The patent pilot program started this month in the Northern District and across the country. The pilot program is a ten-year look at ways to handle patent cases more effectively. The main component of the pilot program is judges in pilot districts, including the Northern District, self-selecting as patent judges. Patent cases will continue to be randomly assigned to all Northern District judges. But when a non-patent judge is assigned a patent case that judge will have thirty days to order reassignment of the case. When reassignment is ordered, the case will be randomly reassigned to one of the patent judges. There will also be patent-related education and programs offered for the patent judges across the country. One unanswered question about the pilot program remains: If a non-patent judge was assigned a patent case less than thirty days before the program kicked off on September 19, can the non-patent judge order the patent case reassigned pursuant to the pilot program? I have not seen it happen yet, but I suspect it could over the next week or two. The Northern District issued the following list of judges who have self-selected as patent judges:
Monthly Archives: September 2011
Party Cannot Lack Standing to be Sued
Posted in JurisdictionRichards v. Burgett, Inc., No. 10 C 7580, Slip Op. (N.D. Ill. Apr. 4, 2011) (Lindberg, Sen. J.).
Judge Lindberg denied the Burgett Bros. defendants’ and the ASC defendant’s motions to dismiss plaintiff’s trademark infringement claims related to the GEORGE STECK marks for pianos. First, the Burgett Bros. argued that they did not have standing to be sued. The argument boiled down to a lack of standing because the case would fail on the merits. But the Court held that standing was only an issue for a plaintiff, and denied that portion of the motion.
The Court next denied ASC’s motion to dismiss based upon a statute of limitations. First, the Court explained that the Lanham Act does not have a statute of limitation. So, ASC’s claim was more properly styled as laches. And because laches is highly fact dependent, it could not be resolved on a motion to dismiss.
The Court also denied ASC’s argument that the claims should be dismissed pursuant to judicial estoppel because plaintiff had made inconsistent statements in pleadings from earlier cases. But no Court had relied upon plaintiff’s earlier statement, as is required for judicial estoppel.
Finally, plaintiff’s earlier voluntary dismissal did not implicate the "two dismissal rule," Fed. R. Civ. P. 41(a)(1)(B). Rule 41(a)(1)(B) states that voluntary dismissal is without prejudice to refile, unless the plaintiff previously dismissed any . . . action based on or including the same claim . . . ." But plaintiff did not dismiss his entire prior action, only specific claims of it. And there was no trademark claim in the earlier action.
The Court also denied ASC’s argument that the claims should be dismissed for plaintiff’s failure to timely record its alleged assignment with the Patent Office. ASC argued that the assignment was void as to ASC because ASC was a bona fide purchaser, without notice of the assignment, and plaintiff had not timely filed its assignment pursuant to 15 U.S.C. Section 1060. Plaintiff argued that the bona fide purchaser rule did not apply to licensees, such as ASC. But neither side offered case law to support its position on the issue. So, the Court denied the motion as to filing the assignment. Additionally, the complaint alleged that ASC acted with knowledge of the assignment.
Plaintiff “Strikes Out”: Expert can be Both Testifying and Consulting
Posted in ExpertsSara Lee Corp. v. Kraft Foods Inc., No. 09 C 3039, Slip Op. (N.D. Ill Apr. 1, 2011) (Denlow, Mag. J.).
Judge Denlow, with a nod to baseball’s opening day, denied plaintiff Sara Lee’s motion to compel expert discovery from defendants (collectively "Kraft Foods") in this trademark dispute. Kraft Foods retained an expert who helped create a survey and then used that survey as part of his expert opinion regarding advertising of Sara Lee hot dogs. The report opined that Sara Lee’s advertisement — "Taste America’s Best Beef Franks" — was misleading because it led consumers to believe that it was Sara Lee’s Angus Beef Franks rather than its Ball Park Beef Franks that were being advertised. Kraft Foods also used the expert in a consulting capacity regarding another Sara Lee hot dog advertisement. The Court’s in camera review showed that all the expert did was advise as to how a survey could be conducted, and that he did not know whether a survey was conducted or what the results were if a survey was conducted.
The Court noted that most courts allow an expert to have both testifying and non-testifying roles, but that the production obligation is generally broad. The only material that can be withheld as privileged or work product is information generated or considered "uniquely" as a consultant. And ambiguity was to be decided in favor of production. Because the requested materials only discussed the studies regarding the advertisement for which the expert was not testifying, they did not need to be produced. Furthermore, because the materials did not provide facts, data or assumptions provided by counsel, they would not have to have been produced by a testifying expert based upon the recent revisions to the Fed. R. Civ. P. 26(a)(2)(B). Instead, the requested materials were protectable work product pursuant to Fed. R. Civ. P. 26(b)(4)(C).
Finally, the Court denied Kraft Foods’ motion for fees and costs because Sara Lee was substantially justified in seeking in camera review of the disputed communications.
False Patent Marking Statute is Constitutional
Posted in Federal RulesLuka v. The Proctor & Gamble Co., No. 10 C 2511 (N.D. Ill. Mar. 28, 2011) (Kennelly, J.).
Judge Kennelly granted certain defendants’ motions to dismiss plaintiff’s false patent marking case for failure to sufficiently plead intent, and held that the statute was constitutional. Note that this case was decided before President Obama signed the America Invents Act which removes expired patents from the false marking statute.
Proctor & Gamble
Plaintiff’s general allegations against defendant Procter & Gamble were insufficient, particularly in light of the license agreement requiring defendant Innovative to comply with the marking statute.
Innovative
Plaintiff sufficiently pled intent as to Innovative by attacking the P&G-Innovative license agreement. In that agreement, Innovative accepts the responsibility of complying with the marking statute.
Helen of Troy & Idelle
Plaintiff’s claims as to Helen of Troy and Idelle failed because they were the sort of generalized pleadings that BP Lubricants held insufficient.
Constitutionality
The Court held that § 292, the false marking statue was constitutional:
For these reasons, the Court agrees with the district court in the Pequignot case that "[a]though these mechanisms concededly do not rise to the same level of government control provided by the FCA, the FCA’s strict safeguards are not required because . . . § 292(b) represents a minimal intrusion onto Executive Branch power." Peguignot v. Solo Cup Co., 640 F. Supp. 2d 714, 728 (E.D. Va. 2009), vacated in part on other grounds, 608 F.3d 1356 (Fed. Cir. 2010).
False Marking Claim Dismissed for Generalized Pleading
Posted in Pleading RequirementsSimonian v. Astellas Pharma US Inc., No. 10 C 1539, Slip Op. (N.D. Ill. Mar. 28, 2011) (Coleman, J.).
Judge Coleman granted defendant Astella’s Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Simonian’s false patent marking claims for failure to meet the Fed. R. Civ. P. 9(b) heightened pleading standards, but did so without prejudice. The Court held that Simonian’s complaint contained "precisely the same" general allegations — a "sophisticated company" that "knew or should have known" of the expired patent — that the Federal Circuit rejected as deficient in BP Lubricants.
Trading Technologies: Court Grants Limited Jurisdictional Discovery
Posted in JurisdictionTrading Techs. Int.’l, Inc. v. BCG Partners, Inc., No. 10 C. 715 (Consolidated), Slip Op. (N.D. Ill. Mar. 28, 2011) (Kendall, J.).
Judge Kendall denied without prejudice defendant’s (collectively "BCG") motion to dismiss for lack of personal jurisdiction. BCG argued that its named entities were holding companies without operational responsibility, and that none had officers in Illinois. Plaintiff Trading Technologies ("TT"), however, produced evidence that one or more of the BCG entities had Illinois officers in Illinois for the purposes of selling the accused eSpeed software. Furthermore, certain government filings suggested that one or more of the BCG entities were operational entities. The Court, therefore, denied BCG’s motion with leave to refile after the parties completed limited jurisdictional discovery and TT replead to the extent it felt necessary.
Pre-BP Lubricant Case Allows General Pleading for Intent to Deceive
Posted in Pleading RequirementsHeathcote Holdings Corp., Inc. v. Maybelline LLC, No. 10 C 2544, Slip Op. (N.D. Ill. Mar. 15, 2011) (Pallmeyer, J.).
Judge Pallmeyer granted in part defendants’ (collectively "Maybelline") motion to dismiss plaintiff Heathcote’s false patent marking case. The Court also granted Maybelline’s motion to transfer the case to the Southern District of New York. In this pre-BP Lubricants case, the Court held that Heathcote had sufficiently pled intent to deceive by pleading the allegedly false statement and Maybelline’s knowledge of the false statement. These are the type of allegations specifically held to be in sufficient by BP Lubricants.
Heathcote did not oppose Maybelline’s motion to dismiss L’Oreal USA Creative, so long as it was given leave to replead if it later found Maybelline’s representations were wrong.
Finally, the Court transferred the case to Maybelline’s home district, the Southern District of New York. One key factor was that the alleged conduct would have largely occurred at Maybelline’s headquarters, in New York. The Court also held that the sources of proof in the case will be more accessible in New York than in Illinois.
Court Refuses “Back Door” Attempt at Claim Construction
Posted in Claim ConstructionMinemyer v. B-Roc Reps., Inc., No. 07 C 1763, Slip Op. (N.D. Ill. Mar. 22, 2011) (Cole, Mag. J.).
Judge Cole denied defendants’ summary judgment of noninfringement. The motion was premised upon an effort to amend the construction of "approximately perpendicular" which the parties previously agrees was "approximately ninety degrees" to no more than five degrees away from a ninety-degree angle. Defendants’ accused couplers had threads at an eighty degree angle – ten degrees away from ninety degrees. But the parties had already cancelled their claim construction process because they agreed upon all constructions, including that approximately perpendicular meant approximately ninety degrees." Even if the arguments were timely, and not a "back door" attempt to avoid the Court’s schedule, defendants’ evidence did not support their construction:
- The inventor’s testimony suggested ten degrees did not meet the "approximate" modifier. But the inventor’s testimony is heavily discounted if not disregarded, in claim construction.
- The parties experts also opined that ten percent was outside "approximate." But that was evidence for the trier of fact to weight in considering infringement.
- The examiner’s use of "perpendicular" without the "approximately" modifier was irrelevant because the allowed claim contains the modifier.
Inventorship Analysis for Foreign Counterpart Patents Requires Separate Analysis
Posted in TrialAffymax, Inc. v. Johnson & Johnson, No. 04 C 6216, Slip Op. (N.D. Ill. Mar. 21, 2011) (Kennelly, J.).
Judge Kennelly granted in part plaintiff Affymax’s motion to vacate the arbitration award between the parties, remand the case to the arbitration panel for further determination of the inventorships of foreign patents. The parties previously undertook two years of discovery before a three-member AAA panel. That panel held that Affymax and defendants (collectively "Johnson & Johnson") were joint inventors on several U.S. Patents and that Johnson & Johnson was the sole inventor as to one patent, and therefore, its foreign counterparts. Noting that it could not vacate the arbitration decision even for "gross" misapplication of the law, the Court considered Affymax’s arguments to vacate the award as to the patents held to be solely owned by Johnson & Johnson:
- The evidence suggested that the panel did conduct the claim-by-claim analysis required by the Agreement as to the US patents and claims. It did not matter that they did not detail the analysis for each US claim.
- The arbitrator’s decision clearly and thoroughly stated the law of joint inventorship. Affymax’s disagreement with the application of the law is not grounds for vacating an arbitration award.
- The arbitrator had the relevant evidence before them. The trail of documents connecting Affymax to the documents was not relevant because the arbitrators disagreed with Affymax regarding the conclusions drawn from the documents.
- The arbitrators manifestly disregarded the law by finding that the foreign patents had the same ownership interests as their U.S. counterparts without performing the required claim-by-claim inventorship analysis. The Court, therefore, vacated the award regarding the foreign patents and rewarded the arbitration panel for determination of inventorship of the foreign patents.
4 Key Provisions of the Patent Reform Act for Patent Litigators
Posted in Legal NewsThe patent blogs are abuzz with detailed analysis of cloture votes, yesterday’s Senate hearings and the Senate’s overwhelming passage of the America Invents Act ( the "AIA"). With the AIA expected to be signed by President Obama in the next few weeks, I am beginning a series of posts looking at its key provisions. This is the first of those posts. It is based upon a post from earlier this week at my Retail Patent Litigation Blog.
Here are four key provisions of the AIA for patent litigators and litigants:
- Smaller Patent Troll Suits: The most immediate impact on patent litigation will be Section 19, limiting joinder in a single suit of unrelated parties. This is not the more extreme restrictions on venue or joinder that many had hoped for. But it will have some positive impact on patent troll litigation. For suits filed on or after the date of enactment, plaintiffs will only be able to join related parties in a single suit — for example, multiple manufacturers, distributors or resellers of an identical product. And while cases against unrelated parties could still be joined for discovery, they will not be able to be joined for trial. At first glance, this is not much of a barrier to entry for patent trolls. Very few defendants get to trial, and cases may still be consolidated for discovery purposes at the court’s discretion. Where a troll today could pay one $350 filing fee and sue 100 unrelated defendants, after enactment that same troll would have to file 100 suits and pay $35,000 in filing fees. $35,000, however, is dwarfed by the settlement demands in many cases. The hassle of filing the extra suits and the related filing fees, however, may be enough to prevent suits against some of the much smaller entities that almost always end up in these suits. And the requirement of separate suits will allow defendants a much greater ability to seek transfer to an appropriate venue. So, while this is not the sea change that many sought, it is a real benefit to retailers who are tired of being sued in Texas and want a better shot at transferring cases. This Section only applies to cases filed after enactment, not pending cases. So, existing cases will not be impacted.
- Post-Grant Review: The AIA establishes a brief window for post-grant and inter partes review in Section 6. Third parties may challenge the validity of any claim of a patent for nine months after a patent is granted or issuance of a reissued patent. But you cannot seek post-grant review after filing a suit involving the patent. And when post-grant review ends in a final Board decision, you give up the right to use the arguments used in post-grant review or arguments that could reasonably have been used, in a later ITC proceeding or district court litigation.
- False Marking Restrictions: Private citizens that file false marking claims will be required to prove competitive injury and their damages will be limited to the injury. Additionally, Section 16(b) excludes marking with an expired patent from the false marking statute. Furthermore, Section 16 applies to all cases pending when the AIA is enacted, as well as cases filed thereafter. Section 16 will clear out many of the existing false marking cases, but leaves considerable room for competitor false marking cases.
- First to Invent: One of the most publicized changes to the U.S. patent laws is the move to a first-to-file patent system, the system used by most of the rest of the world. The first-to-file system incentivizes filing patents as quickly as possible to avoid an earlier filing by a competitor. Section 3 softens the first-to-file system providing for a proceeding between patent owners if the junior patent holder can show that the senior patent holder’s invention was derived from the junior patent holder’s invention. These "derivation proceedings" will replace the current, seldom-used interferences.
Of course, there is much more to the AIA, but these key changes are a good way to start digging into it. If there are other provisions you view as on par with these four from a litigation perspective, I would love to hear about them. Future posts will look at some of the other provisions of the AIA.
Patent Reform Passes the Senate
Posted in Legal NewsThe Senate passed the America Invents Act (the "AIA") this evening without amendment. So, patent reform is headed to the White House where President Obama is expected to sign the AIA into law within the next two weeks. Here is a link to the AIA. I will begin a series of posts discussing key provisions of the AIA tomorrow.
Situs of Material Events in False Marking Cases is Where Marking Occurred
Posted in Pleading RequirementsSimonian v. Maybelline LLC, No. 10 C 1615, Slip Op. (N.D. Ill. Mar. 14, 2011) (Kendall, J.)
Judge Kendall denied defendant Maybelline’s motion to dismiss, granted its motion to transfer and denied as moot its motion to stay pending the Federal Circuits standing decision in Stauffer, in this false patent marking case. The Court held, pre-BP Lubricant, that Fed. R. Civ. P. 9(b) pleading applied to the intent element, but because the intent went to state of mind the fraud could be alleged generally, inconsistent with BP Lubricants. Because plaintiff Simonian had generally pled intent, the complaint was sufficient.
The Court then transferred the case to the Southern District of New York, Maybelline’s home district. As a relator plaintiff, Simonian’s choice of forum was given little deference. And the situs of material facts was where marking decisions were made – New York – not where marked products were bought – Illinois. The Court, therefore, transferred the case.
Kanye West’s “Stronger” Did Not Infringe Based Upon “Fragmented Literal Similarity”
Posted in Legal NewsPeters, p/k/a Vince P. v. Kanye West, No. 10 C 3951, Slip Op. (N.D. Ill. Mar. 3, 2011) (Kendall, J.).
Judge Kendall granted defendants’ (collectively "Kanye West") Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Vince P’s copyright infringement claim. Vince P alleged that Kanye West copied Vince P’s 2006 song "Stronger" when Kanye West released his 2007 song "Stronger." Vince P sufficiently pled ownership of a registered copyright. So, the issue was whether Vince P sufficiently pled copying. As an initial matter, Vince P sufficiently pled access to Vince P’s work by alleging that Vince P shared his song with Kanye West’s "close friend, advisor and business associate" John Monopoly.
The Court then considered whether the allegedly copied elements of Vince P’s song were copyrightable:
- Title — Titles by themselves are not copyrightable.
- Kate Moss — A reference to Kate Moss in each song was an unprotectable fact.
- Hook — The use of the maxim "that which does not kill us makes us stronger" was not protectable because it was not original to Vince P. And the use of "wronger" in each hook was not protectable because while it was a unique word, it was actually part of a rhyme scheme with "longer" and common rhyme schemes are not protectable.
The combination of the above elements was not used in its entirety or in a nearly identical way. Therefore, the combination was not protectable.
Finally, the two songs did not display "fragmented literal similarity." That doctrine, recognized in other circuits, allows for infringement where a smaller fragment of a work is literally copied, but not the entire work. The similarities between the two Stronger songs, however, did not even rise to the level of fragmented literal similarity. Among other reasons the allegedly copied fragments were not integral parts of the copyrighted work.
Because there was no substantial similarity between the two songs, the Court dismissed the copyright infringement claim.