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Modifying the Innovation Act to Selectively Target the Patent Troll Problem

Posted in Legal News

The following is a blog post by Varun Shah, Aruba Network’s Director, Intellectual Property — full disclosure, I previously represented Aruba.  Shah has an interesting alternative patent reform proposal that seeks to target the patent troll problem.  It is interesting because it is under-inclusive.  On the one hand, that is less than ideal because it does not cover all trolls (or at least all entities that are arguably trolls).  On the other hand, it is intriguing because by being under-inclusive it minimizes the impact of the legislation outside of the troll world, which may make it easier to get it a vote in both houses of Congress.  Additionally, while Shah’s discussion focuses largely upon creating a heightened pleading requirement for a subset of patent troll cases, using the same definition of a potential troll, other requirements could be added to the legislation, for example fee awards or discovery limitations, as Shah notes.  So, while Shah’s proposal is not perfect, it is an interesting proposal and is, at a minimum, positive in that it is creating new discussion around patent reform.

With that, here are Shah’s thoughts: 

The Innovation Act was a great attempt at reducing the patent troll problem for the Information Technology industry. For example, the Innovation Act proposed regulating patent litigation practice by increasing pleading standards, placing limitations on patent discovery, and providing cost-shifting mechanisms. However, the Innovation Act is now stalled in Congress, in part, due to the rejection by the Pharmaceutical and Biotech industries of the new proposed regulations such as the limitations on discovery. A solution is needed that reduces the patent troll problem for the Information Technology industry while balancing the needs of the Pharmaceutical and Biotech industries.

I propose modifying the Innovation Act to limit discovery only if the current patent owner is not one of:

  1. The inventor
  2. The assignee, including subsidiaries and parent companies thereof, to whom the inventor was obligated to assign to at the time of filing an application for the patent
  3. An acquiring entity that acquired the patent in a sale of an established line of business originated by (a) or (b), the sale including all trademarks, copyrights, and patents related to the established line of business.

Additional criteria for qualifying as a sale of an established line of business (such as a minimum annual revenue for the established line of business) may be needed in order to ensure that patents are not held in shell entities for selling of patents to third parties and designing around this proposal.

Similar to the limited discovery example above, other sections of the Innovation Act may be considered for modification such that the rights and requirements related to patent assertion activities depend on whether or not the current patent owner is one of (a), (b), or (c) identified above.

This proposal reduces the patent troll problem for the Information Technology industry without reducing the patent assertion rights for the original patent Applicant. More generally, this proposal will protect the interests of all innovators that actually generate the ideas/patents while partially diluting the value of the patents if commoditized and transferred to others that are abusing and burdening the patent system. This re-structuring of patent value is in-line with the true goals of the patent system, i.e., the promotion of innovation.

— — — —

Mr. Shah is actively discussing the proposal with bill writers in Representative Goodlatte’s office to modify the Innovation Act.  If you are in support of the proposal, Mr. Shah suggests contacting the key policymakers: Representative Goodlatte, Senator Reid, Senator Leahy, Senator Cornyn, Senator Schumer, and the White House Office of Science and Technology Policy (OSTP).

2013 PWC Patent Litigation Study: N.D. Illinois Remains a Key Patent District

Posted in Legal News

PWC has published the latest installment in its excellent yearly patent litigation survey.  This year’s survey looks at data for every year from 1995 through 2012.  One interesting aspect of this year’s study was a focus upon individual districts and judges.  Here are some of the key takeaways regarding the Northern District:

  • The Northern District (a top five patent district in terms of number of filings) is the fifteenth fastest district to trial with 35 cases going to trial during the period (1995-2012) in a median time of 3.67 years.  That is relatively slow as compared to the Eastern District of Virginia’s .97 years mediation or the Western District of Wisconsin’s 1.07 years.  But those times to trial do not take into account the number of trials — 32 for the Northern District, 22 for Virginia and 10 for Wisconsin — nor do they consider the relative complexity of those cases. 
  • In those trials, plaintiff’s have a 24.8% success rate with median damages of almost $5.9M.  That puts the Northern District 8th in terms of largest median damages awarded, and 13th in plaintiff’s success rate.
  • The Northern District is 2nd in terms of number of reported NPE decisions with 32 decisions and 133 total patent decisions.  In those decisions, the NPEs’ success rate was 12.5%.
  • The Northern District is also the 4th district in ANDA filings with twelve.

The PWC study also looks at individual judges, with Northern District judges ranking high in all categories:

  • Judge Darrah was the 11th judge nationwide in terms of patent decisions with 10 total.  Plaintiffs’ success rate was 10% on those decisions.  Seven of the ten decisions were summary judgment decisions.  Judge Darrah is ranked 8th for summary judgment decisions nationwide with seven decisions and a 0% success rates for plaintiffs.
  • Judge Kendall was 18th with nine decisions (88.9% were summary judgment decisions).  Kendall had an 11.1% success rate for plaintiffs.  Judge Kendall is ranked 6th for summary judgment decisions nationwide with eight decisions and a 12.5% success rates for plaintiffs.
  • Judge Bucklo was 21st with eight decisions (62.5% were summary judgment decisions).  Bucklo had a 50% success rate for plaintiffs.  Judge Bucklo is ranked 24th for summary judgment decisions nationwide with five decisions and a 20% success rates for plaintiffs.
  • Judge Guzman was 34th with seven decisions (71.4% were summary judgment decisions) with a 14.3% success rate for plaintiffs.  Judge Guzman is ranked 26th for summary judgment decisions nationwide with five decisions and a 20% success rates for plaintiffs.
  • Judge Zagel was 35th with six decisions (66.7% were summary judgment decisions) with a 66.7% success rate for plaintiffs.  Judge Zagel is ranked 36th for summary judgment decisions nationwide with four decisions and a 50% success rates for plaintiffs.
  • Judge St. Eve was 41st with six decisions (83.3% were summary judgment decisions) with a 16.7% success rate for plaintiffs.  Judge St. Eve is ranked 35th for summary judgment decisions nationwide with five decisions and a 0% success rates for plaintiffs.
  • Judge Kennelly is ranked 31st for summary judgment decisions nationwide with five decisions and a 0% success rates for plaintiffs.

The judge-by-judge statistics are interesting, but because of the relatively low number of decisions and the relatively simple statistics offered, they likely do not tell us much.  It is hard to draw many clear conclusions from sample sets of, in most cases, four to six summary judgment decisions spaced over years with varied parties and circumstances. It is also curious that Judge Pallmeyer did not make any of the lists, although she has been on a number of lists as one of the busiest patent judges in the nation over the almost seven years that I have been writing this blog.

Northern District Releases Mobile App

Posted in Legal News

The Northern District has released a mobile app — click here to download it.  My initial suspicion was that it would not add much value beyond the Court’s mobile website, but I have been proven wrong.  The app is intuitive and seems faster to load then the mobile site.  It also provides fast access to the key information you want in a mobile app, like the daily call and the judges’ individual procedures.  I highly recommend that you try it out if you practice regularly in the Northern District.

The State of the Northern District Remains “Good”

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Chief Judge Holderman offered his final State of the Court speech last month.  Judge Castillo takes over as Chief Judge July 1, 2013.  Here are the highlights from the address:

  • “Filings are up and funding is down.”  While the state of the court is good, prposped further budget cuts and reduced funding may force reduced services in the future.
  • For the fifth year in a row, overall civil filings were up .
  • Jury trials dropped, going from 177 in 2011 to 168 in 2012.
  • The combined jury trials for 2011 and 2012, however, are the largest number of trials in any two year period as far back as court records go.
  • Patent filings increased from 239 in 2011 to 247 in 2012..  This continued a trend of increased patent filings in every year since the Northern District instiuted its Local Patent Rules in 2009.
  • The Northern District remains in the top 10% of courts in terms of median time to disposition — 6.5 months for civil cases.
  • The Northern District avoided the expected furloughs by not filling staff vacancies.  The Clerk’s office is down to two-thirds of its allocated staff.  Probation Department personnel may face three day furloughs because of fudning issues in that unit.
  • Three new Article III judge joined the Court — Judges Durkin, Lee and Tharp.
  • The Eastern Division added two magistrates — Magistrate Judges Rowland and Martin.
  • The Western Division added Magistrate Judge Johnston.
  • The Northern District has four judicial vacancies.

Nominations Open for Northern District Excellence in Pro Bono and Public Interest Service Awards

Posted in Legal News

The Northern District and the Chicago Chapter of the Federal Bar Association are seeking nominations (by April 11, 2013) for attorneys who have provided outstanding pro bono and public interest representation in civil and criminal matters before the Northern District that are complete and no longer pending. In the words of the Northern District:

The nominee should be someone who has demonstrated excellence in commitment to pro bono or public interest work by handling a matter in this district as a court-appointed attorney, pro bono attorney, or staff attorney for a not‑for‑profit agency, representing an indigent party in a civil or criminal matter.

Factors include:

  • dedication to pro bono or public interest work, outstanding achievement resulting from the representation of a large group of indigents;
  • successful representation in a difficult case;
  • outstanding negotiation and settlement skills in achieving a result without trial;
  • extraordinary number of hours committed to pro bono work; and
  • other distinguished performance.  

Click Here for the nomination form.  Send your nominations via e-mail to: ProBono_ILND@ilnd.uscourts.gov.  For any questions contact:

Chambers of Chief Judge James F. Holderman
2548 Dirksen Courthouse
219 South Dearborn Street
Chicago, Illinois 60604
Telephone: 312-435-5600 

Call for Nominations for IPLAC’s Creative Achievement Award

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The Intellectual Property Law Association of Chicago (IPLAC) is accepting nominations for its annual Creator of the Year Award honoring creative achievements in the Chicago metropolitan area. The Award recognizes the people or companies behind the creative works in areas protected by intellectual property law, including (1) patented inventions; (2) marketing and branding activities protected by trademark law, and (3) creative works of art, music and literature protected by copyright law. There is no time limit for the nominee’s creative work underlying the nomination. Nominees may include individuals as well as groups of individuals and corporations, and need not be the current owner of the corresponding intellectual property right. Most or all of the creative activity must have occurred in the Chicago metropolitan area.

Nomination deadline: March 15, 2013

Nomination forms are available on the IPLAC website or from Paul Korniczky, Chair, Creative Achievement Award Committee

Article One’s Monica Winghart Discusses the AIA’s New Post-Grant Review & Inter Partes Review Procedures

Posted in Legal News

The following is a summary of an interview I conducted with Monica Winghart, Article One’s Executive Vice President and General Counsel, about the impact of the new America Invents Act (“AIA”) provisions that went into effect on September 16.  Ms. Winghart has more than 15 years of intellectual property experience.  Prior to joining Article One, she was Senior Corporate Counsel for The Clorox Company, where she was Director of IP litigation, responsible for patent clearance and portfolio management, lead counsel for the three of the company’s largest business units, and a part of Clorox’s M&A, licensing and transactions teams.  

Here are the highlights:

Inter Partes Review (“IPR”)

  • The new IPR and post-grant review procedures are “game changing.” They collectively create more “touch points for the PTO & the public to assess the invention over the state of the art than ever before in US patent history.”
  • The cost of applying for IPR is significant, but relative to litigation, the fees are not extreme. There will be some sticker shock for companies, and IPR for entire patent families may be cost-prohibitive. But IPR should be a valid litigation alternative in many cases.
  • Additionally, the increased scope of prior art that will be considered in IPRs is a positive step.
  • The certainty of timing is also an important improvement in the IPR system. Having a reexamination decision within a year in most cases will be a significant draw for companies.
  • Overall, the key positive of the IPR rules is the ability to “bring your case” and have the “experts at the patent office . . . really consider your invalidity arguments on the merits” to determine whether or not it is novel. 
  • Winghart is “almost always pleased with the examiners assigned” to cases she has been involved in. The examiners are “tested and vetted” and develop expertise in the area. 
  • Winghart acknowledges that we will need the first patents that undergo IPR to be “guinea pigs” to see what level of quality comes out of IPR, but is “excited about the possibility of what could be.” 
  • The increased IPR standard — “reasonable likelihood to prevail on at least one claim” instead of “substantial question of patent validity” — has the potential to “open the door” to more challenges.

 Post-Grant Review (“PGR”) 

  • The PGR’s nine-month window to file after a patent issues and the consolidation of multiple PGR’s is significant. Winghart “wish[es] we could do it in IPRs.” 
  • The nine-month window “makes people make a decision and harmonizes to European opposition proceedings.” 
  • The PGR’s required speed – the PTO must respond within 3 months of the patentee’s statement – is a significant benefit: “Within one year you will understand the challenge to your patent.” 
  • Winghart has some concerns about the ability to settle and stop either a PGR or an IPR: “there is a little bit of a tension between the settlement piece and the ultimate goal of determining patent quality.” That is interesting in that the flexibility to settle a case after filing a PGR or an IPR is a key enticement to many companies.


State of the N.D. Illinois is “Good”

Posted in Legal News

Chief Judge Holderman recently gave the Northern District’s annual state of the court address.  The address led with a moment of silence for the late Judge Hibbler.  Pronouncing the state of the Court “good,” Holderman addressed existing vacancies on the bench:

  • There were five vacancies on the bench but two are being filled by new Judges Lee and Tharp, confirmed in May.
  • Magistrate Judges Nolan and Denlow are retiring, both effective October 1, 2012.  The Court is reviewing applications to fill those upcoming vacancies.

The Court is also getting busier:

  • Civil case filings increased 8.2% in 2011 to 9,652 cases.
  • Civil jury trials increased 51% to 127 in 2011.  From 2009 to 2011, civil jury trials increased 160%.
  • The N.D. Illinois remains in the top 10% of districts in efficiency of resolving civil cases, with a median disposition time of 6.6 months.

The Court Clerk is investigating ways to make the Court’s website even more useful  And the Court continues its participation in two pilot programs:

  1. Cameras in the Courtroom; and
  2. Patent Pilot Program.

Finally, the Court’s judges currently preside over more than 60 multi-district litigation cases.

America Invents Act: The More Things Change, the More They Stay the Same

Posted in Legal News

The following article was written for my Retail Patent Litigation Blog, and it is just as relevant for Chicago readers.  So, I am reprinting it here with minor, Chicago-specific revisions.

BNA has an interesting article by James Pistorino of Perkins Coie and Susan Crane looking at the impact of the America Invents Act (“AIA”) on district court patent litigation filings.  The article looks at 2011 data, only one quarter of which is after enactment of the AIA.  But even a quarter’s data tells a clear story:

  • Delaware leap frogs the E.D. Texas as the district of choice for patent plaintiffs with nearly 50% more filings than the E.D. Texas.
  • The number of defendants per case has dropped significantly in almost every district, with the E.D. Texas as a notable exception.
  • The number of total defendants sued appears to be remaining relatively steady.

This early data suggests exactly what we expected.  Overall, the AIA did not control patent litigation filings, but it did reduce average case size and shift venue.  The big question from the study is “why Delaware?”  Here are some key reasons:

  • Retirement and new judges on the E.D. Texas have increased uncertainty and time to trial in the E.D. Texas, for both plaintiffs and defendants.
  • In contrast, Delaware’s bench has remained consistent, and is also experienced with patent litigation.
  • A recent transfer denied by Delaware Judge Robinson noted that defendants incorporated in Delaware (as so many are) cannot “complain” about being sued in Delaware.
  • While Delaware is not a rocket docket and lacks local patent rules, Delaware is relatively fast and has strong local patent customs with each judge.

Additionally, it is worth noting that the AIA has had little impact on the rest of the top five patent litigation districts – C.D. California, N.D. California and N.D. Illinois.

Rest in Peace Judge Ashman

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This morning, the Northern District lost a great judge when Judge Ashman passed away at the age of 81.  Judge Ashman retired in 2009 and then was recalled, continuing to serve as a magistrate judge until he passed away.  Chief Judge Holderman had some particularly kind words about Judge Ashman in the Court’s statement today:

Marty was an outstanding jurist, a warm, gregarious human being, a tremendous mentor to younger judges, a true gentleman, and a wonderful colleague. We will miss him greatly and our hearts go out to his entire family.

I will personally miss him and the warm friendship we shared during our years together on the bench.

Patent Act Does Not Preempt Patent-Related Lanham Act Claims

Posted in Legal News

GL Trade Ams., Inc. v. Trading Techs. Int’l., Inc., No. 11 C 1558, Slip Op. (N.D. Ill. Jan. 23, 2012) (Holderman, C. J.).

Judge Holderman granted defendant Trading Technologies’ (“TT”) Fed. R. Civ. P. 12(b)(6) and 9(b) motion to dismiss plaintiff GL Trade’s false advertising, unfair competition and deceptive trade practices case alleging that TT misrepresented the scope of its patents. Initially, GL Trade’s Lanham Act false advertising and unfair competition claims were not preempted by patent law. The Federal Circuit held that Lanham Act unfair competition claims based upon marketplace statements were not preempted because the Lanham Act claim required a showing of bad faith. And the allegedly false patent markings were marketplace statements. As a matter of law, TT’s actions could not have been bad faith, although what constitutes bad faith in patent-related communications was “somewhat nebulous.” TT’s belief that the marked products read on the marked patents was legally plausible. GL Trade, therefore, could not have acted in bad faith. Similarly, it was legally plausible for TT to believe that it could mark covered products even when they were not being used in a patented way.

N.D. Illinois Seeks Nomination for Pro Bono Excellence Awards

Posted in Legal News

In advance of the Northern District’s Thirteenth Annual Awards for Excellence in Pro Bono and Public Interest Service in May 18, 2012, the Court is seeking nominations for the pro bono awards.  Nominations must be submitted no later than this Thursday, April 12.

Here is the Court’s description of nomination and judging criteria:

  • The nominee should be someone who has demonstrated excellence in commitment to pro bono or public interest work by handling a matter in this district as a court-appointed attorney, pro bono attorney, or staff attorney for a not-for-profit agency, representing an indigent party in a civil or criminal matter.

Factors to be considered in the selection of the nominee include: dedication to pro bono or public interest work, outstanding achievement resulting from the representation of a large group of indigents, successful representation in a difficult case, outstanding negotiation and settlement skills in achieving a result without trial, extraordinary number of hours committed to pro bono work, or other distinguished performance.  All pro bono and public interest work considered must be work performed in this court in civil or criminal matters on cases that are now completed and no longer pending.

Please submit your nominations on or before April 12, 2012, using the form (Click Here) and including a brief summary of the reasons why you think that this person has performed outstanding pro bono or public interest work.

Please send your nominations via e-mail to: probono_ilnd@ilnd.uscourts.gov.

Rest in Peace Judge Hibbler

Posted in Legal News

On Monday morning, the Northern District lost a great judge and a better man when Judge Hibbler unexpectedly passed away at the age of 65.  Chief Judge Holderman issued a touching statement and the Tribune ran a strong obituary.  The following quotes from those two documents explain Judge Hibbler’s importance to the Northern District of Illinois both legally and personally:

  • Chief Judge Holderman:  “Bill was an outstanding jurist, a warm and personable human being, a true gentleman, and a wonderful colleague. We will miss him greatly, and our hearts go out to his entire family.”
  • Judge Ann Claire Williams (7th Cir.):  “He was a man of such warmth, compassion and depth that when word spread of his passing there was so many sad faces around the courthouse . . . . He had such a strong sense of fairness. He connected with people from all walks of life.”
  • U.S. Attorney Patrick Fitzgerald:  “He was a wonderful judge and wonderful person, who treated everyone who appeared before him with great respect.”

Judge Hibbler will be missed by those of us that had the opportunity to practice before him.  My condolences go out to the Hibbler family and all of his friends and colleagues at the Northern District.

Reconsideration Motion Denied After Careful Consideration

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

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

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

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

No Injunction Where Products Are Sold in Different Channels

Posted in Legal News

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

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

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

“Conclusory” Arguments are Fatal to Preliminary Injunction

Posted in Legal News

EnVerve, Inc. v. Unger Meat Co., No 11 C. 472, Slip Op. (N.D. Ill. Apr. 26, 2011) (Castillo, J.).

Judge Castillo denied plaintiff EnVerve’s motion for preliminary injunction in this copyright infringement action involving advertisements. The Court first held that EnVerve had only shown a minimal likelihood of success on the merits:

  • EnVerve’s arguments were "very conclusory" and that "brevity [was] fatal."
  • There was a significant dispute regarding who owned the copyrights based upon a contract between the parties. 
  • EnVerve’s evidence of copying was an unsupported conclusion that defendant use constituted copying.

  • EnVerve failed to address defendant’s best argument – that EnVerve’s claim sounded in contract, not copyright. 

The Court also held that there was no irreparable harm:

  • Money damages were an adequate remedy and were readily calculable based upon the contract, EnVerve’s invoices and defendant’s payments.
  • EnVerve’s claims are reputational harm and defendant’s potential insolvency were too speculative to be considered irreparable harm.

Preliminary Injunction Not Warranted for Unenforceable Non-Compete Clause

Posted in Legal News

Peerless Indus., Inc. v. Crimson AV, LLC, No. 11 C 1768, Slip Op. (N.D. Ill. Jun. 10, 2011) (Lefkow, J.).

Judge Lefkow denied plaintiff Peerless’ motion for a preliminary injunction in this patent and tortious interference case involving audio-visual mount equipment. Peerless had a manufacturing agreement with Sycamore Manufacturing ("Sycamore") which was terminated no later than March 2010. The agreement included a non-compete clause that prevented Sycamore from selling the products it made for Peerless or any similar products, with a very broad definition of similarity. After the March 2010 termination and before the end of the non-compete term, in March 2011, Sycamore began selling similar products to defendant Crimson. The Court held that Peerless had "negligible" likelihood of success because the non-compete clause was likely unenforceable because it was broader than necessary to protect Peerless’ interests. The scope of similar products was far too broad. The scope should have been limited to substantially similar products. Additionally, the definition of similar products was "unworkably difficult to determine."

Peerless also could not show irreparable harm. As an initial matter, the non-compete term had ended before the date this Opinion issued. An injunction barring Crimson from selling product the agreement now allowed it to sell would have improperly extended the term of the non-compete. Additionally, because the alleged unauthorized sales were complete, the damages were readily quantifiable.

Attempts to Resolve Dispute Do Not Prevent a Preliminary Injunction

Posted in Legal News

Flava Works, Inc. v. Gunter d/b/a myVidster.com, No. 10 C 6517, Slip Op. (N.D. Ill. Jul. 27, 2011) (Grady, J.).

Judge Grady granted plaintiff Flava Works’ motion for a preliminary injunction in this copyright case involving adult movies, and ordered the parties to confer on language for the preliminary injunction. Defendants’ myVidster website is a "social video bookmarking" site which allows users to post or link to video content. When a user posts or links to the content, myVidster crawls the website hosting the video to gather data about the video, creates a thumbnail image of the video and embeds the video on the myVidster site.

Likelihood of Success

The Court held that there was a likelihood of success on at least Flava Works’ contributory copyright infringement claim. It could not be "seriously disputed" that third parties have directly infringed Flava Work’s works by posting video content on myVidster. And defendants knew or should have known about the infringement based upon Flava Works’ seven DMCA take down notices outlining instances of the infringement to defendants. In fact, the email exchanges surrounding the notices show that defendants were not cooperative in addressing the notices. And myVidster’s repeat infringer policy was the "epitome" of willful blindness. Furthermore, there was significant evidence that defendants encouraged the infringement. For example, myVidster encouraged sharing of video content without warning of potential copyright infringement issues.

Defendants were not protected by the DMCA’s safe harbor provision. A threshold requirement for safe harbor is that a party adopt and reasonably implement a policy providing for termination of users that are repeat infringers. Defendants policy did not require or directly provide for termination of repeat infringers. And defendants did not consider copyright infringement to be part of the defintion of "infringer."

Irreparable Harm

Defendants failed to rebut the presumption of irreparable harm in copyright cases. Flava Works’ did not delay in bringing the suit and then the injunction motion. Prior to filing suit, Flava Works attempted to resolve the issue with several DMCA take down notices and the Court would not penalize Flava Works for attempting to avoid litigation.

CLE: Ethics of E-Discovery

Posted in Legal News

The Seventh Circuit Electronic Discovery Pilot Program and Wilson Elser are offering a CLE program entitled Ethics of E-Discovery on November 30, 2011 from 12:00-1:30 pm ct.  The program will explore ethical issues in e-discovery, a critical issue for all IP litigants.  Registration is limited to the first 3,000 participants.  So, register quickly.

The program is offering 1.5 ethics credits in a number of states, including Illinois, and looks to be excellent.  Panelists include:

  • Cinthia Motley of Wilson Elser (moderator);
  • Magistrate Judge Mark J. Dinsmore (S.D. Indiana);
  • Debra Bernard of Perkins Coie;
  • Timothy Chorvat of Jenner & Block; and
  • Rachel Lei of GATX Corporation.

Here is what the program promises to cover:

  • What are your ethical duties regarding preservation of Electronically Stored Information (ESI) and what triggers those duties? Does it matter if you are “only” outside counsel?
  • What ethical considerations are at play when you are searching for and producing ESI? What if you know proposed search terms will yield no results? Must you speak up?
  • To what extent does metadata pose ethical issues?
  • What if you inadvertently produce privileged information? Do you need a clawback or will the rules protect you?
  • What about contract attorneys? What is the scope your ethical obligation to supervise?

Case Split Based Upon Differing Forum Selection Clauses

Posted in Legal News

Moran Indus. Inc. v. Baker, No. 10 C 7653, Slip Op. (N.D. Ill. May 27, 2011) (Hibbler, Sen. J.).

Judge Hibbler granted in part defendant’s motion to dismiss and transfer in this Lanham Act case over Mr. Transmission and Meineke Car Care Center marks. Defendant allegedly violated franchise agreements with plaintiff Moran and plaintiff Meineke by using both plaintiffs’ trademarks at defendants’ auto repair shop. Moran’s franchise agreement had an exclusive jurisdiction provision requiring cases be brought in the Northern District of Illinois. So, Moran’s claims were not dismissed. Meineke’s agreement, however, had no such exclusive provision. So, Meineke’s claims were dismissed for lack of personal jurisdiction.

Northern District of Illinois Patent Program Begins

Posted in Legal News

The patent pilot program started this month in the Northern District and across the country.  The pilot program is a ten-year look at ways to handle patent cases more effectively.  The main component of the pilot program is judges in pilot districts, including the Northern District, self-selecting as patent judges.  Patent cases will continue to be randomly assigned to all Northern District judges.  But when a non-patent judge is assigned a patent case that judge will have thirty days to order reassignment of the case.  When reassignment is ordered, the case will be randomly reassigned to one of the patent judges.  There will also be patent-related education and programs offered for the patent judges across the country. 

One unanswered question about the pilot program remains:  If a non-patent judge was assigned a patent case less than thirty days before the program kicked off on September 19, can the non-patent judge order the patent case reassigned pursuant to the pilot program?  I have not seen it happen yet, but I suspect it could over the next week or two.

The Northern District issued the following list of judges who have self-selected as patent judges:

  • Chief Judge James F. Holderman

  • Judge Ruben Castillo
  • Judge John W. Darrah
  • Judge Gary S. Feinerman
  • Judge Virginia Kendall
  • Judge Matthew F. Kennelly
  • Judge Joan Humphrey Lefkow
  • Judge Rebecca R. Pallmeyer
  • Judge Amy J. St. Eve
  • Judge James B. Zagel
  • 4 Key Provisions of the Patent Reform Act for Patent Litigators

    Posted in Legal News

    The patent blogs are abuzz with detailed analysis of cloture votes, yesterday’s Senate hearings and the Senate’s overwhelming passage of the America Invents Act ( the "AIA").  With the AIA expected to be signed by President Obama in the next few weeks, I am beginning a series of posts looking at its key provisions. This is the first of those posts.  It is based upon a post from earlier this week at my Retail Patent Litigation Blog.

    Here are four key provisions of the AIA for patent litigators and litigants:

    1. Smaller Patent Troll Suits: The most immediate impact on patent litigation will be Section 19, limiting joinder in a single suit of unrelated parties. This is not the more extreme restrictions on venue or joinder that many had hoped for. But it will have some positive impact on patent troll litigation. For suits filed on or after the date of enactment, plaintiffs will only be able to join related parties in a single suit — for example, multiple manufacturers, distributors or resellers of an identical product. And while cases against unrelated parties could still be joined for discovery, they will not be able to be joined for trial. At first glance, this is not much of a barrier to entry for patent trolls. Very few defendants get to trial, and cases may still be consolidated for discovery purposes at the court’s discretion. Where a troll today could pay one $350 filing fee and sue 100 unrelated defendants, after enactment that same troll would have to file 100 suits and pay $35,000 in filing fees. $35,000, however, is dwarfed by the settlement demands in many cases. The hassle of filing the extra suits and the related filing fees, however, may be enough to prevent suits against some of the much smaller entities that almost always end up in these suits. And the requirement of separate suits will allow defendants a much greater ability to seek transfer to an appropriate venue. So, while this is not the sea change that many sought, it is a real benefit to retailers who are tired of being sued in Texas and want a better shot at transferring cases. This Section only applies to cases filed after enactment, not pending cases. So, existing cases will not be impacted.
    2. Post-Grant Review: The AIA establishes a brief window for post-grant and inter partes review in Section 6. Third parties may challenge the validity of any claim of a patent for nine months after a patent is granted or issuance of a reissued patent. But you cannot seek post-grant review after filing a suit involving the patent. And when post-grant review ends in a final Board decision, you give up the right to use the arguments used in post-grant review or arguments that could reasonably have been used, in a later ITC proceeding or district court litigation.
    3. False Marking Restrictions: Private citizens that file false marking claims will be required to prove competitive injury and their damages will be limited to the injury. Additionally, Section 16(b) excludes marking with an expired patent from the false marking statute. Furthermore, Section 16 applies to all cases pending when the AIA is enacted, as well as cases filed thereafter. Section 16 will clear out many of the existing false marking cases, but leaves considerable room for competitor false marking cases.
    4. First to Invent: One of the most publicized changes to the U.S. patent laws is the move to a first-to-file patent system, the system used by most of the rest of the world. The first-to-file system incentivizes filing patents as quickly as possible to avoid an earlier filing by a competitor. Section 3 softens the first-to-file system providing for a proceeding between patent owners if the junior patent holder can show that the senior patent holder’s invention was derived from the junior patent holder’s invention. These "derivation proceedings" will replace the current, seldom-used interferences.

    Of course, there is much more to the AIA, but these key changes are a good way to start digging into it. If there are other provisions you view as on par with these four from a litigation perspective, I would love to hear about them. Future posts will look at some of the other provisions of the AIA.

    Patent Reform Passes the Senate

    Posted in Legal News

    The Senate passed the America Invents Act (the "AIA") this evening without amendment.  So, patent reform is headed to the White House where President Obama is expected to sign the AIA into law within the next two weeks.  Here is a link to the AIA.  I will begin a series of posts discussing key provisions of the AIA tomorrow.

    Kanye West’s “Stronger” Did Not Infringe Based Upon “Fragmented Literal Similarity”

    Posted in Legal News

    Peters, p/k/a Vince P. v. Kanye West, No. 10 C 3951, Slip Op. (N.D. Ill. Mar. 3, 2011) (Kendall, J.).

    Judge Kendall granted defendants’ (collectively "Kanye West") Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Vince P’s copyright infringement claim. Vince P alleged that Kanye West copied Vince P’s 2006 song "Stronger" when Kanye West released his 2007 song "Stronger." Vince P sufficiently pled ownership of a registered copyright. So, the issue was whether Vince P sufficiently pled copying. As an initial matter, Vince P sufficiently pled access to Vince P’s work by alleging that Vince P shared his song with Kanye West’s "close friend, advisor and business associate" John Monopoly.

    The Court then considered whether the allegedly copied elements of Vince P’s song were copyrightable:

    • Title — Titles by themselves are not copyrightable.
    • Kate Moss — A reference to Kate Moss in each song was an unprotectable fact.
    • Hook — The use of the maxim "that which does not kill us makes us stronger" was not protectable because it was not original to Vince P. And the use of "wronger" in each hook was not protectable because while it was a unique word, it was actually part of a rhyme scheme with "longer" and common rhyme schemes are not protectable.

    The combination of the above elements was not used in its entirety or in a nearly identical way. Therefore, the combination was not protectable.

    Finally, the two songs did not display "fragmented literal similarity." That doctrine, recognized in other circuits, allows for infringement where a smaller fragment of a work is literally copied, but not the entire work. The similarities between the two Stronger songs, however, did not even rise to the level of fragmented literal similarity. Among other reasons the allegedly copied fragments were not integral parts of the copyrighted work.

    Because there was no substantial similarity between the two songs, the Court dismissed the copyright infringement claim.