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Chicago IP Litigation Tracking Northern District of Illinois IP Cases

Monthly Archives: October 2011

Counsel’s Inattentiveness is Not Excusable Neglect

By R. David Donoghue on Posted in Trial

Lucasfilm Ltd. v. Skywalker Outdoor, Inc., No. 10 C 733, Slip Op. (N.D. Ill. Mar. 11, 2011) (Conlon, J.).

Judge Conlon denied defendant Skywalker Outdoor’s motion to modify or vacate the default judgment entered in favor of plaintiff Lucasfilm in this Lanham Act dispute. Skywalker Outdoor did not answer Lucasfilm’s complaint and then did not attend the hearing on Lucasfilm’s default motion. The Court entered default judgment after that hearing. First, Skywalker Outdoor received sufficient notice of the hearing – more than the required ten days pursuant to Fed. R. Civ. P. 55(b)(2). Furthermore, Skywalker Outdoor’s claim that it believed its counsel would attend the hearing was irrelevant. Counsel’s inattentiveness is not excusable neglect pursuant to Fed. R. Civ. P. 60(b)(1).

Court Reconstrues “Cooking Enclosure”

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. Apr. 12, 2011) (St. Eve, J.).

Judge St. Eve granted defendant Hearthware’s motion for reconsideration holding that the claim term cooking enclosure required no construction. The Court originally construed "cooking enclosure" to mean "an oven housing and a metallic oven pan supported by a base." The Court held that the instruction imported a claim limitation. Furthermore, the doctrine of claim differentiation required broader constructions because other independent claims that further defined the cooking enclosure as having a metallic oven pan as a base were made superfluous by the original construction.

The Court also held that Hearthware’s motion should have been brought pursuant to Fed. R. Civ. P. 54(b) which gives the Court authority to reconsider its interlocutory decisions, not Rule 59(e) which only applies once the Court has entered judgment.

Trading Technologies: Court Quashes Subpoena

By R. David Donoghue on Posted in Discovery

Rosenthal Collins Group, LLC v. Trading Techs. Int’l., Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Jul. 19, 2011) (Coleman, J.).

Judge Coleman granted declaratory judgment plaintiff Rosenthal Collins Group’s ("RCG") motion for protective order and to quash third party subpoenas as to third party CQG. The subpoenas sought information regarding RCG’s use of CQG’s trading software. The Court previously entered judgment against RCE and the only issue left in the case is a January 23, 2012 damages trial. But the judgment and the damages trial were limited to RCG’s use of its software, not other third parties that have not yet been held to infringe, such as CQG’s software.

Case Split Based Upon Differing Forum Selection Clauses

By R. David Donoghue on Posted in Legal News

Moran Indus. Inc. v. Baker, No. 10 C 7653, Slip Op. (N.D. Ill. May 27, 2011) (Hibbler, Sen. J.).

Judge Hibbler granted in part defendant’s motion to dismiss and transfer in this Lanham Act case over Mr. Transmission and Meineke Car Care Center marks. Defendant allegedly violated franchise agreements with plaintiff Moran and plaintiff Meineke by using both plaintiffs’ trademarks at defendants’ auto repair shop. Moran’s franchise agreement had an exclusive jurisdiction provision requiring cases be brought in the Northern District of Illinois. So, Moran’s claims were not dismissed. Meineke’s agreement, however, had no such exclusive provision. So, Meineke’s claims were dismissed for lack of personal jurisdiction.

Court Upholds $1M Sanction for Fabricated Prior Art

By R. David Donoghue on Posted in Discovery

Rosenthal Collins Group, LLC v. Trading Techs. Int’l., Inc., No. 05 C 4088, Slip Op. (N.D. Ill. June 1, 2011) (Coleman, J.).

Judge Coleman denied plaintiff Rosenthal Collins Group’s ("RCG") motion to reconsider or clarify the Court’s February 23, 2011 Order entering defendants judgment in favor of declaratory judgment defendant Trading Technologies ("TT") and sanctioning RCG $1 million. While the discovery misconduct – which the Court described as "attempted fraud" – related to invalidity, it was appropriate to enter default judgment as to infringement because TT’s infringement case would have been "futile" if the "fabricated" evidence had been successfully used to invalidate the patents. Furthermore, RCG should not be allowed to benefit from the thwarting of its misconduct.

Finally, the Court’s sanctions were not criminal, they were made pursuant to Fed. R. Civ. P. 37 and the Court’s inherent powers.

Local Patent Rules Do Not Trump Rule 8 Pleading Requirements

By R. David Donoghue on Posted in Pleading Requirements

Groupon Inc. v. MobGob LLC, No. 10 C 7456, Slip Op. (N.D. Ill. May 25, 2011) (Hibbler, Sen. J.).

Judge Hibbler granted plaintiff Groupon’s motion to strike defendant MobGob’s affirmative defenses and to dismiss MobGob’s counterclaims, and denied MobGob’s motion to dismiss Groupon’s claim in this patent dispute involving online marketing systems.

MobGob’s Motion to Dismiss

Groupon pled the intent elements of its indirect infringement claims upon information and belief. And that pleading was sufficient even though intent is governed by Fed. R. Civ. P. 9(b) because even pursuant to Rule 9(b), intent and knowledge can be pled generally. Additionally, it was reasonable to infer from Groupon’s allegations that MobGob created or had someone create the accused system and the public nature of Groupon’s patent that MobGob had actually knowledge of its accused infringement.

Groupon’s Motions to Strike and Dismiss

First, Groupon sought to strike MobGob’s affirmative defense of invalidity. The Court initially noted that motions to strike are disfavored because they are unlikely to streamline a case or make resolving the case more efficient. But the Court still struck MobGob’s invalidity defense. MobGob’s invalidity defense did nothing more than identify the relevant statutory sections, offering not a single fact, upon information and belief or otherwise. While the Court noted there were some policy reasons for not holding affirmative defenses and counterclaims to the Twombly/Iqbal standards, the Seventh Circuit required that they be met for any pleading. The Court, therefore, struck MobGob’s invalidity defense. And for the same reason, the Court dismissed MobGob’s invalidity counterclaim because it also offered no facts. The Court also noted that it would not excuse inadequate pleading because of the Local Patent Rule 2.3(b) invalidity contentions that MobGob would be required to serve shortly after answering. The LPR 2.3(b) disclosures require significantly more detail than Fed. R. Civ. P. 8 notice pleading. So, MobGob could meet its Rule 8 obligations without providing the level of detail required by LPR 2.3(b).

The Court also struck MobGob’s affirmative defense regarding ownership of Groupon’s patent because it also lacked factual support, and because it did not accept Groupon’s facts as true, as required by an affirmative defense, instead challenging Groupon’s facts.

Jurisdictional Facts Regarding Website Activity Required Before Default

By R. David Donoghue on Posted in Jurisdiction

Deckers Outdoor Corp. v. Does 1-55, No. 114 C 10, Slip Op. (N.D. Ill. May 24, 2011) (Darrah, J.)

Judge Darrah dismissed without prejudice plaintiff’s motion for a default judgment in this Lanham Act case about the UGG mark. The Court held that it would not exercise personal jurisdiction over the Does based solely on interactive websites without additional facts as to whether the websites were aimed at Illinois.

Denying Statements for Which Defendant Lacks Information or Belief is “Oxymoronic”

By R. David Donoghue on Posted in Pleading Requirements

Estwing Manufacturing Co. v. CTT Tools, Inc., No. 11 C 2139, Slip Op. (N.D. Ill. May 18, 2011) (Shadur, Sen. J.).

Judge Shadur entered this order sua sponte to address deficiencies in defendant CTT’s answer, affirmative defenses and counterclaims in this Lanham Act case, as he often does. First, CTT denied plaintiff Estwing’s claims for which CTT lacked information or belief. But the Court noted that denying a statement for which one lacks information or belief was "oxymoronic." The Court, therefore, struck the denials.

The Court also struck, with leave to replead, each of CTT’s affirmative defenses that were mere recitations of a legal principle and did not put Estwing or the Court on notice of the defense, as well as those defenses which did not accept the truth of Estwing’s allegations.

Finally, the Court also struck CTT’s counterclaims with leave to replead those that were not simply the "flip side" of Estwing’s complaint, which "add nothing to the mix." For example, the Court suggested that CTT’s counterclaim for cancellation of Estwing’s mark might be replead, while declaratory judgment claims for noninfringement and invalidity should not be. Finally, the Court ordered that CTT should not be charged for its counsel’s efforts in revising the papers, and counsel should send a letter to that effect to CTT, copying the Court.

Marking With An Unenforceable Patent Does Not Create Intent to Deceive

By R. David Donoghue on Posted in Pleading Requirements

Hollander v. Hospira, No. 10 C 8151, Slip Op. (N.D. Ill. May 12, 2011) (Kendall, J.).

Judge Kendall granted defendant Hospira’s motion to dismiss plaintiff Hollander’s false patent marking claims for failure to sufficiently plead intent. But the Court gave Hollander 30 days to replead because its complaint was filed before the BP Lubricants decision on intent pleading was entered. The following items were of particular note:

  • The fact that some of Hospira’s patents expired for failure to pay maintenance fees was not sufficient.
  • The fact that one patent was held unenforceable was not sufficient to show intent.
  • Hospira’s 10-K statements regarding its attention to third party patents were not relevant to Hospira’s knowledge of its own patents.
  • Packaging inserts inside a consumer package were not relevant because a consumer could not see them before purchasing the product, and therefore, could not be swayed its decisions based upon allegedly false marking.

Trading Technologies: Settlement and Consent Judgment

By R. David Donoghue on Posted in Settlement

Trading Techs. Int’l., Inc. v. TradeHelm, Inc., No. 10 C. 931, Slip Op. (N.D. Ill. May 2011) (Kendall, J.).

Judge Kendall entered the parties – Trading Technologies ("TT") and TradeHelm – agreed consent order, as part of their settlement in this futures trading software – there is much more on this and related cases in the Blog’s archives case. The parties agreed as follows:

  1. TT’s patent infringement claims as to its ’999 and ’056 patents were dismissed.
  2. TradeHelm admitted infringement as to TT’s ’411, ’768, ’382 and ’992 patents, but not the ’056 and ’999 patent-in-suit.
  3. TradeHelm admitted validity and enforceability of the ’304, ’132, ’411, ’768, ’382 and ’996 patents, but again not the ’056 or the ’999 patents-in-suit.
  4. TradeHelm was permanently enjoined from infringing, unless TT permitted it, the ’132, ’304, ’411, ’768, ’382 and ’996 patents. But again, not the ’056 and ’999 patents-in-suit.

Trading Technologies: Court Maintains Existing Protective Order

By R. David Donoghue on Posted in Discovery

Trading Techs., Int’l, Inc. v. BGC Partners, Inc., No. 10 C 715 (Consolidated Cases), Slip Op. (N.D. Ill. Apr. 22, 2011) (Schenkier, Mag. J.).

Judge Schenkier ruled upon various proposed modifications to the 2006 Protective Order in the twelve consolidated 2010 cases. Judge Moran entered the governing protective in 2005, and it has stood since with some revisions. The key rulings included:

The Court denied various proposals to limit plaintiff Trading Technologies’ ("TT") in-house counsel Steve Borsand’s access to technical documents. While there was some risk of inadvertent disclosure because Borsand is involved in strategic decisions as to the scope of patent protection, the risk was small compared to the harm TT would suffer if it lost Borsand, who had been active in these litigations since 2003.

The Court denied efforts to expand the scope of the patent prosecution bar, limiting counsel from prosecuting related patents for a year after the litigation ended. Defendants’ proposed expansion would have limited counsel from prosecuting in completely unrelated areas of trading software technologies. And the current bar balanced protecting the parties against the livelihood of counsel well.

The Court denied to add an additional level of protection for source code or to add additional protections for source code. The Court characterized the proposed protections as "elaborate," "extensive" and "labyrinthian."

The Court held that co-defendants should produce their confidential information to each other. To do otherwise, would limit the value of the case consolidation. And it was unnecessary to limit production because the Protective Order provided sufficient protections for the co-defendants just as it did for information exchanged between TT and a defendant.

Parties were allowed to add additional in-house counsel to the Protective Order, so long as they met the same criteria that Borsand met for TT.

The Court modified the Protective Order to include a specific method for challenging confidentiality designations made pursuant to the Protective Order.

“The Allergens” Requires All Allergens Not Just One or More

By R. David Donoghue on Posted in Claim Construction

Late Allergen Reduction, LLC v. Dynarex Corp., No. 10 C 129, Slip Op. (N.D. Ill. Apr. 21, 2011) (Bucklo, J.).

Judge Bucklo construed the claims in this patent infringement case involving a method of neutralizing protein allergens found in natural rubber latex. Here are constructions of note:

  • "The protein allergens" was construed to require that the method degrade all of the protein allergens in the latex, not just one or more protein allergens.
  • "Non-allergenic to humans" was construed as "the protein allergens contained within the natural rubber latex are degraded such that the natural rubber latex is incapable of producing an allergic reaction in any human . . . ." Plaintiff’s proposed construction requiring greatly reduced levels of allergens to "most humans" would render the claims indefinite.
  • "Non-transmissive" was construed as "an optical structure that reduces the transmission of radiant light to the greatest degree practicable consistent with the intended purpose."
  • "A protease enzyme and a peptidase enzyme" was construed as requiring two separate enzymes, one being a protease and the other being a peptidase. It could not be a single enzyme of both types.