Chicago IP Litigation Blog

Court Does Not Order Sale of LLC to Satisfy Judgment, But May Appoint Receiver

david.donoghue@hklaw.com (R. David Donoghue) — Thu, 04 Dec 2008 05:16:05 -0600

Bobak Sausage Co. v. Bobak Orland Park, Inc., No. 06 C 4747, Slip Op. (N.D. Ill. Nov. 3, 2008) (Kennelly, J.).*

Judge Kennelly denied without prejudice plaintiff Bobak Sausage Co.'s ("Bobak") motion to compel defendant's interest in Bobak Fifty Third Street LLC (“Bobak 53”). Bobak makes and sells meat products and operates a related restaurant in Chicago. Bobak's founder, Frank Bobak, transferred ownership of Bobak's to his sons. In early 2006, Bobak's reorganized, leaving two of the sons owning Bobak's and a third, defendant, owning a grocery store that Bobak's had been building. All of the brothers maintained as interest in Bobak 53. As part of the reorganization, Bobak's granted two entities rights to use Bobak's trademarks at retail locations for a six month period. After the six month period ended, Bobak's filed suit against defendants (including the third son and the licensed retail locations) for, among other things, trademark infringement based upon the continued use of the Bobak's marks. The parties settled that dispute based at least in part upon a stipulated permanent injunction, which the Court entered, setting various limits on what marks each defendant could use, requirements that the defendants remove and change their signage and requirements that defendants use disclaimers that they were not affiliated with Bobak's. The Court later held certain defendants in contempt for violating the permanent injunction and entered a remedial fine of $150,000. When defendants failed to pay the fine, the Court added interest to it.

Because defendants continue not to pay the fine, Bobak moved the Court for an order compelling the transfer of defendant's interest in Bobak 53 pursuant to Fed. R. Civ. P. 69(a) and 70. The Court, however, held that Rule 70 only allows for enforcement of money judgment in very narrow circumstances, circumstances that were not yet met in this case.

Rule 69(a) allows for a writ of execution in accord with the rules of the state where the court is located, Illinois in this case. Illinois law says that the debtor's property delivered for repayment is to be sold by the sheriff at public auction. But because defendant's interest in Bobak 53 is relatively non-liquid – plaintiffs, the other owners of Bobak 53, retain substantial sale over any sale or subsequent sale. The restrictions on ownership and sale of Bobak 53 make a public sale impractical. But the Court could order that any distributions be paid to plaintiff. The Court, therefore, denied plaintiff's motion without prejudice. But the Court also ordered defendant to show cause why the Court should not appoint a receiver for defendant's interest in Bobak 53 and enjoin the state court proceedings regarding Bobak 53.

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

Individual Communications of Infringement are Not Lanham Act Unfair Competition

david.donoghue@hklaw.com (R. David Donoghue) — Wed, 03 Dec 2008 04:29:38 -0600

Foboha GMBH v. Gram Tech., Inc., No. 08 C 969, 2008 WL 4619795 (N.D. Ill. Oct. 15, 2008) (Grady, J.).

Judge Grady denied defendants' (collectively “Gram”) Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiffs' (collectively “Foboha”) Lanham Act unfair competition and related state law claims. Foboha alleged that Gram made false and misleading statements about Gram's patent and about Foboha's alleged infringement of the patent. In particular, Gram allegedly claimed that its technology was patented while its application was still being processed and that Gram made false statements about the status of the reexamination filed by Foboha. The Court held that Foboha's claims were governed by Fed. R. Civ. P. 9(b)'s heightened pleading requirements because they were based upon Gram's allegedly false and misleading statements. And at least for the statements allegedly made about the patent during reexam, Foboha met the heightened standard by explaining what statements were made, when and where they were made, who made them and how they were made.

The Court did, however, hold that Gram's direct communications, in person or in letters to individuals, did not constitute commercial advertising and, therefore, did not constitute Lanham Act unfair competition. But Gram's statements on its website and press releases could constitute commercial advertising.

Location of Family Major Factoring in Determining Citizenship

david.donoghue@hklaw.com (R. David Donoghue) — Tue, 02 Dec 2008 05:13:53 -0600

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

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

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

Finally, the Court denied 24's request to file an amended complaint adding a federal Computer Fraud and Abuse Act claim. A complaint cannot be amended to create subject matter jurisdiction. The case, therefore, had to be dismissed.

IP Licensing Best Practices

david.donoghue@hklaw.com (R. David Donoghue) — Mon, 01 Dec 2008 05:14:01 -0600

As I mentioned here, I recently gave a presentation for the National Constitution Center on settlement agreement best practices. I focused on the important principles of: knowing your client's and opponent's needs; generating trust between the parties during the negotiation and through any ongoing responsibilities pursuant to the agreement; bringing in experts on various topics; and making sure that your agreement and its terms had buy in from all relevant client stakeholders (not just legal, but accounting, media relations, tax and the appropriate C-level or business executives. You can see a copy of the slides here.

Mike Graham, the Seattle Trademark Lawyer, is presenting soon on a related topic, except he is looking at planning ahead for potential litigation in trademark licensing. It promises to be a very interesting presentation based on Graham's initial notes -- click here to read them. Just as litigators do well to bring in licensing experts to finalize settlement agreements, licensing attorneys do well to have a litigator's perspective on their agreements.

[UPDATE:] I just learned that Seattle Trademark Lawyer (the blog, not Graham) turned two yesterday -- click here to read Graham's birthday post. Congratulations Mike. Two years of top quality content, and going strong. I started this blog a few months before Graham started STL. It is nice to see my contemporaries succeeding.

Happy Thanksgiving & Thank You

david.donoghue@hklaw.com (R. David Donoghue) — Thu, 27 Nov 2008 05:20:18 -0600

Hopefully this post finds you at home with your family sharing the day and giving thanks. That is where I am, but I wanted to say "thank you" on the blog. Thanks to the Blog's readers. I am grateful that more than two years into it, my readership continues to grow. But most of all, I am grateful for the conversations and friendships that I have developed from the blog. I started to list them, but the list was too long and I would hate to miss anyone. I am also grateful for the great team at LexBlog who take excellent care of the blog and have become trusted friends and advisers. Finally, I am grateful for my family who allow me the time to pursue blogging.

Happy Thanksgiving.

Dismissal For Failure To Prosecute: Costs Awarded Not Attorney's Fees

david.donoghue@hklaw.com (R. David Donoghue) — Wed, 26 Nov 2008 04:58:07 -0600

Vito & Nick’s, Inc. v. Barraco., No. 05 C 2764, Slip Op. (N.D. Ill. Oct. 10, 2008) (Nolan, Mag. J.)

Judge Nolan granted defendants’ motion for litigation costs, but denied defendants’ motion for attorney’s fees. Plaintiff sued defendants alleging trademark infringement, Lanham Act unfair competition, Illinois Deceptive Trade Practices and related state law claims based upon a dispute over sibling’s competing use of the name of a family business. After initiation of the suit, the parties engaged in extensive settlement negotiations resulting in a framework for settlement. But plaintiff was unable to come up with funds necessary for the settlement and then lost its counsel. Because plaintiff was unable to find replacement counsel, and because corporations cannot appear pro se, plaintiff’s case was eventually dismissed for want of prosecution.

The Court held that plaintiff’s conduct resulting in dismissal did not constitute bad faith warranting an award for attorney’s fees. Plaintiff actively participated in the case and settlement negotiations, until it was unable to come up with the funds required, and lost its counsel. Furthermore, the Court had not had occasion to review the viability of plaintiff’s claim and, therefore, a bad faith finding could not be based upon the viability of the claims.

The Court did, however, award defendants their costs as prevailing parties pursuant to Fed. R. Civ. P. 54(d)(1), as follows:

Costs of serving the summons and subpoenas;
Court reporter, videographer, and transcript fees (transcripts were limited to $3.30 per page and did include indexes, minuscripts or other attorney convenience features);
Witness fees; and
Copy costs (limited to $.10 - $.20 per page).

Trademark Preliminary Injunction Granted

david.donoghue@hklaw.com (R. David Donoghue) — Tue, 25 Nov 2008 04:53:43 -0600

Miyano Machinery USA, Inc. v. MiyanoHitec Mach., Inc., No. 08 C 526, Slip Op. (N.D. Ill. Sep. 5, 2008) (Kendall, J.)

Judge Kendall granted a preliminary injunction against defendants’ (collectively “MiyanoHitec”) continued use of plaintiff Miyano Machinery’s (“MMU”) MIYANO trademarks. MMU proved a sufficient likelihood of success on its trademark infringement claims. Despite the fact that Miyano was the surname of the individual defendants, it was protectible. While personal names are not generally protectible, MMU’s Miyano marks had acquired secondary meaning, making them protectible. And individual defendants originally consented to MMU registering the marks.

MMU’s “Winged M” mark was not abandoned when MMU changed the font of the Miyano name in the mark. And MMU showed a likelihood of confusion. MMU’s and MiyanoHitec’s marks were very similar and were used on similar products – lathes – that were to be sold in similar channels. MMU also offered evidence of a few acts of actual confusion. And the evidence showed that MiyanoHitec likely intended to benefit from the likely consumer confusion.

The Court also found that MMU would be irreparably harmed without an injunction because trademark infringement is presumed to create irreparable harm. In contrast, the injunction would cause MiyanoHitec minimal or no harm. MiyanoHitec had not sold any product yet, had previously used a different name, and was aware of MMU’s trademark claim before choosing its marks.

Finally, the public interest was served by preventing trademark infringement and the resulting consumer confusion. The Court, therefore, granted MMU a preliminary injunction against MiyanoHitec.

IP News & Advice -- Thanksgiving Edition

david.donoghue@hklaw.com (R. David Donoghue) — Mon, 24 Nov 2008 04:49:59 -0600

Here are several IP posts that you should check out:

The MTTLR Blog's Lauren Strandbergh has an interesting post (click here for it) about the implications of the Google Book's settlement and how the Book Rights Registry -- a Copyright Clearance Center or ASCAP-like entity that will, among other things, distribute proceeds from out-of-print books to the authors or rights holders -- will change the publishing industry. Strandbergh raises the right questions, but we will only get answers as we ee how the system works.
[UPDATE:] Speaking of the Copyright Clearance Center and ASCAP, the WSJ Law Blog has a post today (click here to read it) based upon this WSJ story (subscription required for the full text) about two new companies that are aggregating patents and guaranteeing never to assert those patents against their members. It is not clear from the story if they plan to assert them against non-members, but it is an interesting move in the struggle between non-practicing entities and corporations that feel targeted by patent litigation. I believe there have been industry-specific versions of these companies in Europe for some time. As I understand some of those entities, the do assert their patents against non-members to help fund operations.
Victoria Pynchon offers advice for dealing with those uncomfortable Thanksgiving political conversations with family and friends at her Settle It Now Negotiation blog -- click here to read it. The advice translates well for unwinable conversations with opposing counsel.
This week's Blawg Review is up at LawyerCasting -- click here to read it. It provides lots of advice for lawyers dealing with the tough economic times.

Time's 2008 Inventions of the Year: Chicago Connections

david.donoghue@hklaw.com (R. David Donoghue) — Fri, 21 Nov 2008 05:03:57 -0600

Time has published a list of 2008's best inventions -- click here to read it. Here are a couple of inventions with Chicago connections:

12. MacroMarkets -- MacroMarkets was instrumental in starting housing futures trading on the Chicago Mercantile Exchange (the Chicago connection). Now MacroMarkets is working on exchange-traded funds that allow regular investors to bet on housing futures.
23. The Branded Candidate -- This invention is actually about a trademark and a brand. Chicago's own President-elect Obama created a marketing sensation with his branding this year. Here is how Time describes it:

Barack Obama hat: $15. Barack Obama special-edition Beyoncé T shirt: $60. Devising a system to make and sell your own swag and garner millions in profits, not to mention the phone numbers and addresses of hundreds of thousands of potential volunteers? Priceless.

Hat tip to Dennis Crouch who identified Time's list at Patently-O.

The Experts Look at Improving Voir Dire

david.donoghue@hklaw.com (R. David Donoghue) — Thu, 20 Nov 2008 05:15:36 -0600

Anne Reed has an excellent post at her Deliberations blog about improving the voir dire system based upon Judge Mize's and Center for Jury Studies director Paula Hannaford-Agor's new paper, Building a Better Voir Dire -- click here to read the post and for a link to a pdf of the article, which is also worth the read. Reed's post and the article fit well with my recent series of posts on the Seventh Circuit's American Jury Project report -- to read those posts and for a copy of the report, click here (juror questions); here (preliminary jury instructions); here (12 person juries); here (interim statements by counsel)and here (Phase I principles).

Reed nails a huge problem with improving voir dire specifically or the trial process generally -- judges and lawyers have different interests. Judges who do lots of trials while facing bulging dockets and populations with little interest in appearing for jury duty often want trials over quickly and efficiently using the smallest jury pool possible. Lawyers want to know as much as possible about as large a pool of jurors as possible. Of course, the more in-depth the voir dire process, the more time it takes. And the process of testing new ideas and improving upon voir dire, or any part of the trial process, also takes time up front, even if it saves time in the long term. But Reed, Mize and Hannaford-Agor identify two resources that help limit the upfront costs for judges -- the American Jury Project and the NCSC's State-of-the-States Survey. Both are incredible resources for judges that want to try new approaches to better serve all trial stakeholders.

Most of all though, it is exhilirating to see important groups like the NCSC and the Seventh Circuit massing their resources to evaluate and improve the trial process. I look forward to covering more efforts like these and to continuing the discussion about how to best try cases in our courts.

Blawg Review #186

david.donoghue@hklaw.com (R. David Donoghue) — Wed, 19 Nov 2008 05:02:38 -0600

Blawg Review #186 is up at Res Ipsa -- click here to read it. Befitting a blog that focuses on the use of technology in the law, there is plenty of IP content:

Traverse Legal has a great post, including a podcast, (click here to read/listen to it) explaining that while it is possible to register your marks without a lawyer, the smart decision is to use a lawyer that is an expert in the field.
IP's What's Up makes the argument that open source licenses are a powerful use of a copyright -- click here to read it.
The mighty IPKat looks at the best IP advice provided by its readers in response to a recent contest -- click here to read the advice and IP Kat's thoughts.

Finally, it is not directly IP-related, but the Review also looks at an interesting technology debate that is occupying the legal blogosphere -- the value of Twitter as a legal marketing tool. Calling himself a curmudgeon, David Giacalone at f/k/a argues against Twitter, or at least questions its business development value -- click here to read the post, which has generated significant discussion and response. LexBlog's Kevin O'Keefe responded strongly arguing Twitter's value -- click here to read it. O'Keefe's arguments for Twitter boil down to the fact that Twitter is a powerful networking tool. It allows colleagues around the country and world with common backgrounds and issues to find each other and engage in far-reaching conversations. And building networks builds both professional satisfaction and business. I agree with O'Keefe whole-heartedly. But I also understand Giacalone's uncertainty and lack of comfort with Twitter It takes most lawyers multiple tries to get Twitter and more than that to get comfortable using it. Hopefully, Giacalone will keep trying and figure it out eventually.

Northern District of Illinois Court & Clerk's Closings

david.donoghue@hklaw.com (R. David Donoghue) — Tue, 18 Nov 2008 05:07:39 -0600

As usual, the Northern District will be closed for both Thanksgiving Day and the Friday after, November 27 and 28. Additionally, the Clerk's office will close this Thursday, November 20 from 3:30-4:30 pm for a special meeting. The drop box and ECF filing will still be available, but if you want to file in person get there earlier in the day or after 4:30.

[UPDATE:] To those who have wondered, the more standard case analysis posts will be returning shortly -- likely late this week, but at least early next. I am working through procedures with my new shop.

CLE: Drafting & Negotiating Effective Settlement Agreements

david.donoghue@hklaw.com (R. David Donoghue) — Mon, 17 Nov 2008 04:40:30 -0600

This Thursday, November 20 at noon central time, I am presenting a one hour program audio conference on drafting and negotiating effective settlements. The program is not IP-specific, but will be very useful for IP lawyers and litigants, as well as general commercial litigators. I will focus on knowing your needs and those of your opponents, using relationship building to create an effective agreement built for long-term success, and tips for writing long-lasting, realistic agreements that fit the needs of the parties and the realities of their business operations. Click here to read more about the presentation, and here to register for it. The program's costs $199, although I understand you can invite as many people from your firm as you would like to participate on the call.

The program is being put on by the National Constitution Center, which hosts a regular series of CLE programs. For example, on Tuesday, November 25, the NCC is hosting a program entitled IP Issues In Business Transactions: What Every Lawyer Needs To Know. That program will be presented by Brian Kelly, a California-based IP licensing partner of Manatt, Phelps & Phillips.

Docket Navigator: Pacer on Steroids

david.donoghue@hklaw.com (R. David Donoghue) — Fri, 14 Nov 2008 04:46:48 -0600

Earlier this week I had the opportunity to speak with the folks at Docket Navigator about their powerful new patent docket database and search tool. I do not do many product reviews, but Docket Navigator's patent docket database really struck me. You may already know them from their free, daily email that aggregates new patent filings nationwide, as well as patent judgments, injunctions and selected patent decisions from courts across the country. If you do not get the newsletter, you should check it out.

I love the newsletter, but was surprised to learn that the newsletter is eclipsed by Docket Navigator's patent docket database and search tool. The search tool is currently in beta testing -- click here for a tour. But even while they are working the kinks out and adding functionality, it is impressive. The database includes dockets for every case going back to those that were active in mid-2007. From the database you can look at the docket and click on links to pdfs of significant decisions or papers. You can also search the database to find every case involving a selected patent or for statistics about the patent cases a particular judge has had. The judge pages include very specific information and statistics about how many and how that judge has decided numerous issues. For example, you can see how many patent case motions to transfer a judge has ruled on and how many were granted versus denied.

Docket Navigator has taken the information available to every lawyer and litigant on Pacer and turned it into a much more powerful tool. But there is one more feature that warrants special attention. Docket Navigator has searched all of the claim construction opinions in its database and come up with a database of 15,000 (and growing) construed claim terms. You can search the database for your terms and find decisions nationwide about them. It is an incredible resource for locating persuasive decisions and potential, new claim construction arguments.

IP-Centric Blawg Review

david.donoghue@hklaw.com (R. David Donoghue) — Thu, 13 Nov 2008 04:57:51 -0600

This week's Blawg Review #185 is up at Duncan Bucknell's IP Think Tank -- click here to read it. It will be no surprise to Bucknell's readers (including me) that his theme is global intellectual property. Of course, Bucknell focuses on the Bilski decision -- for example, IP Blawg and IP Spotlight. Bucknell also looks at some posts regarding how the changing administration will impact IP law, including two posts from Patent Docs (click here and here) and the IAM Blog.

R. David Donoghue Joins Holland & Knight

david.donoghue@hklaw.com (R. David Donoghue) — Wed, 12 Nov 2008 04:20:07 -0600

Earlier this week, I joined Holland & Knight as a partner in the litigation and intellectual property groups. What does that mean for the blog? Not much. You will notice an updated bio page, some changed branding and the comments have been turned off. Otherwise, I am still based in Chicago and you can expect the same focus on Northern District of Illinois IP issues and the same blog content.

So why am I telling you? Largely so that you will know where to reach me when you need to. And because I am excited about the move. The move holds great potential for my career and for my clients. And this is a good time to remind you that, per the disclaimers, nothing on this Blog should be construed as legal advice.

Post-Election IP News

david.donoghue@hklaw.com (R. David Donoghue) — Tue, 11 Nov 2008 04:42:59 -0600

Here are some interesting IP-related posts and because everyone (at least in Chicago) still seems to have last week's election on their minds, the first is election related:

The MTTLR Blog's Dorothy Eshelman has an interesting post on whether the use of debate clips by, among others, the candidates involved is fair use -- click here to read it. I agree with Eshelman's conclusion that it is probably not fair use. And I agree that debate footage should be dedicated to the public domain, at least on a limited basis. It would be an easy matter for debate commissions to require that for the privilege of filming the debate networks agree that their footage be available in the public domain so long as it is not used near in time to the debate itself (perhaps within an hour) and so long as clips are limited to no longer than a few minutes or one question and set of answers.
The MTTLR Blog's Sherri Nazarian looks at the application of the Computer Fraud and Abuse Act ("CFAA") to hacking VP candidate Sarah Palin's email and argues that the CFAA needs to be modernized -- click here to read the post. Nazarian explains that the email hacking was not enough to trigger the CFAA, enacted in 1984. Perhaps it is time to update the 24 year old CFAA to meet the massive changes in technology.

American Jury Project: Questionnaires, Deliberation Guidance and Time Limits

david.donoghue@hklaw.com (R. David Donoghue) — Mon, 10 Nov 2008 05:04:36 -0600

I previously described the high-level findings of the Seventh Circuit’s American Jury Project – click here for that post, including links to PDFs of the report and related documents. Having discussed the four Principles studied in Phase Two,* this post looks at the additional three Principles considered only during Phase One: juror questionnaires, deliberation guidance, and trial limits.

The Phase One study showed strong value in having potential jurors answer questionnaires prepared by the court and counsel before voir dire. It streamlined the voir dire process, preserving judicial resources and benefiting jurors who are not comfortable with public speaking. The Commission recommended using questionnaires. For much more on questionnaires and a great library of them, check out Anne Reed’s Deliberations blog – click here for Reed’s questionnaire library.

The Phase One analysis of adding deliberation guidance instructions was inconclusive. Judges in sixteen trials used the following instructions regarding picking a foreperson and deliberating:

A. Jury Instruction on the Role of the Presiding Juror:

You are free to deliberate in any way you decide or to select whomever you like as a foreperson. However, I am going to provide some general suggestions on the process to help you get started. When thinking about who should be foreperson, you may want to consider the role that the foreperson usually plays. The foreperson serving as the chairperson during the deliberations should ensure a complete discussion by all jurors who desire to speak before any vote. Each juror should have an opportunity to be heard on every issue and should be encouraged to participate. The foreperson should help facilitate the discussion and make sure everyone has a chance to say what they want to say.

B. Jury Instruction as to Suggestions for Conducting the Deliberations:

In order to help you determine the facts, you may want to consider discussing one claim at a time, and use my instructions to the jury as a guide to determine whether there is sufficient evidence to prove all the necessary legal elements for each claim or defense. I also suggest that any public votes on a verdict be delayed under everyone can have a chance to say what they think without worrying what others on the panel might think of their opinion. I also suggest that separate tasks (such as any note taking, time keeping, and recording votes) be assigned to more than one person to help break up the workload during your deliberations. I encourage you at all times to keep an open mind if you ever disagree or come to different conclusions on facts from any of your fellow jurors. Thinking about the other juror’s point of view may help you understand their position better or give you a better way to explain why you think your position is correct.

A strong majority of jurors believed they had to follow the judge’s instructions above. Guidelines that jurors believe to be rules are not good for the process, especially if an appellate court later decides the guidelines were somehow incorrect.

The Commission also suggested that judges explain the trial schedule to juries – whether they would be required to deliberate on weekends or late in the evening, etc. Generally, providing juries information helps the process and increases juror satisfaction. Having said that, my experience has been that, without any guidance, juries usually adopt reasonable schedules, starting at reasonable times, ending for the day between 5 or 6, and deliberating late or over a weekend when they feel close to a decision.

Finally, the Commission studied trial time limits in Phase One. Generally, judges were disinclined to set hard limits on trial time. My experience, however, is that most judges informally limit trial time and that those informal limits are fairly effective. Counsel do not want to upset judges by going over the limits, and jurors still get increased knowledge of their jury commitment without the extra cost of keeping exact time of trial for each side.

* For more on the Phase Two principles, click here (juror questions); here (preliminary jury instructions); here (12 person juries); and here (interim statements by counsel).

Questions of Fact re Alleged Enjoined Imitations Prevent Contempt

david.donoghue@hklaw.com (R. David Donoghue) — Fri, 07 Nov 2008 04:50:01 -0600

Liquid Dynamics Corp. v. Vaughan, No. 08 C 6934, Slip Op. (N.D. Ill. Oct. 20, 2008) (Conlon, J.).

Judge Conlon denied plaintiff's objections to the Magistrate's Report and Recommendations and denied plaintiff's contempt motion. In a prior case, a jury found plaintiff's patent valid and willfully infringed. The Court trebled plaintiff's damages, awarded plaintiff attorney's fees, and entered a permanent injunction preventing defendant from making, using or selling any of 47 mixing systems, or colorable imitations thereof, at issue in the case. Plaintiff brought a second case alleging infringement of 22 additional mixing systems and then filed a contempt motion arguing that the 22 new mixing systems were imitations of the original 47. After an extensive evidentiary hearing, the Magistrate found questions of fact as to whether the 22 mixing systems were colorable imitations of the enjoined systems and, therefore, denied the contempt motion. After a de novo review, the Court affirmed the Magistrate's Recommendation The 22 new mixing systems were not exact duplicates of the enjoined systems and there were questions of fact as to whether the differences were sufficiently minimal to make the new systems colorable imitations. The contempt motion was, therefore, denied, but the infringement case continued.

Patent Complaint Need Not Identify Specific Products

david.donoghue@hklaw.com (R. David Donoghue) — Thu, 06 Nov 2008 05:08:43 -0600

Edge Capture L.L.C. v. Lehman Bros. Holdings, Inc., No. 08 C 24112, Slip Op. (N.D. Ill. Aug. 28, 2008) (Darrah, J.).

Judge Darrah denied defendants' motion to dismiss plaintiffs' patent complaint and defendants' motion to bifurcate invalidity and enforceability from liability and damages issues. Plaintiffs' complaint was sufficient for the Fed. R. Civ. P. 8(a) notice pleading standards. It pled ownership of a patent to a trading system and infringement by defendants “by making, selling, and using [the device] embodying the patent.” (brackets in the opinion). Plaintiffs were not required to plead infringement by specific devices.

While the Court had broad discretion to bifurcate issues and to stay discovery on the bifurcated issues, it was not warranted in this case because defendants did not meet their burden of proof. While bifurcating would significantly speed resolution if defendants' invalidity or inequitable conduct arguments succeeded, bifurcation could significantly delay the case should defendants lose their invalidity and inequitable conduct arguments. Because defendants had not proven that they were likely to succeed, the Court denied the motion to bifurcate.