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

DeVry Inc. v. Univ. of Medicine & Health Sciences -- St. Kitts, No. 08 C 3280, Slip Op. (N.D. Ill. Feb. 3, 2009) (Coar, J.).

Judge Coar denied defendant's Fed. R. Civ. P. 12(b)(6) motion to dismiss for failure to state a claim for trademark infringement or Lanham Act false designation and false representation. Plaintiffs own and operate the Ross University School of Medicine and are the owners of ROSS and ROSS UNIVERSITY marks.  Defendant marketed its medical school as "Founded by Dr. Robert Ross" and used at least one domain for email addresses including the word "ross." Defendant is not associated with or sponsored by plaintiffs' Ross University.

Defendant argued that its representations that its institution was founded by Dr. Ross and that Dr. Ross founded Ross University were fair uses constituting an impenetrable defense requiring dismissal. The Court, however, held that the defenses did not warrant dismissal for several reasons:

• Whether the use of Dr. Ross's name constituted the use of a mark or simply his name was a question of fact not appropriate for a decision on the pleadings;
   
• While the Seventh Circuit has not explicitly adopted a normative fair use defense, it was not clear that defendant's use of Dr. Ross's name met the criteria for the defense; 
   
• There was a question of fact as to whether defendant's repeated use of the name was more than reasonably necessary to identify the product; and
   
• There was a question of fact as to whether the use of the Ross name implied sponsorship or endorsement.

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The Northern District judges are seeking public comment on a new set of proposed Local Patent Rules -- click here to email Northern District Clerk Michael W. Dobbins with comments and here to download a copy of the proposed Patent Rules.  The rules lay out a schedule that mirrors the Northern District of California and Eastern District of Texas patent rules in requiring initial infringement, noninfringement and invalidity contentions.  But the proposed Patent Rules have some significant and interesting differences.  In particular, the claim construction process, which occurs near the end of fact discovery, provides for an opening brief by the accused infringer, a response brief by the patent holder and a reply brief by the accused infringer.  Here is a general outline of the timeline and procedure dictated by the Patent Rules:

• A standard protective order in place from the beginning of the case, unless and until it is modified, to avoid discovery delays being blamed upon entry of a protective order;
   
• Automatic document production requirements of plaintiff when initial disclosures are served and of defendant when initial noninfringement and invalidity contentions are served;
   
• Plaintiff serves initial infringement contentions two weeks after initial disclosures and defendant respond with initial noninfringement and invalidity contentions two weeks after that, followed two weeks later by plaintiff's response to the invalidity contentions;
   
• Plaintiff files final infringement contentions twenty one weeks after its initial contentions and defendant responds four weeks later with final noninfringement, invalidity and unenforceability contentions (after the final contentions, leave of Court is required for any amendments);
   
• No party can seek a stay pending reexam after serving its final contentions;
   
• The claim construction process begins two weeks after defendant's final invalidity contentions are served;
   
• Defendant files an opening claim construction brief along with a joint appendix including the patents in suit and their prosecution histories consecutively paginated, plaintiff then files a responsive brief within four weeks, and defendant has two weeks to file a reply;
   
• Fact discovery closes forty two days after the claim construction rulings, which triggers expert discovery followed by a dispositive motion deadline.

The Patent Rules are scheduled such that a patent trial should occur within two years of serving the complaint.  Assuming that schedule is enforced, it would result in a significant speeding up of, at least, the larger patent cases in the Northern District.

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Encyclopaedia Britannica, Inc. v. Guerrero, No. 08 C 2752, Slip Op. (N.D. Ill. Feb. 19, 2009) (Castillo, J.).

Judge Castillo granted plaintiff summary judgment as to defendants' declaratory judgment counterclaim in this trademark, copyright and contract dispute. Plaintiff licensed its content, including certain copyright and trademark rights, to defendants for use in an online Spanish-language reference site. Because a third party did not provide certain additional content required by the parties' agreement, plaintiff exercised an option to terminate the parties' license agreement and attempted to exercise a purchase option provided for in the agreement. Defendants, however, argued that the agreement did not allow exercise of the purchase agreement for a six year period, which had not yet passed. The Court held that a dispute over the meaning of a contract clause did not necessarily make a contract ambiguous. The Court determined that while the Agreement could be read to support either party, the intent of the agreement was to allow for immediate purchase by plaintiff in the event of termination, regardless of whether or not the termination occurred after the six year period.

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The latest installment of the Chicago IP Colloquium is this afternoon, March 24.  Loyola is hosting
Professor David Adelman from the University of Arizona Law School discussing his paper, Beyond Patents: Mitigating the Impact of the Health Care Crisis on Drug Development.

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Here are a few stories you do not want to miss:

• The Wisconsin Law Journal has an article based upon a Northern District of Illinois case in which a summary judgment decision hinged upon a failure to substantively answer one of the other party's Local Rule 56.1 statements of material fact.  In that case, a procedural objection was made, but no substantive answer was given.  So, when the objection was denied, the fact was deemed admitted.  This is a point I have made often:  follow Local Rule 56.1 closely and carefully.
   
• The Blog of the Legal Times reported that in a recent interview the Federal Circuit's Chief Judge Michel suggested that the next nominees to the Federal Circuit should have the following backgrounds:  a patent-experienced district judge; a trial lawyer with patent experience; or a chief corporate lawyer with patent experience.

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The Administrative Office of the U.S. Courts has issued its 2008 annually report* analyzing the federal court case load for fiscal year 2008.  The Northern District of Illinois remains an important IP court, ranking fourth in IP case filings for 2008, with 385 cases filed, behind the Central District of California, the Southern District of New York and the Northern District of California.

Nationwide, patent and trademark case filings remained steady with only slight increases, but copyright case filings fell over 25%.  One other interesting note, almost four percent of patent cases terminated in 2008 went through a trial.  That is a relatively large amount of trials in the federal courts where an average of 1% of cases are tried.  The 3% difference is not enough to show a post-eBay trend of increasing trials, but it could be the beginning of such a trend.

For more analysis of the report check out Peter Zura's 271 Patent Blog and Patently-O.

*  Click here to read the report.

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I have noticed that my news updates tend to be patent-focused, so today  they focus on trademarks and copyrights:

• IP Law & Business (subscription required to access the article) has an interesting article in the February/March 2009 issue identifying Justice Ginsburg as the Supreme Court's "champion of copyright holders" because of recent opinions supporting broader copyrights.  The article also identifies Justice Breyer, based on dissents in the same cases, as leading the cause for narrower copyrights.  And the article predicts that the Supreme Court is trending toward a narrower view of copyrights.
   
• Seattle Trademark Lawyer Michael Atkins has a timely post (click here to read it) that traces the March Madness trademark back to the Illinois high school basketball playoffs, as early as the 1940s.  The NCAA and the Illinois High School Association have since pooled their rights and both have a license to use the marks. 
   
• Victoria Pynchon has a great series of posts looking at laches in trademark law based upon a recent Ninth Circuit decision -- click here and here.

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Trading Techs. Int'l., Inc. v. CQG, Inc., No. 05 C 4811, Slip Op. (N.D. Ill. Feb. 17, 2009) (Moran, Sen. J.).

Judge Moran denied a motion to reconsider an earlier order continuing a summary judgment motion and staying the case pending the appeal of a related case, Trading Technologies v. eSpeed.*  The Court also ordered the parties to meet and confer regarding how to exchange defendants' sensitive trading information.  The Court previously ordered defendants to work with plaintiff Trading Technologies ("TT") to determine how to produce defendants' raw transaction data, which was required for a damages calculation.  The parties could not agree on how to exchange the information because of defendants' unwillingness to provide  such sensitive data to TT without restrictions.  The Court ordered the parties to continue trying to resolve the issue and suggested various ways that the information could be exchanged without forcing defendants to provide all of their sensitive business information.

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

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Here are some IP stories with a broad focused from Chicago-based institutions:

• The latest edition of the John Marshall Review of Intellectual Property Law is available here.  The issue is focused on International Trade Commission ("ITC") litigation.  ITC is a powerful tool, because of the speed of the proceedings and because personal jurisdiction is not required, only that the product or service is brought into the United States.  One of the most interesting articles is an overview of the Administrative Law Judge's ("ALJ") role in Section 337 ITC proceedings by ALJ Carl Charneski -- click here to read the article.
   
• The University of Chicago Faculty Blog is wrapping up an intriguing blog conversation amongst intellectual heavyweights regarding the underpinnings of IP theory and whether the standard economic theories (incentivizing innovation) supporting IP should be broadened to included social and cultural theories (incentivizing broader participation) -- click here to read the last post and here to read the first.  I cannot do it justice in a paragraph or two, but as we look at various IP reforms in Congress this year, in particular the 2009 version of the Patent Reform Act, it is a good time to consider the underlying reasons and purposes of the IP laws.

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Aller-Caire, Inc. v. Am. Textile Co., No. 07 C 4086, Slip Op. (N.D. Ill. Feb. 11, 2009) (Andersen, J.).

Judge Andersen granted in part plaintiff's motion to strike certain of defendant's affirmative defenses in this trademark and unfair competition case.  Defendant's competitor's privilege defense was sufficiently pled, although it alleged no specific facts, because it put plaintiff on notice.  Plaintiff knew that the parties were the competitors.  The Court struck the remaining two affirmative defenses:  1) plaintiff's damages were not the proximate result of defendant's alleged acts; and 2) a reservation of rights to amend the defenses.  Neither were affirmative defenses and, therefore, could not be properly pled.

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Fellowes, Inc. v. Aurora Corp. of Am., No. 07 C 7237, Slip Op. (N.D. Ill. Feb. 10, 2009) (Kocoras, J.).

Judge Kocoras granted defendants' motion to stay the litigation as to U.S. Patent No. 7,311,276 ("'276 patent") pending the '276 patent's reexamination.  The Court previously denied defendants' motion to stay the case as to the two other patents in suit.  But the Court granted a stay as to the '276 patent based upon the substantial new question of patentability identified by the Patent Office in granting the reexam.  The Court acknowledged that defendants would be able to challenge the '276 patent's validity after the reexam, but held that a stay would still reduce the burden of the litigation on all parties and the Court.

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WMH Tool Group, Inc. v. Woodstock, Int'l., Inc., No. 07 C 3885, Slip Op. (N.D. Ill. Jan. 14, 2009) (Mason, Mag. J.).

Judge Mason granted plaintiff's motion to quash the deposition notice of plaintiff's trial counsel ("Counsel") for this trademark infringement dispute, who was also plaintiff's trademark prosecution counsel for the mark in suit.  The Court held that regardless of what the proper standard was for determining whether to depose trial counsel, it had not been met.  Until defendants took plaintiff's Rule 30(b)(6) deposition, there was no way to tell whether Counsel had any specialized knowledge or whether his knowledge could be more easily obtained from another source.  The Court, therefore, quashed the deposition notice, but allowed defendants to seek leave to depose Counsel after document production is complete and all relevant depositions have been taken.

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The Sun-Times' Neil Steinberg had an interesting column in the Sunday edition about his acceptance of a class action settlement involving Google Books.  As an author, Steinberg is glad to see the settlement which he sees as a good balance of access to a wide variety of works and compensating the authors.  Steinberg explains that as an author and a newspaper columnist he needs access to research tools and, therefore, is glad to see tools like Google Books created.  But as an author, he also wants  to be paid when his books are used which the class settlement accomplishes according to Steinberg.  Steinberg goes on to predict that we will see other internet-based copyright issues resolved in similar manners over time.  Steinberg may be right and he hits on advice I often give about copyrights:  if you want to use something ask, copyrightholders are generally glad to share their work and often only request a small payment in the form of money or even just acknowledgment.

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Here are several items from around the web that are worth your attention:

• The latest edition of Doug Lichtman's IP Colloquium is available here and it is another excellent listen.  The program looks at copyright's statutory damages regime through the lens of music downloading.  Lichtman moderates an impressive group of experts and stakeholders in the debate.  It would be worth the time, even if CLE credit was not available, but it is.
   
• Congratulations to Victoria Pynchon of the IP ADR Blog and Settle It Now on her move to ADR Services -- click here to read Pynchon's post about the move.
   
• The Alternative Patent Dispute Resolution Project at San Diego's Thomas Jefferson School of Law has an interesting survey up about how ADR should be used in patent cases.  No results yet, but I will discuss them here when they are made available.  The survey follows up a survey done ten years ago by IPWatchdog's Gene Quinn.  Click here to take the survey.

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The legal blogosphere is full of analysis and commentary regarding the Patent Reform Act, here is more of the best:

• FileWrapper;
   
• Patent Baristas (surveying industry responses to the Act);
   
• Patent Docs (discussing the witness list for Patent Reform Act hearings);
   
• Patently-O (damages provisions analysis), and here and here;
   
• Washington State Patent Law Blog.

And the Bilski amicus briefs began coming into the Supreme Court today.  Click here for Dennis Crouch's post with links to many of the amicus briefs.  And here for Crouch's post discussing the PTO's Bilski guidance to Examiners.

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Bone Care Int'l., LLC v. Pentech Pharms., Inc., No. 08 C 1083, Slip Op. (N.D. Ill. Feb. 2, 2009) (Dow, J.).

Judge Dow denied defendants' motion to prevent plaintiffs from using their preferred technical experts in this patent case.  Pursuant to a Protective Order, plaintiffs notified defendants of their intent to provide three experts with confidential materials.  Defendants objected because defendants had previously retained the same experts in a different patent case in the Northern District.  The Court noted that disqualifying experts was a "drastic measure" taken only when the party seeking disqualification proves a substantial relationship between any acquired confidential information and the expert's testimony.  The two cases these experts were hired for involve different pharmaceutical formulations for treatment of different conditions.  And the experts testified that because of the different technologies, no information gained in defendants' earlier case could impact the present case or benefit defendants in this case.  Additionally, the Court noted that defendants did not have a confidential or privileged relationship with the experts.

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As promised, the new Patent Reform Acts were introduced in Congress this week -- click here for the Senate bill and here for the House bill.  While I have not yet done a comprehensive review, I understand that the bills are largely similar.  Here are some highlights of the bills:

• They move from the current first to invent system to the international norm, first to file.
   
• Expanded reexamination and a new period of post-grant review.
   
• Damages provisions require that the specific contribution over the prior art be considered and allow consideration of licensing terms for similar noninfringing substitutes.  As Dennis Crouch points out, for alternatives in the public domain the comparable license could be free.
   
• Specifically allows for Federal Circuit jurisdiction of interlocutory claim construction appeals where the district court approves the appeal.
   
• Federal Circuit judges would no longer be required to live within fifty miles of the District of Columbia.
   
• The venue provisions are changed to narrow possible venues.

There is plenty of commentary in the blogosphere.  Here are some of the best:

• 271 Patent Blog (giving highlights, noting changes from the last version and do not miss Peter Zura's blog makeover);
   
• Patent Docs (discussing the Senate press conference announcing the Senate bill and noting BIO's response to the bills); and
   
• Patently-O (giving highlights and noting changes from the most recent attempted reforms) and here (reposting comments from Google's Head of Patents and Patent Strategy, Michelle Lee).

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Frayne v. Chicago 2016, No. 08 C 5290, Slip Op. (N.D. Ill. Jan. 8, 2009) (Kennelly, J.).

Judge Kennelly granted defendants' motion to dismiss as to plaintiff's Lanham Act Section 114(2)(D) reverse domain name highjacking and attempted highjacking claims.*  Plaintiff registered Chicago2016.com in 2004 at which time plaintiff was not aware that Chicago intended to bid for the 2016 Olympics.  In 2007, plaintiff was contacted by a representative of Chicago 2016 and asked whether plaintiff would entertain offers for the website.  Plaintiff refused and defendants eventually initiated proceedings before the World Intellectual Property Organization alleging that plaintiff registered the domain name in bad faith and in violation of the Uniform Domain-Name Dispute Resolution Policy ("UDRP").  Plaintiff's domain name, however, was never suspended, disabled or transferred to defendants.

Plaintiff conceded that highjacking claim should be dismissed because the domain name had not been suspended, disabled or transferred.  And the Court held that the Lanham Act did not create a cause of action for attempted highjacking.  The text of the statute specifically required that the domain name actually be suspended, disabled or transferred.

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Please join me this Friday, March 6 for the Northwestern Journal of Technology & Intellectual Property's annual symposium.  I will be moderating a debate over whether business methods should be patentable in light of the recent Bilski decision.  McDonnell Boehnen's Bob Irvine will argue for business methods and Knobbe Martens' Lauren Katzenellenbogen will argue against.  If that debate is not enough to get you to the Symposium, here is a sampling of the other excellent presentations:

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