My colleague Dawn Rudenko Albert wrote a valuable article about the impact of the Brexit on IP rights. While it is not specifically about Chicago IP litigation, it answers questions that many Chicago IP litigants are asking. I am also cross-posting this on my Retail Patent Litigation Blog. Here is Dawn’s article:
Glacier Films (USA), Inc. v. Does 1-29, No. 16 C 4016, Slip Op. (N.D. Ill. Dec. 15, 2015) (Darrah, J.).
Judge Darrah denied Doe 7’s motion to quash plaintiff Glacier Films’ subpoena to third party Comcast, Doe 7’s alleged internet service provider (“ISP”) and motion to dismiss for improper joinder in this BitTorrent case regarding the motion picture American Heist.
The Court held as follows:
- Doe 7 could not challenge an undue burden for a subpoena directed to a third party because parties lack standing to challenge third party subpoenas based upon the burden to the third party. In this instance, Glacier Films’ subpoena allegedly required Comcast to produce at counsel’s office more than 100 miles from Comcast’s place of business.
- The Court would not quash the subpoena as a violation of Doe 7’s privacy. Because internet subscribers provide their identify to their ISP, they lack a reasonable expectation of privacy in that information. Furthermore, denials of liability are not a reason to quash subpoenas seeking defendant’s identity.
- Acknowledging the case law split regarding whether defendants must have been in the same swarm at the same time, as opposed to just in the same swarm regardless of time, the Court held that defendants need not have been in the swarm at the same time. The Court, therefore, denied Doe 7’s motion to dismiss.
DR Distribs., LLC v. 21st Century Smoking, Inc., No. 12 C 50324, Slip Op. (N.D. Ill. Dec. 15, 2015) (Johnston, Mag. J.).
Judge Johnston denied defendants’ motion to compel the deposition of plaintiff’s prior trademark prosecution counsel.
Citing the “goose-and-gander” and “same monks, same haircuts” rule, the Court sought to be consistent in its ruling across this case, as well as across the Court’s cases more generally, to the extent possible. The Court set a fact discovery deadline and, after extending it several times, warned the parties that it would not be extended further. The deposition at issue was originally scheduled during the discovery period, but the parties agreed to reschedule to an undetermined date after the close of discovery. Months later and after discovery closed, defendants sought to compel the deposition. The Court held that Fed. R. Civ. P. 16(b)(4) – requiring good cause to modify the Court’s scheduling order, as well as diligence – was not met in this instance. Defendants were not diligent in pursuing the deposition. They were aware of the deponent in at least March 2013. In March 2015, the Court extended discovery for the last time until July 2015, warning the parties further extensions would not be granted. Despite that warning, in late June 2015 the parties agreed amongst themselves to extend the deadline for the deposition at issue. Furthermore, the Court previously denied plaintiff’s motion to amend its affirmative defenses because plaintiff waited eight weeks before seeking to amend. The parties’ agreement was not effective pursuant to Rule 29 and defendants’ motion was not diligent pursuant to Rule 16(b)(4).
Bodum USA, Inc. v. Williams-Sonoma, Inc., No. 16 C 981, Slip Op. (N.D. Ill. Jun. 3, 2016) (Kendall, J.).
Judge Der-Yeghiayan granted defendant Williams-Sonoma’s 28 U.S.C. § 1404(a) motion to transfer the Lanham Act case to the Northern District of California.
The Court held as follows:
- Both the Northern District of California and the Northern District of Illinois were proper venues for the suit.
- The Court afforded Bodum’s choice of forum deference, but it was not a controlling factor. And it was given less weight because Bodum had no discernable connection to the Northern District of Illinois.
- Williams-Sonoma showed that a significant portion of the alleged conduct occurred in California. Additionally, Williams-Sonoma’s witnesses and documents were in California.
- Both courts can handle the Lanham Act claims. The only reason to proceed in Illinois would be for the benefit of Bodum’s counsel.
Victory Records, Inc. v. Kalnoky, No. 15 C 9180, Slip Op. (N.D. Ill. Jun. 8, 2016) (Zagel, J.).
Judge Zagel denied defendant Kalnoky’s Fed. R. Civ. P. 12(b)(6) motion to dismiss contract claims against him personally in this contract and copyright dispute regarding Kalnoky and the band Streetlight Manifesto. Kalnoky was a member of the band Streetlight Manifesto and, before that, Catch 22.
There were two contracts governing the relationship between plaintiff Victory Records and Kalnoky – a 2002 Agreement and a 2013 Amendment. The Court held that while the 2002 Agreement was ambiguous, Victory Records’ complaint was consistent with the agreement and the ambiguous terms of the 2002 Agreement were not properly resolved at the Rule 12 stage.
The 2013 Amendment, on the other hand, was not ambiguous. The 2013 Amendment established that Kalnoky is equivalent to defendant Streetlight Manifesto for purposes of the 2013 Amendment stating that Kalnoky was “professionally known as ‘Streetlight Manifestio.’” Additionally, Kalnoky was the sole individual to sign the 2013 Amendment on behalf of Streetlight Manifesto.
Based upon the above, the complaint states a claim for which relief could be granted: to the extent Kalnoky was individually bound to the 2002 Agreement by the 2013 Amendment, his 2011-15 activities as a solo artist under his own label were a breach of the exclusivity and copyright obligations because Kalnoky did not give Victory written notice of his solo projects.
Finally, Kalnoky’s claims that, even if he is bound, he did not breach the agreements because he did not refuse or fail to perform with Streetlight Manifesto. Because that argument requires facts beyond the complaint, it is not proper at the Rule 12 stage.
Trading Techs. Int’l, Inc. v. BCG Partners, Inc., No. 10 C 715, 716, 718, 720, 721, 726, 882-85, 929 & 931, Slip Op. (N.D. Ill. May 9, 2016) (Kendall, J.).
Judge Kendall granted defendants’ motion to stay plaintiff Trading Technologies’ (“TT”) patent case after institution of covered business method review (“CBM”) of claims from each asserted patent family in this case involving trading software.
The Court considered each of the four statutory factors, as follows:
- Simplification of the Issues: The Patent Office instituted CBMs involving six of the patents-in-suit which requires a determination that the instituted claims are more likely than not unpatentable. While the Patent Office had not yet ruled on CBM petitions for the remaining patents-in-suit, the potential that all of the asserted claims in six patents-in-suit could be terminated would simplify the issues in the case.
- Stage of the Litigation: While the case had been pending for six years and had undergone early summary judgment and a Federal Circuit appeal, the case was still in its early stages because of, among other things, the parties’ “numerous discovery conflicts.” While written discovery was underway, no depositions had been taken. Also, TT had sought to add additional patents and claims to the cases.
- Undue Prejudice/Tactical Advantage: The fact that TT and the defendants were competitors weighed against a stay, as did defendants several year delay in filing the CBM petitions. But TT’s decision not to seek a preliminary injunction weighed against a finding that it was prejudiced by a stay. And while a stay could result in some memory loss for individual witnesses, there was no reason to believe that any document discovery would be lost.
- Burden of Litigation: The Court held that the burden of litigation warranted a stay. Six of the twelve patents had CBMs instituted. Four more had CBM petitions pending and defendants stated that they intended to file CBM petitions regarding the remaining two patents. So, the litigation could at least be significantly reduced by the instituted CBMs and possibly entirely negated.
PSN Pharma, LLC v. Niazi, No. 14 C 6865, Slip Op. (N.D. Ill. Apr. 1, 2016) (Coleman, J.).
Judge Coleman granted declaratory judgment defendant’s (“Defendant”) Fed. R. Civ. P. 12(b) motion to dismiss for lack of subject matter jurisdiction after providing declaratory judgment plaintiffs (collectively “PSN Pharma”) a covenant not to sue on the patents at issue.
Defendant provided PSN Pharma with a broad covenant not to sue, protecting PSN Pharma from suit as to any claim of the patents in suit based upon PSN Pharma’s past, present or future products, including specifically identifying the accused products. Defendant’s covenant divested the Court of subject matter jurisdiction over the patent suit. The fact that the covenant did not establish Defendant’s ownership – which PSN Pharma disputed in the suit – was not sufficient to maintain the Court’s jurisdiction. The Court can only decide issues between the parties before it. So, whether or not another entity owned some or all of the patents, Defendant’s covenant resolved all disputed issues in this suit, regardless of who, or who else, owns the asserted patents.
Without any federal claims, the Court dismissed the state law claims without prejudice to refile them in state court.
Taurus Flavors, Inc. v. More Flavors, Inc., No. 15 C 265, Slip Op. (N.D. Ill. Apr. 20, 2016) (Alonso, J.).
Judge Alonso denied plaintiff Taurus Flavors’ motion for default judgment against More Flavors and the individual defendant More Flavors’ principal in this Lanham Act case.
The Court had previously defaulted both defendants for failure to respond to the complaint. But Taurus Flavors failed to provide the evidence necessary to show that the damages were either liquidated or ascertainable from definitive figures in the documentary evidence or affidavits. A hearing was, therefore, required to ascertain whether damages were appropriate and the amount of any award.
Injunctive relief was not warranted because Taurus Flavors offered no evidence that More Flavors continued its use of the allegedly infringed marks at the relevant location. And seizure of property to pay a damages award was not appropriate as no damages were awarded.
Finally, attorney’s fees were not warranted. As to the Lanham Act claim, Taurus Flavors offered no evidence of what made the case exceptional, as required by the Lanham Act for fees. And under Illinois law fees were only recoverable for dilution of a famous mark. Again, Taurus offered no proof of dilution.
Having denied to enter an award for Taurus Flavors, the Court set a status hearing to discuss next steps in the case.
Ariel Investments, LLC v. Ariel Capital Advisors, LLC, No. 15 C 3717, Slip Op. (N.D. Ill. May 16, 2016) (Kennelly, J.).
Judge Kennelly granted plaintiff Ariel Investments’ Fed. R. Civ. P. 12(b)(6) motion to dismiss defendant Ariel Capital’s fraud on the Patent & Trademark Office and abuse of process claims in this Lanham Act dispute involving Ariel Investment’s ARIEL federal trademark registration.
Ariel Capital’s fraud claim was not sufficiently pled because it did not include “any factual allegations describing the who, what, when, where or how of the alleged fraud.” Conclusory allegations, particularly those pled on information and belief were insufficient.
Ariel Capital’s abuse of process claim was not well pled because the misuse must be of a court process, not just a party’s pleadings. Ariel Capital’s did not claim that Ariel Investment misused a court process, such as service of process. Instead, the allegations were merely focused upon Ariel Investment’s allegations, which could not make an abuse of process claim.
Nalco Co. v. Chem-Mod, LLC, No. 14 C 2510, Slip Op. (N.D. Ill. Oct. 15, 2015) (Darrah, J.).
Judge Darrah granted defendants’ motion to dismiss defendants’ motion to dismiss plaintiff Nalco’s Third Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6) in this patent case involving a method for reducing mercury emission from flue gasses created during coal combustion.
As an initial matter, the Court held that Nalco’s arguments that defendants’ Section 45 tax credits – obtained for selling refined coal – did not sufficiently prove defendants’ direct infringement or control.
Defendants argued that their accused Chem-Mod Solution could not meet the patent’s “injection” requirement. Nalco countered that defendants’ argument required claim construction that was premature at the Rule 12 stage. The Court held that Nalco had not sufficiently pled infringement because no construction could make the Chem-Mod Solution meet the patent’s “injection” requirement. Furthermore, Nalco failed to allege that defendants were responsible for preparing the Chem-Mod Solution mixture and injected the coal.
The Court also dismissed Nalco’s indirect infringement claim because Nalco had not sufficiently pled direct infringement and because Nalco did not plead any facts supporting that the accused solutions lacked substantial non-infringing uses.