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Chicago IP Litigation

Tracking Northern District of Illinois IP Cases

Fine Levied for Failing to Serve Courtesy Copies

Posted in Local Rules

Sonic Industry, LLC v. iRobot Corp., No. 13 C 9251, Slip Op. (N.D. Ill. Jan. 14, 2014) (Shadur, Sen. J.).

Judge Shadur sua sponte fined plaintiff Sonic Industry for failure to comply with Local Rule 5.2(f).  Several days after filing its complaint, Sonic Industry still had not provided chambers with a courtesy copy of the complaint.    

Plaintiff Given an Opportunity to Correct Diversity Jurisdiction Pleading

Posted in Jurisdiction, Pleading Requirements

Alliance for Water Efficiency v. Fryer, No. 14 C 115, Slip Op. (N.D. Ill. Jan. 15, 2014) (Shadur, Sen. J.).

Judge Shadur sua sponte ordered plaintiff Alliance for Water Efficiency (“AWE”) to correct two deficiencies in its diversity jurisdiction pleading:

  1. AWE pled that it was headquartered in Illinois, but did not plead its corporate citizenship.
  2. AWE pled that defendant was a resident of California, but not whether defendant was also a citizen of California.

Although the Seventh Circuit generally required dismissing complaints where an individual’s residence, but not citizenship, is pled the Court found that “Draconian” and afforded AWE five days to correct its complaint, if it could.

Court Maintains Secrecy of Copyright Doe Defendants Because of “Substantial Possibilit[y]” of Misnaming

Posted in Discovery

Osiris Entertainment, LLC v. Does 1-38, No. 13 C 4901, Slip Op. (N.D. Ill. Aug. 20, 2013) (Tharp, J.).

Judge Tharp granted plaintiff Osiris Entertainment’s Fed. R. Civ. P 26(d) motion to take expedited discovery prior to a Rule 26 conference in order to discover the potential identities of the thirty eight Doe defendants otherwise only identified by their respective IP addresses in this copyright case involving the alleged infringement of the movie Awaken via BitTorrent. 

As an initial matter, the Court sua sponte considered whether the thirty-eight Does were properly joined.  Recognizing a district split, that mirrors a national split among district courts, the Court held that members of the same swarm may be joined in a single suit even if their direct participation in the swarm did not overlap in time, explaining:

As noted above, BitTorrent requires a cooperative endeavor among those who use the protocol.  Every member of a swarm joins that cooperative endeavor knowing that, in addition to downloading the file, they will also facilitate the distribution of that identical file to all other members of the swarm, without regard to whether those other members were in the swarm contemporaneously or whether they joined it later.  In that light, permitting joinder among non-contemporaneous swarm participants does not seem novel or extreme; the law governing joint ventures and conspiracies, for example, clearly permits plaintiffs to proceed against groups of defendants who engaged in a cooperative endeavor to facilitate an unlawful object whether or not all of the members of the group took part in all of the actions of the group and without regard to when the members joined the group.

Citations omitted.  The Court did, however, note that there would be some requirement of temporal proximity because at some amount of separation the analogy would break down.  But in this instance, the alleged Does were involved over a “relatively brief” period.

Having determined that joinder was proper at least at the initial stages of the case, the Court granted Osiris Entertainment’s motion to issue subpoenas aimed at identifying the Does based upon their alleged IP addresses.  The Court, however, prohibited Osiris Entertainment from publishing the Doe’s alleged identities without leave of Court, noting that there was a “substantial possibility[y]” that the individuals associated with a particular IP address were not the individuals that downloaded the allegedly copyrighted material. 

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.

Illinois Does Not Recognize Tortious Interference Based Upon Wrongfully Filed Suits

Posted in Pleading Requirements

Flava Works, Inc. v. Gunter d/b/a myVidster.com, No. 10 C 6571, Slip Op. (N.D. Ill. Sep. 3, 2013) (Grady, Sen. J.).

Judge Grady granted in part plaintiff Flava Works’ Fed. R. Civ. P. 12(b)(6) motion to dismiss defendants’ (collectively “myVidster”) tortious interference and Digital Millenium Copyright Act (“DMCA”) claims in this copyright infringement suit involving videos posted on websites.  To the extent the tortious interference claim was based upon the alleged wrongful filing of this suit it was dismissed because Illinois does not recognize a tortious interference claim based upon wrongfully filed suits.  The claim, however, survived to the extent it was based upon Flava Works allegedly misrepresenting myVidster’s intellectual property infringement with the intent of causing myVidster’s server suppliers to terminate contracts with myVidster.

With respect to its DMCA claim, myVidster pled that Flava Works knowingly misrepresented that allegedly infringing content was available on myVidster to “improperly exaggerate the actual amount of infringing content available” on the website.  Those allegations were sufficient to meet the intent requirement.

Failure to Properly Plead Valid Copyright Registration Warrants Dismissal

Posted in Pleading Requirements

Personal Keepsakes, Inc. v. Personalizationmall.com, Inc., No. 11 C 05177, Slip Op. (N.D. Ill. Sept. 24, 2013) (Tharp, J.).

Judge Tharp granted Defendants’ Fed. R. Civ. P. 12(b)(6) motion to dismiss Counts I and II for failure to state a claim under which relief can be granted.  Count I alleged copyright infringement and Count II alleged violations of the Digital Millennium Copyright Act (“DCMA”). 

The Court held Plaintiff’s complaint failed to state a claim for copyright infringement because it did not plausibly allege that the allegedly copyrighted phrase, “May the strength of the Holy Spirit be with you, guiding you every day of your life,” was protected by a valid copyright.  The Court held the phrase was too common and unoriginal to receive copyright protection, was not protected by Plaintiff’s alleged copyright because the copyright registration was for an entire collection of poems that spanned six pages not for the single at-issue sentence, and there was no substantial similarity between the elements of Plaintiff’s and Defendant’s works.

The Court held Plaintiff’s complaint failed to state a claim under the DCMA because Copyright Management Information was not displayed on or with the allegedly copied works.

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.

Court Allows Joinder of BitTorrent Does for Early Stages of Case

Posted in Pleading Requirements

The Bicycle Peddler, LLC v. Does 1-99, No. 13 C 2375, Slip Op. (N.D. Ill. Aug. 13, 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 Bicycle Peddler was entitled to the information sought in the subpoenas and that the Doe defendant was 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 Bicycle Peddler not to publish any Doe’s identity without leave of Court.
  • 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 over sixteen days.
  • 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

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.”).

Non-Practicing Entity Patent Litigation 2013: Plaintiff and Defense Perspectives

Posted in Legal Seminars

Last month, I chaired a day-long PLI program discussing troll cases.  The day was an excellent dialogue on changes in the law impacting troll cases and trends in defending against trolls.  We heard from the general counsel of a start-up with a unique perspective on dealing with troll suits in young, growing businesses.  And we had experts on the current patent reform legislation, the state of patent damages and the ITC domestic industry requirement.  The agenda included:

  • The View from the C-Suite: How a Start-Up GC Faces NPEs – Sean Patrick Butler
  • ITC: Recent Developments in Domestic Industry and ITC Law – Stefani E. Shanberg
  • Panel on NPE litigation – Anthony E. Dowell, Peter Kirk, Amy G. O’Toole, and R. David Donoghue
  • Damages Update: Apportionment, RAND, and Other Federal Circuit Decisions Sonal N. Mehta, Cynthia Bright, and Ahmed J. Davis
  • Overview of NPE Reform Legislation with a Focus on the Practical Impact of Legislation – Laura A. Sheridan
  • Strategies of Defending Against NPEs – R David Donoghue and Steven E. Jedlinski

Click here to register for a webcast of last month’s program

As I begin to prepare the agenda and faculty for next year’s programs – November 21, 2014 in San Francisco and December 19, 2014 in New York City – I would love reader input on what we should discuss this year.  Also, I plan to put a larger emphasis on panels over individual speakers.  So, if you have a unique perspective and would like to join one of my programs as a presenter, please let me know.  Just send me an email.