Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

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.

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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.

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Simonian v. Allergan, Inc., No. 10 C 2414, Slip Op. (N.D. Ill. Apr. 28, 2011) (St. Eve, J.).

Judge St. Eve denied defendant Allergan's motion to dismiss plaintiff Simonian's false patent marking suit holding that the false marking statute was constitutional pursuant to the Take Care Clause. The government retained little control over false marking actions, but that was less of a concern because false marking cases were civil not criminal. And, in fact, the government retained sufficient control. The executive branch was notified of each suit because the district court clerk was required to give the Director of the Patent Office (a member of the executive branch) notice of every patent suit. Furthermore, the government may intervene in every case. And when the government intervenes, plaintiff cannot dismiss a case without the government's agreement.
 

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Triteq v. HMC Holdings LLC, No 11 C 843, Slip Op. (N.D. Ill. Jul. 5, 2011) (Leinenweber, J.).

Judge Leinenweber granted in part and denied in part defendant HMC Holdings' ("HMC") motion to dismiss this patent and false marking complaint involving pistol boxes. Plaintiff Triteq had standing to bring its declaratory judgment claim based upon HMC's letter to Triteq alleging Triteq's products were direct copies of HMC's patented product and seeking the names of Triteq's customers. The Court dismissed Triteq's false marking claim - alleging that the marked pistol boxes were not covered by the marked design patent - with leave to replead. Triteq's claim lacked specific facts showing intent as required by BP Lubricants.
 

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Culligan Int'l Co. v. Water Sys. of Birmingham, Inc., No. 10 C 8199, Slip Op. (N.D. Ill. Apr. 27, 2011) (Bucklo, J.).

The Court granted defendants' Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction in this trademark dispute regarding plaintiff's CULLIGAN marks. Defendants were Alabama entities without offices, employees or agents in Illinois. All of defendants' business was conducted in Alabama. The parties' agreement was negotiated and executed in Alabama, and there was no indication of a choice of law provision selecting Illinois law. The only connection to Illinois was that plaintiff did business in Illinois, and that was not sufficient to create jurisdiction over defendants.
 

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Heathcote Holdings Corp. v. L'Oreal USA, Inc., No. 11 C 1921, Slip Op. (N.D. Ill. Aug. 9, 2011) (Lefkow, J.).

Judge Lefkow granted defendant L'Oreal's motion to transfer plaintiff's false patent marking case involving boxes of hair dye to the S.D. New York, L'Oreal's home district. Generally, plaintiff's Heathcote's choice of forum would be given deference, but in false marking cases the United States is the real party in interest. So, the qui tam plaintiff's chosen forum is given little deference. The situs of material events was New York, where the accused packaging was designed and where the relevant employees reside. L'Oreal's witnesses and documents were more likely in New York than Illinois.

The convenience of the parties also weighed in favor of New York. Heathcote did not identify any employees that would have to travel to New York for the case, whereas L'Oreal's relevant employees were in New York. Furthermore, Heathcote's only business was litigation and therefore the travel would not distract Heathcote from its business.

The interests of justice weighed in favor of transfer. There were already four false marking cases against L'Oreal or its subsidiaries that had been transferred to the S.D. New York. And the potential consolidation of those cases would benefit the parties and judicial economy.
 

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ArrivalStar S.A. v. Geo-Comm, Inc., No. 11 C 5016, Slip Op. (N.D. Ill. Jul. 27, 2011) (Shadur, Sen. J.).

Judge Shadur sua sponte challenged the sufficiency of plaintiff ArrivalStar's venue allegations. Venue is proper in patent cares: 1) where the defendant resides; or 2) where the defendant allegedly committed the accused acts and had a regular place of business. Geo-Comm resided in Minnesota. So, only the second option was possible. ArrivalStar did plead that Geo-Comm sold accused products in the district. But ArrivalStar failed to plead that Geo-Comm had a regular and established place of business in the district. Instead of requiring immediate repleading or briefing, the Court set a status conference to discuss the issue.
 

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TechnoLines, LP v. GST Autoleather, Inc., No. 11 C 965, Slip Op. (N.D. Ill. Jun. 30, 2011) (Grady, J.).

Judge Grady granted defendant GST's motion to dismiss plaintiffs' patent claims for improper revenue and lack of production and dismissed the remaining state law claims without prejudice to be refiled pursuant to diversity jurisdiction, if possible.

The Court's key rulings were:

• GST's failed license negotiations with plaintiff Echelon in Illinois alone could not create personal jurisdiction.
   
• Echelon residing in Illinois and, therefore, having been allegedly harmed in Illinois does not create personal jurisdiction. GST's conduct must have been specifically directed at Illinois. And there was no evidence that GST sold product into Illinois.
   
• GST's phone calls and emails to Echelon in Illinois did not create personal jurisdiction.
   
• The Court refused supplemental jurisdiction over the remaining state law claims, and gave plaintiff a deadline for repleading based upon diversity jurisdiction, if it could.

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Revenue Realization LLC v. H&R Block, Inc., No. 11 C 85, Slip Op. (N.D. Ill. Apr. 11, 2011) (Shadur, Sen. J.).

Judge Shadur granted defendant H&R Block's motion to dismiss, after granting plaintiff Revenue Realization leave to file its response to the motion and fully considering it. Revenue Realization accused H&R Block of patent infringement. H&R Block moved to dismiss because it was a passive holding company for a variety of subsidiaries and, therefore, was not the proper H&R Block defendant.

H&R Block offered to identify the proper entities for Revenue Realization. But Revenue Realization refused the offer, as well as the Court's suggestion that it file against all possible subsidiaries and narrow the defendants based upon the entities' subsequent motions to dismiss. Instead Revenue Realization argued that the Federal Circuit's decision in Nuance Commc'ns, Inc. v. Abbyy Software House, 626 F.3d 1222 (Fed. Cir. 2010) confirmed that the Court had jurisdiction over a passive parent entity in patent cases. The Court, however, held that the opinion stood for quite a different proposition and was a "weak reed to lean on." In fact, Nuance dealt with a subsidiary entity that had direct contacts with the forum. In contrast, H&R Block was a true holding company. And the fact that H&R Block defined itself as including its subsidiaries in certain SEC filings was irrelevant to the Court's analysis.

The Court finished the opinion referring to the New Yorker's old practice of filling the final page of an article that otherwise would have left a portion blank with a section captioned "Department of Clotted Nonsense" containing amusing quotations and reprinted errors from other publications. The Court then granted plaintiff leave to file its response brief, and noted that the Court had already fully considered it.
 

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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.
 

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Richards 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.
 

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Trading 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.
 

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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.
 

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Labtest Int'l., Inc., d/b/a Intertek Consumer Goods N. Am. v. Centre Testing Int'l. Corp., No. 10C2897, Slip Op. (N.D. Ill. Feb. 1, 2011) (Dow, J.).

Judge Dow granted defendant CTI's Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction in this copyright infringement action. The Court did not have jurisdiction over CTI:

• CTI was a Chinese entity with no U.S. offices.
   
• CTI's only possible contact with Illinois regarding the copyrighted subject matter was via its passive website.
   
• Plaintiff Intertek offered no proof that anyone from Illinois downloaded the allegedly infringing chart.
   
• CTI's only connection was work in China for an entity with a parent entity in Illinois.

The Court did not award Intertek its fees and costs for defending the case or the case filed by Intertek in Connecticut. Intertek had credible arguments for each, and it was not forum shopping even if the arguments were eventually proven wrong.
 

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Millennium TGA, Inc. v. Does 1-800, No. 10 C 5603, Slip Op. (N.D. Ill. Nov. 30, 2010) (Manning, J.).

Judge Manning sua sponte severed each Doe defendant in this copyright suit over alleged use of copyrighted materials via BitTorrent, except for one Doe IP address. And the Court granted that Doe's motion to quash the subpoena.

The Court previously granted plaintiff leave to subpoena Internet Service Providers ("ISP") to obtain identities associated with certain IP addresses - unique strings of numbers that can often be associated with a single computer or location. Plaintiff had met the Fed. R. Civ. P. 20(a)(2)(A) joinder requirements because it could not show that the Does acted in concert. Furthermore, the case in its current position could leave the Court with dozens or hundreds of factually unique motion to dismiss, quash or sever. And there was no indication that venue was proper. Plaintiff had no connection to Illinois, and it was not clear that any Doe did either.
 

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Salud Natural Entrepreneur, Inc. v. Nutricento Internacional, Inc., No. 09 C 4417, Slip Op. (N.D. Ill. Jan. 27, 2011) (Zagel, J.).

Judge Zagel denied defendant Azteca Products' ("Azteca") Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction in this Lanham Act case. Azteca's officer, a non-lawyer, purported to file an answer on Azteca's behalf. Azteca then hired counsel who participated in Rule 26 scheduling conferences. Azteca's officer then filed a Rule 12(b)(2) motion to dismiss without counsel, which the Court struck because it was not filed by counsel, and a corporate entity cannot act pro se. The Court then entered a default judgment and an injunction against Azteca. Azteca hired counsel and asked through counsel that the default be vacated. The Court vacated the judgment and agreed to consider whether Azteca's personal jurisdiction arguments had been waived. Noting the "bizarre posture of the case, the Court held that Azteca had not preserved its jurisdiction arguments.

The answer did not waive Azteca's arguments because as a pro se filing it was treated as never having been filed. But counsel did participate in Rule 26(f) conferences, although he filed no notice of appearance, and offered no suggestion that Azteca would challenge jurisdiction during that time. Furthermore, jurisdiction was challenged for the first time more than thirty days after the other defendants settled based upon discussions that Azteca did not participate in. Regardless of the legal impact of Azteca's filings, by the time Azteca challenge jurisdiction, plaintiff had developed a "reasonable expectation" that Azteca would defend itself in Illinois.
 

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Rude d/b/a ABT Sys., LLC v. Lux Prods. Corp., No. 09 C 6957, Slip Op. (N.D. Ill. Jan. 12, 2011) (Norgle, J.).

Judge Norgle granted defendant Emerson Climate Technologies' ("ECT") motion to sever plaintiffs' claims against ECT for improper joinder, and granted ECT's motion to transfer the case to the Eastern District of Missouri in this patent dispute regarding an air distribution fan recycling control. ECT sought dismissal because each defendant's accused system, generally a thermostat, was a different product and, therefore, there was no common transaction or occurrence as required for Fed. R. Civ. P. 20 joinder. The Court agreed, holding that sales of similar products by unrelated defendants did not meet Rule 20(a)'s common transaction or occurrence requirement, noting agreement from several other judges in the Northern District. Furthermore, allegations that unrelated defendants design and sell similar products does not satisfy Rule 20(a). Similarly, the fact that the defendants' defenses and counterclaims were "nearly identical" was irrelevant to the joinder analysis. Having held that ECT was misjoined, the Court declined to consolidate the two cases for pretrial proceedings pursuant to Fed. R. Civ. P. 42(a). And the Court severed ECT's case pursuant to Fed. R. Civ. P. 21.

The Court then transferred the severed case to the Eastern District of Missouri, where ECT was located. Plaintiffs' choice of forum was given less than normal deference because plaintiffs were not Illinois residents. The situs of material events was irrelevant, as in many patent cases.

The ease of access to the proofs weighed strongly in favor of transfer. ECT's relevant entities were headquartered in St. Louis, within the Eastern District of Missouri. ECT identified at least five key party witnesses within the Eastern District of Missouri. And that district could more easily compel non-party witnesses also likely to be resident in St. Louis. Additionally, while ECT would gain significant convenience from transfer, plaintiffs would be inconvenienced either way, as they were not residents of either contemplated district. So, relative convenience of the parties weighed in favor of transfer. And the speed of the districts to trial slightly favored transfer.
 

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Heathcote Holdings Corp., Inc. v. Leapfrog Enters., Inc., No. 10 C 1471, Slip Op. (N.D. Ill. Dec. 27, 2010) (Coar, J.).

Judge Coar transferred plaintiff Heathcote's false patent marking case to the Northern District of California. Because Heathcote was a relator standing in the shoes of the federal government, Heathcote's chosen forum was given little deference. All of defendant's witnesses — party and non-party alike — were located in California. Additionally, the relevant evidence was located in defendant's California offices. And Heathcote was unlikely to have much relevant evidence. The Court, therefore, transferred the case.
 

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Airoom LLC v. Demi & Cooper, Inc., No. 09 C 4205, Slip Op. (N.D. Ill. Jan. 5, 2011) (Gottschall, J.).

Judge Gottschall granted defendants' Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of jurisdiction. Plaintiff Airoom accused defendants of infringing its trademarks, as well as related state law claims. Defendants, who were creating and hosting Airoom's website, stopped when Airoom refused to pay amounts allegedly due pursuant to the parties' contract hosting the site, causing website visitors to be directed to a generic "text page."

Airoom claimed Lanham Act violations based upon defendants' decision not to continue hosting the site. Based upon the "artful pleading" doctrine, the Court held that Airoom's claims sounded in copyright, not the Lanham Act. The Court, therefore, lacked federal question jurisdiction. And because all parties were Illinois residents, there could not be diversity jurisdiction. Airoom's case was, therefore, dismissed.
 

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Dental Arts Lab. V. Studio 360, The Dental Lab, LLC, No. 10 CV 4535, Slip Op. (N.D. Ill. Nov. 23, 2010) (Dow, J.).

Judge Dow denied defendant's Fed. R. Civ. P. 12(b) motion to dismiss this Lanham Act dispute regarding plaintiff's 360 Dental Laboratories mark. Defendant was a Nevada entity which had sold product to sixteen Illinois dentists, making up 1.2% of defendant's gross revenue, and maintained a website that used the mark and offered defendant's products for sale. Plaintiff only argued that the Court had specific, not general jurisdiction. While defendant's contacts were minimal - sixteen customers and 1.2% of revenues - they involved the alleged tortious acts at issue. The sales, therefore, were sufficient minimum contacts to create specific jurisdiction. Although the Illinois sales were allegedly de minimus, each sale was allegedly a tortious act and the Court could have had jurisdiction based upon even one of the sales. Because defendant's venue arguments mirrored its jurisdiction arguments, venue was also proper.
 

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Insubuy, Inc. v. Community Ins. Agency, No. 10 C 3925, Slip Op. (N.D. Ill. Nov. 9, 2010) (St. Eve, J.).

Judge St. Eve granted counter-plaintiff Community Insurance Agency's ("CIA") motion for expedited jurisdictional discovery regarding individual counter-defendants. CIA established a prima facie case of personal jurisdiction warranting discovery based upon public records and affidavits that established that the individual defendant:

• Was a director, owner and the CEO of plaintiff Insubuy.
   
• Registers and maintains domains for Insubuy.
   
• Had prior notice of CIA's trademarks and that CIA was an Illinois corporation.
   

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Trading Techs. Int'l, Inc. v. GL Consultants, Inc., No. 05 C 4120 & 5164, Slip Op. (N.D. Ill. Oct. 20, 2010) (Schenkier, Mag. J.).

Judge Schenkier denied plaintiff Trading Technologies' ("TT") motion for jurisdictional discovery as moot because defendant GL Consultants withdrew its motion to dismiss. The Court also set an abbreviated process for filing the pending motion for a protective order. Click here for the procedures required of the parties before filing a discovery motion.

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Simonian v. Monster Cable Prods., No. 10 C 1269, Slip Op. (N.D. Ill. Nov. 22, 2010) (Bucklo, J.).

Judge Bucklo granted defendant Monster Cable Products' ("Monster") § 1404 motion to transfer this false patent marking case. Citing the Court's decision transferring another of plaintiff Simonian's false marking cases to Iowa in Simonian v. Pella. As in Pella, the qui tam plaintiff's chosen forum was given little deference. And California was the situs of the events because that is where Monster designed the packaging at issue and made the alleged marking decisions. Also, all of Monster's witnesses were located in California. The Court, therefore, transferred the case to the Northern District of California.

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Poulsen Roser A/S v. Jackson & Perkins Wholesale, Inc., No. 10 C 1894, Slip Op. (N.D. Ill. Nov. 15, 2010) (St. Eve, J.).

Judge St. Eve denied plaintiff Pousen Rosen's ("Poulsen") Fed. R. Civ. P. 59(e) and 60(b) motion for reconsideration of the Court's decision dismissing the case as to the individual defendants for lack of personal jurisdiction in this Lanham Act case.

First, "new evidence" in the form of the District of South Carolina Bankruptcy Court's order consolidating the corporate defendants was irrelevant and did not alter the Court's analysis. The Bankruptcy Court made no finding regarding the relationship between the corporate and individual defendants.

Second, the Court reconsidered and upheld its analysis regarding the corporate defendants' internet contacts. The Seventh Circuit rejected the Zippo case's sliding scale for internet-based jurisdiction because of the possibility of creating universal jurisdiction:

__ F.3d __, 2010 WL 3547647, at *6 (7^th Cir. 2010).

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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.
 

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Von Holdt v. A-1 Tool, No. 04 C 4123, Slip Op. (N.D. Ill. Aug. 18, 2010) (Manning, J.).

Judge Manning, having granted in part plaintiff's motion for reconsideration, decided to maintain supplemental jurisdiction over plaintiffs' remaining state law claims despite having granted defendants summary judgment as to plaintiffs' federal patent infringement and Computer Fraud and Abuse Act ("CFAA") claims. Plaintiffs' state law claims - trade secret, tortious interference and breach of fiduciary duty claims - were "loosely" connected to plaintiffs' CFAA claim because they were based upon the alleged theft of plaintiffs' confidential information by a former employee.
 

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Von Holdt v. A-1 Tool, No. 04 C 4123, Slip Op. (N.D. Ill. Aug. 3, 2010) (Manning, J.)

Judge Manning granted in part plaintiffs' motion to reconsider the Court's opinion granting defendants summary judgment on plaintiffs' patent claims and dismissing plaintiffs' related state law claims for lack of supplemental jurisdiction.

The Court reversed its supplemental jurisdiction decision because Illinois law barred the refiling more than once of a claim that was voluntarily dismissed. Presented with the "new" fact that plaintiffs had previously filed suit in state court, the Court vacated its prior decision and ordered plaintiffs to brief whether the Court should retain jurisdiction over the state law claims.

The Court, however, did not reverse its summary judgment of noninfringement. On that Plaintiffs agreements were a "rehash" of its prior agreements.

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Merrill Primack v. Polto, Inc., No. 08 C 4539, Slip Op. (N.D. Ill. Jul. 8, 2010) (Dow, J.).

Judge Dow granted defendants' Fed. R. Civ. P. 12(b)(2) motion to dismiss this Lanham Act case over plaintiff's "Credit Lifeline" mark for lack of personal jurisdiction. Plaintiff did not claim general jurisdiction, relying only upon specific jurisdiction. Defendants' only Illinois contacts were the sale of 212 books unrelated to the Credit Lifeline mark into Illinois. And defendants' offer for sale of its Credit Lifeline book via an interactive website could not alone create specific jurisdiction. Similarly, injury to intellectual property alone did not create jurisdiction based upon the effects test. Harm to the plaintiff in the jurisdiction did not satisfy the test by itself. Defendant's actions must have been intentional, aimed at the forum state and defendant had to know that plaintiff's harm was likely to be suffered. But there was no indication that defendant was even aware of plaintiffs' Credit Lifeline mark, or of plaintiff, from defendant's first use of the mark in 2001 until, at the earliest, when plaintiff registered its mark in 2008.

Finally, the Court held that there was no persuasive reason that exercising personal jurisdiction would have comported with "fair play and substantial justice." 

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MPH Techs. Oy v. Zyxel Coms. Corp., No. 10 C 684, Slip Op. (N.D. Ill. Jul. 16, 2010) (Darrah, J.).

Judge Darrah granted defendants' 28 U.S.C. § 1404(a) motion to transfer this patent case to the Northern District of California. Venue was proper in both districts. Plaintiff's choice of forum was only given slight weight because the Northern District of Illinois was not plaintiff's home forum and had only a weak connection to the case. The convenience of witnesses weighted in favor of transfer. All of defendants' employee witnesses were in the Northern District of California and, more importantly, half of the non-party witnesses were in the Northern District of California. Three of plaintiff's four witnesses were in its home country – Finland. Access to proofs is given little deference in light of wide-spread use of digital discovery, but still leaned slightly in favor of transfer because defendants' documents were largely in California.

The situs of material events was neutral because it is largely irrelevant in patent cases. The convenience of parties weighed in favor of transfer. Plaintiff's inconvenience in traveling from Finland to Chicago or to Northern California was not significantly different.

The interests of justice weighed slightly in favor of transfer because defendants' employees had a greater interest in the case than Illinois citizens did. Otherwise, the Courts were similarly capable of handling patent cases and had comparable times to resolution, with only a few months difference in each category.

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Simonian v. Merck & Co., No. 10 C 1297, Slip Op. (N.D. Ill. June 1, 2010) (Shadur, Sen. J.).

In response to defendant Merck's motion to dismiss plaintiff's false patent marking action, the Court sent a copy of its prior decision in Zojo Solutions, Inc. v. The Stanley Works, No. 10 C 1174, Slip Op. (N.D. Ill. May 12, 2010) (Shadur, Sen. J.). In that case, the Court held that marking with expired patents was actionable and that an individual citizen could bring a false marking action pursuant to 35 U.S.C. § 292. The Court ordered the parties to appear on the notice date to discuss the course of the litigation.

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Zojo Solutions, Inc. v. The Stanley Works,No. 10 C 1175, Slip Op. (N.D. Ill. May 12, 2010) (Shadur, Sen. J.).

Judge Shadur denied defendants' motion to dismiss this false patent marking case before plaintiff responded. First, the Court held that marking with expired patents was actionable pursuant to 35 U.S.C. § 292(a), citing Forest Group, Inc. v. Bon Tool Corp., 590 3d 1295 (Fed. Cir. 2009). Also citing Forest Group, the Court held that private citizens had standing. The Court reasoned that if there was not standing, the Federal Circuit would have been obligated to address it before deciding the substantive issues. Finally, the Court characterized false patent marking cases as an "infestation of dandelions" which "dot the greensward of patent litigation." 

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Alta Mere Indus., Inc. v. DBC Window Tinting, Inc., No. 10 C 266, Slip Op. (N.D. Ill. May 6, 2010) (Darrah, J.).

Judge Darrah granted defendant Impact's Fed. R. Civ. 12(b)(2) motion to dismiss plaintiff Alta Mere's Lanham Act claims regarding its marks related to automotive window tinting and alarm systems. Impact operated a local Texas business and had no other identified Illinois contacts. Alta Mere argued that the Court had specific jurisdiction over Impact because of Impact's interactions with other defendants who were Alta Mere franchisees, as well as two letters allegedly sent to Impact warning that a franchise agreement governing defendant Cader's use of the Alta Mere marks were governed by Illinois law.

The Court considered jurisdiction over each defendant separately and, therefore, did not consider the other defendants' Illinois contacts in analyzing jurisdiction over Impact. Impact alleged that it never received Alta Mere's letters. But even if Impact had received them, correspondence sent to a defendant outside the forum could not alone create jurisdiction. The letters were "random, fortuitous, or attenuated contacts."

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Chicago Bd. Options Exchange Inc. v. Realtime Data, LLC d/b/a IXO, No. 09 C 4486, Slip. Op. (N.D. Ill. Jan. 8, 2009) (Lindberg, Sen. J.).

Judge Lindberg granted declaratory judgment for defendant Realtime's Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. The parties agreed that the Court lacked general jurisdiction and focused their arguments on specific jurisdiction. Because plaintiff Chicago Board Options Exchange ("CBOE") brought declaratory judgment claims, the analysis focused upon whether Realtime's patent enforcement activities were directed at the jurisdiction. CBOE argued that specific jurisdiction was created by Realtime's Texas patent infringement suit against, among others, Chicago-based defendants, including eventually CBOE. But the Court held that Realtime's Texas action alone did not create specific jurisdiction, and the Court did not consider the Texas suit against CBOE because CBOE was not added to the Texas action until after the instant suit was filed.

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Kolcraft Enter., Inc. v. Chicco USA, Inc., No. 09 C 339, Slip Op. (N.D. Ill. Oct. 23, 2009) (Norgle, J.)

Judge Norgle denied defendant Chicco's § 1404(a) motion to transfer this patent case to the Eastern District of Pennsylvania, where Chicco's principle place of business is located. Neither court was more suited for the case in terms of speed or familiarity with the law. The Court also noted that the location of documents was neutral based upon electronic document exchange. The convenience of the parties was also neutral because one party would be inconvenienced by the decision either way. Additionally, the situs of material events was irrelevant as in most patent cases because the comparison of an accused product to a claim does not revolve around any location. 

As to non-party witnesses, one inventor was within the Northern District and the other was outside the subpoena power of both districts. And patent prosecution counsel also resided within the Northern District. Additionally, plaintiff agreed to depose all U.S. parties in their home districts, further diminishing that factor. Finally, the Court held that plaintiff's choice of forum deserved significant weight. The Court, therefore, denied Chicco's motion to transfer. 

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SP Techs., LLC v. Garmin Int'l., Inc., No. 08 C 3248, Slip Op. (N.D. Ill. Nov. 3, 2009) (Pallmeyer, J.).*

Judge Pallmeyer denied the individual inventor's ("Inventor) motion to intervene in this patent case.  Inventor sought to intervene in this case arguing that the assignment of his patent to plaintiff SP Technologies ("SPT") was invalid because SPT coerced Inventor to sign it.  The Court held that Inventor's argument was unpersuasive.  Inventor admitted signing the assignment, but argued it was under duress.  But the Court held that Inventor could not intervene, even if Inventor could prove the duress.  Inventor failed to explain why SPT would not adequately represent Inventor's interests in the case.  In fact, Inventor even agreed that his interests were aligned with SPT.  Intervention, therefore, was not proper.  Inventor was, however, free to pursue his claims in a separate suit against SPT.

*  Click here for more on this case in the Blog's archives.

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Guiness World Records Ltd. v. John Doe, d/b/a World Records Academy, No. 09 C 2812, Slip Op. (N.D. Ill. Oct. 20, 2009) (Shadur, Sen. J.)

Judge Shadur granted defendant World Records Academy’s (Academy”) Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction in this trademark dispute regarding plaintiff’s GUINESS WORLD RECORD and WORLD RECORD trademarks. Academy’s website alone did not create specific jurisdiction because it did not allow users to purchase Academy's products, it only told them how to buy the products. Academy did have limited sales into Illinois – three sales to two customers - and sent form email solicitations to world record holders from Illinois. And the Court held that Academy’s emails and de minimis sales could not create jurisdiction, either general or specific. The Court reasoned that if de minimis sales created jurisdiction, alleged intellectual property infringers could be hailed into almost any jurisdiction nationwide.

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More Cupcakes, LLC v. Lovemore LLC, No. 09 C 3555, Slip. Op. (N.D. Ill. Sep. 29, 2009) (Kocoras, J.)

Judge Kocoras denied defendants (collectively “Lovemore”) Fed. R. Cir. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction and Fed. R. Cir. P.12(b)(6) motion to dismiss the individual Lovemore defendants’ (collectively "Lovemore individuals") based upon the fiduciary shield doctrine in this Lanham Act dispute regarding plaintiff More Cupcake’s LOVE MORE mark for use on t-shirts. The Court did, however, grant Lovemore’s §1404 motion to transfer the case to the Eastern District of New York.

The parties agreed that the Court lacked general jurisdiction and argued only specific jurisdiction. The Court held that it had specific jurisdiction based upon the effects test. Lovemore’s alleged infringing acts were aimed at More Cupcakes in Illinois when Lovemore approved sales of allegedly infringing t-shirts to Illinois addresses after being warned of the alleged infringement in a Patent & Trademark Office proceeding and in settlement talks with More Cupcakes. Lovemore’s interactive website coupled with sales to Illinois also created specific jurisdiction. The fact that Lovemore’s most recent Illinois sale was to More Cupcakes’ counsel did not impact the analysis. Lovemore still knowingly sold product within Illinois. 

The fiduciary shield doctrine did not apply to the individual defendants, who were both owners and operators of Lovemore. The fiduciary shield doctrine denies personal jurisdiction over individuals who contact Illinois solely for the benefit of their employees and not themselves. But the doctrine does not apply to owners of a company that have discretion over whether or not they do business in Illinois. As Lovemore owners, therefore, the Lovemore individuals are not protected by the fiduciary shield doctrine.

For similar reasons, while corporate officers are generally not personally liable for corporate trademark infringement claims, More Cupcakes’ claims against the Lovemore individuals survived. Both individuals were owners of Lovemore and the Complaint alleged that they personally directed the allegedly infringing acts.

Finally, the Court transferred the case to the Eastern District of New York.  While More Cupcakes’ chosen forum deserves deference, the material events regarding the alleged infringement all occurred in New York where the t-shirts were designed, made, offered for sale and sold. And the Court held that the convenience factors, such as locations of documents and witnesses, were all neutral.

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Occidental Hoteles Mgt., S.L. v. Hargrave Group, LLC, No. 08 C 2165, Slip Op. (N.D. Ill. Jul. 24, 2009) (Gottschall, J.)

Judge Gottschall held that the Court lacked personal jurisdiction over plaintiff’s trademark claims related to defendant’s use of the sites in a suit which allegedly incorporates plaintiff’s marks, to tell the alleged story of plaintiff’s alleged negligence.  Defendant did not maintain offices or employees in Illinois and did not maintain an agent for service in Illinois. In fact, defendant’s only Illinois connection was the listing on a website of defendant’s of a martial arts instructor in Illinois. The fact that defendant also maintained interactive websites could not create general jurisdiction pursuant to Zippo. Interactive websites alone can at most create specific jurisdiction. The Court also lacked specific jurisdiction. The websites in suit were not interactive, and the only site with an Illinois connection, the marital arts site, was not in the suit.

While a Court generally cannot transfer a cure pursuant to § 1409(a) without first having jurisdiction and venue, courts can do so in the interests of justice. In this case, the Court held that justice required a transfer to the Northern District of Oklahoma. Both parties alternatively sought transfer and the case had already been in the Northern District of Illinois for fifteen months.

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The Ticketreserve, Inc. v. Viagogo, Inc., No. 08 C 502, Slip Op. (N.D. Ill. Aug. 11, 2009) (Kendall, J.).

Judge Kendall denied defendants’ Fed. R. Civ. P. 12(b)(3) motion in limine for improper venue and granted defendant Viagogo, Inc.’s (“Viagogo”) Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. Defendants agreed that venue was improper based on an arbitration clause in a nondisclosure agreement the parties requested when they explored a joint venture. Defendants agreed that the patented technology was disclosed pursuant to the nondisclosure agreement.

But because plaintiff’s international patent on the same technology as the U.S. patent, issued before the nondisclosure agreement the patent infringement claim was expressly excluded from the nondisclosure agreement and its arbitration claims.

The Court then dismissed Viagogo for lack of personal jurisdiction. Viagogo had no contract with Illinois to create personal jurisdiction. And while the viagogo.com interactive website likely created specific jurisdiction for its owner, the evidence suggested that Viagogo Ltd., which did not contest personal jurisdiction owned and operated the website, not Viagogo, Inc.

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James H. Anderson, Inc. v. Johnson, No. 08 C 6202, Slip Op. (N.D. Ill. Jul 27, 2009) (Coar, J.).

Judge Coar granted defendants'  Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff's copyright malpractice claim for lack of jurisdiction.  Plaintiff argued that the Court had jurisdiction over its state law malpractice claim based upon 28 U.S.C. Section 1338(a) which creates the federal court's exclusive jurisdiction over patent and copyright cases.  The Court held that it did not have jurisdiction based upon the copyright claim in the underlying action.  Federal jurisdiction requires not just a contested federal issue, but a substantial federal issue.  The underlying was not a substantial issue. Furthermore, the federal interest in regulating malpractice was outweighed by the state interest.  And the Court reasoned that copyright malpractice was different than patent malpractice.  Copyright cases are fact intensive and do not require legal analysis of the claims, as required in patent law.

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Poparic v. Lincoln Square Video, No. 08 C 3491, Slip Op. (N.D. Ill. Jun. 25, 2009) (Kocoras, J.).

Judge Kocoras granted defendant Taste of Europe's Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction.  Plaintiff alleged that Taste of Europe sold a single copy of plaintiff's copyrighted movie in its Indiana store and argued only that the Court had general jurisdiction over Taste of Europe, without addressing specific jurisdiction.  Taste of Europe presented evidence that it was an Indiana-based business that did not advertise in Illinois or conduct any business in or with Illinois.  Plaintiff did not present any evidence of Taste of Europe's Illinois connections, but sought jurisdictional discovery.  The Court, however, found that it lacked personal jurisdiction, holding that jurisdictional discovery was not appropriate where plaintiff had identified no evidence showing Illinois connections to overcome Taste of Europe's proofs.

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Merrill Primack v. Pearl B. Polto, Inc., No. 08 C 4539, Slip Op. (N.D. Ill. Jul. 8, 2009) (Dow, J.).

Judge Dow granted the Polto defendants' (collectively "Polto") Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction in this Lanham Act dispute regarding plaintiff's "Credit Lifeline" mark.  Plaintiff alleged only specific jurisdiction, not general jurisdiction.  Plaintiff's evidence of specific jurisdiction was based upon the following facts: 1) Polto's 2006 trip to Chicago to put on a Credit Lifeline seminar; and 2) Polto's interactive website.  Polto, however, had not been aware of plaintiff's trademark during the 2006 trip.  Plaintiff did not file for its trademark until 2008.  So, when Polto made its 2006 trip there was no evidence of notice of plaintiff's mark.  Furthermore, no one attended Polto's 2006 Chicago seminar and Polto returned to Philadelphia immediately after leaving the seminar site.  Finally, the Court held that Polto's interactive website by itself could not confer specific jurisdiction.

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SourceOne Global Partners,  LLC v. KGK Synergize, Inc., No. 08 C 7403, Slip Op. (N.D. Ill. May 13, 2009) (Schenkier, Mag. J.).

Judge Schenkier denied declaratory judgment defendant KGK's motion to dismiss plaintiff SourceOne's declaratory judgment claims of noninfringement and invalidity of KGK's patents.  KGK allegedly asserted its patents against SourceOne's cholesterol fighting drug Cholesstrinol.  KGK argued that the Court lacked subject matter jurisdiction because SourceOne did not, and could not name the co-owner of KGK's patent, the United States government.  The Court held that it had subject matter jurisdiction over SourceOne's patent declaratory judgment claims, reasoning that otherwise the government's co-ownership of a patent would strip accused infringers of ever seeking declaratory actions.

The Court also held that, while the government was a required party pursuant to Fed. R. Civ. P. 19(a), the Rule 19(b) factors weighed in favor of allowing SourceOne's case to proceed despite its inability to join the government.  The Court held that allowing KGK to prevent a declaratory suit because it was not possible to name the government would give KGK too much power as a patent holder:

The approach urged by KGK (and the Government) would allow KGK to threaten legal action against SourceOne (or others) with impunity.  For those who gave into those threats, KGK would receive the benefit of the patent (a cessation of the alleged infringing conduct and perhaps compensation) without the need to do anything more.  For those who might rear up and seek a judicial resolution, KGK could retreat behind the Government's cloak of immunity and prevent the infringement or validity of the '125 Patent from ever being tested in court.

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MacLean-Fogg Co. v. Edge Composites, L.L.C., No. 08 C 6367, Slip Op. (N.D. Ill. Apr. 14, 2009) (Conlon, J.).

Judge Conlon granted defendants' motion to dismiss.  Plaintiffs (collectively "MacLean") alleged that defendant Edge Composites ("Edge") violated plaintiffs' carbon fiber bicycle wheel patent and together with the individual defendant, a former MacLean employee and current Edge employee, violated MacLean's trade secrets, as well as breaching the individual defendant's nondisclosure agreement with MacLean.  First, the Court held that the MacLean entities that lacked an ownership in the patent when the complaint was filed lacked standing.  It was not sufficient that the MacLean entities entered an agreement creating joint ownership amongst them after the complaint was filed.

The Court also held that it lacked supplemental jurisdiction over MacLean's state law trade secret and breach of contract claims.  The patent infringement claims were based upon manufacture and sale of carbon fiber wheels.  The trade secret and breach of contract claims were based upon defendants' alleged  use of MacLean's trade secrets.  Because MacLean never met its burden of showing how the claims overlapped factually, the Court dismissed the state law claims for lack of subject matter jurisdiction.

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UTStarcom, Inc. v. Starent Networks, Corp., No. 07 C 2582, Slip Op. (N.D. Ill. Mar. 25, 2009) (Lindberg, Sen. J.).

Judge Lindberg denied the individual defendant's Fed. R. Civ P. 12(b)(2) motion to dismiss for lack of personal jurisdiction.  The individual defendant's four business trips to Illinois and prior work in California for plaintiff did not create general jurisdiction.  But the Court did have specific jurisdiction over the individual defendant.  Individual defendant was president of defendant Starent.  As president, he had authority over Starent's alleged pattern of hiring away plaintiff's employees and allegedly misappropriating plaintiff's trade secrets from those employees.  Because the alleged trade secret misappropriation harmed plaintiff's Illinois-based business in Illinois, the Court had general jurisdiction over Starent and its president, the individual defendant.

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Richter v. INSTAR Enterprises Int'l, Inc., No. 08 C 50026, Slip Op. (N.D. Ill. Jan. 23, 2009) (Kapala, J.).

Judge Kapala granted defendant INSTAR's Fed. R. Civ. P. 12(b)(2) motion to dismiss plaintiff's copyright infringement claims for lack of personal jurisdiction. INSTAR did not have sufficient contacts with Illinois for general jurisdiction. INSTAR did not maintain offices or otherwise regularly do business in Illinois. Its contacts with Illinois were: 1) its interactive website; and 2) INSTAR's customer's resale of its products within Illinois. Additionally, INSTAR produced undisputed evidence that less than .1% of its business came from Illinois and that none of the accused products were sold directly into Illinois.

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C.S.B. Commodities, Inc. v. Urban Trend (HK) Ltd., No. 08 C 1548, Slip Op. (N.D. Ill. Jan. 7, 2009) (Dow, J.).

Judge Dow granted corporate defendant Urban Trend's (“Urban Trend”) and denied the individual defendant's respective Fed. R. Civ. P. 12(b)(2) motions to dismiss plaintiff's Lanham Act unfair competition and related state law claims for lack of personal jurisdiction. Plaintiff served the individual defendant, who was Urban Trend's president, while he was representing Urban Trend at a trade show in Illinois. The Court held that personal service created jurisdiction over the individual defendant, even though the Court may not have had jurisdiction but for personal service. And while the individual defendant was in Illinois as part of his job responsibilities representing Urban Trend at the trade show, the Fiduciary Shield Doctrine did not protect him. As Urban Trend's president, the individual defendant would have gained independent economic benefit from selling Urban Trend's products at the trade show. And as president, the individual defendant had at least some control over whether to sell or promote products in Illinois.

The Court, however, held that personal service upon Urban Trend's president was not sufficient to create jurisdiction over Urban Trend. And tradeshow attendance alone was not sufficient to create specific jurisdiction over Urban Trend. There was no evidence that Urban Trend's tradeshow efforts were particularly focused on Illinois sales, or that Urban Trend completed any sales.

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Freightquote.com, Inc. v. Air Ocean Land Sol'ns., Inc., No. 98 C 346, Slip Op. (N.D. Ill. Jan. 26, 2009) (Shadur, Sen. J.).

Judge Shadur issued this Memorandum questioning whether plaintiff's trademark infringement and related state law claims should have been brought in the Northern District.  The complaint listed the parties' citizenship as being in Delaware, Kansas, North Carolina and Texas.  The lack of an Illinois resident or citizen in the case caused the Court to question whether the Northern District was the appropriate location for the suit.  The Court did not rule upon the issue, but directed the parties to be prepared to discuss whether the Northern District was the appropriate forum for the case at the next hearing.

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ACCO Brands USA LLC v. PC Guardian Anti-Theft Prods., Inc., No 06 C 7102, Slip Op. (N.D. Ill. Dec. 10, 2008) (Zagel, J.).*

Judge Zagel denied defendant PC Guardian's ("PCG") renewed motion to transfer plaintiff's patent suit against PCG, but not necessarily the other defendants, to the Northern District of California, where plaintiff and PCG were litigating a related patent.  The Court previously denied this motion, reasoning that all issues related to the patents in suit should be tried in one court, as opposed to the Northern District of California resolving the case as to PCG and the Northern District of Illinois to resolve the issues as to the other defendants in this suit. 

PCG renewed its motion because its new Northern District of California inequitable conduct motion implicated both the patents in suit in the Northern District of California and those at issue in the Northern District of Illinois.  But the Court held that transfer of the case would still leave this Court to resolve the identical issues as to the remaining defendants.  Additionally, because the Northern District of California court would likely rule on the issues before this Court, this Court would have the opportunity to consider the California rulings before deciding the issues.  And this Court had already construed the claims in this case (click here), resulting in only two minor differences between the courts.

*  Click here for more on this case in the Blog's archives.

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Idex Corp. v. Dripping Wet Water, Inc., No. 08 C 1114, 2008 WL 4372038 (N.D. Ill. Feb. 26, 2008) (Shadur, Sen. J.).

Judge Shadur sua sponte gave plaintiffs one week to amend their pleadings to resolve potential subject matter jurisdiction issues.  The Court noted that the breach of a patent settlement did not create federal question jurisdiction because the agreement was about a patent.  And the Court held that it was not sufficient for diversity jurisdiction just to plead the parties' residences.  Both residence and citizenship must be pled for the purposes of diversity jurisdiction.  The Court, therefore, ordered plaintiffs to amend their complaint to plead both residence and citizenship, or otherwise prove jurisdiction.  The Court also ordered plaintiffs to explain why the case was filed in the Northern District rather than in Texas where the parties had an ongoing suit or Connecticut where the litigation resulting in the settlement at issue took place.

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24 Hour Fitness USA, Inc. v. Bally Total Fitness Holding Corp., No. 08 C 3853, 2008 WL 4671748 (N.D. Ill. Oct. 21, 2008).

Judge Lefkow granted defendants' Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff 24 Hour Fitness's (“24”) trade secret misappropriation complaint for lack of subject matter jurisdiction. 24 alleged that defendant Bally Total Fitness (“Bally) and the individual defendant (“Defendant”) misappropriated 24's trade secrets when Defendant resigned his position as 24's COO and became Bally's CEO. But defendants argued that the Court lacked subject matter jurisdiction over 24's state law trade secret claims because there was no diversity of citizenship – both 24 and Defendant were California citizens. 24 argued that Defendant was, in fact, a citizen of Illinois because he worked at Bally's Illinois headquarters and because Defendant's contract with Bally required that he move to Illinois before the case was filed.

Looking at the totality of the circumstances, the Court held that Defendant remained a citizen of California, where he had lived while employed by 24. Defendant had put his California home for sale and did have a contract requiring that he become domiciled in Illinois, although the particulars of the contract were disputed. But the most significant factor in the analysis was that Defendant's family remained in California. And Defendant had not purchased or rented a home in Illinois or gotten an Illinois driver's license, bank account or voter registration card.

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Compliance Software Sol’ns. Corp. v. MODA Tech. Partners, Inc., No. 07 C 6752, 2008 WL 2960711 (N.D. Ill. Jul. 31, 2008) (Manning, J.)

Judge Manning granted defendants’ (collectively “MODA”) Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. MODA was a Pennsylvania resident, as were its employees. Its alleged Illinois contacts were: 1) attendance at an Illinois trade show, Pittcon, where it demonstrated its software – software that allegedly infringed plaintiff CSSC’s patent and copyright covering CSSC’s environmental monitoring software; and 2) signing a contract with an Illinois choice of law provision.

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Tuthill Corp. v. ArvinMeritor, Inc., No. 07 C 2758, 2008 WL 4200888 (N.D. Ill. Sep. 5, 2008) (Gottschall, J.)

Judge Gottschall denied declaratory judgment (“DJ”) defendant ArvinMeritor’s Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. ArvinMeritor sent DJ plaintiff Tuthill Corp. a letter alleging that Tuthill infringed a group of patents to recreational vehicle suspension systems (the “RV patents”). Tuthill responded that its product did not infringe, that the patents were invalid, and that the accused products were not in production yet. Tuthill alleged that the parties had continuing discussions regarding the RV patents. ArvinMeritor claimed that the discussions went dormant as to the RV patents after it received Tuthill’s letter. Tuthill filed this suit after its accused products were put on the market. The Court held that regardless of whether the discussions went dormant, Tuthill’s claim met the Supreme Court’s MedImmune standard, as defined in the Federal Circuit’s SanDisk opinion. And ArvinMeritor never dissolved the controversy by providing Tuthill a covenant not to sue.

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BorgWarner, Inc. v. Hilite Int’l., Inc., No. 07 C 3339, 2008 WL 3849908 (N.D. Ill. Aug. 14, 2008) (Zagel, J.)

Judge Zagel denied defendant Hilite’s 23 U.S.C. §1404(a) motion to transfer. Plaintiff BorgWarner filed this patent infringement suit over variable camshaft timing (“VCT”) in June 2007. Hilite answered and counterclaimed in March 2008. Five days after answering, Hilite filed a suit in the District of Delaware alleging that BorgWarner infringed Hilite’s VCT patent. Hilite reasoned that its VCT case was related to a prior Delaware patent case filed by BorgWarner on the patent currently at issue in the Northern District, and, therefore, by the transitive property this suit and BorgWarner’s closed Delaware case were related.

While the Seventh Circuit does not strictly follow the first-to-file rule, its use was warranted in this case. BorgWarner’s choice of forum deserved some deference. And the Northern District, while equivalent to Delaware in terms of time to trial, was significantly faster for average disposition without court actions – 6.2 months in the Northern District to 12.5 months in Delaware. Convenience factors were neutral, and therefore weighed in favor of keeping the case in the Northern District.

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Personified, LLC v. Sales Consultants of Cary, LLC, No. 08 C 3123, 2008 WL 3200842 (N.D. Ill. Aug. 8, 2008) (Der-Yeghiayan, J.)

Judge Der-Yeghiayan granted declaratory judgment (“DJ”) defendant Sales Consultants of Cary’s (“SCC”) Fed. R. Civ. P. 12(b)(6) motion to dismiss DJ plaintiff Personified’s trademark case in favor of SCC’s later-filed District of North Carolina action. Shortly after its parent registered the trademark “Personified,” Personified began using the name and allegedly received a cease and desist letter from SCC who offered staffing services using the name “Personified.” SCC’s letter allegedly demanded that Personified immediately change its name and pay SCC damages. In response, Personified filed this suit seeking a declaratory judgment that it had not violated trademark laws or engaged in unfair competition. SCC countersued in the District of North Carolina several days later.

The Court had federal question jurisdiction because of the Lanham Act issues.  Personified was the first to file, but the Court noted that the Seventh Circuit did not strictly follow the first-to-file rule. And the Court exercised its “wide discretion,” declining to exercise jurisdiction over the declaratory action. SCC was the natural plaintiff. Instead of filing suit after receiving the cease and desist letter, Personified could have gone to SCC to resolve the dispute. Additionally, Personified was already preparing a motion to transfer the North Carolina action to the Northern District. The Court also denied a motion to stay its ruling pending a decision by the District of North Carolina. If the North Carolina Court transferred the case to the Northern District, Personified would not face substantial hardship by having to replead its DJ claim.

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Moran Indus., Inc. v. Higdon, No. 07 C 6092, Slip Op. (N.D. Ill., Jul. 26, 2008) (Guzman, J.).

Judge Guzman held that the Court had personal jurisdiction over the defendants, but dismissed plaintiff’s trademark and breach of contract case for improper venue. Defendants, various franchisees of plaintiff, were all residents of and operated their franchises in various combinations of Indiana, Kentucky and Tennessee. Each relevant franchise agreement had a forum selection clause consenting to jurisdiction in the Northern District. But the Court held that the clause was permissive, allowing defendants to challenge personal jurisdiction. While defendants were not Illinois residents, their numerous contacts with plaintiff — sending plaintiff royalty payments and reports to Illinois and attending training in Illinois, among others — created personal jurisdiction.

While defendants were subject to personal jurisdiction in Illinois, the Court held that the Northern District was not the proper venue. A substantial part of the harm alleged occurred not in Illinois, but in Indiana, Kentucky and Tennessee. Those were the states where defendants allegedly failed to make payments, not Illinois. The Courts, therefore, dismissed the case.

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Hope Family Vineyards Pty, Ltd., v. Hope Wine, LLC, No. 08 C 3246, Slip Op. (N.D. Ill. Jul. 11, 2008) (Lindberg, J.).

Judge Lindberg granted defendant’s §1404(a) motion to transfer to the Central District of California. Plaintiff was an Australian entity with its principal place of business in Australia. Its only direct connection to the Northern District was that its exclusive U.S. distributor was headquartered in Illinois. The distributor, however, was not a party to the suit. The Court therefore, gave plaintiff’s choice of forum minimal deference.

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Judge Castillo dismissed some defendants for lack of personal jurisdiction (the wrong defendants) and denied defendant Strategic Commercial Solutions (“SCS”). Fed. R. Civ. P. 12(b)(6) motion to dismiss. Plaintiff Medline alleged that defendants violated its trademark and related federal and state laws by selling “Medline Savings” packages with telemarketers.

Personal Jurisdiction

The Court did not have personal jurisdiction over the Wong defendants. The Wong defendants, all individuals, did not direct any of their allegedly infringing and fraudulent calls to Illinois residents. Their only contacts with Illinois were calls to and from Illinois banks regarding processing payments and refunds. These secondary contacts were not sufficient to create personal jurisdiction.

SCS similarly did not have sufficient contacts with Illinois. But Fed. R. Civ. P. 4(K)(2) provided for national, and therefore, there was personal jurisdiction in Illinois because SCS argued it was not subject to jurisdiction in any U.S. state or territory.

Telemarketing and Consumer Fraud and Abuse Act

SCS argued that Medline could not bring its Telemarketing and Consumer Fraud and Abuse Act claim because it was not a “private person” that was “adversely affected” by the telemarketing as required by the Act. But the Court held that while Medline was not an aggrieved consumer, the alleged unfair use of Medline’s trademarks could have caused Medline the harm it alleged.

Trademark Infringement

The Court noted that it was not aware of a similar case in which a party was accused of trademark infringement for using marks in telemarketing. But SCS’s alleged use of Medline’s marks was a use in commerce.

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Judge Norgle dismissed plaintiff’s copyright infringement case for lack of personal jurisdiction, pursuant to Fed. R. Civ. P. 12(b)(2). The Court agreed with plaintiff that the alleged injury was suffered in Illinois because plaintiff was an Illinois resident. But that was not enough to create personal jurisdiction. Plaintiff identified no supported facts showing that defendants intended to impinge upon an Illinois interest or otherwise purposely availed themselves of Illinois.

And the individual defendants’ contract with plaintiff in Illinois did not create personal jurisdiction either. All of the individual defendants’ contracts occurred before the corporate defendant was incorporated. And after incorporation, the defendants did no business in Illinois or with Illinois residents. Defendants did maintain a website, but plaintiff’s evidence regarding the website was insufficient.

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Judge Conlon denied defendants' (collectively “Wound Care Plus”) motion to dismiss plaintiff Wound Care Education Institute's (“WCEI”) trademark and copyright infringement case for lack of personal jurisdiction, improper venue and forum non conveniens. WCEI provided wound treatment education to health professionals across the country using copyrighted materials, and is largely based in the Northern District. It alleged that Wound Care Plus attended three of its seminars and then began running competing seminars, including at least one in Chicago, using course materials that were substantially similar to or exact copies of WCEI's copyrighted course materials. Wound Care Plus also operated a website which allowed its customers to register online for the Wound Care Plus seminars.

Personal Jurisdiction

The Court held that it had specific personal jurisdiction over Wound Care Plus, a New York resident, because it advertised its Chicago seminars in national publications seeking to register Illinois customers. Additionally, Wound Care Plus's website created jurisdiction because it was an active, commercial website that allowed Wound Care Plus's customers to register for, among others, its Chicago seminar online.

Venue

Venue was proper in the Northern District, despite the fact that Wound Care Plus did not reside in Illinois because a substantial part of the events giving rise to WCEI's claims, the Chicago seminars, occurred within the Northern District.

Forum Non Conveniens

The Court noted that the motion should have been brought pursuant to 28 U.S.C. Section 1404(a), instead of the common law forum non conveniens.  Forum non conveniens was inapplicable to this case because the alternate forum was not abroad or a state court. 

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Judge Lindberg granted individual defendants Mr. and Ms. Greiling's Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. Both Greilings were German citizens and residents. Mr. Greiling was previously Managing Director of plaintiff's parent company, but no longer held that role. First, the Court held that the Greilings were not amenable to Fed. R. Civ. P. 4(k)(2) nationwide service of process because the Lanham Act, which created federal question jurisdiction in this trade secret misappropriation case, did not provide for nationwide service, as some acts do. As a result, the Greilings' general contacts with the United States were irrelevant. The issue was whether the Greilings had sufficient minimum contacts with Illinois for specific jurisdiction.

The Court did not have specific jurisdiction over Ms. Greiling because she had no contacts with Illinois. She had never been to or conducted business in Illinois and she had no other attachments to Illinois.

Mr. Greiling was a closer question, but the Court held that it lacked specific jurisdiction over him as well. Mr. Greiling was formerly Managing Director of plaintiff's parent entity, and plaintiff was an Illinois entity. But Mr. Greiling was no longer employed by plaintiff's parent. And plaintiff provided no facts indicating that Mr. Greiling had any contacts with Illinois during the time relevant to the case.

The Court also denied plaintiff's request for jurisdictional discovery. Plaintiff had not made a prima facie case for personal jurisdiction and jurisdictional discovery was not appropriate without the prima facie showing of jurisdiction.

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Bretford Mfg., Inc. v. Mass Engineered Design, Inc., No. 08 C 486, Slip Op. (N.D. Ill. May 13, 2008) (Moran, Sen. J.).

Judge Moran denied declaratory judgment ("DJ") of defendants' (collectively "Mass Engineered") motion to dismiss DJ plaintiff Bretford Manufacturing's ("Bretford") complaint and granted Mass Engineered's motion to transfer. Mass Engineered filed a patent infringement suit against three of Bretford's customers in the Eastern District of Texas in 2006. That case was six months from trial as of the Court's opinion.

The Court denied Mass Engineered's argument that the case should be dismissed because it was not the first filed case. But the Court transferred the case to the E.D. Texas. The Court noted its belief that related patent litigation should be resolved in one jurisdiction. Additionally, Bretford had played a role in the E.D. Texas litigation, at least as a third party defendant. And the E.D. Texas Court granted Mass Engineered's motion to amend its complaint adding infringement allegations against Bretford.

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HyperQuest, Inc. v. N'Site Solutions, Inc., No. 08 C 483, 2008 WL 1968554 (N.D. Ill. May 1, 2008) (Shadur, Sen. J.).

Judge Shadur dismissed plaintiff's copyright infringement case for lack of subject matter jurisdiction. Plaintiff argued that it was the exclusive licensee of the copyright. But the Court held that plaintiff's license was nonexclusive because licensor retained various rights, including, the rights to:

• Make derivative works;
  
• Reproduce the work; and
  
• Sell the copyrighted software.

But the Court's adoption of defendants' reply was its most notable feature:

To that end [defendants’] Reply addressed fully every aspect of [plaintiff’s] attempt to characterize itself as an exclusive licensee . . . and it completely scotched HQ's position. Because the Reply has covered the waterfront so thoroughly and persuasively, this Court finds it unnecessary to reiterate the analysis there piece by piece-instead it simply adopts [defendants’] presentation as proffered in the Reply.

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Genender Int'l, Inc. v. Skagen Designs, Ltd., No. 07 C 5993, Slip Op. (N.D. Ill. Apr. 14, 2008) (Grady, J.).

Judge Grady denied defendant Skagen's Fed. R. Civ. P. 12(b)(3) motion to dismiss plaintiff Genender's declaratory judgment ("DJ") case. The Court also granted in part Skagen's Fed. R. Civ. P. 12(b)(6) motion to dismiss, dismissing Genender's tortious interference claim. Skagen argued that Genender's DJ suit should be dismissed in favor of Skagen's later-filed suit for design patent and trade dress infringement filed in the District of Nevada. Skagen argued that dismissal was required by the Seventh Circuit's standard as set forth in Tempco Elec. Heater Corp. v. Omega Eng., Inc., 819 F.2d 746 (7th Cir. 1987). The Court, however, held that Federal Circuit law controlled because of the design patent claims. And the Federal Circuit explicitly rejected Tempco in Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931 (Fed. Cir. 1993) (abrogated on other grounds). Instead, the Federal Circuit required that Skagen provide a "sound reason" that proceeding with the DJ would be unjust or inefficient. Skagen provided no such reason and, in fact, Skagen's counsel agreed at argument that it did not matter whether the case was tried in the Northern District or in the District of Nevada.

The Court dismissed without prejudice Genender's tortious interference claim. Genender alleged that Skagen interfered with Genender's business relationship with customer Sears by copying Sears personnel on cease and desist letters. But the claim was deficient because Genender did not allege that it lost any Sears business because of Skagen's actions.

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Judge Shadur, on the Court's own motion, struck the portions of defendant Biorigin's Answer that denied plaintiff's claims because plaintiff misspelled Biorigin – spelling it “Biorgin” instead of “Biorigin.” The Court noted that a denial based upon misspelling was an argument “only a patent lawyer could love.” And the Court explained that, despite plaintiff's misspelling, Biorigin understood that it was the intended target of plaintiff's complaint.

The Court also struck Biorigin's lack of personal jurisdiction, insufficient service and insufficient process affirmative defenses. The Court held that by filing a counterclaim, Biorigin affirmatively invoked the Court's jurisdiction, forfeiting these affirmative defenses.

As to Biorigin's lack of standing affirmative defense, the Court noted that it was pled on information and belief and required that Biorigin, should it find facts to support its defense, file a motion with such facts as quickly as possible because standing should be addressed as early as possible.

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Integrated Genomics, Inc. Kyrsides, No. 06 C 6706, 2008 WL 63065 (N.D. Ill. Mar. 4, 2008) (Lefkow, J.).

Judge Lefkow dismissed defendant Ivanova for lack of subject matter jurisdiction, held that the Court had subject matter jurisdiction over defendant Kyrsides, and denied defendants' Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff's claims based upon preemption. Plaintiff alleged that defendants' breached their non-compete agreements and otherwise named plaintiff when defendants resigned from plaintiff, where they worked with genome software, and joined plaintiff's competitor in similar roles. Defendants each argued that plaintiff had not sufficiently pled diversity jurisdiction because plaintiff had not shown that $75,000 or more was in controversy. In response, plaintiff alleged that they lost customers to defendants' new employer after defendants resigned. But that was insufficient because plaintiff did not allege that defendants were responsible for, or the cause of, those lost customers. The Court, therefore, dismissed defendant Ivanova. But for Kyrisides, plaintiff also relied upon an email sent from Kyrsides to plaintiff's employees explaining Krysides's view that his resignation cost plaintiff a very large number of contracts. Kyrsides statements were sufficient proof that the amount in controversy exceeded $75,000.

The Court held that a motion to dismiss was not the appropriate vehicle for deciding the scope of the relevant non-compete agreements. The scope of a non-compete was fact-intensive and best determined after additional discovery.

Finally, the Court held that plaintiff's claims were not preempted by the Illinois Trade Secret Act ("ITSA"). While the claims could encompass trade secret information, they were based upon the broader category of confidential information. Because the claims were potentially broader than trade secrets, they were not preempted.

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Strom v. Strom Closures, Inc., No. 06 C 7051, 2008 WL 489363 (N.D. Ill. Feb. 20, 2008) (Der-Yeghiayan, J.).

Judge Der-Yeghiayan granted plaintiff Victoria Strom’s (“Strom”) motion to dismiss defendants’ (collectively “SCI”) counterclaims. SCI filed an earlier suit charging Strom with patent infringement. The parties settled that suit pursuant to a Settlement Agreement (“Agreement”). SCI alleged that Strom breached the Agreement and was once again, therefore, infringing SCI’s patents. But the Court held that once a district court dismisses a case with prejudice, it cannot reopen the case for enforcement of a related agreement without independent jurisdiction. SCI’s appropriate claim was for breach of the Agreement, not patent infringement. Because breach of the Agreement was a state law claim and because there was no diversity (SCI pled that all parties were Illinois residents), the Court lacked jurisdiction. Finally, the Court held that there was not supplemental jurisdiction based upon Strom’s federal employment claims. Strom’s claims and the breach of the Agreement were not sufficiently related.

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U.S. Gypsum Co. v. 3M Innovative Props. Co., No. 07 C 6381, 2008 WL 514976 (N.D. Ill. Feb. 20, 2008) (Darrah, J.).

Judge Darrah granted defendants’ (collectively “3M”) Fed. R. Civ. P. 12(b)(3) motion to dismiss for lack of venue. Plaintiff United States Gypsum (“Gypsum”) filed this action asserting its own patent and seeking declaratory judgments regarding 3M’s patents, all to low dust construction compounds. Shortly thereafter, 3M filed a corresponding suit in the District of Minnesota. Prior to filing their suits, the parties were in extended negotiations regarding cross-licensing of their patents. Pursuant to those negotiations, the parties entered a confidentiality agreement (“Agreement”) requiring that all disputes “arising from the subject matter of this Agreement shall be brought . . . exclusively in [D. Minn.]” Because the express subject matter of the Agreement was the patents in suit and because the Agreement, negotiated by sophisticated parties, set D. Minn. as the exclusive jurisdiction, the Court dismissed the case in favor of 3M’s action filed in the D. Minn.

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Gabbanelli Accordions & Imports, L.L.C. v. Italo-Am. Accordion Mfg. Co. et al., No. 02 C 4048, 2008 WL 351860 (N.D. Ill. Feb. 8, 2008) (Zagel, J.)*

Judge Zagel granted plaintiff summary judgment of trademark and trade dress infringement regarding plaintiff’s “wildly colorful” and “heavily ornamental” accordions. The Court awarded plaintiff approximately $500,000 in damages, attorneys fees and costs. Defendants – Italian entities that sold accordions in the United States – chose not to participate in the case. Instead, they filed an Italian case after this case was filed, but before defendants were served pursuant to the Hague Convention. The Court previously stayed a portion of the case pending the outcome of the Italian case, but noted that the stay may have been a mistake. Years after filing, the Italian case had not been resolved and defendants failed to participate in the U.S. proceeding based upon a belief that the Italian proceeding controlled. For example, defendants admitted personal jurisdiction when they failed to respond to jurisdictional Requests for Admission and instead of filing a motion to dismiss, defendants sent the Court an unsupported letter listing their complaints with the case and the Court’s jurisdiction over them. By failing to participate in discovery and not following the Court’s rules, defendants preempted whatever ability they might have had to make their case.

Practice tip: Participate and play by the rules. Even if you cannot or will not afford counsel, you must answer discovery, respond to motions and appear when required to. Failing to participate will not insulate you from judgment.

* Click here for more on this case in the Blog’s archives.

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Palantir.net, Inc. v. Palantir Techs., Inc., No. 07 C 4271, Min. Order (N.D. Ill. Nov. 27, 2007) (Guzman, J.).*

Judge Guzman granted defendant's motion to transfer this Lanham Act case to the Northern District of California ("N.D. Cal.") pursuant to 28 U.S.C. Section 1404(a).  Defendant's principal place of business was in the N.D. Cal. and defendant had an earlier-filed case against plaintiff pending in the N.D. Cal.  The Court, therefore, held that the convenience of the parties and the witnesses, as well as the interests of justice, were best served by transferring the case to the N.D. Cal.

*  Click here for a copy of the case.

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Morton Grove Pharms., Inc. v. Nat'l. Pediculosis Assoc., __ F. Supp.2d __, 2007 WL 4259422 (N.D. Ill. Nov. 30, 2007) (Bucklo, J.).

Judge Bucklo granted in part defendants Fed. R. Civ. P. 12(b)(2) motion to dismiss and denied defendants’ motion to transfer the case to the Eastern District of Michigan. Plaintiff manufactures a line of lotions and shampoo which are FDA-approved for treating lice and scabies.  Defendants are a Michigan non-profit group, Ecology Center, Inc., and related individuals (collectively the "Center"), as well as the National Pediculosis Association. The Center mailed two newsletters related to passage of Michigan legislation to approximately 19,000 addresses of which 44 were in Illinois.  99% of the Center's donors were from Michigan, with just .23% from Illinois (18 Illinois-based donors total).  The Center's strongest ties to Illinois consisted of two donations totaling $270,000 from an Illinois-based foundation and an interactive website which accepts donations, although none have come from Illinois.  The Court previously held that these contacts did not create general jurisdiction.* 

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Jewel Am., Inc. v. Combine Int’l., Inc., No. 07 C 3596, 2007 WL 4300589 (N.D. Ill. Nov. 30, 2007) (Guzman, J.).

Judge Guzman denied defendants’ 28 U.S.C. § 1404(a) motion to transfer this copyright case to the Eastern District of Michigan. Plaintiff argued that its choice of forum should be given deference because its relevant subsidiary was an Illinois entity with its place of business and all of its operations in Illinois. But the Court looked to the residence of the named plaintiff, not the plaintiff’s subsidiary. Because the named plaintiff was a New York entity, plaintiff’s chosen forum was not given deference. Further, the situs of material events was Michigan. Defendants were Michigan entities and the alleged infringement and related planning occurred in Michigan. The Court discounted the location of documents because, “[i]n this age of faxing, scanning and overnight courier services, however, the location of documentary evidence is largely irrelevant.”

No party identified a third party witness that would be required to testify. And convenience of the parties tipped slightly to plaintiff whose subsidiary’s business would be disrupted if its main employees and key witnesses had to travel from Illinois to Michigan for court proceedings and depositions. Based upon these factors, the Court held that defendants had not shown that the Eastern District of Michigan was clearly more convenient and denied the motion.

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Goss Int’l Ams., Inc. v. A-Am. Mach. & Assembly Co., No. 07 C 3248, 2007 WL 4294744 (N.D. Ill. Nov. 30, 2007) (Gettleman, J.).

Judge Gettleman denied defendant’s Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff’s copyright for lack of subject matter jurisdiction. Plaintiff alleged that defendant violated plaintiff’s copyrights in its simplified machine drawings of its commercial printing machines by placing them on the internet without authorization. The Court held that plaintiff’s simplification of its drawings and addition of part numbers were sufficient to meet copyright’s originality requirement. The Court also looked to the Fifth and Eighth Circuits and held that the registration requirement was met when plaintiff filed its copyright registration, as opposed to when the Copyright Office acted on it. In this case, plaintiff filed its application in May 2007 and was waiting on registration as of the date of the opinion. The Court reasoned that because plaintiff would also have a cause of action if the registration was denied, there was no reason to make plaintiff wait until the Copyright Office acted.

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Tamburo v. Dworkin, No. 04 C 3317, 2007 WL 3046216 (N.D. Ill. Oct. 9, 2007) (Gottschall, J.).

Judge Gottschall granted defendants’ motion to dismiss for lack of personal jurisdiction. Plaintiffs sell a dog breeding and pedigree software program and sought, among other things, a declaratory judgment that certain allegedly factual information (date of birth, gender, parent’s names, titles, color, medical information, etc.) included in its pedigree database was not copyrightable and, therefore, could not be infringed by plaintiffs. Defendants either offer allegedly competing software or are dog breeders who use such software. The Court held that it lacked general or specific jurisdiction over each of the defendants. There was no general jurisdiction because plaintiffs identified, at most, minimal interactions with and sales to Illinois residents. And defendants various websites were not sufficiently targeted to Illinois to alone create general jurisdiction. The Court similarly found that it lacked specific jurisdiction. Of particular interest, the Court held that defendants’ posts to internet chat groups and message boards could not create specific jurisdictions. The posts allegedly accused plaintiffs of theft and trafficking in stolen goods, among other things. The Court held that, while the Seventh Circuit had not addressed the issue or expressly adopted the Zippo sliding scale analysis, posts to internet chat rooms and message boards would fall below passive websites, which make up the bottom of the Zippo scale. Defendants are not alleged to own the chat rooms or to use them to transact or target business within Illinois. The Court reasoned that a holding that specific jurisdiction was created by postings to chat rooms would make jurisdiction boundless because the chat rooms have no geographic restrictions.

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Papst Lic. GmbH & Co. KG v. Fujifilm Corp., No. 07 C 3401, Slip Op. (N.D. Ill. Nov. 27, 2007) (Holderman, C.J.).

Judge Holderman transferred this case to the District of the District of Columbia (“D.D.C.”) pursuant to an order of the Multidistrict Litigation Panel (“MDL Panel”). Plaintiff Papst Licensing (“Papst”) sought centralization pursuant to 28 U.S.C. Section 1407 of this case and four others – two in the D.D.C, one in the District of Delaware and on in the District of New Jersey. The MDL Panel centralized the cases, but centralized them in the D.D.C., instead of the Northern District. The first, and the most advanced, of the cases was pending in the D.D.C. And the MDL Panel held that the East Coast would be the most convenient location for the majority of the parties.

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Abbott Labs. V. Church & Dwight, Inc., No. 07 C 3428, 2007 WL 3120007 (N.D. Ill. Oct. 23, 2007) (Kennelly, J.).

Judge Kennelly denied defendant Church & Dwight’s (“C&D”) 28 U.S.C. Section 1404(a) motion to transfer this patent case to the District of New Jersey, where a related case between the parties was pending, and granted C&D’s motion to dismiss a claim that the New Jersey Court previously dismissed for lack of standing. In New Jersey, C&D sued plaintiff Abbott Laboratories (“Abbott”) alleging infringement of patents covering lateral flow immunology devices, and pregnancy and ovulation testing methods. Abbott counterclaimed alleging infringement of three patents, including U.S. Patent No. 6,534,320 (the “’320 patent”). The New Jersey Court ultimately dismissed Abbott’s counterclaim, holding that Abbott was a nonexclusive licensee of the ‘320 patent and, therefore, lacked standing. The New Jersey Court also held that standing could not be cured by Abbott’s effort to involuntarily join its licensor Inverness pursuant to Fed. R. Civ. P. 19.  Based upon the New Jersey Court’s ruling, this Court held that issue preclusion prevented Abbott from re-litigating its standing to sue. Unless Abbott revised its license agreement with Inverness, giving Abbott additional rights, the New Jersey Court’s ruling was preclusive. The Court, therefore, dismissed Abbott’s ‘320 patent infringement claim.

The Court denied C&D’s motion to transfer the case to New Jersey. The Court gave Abbott’s choice of forum deference. And the Court gave little weight to the parties’ ongoing New Jersey patent suit because the New Jersey Court dismissed Abbott’s counterclaims before making any substantive rulings. The New Jersey Court, therefore, would not have been in a better position to decide any issues in the case. 

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ExcelStor Tech., Inc. v. Papst Licensing GMBH & Co. KG, No. 07 C 2467, 2007 WL 3145013 (N.D. Ill. Oct. 24, 2007) (Der-Yeghiayan, J.).

Judge Der-Yeghiayan granted defendant Papst Licensing’s (“Papst”) Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Plaintiffs, various related ExcelStor Technology entities (collectively “ExcelStor”) licensed Papst’s patent portfolio (the “Agreement”) related to hard disk drives (“HDD”). ExcelStor alleged that when the Agreement was signed, Papst had already given third party Hitachi a license covering the same HDDs. Furthermore, ExcelStor alleged that Papst concealed the Hitachi license from ExcelStor. 

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Medallion Products, Inc. v. H.C.T.V., Inc., No. 06 C 2597, 2007 WL 3085913 (N.D. Ill. Oct. 18, 2007) (Darrah, J.).

Judge Darrah dismissed defendant Broadcast Arts Group (“BAG”) for lack of personal jurisdiction, but held that the Court had personal jurisdiction over defendant ICC, Woodridge Specialty Products Corp. and an individual defendant (collectively “ICC Defendants”). Plaintiffs argued that BAG’s tortious acts against plaintiffs, all Illinois residents, created personal jurisdiction based upon the effects test doctrine. But the Court held that the alleged tortious acts against were not sufficient for jurisdiction because BAG was a Florida resident and all of its allegedly tortious acts were performed in Florida or Pennsylvania, at the request of non-Illinois residents. 

The alleged tortious acts of the ICC Defendants, however, did create personal jurisdiction pursuant to the effects test doctrine. The ICC Defendants allegedly entered an agreement to develop, market and sell a counterfeit pet-stain removal product that was packaged in bottles using plaintiff’s “Urine Gone” logo. The alleged acts and resulting injury would have occurred in Illinois.

The Court also held that plaintiffs met the Fed. R. Civ. P. 8 pleading standards as clarified in Atlantic Corp. v. Twombly, ____ U.S. ____, 127 S. Ct. 1955 (2007). So, the Court denied defendant’s motion to dismiss plaintiffs’ state law claims.

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Kammin v. Smartpros, Ltd., No. 07 C 2665, 2007 WL 3046128 (N.D. Ill. Oct. 9, 2007) (Guzman, J.)

Judge Guzman transferred this copyright case to the Southern District of New York pursuant to 28 U.S.C. Section 1404. While plaintiff’s choice of forum is usually given significant weight, no party was a resident of the Northern District – both parties were New York residents. Furthermore, the non-party witnesses were closer to New York. And New York had a significant interest in deciding a case between its citizens regarding a dispute arising within New York.

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Mitchell v. First Northern Credit Union, No. 07 C 1891, 2007 WL 2948374 (N.D. Ill. October 4, 2007) (Norgle, J.).

Judge Norgle granted defendant Arizona State Credit Union’s ("ASCU") motion to transfer to the District of Arizona pursuant to 28 U.S.C. Section 1404 in this patent dispute. The Court acknowledged that plaintiff’s chosen forum was given significant weight. But the ease of access to the evidence in Arizona dictated that the case be transferred. Plaintiff was an Arizona resident, at least as of his filing date. And ASCU, all of its documents and all of its employees were in Arizona.

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Chicago Architecture Foundation v. Domain Magic LLC, No. 07 C 764, Slip Op. (N.D.Ill. October 12, 2007) (Norgle, J.).

Judge Norgle denied defendant’s Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. Although defendant was a Florida corporation, defendant’s website – www.chicagoarchitecturefoundation.com – played upon plaintiff Chicago Architecture Foundation’s (“CAF”) name and only included links to other Chicago businesses. The Court, therefore, held that defendant’s website targeted the Northern District creating general personal jurisdiction.

Additionally, as a Fed. R. Civ. P. 37 sanction for failing to answer interrogatory responses as the Court ordered, the Court held that defendant generated revenue from the use of CAF’s trademark. 

Practice tip: Answer discovery requests on time and, if you cannot for some reason, at least answer them by the Court ordered deadline. 

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Geisha, LLC v. Tuccillo, No. 05 C 5529, 2007 W> 2608558 (N.D. Ill. Sep. 4, 2007) (Pallmeyer, J.).

Judge Pallmeyer held that the Court lacked jurisdiction over plaintiff Geisha’s declaratory judgment claim. Geisha operates a series of restaurants, each called Japonais – Japonais Chicago, Japonais New York and Japonais Las Vegas. Between the openings of Japonais Chicago and Japonais New York, defendant Roy Tuccillo (“Tuccillo”) filed an intent to use trademark application for a nearly identical Japonais mark, with the “firm intent” to open a restaurant using the mark. Geisha registered Japonais with the State of Illinois, but never federally registered the mark. Geisha sought, among other things, a declaratory judgment that Geisha owned the Japonais mark and that Tuccillo’s opening of a Japonais restaurant would infringe Geisha’s mark. The Court noted that the Seventh Circuit looks to patent law when considering whether there is an actual controversy in a trademark declaratory judgment action. The Court, therefore, relied upon the Supreme Court’s recent MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 765 (2007), decision which required that a controversy be “real and immediate,” overturning the Federal Circuit’s reasonable apprehension of suit test. The Court held that there was no “real and immediate” controversy. While Tuccillo had filed for registration of a Japonais mark nearly identical to Geisha’s and expressed his firm intent to open a Japonais restaurant, Tuccillo’s actions did not suggest that there was “imminent danger” that he would actually open a restaurant when the suit was filed. Tuccillo testified that he had generally looked at some properties to purchase for the restaurant, but he did not remember when he had done that and could not identify specific properties. Additionally, Tuccillo purchased a Chinese restaurant in 2002, but leased the space without opening a Japonais restaurant in 2003, two years before Geisha filed this suit.

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Abbott Labs v. Baxter Healthcare Corp., No. 04 C 0836, 2007 WL 2875503 (N.D. Ill. Sep. 28, 2004) (Guzman, J.).

Judge Guzman granted plaintiff Abbott Laboratories’ (“Abbott”) Fed. R. Civ. P. 15(a) motion to amend its Complaint dismissing claims regarding its U.S. Patent No. 6,444,859 (the “’859 patent”). After the Federal Circuit held the parent of the ‘859 patent invalid, Abbott Labs v. Baxter Pharm. Prods., 471 F.3d 1363 (Fed. Cir. 2006), Abbott gave defendant Baxter Healthcare (“Baxter”) a covenant not to sue Baxter on the ‘859 patent (“Covenant”). Abbott, therefore, sought leave to dismiss its claims regarding the ‘859 patent. But Baxter argued that the claims should not be dismissed because the Covenant excluded any reissue or reexamination of the ‘859 patent, thereby creating an actual controversy. The Court held that Abbott’s potential suit based upon its potential reissue or reexam of the ‘859 patent did not create a current controversy. The Court, therefore, allowed Abbott to amend its Complaint dismissing claims regarding the ‘859 patent. 

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Minemyer v. R-Boc Reps., Inc., No. 07 C 1763, 2007 WL 2461666 (N.D. Ill. Aug. 24, 2007) (Coar, J.).

Judge Coar denied individual defendant Timothy Grimsley’s (“Grimsley”) motion to dismiss for lack of personal jurisdiction. Grimsley argued that all of his involvement in allegedly infringing plaintiff’s patented couplers was undertaken within the scope of his employment for defendant Dura-Line and, therefore, was protected by the fiduciary shield doctrine. But the Court disagreed. The parties provided conflicting evidence regarding whether Grimsley was an officer of Dura-Line and Grimsley’s level of control over Dura-Line’s coupler business. Additionally, the parties provided conflicting evidence regarding whether Grimsley was aware that Dura-Line’s couplers infringed plaintiff’s patents, but continued to market and sell them despite that knowledge, acts which would go beyond the scope of his employment because of his knowledge of their illegality. The Court, therefore, held that based on the current evidence the fiduciary shield doctrine was not available to Grimsley. But the Court acknowledged that further evidence may reverse that analysis and allowed Grimsley to refile his motion should discovery present that additional evidence.

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Canadian Thermal Windows, Inc. v. Magic Window Co., No. 07 C 1784, 2007 WL 2481295 (N.D. Ill. Aug. 27, 2007) (Moran, Sen. J.).

Judge Moran granted defendant’s Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. Defendant’s business is focused on southeastern Michigan. Defendant’s only connections to Illinois were a passive website, which cannot create jurisdiction, and purchases of certain supplies which were wholly unrelated to defendant’s alleged infringing activities. The Court, therefore, held that it lacked personal jurisdiction. In addition, the Court awarded defendant its attorneys fees and costs for moving to transfer or dismiss the case because plaintiff knew that defendant’s business was localized in southeastern Michigan without any ties to Illinois based on the parties’ ongoing business relationship.

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Farag v. Defense Threat Reduction Agency, No. 07 C 1688, 2007 WL 2404625 (N.D. Ill. Aug. 15, 2007) (Hart, J.).

Judge Hart dismissed for lack of subject matter jurisdiction plaintiff's suit seeking that the Court order the PTO to place a secrecy order on plaintiff's patent application for a process of separating an isotope from uranium for use in nuclear applications.  Plaintiff's application is about to be published and plaintiff believes that publication of the application would allow use of his process for illicit purposes that might threaten national security.  The Invention Secrecy Act provides a patent applicant the right to appeal the issuance of a secrecy order, but not the right to appeal the denial of a secrecy order.  See 35 U.S.C. Section 181; 35 C.F.R. Section 5.4.  The Invention Secrecy Act also permits a suit for compensatory damages, but only based on damage created by a secrecy order, not the absence of one.  Finally, the Court noted that plaintiff might have a claim pursuant to the Administrative Procedure Act (the "APA"), but the APA requires that the plaintiff by harmed by the agency (PTO) action.  The Court noted that potential threat to national security based upon a review of plaintiff's patent application was too remote and general to create standing pursuant to the APA.  As a result, the Court dismissed plaintiff's complaint.  It is also interesting to note, the Court instructed plaintiff to file any appeal with the Seventh Circuit, instead of the Federal Circuit despite the fact that the case is focused on PTO procedure. 

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Everything Baseball Ltd., LLC v. Team Athletic Goods, Inc., No 05 C 5526, Slip Op. (N.D. Ill. Aug. 16, 2007) (Pallmeyer, J.).

Judge Pallmeyer denied defendant Team Athletic Goods, Inc.’s (“TAG”) Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of standing. The inventors of the patent at issue, for baseball chest protectors, assigned their rights in the patent to Everything Baseball Ltd. (“EB Ltd.”), but the correct corporate name was Everything Baseball Limited, LLC (“EBL LLC”). Plaintiffs argued that because EBL LLC was not the assignee when it filed suit, the Court should dismiss the case. But the Court held that the assignment to EB Ltd. was a clerical error and that the parties’ clear intent was to assign to plaintiff EBL LLC. The Illinois’s records show that while EBL LLC was incorporated, EB Ltd. never existed. Furthermore, some months after TAG identified the error, EBL LLC amended their assignment with the PTO. But the Court did note that the amended assignment could not create standing in this suit. The Federal Circuit case law is clear that where standing does not exist when the suit is filed, it cannot be corrected during the suit. The difference in this case was the Court’s ruling that the intent of the assignment agreement was to assign the patent in suit to EBL LLC, not EB Ltd., which did not exist.

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Black & Decker, Inc. v. Robert Bosch Tool Corp., No. 06 C 4440, Min. Order (N.D. Ill. Jul. 13, 2007) (Manning, J.).*

In the first Northern District opinion to address the Supreme Court’s MedImmune declaratory judgment standard, Judge Manning denied plaintiff Black & Decker’s (“B&D”) motion to dismiss defendant Robert Bosch Tool Corp.’s ("Bosch") declaratory judgment counterclaims for lack of subject matter jurisdiction. In a prior case between the parties before Judge St. Eve (numerous prior opinions are discussed in the Blog's archives), B&D asserted that two models of Bosch's Power Box radio (the "Old Power Box") infringed B&D's two patents (the "Old Patents").  Shortly before Judge St. Eve held trial in the previous case, B&D brought this suit against Bosch asserting that Bosch's new model of its Power Box radio (the "New Power Box") infringed a third patent (the "New Patent").  At about the same time, B&D sought leave to present evidence at trial before Judge St. Eve that the New Power Box infringed the Old Patents.  Judge St. Eve, however, held that B&D had not disclosed the New Power Box as an accused product and that Bosch would be prejudiced by adding it immediately before trial.  After the trial before Judge St. Eve, the jury returned a verdict that the Old Power Boxes willfully infringed certain claims of the Old Patents.

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Steiner Indus., Inc. v. Auburn Mfg., Inc., No. 07 C 668, 2007 WL 1834176 (N.D. Ill. Jun. 22, 2007) (Darrah, J.).

Judge Darrah denied declaratory judgment defendant Auburn Manufacturing’s (“Auburn”) motion to dismiss. Auburn argued that plaintiff’s (collectively “DJ Plaintiffs”) suit improperly anticipated Auburn’s complaint which alleged Lanham Act claims of false designation and false advertising, as well as related state law claims. Auburn filed its complaint in the District of Maine within a week of DJ Plaintiffs’ filing. Auburn alleged that DJ Plaintiffs’ use of “FM Approved” and “Made in the USA” in their catalogs and website advertising in connection with their welding blankets constituted false designation and false advertising. DJ Plaintiffs were aware of the allegations before they filed suit because, as part of an ongoing negotiation with plaintiffs, Auburn had provided plaintiffs a copy of its complaint. The Court acknowledged its discretion to dismiss the case in favor of Auburn’s later filed complaint, but did not dismiss the case. The two cases mirrored each other, so either could resolve the parties’ dispute. And because both cases were filed in federal courts, there was no concern that the DJ case would cause friction between federal and state courts. The deciding issue was whether the Maine Court could offer a full remedy. DJ Plaintiffs had a motion to transfer or dismiss pending before the Maine Court. In that motion, DJ Plaintiffs argued that the Maine Court lacked personal jurisdiction over two of the three DJ Plaintiffs – Steiner Industries, Inc. and Lab Safety Supply, Inc. DJ Plaintiffs, therefore, asked the Maine Court to transfer the case to the Northern District of Illinois or to dismiss the case.  The Court held that if the Maine Court transferred the case to the Northern District or dismissed Steiner and Lab Safety for lack of jurisdiction, those factors would weigh in favor of maintaining the DJ action. If, however, the Maine Court denied DJ Plaintiffs’ motion and held that it had jurisdiction over all DJ Plaintiffs, then the Main Court could more effectively decide the dispute than the Northern District. The Court, therefore, denied the motion to dismiss with leave to refile if the Maine Court finds it has jurisdiction over all DJ Plaintiffs and does not transfer the case to the Northern District.

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Varitalk, LLC v. Lahoti, No. 07 C 1771, 2007 WL 1576127 (N.D. Ill. May 30, 2007) (Conlon, J.).

Judge Conlon denied defendant Dave Lahoti’s (“Lahoti”) Fed. R. Civ. P. 60(b) motion for reconsideration of the Court’s previous opinion denying Lahoti’s motion to dismiss for lack of personal jurisdiction, improper venue and forum non conveniens (you can read more about the previous decision in the Blog’s archives). Lahoti, a California resident, operated a website from California using the domain name www.veritalk.com. Lahoti’s site was an internet portal which allowed visitors to his site to click through links to buy various products or services. The Court held that Lahoti’s website fell in the gray area between active websites (which create specific jurisdiction) and passive websites (which do not create specific jurisdiction). But the portal’s interactive and commercial nature combined with plaintiff Varitalk’s evidence that some consumers were confused and erroneously visited Lahoti’s website created personal jurisdiction. Lahoti argued for reconsideration because he contends that his website did not link to businesses located in or doing business in Illinois, and that a third party puts the content on his website. The Court denied both of these arguments, explaining that Varitalk had put presented evidence that Lahoti’s website included links to business with substantial Illinois operations and that whether Lahoti or an agent of his placed the content on his website did not change the Court’s analysis. But the Court’s procedural analysis may be the most useful part of this case for litigators. The Court notes that Lahoti styled his motion as a Fed. R. Civ. P. 60(b) motion for reconsideration, but that it is actually a Fed. R. Civ. P. 54(b) motion. Rule 60(b) is for reconsideration of final judgments, where as Rule 54(b) is for interlocutory decisions. A denial of a motion to dismiss is necessarily interlocutory.

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Varitalk, LLC v. Lahoti, No. 07 C 1771, 2007 WL 1576127 (N.D. Ill. May 30, 2007) (Conlon, J.).

Judge Conlon denied defendant Dave Lahoti’s (“Lahoti”) motion to dismiss plaintiff Varitalk’s complaint for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2), improper venue pursuant to Fed. R. Civ. P. 12(b)(3) and forum non conveniens. Varitalk had a principal place of business in Chicago, where it developed software to relay highly customizable pre-recorded audio messages to consumers that were indistinguishable from live human voice. Varitalk registered a trademark in its name “Varitalk” for use in connection with this business. Lahoti is an individual residing in California where he operates various businesses using websites, such as www.omegaworks.com and www.crosspath.com. Lahoti registered the domain name www.veritalk.com, where he set up an internet portal which allowed visitors to his site to click through links to buy various products or services. The Court held that Lahoti’s website fell in the gray area between active websites (which create specific jurisdiction) and passive websites (which do not create specific jurisdiction). But the portal’s interactive and commercial nature – Lahoti earned income from the site based on how many visitors clicked on links on the site and whether they bought products from the linked sites – combined with Varitalk’s evidence that some consumers were confused and erroneously visited Lahoti’s portal, create specific jurisdiction over Lahoti. On the other hand, Lahoti’s email exchange with Varitalk’s CEO Frederick Lowe, initiated by Lowe, regarding whether Lahoti would sell his portal to Varitalk did not create specific jurisdiction because the exchange was limited and not initiated by Lahoti.

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Rowe Int'l Corp. v. Ecast, Inc., No. 06 C 2703, 2007 WL 1438370 (N.D. Ill. May 14, 2007) (Kennelly, J.).*

Judge Kennelly denied defendants' motion to dismiss plaintiffs' patent infringement complaint for lack of standing.  As to two patents that were not expressly assigned to plaintiffs before the suit was filed (the "Progeny Patents"), the Court used Illinois contract law to interpret the following blanket provision in the assignment agreement regarding the parent patent, which assigned the parent application and any improvements or related applications:

any and all other applications . . . which the undersigned may file . . . on said invention or improvements, and in any and all Letters Patent of the United States and foreign countries, which may be obtained on any of said applications . . . .

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Trading Techs. Int'l., Inc. v. GL Consultants, No. 05 C 4120, Slip Op. (N.D. Ill. May 17, 2007) (Gottschall, J.).*

Judge Gottschall denied defendant GL Trade SA's ("GL SA") motion to dismiss for lack of personal jurisdiction, with leave to refile after completion of jurisdictional discovery.  GL SA is a French company located in Paris.  GL SA does not have an office or any assets in Illinois, but it does have a subsidiary, defendant GL Americas, Inc. ("GL Americas").  GL Americas maintains a regional office in Chicago.  The Court noted that despite three rounds of briefing on jurisdiction, neither party "provided anything of substance to the court."  Plaintiff Trading Technologies ("TT") treated GL SA's subsidiary GL Americas as GL SA, and had not submitted evidence of GL SA's specific contacts with Illinois.  GL SA submitted several declarations, but none sufficiently clarified that GL SA did not have minimum contacts with Illinois.  As a result, the Court held that it lacked sufficient evidence to rule upon the motion, and granted TT's motion for jurisdictional discovery.

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Morton Grove Pharms., Inc. v. Nat'l. Pediculosis Assoc., __ F. Supp.2d __, 2007 WL 1302971 (N.D. Ill. May 3, 2007) (Bucklo, J.).

Judge Bucklo granted defendants' motion and dismissed plaintiff's deceptive trade practices case for lack of personal jurisdiction.  Defendants' sporadic contacts with Illinois did not confer general jurisdiction.  Plaintiff manufactures a line of lotions and shampoo which are FDA-approved for treating lice and scabies.  Defendants are a Michigan non-profit group, Ecology Center, Inc., and related individuals (collectively the "Center"), as well as the National Pediculosis Association which is not a party to the motion to dismiss.The Center mailed two newsletters related to passage of Michigan legislation to approximately 19,000 addresses of which 44 were in Illinois.  99% of the Center's donors were from Michigan, with just .23% from Illinois (18 Illinois-based donors total).  The Center's strongest ties to Illinois consisted of two donations totaling $270,000 from an Illinois-based foundation and an interactive website which accepts donations, although none have come from Illinois.  The Court held that these occasional contacts did not rise to the level of continuous and systematic, as required for general jurisdiction.

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Gencor Pacific, Inc. v. Nature's Thyme, LLC, No. 07 C 167, 2007 WL 1225362 (N.D. Ill. Apr. 24, 2007) (Kocoras, J.).

Judge Kocoras granted defendants' Fed. R. Civ. P. 12(b)(2)&(3) motion to dismiss for lack of personal jurisdiction and venue and dismissed the case.  Plaintiff brought this Lanham Act false advertising and copyright infringement case alleging that defendants used portions of plaintiff's copyrighted studies regarding the efficacy of a weight-loss and appetite suppressant containing Caralluma Fimbriata extract.  Defendants, a business and two individuals employed by the business, were residents of New Jersey and had a single sale to an Illinois customer, valued at $300.  Defendants only other contacts with Illinois were an interactive website accessible in Illinois and the fact that one or two of defendants' general solicitations may have been sent to Illinois.  Defendants did not own property in Illinois and there was no proof that any defendants sent any of the allegedly infringing information to Illinois.  The Court held these contacts were not sufficient to create either general or specific jurisdiction.  The Court also held that venue was not proper in the Northern District of Illinois because defendants were not residents of Illinois and the acts at issue in the suit did not occur in the Northern District.

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United States Gypsum Co. v. LaFarge N. Am., Inc., No. 03 C 6027, 2007 WL 1100804 (N.D. Ill. Apr. 3, 2007) (Hart, J.).

Judge Hart granted in part and denied in part the parties' cross-motions for summary judgment.  This case was a dispute over technology related to gypsum wallboard manufacturing and included patent infringement, trade secret misappropriation, breach of contract, Stored Communications Act ("SCA"), Computer Fraud and Abuse Act ("CFAA") and various related state tort claims.  The Court first looked at plaintiff's patent infringement claims regarding methods for making gypsum board and resolved the parties' claim construction disputes.  The Court then turned to defendants' argument that plaintiff was estopped from claiming infringement by equivalents because it failed to expressly refer to the doctrine of equivalents in its complaint or in its contention interrogatory responses.  The Court held that it was sufficient to allege infringement and cite Section 271 in a complaint.  And as to waiver for failure to disclose equivalents in its interrogatory responses, the Court held that defendants had shown no prejudice from plaintiff's failure to disclose equivalents and that while plaintiff did not use the term equivalents in its responses, it did state that it contended defendants infringed the patents even if defendants processes did not meet timing requirements in the claims.  As a result, plaintiff was not barred from arguing infringement pursuant to the doctrine of equivalents.

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Johnson v. Wright, No. 05 C 3943, 2007 WL 1079063 (N.D. Ill. Apr. 5, 2007) (Grady, J.).

Judge Grady denied defendants' Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff's amended complaint for lack of subject matter jurisdiction.  Defendants, record companies and related individuals, were accused of infringing plaintiff Syl Johnson's copyright in his song "Is It Because I'm Black," as well as related state law claims.  Defendants argued that there was not federal jurisdiction because the co-owners of Johnson's copyright had transferred their rights to one of the defendants.  The transfer, defendants argued, destroyed Johnson's federal copyright claim, leaving only state claims over which the Court lacked independent jurisdiction.  But defendants conceded that Johnson stated a claim for federal copyright infringement.  The Court held that Johnson's and defendants' alleged co-ownership of the copyright was an affirmative defense, not a jurisdictional matter.  Because Johnson had a well-pled claim of federal copyright infringement, the Court denied defendants' Rule 12(b)(1) motion to dismiss.  The Court also noted that defendants' motion was "essentially" a copyright infringement summary judgment motion, but because it was styled as a Rule 12(b)(1) motion on the pleadings, Johnson was not given adequate opportunity to present his response.  Additionally, the Court identified several questions of fact that would have prevented a grant of summary judgment based upon the exhibits attached to the parties' briefs.

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GMAC Real Estate, LLC v. E.L. Cutler & Assocs., Inc., 472 F. Supp.2d 960 (N.D. Ill. Oct. 20, 2006) (Bucklo, J.).

Judge Bucklo held that the Court lacked personal jurisdiction over defendant and dismissed plaintiff's complaint.  Plaintiff, a franchiser of residential real estate brokerages, brought this suit alleging that defendant, a former franchisee, breached its agreement with plaintiff and after the breach continued using plaintiff's trade and service marks.  The Court held that defendant's continued business relationship with plaintiff after plaintiff moved from New Jersey to Illinois was not sufficient to create specific jurisdiction.  While defendant had exchanged some communications with plaintiff in Illinois and come to Illinois for business meetings on one or more occasions, the Court lacked jurisdiction because the parties negotiated the underlying agreement in New Jersey (plaintiff's prior main office) and Ohio (defendant's location); defendant paid its franchising fees to plaintiff's Pennsylvania office; defendant's post-termination obligations which it allegedly did not meet were to have been performed in Ohio; and plaintiff's letter to defendant terminating the franchise agreement had a New Jersey return address.  Furthermore, the Court held that the location of defendant's alleged trademark infringement and cybersquatting was in Ohio, not Illinois.

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Timebase Pty Ltd. v. Thomson Corp., No. 07 C 460, 2007 WL 772946 (N.D. Ill. Mar. 9, 2007) (Lindberg, Sen. J.).

Judge Lindberg transferred this patent case to the District of Minnesota because all of the relevant documents and witnesses reside within that district or its subpoena power, while the dispute has no apparent unique connection to Illinois.  The software at issue, Westlaw's PastStat Locator, was researched, designed and developed in Minnesota and the related documents were still there.  Additionally, although the PastStat Locator can be accessed in any state, including Illinois, the hardware and software necessary to operate it are located in Minnesota.  Finally, 24 of the 25 witnesses identified as related to defendant are within the D. Minn. or its subpoena power.  And plaintiff's witnesses are in Australia, so whether they flew to Illinois or Minnesota was a minor difference to them at most.

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Adventus Ams. Inc. v. Innovative Envtl. Techs., Inc., No. 06 CV 3267, 2007 WL 704938 (N.D. Ill. Mar. 5, 2007) (Manning).

Judge Manning dismissed one plaintiff for lack of standing and transferred the case to the Eastern District of Pennsylvania.  Plaintiff EnviroMetal Technologies ("EnviroMetal") had an exclusive license to the patent-in-suit from the University of Waterloo in Canada.  The Court held that EnviroMetal's license was sufficiently exclusive to create standing because, among other things, it expressly gave the right to make use or sell and EnviroMetal had exclusive sublicensing rights.  Plaintiff Adventus Americas ("Adventus"), however, was a non-exclusive sublicensee of EnviroMetal and the Court held it had no standing.  Defendant also argued that the Court lacked personal jurisdiction, but the Court held that defendant's sales contacts with Illinois were sufficient to create personal jurisdiction.

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Goss Int'l Am., Inc. v. Graphic Management Assocs., Inc., No. 05 C 5622, 2007 WL 161684 (N.D. Ill. Jan. 11, 2007) (Valdez, Mag. J.).

Magistrate Judge Valdez  compelled certain foreign defendants (the "Swiss Defendants") to produce documents related to each Swiss Defendant's contacts with the United States.  After plaintiff filed its patent infringement claims against the defendants, the Swiss Defendants filed motions to dismiss the case for lack of jurisdiction.  They argued that no state had personal jurisdiction over them.  Plaintiff responded that the Court had jurisdiction pursuant to Fed. R. Civ. P. 4(k)(2), the federal long-arm statute.  Plaintiff also sought jurisdiction-related discovery to prove the necessary jurisdictional facts.  The  Court granted jurisdictional discovery and, based upon that decision, compelled the Swiss Defendants to produce documents relevant to their contacts with the United States after the Swiss Defendants refused to produce them pursuant to plaintiff's discovery requests.

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Junction Solutions, LLC v. MBS DEV, Inc., No. 06 C 1632, 2007 WL 114306 (N.D. Ill. Jan. 9, 2007) (Gottschall, J.).

Judge Gottschall denied defendants' motion to dismiss plaintiff's, Junction Solutions, trade secret and tortious interference case for lack of venue and denied plaintiff's motion to remand the case to Cook County Circuit Court, from where defendants removed the case.  Individual defendants, Jeffrey Ernest, Mitch Tucker and Kenneth Paul, were plaintiff's employees and helped it develop it its Junction Multi-Channel Distribution Software ("JMCD Software").  Shortly after developing the JMCD Software, the individual defendants left Junction Solutions and joined its competitor MBS DEV.  MBS DEV then began marketing software that competed with the JMCD Software.  Junction Solutions sued MBS DEV in the District of Colorado in 2004.  The parties eventually settled that case, a settlement which was also signed by the individual defendants.  In 2006, MBS partnered with Iteration2 and again began planning to market a software product very similar to the JMCD Software.  In response, plaintiff filed the instant suit in Cook County Circuit Court and defendants removed it to the Northern District.

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Ortho-Tain, Inc. v. Rocky Mountain Orthodontics, Inc., No. 05 C 6656, 2006 WL 3782916 (N.D. Ill. Dec. 20, 2006) (Leinenweber, J.).

Judge Leinenweber dismissed defendant's, Rocky Mountain Orthodontics ("RMO"), patent-related declaratory judgment counterclaims for lack of subject matter jurisdiction.  Plaintiff, Ortho-Tain ("OT"), sued RMO alleging that RMO breached the distributorship agreement between the parties pursuant to which OT manufactured dental appliances (allegedly covered by OT's patents) and RMO sold those appliances in France.  RMO counterclaimed for, among other things, declaratory judgment of noninfringement and unenforceability of OT's relevant United States patents.  RMO argued that OT's breach of contract and tortious interference suit combined with OT's warnings to RMO's customers that RMO was no longer authorized to sell OT products created the requisite reasonable apprehension of suit.  The Court, however, held that there was no reasonable apprehension.  OT's suit had been pending for over a year and OT had not added patent claims.  OT had also repeatedly stated that the suit was only a contract and tortious interference action.  While OT's statements stopped short of an affirmative disavowal of suit, they were sufficient to prevent a reasonable apprehension of suit.

Additionally, there was no present activity by RMO which constituted infringement.  RMO's counterclaims identified only United States patents, but RMO's sales activities were all in France.  Because there was no evidence submitted of infringing activity in the United States, there was no subject matter jurisdiction for a declaratory judgment action.

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Microthin.com, Inc. v. Siliconezone USA, LLC, No. 06 C 1522, 2006 WL 3302825 (N.D. Ill. Nov. 14, 2006) (Kendall, J.).

Judge Kendall held that plaintiff's patent claim did not give the Court supplemental jurisdiction over defendants' assault and battery, trespass, breach of contract and tortious interference counterclaims, even though the counterclaims were arguably related to plaintiff's patent infringement allegations.  The Court did, however, have diversity jurisdiction over the counterclaims.  After concluding it had jurisdiction, the Court dismissed the assault and battery counterclaims because there is no tort of assault against a corporation in Illinois.  The Court also dismissed the breach of contract claim, because plaintiff/counter-defendant was neither a party to the contract, nor an intended beneficiary. 

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