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Category Archives: Federal Rules

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Generic Computer System Not Made Patentable by Connection to Other Programs

Posted in Federal Rules

Vehicle Intelligence & Safety LLC v. Mercedes-Benz USA, LLC, No. 13 C 4417, Slip Op. (N.D. Ill. Jan. 29, 2015) (Hart, Sen. J.).

Judge Hart granted defendants’ Mercedes-Benz USA’s and Daimler’s Fed. R. Civ. P. 12(c) motion to dismiss plaintiff Vehicle Intelligence & Safety’s (“VIS”) patent claims as unenforceable because they were patent ineligible pursuant to 35 U.S.C. § 101 in this patent case involving automotive safety systems.

Following the two-prong analysis set forth in Mayo and further refined in Alice, the Court first held that the asserted claims covered abstract ideas – testing operators of moving vehicles for physical or mental impairment.  The Court reasoned that testing for impairment could be performed entirely within the human mind.

The Court then turned to whether the asserted claims set forth an inventive concept sufficient to make the claims patent eligible.  The key claim element for each asserted claim required “expert system(s)” – a class of computer programs designed to mimic human decision-making.  The Court reasoned that the expert systems were “generic computer automation” that did not amount to an inventive concept.  Importantly, the claims did not require that the expert system be programed in any specific way to perform its various functions.

Claims requiring that the expert systems use one or more of various modules did not rise to the level of an inventive concept at least because it did not specify how the expert system was required to use any of the modules.

Foreign Defendant’s Refusal To Concede Jurisdiction In Any State Creates Jurisdiction

Posted in Federal Rules, Jurisdiction

Snap-On Inc. v. Robert Bosch, LLC, No. 09 C 06914, Slip Op. (N.D. Ill. Sept. 26, 2013) (Kocoras, J.).

Judge Kocoras denied defendant Beissbarth’s Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction in this patent infringement case involving patents relating to an optical wheel alignment system.  Plaintiff asserted jurisdiction over Beissbarth was proper pursuant to Fed. R. Civ. P. 4(k)(2) that establishes jurisdiction if: (1) the plaintiff’s claim arises under federal law: (2) the defendant is not subject to jurisdiction in any state’s court of general jurisdiction; and (3) the exercise of jurisdiction comports with due process. The first requirement was uncontested. The second requirement was satisfied because Beissbarth refused to identify another forum where jurisdiction would be proper.  Under the  Federal Circuit’s burden shifting approach, if a defendant asserts that it cannot be sued in the form state and refuses to identify any other state where suit is possible, Rule 4(k)(2) may be used to establish jurisdiction.  The third requirement of Rule 4(k)(2) was satisfied under the Federal Circuit’s three-part test to determine if personal jurisdiction over a foreign defendant comports with due process: Beissbarth purposefully directed its activities at residents of the United States; the claims against Beissbarth “arise out of” and “relate to” Beissbarth’s activities in the United States; and, exercising jurisdiction would be reasonable and fair.

Court Allows Joinder of BitTorrent Does for Early Stages of Case

Posted in Federal Rules, Pleading Requirements

Purzel Video GmbH v. Does 1-99, No. 13 C 2501, Slip Op. (N.D. Ill. Aug. 16, 2013) (Gottschall, J.).

Judge Gottschall denied various Doe defendants’ motions to quash third party subpoenas to their respective internet service providers (ISPs) as well as motions to sever and dismiss individual Does from this action.  This is a BitTorrent case in which the Does are accused of being part of a “swarm” that downloads a copyright file, in this case the motion picture “Trade of Innocents.”  Of particular interest, the Court held as follows:

  • The Court avoided a district split in whether Doe defendants have standing to quash a third-party ISP subpoena, holding that plaintiff Purzel Video was entitled to the information sought in the subpoenas and that the Doe defendants were not unduly burdened by the third-party subpoenas.  The fact that the customer associated with the identified IP address may not be the actual infringer was not a basis for quashing the subpoenas.
  • The Court ordered Purzel Video not to publish any Doe’s identity without leave of Court.  And to further limit “potential for harassment,” the Court held that only the bill payer and mailing address related to the IP address were discoverable.  Purzel Video was not entitiled to phone numbers or email addresses.  Purzel was also required to communicate with Does via their respective counsel to the extent that they had counsel.
  • Recognizing a nation-wide split in authority as to how closely connected members of a “swarm” must be in order to be joined in a single suit, the Court sided with Judge Castillo, holding that it was sufficient that the Does downloaded the same initial seed file intending to use other computers to download pieces of the copyrighted works and to allow the Doe’s computer to be used by others in the swarm to download the same work.  The Court also noted that while not all Does downloaded the files at the same time, the downloads occurred during the same month.
  • The Court declined to exercise its Fed. R. Civ. P. 21 discretion to sever the cases, although without prejudice to reconsider at a later date.  In the early stages of the case, the issues amongst Does remained relatively common and joinder made judicial sense.  It is possible that varying and opposing defenses might eventually change that, at which point the Court would be willing to consider severing some or all of the cases.
  • Purzel Video’s civil conspiracy claim was preempted by copyright law because it seeks to vindicate the same rights as a copyright claim.
  • Purzel Video’s Local Rule 3.2 corporate disclosure was deficient because it did not list all of the members of Purzel Video.  A GmbH is a German LLC, and Local Rule 3.2 requires disclosure of all members of LLC’s.

Intrinsic Evidence Supported Claim Construction That Excluded a Preferred Embodiment

Posted in Claim Construction, Federal Rules

Albecker v. Contour Prods., Inc., No. 09 C 00631, Slip Op. (N.D. Ill. Sept. 27, 2013) (Chang, J.).

Judge Chang decided the parties’ respective Fed. R. Civ. P. 60(b) motions for reconsideration: (1) plaintiff’s motion for reconsideration of the Court’s previous claim construction order; and (2) defendant’s motion for reconsideration of the Court’s previous opinion denying defendant’s motion to dismiss the declaratory judgment count for lack of subject matter jurisdiction.  Plaintiff filed affirmative patent infringement claims against defendant, as well as declaratory claims seeking to invalidate defendant’s patent.  Defendant argued that the Court lacked subject matter jurisdiction to declare defendant’s patent invalid because there was no case or controversy.  The Court denied defendant’s motion to dismiss.  Then, during claim construction of plaintiff’s patent, the claim term “secured to” was construed to mean “attached using attachment means,” a construction that allegedly excluded a preferred embodiment disclosed in the patent’s specification.

In its motion for reconsideration, plaintiff argued that the Court’s construction impermissibly excluded a preferred embodiment disclosed in the specification.  Defendant argued that this construction did not impermissibly exclude a disclosed embodiment because the intrinsic evidence supported the construction and plaintiff withdrew the claims directed to the preferred embodiment in favor of prosecuting other embodiments in response to a restriction requirement issued by the PTO. Even heeding the Federal Circuit’s cautionary warning from Plantronics, Inc. v. Aliph, Inc., 724 F.3d 1343 (Fed. Cir. 2013) to not conclude that a patentee has disclaimed claim scope simply by withdrawing claims after receiving an unexplained restriction requirement, the Court found that the bulk of intrinsic evidence supported the Court’s prior construction.  Because the weight of the evidence supported the Court’s prior construction, plaintiff did not meet the burden required of a motion to reconsider.

Defendant’s motion for reconsideration of defendant’s denied motion to dismiss was granted because defendant’s actions toward plaintiff did rise to the standard required by SanDisk Corp. v. STMicroelectronics, Inc. for declaratory judgment actions.  480 F.3d 1372, 1381 (Fed. Cir. 2007) (requiring patentee to take position that “puts the declaratory judgment plaintiff in the position of either pursuing illegal behavior or abandoning that which he claims a right to do.”).

Draft Expert Reports Protected as Work Product

Posted in Discovery, Federal Rules

The Medicines Co. v. Mylan, Inc., No. 11 C 1285, Slip Op. (N.D. Ill. June 13, 2013) (St. Eve, J.).

Judge St. Eve denied plaintiff The Medicines Company’s (“TMC”) motion to compel discovery withheld as privileged in this patent dispute.  Initially, the Court held that TMC failed to comply with Local Rule 37.2 by filing its motion to compel without having a meet and confer.  But the Court addressed the merits of the motion to avoid “needless delay.”

Drafts of defendant Mylan’s expert report were not discoverable.  Mylan’s counsel had not written the reports, they had merely provided a prior declaration, portions of which were used verbatim in the report.  TMC was, however, free to impeach the expert based upon his copying of the declaration.  Finally, TMC did not show the “substantial need” required to overcome the Rule 16(b) protections of the draft reports.

Pre-Trial Consolidation of Patent Cases is Within the Court’s Discretion

Posted in Federal Rules

Unified Messaging Sols., LLC v. United Online, Inc., MDL No. 2371, Slip Op. (N.D. Ill. May 3, 2013) (Lefkow, J.).

Judge Lefkow denied defendants’ United Online, Juno Online Services, Netzero and Memory Lane (collectively “UOL Defendants”) motion to deconsolidate their case from this earlier consolidated patent litigation.  The Judicial Panel for Multidistrict Litigation transferred the earlier filed cases to the Court for pre-trial proceedings and ordered that any “tag-along actions” be transferred to the Court.  The Court then entered an order providing that any future tag-along actions would be consolidated for pre-trial purposes.  The Court also entered a scheduling order which required the consolidated defendants to file certain papers jointly, but providing them enlarged limits for those filings.

Being required to file a joint claim construction brief, particularly with the increased page limits, did not violate the UOL Defendants’ due process rights.  The defendants were given increased page limits to assure they had sufficient space to make any necessary arguments.  Additionally, the UOL Defendants had not even yet been included in the earlier created schedule. 

Additionally, the joint briefing and claim construction hearing did not violate the UOL Defendants’ rights to brief unique issues concerning their respective accused technologies.  Claim construction focuses upon the intrinsic evidence surrounding the patents, not the accused technologies. 

While the JPML did not require pre-trial consolidation, Fed. R. Civ. P. 42 allowed the Court to consolidate the actions based upon their common questions of law and fact.  And by returning each case to its home district for trial, many of the UOL Defendants’ concerned are minimized.  The fact that the Court ordered consolidation of tag-along actions before the case against the UOL Defendants was filed was irrelevant.

Finally, pre-trial consolidation did not violate the AIA’s anti-joinder provision, 35 U.S.C. § 299, as the JPML had already held.

Doe Defendants Severed in Bit Torrent Case

Posted in Federal Rules

TCYK, LLC v. Does 1-28, No. 13 C 3839, Slip Op. (N.D. Ill. June 24, 2013) (Guzman, J.).

Judge Guzman sua sponte severed Does 2-28 and dismissed them without prejudice in this Bit Torrent copyright case.  Joinder was not proper pursuant to Fed. R. Civ. P. 20 because while the Does were allegedly part of the same “swarm,” they were not part of it at the same time.  Furthermore, the Court exercised its Fed. R. Civ. P. 21 discretion to sever and dismiss all but one Doe, noting that multi-Doe Bit Torrent cases were a “logistical nightmare.”

The Court also denied early discovery as to the remaining Does’ identity because plaintiff TCYK had not shown the necessary good cause for early discovery.

Multi-Doe Defendant Case Would be a “Logistical Nightmare”

Posted in Federal Rules

TCYK, LLC v. Does 1-88, No. 13 C 3828, Slip Op. (N.D. Ill. June 24, 2013) (Guzman, J.).

Judge Guzman sua sponte severed Does 2-88 pursuant to Fed. R. Civ. P. 20 & 21 in this Bit Torrent copyright case.  Because the Does were not all part of the same “swarm” at the same time - although they were part of the same swarm - joinder was not proper pursuant to Rule 20.

Even if Rule 20 joinder was proper, the Court would have exercised its Rule 21 discretion to sever the eighty eight Does, quoting 101 Doe case as a “logistical nightmare.”  Pacific Century International, Ltd. v. Does 1-101, No. C-11-02533 (DMR), 2011 WL 5117424, at *3 (N.D. Cal. Oct. 27, 2011).

Bit Torrent Doe Allowed to Proceed Anonymously

Posted in Federal Rules

Malibu Media, LLC v. Reynolds, No. 12 C 6672, Slip Op. (N.D. Ill. Mar. 7, 2013) (Kendall, J.).

Judge Kendall:  1) denied defendant Doe 15’s motion to dismiss; 2) denied Doe 15’s motion to quash the subpoena of Doe 15’s internet provider; 3) granted Doe 15’s unopposed motion to remain anonymous; and 4) severed each of the 15 defendants, except for Doe 15 in this Bit Torrent copyright case.  The Court leads off with a very good description of Bit Torrent and how a “swarm” operates.  It is worth reading for anyone that is dealing with these cases. 

Motion to Dismiss

The fact that plaintiff Malibu Media filed certain copyrights as works for hire, although Malibu Media was not yet formed when those works were made (and therefore they could not be works for hire) was a mistake that Malibu Media had already taken steps to correct, and it did not require dismissal of Malibu Media’s copyright claims.

Motion to Quash

Doe 15 did not have standing to oppose Malibu Media’s subpoena to Doe 15’s internet service provider, absent a privilege claim.  But regardless of standing, Doe 15 had not made a showing that it would face an undue burden based upon the subpoena. 

Motion to Proceed Anonymously

Malibu Media did not oppose Doe 15 remaining anonymous, at least through the close of discovery.  And the Court agreed that allowing Doe 15 to proceed anonymously would prevent Malibu Media from forcing settlement based upon Doe 15’s potential embarrassment from being accused of illegally downloading pornography.  The Court, therefore, allowed Doe 15 to proceed anonymously at least until dispositive motions were decided.

Motion to Sever

The Court held that in order to be joined in the same case, defendants need not just have been members of the same swarm — which can last weeks or months depending upon the members of the swarm.  Instead, the defendants would have to have been members of the same swarm that downloaded the accused file at the same time.  Because none of the defendants, which were all part of the same swarm, were part of the same swarm at the same time, the Court severed each of the defendants, except Doe 15.  While the Court would normally retain the first defendant, in this instance the Court retained the last because it had decided several motions related to Doe 15.

Illinois Witnesses Not Sufficient to Retain Case Where Michigan Witnesses Provide Same Proof

Posted in Federal Rules, Jurisdiction

Addiction & Detoxification Institute, LLC v. Rapid Drug Detox Center, No. 11 C 7992, Slip Op. (N.D. Ill. Mar. 11, 2013) (Coleman, J.).

Judge Coleman granted defendant Rapid Detox’s 28 U.S.C. § 1404(a) motion to transfer this patent infringement case to the Eastern District of Michigan.  While Rapid Detox had a website and had patients from Illinois, the website did not specifically target Illinois residents and Rapid Detox’s treatments all occurred in Michigan.  Furthermore, to the extent that patients became necessary witnesses, there was no reason plaintiff could not use Michigan patients instead of the Illinois patients that it identified in the motion papers. 



Declaratory Judgment Claims re: Redesigned Product May be Brought in A Separate Suit

Posted in Federal Rules

R-Boc Reps., Inc. v. Minemyer, No. 11 C 8433, Slip Op. (N.D. Ill. July 16, 2012) (Cole, Mag. J.).

Judge Cole denied declaratory judgment defendant Minemyer’s Fed. R. Civ. P. 13(a) motion to dismiss declaratory judgment plaintiff R-Boc’s complaint seeking a declaratory judgment that its redesigned coupler did not infringe Minemyer’s patent.  Minemyer argued that R-Boc’s complaint was improper claim-splitting and that the claim should have been filed in Minemyer’s 2007 suit accusing R-Boc’s original coupler designs.  In February 2012, a jury held that R-Boc’s original coupler did not infringe. 

The Court noted the length of that case - five years and 527 docket entries - quoting the Federal Circuit:

“Patent litigations are among the longest, most time-consuming types of civil actions.  As of 2009, 384 patent cases had been pending in the district courts for three years or more.  Moreover, the costs of patent litigation are enormous with an average patent case costing upwards of $3 million for each side.”  Ohio Willow Wood Co. v. Thermo-Ply, Inc., 629 F.3d 1374, 1376-77 (Fed.Cir. 2011)(citations omitted).

R-Boc’s claims were not claim-splitting.  While a patentholder must assert all claims from a single patent against a single product in one action, claims regarding a new product, need not be filed in the same suit involving an older version of that product.  R-Boc’s declaratory judgment claims regarding the new coupler would only have been compulsory in the earlier suit had that suit accused the new coupler of infringement.

Dismissal Without Prejudice Will Allow Both Parties to Reassert Unexhausted Claims

Posted in Federal Rules

ImageCube LLC v. MTS Sys. Corp., No. 04 C 7587, Slip Op. (N.D. Ill. Apr. 4, 2012) (Dow, J.).

 Judge Dow granted plaintiff ImageCube’s Fed. R. Civ. P. 41(a)(2) motion to dismiss all claims without prejudice in this nearly eight year-old patent litigation involving alloyed and non-alloyed powders.  The Court previously granted summary judgment of non-infringement regarding the alloyed powders and certified its decision for immediate appeal.  After the Federal Circuit affirmed the decision, the parties attempted to settle the case and came close, but were not quite able to resolve their disputes.  As a result of that, ImageCube sought dismissal of all claims without prejudice so that it could reassert its non-alloyed powder claims at a later date, presumably if defendant MTS’s sales became more significant.  MTS opposed dismissal without prejudice, instead asking that all claims be dismissed with prejudice except for MTS’s claim for attorney’s fees pursuant to 35 U.S.C. Section 285. 

 The Court noted that it was in a “less advantageous position” than the parties to predict the future of their claims.  As a result, the Court dismissed all of the claims without prejudice.  That way the parties would be free to assert their claims should conditions warrant it, but the Court also noted that issue and claim preclusion would likely bar relitigation of previously decided claims.

Must Decide Form of Dismissal Before Considering Fees

Posted in Federal Rules

Zander v. Groh, No. 10 C 944, Slip Op. (N.D. Ill. Sep. 30, 2011) (Manning, J.).

Judge Manning mooted defendant Groh’s objections to the Magistrate Judge’s failure to award attorney’s fees for a voluntary dismissal in this copyright and trademark action. After a brief discovery period, plaintiff Zander moved pursuant to Fed. R. Civ. P. 15 to amend its complaint deleting its copyright claim and adding a Lanham Act claim. The Magistrate Judge treated the deletion of the copyright claim as a Fed. R. Civ. P. 41(a)(2) voluntary dismissal, dismissing the claim with prejudice. The Magistrate Judge did not award attorney’s fees for defending the copyright claim, however, to avoid chilling voluntary dismissals and the resulting reduction in legal fees for both sides.

The Court ordered further briefing to resolve whether the deletion of the copyright claim should be treated pursuant to Fed. R. Civ. P 15 or 41.

In the interest of judicial economy, the Court reserved a decision regarding whether attorney’s fees were appropriate until the Court decided whether the dismissal was by amendment or as a Rule 41(a)(2) voluntary dismissal.

False Patent Marking Statute is Constitutional

Posted in Federal Rules

Luka v. The Proctor & Gamble Co., No. 10 C 2511 (N.D. Ill. Mar. 28, 2011) (Kennelly, J.).

Judge Kennelly granted certain defendants’ motions to dismiss plaintiff’s false patent marking case for failure to sufficiently plead intent, and held that the statute was constitutional.  Note that this case was decided before President Obama signed the America Invents Act which removes expired patents from the false marking statute.

Proctor & Gamble

Plaintiff’s general allegations against defendant Procter & Gamble were insufficient, particularly in light of the license agreement requiring defendant Innovative to comply with the marking statute.


Plaintiff sufficiently pled intent as to Innovative by attacking the P&G-Innovative license agreement. In that agreement, Innovative accepts the responsibility of complying with the marking statute.

Helen of Troy & Idelle

Plaintiff’s claims as to Helen of Troy and Idelle failed because they were the sort of generalized pleadings that BP Lubricants held insufficient.


The Court held that § 292, the false marking statue was constitutional:

For these reasons, the Court agrees with the district court in the Pequignot case that "[a]though these mechanisms concededly do not rise to the same level of government control provided by the FCA, the FCA’s strict safeguards are not required because . . . § 292(b) represents a minimal intrusion onto Executive Branch power." Peguignot v. Solo Cup Co., 640 F. Supp. 2d 714, 728 (E.D. Va. 2009), vacated in part on other grounds, 608 F.3d 1356 (Fed. Cir. 2010).

Another Case Dismissing Hundreds of Doe Copyright Defendants as Improperly Joined

Posted in Federal Rules

Light Speed Media Corp. v. Does 1-1000, No. 10 C 5604, Slip Op. (N.D. Ill. Mar. 31, 2011) (Manning, J.).

Judge Manning dismissed without prejudice 999 of the 1,000 Doe defendants in this copyright infringement suit accusing unknown individuals of using BitTorrent to download copyrighted material without sufficient permissions. As in prior cases in the Northern District (click here for similar decisions), the Court held that the Doe defendants were not properly joined pursuant to Fed. R. Civ. P. 20(a)(2)(A) because the use of a common internet service provider or network does not create sufficient commonality of action or transaction to warrant permissive joinder. The Court also held that joinder did not serve judicial interests or economy. A case with 1,000 Doe defendants could generate hundreds of factually dissimilar motions, just at the initial phase of the litigation.

The Court’s decision to sever was bolstered by its concerns about whether venue was proper. There was nothing to indicate that plaintiff or any Doe had contacts with Illinois. The Court, therefore, dismissed without prejudice each of the Does except the one individual who had been identified, although not yet named. Plaintiff was given seven days from the Order to notify the parties and their Internet Service Providers. Finally, the Court denied as premature the identified individual’s motion to dismiss for lack of personal jurisdiction. The motion was premature until the individual was actually named in the suit.

In Forma Pauperis Status Denied Without Full Proof of Need

Posted in Federal Rules

Kim v. The Earthgrains Co., No. 01 C 3895, Slip Op. (N.D. Ill. Mar. 9, 2011) (Cox, Mag. J.).

Judge Cox denied plaintiff’s application for in forma pauperis ("IFP") status during its Federal Circuit appeal. The Court previously granted plaintiff’s IFP motion, until questions were raised regarding plaintiff’s real estate holdings. At that point, the Court rescinded the IFP status — there is more on that decision and this case generally in the Blog’s archives. Because the Court continued to have similar concerns regarding plaintiff’s property holdings, the Court denied IFP status.

Congress Considers Changes to Rule 11 Sanctions

Posted in Federal Rules

Congress is currently considering revision Rule 11 sanctions, including:

  1. Removing the existing 21 day "safe harbor" provision which requires that you send your motion to the opposing party and give them 21 days to remedy the alleged Rule 11 violation before filing the motion with the Court; and
  2. Making an award of fees and costs related to a winning Rule 11 motion automatic, instead of discretionary.

The Federal Bar Association (of which I am a member) has published a call for comment that sets out both sides of the issue well.  It follows below.  I can understand the inclination to make fees and costs automatic, but the 21 day "safe harbor" serves a valuable gatekeeping role.  It avoid clogging the federal courts with Rule 11 motions that could be fixed with notice of the alleged deficiency.

Proposed Amendments in H.R. 966

The H.R. 966 bill would repeal amendments that the Judicial Conference of the United States proposed for adoption effective in 1993, thereby in part reinstating an earlier version of Rule 11 that had been in force between 1983 and 1993. It would also add a new provision for punitive monetary sanctions to be paid into court.

Under the bill, there would no longer be a “safe harbor” provision that allows an adverse party to withdraw or modify a challenged pleading or other paper before a sanctions motion can be filed or otherwise presented to the court. See Fed. R. Civ. P. 11(c)(2). That safe harbor clause was adopted effective in 1993.

The bill would also provide that sanctions awards would once again be mandatory, rather than discretionary, in cases where a court has found that a pleading or other paper was signed without adequate factual or legal grounds. Sanctions had been mandatory from 1983 to 1993. The bill would specify that, in addition to any other sanctions the court might impose, “the sanction shall consist of an order to pay to the party or parties the amount of the reasonable expenses incurred as a direct result of the violation, including reasonable attorneys’ fees and costs.”

In doing so, the bill would repeal the current provision in Rule 11(c)(2) that that fees and costs “may” be awarded “if warranted.” In place of that provision, the bill would further authorize punitive monetary awards, to be paid into the court, “if warranted for effective deterrence.”

Testimony Supporting and Opposing the H.R. 966 Bill

According to testimony on behalf of the National Federation of Independent Business and the U.S. Chamber Institute for Legal Reform, the changes are necessary because frivolous lawsuits and staggering litigation costs are creating a climate of fear for America’s small businesses. In their view, the current “safe harbor” means that preparing a motion for sanctions may serve only to increase the costs for the moving party – which is, generally, the defendant. And even if a plaintiff does not withdraw his or her claims for relief, and even if the court finds them to be frivolous, the discretionary nature of the current sanctions provision means that the court may choose not to impose any sanction other than dismissing the case. These trade associations also believe that the current version of Rule 11 discourages judges from imposing sanctions for the purpose of compensating defendants for their attorney’s fees and costs.

In opposition to the H.R. 966 bill, a professor at the University of Houston Law Center has testified that the 1993 amendments of Rule 11 were adopted in the face of studies suggesting that the 1983 version of Rule 11 was deterring the filing of meritorious cases. Additionally, in practice, civil rights and employment discrimination plaintiffs were impacted the most severely under the earlier version of Rule 11 as adopted in 1983. Studies also showed that plaintiffs had been the targets of sanctions far more often than defendants, even though the terms of Rule 11 apply to all pleadings and other papers – including a defendant’s answer containing denials and affirmative defenses. Scholars and practitioners had noted that the 1983 version actually increased costs and delays by encouraging “the Rambo-like use of Rule 11 by too many lawyers,” and that the resulting increase in sanctions-oriented motions practice had led to a breakdown of civility and professionalism. This professor cited a 1991 study by the Federal Judicial Center, which revealed that few judges polled thought the then-current 1983 version of the rule was “very effective” in deterring groundless pleadings. In a 2005 survey of 278 district judges polled by the Federal Judicial Center, more than 80% of the judges said that “Rule 11 is needed and it is just right as it stands now.”

Call for Comment and Proposals from the Federal Litigation Bar

The Committee on Federal Rules of Civil Procedure and Trial Practice seeks your comments. Comments may be submitted concerning any of the proposed revisions contained in the H.R. 966 bill; or concerning any other proposals to modify Rule 11; or concerning whether to retain the text of Rule 11 as currently in force. We also welcome any other proposals that are germane to the application or purposes of Rule 11. Upon request, we will handle any comment as confidential. Anonymous comments will also be accepted.

Rob Kohn and John McCarthy are co-chairs of the Committee on Federal Rules of Civil Procedure and Trial Practice. Kohn is also the Secretary and Treasurer of the Federal Litigation Section; and McCarthy is Chapter President of the Southern District of New York chapter of the FBA. Kohn may be reached at rkohn@kohnlawgroup.com. McCarthy may be reached at jmccarthy@sgrlaw.com.

Patent Cases Consolidated and Stayed Pending Related Case

Posted in Federal Rules

GS Cleantech Corp. v. Big River Resources Galva, LLC, No. 10 C 990, Slip Op. (N.D. Ill. Jul. 30, 2010) (Andersen, J.).

Judge Andersen reassigned this case so that it could be consolidated with a case before Judge Bucklo by the same plaintiff asserting the same patent accusing similar technologies. The Court also ordered that a stay awaiting resolution of a related District of Kansas case would apply to the consolidated case.

False Claims Act Does Not Bar Multiple False Marking Suits

Posted in Federal Rules

Simonian v. Hunter Fan Co., No. 10 C 1212, Slip Op. (N.D. Ill. Jul. 8, 2010) (St. Eve, J.).

Judge St. Eve denied defendant Hunter Fan’s motion to dismiss plaintiff’s false patent marking case. Hunter Fan argued that the Court lacked subject matter jurisdiction because approximately four hours before this suit was filed, another plaintiff filed a separate suit in the Northern District of Texas accusing Hunter Fan of the same alleged false patent marking. The False Claim Act did have a first-to-file provision, 31 U.S.C. § 3730(b)(5), but the provision expressly limited its application to False Claims Act cases. Because false patent marking is part of the Patent Act, not the False Claims Act, the first-to-file limitation was not applicable. 

In reply, Hunter Fan argued that 35 U.S.C. § 292 allowed for only a single claim, and that the reasoning of the False Claim Act’s first-to-file rule should have been applied to the false patent marking statute.  Hunter Fan, however, waived these arguments by failing to make them in its opening brief. 

Court Sua Sponte Dismisses Improperly Pled Affirmative Defenses

Posted in Federal Rules

Shop-Vac Corp. v. Alton Indus. Ltd Group, No. 10 C 1066, Slip Op. (N.D. Ill. Jun. 7, 2010) (Shadur, J.).

Judge Shadur sua sponte dismissed several of plaintiff Shop-Vac’s affirmative defenses in response to defendant Alton’s counterclaims as inappropriate, citing the Court’s decision in State Farm Mut. Auto Ins. Co. v. Riley, 199 F.R.D. 276 (N.D. Ill. 2001). The Court dismissed one affirmative defense which was the equivalent of a Fed. R. Civ. P. 12(b)(6) challenge to the sufficiency of Alton’s counterclaims.

The Court also dismissed two affirmative defenses that were proper pursuant to Fed. R. Civ. P. 8(c), but were not pled with sufficient facts. Shop-Vac was given leave to reassert them with additional supporting facts. The Court also dismissed two affirmative defenses that contradicted allegations in the counterclaim. Shop-Vac put those issues in contention by denying the facts.  

Post-Default Letter Does Not Alter Judgment

Posted in Federal Rules

Be2, LLC v. Be2.net, No. 10 C 1650, Slip Op. (N.D. Ill. Jul. 12, 2010) (Shadur, Sen., J.).

Judge Shadur denied the individual defendant’s letter request to alter the Court’s default judgment. The Court attached the letter to the opinion to avoid any concerns that the defendant’s communications were ex parte. And the Court left the judgment intact because the defendant’s explanation did not warrant alteration or vacatur of the judgment.

Attorney’s Fees Petition Must be Tailored to Resolved Claims

Posted in Federal Rules

Nova Design Build, Inc. v. Grace Hotels, LLC, No. 08 C 2855, Slip Op. (N.D. Ill. Jun. 8, 2010) (Der-Yeghiayan, J.).

Judge Der-Yeghiayan granted defendant Grace Hotel’s motion for costs and denied without prejudice Grace Hotel’s motion for attorney’s fees. As an initial matter, the Court held that Grace Hotels was a prevailing party pursuant to both Fed. R. Civ. P. 54(d) (costs) and 17 U.S.C. § 505 (attorney’s fees). While the standards were different, Grace Hotels met both standards. Grace Hotels was granted summary judgment on plaintiff’s copyright infringement claim because plaintiffs did not have a valid copyright registration – click here for more on this opinion in the Blog’s archives. While the decision was jurisdictional and not substantive, Grace Hotel was a prevailing party because the Court’s ruling "effectively foreclosed" Plaintiff’s copyright claims. In other words, "Grace [Hotels] obtained more than just a moral victory on a minor jurisdictional point." Because Grace Hotels was a prevailing party, the Court awarded the reasonable costs Grace Hotels requested for court reporter fees pursuant to Fed. R. Civ. P. 54(d) – $2,534.70. 

While Grace Hotels was also a prevailing party for purposes of § 505, the Court denied Grace Hotels attorney’s fees motion without prejudice. The fees did not appear reasonable. They were not limited to fees associated with defending the copyright claim. Grace Hotels was not entitled to fees for defending related state law claims which the Court declined to exercise supplemental jurisdiction over after resolving the federal copyright claim. Grace Hotels also sought fees for a separate case between the parties. The Court allowed Grace Hotels to file a renewal motion for attorney’s fees tailored to the recoverable fees.

Court Will Not Amend Summary Judgment Based Upon “New” Evidence

Posted in Federal Rules

Ho v. Taflove, No. 07 C 4305, Slip Op. (N.D. Ill. Apr. 9, 2010 (Bucklo, J.) 

Judge Bucklo denied plaintiffs’ motion for reconsideration of the Court’s order granting defendants summary judgment as to plaintiffs’ Copyrights, Lanham Act and related state law claims in this dispute over whether defendants took plaintiffs’ mathematical model (the “Model”). As an initial matter, the Court noted that the Federal Rules of Civil Procedure do not provide for “motions to reconsider.” Rather, parties file either a Rule 59(e) motion to alter or amend judgment (within 28 days of the judgment) or a Rule 60(b) motion for relief from judgment (within a "reasonable time”). The substance of the motion determines whether it is heard pursuant to Rule 59(e) or Rule 60(b). Plaintiffs’ motion was brought pursuant to Rule 60(b), but the Court treated it as a Rule 59(e) motion because it sought to alter the judgment, not for relief from it.

A Rule 59(e) motion requires newly discovered evidence or manifest errors of law. Plaintiffs’ motion as to their state law conversion, copyright and Lanham Act claims relied upon additional facts that were available during the initial briefing, but not raised at that time. The Court, therefore, did not consider the evidence and the plaintiffs’ arguments were denied.

As to the Court’s decision that the Model was not copyrightable as a mathematical formula pursuant to §102(b) of the Copyright Act, plaintiffs provided no convincing authority showing that it was copyrightable. And plaintiffs provided not even a single example of an alternate expression of the Model to satisfy the merger doctrine.

Bare Denials Not Sufficient to Reverse Default Judgment

Posted in Federal Rules

Lyons Partnership, L.P. v. Welle, No. 08 C 2909, Slip Op. (N.D. Ill. Feb. 22, 2010) (Grady, Sen. J.).

Jude Grady denied defendants’ motion to set aside the Court’s Fed. R. Civ. P. 55(c) default judgment in this case alleging that defendants violated plaintiff’s intellectual property rights in children’s characters Hello Kitty, Bob the Builder and Thomas the Tank Engine, among others. While the defendants acted diligently after default was entered, they did not act diligently prior to the default. Defendants’ "cash flow" problems were not an excuse for failing to appear pro se. Additionally, the defendants did not identify a meritorious defense. Bare denials from defendants’ answer were not sufficient.