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

Irrevocable Trust of Anthony J. Antonious v. Tour Edge Golf Manufacturing, Inc., No. 10 C 5552, Slip Op. (N.D. Ill. Apr. 17, 2011) (Kennelly, J.).

Judge Kennelly sanctioned two counsel, Silverman and Daghighian, for false statements made in Silverman's pro hac vice application which was filed by Daghighian in this patent case. Daghighian prepared and filed Silverman's application, without his consent or review, based upon prior applications the two had filed in other courts. In doing so, Daghighian stated for Silverman that he had never been suspended from practice and that he had not been held in contempt. The Court later learned that both statements were false. The Court noted that it would likely have granted Silverman's application had he explained the two instances that should have been identified, but despite that the misstatements were material.

The Court ordered that: 1) Silverman provide a copy of the Court's opinion to his state disciplinary authority; 2) Silverman pay a $5,000 fine to the Clerk to be put into the pro bono fund; and 3) Silverman was barred from seeking pro hac vice admission to the Northern District for three years without prior permission from the Court's Executive Committee. Silverman received the more severe sanctions of the two because he was significantly more experienced and because he failed to take personal responsibility in the declaration he provided the Court.

Daghighian received lesser sanctions because he had only been practicing five years and, while his violations were more egregious in some ways, he took responsibility for his actions in his declaration. The Court ordered that: 1) Daghighian provide a copy of the Court's opinion to his state disciplinary authority, but suggested that the authorities consider the mitigating factors the Court noted in rendering its decision; 2) Daghighian pay a $1,000 fine to the Clerk to be put into the pro bono fund; and 3) Daghighian's appearance and pro hac vice application were not stricken.
 

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

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

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

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

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

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

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

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

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

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Several significant trends are developing as I read this year's N. D Illinois patent decisions. The trends are largely, although not all, Chicago-specific. And they appear to be largely influenced by the not-so-new Local Patent Rules.

1. Faster Settlement Times. Patent cases are settling faster. While the economy may still be playing a role, I believe that the LPR 2 initial contentions are driving early settlements. When parties take them seriously and make their best early cases, it is causing opponents to reconsider their positions and driving earlier settlements. Maybe more importantly, armed with more substantive analysis up-front, parties are talking more and more settlement discussions lead to more settlements. No doubt this is one of the impacts that the Court expected when it developed the LPR 2 initial contentions.
    
2. False Patent Marking is Dying. In early 2010, the Northern District was among the top three districts for false patent marking filings, in particular those cases brought by marking trolls (non-competitors in the defendant's industry). Unlike the Eastern District of Texas (which applied Rule 8 notice pleading to the intent requirement), the Northern District was split with many judges applying Rule 9 heightened pleading and a few applying Rule 8 notice pleading. That slowed the flow of cases to a degree, but what seems to have finished them is a combination of the Federal Circuit's BP Lubricants decision (requiring Rule 9(b) pleading for the intent requirement) and a decision this spring holding that corporate intent was not recognized in the Seventh Circuit, so the required intent must be shown in at least one employee, officer or agent of the corporation.
    
3. LR 56.1 Summary Judgment Decisions are on the Decline. There seem to be fewer decisions granting or denying summary judgment for failure to comply with the Local Rule 56.1 requirements for statements of material facts. Having tracked five years worth of intellectual property summary judgment decisions chastising parties for failure to comply with Local Rule 56.1, I cannot imagine that there is a trend toward strict compliance with Local Rule 56.1. Furthermore, this does not appear to be true in the trademark, copyright or trade secret realms. So, my suspicion is that this trend is really about fewer summary judgment decisions. And there are fewer summary judgment decisions for at least two reasons: 1) earlier settlement which avoids summary judgment motions; and 2) the Local Patent Rule 6.1 comment that judges have discretion to delay "early" summary judgment motions until the end of the discovery and the LPR 1.1 authority to delay motions raising claim construction issues until after the claim construction opinion issues.
    

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Healix Infusion Therapy, Inc. v. HHI Infusion Servs., Inc., No. 10 C 3772, Slip Op. (N.D. Ill. Jan. 27, 2011) (Zagel, J.).

Judge Zagel denied plaintiff Healix's motion for summary judgment as to defendant HHI's alleged tortious interference and denied HHI's motion to dismiss Healix's tortious interference claim. The motion to dismiss was premised upon application of Washington law, but the Court held that Texas law applied and the claim was properly plead.

Regarding summary judgment, both parties "cried foul" as to the other's Local Rule 56.1 compliance. The Court held that both parties were correct. But in light of the mutual non-compliance, the Court considered the substance of the motion, instead of resolving it on procedural grounds. Additionally, the Court held that emails offered as evidence were admissible over a hearsay objection as business records pursuant to FRE 803(6). Finally, the Court held that there was a question of fact as to whether HHI's alleged interference was willful and intentional.
 

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Pactiv Corp. v. Multisorb Techs., Inc., No. 10 C 461, Slip Op. (N.D. Ill. Feb. 15, 2011) (Leinenweber, Sen. J.).

Judge Leinenweber granted defendant Multisorb Technologies' Fed. R. Civ. P. 42 motion to consolidate a later-filed and related patent case before Judge Dow with the instant case. While the two cases asserted different patents, both cases accused Multisorb's FreshPax CR device for creating low-oxygen packaging. And several of the patents claimed the same priority. Additionally, the two complaints used virtually identical language. And the fact that plaintiff Pactiv's patent claims in the first suit were stayed pending reexam did not matter. Regardless of the timing of decisions, having two separate cases would still subject the parties to inconsistent rulings.

And transfer of the later-filed case was warranted to Local Rule 40.4. Both cases involved the same accused product. While the stay of Pactiv's patent claims in the first suit complicated matters, it did not mitigate the value of consolidating and reassigning the cases before a single judge.
 

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Am. Taxi Dispatch, Inc. v. Am. GSS Limo, Inc., No. 10 C 5713, Slip Op. (N.D. Ill. Jan. 27, 2011) (Dow, J.).

Judge Dow gave defendants in this trademark infringement suit a deadline for obtaining counsel, or in the case of the individual defendants filing a notice of pro se representation. The Court reminded the defendants that corporate entities may not appear without counsel in federal courts. Finally, the Court warned defendants that they faced a potential default judgment if they did not act by the deadline.
 

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I am often asked if declaratory judgment counterclaims delay the Local Patent Rule ("LPR") initial disclosure and contention obligations -- generally two weeks after a defendant's answer or other response to the complaint. LPR 2.1 is clear that initial disclosures are due two weeks after the answer unless "another" patent is asserted in counterclaims. "Me too" declaratory judgment claims focused only upon the asserted patents, therefore, do not delay the initial disclosure deadline. Initial disclosures are due two weeks after defendant's answer or response, unless defendant adds a new patent to the case in its counterclaims.

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One of the common early questions I get about the Local Patent Rules ("LPR") is how to address the LPR 2.1(a) & (b) document production that must accompany the LPR 2.1 initial disclosures. There is no set requirement for providing any statement regarding the production. In theory, it would be sufficient to send a cover letter with the production referencing LPR 2.1(a) or (b). But the better practice is to include an extra section in your initial disclosures identifying the LPR 2.1(a) or (b) production.

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Trading Technologies, Inc. v. BGC Partners, Inc., No. 10 C 715, Slip Op. (N.D. Ill. Feb.3, 2011) (Kendall, J.).*

Judge Kendall consolidated plaintiff Trading Technologies' ("TT") patent infringement cases that were filed in 2010 - Judge Coleman previously denied TT's motions to consolidate the cases filed in 2005 with those filed in 2010. The Court held that the 2010 cases were sufficiently related pursuant to Local Rule 40.1. While the products were not identical and the asserted patents were not identical for each defendant, the accused products were similar and were all accused of infringing one or more of three of TT's patent families. Additionally, consolidation would conserve substantial time and effort without causing delay.

The Court also ordered the parties to file a summary of all pending motions and discovery status.

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

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Trading Techs. Int'l., Inc. v. CQG, Inc., No. 10 C 718, Slip Op. (N.D. Ill. Jan. 6, 2011) (Shadur, Sen. J.).

Judge Shadur denied plaintiff Trading Technologies' ("TT") motion to strike certain of defendants' (collectively "CQG") affirmative defenses and counterclaims.* The motion was originally filed September 1, 2010 and had been stayed by agreement as the parties attempted to negotiate a global settlement. Because allowing motions to lie "fallow" for so long was "undesirable" the Court dismissed the motion with leave to refile it should the parties restart the substantive portion of the case.

*  Click here for much more on this and the related Trading Technologies cases in the Blog's archives.
 

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CP Prods., Inc. v. Does 1-300, No. 10 C 6255, Slip Op. (N.D. Ill. Dec. 29, 2010) (Shadur, Sen. J.).

Judge Shadur dismissed defendant Doe 300's motion to quash a subpoena in this copyright case, for numerous failures to comply with the Local Rules: 1) failure to provide a courtesy copy to chambers; 2) failure to notice the motion; and 3) failure to seek leave to appear pro hac vice. The Court, however, did not fine counsel for the violations because she was an out-of-state lawyer.

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Rosenthal Collins Group, LLC v. Trading Technologies Int'l, Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Nov. 23, 2010) (Coleman, J.).

Judge Coleman denied plaintiff Trading Technologies' ("TT") Local Rule 40.4 motion to consolidate TT's sixteen pending patent cases,* involving nine patents. Initially, the Court noted that TT did not seek consolidation of all sixteen cases in a single case, but consolidation of the four remaining cases that TT filed in 2005, and separately the twelve cases TT filed in 2010. LR 40.4 requires that a motion to consolidate be filed in the lowest number case. So, while the instant case was the lowest number of the 2005 cases, it was not the lowest number 2010 case. As to the 2010 cases, therefore, the Court did not address consolidation. As to the 2005 cases, TT failed to show that the cases were sufficiently related -- while they involved common patents, the accused products operated in "very different manner[s]." Furthermore, while Judge Moran previously coordinated discovery of all of the 2005 cases before the cases were reassigned, TT did not demonstrate that consolidating the 2005 cases would conserve resources.
 

*  Click here for much more on these cases in the Blog's archives.

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Callprod, Inc. v. GN Netcome, Inc., No. 06 C 4961, Slip Op. (N.D. Ill. Nov. 1, 2010) (Kendall, J.).

Judge Kendall granted in part plaintiff Callprod's motion to stay determination regarding attorney's fees pending appeal of the underlying patent issues and the Court's determination as to whether the case was exceptional. The Court held that the Court's and the parties' resources were best preserved if all proceedings regarding attorney's fees were stayed until the Federal Circuit ruled on Callprod's appeal of the Court's grant of summary judgment of noninfringement. The Court, however, ordered Callprod to respond to defendants' bill of costs.
 

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JAB Distribs., LLC v. Martha Stewart Living Omnimedia, Inc., No. 10 C 5716, Slip Op. (N.D. Ill. Oct. 26, 2010) (Shadur, Sen. J.).

Judge Shadur sua sponte struck plaintiff JAB's reply to defendant Martha Stewart Living's counterclaims. The reply failed to comply with Local Rule 10.1, requiring that an answer repeat the contention before responding to it. Additionally, JAB was ordered not to deny statements for which it lacked information and belief; as denying something about which one lacks sufficient information is "oxymoronic."
 

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DH Holdings, LLC v. MeridianLink. Inc., No. 10 C 2351, Slip Op. (N.D. Ill. Aug. 23, 2010) (Kennelly, J.).

Judge Kennelly denied defendant MeridianLink's motion for sanctions pursuant to Fed. R. Civ. P. 11, § 1927 and the Court's inherent powers. Plaintiff DH Holdings originally filed its Northern District patent infringement case in 2008, and Judge Norgle entered a default against MeridianLink when it failed to answer the complaint. MeridianLink later got the judgment overturned for improper service in the Central District of California, and then filed a declaratory judgment action in that district. DH Holdings responded by filing the instant case and simultaneously asking Judge Norgle to reopen the 2008 case. MeridianLink claimed that DH Holding unnecessarily multiplied the litigation by seeking to reopen the 2008 case and filing the instant case. But the Court held that DH Holding simply took prudent actions to maintain the status quo. DH Holding could not be certain that its original case would be reopened. So, filing a new case was a reasonable precaution.
 

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Zojo Sol'ns., Inc. v. Leviton Mfg. Co., No. 10 C 881, Slip Op. (N.D. Ill. Oct. 20, 2010) (Grady, Sen. J.).

Judge Grady granted defendant Leviton's 28 U.S.C. § 1404(a) motion to transfer this false patent marking case to the Eastern District of New York. Plaintiff Zojo's choice of forum was given little deference because Zojo was a qui tam plaintiff. The location of Leviton's witnesses and documents in New York combined with the fact that Leviton's New York headquarters was the situs for the alleged false marking, favored transfer. That was true even though the Eastern District of New York was a slightly faster court. The most interesting aspect of the decision, however, was a statement that the Local Patent Rules did not apply to false patent marking cases because patent infringement was not alleged. Presumably, the analysis is different if the alleged false marking involves a marked product that allegedly does not fall within the claims of the marked patent.

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Kim v. Earthgrains Co., No. 01 C 3895, Slip Op. (N.D. Ill. Jun. 24, 2010) (Cox, Mag. J.).

Judge Cox denied defendant's motion to dismiss plaintiff's patent claims regarding a bread formulation pursuant to 28 U.S.C. 1915(e)(2)(A). The Court held that plaintiff made false statements on her in forma pauperis ("IFP") application. The normal remedy for false IFP application statements was dismissal of the applicant's case.

But that remedy was not appropriate in this case because plaintiff had not "reaped the benefits" of IFP status. Plaintiff financed her own case for over nine years by mortgaging her house, using credit cards and borrowing from friends and family. Plaintiff only applied for IFP status after the Court suggested it, and only enjoyed its benefits for ten months. And while plaintiff made false statements, they were all either contradicted elsewhere in the application or the false statements tended to portray plaintiff as wealthier than she was. The consumers, therefore, suggested plaintiff misunderstood the question. While the Court did not dismiss plaintiff's claims, the Court did sanction plaintiff pursuant to Fed. R. Civ. P. 11 for her false statement. Plaintiff was ordered to pay for here legal services received from pro bono counsel. The Court, however, observed the fees and costs were not likely recoverable unless plaintiff won at trial.

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Billingnetwork Patent, Inc. v. Avisena, Inc., No. 09 C 8002, Slip Op. (N.D. Ill. Jan. 4, 2010) (Shadur, Sen. J.).

Judge Shadur sua sponte ordered plaintiff to dismiss and refile against four of the five unrelated defendants in this patent infringement suit. The Court also instructed that the cases should not be refiled as previously dismissed cases such that they would be reassigned to the Court. And the plaintiff should not move for reassignment as a related case pursuant to Local Rule 40.4. The Court, however, noted that it would be open to reciprocal orders allowing concurrent discovery in each of the five cases.

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The Northern District has become the jurisdiction of choice for 35 USC Section 292 false patent marking suits. Of the more than 80 false marking suits filed this year, more than half were filed in Northern District. Granted many of the suits, 38, have been filed by a single plaintiff and his counsel, but several other plaintiffs have chosen the Chicago federal courts to file complaints that arguably could have been filed in almost any district court. As I have watched the cases pile up, I have spent a fair amount of time trying to determine why the plaintiffs are choosing Chicago. While the numbers could be skewed by one plaintiff, Simonian, that has filed the majority of the cases, several other plaintiffs are availing themselves of the Chicago courts, so I do not think that answers the question. Rather, I think the Chicago filings are a by-product of the new Local Patent Rules, for two reasons: 1) assuming that the Local Patent Rules apply to these cases (and I believe they will) the Local Patent Rules will place most of the upfront responsibilities on the defendant-patentholder; and 2) the proposed case schedule that would have cases tried in two years gives plaintiffs a moderate case length moderating their potential fees and costs while maintaining a relatively high defense cost for the defendants, including the potential threat of the longer pre-Rules schedule for most Northern District of Illinois patent cases prior to enacting the Rules. Before I analyze the reasons further, some background will be valuable as false marking is a very new phenomena in patent law and remains unknown to many.

Modern False Marking Cases

The first of the modern false marking cases, excluding the occasional false marking claim in a broader patent dispute between competitors, was Pequignot v. Solo Cup Co., No 1:07cv897-LMB/TCB (E.D. Va. July 2, 2009). In that case, Solo was accused of falsely marking coffee cup lids sold to Starbucks. The Eastern District of Virginia's Judge Brinkema granted Solo Cup summary judgment finding that there was no intent to deceive the public in Solo's alleged false marking based upon the advice of Solo's counsel that it would be reasonable to replace molds identifying expired patents with molds showing no marking gradually. Additionally, the Court held that a patent marking “offense,” punishable by a fine up to $500, was the decision to improperly mark, not each improperly marked product. That decision significantly reduced the damages potential for false marking cases, and is currently on appeal at the Federal Circuit.

Then in the last week of December 2009, the Federal Circuit decided Forest Group, Inc. v. Bon Tool Co. In that case, the district court followed reasoning similar to the Solo case fining defendant $500 for a single decision to false mark. But the Federal Circuit reversed, holding that the fine was to be assessed per falsely marked product. That drastically changed the damages calculus for false marking claims, and led to the deluge of patent false marking cases beginning this January. 

In the first quarter of this year, at least to date, more than 80 false marking cases have been filed. The Federal Circuit will soon hear oral argument in Pequignot v. Solo Cup, to rule upon the bounds of the intent required by 35 USC Section 292. The only potential relief for patent holders is a section of the current patent reform bill in the U.S. Senate that would require that the false patent marking plaintiff have been harmed by the alleged false marking – check out a discussion of the provision at the Patent Docs.

The Local Patent Rules are Driving False Marking Cases

With that background, the question remains – why are so many false patent marking cases being filed in the Northern District? As I proposed above, the reasons stem from the Northern District's new Local Patent Rules. First, many people see false marking cases as commercial litigation in patent litigation's clothing. That is not completely the case, however. In fact, the parties must determine whether the marked product reads upon the patent claims, unless the the only issue is an expired patent. That means that the court and the parties must conduct a full infringement analysis with all of the required claim charts, technical analysis, expert discovery, Markman hearings and perhaps even summary judgment motions. That means that the Local Patent Rules will likely govern these cases, bringing with them the required Initial Disclosures and production obligations, and claim charts.

That is significant because the false marking plaintiff does not have all of the obligations of either a typical patent plaintiff or defendant, while the false marking defendant has most of its obligations. The plaintiff will not have to produce his reduction to practice documents, prosecution histories, etc. along with Initial Disclosures, although the defendant likely will have to at least produce the prosecution histories. And the defendant will also have the obligations of a typical defendant – producing documents sufficient to show how each accused product or process works. So, the defendant has initial discovery burdens that are not shared by the plaintiff, and the plaintiff is guaranteed early document production. Additionally, the defendant will likely be obligated to produce initial infringement contentions, after which the plaintiff would have to respond with noninfringement contentions. So, the plaintiff not only escapes initial production requirements, but also gets to file its initial claim charts last. These are significant costs for the defendant which may benefit the plaintiff, at little up front cost. Additionally, knowing that these costs are coming early in the case may drive the defendant's willingness to settle up. Of course, it could always backfire on the plaintiff and drive the defendant's settlement down in line with the amounts spent upon early discovery.

Second, the Local Rules contemplate a two year time-to-trial, as opposed to the prior patent litigation average in Chicago that was likely in excess of three years. So, the plaintiff still has a moderately long time to trial, driving up the defendant's likely litigation fees and expenses, but not so long that the plaintiff feels like it will never see its potential award.

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I am working on some additional analysis of the Local Patent Rules, after I finish with a trial in the next several weeks.  But for now, this Chicago Daily Law Bulletin story quotes me and several others about the impact of the Rules:

New rules could boost patent filings
By Jerry Crimmins
Law Bulletin staff writer

New rules for patent litigation that have been in effect here for only a month are expected to increase patent litigation in the Northern District of Illinois, local lawyers say.

Until Oct. 1 the Northern District of Illinois did not have standard local rules for the scheduling of events in patent cases, according to these lawyers.

"I think [the rules] will increase filings … for a couple reasons," said R. David Donoghue, who writes the Chicago IP Litigation Blog.

"They benefit plaintiffs in a few ways that would draw plaintiffs to file their claims in the Northern District of Illinois when they can," Donoghue said.

Donoghue is a partner at Holland & Knight LLP.

The rules will "speed up the average length of time in patent cases from filing to trial," said Allan J. Sternstein, director of the Intellectual Property and Intellectual Property Litigation Department at Dykema, Gossett PLLC.

Yet the rules "will maintain sufficient time so the case can get done in a manner beneficial to both parties," Sternstein added. "Simply stated, it won't be too fast. It won't be a rocket docket.

"The biggest advantage," Sternstein said, is "it gives the attorneys and clients a much more solid foundation on which to base budgets and scheduling."

That in itself will bring more patent litigation to Chicago, Sternstein predicted.

Local patent lawyers on the Litigation Committee of the Intellectual Property Law Association of Chicago certainly saw it that way, he said.

"A lot of local patent attorneys felt a lot of the business was going to places where they did have local patent rules," according to Sternstein.

Bradford P. Lyerla of Marshall, Gerstein & Borun LLP, also agreed the new rules could bring more patent cases to the Northern District of Illinois. "No question about that."

But "I wouldn't expect to see a huge uptick," Lyerla noted.

He said the customs followed in the Eastern District of Texas and in Delaware are more advantageous to plaintiffs in patent cases so those places will continue to attract more filings.

Lyerla is a trial lawyer who focuses on patent and trade secret litigation.

The new rules were drafted by a committee of lawyers affiliated with the Intellectual Property Law Association of Chicago and four federal judges here.

Judge Matthew F. Kennelly chaired the drafting committee, which also included Judge James B. Zagel, Judge Amy St. Eve and Judge James F. Holderman, chief judge of the U.S. District Court here.

Sternstein and Lyerla were among the seven practitioners on the drafting committee.

The rules expect a case to be ready for trial in 25 to 26 months, Donoghue said.

This compares to a previous average time to trial of up to 43 months, according to Lyerla.

"The time to trial in the Northern District of Illinois for a patent cases was really, really, really long, just way out of kilter with other cases in the Northern District of Illinois," Lyerla said.

For other federal litigation here, time to trial is about 24 months, according to Lyerla.

As examples of the new rules, Donoghue cited two benefits to plaintiffs and two benefits to defendants.

"The claim construction process is held late in discovery ... later than in most other local patent rules'' found in some other federal jurisdictions, Donoghue said.

The claims construction process is the way a judge decides on the meaning of certain, disputed words or phrases in the patent at issue, Donoghue said.

To have this process late in the litigation allows the plaintiff broader discovery and depositions and a broader patent infringement theory throughout, Donoghue explained.

The new rules also require both sides to produce "initial disclosures'' or categories of documents that could be relevant along with names of witnesses and individuals with knowledge about the case only about nine weeks after the complaint is filed, Donoghue continued.

The earliness is another advantage for plaintiffs, he said.

As an advantage for defendants, he said the new rules require plaintiffs to produce early on the documents showing ownership of the patents allegedly infringed as well as documents on the development of those patents.

That early discovery helps defendants, according to Donoghue.

"The other big benefit to the defendant is the claim construction briefing process," he continued.


Normally, a plaintiff writes the opening brief in the claims construction process. The defendant responds, and the plaintiff then replies to that, he said.

"In these rules, it's reversed," Donoghue said. "Defendant files the opening and reply brief. Plaintiff files just the response brief."

Lyerla said that five years ago, he proposed to Holderman in private that local patent rules be drawn up for the Northern District of Illinois. Lyerla said he was politely rebuffed.

Holderman "said it would never happen," explaining that the tradition here is that district court judges "pretty much run their own show in terms of scheduling," according to Lyerla.

But since then Holderman has become an advocate for "a more thoughtful approach to patent litigation in the federal courts," Lyerla said.

The Litigation Committee of IPLAC began discussing the issue again under its new chairman, Dean A. Monco, Lyerla added.

In 2007 Sternstein, who was on that committee, said he approached Holderman about drawing up rules, and "Judge Holderman was very receptive."

Sternstein was named chairman of a subcomittee of the IPLAC Litigation Committee to work with the judges to draw up the new rules.

After a long process of publishing drafts, comments and revisions, the rules went into effect Oct. 1.

But Sternstein said as soon as the drafts started circulating, "some of the judges started using our drafts."

The other lawyers on the drafting committee were Edward D. Manzo, Michael P. Padden, Marshall Seeder, and Paul K. Vickrey.

jcrimmins@lbpc.com

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Card Activation Techs. V. Bebe Stores, Inc., No. 09 C 406, Slip Op. (N.D. Ill. Nov. 20, 2009) (Gottschall, J.).

Judge Gottschall stayed the case pending reexamination of plaintiff's patent. The fact that the asserted claims were not being reexamined did not weigh against a stay. The reexamined claims were narrower than the asserted claims. So, if the narrower claims were rejected the broader claims could be found invalid as well. And all of the claims used similar language. As a result, the reexam's prosecution history would, at a minimum, be pertinent to the case. And delay caused by a stay would not prejudice plaintiff because it could be compensated with money damages. Additionally, the Court allowed either party to move to begin full or limited discovery at a status conference eight months after the opinion issued, if the reexam was still pending at that time.

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The most popular posts on the Blog during 2009, in terms of both views and reader questions, were those on the Local Patent Rules.  Because of high interest, I have plans for additional analysis this year.  This is the first of those posts.  In late 2009, I had an article published in Bloomberg Law discussing why the new Rules will drive patent cases to the Northern District of Illinois.  Bloomberg generously allowed me to post a pdf version of the story -- click here to download it -- and to repost it on the blog.  Here is the article:

The Northern District of Illinois enacted Local Patent Rules ("LPR" or "Rules") on October 1, 2009. The purpose of the Rules is to normalize patent litigation in the Northern District of Illinois and to streamline the patent litigation discovery process. See LPR, Preamble. The rules also make clear that the court does not intend to become a "rocket docket." In fact, the Rules create a schedule that would have cases ready for trial in a little over two years, although cases would not necessarily be tried at that time. That is at most a modest change from the court's average time to trial for all cases—about twenty-seven months, according to the most recent Federal Court Management Statistics.

The Northern District of Illinois did not intend that its new Rules would drive patent cases to Chicago, as has happened when other courts enacted local patent rules, such as the Eastern District of Texas. But despite its intentions, the Northern District of Illinois's plan to normalize patent litigation practice and streamline discovery will significantly increase patent filings in Chicago. To understand why the Rules will increase case filings, it is important to understand the process created by the Rules, and then look at the impact specific Rules will have for both patentholders and accused infringers.

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Memorylink Corp. v. Motorola, Inc., No. 08 C 3301, Slip Op. (N.D. Ill. Oct. 15, 2009) (Hibbler, J.)

Judge Hibbler granted in part plaintiff Memorylink’s motion for reconsideration of the Court’s earlier opinion dismissing seventeen of Memorylink’s nineteen claims.

Correction of Inventorship

The Court previously held that Memorylink pled itself out of court because its complaint indicated that Memorylink was silent when Motorola gave Memorylink the opportunity to object to inventorship of the patents. But upon reconsideration, the Court reversed its decision for two reasons. First, the pleadings did not show whether Memorylink reviewed or approved the patent application. Second, the patent statute allowed for correction based upon mistake. It was possible Memorylink reviewed the application; but made a mistake regarding inventorship.

Statutes of Limitation

The Court held that it was correct in dismissing Memorylink’s claim based upon Motorola’s legal representation of Memorylink because Memorylink knew of its claims prior to the legal representation. One dismissed claim, however, was not based upon the legal representation. The Court treated Memorylink’s claim that the assignment at issue was void as a fraud claim. But the Court held that the claim sounded in contract, not fraud. Because the contract statute of limitation had not run, that claim was reinstated.

Patent Infringement

Because Memorylink’s contract claim could void the patent assignment, the Court reinstituted the related patent infringement claims which had been dismissed upon the basis that as a joint owner of the patents Motorola could not be liable for infringement. In the event that the assignment is held void, Motorola could be liable for infringement.

Unjust Enrichment

Motorola’s agreement that the memoranda of understanding at issue in this claim did not create any legal obligations did not change the Court’s determination that they created relevant legal obligations. 

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The face of patent litigation in the U.S. has evolved greatly in the last 5 years with respect to patent reexamination. For patent litigators, throughout the U.S. and especially the Northern District of Illinois, the emergence of this now seemingly reliable strategic option is an important case management consideration. Indeed, if not adequately considered in the course of litigation counseling, reexamination ignorance may create malpractice opportunities for unsuccessful defendants.

Defendants, as well as those concerned with patents clouding their competitive landscape are increasingly requesting patent reexamination at the USPTO. When prior art patents and printed publications can be effectively presented to enable the USPTO to reject original patent claims, the expectation is that the prosecution of the reexamination proceeding will result in cancellation or amendment of original patent claims. 

The sudden growth in reexamination filings can be attributed to several factors. These factors include, the emergence of the “non-practicing entity”(NPE) problem, the eligibility of inter partes reexamination for post 1999 patent application filings, and the efforts of the USPTO and Congress to overhaul the reexamination process, first with legislation overruling the Portola Packaging decision in 2002, and with creation of a special USPTO unit in 2005.

In 2005, the USPTO established the Central Reexamination Unit (CRU) to exclusively handle all reexaminations, whether ex parte or inter partes within the Office. The CRU created a procedure by which every reexamination proceeding is processed by a team (3) of experienced primary examiners. The CRU has greatly improved the responsiveness and quality of patent reexamination.

With respect to NPEs, reexamination is an attractive strategy as an active reexamination may shut down (i.e., stay) an otherwise costly litigation by forcing the dispute away from the high cost battle of district court litigation, back to the PTO. At the PTO, the NPE’s leverage of contingency litigation counsel and forced discovery costs are removed. Moreover, the standard of review in reexamination for proving unpatentability is much more favorable to a challenger as compared to the district court action. In federal district court the standard to invalidate a U.S. patent is “clear and convincing evidence.” Whereas, in reexamination, the US PTO can establish unpatentability by a “preponderance of evidence,” and unexpired claims are given their broadest reasonable interpretation. See 37 C.F.R. 1.555(b)(2)(ii).

Upon conclusion of a reexamination, canceled or amended claims will present the challenger with freedom to operate either through non-infringement of the altered claims, or decrease liability through the doctrine of intervening rights. 

With this background in mind, a review of a recently asserted malpractice claim is presented along with a discussion of the new Local Patent Rules of the Northern District of Illinois as they pertain to concurrent reexaminations.

In Ecast Inc. v. Morrison & Foerster L.L.P. (Superior Court for the State of California, County of San Francisco) Ecast, a former client of MoFo, sued the firm for malpractice. The compliant stemmed from MoFo’s defense of Ecast in a patent infringement suit in the Northern District of Illinois. In the suit, six patents were asserted against Ecast by Rowe International Corp and Arachnid Inc. (Rowe International Corp., and Arachnid, Inc. v. Ecast, Inc., Rockola Mfg. Corp., and View Interactive Entertainment Corp. (click here for much more about this case from the Chicago IP Litigation Blog's archives).

** Guest Post by Scott A. McKeown of Oblon Spivak & PatentsPostGrant.com **

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Last month I had the opportunity to participate in a panel discussing the Northern District of Illinois' new Local Patent Rules* hosted by Applied Discovery. In addition to me, the panelists were:

• Mark Ouweleen of Bartlit Beck
   
• David Callahan of Kirkland & Ellis

The panel briefly touched on the mechanics of the Rules, and then dove into the implications of the Rules for Northern District patent litigation generally, as well as specific issues litigants will likely face with the Rules. Here are some of the highlights:

• The Rules will increase patent litigation filings in the Northern District despite the fact that the 2+ year trial timeline does not create a rocket docket.

• The Rules are widely accepted as positive by both sides of the bar.

• The Initial Disclosure document production requirements will have the most significant impact. Plaintiffs will need to prepare their cases early, and defendants cannot delay prior art searches.

• The combination of early document production and early initial contentions means that parties will not be able to use the first six months of a patent case to try settling it without much investment in the case.

• Ouweleen pointed out that other courts have used the contention disclosures to exclude new information after content deadlines without a showing of good cause. That places a premium on early prior out searches and fleshing out each party's technical case early.

• Callahan believed that the Rules will focus cases on the substantive issues, instead of negotiating over protective orders and interrogatory responses. That is a benefit to judges (reduced motion practice), litigants (reduced cost), and litigators (more time to focus on the art of lawyering and the substantive case).

It will be very interesting to test the accuracy of these predictions once we have a year or two of data using the Rules.

*  Click here for much more on the Blog's archives about the Local Patent Rules.

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The Northern District of Illinois is revising its Local Rules effective December 1, 2009, to comport with the Federal Rules of Civil Procedure (as well as the criminal, appellate and bankruptcy rules) changes effective on the same date.   The FRCP are being revised to change all time periods to seven day multiples to make calculating deadlines simpler.  In accordance with those revisions, the Local Rules have been revised so that all time periods less than thirty days are changed to multiples of seven, according to the following schedule:

The Local Rule 5.3(a) two-day notice period remains two days.  And the notice periods set by individual judges remain unchanged.  Weekends and holidays are not counted in calculating either of these deadlines.

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Se-Kure Controls, Inc. v. Senneco Sol’ns., Inc., No. 08 C 6075, Slip Op. (N.D. Ill. Oct. 23, 2009) (Holderman, C. J.)

Chief Judge Holderman stayed the case as to plaintiff Se-Kure Controls’ ‘590 patent while Se-Kure appealed Judge Guzman’s invalidity decision regarding the ‘590 patent. The Court, however, did not stay the case as to Se-Kune’s other two patents-in-suit - the ‘807 and ‘822 patents. The Court held that defendant Senneco would be prejudiced by a delay as to the ‘807 and ‘822 patents. And the appeal as to the ‘590 patent would not simplify issues regarding either the ‘807 or ‘822 patents.

But the Court held that the burden of staying just the ‘590 patent issues would be minimal. If the ‘590 patent invalidity decision were upheld it would reduce the issues for trial. If the decision was overturned, little additional discovery would be required. And the parties had already agreed to adopt Judge Guzman’s claim constructions, with only a few additional terms requiring construction.

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If you cannot make the Applied Discovery roundtable discussion about the new Local Patent Rules that I am participating in this Wednesday, November 11, from 11:30 until 2:00pm (click here for more information and click here to register by email, but move quickly because space is running out), or if you just cannot get enough analysis of the Rules, check out what looks like it will be a great teleseminar by Law Seminars International, tomorrow from 2:00 until 3:00pm.*  Law Seminars promises to address:

• The background and history of the Rules;
   
• What the Court is trying to achieve with the Rules; and
   
• The Rules' implications for plaintiffs and defendants.

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Next Wednesday, November 11, from 11:30 am until 2:00 pm, I am participating in a roundtable discussion about the Northern District's new Local Patent Rules hosted by Applied Discovery.  Blog readers have already read a lot about the Local Patent Rules -- click here, here and here for some of the Blog's analysis of the Rules.  But this panel will add valuable perspective from other members of the Chicago patent bar.  I am especially looking forward to the insights of friend and former colleague David Callahan of Kirkland & Ellis.

Here is Applied Discovery's description of the event and registration information:

Applied Discovery is pleased to offer a roundtable forum led by local experts discussing the practical consequences of the rules and the effects the rules could have on patent litigation in the Northern District of Illinois.  Virginia Henschel, vice president for e-discovery affairs at Applied Discovery will be moderating the panel.  Ms. Henschel’s distinguished career prior to Applied Discovery includes serving as counsel for Sunoco, Inc., where she managed all facets of ESI for litigation, including designing and managing defensible data collection and production for large, complex legal matters.

If you have not already registered, there is still time to join us for a spirited analysis of the new Rules with opinions from plaintiffs, defendants and the bench. 

TOPICS
• An overview of the Rules and the specific new obligations placed on patentees, accused infringers, and declaratory judgment plaintiffs.
• The effects of the new Rules on patent filings in the Northern District of Illinois.
• Scheduling deadlines and new requirements.
• Changes in the discovery process.

ROUNDTABLE PANELISTS
• Mark Ouweleen, Partner, Bartlit Beck Herman Palenchar & Scott LLP
• David Donoghue, Partner, Holland & Knight LLP
• David Callahan, P.C., Partner, Kirkland & Ellis LLP

DATE
Wednesday, November 11, 2009
11:30 am - 2:00 pm

LOCATION
Union League Club
65 West Jackson Boulevard, Room 710
Chicago, IL 60604
(Business Attire Required)

RSVP BY 11/6
If you wish to attend, please email Jennifer Towell at jennifer.towell@applieddiscovery.com as soon as possible. Space is limited.

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Following up on posts analyzing the Northern District's Local Patent Rules over the last several weeks (click here (for analysis of the Rules, here (for a comparison of the enacted Rules to the Proposed Rules) and here (arguing that the Rules will increase patent litigations in the Northern District of Illinois) for those posts and here for a copy of the Rules), I have prepared the following chart laying out the schedule contemplated by the Rules in an easy to reference format.  As I promised earlier, I will begin a series of posts soon looking at each Rule or group of Rules in more detail.

Key Time Intervals:

To Final Infringement Contentions: 7-8 months

To Claim Construction Hearing: 13-14 months

To Summary Judgment Motions: 19-20 months

To Trial: 25-26 months

* The Answer deadlines are approximate and can be impacted by waiver of service, extensions granted by the Court and when the Complaint is served, among other factors.

** LPR 3.3 references LPR 3.2 Final Invalidity Contentions. LPR 4.1(a) sets the claim construction dates based upon "Final Invalidity Contentions pursuant to LPR 3.2." These are likely artifacts from the Proposed Local Rules. In the Proposed Local Rules, LPR 3.2 addressed Final Invalidity Contentions which were served after Final Infringement Contentions. In the Rules as issued, however, LPR 3.2 controls Final Non-Infringement, Enforceability and Validity Contentions, and LPR 3.1 addresses Final Invalidity Contentions, among others. I understand a correction is likely to be issued clearing this up in the next week or so. As a result, this chart treats the references to the Final Validity Contentions in LPR 3.3 and LPR 4.1(a) to refer to the LPR 3.1 Final Invalidity Contentions.

*** LPR 3.6 schedules the due date for opinion of counsel disclosures and production at the close of fact discovery, but does not say whether it is at the initial pre-claim construction close or the post-claim construction close. I suspect it will ultimately end up after the claim construction process, so that it need not be dealt with if the case is resolved by the claims constructions. But for the sake of safety, it is included at the earliest possible date in this chart.

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While the Northern District has made clear that it is not transforming itself into a rocket docket like the Eastern District of Virginia or the Western District of Wisconsin, the newly enacted Local Patent Rules (“Rules” or “LPR”)* are going to have a significant impact on patent litigation filings in Chicago. The cases will not proceed to trial faster than the Northern District's average for all cases of slightly more than two years, but the path to trial will be significantly different. The changes are even-handed, benefiting both patentholders and accused infringers.  One might expect even-handed Rules to have little impact on filings, but in this case patentholders will likely decide that the Rules provide enough value to overcome the portions of the Rules that benefit accused infringers.  The Rules, therefore, will draw patent cases to the Northern District. Here are the particular elements of the Rules that will attract patent plaintiffs to the Northern District:

1.      Substantive Initial Disclosures & Document Production.

LPR 2.1 requires both parties to exchange substantive, non-evasive Rule 26(a) Initial Disclosures. Furthermore, LPR 2.1(b) requires that along with its Initial Disclosures, an accused infringer produce: 1) documents sufficient to show the operation and construction of each element of any product or process specifically accused in the Complaint; and 2) copies of all known prior art. This early document production, which is generally contemplated by Rule 26 but almost never done in practice, will be a major draw for patentholders. The ability to get immediate technical information in discovery, without the expense of serving document requests, is significant. It allows patentholders to have information before preparing their Initial Infringement Contentions. It also allows patentholders to evaluate the strength of their cases early using the technical information produced by the accused infringers, before incurring significant discovery expenses.

But while LPR 2.1 will attract patent plaintiffs, it also benefits accused infringers. LPR 2.1 also requires patentholders to make an initial document production, and patentholders have a more significant obligation. They must produce not just documents sufficient to show, but all documents regarding: 1) any sale, offer for sale or use of the patented invention before filing; 2) design, reduction to practice or invention of the patented technology generally; 3) all communications with the PTO (the prosecution history) for the patents in suit and any patents from which they claim priority; and 4) ownership of the patent. Additionally, as with accused infringers, patentholders must identify which documents correspond to each of the four categories. Having this early information will allow accused infringers to evaluate their defenses early in the case and prepare for early dispositive motions such as motions challenging ownership or validity based upon a bar date. And the documents will allow accused infringers to update affirmative defenses or add counterclaims before there could be any prejudice.

Finally, the accused infringers' production obligation regarding its products is only triggered if the patentholder specifically identifies the accused products in its complaint. This will strongly encourage plaintiffs to identify the accused products in the complaint. A standard which comports with the Twombly/Iqbal pleading standards – click here to read my article on the uneven application of the Twombly standard between patentholders and accused infringers.

2.      Defendant opens and closes Markman briefing.

Most Districts either have two rounds of concurrent claim construction briefing or a traditional opening-response-reply schedule with the patentholder opening and replying. Significantly, the Rules provide for a single set of briefs with the accused infringer—not the patent holder—submitting the initial and final briefs. Writing first and last benefits the accused infringer. But economically, the patentholder saves money by only writing one brief and can make any follow up arguments during a hearing or seek a sur-reply if the Court does not hold a hearing.

3.      Late Claim Construction briefing.

The final major draw for patentholders is the late claim construction proceedings. In addition to cost savings in the briefing process, the claim construction is scheduled during the later portion of a discovery period that is scheduled to end forty-five days after the Court rules on claim construction. Maintaining pre-claim construction uncertainty through most of discovery benefits patentholders. Furthermore, the Rules make clear that a judge can disregard early dispositive motions that would require claim construction before the claim construction contemplated by the Rules. So, patentholders may face fewer early summary judgment motions.

Conclusion

The Rules are evenhanded, benefiting both patentholders and accused infringers. But the specific benefits afforded patentholders will still drive patentholders to file in the Northern District of Illinois over other courts, some that may have faster times to trial, with different rules.

* Click here for my post analyzing the Rules and here for my post analyzing the differences between the Rules and the Proposed Rules.

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Yesterday, October 1, 2009, the Northern District of Illinois adopted Local Patent Rules ("LPR" or "Rules"), effective immediately -- click here for a copy of the Rules.  According to LPR 1.1, the Rules apply to all cases filed in or transferred to the District after October 1, 2009.  Judges are also free to apply all or part of the Rules to currently pending cases.  Late yesterday, I analyzed the schedule contemplated by the Rules -- click here to read that post. 

In this post, I am going to focus on the handful of substantive changes between the new Rules and proposed local patent rules ("Proposed Rules") first issued earlier this year for the benefit of those members of the Northern District Bar that have closely followed the enactment of these Rules.*   As a side note, the Rules show that the Court seriously considered the comments made during the public session to discuss the Proposed Rules earlier this year.  The overall schedule set out by the Rules is also almost identical to that created by the Proposed Rules, with a few additions additions and a lengthening of about two weeks.

Over the next several weeks, I will break down each LPR in more detail.  I will also post a schedule of the timing contemplated by the Rules in a table format, but for now here are highlights of the significant changes between the Proposed Rules and the Rules as enacted yesterday:

Some of the more significant changes the Court made from the Proposed Rules to the LPR as enacted:

• Early Dispositive Motions (LPR 1.1 & 6.1):  A statement was added in LPR 1.1 that the Court may defer any motion filed before the LPR Section 5 claim construction process until after the Claim Construction Proceedings.  A new comment to LPR 6.1 explains that the Court has discretion in determining whether to consider "early" summary judgment motions;
  
• Protective Order (LPR 1.4):  The Proposed Rules requirement that the parties file an agreed Protective Order in the form of LPR Appendix B -- click here for the form Protective Order -- seven days before exchanging LPR 2.1 Initial Disclosures was removed.  Instead, the Appendix B Protective Order will be deemed to be in effect from the date of the Initial Disclosures and either party can seek to modify it;
  
• Meaningful Initial Disclosures (LPR 2):  The initial comment requires that the LPR 2.1 Initial Disclosures be "meaning - as opposed to boilerplate - and non-evasive.  This is not a change from the Proposed Rules, but is worth an additional mention;
  
• Initial Disclosures (LPR 2.1):  The Initial Disclosures deadline remains fourteen days after defendant files its answer, but in the event that defendant files counterclaims the deadline is now extended to fourteen days after plaintiff answers the counterclaims.  It is also worth mentioning again although it is not an addition to the Proposed Rules, that all parties have affirmative production requirements, outlined in LPR 2.1(a) & (b), along with the preparation and exchange of Initial Disclosures;**

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Today, October 1, 2009, the Northern District of Illinois adopted Local Patent Rules ("LPR" or "Rules"), effective immediately -- click here for a copy of the Rules.  According to LPR 1.1, the Rules apply to all cases filed in or transferred to the District after October 1, 2009.  Judges are also free to apply all or part of the Rules to currently pending cases.  The new Rules are substantively very similar to the proposed local patent rules ("Proposed Rules"),* with a series of modifications that shows that the Court seriously considered the comments made during the public session to discuss the Proposed Rules earlier this year.  The overall schedule is also almost identical, with additions and a lengthening of about two weeks.

Over the next several weeks, I will break down each LPR in more detail.  I will also post a schedule of the timing contemplated by the Rules in a table format, but for now here are highlights of the new Rules:

• Protective Order:  A standard protective order is deemed entered as of the exchange of Initial Disclosures with any party free to seek modifications, to avoid discovery delays being blamed upon entry of a protective order (LPR 1.4);
   
• Initial Disclosures & Production:  Automatic document production requirements of both parties claiming patent infringement and accused infringers when Initial Disclosures are served and of accused infringers when Initial Non-infringement and Invalidity Contentions are served;**
   
• Initial Contentions:  Fourteen days after Initial Disclosures, parties claiming patent infringement serve Initial Infringement Contentions.  Fourteen days after Initial Infringement Contentions are served, accused infringers serve Initial Non-infringement, Unenforceability and Invalidity Contentions.  Fourteen days later, parties claiming patent infringement parties claiming patent infringement serve an Initial Response to Invalidity Contentions;
   
• Final Contentions:  Twenty-one weeks after Initial Infringement Contentions, parties claiming infringement serve Final Infringement Contentions, and accused infringers serve Final Unenforceability and Invalidity Contentions at the same time.  Twenty-eight days later, accused infringers serve Final Non-infringement Contentions and parties claiming patent infringement serve Final Enforceability and Validity Contentions (after the final contentions, leave of Court is required for any amendments);

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**  This post is cross-posted at Patently-O  **

The Northern District of Illinois judges are currently considering public comments on a new set of proposed Local Patent Rules – click here to download a copy of the proposed rules.  The Court expects to enact a finalized version of the proposed Patent Rules later this year. As currently written, the rules likely will have a significant impact on the way that patent cases are litigated in the Northern District, and may result in an influx of patent cases to the Northern District, which is already among the top five for patent cases. As a result, patent litigators throughout the country should keep an eye on the proposed Patent Rules as they progress through the Court's committee. While the proposed Patent Rules resemble those of the other major patent districts such as the N.D. California and the E.D. Texas, they differ in two rather significant respects:

1.      The proposed Patent Rules promote uniformity, not speed.

The proposed Patent Rules contemplate a trial approximately two years after a complaint is filed. During a public comment session, several Northern District judges pointedly stated that, in seeking to promulgate local patent rules, the Court does not want to become a "rocket docket" for patent cases. And the Court does not seek to become the busiest patent docket in the country.   Instead, the aim of the local patent rules is simply to promote uniformity and best practices among the judges of the Northern District. The Northern District of Illinois is one of the largest districts in the country, and uniformity among the District's judges would promote case management predictability for both the Court and the litigants. Each Northern District judge currently schedules patent cases based upon her own experience, with little uniformity among the judges. The proposed Patent Rules attempt to remedy that. 

That said, the rules are optional, not mandatory—individual judges will be able to deviate from the proposed Patent Rules. But the proposed Patent Rules at least will provide a starting point for uniformity and a suggested framework for the judges who choose to adhere to them.

2.      Defendant opens and closes Markman briefing late in fact discovery.

The biggest deviation from the Northern District of California and Eastern District of Texas patent rules occurs in the claim construction phase. Significantly, the proposed Patent Rules do not contemplate two rounds of simultaneous briefing, as has become commonplace in patent cases. Instead, the proposed Patent Rules provide for a single set of briefs: the accused infringer files the opening brief, the patent holder responds, and the accused infringer replies. Notably, the accused infringer—not the patent holder—submits the initial and final briefs. The accused infringer necessarily will not have the benefit of the patentee's claim construction position at the outset of the briefing. The practical impact of having the accused infringer file the opening claim construction brief remains to be seen, although some practitioners view this provision as having the potential to greatly increase the number of patent cases filed in the Northern District. 

At the public comment session held on March 23, the judges on the rules committee explained the rationale behind this provision. Concurrent briefing, they noted, wasted a lot of time. The parties' opening briefs tend to be ships passing in the night—the parties often argue past each other, rendering the opening briefs incomprehensible, or they agree with each other, rendering those points moot. As a result, neither the disputed claims nor the parties' positions are fully understood until the concurrent responsive briefs. The proposed Patent Rules contemplate streamlining the process by eliminating simultaneous briefs.

The judges also addressed their decision to have the accused infringer, rather than the patent holder, begin the briefing. The judges explained that the patent holder's opening argument is often for the "ordinary" meaning of claim terms. As a result, when the patent holder opens the briefing, the accused infringer has no chance to address many of the patent holder's arguments because the patent holder often does not make those arguments until the reply brief. So, the judges explained, the Court and the parties are better served by having the accused infringer open the briefing with the patent holder responding to the accused infringer's claim construction arguments. 

Interestingly, a comment was made at the session pointing out that the Court has not decided how to schedule briefing when both parties assert patents against each other, that is, when each party is a patent holder and each party is an accused infringer. A possible resolution would be to allow two sets of parallel briefs with the accused infringer for each set of patents opening the briefing for those patents.

                                                                        Conclusion

The proposed Patent Rules notably differ from the rules of other courts in two significant respects: the new briefing schedule, and for the fact that they are not aimed at decreasing the time to trial or at significantly growing the Northern District of Illinois's patent docket. Assuming that the Court institutes the proposed Patent Rules with the current claim construction briefing schedule, it will be very interesting to see whether and how the claim construction procedures impact both case outcomes and the number of patent filings in the Northern District of Illinois.

For those interested in the specifics of the proposed Patent Rules, here is a general outline of the timeline and procedure that the proposed Patent Rules outline:

• A standard protective order in place from the beginning of the case, unless and until it is modified, to avoid discovery delays being blamed upon entry of a protective order;
   
• Automatic document production requirements of plaintiff when initial disclosures are served and of defendant when initial noninfringement and invalidity contentions are served;
   
• Plaintiff serves initial infringement contentions two weeks after initial disclosures and defendant respond with initial noninfringement and invalidity contentions two weeks after that, followed two weeks later by plaintiff's response to the invalidity contentions;
   
• Plaintiff files final infringement contentions twenty one weeks after its initial contentions and defendant responds four weeks later with final noninfringement, invalidity and unenforceability contentions (after the final contentions, leave of Court is required for any amendments);
   
• No party can seek a stay pending reexam after serving its final contentions;
   
• The claim construction process begins two weeks after defendant's final invalidity contentions are served;
   
• Defendant files an opening claim construction brief along with a joint appendix including the patents in suit and their prosecution histories consecutively paginated, plaintiff then files a responsive brief within four weeks, and defendant has two weeks to file a reply;
   
• Fact discovery closes forty two days after the claim construction rulings, which triggers expert discovery followed by a dispositive motion deadline; and
   
• A trial is contemplated approximately two years after the filing of the complaint.

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Bajer Design & Marketing Inc. v. Ware Mfg. Inc., No. 09 C 1425, Min. Order (N.D. Ill. Jun 11, 2009) (Kendall, J.).

Judge Kendall denied plaintiff Bajer's motion to reassign its second filed patent infringement suit pending before Judge Zagel asserting the patent in suit to Judge Kendall pursuant to Fed. R. Civ. P. 42 and Local Rule 40.4. The cases met two of the four Rule 40.4(b) requirements for reassignment because both cases were pending in the Northern District and because both cases were at similar stages with defendants having just answered, such that reassignment would not slow progress of the first case. The Court also noted that a single Markman proceeding and set of claim constructions was a benefit of reassignment. But the potential for a uniform claim construction was outweighed by the fact that defendants' accused products and, therefore, noninfringement positions were significantly different. Based upon the differing noninfringement positions and other possible differences in the parties defenses, the Court held that reassignment would not achieve the required substantial savings of judicial time and effort.

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The Northern District judges are seeking public comment on a new set of proposed Local Patent Rules -- click here to email Northern District Clerk Michael W. Dobbins with comments and here to download a copy of the proposed Patent Rules.  The rules lay out a schedule that mirrors the Northern District of California and Eastern District of Texas patent rules in requiring initial infringement, noninfringement and invalidity contentions.  But the proposed Patent Rules have some significant and interesting differences.  In particular, the claim construction process, which occurs near the end of fact discovery, provides for an opening brief by the accused infringer, a response brief by the patent holder and a reply brief by the accused infringer.  Here is a general outline of the timeline and procedure dictated by the Patent Rules:

• A standard protective order in place from the beginning of the case, unless and until it is modified, to avoid discovery delays being blamed upon entry of a protective order;
   
• Automatic document production requirements of plaintiff when initial disclosures are served and of defendant when initial noninfringement and invalidity contentions are served;
   
• Plaintiff serves initial infringement contentions two weeks after initial disclosures and defendant respond with initial noninfringement and invalidity contentions two weeks after that, followed two weeks later by plaintiff's response to the invalidity contentions;
   
• Plaintiff files final infringement contentions twenty one weeks after its initial contentions and defendant responds four weeks later with final noninfringement, invalidity and unenforceability contentions (after the final contentions, leave of Court is required for any amendments);
   
• No party can seek a stay pending reexam after serving its final contentions;
   
• The claim construction process begins two weeks after defendant's final invalidity contentions are served;
   
• Defendant files an opening claim construction brief along with a joint appendix including the patents in suit and their prosecution histories consecutively paginated, plaintiff then files a responsive brief within four weeks, and defendant has two weeks to file a reply;
   
• Fact discovery closes forty two days after the claim construction rulings, which triggers expert discovery followed by a dispositive motion deadline.

The Patent Rules are scheduled such that a patent trial should occur within two years of serving the complaint.  Assuming that schedule is enforced, it would result in a significant speeding up of, at least, the larger patent cases in the Northern District.

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Global Patent Holdings, LLC v. Green Bay Packers, Inc., No. 00 C 4623, Slip Op. (N.D. Ill. Apr. 23, 2008) (Kocoras, J.).

Judge Kocoras reassigned a related case consolidating it with this case and stayed the patent infringement cases pending a second reexamination proceeding. New defendant CDW argued that reassignment of the second case pursuant to Local Rule 40.4 was not appropriate because the first case, which was dismissed without prejudice in light of the first reexam, was filed by TechSearch LLC, instead of the current plaintiff Global Patent Holdings ("GPH"). But original plaintiff TechSearch reopened the case before moving to substitute GPH, the current assignee of the patent in suit and TechSearch's parent, as plaintiff. Because TechSearch reopened the case, the first case retained its first-filed status. The fact that TechSearch and GPH were no longer related entities when the case was reopened was not relevant.

The Court also held that the two cases were related because both accused defendants' websites of infringing the patent because they downloaded or induced others to download JPEG and other files.

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Judge Conlon granted Citicorp defendants and denied defendant Gelfand summary judgment of copyright infringement. Plaintiff FM Industries ("FMI") alleged that Gelfand infringed FMI's copyright in its TUCANS debt-collection software by continuing to use it after Gelfand's license expired. Gelfand argued that FMI could not prove ownership of the copyright because it could not produce the written assignment. But the Court held that FMI's deposition testimony was sufficient to create a material question of fact and, therefore, denied summary judgment.

Citicorp was accused of encouraging and inducing its outside attorneys to use the TUCANS software after their licenses expired. But at least in part because FMI failed to respond to Citicorp's Local Rule 56.1 statements or to submit its own responsive statements of fact, the Court accepted as true Citicorp's evidence that it told its outside attorneys to stop using TUCANS before licenses expired and that Citicorp was unaware that the attorneys continued using TUCANS.

Practice Tip: I cannot say it enough: you must strictly comply with Local Rule 56.1. Click here to read about other opinions considering Local Rule 56.1

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Murata Mfg. Co., Ltd. v. Bel Fuse, Inc., No. 03 C 2934, Order (N.D. Ill. Mar. 5, 2008) (Gottschall, J.).*

Judge Gottschall denied plaintiffs’ summary judgment motion without prejudice for failure to comply with both Local Rule 56.1 and the Court’s Standing Order — the Standing Order further explained that each short, numbered statement of fact required by Local Rule 56.1 should contain one fact and no attorney argument. Despite Local Rule 56.1’s clear requirements and the Standing Order’s directive to strictly comply with Local Rule 56.1, the Court held that nearly one-third of plaintiff’s 145 statements of fact did not comply with the rules:

• Many were long;
  
• One contained no facts;
  
• Several focused on an expert’s methodology instead of his results; and
  
• The rest contained inferences, argument, or legal conclusions.

The Court explained that the case’s complexity required strict adherence to Local Rule 56.1:

The court simply does not possess the resources to comb through the parties’ statements of fact in an attempt to sift out usable fact from impermissible argument or inference. … The Standing Order and LR 56.1 are composed in plain English and their meaning is clear; the court properly expects experienced and sophisticated attorneys to adhere to them strictly, particularly given the complex and sophisticated nature of this litigation.

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Garcia v. City of Chicago, No. 07 C 5828, Slip Op. (N.D. Ill. Dec. 10, 2007) (Shadur, J.).

Judge Shadur sua sponte struck certain denials in defendant’s answer. The Court held that it was improper to deny those allegations for which defendant stated it lacked sufficient information or belief to respond and, therefore, struck them from the answer. Additionally, the Court noted that defendants had not provided the Court with courtesy copies pursuant to Local Rule 5.2(e).

Practice tip: Courtesy copies often get lost in the administrative shuffle after a complex filing. But there are few things more important than providing the Court with easy access to your papers.

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Yes! Following the rules, all of them, matters – federal and local, substantive and procedural, big and small. Regular readers will not be surprised by my answer. I have repeatedly reminded people, as do the Northern District judges (click here for examples of both), to comply with Local Rule 56.1.

But I also think it matters for more “minor” rules, such as the newly revised Fed. R. Civ. P. 11 & 26, which now require that counsel include an e-mail address along with a physical address and phone number (click here for my previous post on the December 1, 2007 Fed. R. Civ. P. amendments.)

My experience since December 1 is that most attorneys are not following the e-mail address requirement. It is unlikely that courts will sanction counsel for failure to provide an e-mail address, but to me, and I presume to at least some judges and clerks, it signals sloppy lawyering. It says that counsel is not staying current with changes in the profession. And it makes me wonder what else counsel is not current with. Have they explored the significant codification of electronic discovery rules from December 1, 2006? At least it is unprofessional, and at most it is an indication of a lack of knowledge of the current state of the law — a significant advantage to those of us that keep current.

Am I overreacting because these are "minor" rules that likely are not sanctionable? Comment to this post or send me an e-mail with your thoughts. I will post about whatever feedback I receive (without names, of course).

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Nutrinova Nutrition Specialties & Food Ingredients GmbH v. Viachem, No. 07 C 4232, Min. Order (N.D. Ill. Nov. 21, 2007) (St. Eve, J.).

Judge St. Eve granted in part plaintiff’s motion to compel various discovery. The Court ordered defendants to produce various once-privileged documents disclosed to unidentified customers pursuant to an alleged common interest privilege. The Court acknowledged that common interest could protect such disclosures. But defendants failed to identify the specific customers that were shown documents, which documents were disclosed or when the disclosures occurred. On that record, the Court could not find that defendants had maintained the privilege. 

The Court also ordered defendants to update their privilege log to identify any attorneys on the log. And the Court ordered the parties to meet and confer regarding uncrystalized disputes over defendants’ answers to some interrogatories.

Practice Tip: It is the rare judge that appreciates discovery motions, let alone motions where the parties did not identify what the actual issues were. It is very important to follow both the letter and the spirit of Local Rule 37.2 meet and confers.

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Here is some recent Northern District news:

• Judge Coar recently updated his case management procedures (click here to read them) to state that pursuant to Local Rule 5.2(e), parties are no longer to provide courtesy copies of electronically filed papers to Judge Coar's chambers, except for papers pertaining to Fed. R. Civ. P. 56 or Local Rule 56.1 (summary judgment papers).
  
• Magistrate Judges Brown (Eastern Division -- Chicago) and Mahoney (Western Division -- Rockford) are both up for reappointment in early 2008.  Pursuant to federal law, the Court has established a citizen's panel to consider their reappointments.  Members of the bar, as well as the general public, are requested to forward comments regarding the reappointments no later than January 18, 2008, to:

Magistrate Judge Advisory Panel
c/o Mr. Michael W. Dobbins
Clerk of Court
U.S. District Court
219 South Dearborn St. -- Rm. 2050
Chicago, IL 60604

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Shen-Wei (USA), Inc. v. Ansell Healthcare Prods., Inc., No. 05 C 6003, 2007 WL 2903184 (N.D. Ill. Sep. 28, 2007) (Guzman, J.).

Judge Guzman denied defendant’s motion for summary judgment of invalidity pursuant to 35 U.S.C. § 102(b). Defendant argued that plaintiffs sold medical gloves embodying the claims of their patent, U.S. Patent No. 6, 953,582 (the “’582 patent”), to a glove with a coating of a skin-soothing substance in July 1999, approximately two years before the ‘582 patent’s July 1, 2001 critical date. Furthermore, plaintiffs admitted that they sold patented gloves as early as July 1999 by failing to cite any contradictory evidence in their responses to defendant’s Local Rule 56.1 statement.

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Flentye v. Kathrein, No. 06 C 3492, Slip Op. (N.D. Ill. Oct 2, 2007) (Cole, Mag. J.).*

Judge Cole continued defendants’ motion to compel for one week because defendants had not conducted a Local Rule 37.2 conference before filing their motion. But the Court also provided its thoughts on the prosecution of discovery, both in this specific case and generally. The Court noted that after one year of discovery, “not a single document was produced in response to the 70 paragraph document request!”

But what is most interesting about the opinion is the Court’s quotes on various discovery issues. On discovery generally: 

“[D]iscovery is the bane of modern federal litigation.” Rossetto v. Pabst Brewing Co., Inc., 217 F.3d 539, 542 (7th Cir. 2000). It is intrusive, unpleasant, time-consuming and costly. It is, like life itself, “nasty [and] brutish …” Hobbes, Leviathan, Chapt XIII. Unfortunately, it is not generally “short.”

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Dicam, Inc. v. United States Cellular Corp., No. 07 C 5472, Slip. Op. (N.D. Ill. Sep. 28, 2007) (Shadur, J.).*

Judge Shadur sua sponte ordered plaintiff Dicam to dismiss all parties but defendant United States Cellular (“U.S. Cellular”) and one of its five co-defendants. Dicam’s Complaint alleged patent infringement of telephones sold by U.S. Cellular and manufactured by the other five defendants. The Court could find “no legitimate reason” for brining what it believed were five separate suits as one. The Court explained that if Dicam had filed the suits separately, the Court would not have consolidated them pursuant to Local Rule 40.4, although they might have qualified for coordinated discovery. The Court, therefore, ordered Dicam to dismiss four of the five suppliers, without prejudice to refile separate cases against those suppliers. Dicam has since dismissed all but one of the four suppliers and refiled separate cases against each of the four suppliers with U.S. Cellular named as a co-defendant in each case.

* Click here for a copy of the opinion.

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PSN Illinois, LLC v. Ivoclar Vivadent, Inc., No. 04 C 7232, 2006 WL 3523760 (N.D. Ill. Dec. 7, 2006) (Kendall, J.).

Judge Kendall denied plaintiff's Fed. R. Civ. P. 59 motion for reconsideration of the Court's prior ruling (discussed in the Blog's archives) construing the claims of the patent at issue and granting summary judgment of noninfringement on behalf of defendant Ivoclar Vivadent, Inc. ("Ivoclar").  The Court denied plaintiff's motion for reconsideration because it considered each of plaintiff's reconsideration arguments in its original Opinion granting summary judgment.  But the Court spent some time on one of plaintiff's claim construction arguments regarding a patent related to porcelain veneers.  On reconsideration, plaintiff argued for a different construction of "ready for mounting."  In its original papers plaintiff did not argue for the proposed construction, although it did propose it in its Local Rule 56.1 Additional Statement of Material Facts.  The Court held that because claim construction is a matter of law, proposed constructions are not material facts and, therefore, cannot be put in LR 56.1 statements.  The Court noted its obligation pursuant to LR 56.1 to disregard legal arguments and conclusions placed in statements of fact.  The Court did, however, go on to consider plaintiff's construction and explain why the Court's original construction was correct.

Practice tip:  Think carefully about what goes into your LR 56.1 statements of material fact.  Do not put arguments in your statements of fact. And by all means, do not put arguments in your statements of fact and then omit those arguments from your brief. The Court will disregard them, and you will be out of luck. 

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Days Inns Worldwide, Inc. v. Lincoln Park Hotels, Inc., No. 06 C 2960, 2007 WL 1455798 (N.D. Ill. May 16, 2007) (Der-Yeghiayan, J.)

Judge Der-Yeghiayan granted in part defendants' motion for reconsideration of the Court's award of plaintiff's attorneys fees' and costs for preparing summary judgment motions.  Plaintiff owns various marks relating to its Days Inn chain (the "Days Inn Marks").  Plaintiff licensed defendants Lincoln Park Hotels, Inc. and Richard Erlich (collectively "LPH") to use the Days Inn Marks in connection with the operation of a hotel in Chicago's Lincoln Park neighborhood.  In 2005, LPH sold the hotel to defendant Gold Coast Investors ("GCI") without informing plaintiff, in violation of the parties' license agreement.  GCI continued operating the hotel using the Days Inn Marks without licensing the rights to the marks from plaintiff.  As a result, plaintiff brought this suit against defendants alleging that, among other things, GCI infringed plaintiff's Days Inn Marks and LPH contributorily infringed plaintiff's Days Inn Marks by selling the hotel to GCI with the knowledge that GCI intended to continue using the Days Inn Marks and without informing plaintiff of the sale or removing the Days Inn Marks from the hotel, as required in the parties' license agreement.  In February, the Court granted plaintiff's summary judgment motion on twelve of fifteen counts and dismissed the remaining three counts as moot (you can find discussion of that opinion in the Blog's archives).  The Court also awarded plaintiff its attorneys' fees, approximately $150,000, for preparing its summary judgment motion.  Defendants moved the Court to reconsider, arguing that the Court should have required the parties to meet to resolve the attorneys fees dispute pursuant to  Local Rule 54.3 before ruling on the fees and that the Court should specifically apportion the fees between defendants.  The Court held that it was not required to follow the Local Rule 54.3 procedure in this case because defendants did not object to plaintiff's requests for fees made in its summary judgment briefing and because additional briefing required by the rule would not have benefited the Court because of its intimate knowledge of the case.  The Court did, however, apportion the fees that it was able to identify as only applicable to one group of defendants.  And the Court awarded an additional $35,000 of fees and costs that had not been presented in the initial motion.

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Days Inns Worldwide, Inc. v. Lincoln Park Hotels, Inc., No. 06 C 2960, 2007 WL 551570 (N.D. Ill. Feb. 22, 2007) (Der-Yeghiayan, J.)

Judge Der-Yeghiayan granted plaintiff summary judgment on its trademark infringement and Illinois Deceptive Trade Practices Act ("IDTPA") claims, among others.  Plaintiff owns various marks relating to its Days Inn chain (the "Days Inn Marks").  Plaintiff licensed defendants Lincoln Park Hotels, Inc. and Richard Erlich (collectively "LPH") to use the Days Inn Marks in connection with the operation of a hotel in Chicago's Lincoln Park neighborhood.  In 2005, LPH sold the hotel to defendant Gold Coast Investors ("GCI") without informing plaintiff, in violation of the parties' license agreement.  GCI continued operating the hotel using the Days Inn Marks without licensing the rights to the marks from plaintiff.  As a result, plaintiff brought the instant action against defendants alleging that, among other things, GCI infringed plaintiff's Days Inn Marks and LPH contributorily infringed plaintiff's Days Inn Marks by selling the hotel to GCI with the knowledge that GCI intended to continue using the Days Inn Marks and without informing plaintiff of the sale or removing the Days Inn Marks from the hotel, as required in the parties' license agreement. 

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Best Vacuum, Inc. v. Ian Design, Inc., No. 04 C 2249, 2006 WL 3486879 (N.D. Ill. Nov. 29, 2006) (Hort, J.).

In this trademark and Lanham Act unfair competition suit, Judge Hort granted summary judgment for defendant and dismissed the case.  Plaintiff had operated under the name "Best Vacuum" since 1983 and operated a www.bestvacuum.com website since 1996.  In 2003, defendant began operating a www.bestvacuumcleaners.com website, but when plaintiff complained, defendant changed its website to www.bestchoicevacuums.com.  After defendant refused to take down its second site, plaintiff sued.  Plaintiff's trademark infringement claim was dismissed earlier in the case because plaintiff never registered its "Best Vacuum" mark.  The case was before the Court on cross summary judgment motions.

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The Northern District of California is considering revising its patent rules (enacted in January 2001).  To start its review, the Northern District of California is seeking public comments.  Comments must be sent by December 15, 2006 to patentlocalrulescommittee@gmail.com.  The notice is here.   The Northern District of California Local Rules are not directly relevant to Northern District of Illinois cases, but because the Northern District of California's patent rules serve as a pattern for courts across the country, including in the Northern District of Illinois, any changes to the Northern District of California's rules could effect courts in the Northern District of Illinois and across the country.

Thanks to Dennis Crouch at Patently-O for identifying the request for comments and for an interesting post, followed interesting comments, on proposed changes.

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The new electronic discovery amendments to the Federal Rules of Civil Procedure become effective in one month, on December 1st.  In preparation for practicing under the amended rules, this Law Practice Today page provides a wealth of links to sites discussing the amendments and electronic discovery generally (thanks to the Illinois Trial Practice Weblog for identifying this excellent resource).  Also, the federal judiciary posts a list of all Federal Rules being amended December 1st here.

Additionally, in April the Northern District amended several of its Local Rules.  You can see a list of the amended rules here.  Amended Local Rule 5.2, among other things, states that where electronic and paper copies of a document are filed, the electronic version controls.  Amended Local Rule 5.2 also requires that the judge receive a courtesy copy of all electronically filed documents, unless the judge requires otherwise.

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Cobra Capital LLC v. LaSalle Bank Corp., __ F. Supp.2d __, 2006 WL 2720626 (N.D. Ill. Sept. 19, 2006) (Bucklo, J.)

In this trademark infringement dispute, Judge Bucklo denied defendants' summary judgment motion because there were material issues of fact regarding, among other things, the protectability of the marks at issue ("Making Impossible Possible" and "Make the Impossible Possible").  Defendants argued that the marks were descriptive of the banking and lease financing industry, and that the marks were "merely common self-laudatory advertising."  The Court, however, disagreed, stating that the latter argument  "borders on frivolous" and noting that defendants' argument was harmed by their corporate parent's pending application for the similar mark "Making More Possible."

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Kenall Mfg. Co. v. Genlyte Thomas Group LLC, 439 F. Supp.2d 854 (N.D. Ill. July 20, 2006) (Castillo, J.).

Judge Castillo denied opposing infringement and invalidity summary judgment motions in this very detailed and thorough opinion. The opinion is most remarkable for its illustration of two basic, but important, practice tips, which are best understood from the following excerpts:

The only thing that the multitude of summary judgment motions and expert reports filed in this hotly-disputed patent case make clear is that multiple issues of material fact remain to be determined. Instead of moving this case toward a timely resolution, the parties are driving up the costs of litigation with superfluous briefing that has repeatedly failed to abide by this Court’s local rules.

                                                                * * *

This case has been poorly litigated up to this point. By failing to file a 56.1 statement of facts and by failing to respond to Genlyte’s 56.1 statement, Kenall’s attorneys have come dangerously close to losing this case for their client based on nothing but their own ineptitude. On the other side, both Genlyte and Kenall have fanned the flame of excessive and superfluous briefing with arguments for unfeasible claim construction and a litany of expert reports that show nothing but material issues of facts. The parties have now spent tens of thousands of dollars on seven expert reports and extensive briefing of three separate motions for summary judgment to prove to this Court that this case is certainly not appropriate for resolution on summary judgment.

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C/F Int’l., Inc. v. Payne, No. 06 C 1329, 2006 WL 22290992 (N.D. Ill. Aug. 3, 2006) (Kennelly, J.).

Plaintiff filed suit to enforce a copyright infringement and breach of contract judgment against individual defendant Payne, his wife and two companies run by Payne after Payne allegedly transferred both personal and corporate assets to his wife. Judge Kennelly denied defendants’ motions to dismiss and for judgment on the pleadings, and deferred ruling on defendants’ motion to stay based on one defendant’s Chapter 7 bankruptcy proceeding.

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Shanklin Corp. v. American Packaging Mach., Inc., No. 95 C 1617, 2006 WL 2054382 (N.D. Ill. July 18, 2006) (Schenkier, Mag. J.).

In this case, Magistrate Judge Schenkier considered plaintiff’s Amended Bill of Costs after the two defendants were found to have infringed plaintiff’s patents, one defendant willfully.  The Court took pains explaining plaintiff’s math and proof-reading errors in plaintiff’s cost spreadsheet.  Apparently, defendant’s (only one defendant objected to the Bill of Costs) initial objections to the Bill of Costs were largely based upon plaintiff’s failure to explain and support its costs. Both parties would have saved attorneys fees – and the court would have been spared the task of sorting this out – had plaintiff taken the time to explain in detail its costs in the first place.  This opinion also provides a useful explanation of which standard costs are recoverable and which are not.

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Zeidler is worth mentioning despite the absence of intellectual property issues because it makes a point that many practitioners miss:  disregarding Local Rule 56.1 Statements of Fact or slapping one together at the last minute can have real, potentially case-dispositive consequences. Judge Andersen accepted defendant's statement of facts in its entirety because plaintiff’s statement of facts and his response to defendant’s statement of facts included unsupported statements, made legal arguments, referenced unauthenticated documents, and contradicted other factual evidence.

Plaintiff started at a major disadvantage by choosing to represent himself. But even many experienced members of the N.D. Ill. bar play fast and loose with the Local Rule 56.1 requirements or just ignore them until hours or minutes before filing deadlines. This case is the most recent example that such an approach is foolish and may have case-ending consequences.

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