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

Occidental Hoteles Mgt., S.L. v. Hargrave Group, LLC, No. 08 C 2165, Slip Op. (N.D. Ill. Jul. 24, 2009) (Gottschall, J.)

Judge Gottschall held that the Court lacked personal jurisdiction over plaintiff’s trademark claims related to defendant’s use of the sites in a suit which allegedly incorporates plaintiff’s marks, to tell the alleged story of plaintiff’s alleged negligence.  Defendant did not maintain offices or employees in Illinois and did not maintain an agent for service in Illinois. In fact, defendant’s only Illinois connection was the listing on a website of defendant’s of a martial arts instructor in Illinois. The fact that defendant also maintained interactive websites could not create general jurisdiction pursuant to Zippo. Interactive websites alone can at most create specific jurisdiction. The Court also lacked specific jurisdiction. The websites in suit were not interactive, and the only site with an Illinois connection, the marital arts site, was not in the suit.

While a Court generally cannot transfer a cure pursuant to § 1409(a) without first having jurisdiction and venue, courts can do so in the interests of justice. In this case, the Court held that justice required a transfer to the Northern District of Oklahoma. Both parties alternatively sought transfer and the case had already been in the Northern District of Illinois for fifteen months.

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Lorillard Tobacco Co. v. Elston Self Serv. Wholesale Grocs., Inc., No. 03 C 4753, Slip Op. (N.D. Ill. Jun. 9, 2009) (Gottschall, J.).

Judge Gottschall granted in part and denied in part defendants’ motion for summary judgment regarding plaintiff’s Deceptive Trade Practices Act and fraud* claims regarding sales of recirculated Newport cigarettes. Plaintiff claimed that defendants purchased cigarettes from retailers to take advantage of plaintiff’s discount program and resold those recirculated cigarettes to other entities, sometimes recurring a second relate for those purchases. Plaintiff further alleged that some of the recirculated cigarettes were old and stale. But the Court held that the accrued recirculation and sale of record that cigarettes could not make a Deceptive Practices Act claim because of the likelihood of confusion requirement. Like in the trademark law, likelihood of confusion as to origin. But plaintiff did not allege that there was any common confusion regarding that plaintiff was the source of the cigarettes. Confusion as to whether the cigarettes were first or second hand was irrelevant.

* This post does not address the fraud claims.

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Next Tuesday, September 29, at noon central, Adrian Dayton and I are giving an ALI-ABA audio seminar titled:  IP Issues in Social Media.  Dayton and I will discuss the growing importance of social media for businesses and look at strategies for protecting and promoting your brands with a focus on social media sites such as Twitter.  Click here to register for the program.  I hope to "see" you there.

Here is more detail about the program from ALI-ABA:

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The Ticketreserve, Inc. v. Viagogo, Inc., No. 08 C 502, Slip Op. (N.D. Ill. Aug. 11, 2009) (Kendall, J.).

Judge Kendall denied defendants’ Fed. R. Civ. P. 12(b)(3) motion in limine for improper venue and granted defendant Viagogo, Inc.’s (“Viagogo”) Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. Defendants agreed that venue was improper based on an arbitration clause in a nondisclosure agreement the parties requested when they explored a joint venture. Defendants agreed that the patented technology was disclosed pursuant to the nondisclosure agreement.

But because plaintiff’s international patent on the same technology as the U.S. patent, issued before the nondisclosure agreement the patent infringement claim was expressly excluded from the nondisclosure agreement and its arbitration claims.

The Court then dismissed Viagogo for lack of personal jurisdiction. Viagogo had no contract with Illinois to create personal jurisdiction. And while the viagogo.com interactive website likely created specific jurisdiction for its owner, the evidence suggested that Viagogo Ltd., which did not contest personal jurisdiction owned and operated the website, not Viagogo, Inc.

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Cassetica Software, Inc. v. Computer Sciences Corp., No. 09 C 0003, Slip Op. (N.D. Ill. Jun. 18, 2009) (Kendall, J.).

Judge Kendall granted defendant CSC's Fed. R. Civ. P. 12(b)(6) motion to dismiss.  Plaintiff Cassetica asserted patent infringement, breach of contract, violation of the Computer Fraud and Abuse Act ("CFAA"), and related state law claims based upon CSC's alleged continued use of Cassetica's NotesMedic software after the end the parties' contract for the software.  The Court dismissed each claim as follows:

• Copyright Infringement:  Cassetica's copyright claim was dismissed because Cassetica could not recover its claimed statutory damages.  Cassetica registered its copyright after CSC's alleged infringement began.  It did not matter that CSC's alleged infringement allegedly continued after the registration.
   
• Breach of Contract:  Because CSC's alleged breach occurred after the contract terminated there was no longer a contract to be breached and, therefore, no claim.
   
• CFAA:  There was no "damage" as defined by the CFAA.  The CFAA defines damages as harm to a computer system's data.  But Cassetica alleged copying of electronic information, not that any of its data was lost or harmed.  Otherwise, Cassetica only made bare allegations that its data was harmed without any factual statement.
   
• Other State Law Claims:  Cassetica's conversion, trespass to chattels and unjust enrichment claims were all preempted by the copyright law because each state law claim was based upon the alleged downloads of the NotesMedic software.

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Zimnicki v. Neo-Neon Int'l., Ltd., No. 06 C 4879, Slip Op. (N.D. Ill. Jul. 30, 2009) (Norgle, J.).

Judge Norgle denied plaintiff's motion for an antisuit injunction.  Plaintiff filed copyright, trademark and unjust enrichment claims against defendant based upon the alleged use of plaintiff's North Pole Village brand and decorative holiday lighting products.  Defendant then filed a declaratory judgment action in China seeking a determination that defendant, who filed Chinese copyrights on designs similar to those covered by plaintiff's US copyrights in suit, owned the disputed designs.  The Court explained that there is a circuit split on the standard for antisuit injunctions that the Seventh Circuit had not weighed in on.  The First, Second, Third, Sixth and District of Columbia take the "conservative approach" requiring that the foreign action to be enjoined would prevent US jurisdiction or threaten a vital US policy, and that the domestic interests outweigh concerns of international comity.  The Fifth and Ninth Circuits take the "liberal" approach which requires only that the injunction is "necessary to prevent duplicative and vexatious foreign litigation and to avoid inconsistent judgments."

Because the Seventh Circuit has not chosen an approach, most district courts in the circuit follow the more "lax" liberal approach.  But in this case, the Court did not need to make that determination because plaintiff's claim did not meet either standard because the issues in suit were not the same.  Plaintiff's instant suit asserted its US intellectual property.  Defendant's Chinese suit, on the other hand, sought a declaratory judgment that defendant owned its Chinese intellectual property, not plaintiff.  Because the Chinese suit would not make determinations about plaintiff's US intellectual property, neither litigation's outcome would be dispositive of the other.  Furthermore, plaintiff did not present evidence that the relevant Chinese intellectual property laws were the same or similar to the US Copyright or Lanham Acts.

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James H. Anderson, Inc. v. Johnson, No. 08 C 6202, Slip Op. (N.D. Ill. Jul 27, 2009) (Coar, J.).

Judge Coar granted defendants'  Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff's copyright malpractice claim for lack of jurisdiction.  Plaintiff argued that the Court had jurisdiction over its state law malpractice claim based upon 28 U.S.C. Section 1338(a) which creates the federal court's exclusive jurisdiction over patent and copyright cases.  The Court held that it did not have jurisdiction based upon the copyright claim in the underlying action.  Federal jurisdiction requires not just a contested federal issue, but a substantial federal issue.  The underlying was not a substantial issue. Furthermore, the federal interest in regulating malpractice was outweighed by the state interest.  And the Court reasoned that copyright malpractice was different than patent malpractice.  Copyright cases are fact intensive and do not require legal analysis of the claims, as required in patent law.

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While I travel for a few pressing client matters, here are a couple of podcasts and IP stories worth a read or listen:

• At the end of August, I had the privilege of joining Jeremy Phillips and Philip Parker on Duncan Bucknell's IP Think Tank Podcast.  We discussed the impact of the recession on global patenting and the quality of patents in the US, Japan and Europe.  Click here  for the podcast.
   
• The latest installment of Doug Lichtman's IP Colloquium is available here.  Lichtman investigates the scope of the derivative work rights in copyright law, using a recent case that questioned whehter a Harry Potter was a derivative work based upon J.K. Rowling's Harry Potter series.  It is a great listen and comes with free CLE credit.  Click here for the podcast.

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Bajer Design & Marketing, Inc. v. Whitney Design,, Inc., No. 09 C 1815, Slip Op. (N.D. Ill. Jun. 26, 2009) (Zagel, J.).

Judge Zagel denied defendant Whitney Design's ("Whitney") Section 1404(a) motion to transfer plaintiff Bajer Design & Marketing's ("Bajer") patent infringement case to the Eastern District of Missouri, where Whitney filed a declaratory judgment case after being served with Bajer's complaint.  Although Bajer was not a Chicago-based company, its choice of forum still deserved significant deference because the alleged injury occurred in Chicago.  Bajer filed the complaint after identifying the accused infringement at the International Housewares Show in Chicago.  Whitney argued that the accused infringement occurred in the St. Louis area where Whitney researched and designed the accused clothes hampers.  But the Court held that the point of sale, Chicago, was the situs of the injury.  

Whitney also argued that convenience of the parties weighed in favor of transfer because all of its documents and people were in the St. Louis area.  But the Court held convenience weighed against transfer because the parties could transfer documents electronically and, in any event, the documents would have to be sent to the parties' counsel across the midwest.  And the convenience of third parties also weighed against transfer.  The only third party, the inventor, lived in Iowa almost equidistant from Chicago and St. Louis.

Finally, the interests of justice did not weigh in favor of transfer.  Whitney argued that time to trial in the Eastern District of Missouri was significantly faster than in the Northern District of Illinois.  But the Court held that those statistics were irrelevant because they were for all cases, not split up by case types. 

The Court denied Bajer's preliminary injunction motion seeking to enjoin the Eastern District of Missouri case.  Because that court stayed its case pending the Northern District of Illinois's decision on the transfer motion, there was no need to enjoin a stayed case.

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Von Holdt v. A-1 Tool Corp., No.. 04 C 4123, Slip Op. (N.D. Ill. Jun. 19, 2009) (Manning, J.).

Judge Manning adopted Magistrate Judge Brown's claim construction Report and Recommendation over defendants' objections in this patent infringement case involving molded buckets with stacking strength.  Of particular interest:

• "Side-by-side" meant "one beside the other."  The Court refused to hold that nothing could be between the ribs of the buckets because doing so would be construing the terms in reference to the accused devices.
   
• "[A] relatively large radius" meant a single large radius, despite the fact that "a" or "an" following comprising language generally means one or more.  In this case, one or more would not make sense.  Multiple radii would require one or more radius to be smaller than the others.  Additionally, the strongest bucket configuration was a single radius, as shown in the patent figures.
   
• "In alignment" meant in a "straight line with," not "parallel."  Requiring the alignment to be parallel was an unnecessary restriction.

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In late 2007, Chicago lost an important member of our IP community, Mark Banner.  Chicago's Richard Linn Inn of Court, of which Banner as a founding Master, has established a scholarship offering second and third year law students $5,000 toward their fall semester tuition.  Applications (click here to download one) are due by October 10.  Here are the scholarship criteria:

• Commitment to pursue IP law;
   
• Commitment to ethics, civility and professionalism;
   
• Academic merit, both law school and other undergraduate or graduate work;
   
• Written and oral communication skills, including a telephone interview;
   
• Leadership and community involvement; and
   
• Member of a historically underrepresented group in IP.

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Poparic v. Lincoln Square Video, No. 08 C 3491, Slip Op. (N.D. Ill. Jun. 25, 2009) (Kocoras, J.).

Judge Kocoras granted defendant Taste of Europe's Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction.  Plaintiff alleged that Taste of Europe sold a single copy of plaintiff's copyrighted movie in its Indiana store and argued only that the Court had general jurisdiction over Taste of Europe, without addressing specific jurisdiction.  Taste of Europe presented evidence that it was an Indiana-based business that did not advertise in Illinois or conduct any business in or with Illinois.  Plaintiff did not present any evidence of Taste of Europe's Illinois connections, but sought jurisdictional discovery.  The Court, however, found that it lacked personal jurisdiction, holding that jurisdictional discovery was not appropriate where plaintiff had identified no evidence showing Illinois connections to overcome Taste of Europe's proofs.

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DeVry Inc. v. Int'l Univ. of Nursing d/b/a Robert Ross Int'l Univ. of Nursing, No. 06 C 3364, Slip Op. (N.D. Ill. Jun. 30, 2009) (Guzman, J.).

After a bench trial, Judge Guzman issued findings of facts and conclusions of law, holding plaintiffs Ross University marks infringed and enjoining defendants from using the Ross name in conjunction with medical or nursing schools.  Plaintiffs operated the Ross University School of Medicine and the Ross University School of Veterinary Medicine, both off which plaintiffs bought along with the related trademarks from Robert Ross.  Both institutions are offshore and cater to US students.  Ross later associated himself with defendant, after which defendant, an offshore nursing school, began using the Ross name.  Defendant claimed plaintiffs' claims were moot because defendant stopped using the Ross name.  But the Court held that an injunction could be appropriate to guarantee that the misconduct does not restart after the case.

The Court held that defendants' "Robert Ross International University of Nursing" mark was confusingly similar to plaintiffs' "Ross University" marks for the following reasons:

• Defendant's marks were "strikingly similar" to plaintiffs' in both appearance and suggestion;
   
• Both sets of marks represent offshore medical institutions;
   
• The parties promote their institutions and hire faculty and staff through the same channels; and
   
• There have been numerous instances of actual confusion.

Having held that plaintiffs' mark was infringed, the Court held that injunctive relief was appropriate.  Plaintiffs were irreparably harmed  because of the ongoing actual confusion between the parties' marks and plaintiffs' inability to control its image when confusion occurs.  Furthermore, the balance of hardships weighed in favor of plaintiffs.  Plaintiffs faced "potential devastation" if an injunction was not issued, but defendant's only harm was Ross's temporary inability to use his name in connection with offshore medical services.  And the public would not be harmed by an injunction.  In fact, the injunction would serve the public interest by clarifying the source of medical education services for consumers.

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