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Chicago IP Litigation Tracking Northern District of Illinois IP Cases

Monthly Archives: August 2011

Protective Order Amended to Allow Disclosure of Confidential Information in a Reexam

By R. David Donoghue on Posted in Discovery

Sloan Valve Co. v. Zurn Indus., No. 10 C 204, Slip Op. (N.D. Ill. Mar. 8, 2011) (St. Eve, J.).

Judge St. Eve granted plaintiff Sloan’s motion to lift the stay pending reexam of the patent-in-suit to modify the Protective Order. The Patent office required production of all information material to patentability, even if it is subject to a Protective Order. MPEP § 724. But the Protective Order was silent as to whether Sloan could provide the Patent Office with confidential information.

The Court noted case law holding that MPEP § 724 could not override district court orders. Telecomm. Sys., Inc. v. Mobile 365, Inc., No. 06 C 485, 2009 WL 594 3235 (E.D. Va. Mar. 31, 2009). As a result, the proper method for a patentee was exactly what Sloan did – seek a modification to the governing Protective Order.

So, the Court modified the Protective Order to allow disclosure to the Patent Office, so long as MPEP § 724.02 procedures for maintaining documents as confidential.

Court Orders Hearing to Quantify Fees for Defendants’ Contempt

By R. David Donoghue on Posted in Local Rules

Optics Plantet, Inc. v. OpticSale, Inc., No. 09 C 7934, Slip Op. (N.D. Ill. Mar. 7, 2011) (Shadur, Sen. J.).

Judge Shadur denied defendants’ (collectively "AKYR") motion to delay the contempt proceedings against it in this Lanham Act case. AKYR had failed to post a court ordered disclaimer for about eight months, and the Seventh Circuit denied AKYR mandamus relief. The Court, therefore, ordered that the parties appear to quantify the fee-shifting required to address AKYR’s delay pursuant to 28 U.S.C. § 1927, and to discuss whether additional sanctions where warranted.

Court Will Not Import Limitations From the Specification

By R. David Donoghue on Posted in Claim Construction

Morningware, Inc. v. Hearthware Home Prods., Inc., No. 09 C 4348, Slip Op. (N.D. Ill. Feb. 23, 2011) (St. Eve, J.).

Judge St. Eve construed the the claims of counter-plaintiff Hearthware’s patent involving halogen convection ovens. Of particular note, the Court construed the following terms:

  • "A cooking enclosure" means "an oven housing and a metallic oven pan supported by a base." This definition fit with the language of the abstract and the summary of the invention.
  • "A fan" means "one or more fans." The Court declined Morningware’s argument that fan be limited to the fan described in the preferred embodiment.
  • "A fan chamber" means "one or more enclosed spaces, through which a fan moves air, that are in the power head and above both the cooking enclosure and the heating unit." The Court held that a more particular definition proposed by Morningware would require improper importation of limitations into the claims from the specification.

ANDA Case Stayed Pending Reexam

By R. David Donoghue on Posted in Local Rules

Genzyme Corp. v. Cobrek Pharms., Inc., No. 10 C 112 (N.D. Ill. Feb. 17, 2011) (Dow, J.).

Judge Dow used the Court’s inherent power to grant plaintiff Genzyme’s motion to stay the case pending the reexamination of Genzyme’s patent related to its pharmaceutical drug Hectorol. The Patent Office had already issued an Office Action rejecting all of Genzyme’s claims. The Court also noted that reexams were valuable, during the initial stages of a case, because they either remove an issue for trial, when claims are rejected, or focus the issue by providing the Court with the PTO’s expert view on the claim issues. The Court noted that in this case only limited discovery had occurred — no depositions had been taken — and a trial date had not been set. Finally, it was the Defendant that filed the reexamination request and then opposed the motion to stay. And to the extent that the delay created by a stay would harm the Defendant, that was mitigated by the fact that the case(s) had already been pending for three years.

Accused Infringer Need Not Test Prior Art Patented Products to Prove Invalidity

By R. David Donoghue on Posted in Summary Judgment

Viskase Cos., Inc. v. World Pac Int’l AG, No. 09 C 5022, Slip Op. (N.D. Ill. Feb. 3, 2011) (Bucklo, J.).

Judge Bucklo granted declaratory judgment plaintiff Viskase’s motion for summary judgment of invalidity and denied the remaining cross-summary judgment motions as moot in this patent dispute involving food casings that prevent the loss of weight, flavor and taste. The Court previously construed "impermeable" to mean that the casing did not allow any measurable loss of weight, flavor or moisture. Instead of addressing each of Viskase’s arguments element-by-element, declaratory judgment defendant World Pac put "all of its eggs in one basket." The Court denied World Pac’s earlier summary judgment motion regarding infringement largely because of World Pac’s failure to test the alleged impermeability of Viskase’s accused products. World Pac, therefore, argued that because Viskase had not tested sausages covered by the prior art patent, it could not succeed.

But the Court explained that "what is good for the goose is not always good for the gander." The Court held that there was no authority requiring that a party test alleged anticipatory prior art patents to prove that they read on the asserted patent. While there was some appeal to World Pac’s argument, it was unsuccessful. An accused infringer is not required to test prior art products. Furthermore, World Pac’s own expert had conceded that the relevant claim elements of the patent-in-suit were disclosed in the prior art patent.

No Presumption of Irreparable Harm From Breach of a Non-Compete

By R. David Donoghue on Posted in Legal News

E.B.N. Enters., Inc. v. C.L. Creative Images, Inc., No. 09 C 6279, Slip Op. (N.D. Ill. Mar. 28, 2011) (Coleman, J.)

Judge Coleman granted in part plaintiff’s ("Fantastic Sams") preliminary injunction motion in this case involving a non-compete agreement related to a terminated Fantastic Sams hair salon franchise. The Court granted a preliminary injunction regarding Fantastic Sams’ operations manual which defendants were contractually required to return to Fantastic Sams. The Court denied the remainder of the requested injunction. Fantastic Sams alleged that defendant’s decision to operate a new salon at the same location breached the two-year requirement that defendants not operate a salon within five miles of the prior Fantastic Sams location. Fantastic Sams made an uncontested showing that defendants breached that agreement. But Fantastic Sams did not sufficiently show irreparable harm. There is no question of irreparable harm from breach of a non-compete agreement. Fantastic Sams did not ever show that another franchise wanted defendants’ territory. Finally, there was no evidence that defendants’ customers continued using defendants because of features unique to Fantastic Sams.

Summary Judgment Granted Based Upon Failure to Comply With Rule 56.1

By R. David Donoghue on Posted in Local Rules

International Tax Advisors, Inc. v. Tax Law Assocs., LLC, No. 08 C 2222, Slip Op. (N.D. Ill. Feb. 15, 2011) (Valdez, Mag. J.)

Judge Valdez denied plaintiffs’ (collectively "ITA") motion for summary judgment, and granted defendants’ (collectively "TLA") motion for summary judgment as to ITA’s copyright claim, and chose not to retain supplemental jurisdiction over ITA’s remaining state law claims. While ITA may have had evidence to support its copyright claim, it did not properly cite to that evidence via its Local Rule 56.1 statement of uncontested material facts. And to the extent ITA cited directly to evidence it did so generally by description, without exhibit numbers or specific page cites.

The Court granted TLA summary judgment of noninfringement because ITA did not properly cite to facts in its Local Rule 56.1 statement showing a question of material fact.

The Court also granted TLA summary judgment as to ITA’s RICO claim because ITA only alleged one of the required two predicate acts. 

Finally, the Court declined to exercise supplemental jurisdiction over the remaining claims.

False Patent Marking Requires Particular Allegations That Each Defendant Marked

By R. David Donoghue on Posted in Pleading Requirements

Newt LLC v. Nestle USA, Inc., No. 09 C 4792, Slip Op. (N.D. Ill. Mar. 28, 2011) (Coleman, J.)

Judge Coleman denied defendants’ Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, but dismissed the false patent marking case pursuant to Rule 12(b)(6) for failure to sufficiently plead intent to deceive. The Court held that plaintiff Newt had standing to sue without proof of particularized injury, citing Stauffer v. Brooks Bros., Inc., 619 F. 3d 1321, 1327 (Fed. Cir. 2010).

Newt alleged that defendant Graphic Packaging ("GPI") falsely marked the products and sold them to the customer defendants. GPI made no allegations that the customer defendants marked the accused products. The customer defendants were, therefore, dismissed.

Further, all defendants were dismissed because Newt only made generalized intent allegations — e.g., that defendants were "sophisticated companies." 

Finally, the Complaint was dismissed because Newt made only general allegations against all defendants, rather than particular allegations against each defendant.

Answer Regarding Whether a Test Was Performed Does Not Violate Privilege

By R. David Donoghue on Posted in Discovery

Itex, Inc. v. Work Rite Uniform Co., No. 08 C 1224, Slip Op. (N.D. Ill. Mar. 31, 2011) (Kim, Mag. J.).

Judge Kim granted in part defendants’ motion to compel supplemental answers to defendants’ requests for admission. The requests at issue sought an admission regarding whether plaintiff had performed very specific tests as part of its pre-suit investigation. Plaintiff objected on the ground that answering the request would violate its attorney-client privilege and attorney work product protections. But the Court held that the requests were "artfully" drafted to avoid seeking any indication of whether the tests were performed at the request of counsel or not. Instead, the requests simply sought an admission as to whether the specific tests were performed at all. The Court also noted that the Federal Rules of Civil Procedure do not require proof of a denial, which had been given in this case despite that.

Another Case Dismissing Hundreds of Doe Copyright Defendants as Improperly Joined

By R. David Donoghue on Posted in Federal Rules

Light Speed Media Corp. v. Does 1-1000, No. 10 C 5604, Slip Op. (N.D. Ill. Mar. 31, 2011) (Manning, J.).

Judge Manning dismissed without prejudice 999 of the 1,000 Doe defendants in this copyright infringement suit accusing unknown individuals of using BitTorrent to download copyrighted material without sufficient permissions. As in prior cases in the Northern District (click here for similar decisions), the Court held that the Doe defendants were not properly joined pursuant to Fed. R. Civ. P. 20(a)(2)(A) because the use of a common internet service provider or network does not create sufficient commonality of action or transaction to warrant permissive joinder. The Court also held that joinder did not serve judicial interests or economy. A case with 1,000 Doe defendants could generate hundreds of factually dissimilar motions, just at the initial phase of the litigation.

The Court’s decision to sever was bolstered by its concerns about whether venue was proper. There was nothing to indicate that plaintiff or any Doe had contacts with Illinois. The Court, therefore, dismissed without prejudice each of the Does except the one individual who had been identified, although not yet named. Plaintiff was given seven days from the Order to notify the parties and their Internet Service Providers. Finally, the Court denied as premature the identified individual’s motion to dismiss for lack of personal jurisdiction. The motion was premature until the individual was actually named in the suit.

Court Denies Summary Judgment in Favor of Bench Trial

By R. David Donoghue on Posted in Summary Judgment

Bone Care, Int’l v. Pen Tech Pharm., No. 08 C 1083, Slip Op. (N.D. Ill. Mar. 30, 2011) (Dow, J.).

Judge Dow denied defendants’ (collectively "Pentech") motion for summary judgment of invalidity for lack of enablement and written description. The Court also denied plaintiff Bone Care International’s cross-motion for summary judgment that the patent-in-suit was enabled by its specification, in this patent case involving methods of treating hyperparathyroidism that is secondary to end-stage renal disease. The parties finished briefing their cross-motions weeks before a bench trial began, including the issues in the motion. And by the time of the opinion, the parties had filed extensive post-trial briefing — the Court allowed briefs up to 280 pages in length. As such and in light of its coming opinion ruling on all factual issues, the Court did not provide a detailed analysis of its reasoning. Instead, it focused on one of the most common hurdles to summary judgment, the battle of the experts. The parties’ experts set forth competing views of the facts and circumstances on the case. Because both parties relied upon those experts to make their cases, summary judgment was not proper.

The Court, however, did commit to resolve the issues as part of its written trial decision.

Trading Technologies: Final Judgment Amended to Include Monetary Damages

By R. David Donoghue on Posted in Trial

Trading Techs. Int’l., Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. Mar. 29, 2011) (Dow, J.).

Judge Dow amended the final judgment in this case to reflect the jury verdict and post-remittitur damages award of about $2.5M — go to the Blog’s archives for much more on this case and related cases. The Court also, after a de novo review, adopted Judge Schenkier’s report and recommendation on the motion. Plaintiff Trading Technologies ("TT") sought to amend the Court’s final judgment, entered by the late Judge Moran, pursuant to Fed. R. Civ. P. 59(e) or 60(a), to reflect the damages award, and sought its fees for bringing the instant motion. The Court held as follows:

  • While it may have been too late to amend the judgment pursuant to Rule 59(e), the Court had discretion to amend pursuant to Rule 60(a) to correct an "oversight or omission." The record established that TT and defendants (collectively "eSpeed") understood that there was a money judgment. For example, eSpeed moved the Court to waive the supersedes bond normally required to appeal a case with money damages.
  • The Federal Circuit and the parties understood the appeal to be on all issues, not just injunctive relief. As such, eSpeed cannot argue that it held back arguments on appeal, that it might otherwise have made if eSpeed had known the appeal went beyond injunctive issues.
  • Whatever TT’s reason for not seeking to correct the judgment with Judge Moran while the case was still pending before him, all parties understood that the judgment included the money damages.

Finally, the Court denied TT’s request for it fees incurred bringing the motion. First, both parties should have sought to correct the judgment when it was entered. Second, TT’s fee request was undermined by its unreasonable demand in the initial motion that eSpeed pay the money damages within five days.

Federal Counterclaim Cannot Create Original Jurisdiction

By R. David Donoghue on Posted in Jurisdiction

First Step Child Care Center, Inc. v. KASI Designs, Inc., No. 10 C 7372, Slip Op. (N.D. Ill. Mar. 24, 2011) (Lefkow, J.).

Judge Lefkow remanded plaintiff’s state claims involving the building of a child care center to state court. Defendant removed the case from state court alleging that it would bring copyright counterclaims. But defendant never asserted its counterclaims, and even if it had counterclaims cannot create original jurisdiction.

Collective Scienter Does Not Apply to False Patent Marking

By R. David Donoghue on Posted in Summary Judgment

Heathcote Holdings Corp. v. William K. Walthers, Inc. d/b/a Darda Toys, No. 09 C. 6722, Slip Op. (N.D. Ill. Mar. 11, 2011) (Bucklo, J.).

Judge Bucklo granted defendants summary judgment that it lacked the intent to deceive required by the false patent marking statute, 35 U.S.C. § 292. While an employee and her team were responsible for the information on the packaging, there was no evidence that the employee or her team were aware that the patents had expired, were (in one case) not the correct patent number or otherwise had any knowledge of the false marking statute. Indeed, plaintiff acknowledged that defendant "makes an effort to ensure that its packaging is truthful." Furthermore, upon learning of plaintiff’s allegations, defendant created an "action plan" to resolve the issues. Defendant segregated the accused inventory, removed the patent information and held new production until its suppliers could change the markings. Based upon these facts, the Court held that no reasonable jury could find that the defendant had the required intent to deceive.

The Court went on to hold that the concepts of agency and collective corporate knowledge, or "collective scienter" were not applicable. The Seventh Circuit had specifically held that intent to deceive is not a corporate attribute.