It is a great first resource for anyone looking at trademarks for the first time.
  
• The Tribune's Ann Therese Palmer wrote about and interviewed Pedro DeJesus, Senior Vice President, General Counsel and Secretary of Tampico Beverages, a Chicago-based company that is the leading refrigerated juice drink manufacturer -- click here for the article.  DeJesus, a former associate at DLA predecessor Piper Rudnick, does not appear to have an IP focus.  But his story captured my attention, probably because, like me, he went to law school focused on public interest law, but ended up entering and enjoying commercial legal services.  It is especially worth a read for current and aspiring law students.  I echo Judge Castillo's advice to DeJesus that anyone planning to do public interest law would benefit from some big firm experience.  Big firms provide exposure to many facets of the law, including exciting public interest opportunities. 

• Email This
• Print
• Trackbacks
• Share Link

The Northern District had 72 trademark cases filed during the first half of 2008.  That is well on the way to meeting or exceeding 2007's total of 138 cases -- click here to read about the 2007 case filings.  So, it looks like, as with patents, the Northern District continues to have an active trademark infringement docket.  A difficult economy is not slowing the Northern District's IP cases.

Thanks to Mike Atkins at the Seattle Trademark Lawyer for the idea of a mid-year status report.  Expect a similar copyright mid-year report shortly.

• Email This
• Print
• Trackbacks
• Share Link

Blawg Review #168 is available at Jeffrey Mehalic’s West Virginia Business Litigation blog (another LexBlog blog) – click here for the post. It is another excellent review, although it is a bit light on IP. Additionally, Mehalic has a very even-handed post about the settlement of a West Virginia suit between West Virginia University and Rich Rodriguez, the new football coach of my University of Michigan Wolverines. While the subject matter of that dispute is not necessarily relevant to Chicago IP litigators (Coach Rodriguez is paying his full $4M buyout over time, much of it funded by the University of Michigan), Mehalic has an interesting side note about a contract the court reporters put on each transcript in the case requiring that no copies be made or used without paying the court reporter for them – click here for the post. My first reaction is, and always has been, that the reporters hold the copyright because the transcript is their interpretation and compilation of what was said. But Mehalic disagrees, and makes a good point. The copyright in a (usually) verbatim recitation of a proceeding has to have a very thin copyright, if any.

• Email This
• Print
• Trackbacks
• Share Link

• Email This
• Print
• Trackbacks
• Share Link

1. Eastern District of Texas -- 32 filings
   
2. District of Delaware -- 24 filings
   
3. Central District of California -- 20 filings

Patent Appeal Tracer also mentions EZ4Media's two Northern District cases against thirteen defendants as cases to watch.  The defendants in those cases are alleged to infringe patents to wireless streaming of digital media.

[UPDATE:] More on the year's trademark and copyright filings is coming next week, prompted by Mike Graham's Seattle Trademark Lawyer post about this year's Western District of Washington trademark litigation statistics -- click here to read it.  Thanks for the mention Mike.

• Email This
• Print
• Trackbacks (1)
• Share Link

Viacom wants records from a YouTube database that records each time a video is watched and pairs that with two kinds of information about people who viewed it: log-in names (for YouTube users that have accounts), and IP addresses (for YouTube users without accounts).

For those concerned about the production, there is nothing to be worried about.  Virtually every federal case involving sensitive information is governed by a protective order preventing use or disclosure of the information outside of the litigation.  And in virtually all of those cases the parties honor the protective order and the information is not disclosed or used besides in the litigation.

[UPDATE:]  Randy Picker at the University of Chicago Faculty Law Blog has an interesting post questioning how the information could be kept or produced by Google differently to avoid disclosing identities along with the viewing information, and whether the information is covered by the Video Privacy Protection Act of 1988 (enacted after Judge Bork's video rental records were obtained during Senate confirmation hearings):

So Viacom has a legitimate interest in seeing YouTube’s viewing records. But of course viewers have a privacy interest in those records as well. Exactly how many views have I contributed to The Evolution of Dance, the, I gather, most-viewed video on YouTube (currently at 91,619,702 views)? (I have watched only because I teach copyright, not because it is quite funny.)

• Email This
• Print
• Trackbacks (1)
• Share Link

Anne Reed has an excellent post at Deliberations identifying the numerous ways that litigators misunderstand jurors.  Her post is based upon an article titled To Deal Better With Juries, Stop Thinking Like a Lawyer!, by Patricia Steele of Varinsky Associates -- click here for Reed's post and for a link to a pdf of Steele's article.  Steele provides numerous examples of the way the common legal wisdom about juriors directly opposes jurors' realities.  For example:

• It is not the lawyer or her closing that makes the case, but the facts.
  
• Clever legal arguments lose cases, themes of justice, and rights or wrongs win cases.
  
• Voir dire should be used to get to know the jurors, not to teach the case.

Steele's observations square perfectly with my observations as the son of a trial attorney, a former federal district court law clerk and a practicing lawyer.  Each of the misconceptions Steele identifies comes from one of two basic and common misunderstandings:

1. Trials are stages for lawyers.  Wrong.  Trials are a stage for the facts and the themes lawyers wrap the facts in.  Good facts generally beat good lawyering.
   
2. Lawyers understand jurors.  Almost always wrong.  As most lawyers know, law school is intellectually transformative.  After three years of law school (plus years of practice) a lawyer thinks differently.  One of the critical tools for a trial attorney is access to non-legal thinking.  One way to get it is to learn to strip away the legal framework we have built up and think like a juror.  This is hard to do, especially as you are in the whirlwind of a trial or trial preparation.  The best lawyers recognize this issue and turn to juror proxies -- their assistants, spouses, children, neighbors, friends, baristas or anyone else they know without legal training -- to get non-legal perspectives.  Of course, consultants, focus groups and mock juries can also provide juror thinking.

Everyone who tries cases, or who aspires to, should go to Reed's post and download Steele's article to read and re-read.

• Email This
• Print
• Trackbacks
• Share Link

One of our personal favorites, Evan Brown's InternetCases, provides timely analysis of recent cases from the perspective of a practicing attorney.  In the last week alone, Mr. Brown has posted analysis of a website copyright infringement case decided by the United States District Court for the Western District of Virginia, a cyber-stalking decision from the North Carolina Court of Appeals, and a case applying the Rule Against Perpetuities to a software distribution agreement.

• Email This
• Print
• Trackbacks
• Share Link

Mullen v. Society of Stage Directors & Choreographers, No. 06 C 6818 (N.D. Ill.) (Coar, J.).

Judge Coar dismissed this case based upon the parties' settlement in late 2007.*  Plaintiffs were the various production heads of the Chicago production of the musical “Urinetown!” (“Chicago Production”). The Chicago Production was performed pursuant to a license from Blue Dog Entertainment, LLC. Despite that license, plaintiffs each received a cease and desist letter from counsel for defendants (the heads of production of the Broadway Urinetown! production (“Broadway Production”) and their unions USA and the Society of Stage Directors & Choreographers (“SSDC”). The letter warned that plaintiffs willfully copied copyrighted aspects of the Broadway Production and attempted to pass off the Chicago Production as the award-winning Broadway Production. Defendants also held a press conference during which they publicly stated that the plaintiffs “plagiarized” the Broadway Production. Plaintiffs responded by filing suit seeking declaratory judgments that the Chicago Production did not infringe any of plaintiffs’ copyrights and that it was not Lanham Act passing off. And based upon the press conference, plaintiffs included a defamation claim.

The lesson for producers is clear.  Obtaining production rights from a publisher (such as Samuel French, Tams-Witmark, Rodgers & Hammerstein, etc.), does NOT include the right to copy all or part of the broadway, off-broadway or other original production.  It is incumbent on producers to either (a) obtain such rights separately, or (b) re-imagine the show and create a new, original production from the ground up.

• Email This
• Print
• Trackbacks
• Share Link

1. single works;
   
   
2. collections of unpublished works by the same author that are owned by the same claimant; and
   
   
3. multiple published works contained in the same unit of publication that are owned by the same claimant.

• Email This
• Print
• Trackbacks
• Share Link

No patent this Fourth of July.  Just good wishes to all, a hearty thank you to our service men and women protecting us here and abroad, and a quote from the preamble of one of the most impressive legal documents ever written, the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

• Email This
• Print
• Trackbacks
• Share Link

Goss Int'l Ams., Inc. v. Graphic Mgmt. Associate, Inc., No. 05 C 5622, Slip Op. (N.D. Ill. Jun. 11, 2008) (Manning, J.).

Judge Manning construed the terms of plaintiff's patent related to a newspaper assembly collating machine by adopting in part and rejecting in part Magistrate Judge Valdez's Report and Recommendation ("Report") construing the claims. Of particular note, the Court considered whether it should review the Report de novo or for clear error, because the constructions were not dispositive. Because the constructions likely would be case dispositive in fact, and because prior cases reviewed magistrate claim construction reports de novo, the Court held that de novo review was appropriate.

• Email This
• Print
• Trackbacks
• Share Link

Shen Wei (USA), Inc. v. Ansell Healthcare Prods., Inc., No. 05 C 6003, Slip Op. (N.D. Ill. May 29, 2008) (Guzman, J.).

Judge Guzman construed the disputed claim terms from plaintiff's patent for a skin-enhancing glove. The parties disputed two terms: dehydrated and dry. Defendants argued dehydrated meant removal of all water, while plaintiffs argued it meant removal of water, but not necessarily all water. Judge Holderman construed dehydrated as used in a related patent in an earlier suit between the parties, consistent with plaintiff's proposed construction.* Because Ansell advanced the same construction in the present suit that it lost in the earlier suit before Judge Holderman, the Court held that collateral estoppel, or issue preclusion, prevented Ansell from arguing against plaintiff's construction. The Court also noted that Judge Holderman's construction was correct.

The Court construed "dry" in a similar fashion to mean removal of water, but not necessarily all water, based upon the prosecution history.

* I was involved in the briefing before Judge Holderman, but I am not involved in the current case.

• Email This
• Print
• Trackbacks
• Share Link

Nilssen v. Osram Sylvania, Inc., No. 2007-1998, -1348 Slip. Op. (Fed. Cir. June 17, 2008).

The Federal Circuit affirmed Judge Darrah's award of defendant's/appellee's attorney's fees – click here to read the Blog's post about the inequitable conduct opinion. Judge Darrah previously held and the Federal Circuit previously affirmed that plaintiffs committed inequitable conduct by, among other things: (1) falsely claiming small entity status; (2) failing to disclose material prior art to the PTO; and (3) failing to disclose related litigation to the PTO. Judge Darrah then held that the case was exceptional based upon plaintiff's inequitable conduct, filing of a frivolous suit, and litigation misconduct. Because the case was exceptional, Judge Darrah awarded defendants their attorney's fees.

The Federal Circuit agreed with plaintiffs, holding that an inequitable conduct finding did not require a case be deemed exceptional. But the Court held that Judge Darrah's findings were supported by evidence and, therefore, were within his discretion.

Judge Newman dissented, stating:

The court today promotes unexceptional trial procedures and non-culpable prosecution errors into an "exceptional case" of such severity as to warrant the award of attorney fees. That is not what the status, or precedent, or policy contemplates. I respectfully dissent.

Check the following blogs for more on this opinion:

• Filewrapper
  
• Patently-O

• Email This
• Print
• Trackbacks
• Share Link