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Chicago IP Litigation Tracking Northern District of Illinois IP Cases

Monthly Archives: November 2010

Different Flavors of Tortious Interference are “Tweedledum and Tweedledee”

By R. David Donoghue on Posted in Pleading Requirements

Optics Planet, Inc. v. OpticSale, Inc., No. 09 C 7934, Slip Op. (N.D. Ill. Jul. 14, 2010) (Shadur, Sen. J.).

The Court granted in part Plaintiff Optics Planet’s Fed. R. Civ. P. 12(b)(6) motion to dismiss. Initially, the Court noted that defendants’ tortious interference with prospective business relationships and with prospective economic advantage were not separate counts, but at most separate theories of recovery for a single court, calling the claims "Tweedledum and Tweedledee."

But the claims, whether single or multiple counts did not survive the competitor’s privilege. Defendants offered no evidence showing that plaintiff was doing anything except "feathering its own competitive nest". Defendants’ attempted monopolization claims were also dismissed because there was no evidence that plaintiff did anything but compete, and there was no indication that plaintiff would or could acquire power over market pricing.

Finally, the Court dismissed defendant’s accounting counterclaim to the extent the claim was based upon the dismissed counterclaims.

False Patent Marking Plaintiff Must Meet Rule 9(b) Pleading for Intent

By R. David Donoghue on Posted in Pleading Requirements

Simonian v. Edgecraft Corp., No. 10 C 1263, Slip Op. (N.D. Ill. Sep. 20, 2010) (Grady, Sen. J.).

Judge Grady granted defendant Edgecraft’s Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Simonian’s false patent marking claims. The Federal Circuit’s recent decisions rejected two of Edgecraft’s three arguments. In Stauffer, the Federal Circuit held that any individual had standing to sue for false marking without regard to injury in fact. And in Solo Cup, the Federal Circuit held that marking with an expired patent could constitute false patent marking.

The Court, however, held that Fed. R. Civ. P. 9(b) heightened pleading standards applied to the intent to deceive requirement. Simonian’s "bare allegations" – and otherwise only "mere labels and conclusions" – at best suggested a "possibility of misconduct," not intent. While Rule 9(b) does allow intent to be pled generally, the allegations must create a reasonable inference that defendant acted with the necessary intent.

Answer and Counterclaims Struck Sua Sponte

By R. David Donoghue on Posted in Pleading Requirements

Trading Techs. Int’l., Inc. v. CQG, Inc., No. 10 C 718, Slip Op. (N.D. Ill. Aug. 12, 2010) (Shadur, Sen. J.).

Judge Shadur sua sponte struck defendants’ answer and counterclaim with leave to file an amended answer and counterclaim based upon a variety of pleading deficiencies. First, the Court struck statements that the patents-in-suit "speak for [themselves]" and related answers citing State Farm Mut. Auto Ins. Co. v. Riley, 199 F.R.D. 276, 279 (N.D. Ill. 2001). But the Court granted CQG leave to replead those answers.

The Court also struck several affirmative defenses. CQG’s Fed. R. Civ. P. 12(b)(6) defense was struck because it was not an affirmative defense. And no leave to replead was granted because when plaintiff Trading Technologies’ ("TT") allegations were accepted as true CQG’s defense was "simply dead wrong." The Court also struck various affirmative defenses that were only "skeletal recitals" of legal doctrines, with leave to replead if CQG could. Finally, the Court struck CQG’s noninfringement defense because denials in the answer already brought infringement into issue.

The Court also struck CQG’s counterclaim with leave to replead for failure to meet the Twombly/Iqbal pleading standards. Finally, the Court ordered that CGQ’s counsel should not charge CQG for preparing CGQ’s amended answer and counterclaim and should send CQG a copy of the Court’s Order.

Passing Off Claims Preempted by Copyright Claims

By R. David Donoghue on Posted in Jurisdiction

Cyber Websmith v. Am. Dental Assoc., No. 09 C 6198, Slip Op. (N.D. Ill. Aug. 4, 2010) (Dow, J.).

Judge Dow granted defendants’ Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff’s Lanham Act and Illinois Deceptive Trade Practices Act claims. Both were essentially reverse passing off claims – defendants allegedly represented plaintiff’s website templates as their own. And reverse passing off claims based upon copyrighted works rarely survive preemption claims. Pleading consumer confusion was not enough to avoid preemption in this case.

Defendant May not Amend Answer After Close of Fact Discovery

By R. David Donoghue on Posted in Pleading Requirements

Chamberlain Group, Inc. v. Lear Corp., No. 05 C 3449, Slip Op. (N.D. Ill. Sep. 10, 2010) (St. Eve, J.).

Judge St. Eve denied defendant Lear’s motion to amend its complaint adding new inequitable conduct defenses. While leave to amend is freely granted and delay alone is usually not enough to deny leave, Courts retain discretion to deny leave to amend. In this case, Lear waited until after fact discovery closed in this five-year-old case to seek leave to amend. And without explanation, Lear appeared in court three times and eight entries were added to the docket between the depositions in which Lear allegedly discovered the inequitable conduct and filing of its motion. Furthermore, Lear had been aware of the individuals accused of committing the inequitable conduct for several years. Finally, plaintiff Chamberlain Group would have been prejudiced by amendment at this late date because the expert reports the parties had already exchanged would have to have been revised or supplemented if Lear was allowed to amend.

Court Extends Discovery and Warns Parties to Attend Hearings

By R. David Donoghue on Posted in Discovery

Cyber Websmith v. Am. Dental Assoc., No. 09 C 6198, Slip Op. (N.D. Ill. Aug. 4, 2010) (Dow, J.).

Judge Dow granted the parties’ competing motions for extensions of fact discovery and the deadline for filing dispositive motions. While plaintiff’s motion to extend fact discovery was filed after fact discovery had closed, the Court granted the extension because defendant did not meet its discovery obligations until after the close of fact discovery and because both parties continued to conduct discovery after fact discovery closed.

The Court also extended the dispositive motion deadline thirty days beyond the close of discovery. The extension allowed defendant’s new counsel to "catch up" and both parties time to evaluate their positions after the close of fact discovery.   Finally, the Court cautioned the parties’ counsel that they must appear at status conferences or face sanctions.

Motion to Dismiss Denied as Moot Over Plaintiff’s Objection

By R. David Donoghue on Posted in Pleading Requirements

Trading Techs., Intl., Inc. v. BGC Partners, Inc., No. 10 C 715, Slip Op. (N.D. Ill. Aug. 17, 2010) (Kendall, J.).

Judge Kendall denied defendant BGC Partners’ ("BGC") motion to dismiss as moot because of plaintiff Trading Technologies’ ("TT’s") subsequently filed amended complaint. Courts routinely deny without prejudice motions to dismiss when an amended complaint is filed, but this case was unique because TT opposed dismissal. TT argued that BGC’s improper service argument should be dismissed with prejudice and the remaining arguments should be heard to avoid delay because TT continued asserting similar claims in the amended complaint. The service arguments were, however, moot because BGC did not make the service arguments in response to the amended complaint.

The Court also denied the motion to dismiss without prejudice as to the remaining arguments. While the claims may have remained factually similar, BGC’s arguments went to jurisdiction, not the sufficiency of the facts. Furthermore, the amended complaint added several new defendants. BGC and the other defendants would have been prejudiced if they were not given the opportunity to review the amended complaint and to collectively decide how to address any jurisdiction or venue issues.

Court Allows Claims Regarding Photos of Obama Home to Proceed

By R. David Donoghue on Posted in Legal News

Wayne Cable v. Agence France Presse, No. 01 C 8031 (N.D. Ill. July 20, 2010) (Manning, J.).

Judge Manning denied defendant Agence France Presse’s ("AFP") motion to dismiss plaintiff’s copyright, Lanham Act, Digital Millennium Copyright Act ("DMCA") and related state law claims. Plaintiff took a series of photos of a Chicago-area home for a realtor that included images of the home next-door owned by President and Mrs. Obama. AFP allegedly reproduced those images and distributed them over the internet after first removing plaintiff’s copyright notice and an embedded link to plaintiff’s website.

The Court held that the alleged removal of plaintiff’s copyright notice and website link could fall within the scope of altering "copyright management information" in violation of the DMCA.

Plaintiff’s Lanham Act claim, allegedly a reverse passing-off claim, was not preempted by the Copyright Act pursuant to the Supreme Court’s decision in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003). In Dastar, the Supreme Court held that the Lanham Act claim would have been sustained if defendant had repackaged plaintiff’s videos as its own. That is what plaintiff alleged AFP did with plaintiff’s photographs. Similarly, the Court did not dismiss plaintiff’s state law claims which allegedly rose and fell with plaintiff’s Lanham Act claim.

False Marking Case Dismissed With Prejudice for Failure to Plead Intent

By R. David Donoghue on Posted in Pleading Requirements

McNamara v. Natural Organics, Inc., No. 10 C 3544, Slip Op. (N.D. Ill. Sep. 1, 2010) (Shadur, Sen. J.).

Judge Shadur denied defendant’s motion to stay this false patent marking case pending the Federal Circuit’s standing decision in Stauffer (Stauffer has since been decided). The Court also dismissed plaintiff’s second amended complaint for failure to plead the requisite intent to deceive pursuant to Fed. R. Civ. P. 9(b) heightened pleading standards. Plaintiff attempted to plead intent upon information and belief using a nine-year-old statement made on defendant’s behalf about its skilled legal representative in an FTC proceeding. But that quoted language referred to a lawyer who was deceased, and he had passed away even before the FTC proceeding. Because plaintiff had already been given two chances to replead, the Court dismissed the case.

Third Party Competitor Need Not Comply With Onerous Subpoenas

By R. David Donoghue on Posted in Discovery

Viskase v. World Pac, Inc., No. 09 C 5022, Slip Op. (N.D. Ill. Sep. 9, 2010) (Bucklo, J.)

Judge Bucklo granted third party Kalle’s motion for a protective order and to quash plaintiff Viskase’s subpoena. Because the documents sought were created after the patent-in-suit’s filing date, they would have had little impact upon validity. Furthermore, Kalle was a competitor and its confidential information could not be protected from disclosure at trial. Finally, the volume of requested documents and the breadth of Fed. R. Civ. P. 30(b)(6) requests would have made compliance with the subpoena costly and burdensome.

Party Required to Hire Counsel or Face Sanctions

By R. David Donoghue on Posted in Discovery

GZ Gourmet Food & Beverages v. Radioactive Energy of Ill., No. 07 C 7110, Slip Op. (N.D. Ill. Aug. 31, 2010) (Dow, J.).

Judge Dow granted plaintiff’s counsel’s motion to withdraw contingent upon counsel serving plaintiff with the Order by certified mail. Plaintiff had not responded to counsel in several months and was several months overdue in responding to discovery requests. The Court denied defendant’s motion for sanctions based upon that delay. Instead, the Court offered plaintiff one additional opportunity to hire substitute counsel and begin prosecuting its case. The Court warned that corporate entities cannot appear pro se in federal court. The Court also warned that failure to retain counsel and appear at the next status could result in sanctions up to dismissal of plaintiff’s case.

Second False Patent Marking Plaintiff Lacks Standing

By R. David Donoghue on Posted in Jurisdiction

Simonian v. The Quigley Corp., No. 10 C 1259, Slip Op. (N.D. Ill. Jul. 19, 2010) (Lindberg, Sen. J.).

Judge Lindberg granted defendant The Quigley Corp.’s ("Quigley’s") motion to dismiss plaintiff Simonian’s false patent marking case for lack of standing. Simonian’s case was the second filed against Quigley regarding the identical allegedly false patent marking of its COLD-EEZE branded products. Noting a lack of controlling case law, the Court analogized to the False Claims Act and held, citing a 1941 New York state case, that a second false marking plaintiff lacks standing to bring suit.