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Chicago IP Litigation Tracking Northern District of Illinois IP Cases

Monthly Archives: February 2012

Required Third Party Data Backs Patent Claims

By R. David Donoghue on Posted in Summary Judgment

Civix-DDI, LLC v. Hotels.com, No. 05 C 6869, Slip Op. (N.D. Ill. Aug. 19, 2011) (St. Eve, J.). 

Judge St. Eve granted defendant Hotels.com summary judgment of noninfringement in this patent litigation involving selecting items from a database based upon geographic vicinity. Here are the key holdings:

  • Citing Centillion Data Sys., LLC v. Quest Comm’ns Int’l, Inc. 631 F. 3d 1279 (Fed. Civ. 2011) the Court held that Hotels.com did not "use" or "make" the required "point" or end-user computer or mobile device. The end-user had to initiate a query by implementing data into its post. Those activities were not under Hotels.com’s control. And therefore Hotels.com neither directly infringed nor induced infringement. 
  • Plaintiff Civix-DDI ("Civix") only identified star-rankings and property type in its interrogatory responses as "Associated Categories." Civix was, therefore, limited to those two associated categories. Because no Hotels.com initial screen in evidence allowed for search by either of these associated categories, Hotels.com was entitled to partial summary judgment of noninfringement. 
  • Hotels.com was granted summary judgment of noninfringement because its banner ads were supplied by a third party, not from a Hotels.com database as required by the patents. Similarly, Hotels.com did not store the required virtual tours on its own database as required by the patent. 
  • The Court refused to consider Civix’s expert declarations to the extent that they contradicted the expert’s deposition testimony.

False Marking Requires More than General Intent Allegations

By R. David Donoghue on Posted in Pleading Requirements

Simonian v. Mead Westvaco Corp., No. 10 C 1217 Slip. Op. (N.D. Ill. Sep. 1, 2011) (Castillo, J.). 

Judge Castillo granted defendant Mead Westvaco’s motion to dismiss plaintiff Simonian’s false patent marking suit claiming that Mead Westvaco marked envelopes with expired patents. Simonian’s general allegation of intent did not meet the Fed. R. Civ. P. 9 (b) heightened pleading standards. In fact, they mirrored the allegations held insufficient in BP Lubricant. And Simonian did not:

  • Identify specific Mead Westvaco individuals with knowledge of the alleged false marking;
  • Allege that Mead Westvaco sued a third party asserting the patents after they expired; or
  • Allege that Mead Westvaco made multiple revisions to the packaging on the markings after the patents expired. 

Trading Technologies: Party Cannot Waive FRE 408 Protection As to its Communications

By R. David Donoghue on Posted in Settlement

Trading Techs. Int’l., Inc. v. BCG Partners, Inc., No. 10 C 715 (Consolidated), Slip Op. (N.D. Ill. Sep. 2, 2011) (Kendall, J.). 

Judge Kendall granted defendants’ motion to strike references to settlement discussions in plaintiff Trading Technologies ("TT") complaints, and denied the parties’ various motions to dismiss each others pleadings in their patent cases involving trading software. TT used various of its settlement documents to allege certain defendants’ actual knowledge of both TT’s patents and defendants’ alleged infringement of those patents. TT acknowledged that the documents were settlement documents. The Court noted that TT could not waive FRE 408 even for its own documents and held that TT’s attempted use was improper pursuant to FRE 408. TT used the documents to prove two elements of liability for indirect infringement – knowledge of the patents and the alleged infringement. The Court, therefore, struck all references to the documents pursuant to Fed. R. Civ. P. 12(b). The Court denied defendants’ motions to dismiss TT’s indirect infringement claims. Even after striking the settlement documents, TT pled sufficient facts:

  • TT made a general allegation of knowledge which was not alone sufficient, but was adequately supported. 
  • TT alleged that each defendant competed with TT. It was "not a stretch" to presume that TT’s competitors would be watching TT’s patents. 
  • TT alleged that defendants were aware of the patents through various suits. The Court voted conflicting case law regarding whether these suits could create notice. 
  • TT denied that defendants encouraged infringement by advertising allegedly infringing products and encouraging them to infringe by using the software products. 

The Court denied TT’s motion to strike defendants’ noninfringement and invalidity affirmative defenses and then related counterclaims calling the motions a "waste of time":

  • The defendants’ bare-bones affirmative defenses were consistent with standard patent litigation practice and put TT on notice.
  • The defenses were also consistent with the Local Patent Rules which require more detailed allegations early in discovery. See LPR 2.3.
  • TT’s affirmative defenses as to one defendant were "really identical" to those TT sought to strike.
  • Defendant had a right to maintain their declaratory judgment counterclaim for findings of noninfringement and invalidity.

Nielson Marketing Area Maps are Protectable

By R. David Donoghue on Posted in Summary Judgment

The Nielsen Co. (US), LLC v. Truck Ads, LLC, No. 08 C 6446, Slip Op. (N.D. Ill. Aug. 29, 2011) (Pallmeyer, J.).

Judge Pallmeyer granted in part plaintiff Nielsen’s motion for summary judgment and denied defendant Truck Ad’s cross-motion in this copyright case involving Nielsen’s marketing area maps for television and other media. The Court held that Nielsen had valid copyrights in its maps:

  • The fact that Arbiton may have made the maps first did not prevent Nielsen’s copyright because of Nielsen’s original contribution to its maps.
  • Nielsen’s maps were not merely factual; Truck Ad’s comparison to the white pages was imperfect.
  • The FCC’s use of the maps did not bring them into the public domain.

The court held that there were questions of fact as to infringement, including: 

  • Truck Ad’s access to the copyrighted maps;
  • The similarity between Nielsen’s and Truck Ad’s maps; and
  • Truck Ad’s defense of independent creation.

Shared Downloading of a Movie Makers Joinder

By R. David Donoghue on Posted in Discovery

First Time Videos, LLC v. Does 1-76, No. 11 C 3831, Slip Op. (N.D. Ill. Aug. 16, 2011) (Bucklo, J.).

Judge Bucklo denied the Doe defendants’ various motions to quash or dismiss in this BitTorrent copyright infringement case. Plaintiff First Time Video ("FTV") alleged that the seventy-six Doe defendants infringed plaintiff’s copyright in an adult movie using BitTorrent and in so doing engaged in a civil conspiracy. The Court denied each motion: 

·       While file-sharers have limited first amendment rights, those rights do not shelter copyright infringement. 

·       FTV sufficiently described the alleged copyrighted work by naming the movie in the complaint. 

·       Joinder of the seventy-six Does was proper. FTV alleged that the Does acted in concert to copy one video over several months as part of a BitTorrent "swarm." And the case involved common legal questions regarding copyright law. 

·       The Court recognized that other Northern District judges had severed all of the Doe defendants. Those cases, however, involved many more Does, and did not show a connection to Illinois. FTV alleged that it had traced the accused IP addresses to Illinois using geo-location technology.

·       FTV’s personal jurisdiction allegations – that FTV traced the Doe IP addresses to Illinois – were also sufficient.

CLE: John Marshall 56th Annual IP Law Conference

By R. David Donoghue on Posted in Legal Seminars

John Marshall is hosting its 56th Annual Intellectual Property Law Conference this week, on Friday, February 24, 2012. 

The content looks excellent, including:

  • Recent Developments in Intellectual Property Law;
  • Bernard Knight, General Counsel, U.S. Patent & Trademark Office will present a luncheon keynote on "The Future Challenges of IP Litigation: A Judge’s Perspective";
  • Supreme Court’s Renewed Interest in Patent Law;
  • Critical Trends in 2012 from In-House Perspective;
  • Monetizing IP and Generating Cash from Patents; and
  • E-Discovery — Limiting the Solar System or Expanding the Universe?

Registration and additional information is available here.

Potential Sanctions for Early Discovery Inconsistent With Pleadings

By R. David Donoghue on Posted in Summary Judgment

Millennium TGA, Inc. v. Doe, No. 10 C 5603, Slip Op. (N.D. Ill. Aug. 24, 2011) (Manning, J.). 

Judge Manning held in abeyance Doe defendant’s motion to quash a subpoena issued to its alleged internet service provider and Doe’s motion to dismiss the case for lack of personal jurisdiction. Plaintiff Millennium TGA reasoned that the subpoenaed information would allow it to show that Doe’s actions were directed at Illinois and within the Courts’ jurisdiction. 

 

The Court was "troubled" by Millennium TGA’s claims that it needed jurisdictional discovery, as opposed to discovery only seeking Doe’s identity. Millennium TGA already filed a complaint alleging jurisdiction upon information and belief. The Court, therefore, ordered Millennium TGA to file a brief detailing how the information it sought was necessary. And the Court held the motions in abeyance pending that brief. The Court also warned Millennium TGA that it would initiate sanctions proceedings if Millennium TGA had not met its Fed. R. Civ. P 11 obligations.

Defendant Has Right to Bring Declaratory Trademark Claims

By R. David Donoghue on Posted in Pleading Requirements

ExactLogic, Inc. v. Xactlink, LLC, No. 11 C 50038, Slip Op. (N.D. Ill. Aug. 18, 2011) (Reinhard, J.).  

Judge Reinhard granted in part plaintiff ExactLogic’s motion to dismiss defendant Xactlink’s counterclaims. The Court dismissed Xactlink’s declaratory judgment copyright infringement counterclaim. Xactlink agreed to dismiss the claim so long as Xactlink was free to challenge the validity of ExactLogic’s registration. Because the registration’s validity was at issue based upon Xactlink’s affirmative defenses, the Court dismissed the counterclaim.

 

The Court allowed Xactlink’s declaratory judgment trademark infringement claim. While ExactLogic did not directly allege trademark infringement, its Lanham Act claims would require a determination of the likelihood of confusion between the marks. As such, the trademark was as issue and Xactlink had a right to its declaratory judgment claim. 

New Arguments Improper in Motion for Reconsideration

By R. David Donoghue on Posted in Summary Judgment

llinois Corporation Research LLC v. Best Buy Stores, L.P., No. 10 C 4298 Slip. Op. (N.D. Ill. Sep. 12, 2011) (Zagel, J.). 

Judge Zagel denied plaintiff Illinois Computer Research’s (“ICR”) motion to reconsider the Court’s opinion granting summary judgment in this patent case for the following reasons:

·       ICR’s argument that defendant Best Buy’s agreement was based upon an improper definition of “affiliate” was improper for reconsideration because it was a new argument; 

·       ICR’s argument that Singapore law controlled was also new and, therefore, improper.

Intent Allegations “Nearly Identical” to BP Lubricants Dismissed

By R. David Donoghue on Posted in Pleading Requirements

Porritt v. MacLean Power Sys., LP, No. 10 C 6128 Slip. Op. (N.D. Ill. Sep. 6, 2011) (Lefkow, J.). 

Judge Lefkow granted defendants’ (collectively “MacLean”) Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff’s false patent marking case involving allegedly expired patents marked upon MacLean’s Square Shank Barbed Staples. Plaintiff’s intent allegations were “nearly identical” to those held inadequate in BP Lubricants.  The Court, therefore, dismissed plaintiff’s claim.

The decision was issued about one week before the America Inventory Act was signed into law. But, McLean could not have challenged plaintiff’s claim because they were based upon expired patents. The Court refused to consider MacLean’s constitutional challenge to the False Marking Act.

Reconsideration Motion Denied After Careful Consideration

By R. David Donoghue on Posted in Legal News

Flava Works, Inc. v. Gunter d/b/a myVidster.com, No. 10 C 6517 Slip. Op. (N.D. Ill. Sep. 1, 2011) (Grady, J.). 

Judge Grady denied defendant’s motion to reconsider its preliminary injunction, for the following reasons:

  • The Court addressed defendant’s arguments even though they “could and should have been” brought in the original briefing.

  • Defendants’ argument was too narrow. Someone who linked the copyrighted material can be a direct infringer. The alleged direct infringement of defendant’s customers, therefore, can be true whether the myVidster owner saved the copyrighted file or embedded a link to it.

No Injunction Where Products Are Sold in Different Channels

By R. David Donoghue on Posted in Legal News

Akoo Int’l, Inc. v. Harris, No. 10 C 1685 Slip. Op. (N.D. Ill. Sep. 9, 2011) (Coleman, J.). 

Judge Coleman denied plaintiff Akoo International (“AI”) a preliminary injunction to prevent rapper Clifford Harris from using the Akoo mark for his clothing line. The Court held that AI had not shown a sufficient likelihood of confusion:

  • AI’s advertising system was very different than Harris’ clothing line.
  • The parties sold in different channels.
  • There was no evidence that Harris began using the mark to confuse AI’s customers.

Soliciting Illinois Customers Creates Jurisdiction

By R. David Donoghue on Posted in Jurisdiction

Fasteners for Retail, Inc. v. Andersen, No. 11 C 2164 Slip. Op. (N.D. Ill. Aug. 30, 2011) (Kennelly, J.). 

Judge Kennelly denied defendant Andersen’s motion to dismiss this patent and trade secret case. The Court had personal jurisdiction over Andersen because he worked for defendant K International, an Illinois entity, and Andersen had solicited his former customers in Illinois.

Venue was also proper in the Northern District. A substantial part of the facts at issue occurred in Illinois. The parties’ prior agreement did not release plaintiff’s trade secret claims because they were not contemplated when plaintiff signed the agreement.

No Personal Jurisdiction Based Upon a Passive Website and a Single Advertisement

By R. David Donoghue on Posted in Jurisdiction

Modern Trade Comms., Inc. v. PSMJ Resources, Inc., No. 10 C 5380, Slip Op. (N.D. Ill. Aug. 19, 2011) (Pallmeyer, J.).

Judge Pallmeyer granted defendants PSMJ Resources’ ("PSMJ") and Oser Communications’ ("Oser") motion to dismiss for lack of personal jurisdiction in this Lanham Act case involving plaintiff Modern Trade Communications’ ("MTC") rights in its Metal Construction News mark for a metal industry trade publication. At the Metalcon tradeshow in 2010, Oser distributed a daily publication entitled Metal Daily News at PSMJ’s direction. MTC alleged that the Metal Daily News title infringed its Metal Construction News mark, which MTC used to publish an official show guide at the same conference. 

PSMJ was a Massachusetts company without offices or personnel in Illinois. It approximated that 3% of its revenue at the 2009 Metalcon show in Florida was from Illinois residents. PSMJ’s website was not interactive. PSMJ did produce six training seminars unrelated to Metalcon in Illinois. PSMJ’s small revenues from Illinois residents did not create general jurisdiction. While related to Metalcon, PSMJ’s contract with a third party in Illinois did not create specific jurisdiction. And PSMJ’s production of the 2002 Metalcon in Illinois did not create specific jurisdiction because the accused Metal Daily News was only distributed at the 2010 Metalcon in Las Vegas. The Court, therefore, had neither general nor specific jurisdiction over PSMJ.

 

Oser was an Arizona company without offices or personnel in Illinois, although Oser did distribute publications at two to three trade shows per year in Chicago. Oser’s website was passive, except that the 2010 Metal Daily News was available on the site for downloading. Attendance at two to three trade shows each year in Chicago did not create the systematic contacts necessary for general jurisdiction. Oser’s website was not sufficient to create specific jurisdiction. MTC made no allegation that the website was targeted at Illinois, and the availability of the publication as a free download was not sufficient either. And MTC did not allege how Oser’s alleged infringement in Las Vegas was tied to Oser’s Illinois activities. Furthermore, the sale of an advertisement in the Metal Daily News to an Illinois resident, even combined with the website allegations, was not sufficient to create specific jurisdiction.

 

The Court also denied MTC’s motion to amend because it did not allege any new facts that might create personal jurisdiction.

Determining Senior User is Not an Issue for Motion to Dismiss

By R. David Donoghue on Posted in Pleading Requirements

Arcadia Group Brands Ltd. v. Studio Moderna SA, No. 10 C 7790, Slip Op. (N.D. Ill. Aug. 15, 2011) (Der-Yeghiayan, J.).

Judge Der-Yeghiayan granted plaintiffs’ (collectively "Arcadia") motion to dismiss defendants’ (collectively "Moderna") counterclaims and denied Moderna’s motion to dismiss Arcadia’s claims in this Lanham Act case involving Arcadia’s TOPSHOP and Moderna’s TOP SHOP TV marks.  In 2004, the parties entered a settlement agreement (the "Agreement") pursuant to which Moderna agreed not to use TOPSHOP to sell women’s clothing in any country.  Arcadia alleged that Moderna violated the Agreement beginning in 2010 when it began selling women’s clothing in the US on Moderna’s topshoptv.com website.

Moderna’s Motion

 

Moderna argued that Arcadia did not plausibly plead a protectable mark because Moderna was the first user of the mark.  But a motion to dismiss must assume the truth of Arcadia’s allegations and Arcadia plausibly pled that it was the first user of the mark.  Additionally, Moderna’s arguments ignored that Arcadia’s complaint challenged the validity of Moderna’s TOPSHELF TV registration.

 

Arcadia sufficiently pled fame as part of its trademark dilution claim.  While Arcadia did not parrot the language of the statute, it pled its TOPSHOP brands were "world famous", that the brand is one of the most successful in the world, that there have been millions of dollars in US sales and that the brand is regularly featured in US and international fashion and celebrity magazines and other media.

 

Arcadia’s Motion

 

The Court dismissed Moderna’s counterclaim for a declaratory judgment that it was the senior user of its TOP SHOP TV mark.  Arcadia, however, had never challenged Moderna’s TOP SHOP TV mark.  Arcadia’s only claims, in the suit or otherwise, were with respect to its TOPSHOP mark.  As a result, any decision regarding the mark would be an impermissible advisory opinion.

 

The Court dismissed Moderna’s trademark misuse counterclaim because Moderna did not show that trademark misuse was an affirmative cause of action. Moderna was, however, allowed to amend its answer to add an affirmative defense of trademark misuse.