Header graphic for print
Chicago IP Litigation Tracking Northern District of Illinois IP Cases

Tag Archives: 12(b)(1)

“Special Sharing” Allows Claims Against Corporate Officer

Posted in Pleading Requirements

Lang Exteriors, Inc. v. Lang Windows, Inc., No. 11 C 5517, Slip Op. (N.D. Ill. Aug. 16, 2012) (Finnegan, J.).

Judge Finnegan denied individual defendant Lang’s Fed. R. Civ. P. 12(b)(1) & (6) motion to dismiss this Lanham Act suit.  Lang argued that plaintiff Lang Exterior could not bring claims directly against Lang without piercing the corporate veil.  But Seventh Circuit law allows personal claims against corporate officers where there was a “special showing” that the officer acted beyond the scope of her official duties.  Plaintiff’s pleadings were sufficient to make that showing at the Rule 12(b) stage.  Specifically, plaintiff pled:

  1. Lang founded defendant Lang Windows and deliberately chose a name to confuse.
  2. Lang personally emailed contacts using a pseudonym she used for plaintiff in order to confuse customers.
  3. Lang created a website intending to confuse.

The Court also deemed waived Lang’s arguments reviewed for the first time on appeal.

False Patent Marking Requires Particular Allegations That Each Defendant Marked

Posted in Pleading Requirements

Newt LLC v. Nestle USA, Inc., No. 09 C 4792, Slip Op. (N.D. Ill. Mar. 28, 2011) (Coleman, J.)

Judge Coleman denied defendants’ Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, but dismissed the false patent marking case pursuant to Rule 12(b)(6) for failure to sufficiently plead intent to deceive. The Court held that plaintiff Newt had standing to sue without proof of particularized injury, citing Stauffer v. Brooks Bros., Inc., 619 F. 3d 1321, 1327 (Fed. Cir. 2010).

Newt alleged that defendant Graphic Packaging ("GPI") falsely marked the products and sold them to the customer defendants. GPI made no allegations that the customer defendants marked the accused products. The customer defendants were, therefore, dismissed.

Further, all defendants were dismissed because Newt only made generalized intent allegations — e.g., that defendants were "sophisticated companies." 

Finally, the Complaint was dismissed because Newt made only general allegations against all defendants, rather than particular allegations against each defendant.

Maps, Not Underlying Data, Warrant Copyright Protection

Posted in Legal News

The Nielsen Co. (US), LLC v. Truck Ads, LLC, No. 08 C 6446, Slip Op. (N.D. Ill. Jan. 24, 2011) (Pallmeyer, J.).

Judge Pallmeyer granted plaintiff Nielsen’s: 1) Fed. R. Civ. P. 12(b)(1) motion to dismiss defendant Truck Ads’ declaratory judgment claim for lack of copyright infringement; and 2) Fed. R. Civ. P. 56 motion for summary judgment regarding Truck Ads’ copyright misuse counterclaim in this copyright case regarding Nielsen’s designated marketing area ("DMA") maps.

While the Court held that any copyright claim to raw census data would be "frivolous," that was not Nielsen’s claim. Nielsen originally brought claims alleging infringement of its DMA regions and data, as well as the DMA maps. The current claims only accused infringement of the DMA maps. There was therefore, no case or controversy regarding the DMA regions or data. The Court also granted Nielsen summary judgment on Truck Ads’ copyright misuse claim. First, the Court held that counts were split on whether copyright misuse was a proper counterclaim, or an affirmative defense. But the Court did not have to decide the issue because Truck Ads could not prove that Nielsen’s claims were wholly lacking in merit. The DMA maps are original content that can warrant copyright protection, even though they may have been created based upon uncopyrighted data. And Nielsen’s allegation that Truck Ads’ alleged copying of the maps was unlawful was not frivolous, unsupported by law or clearly contradicted by record facts. Furthermore, Truck Ads offered no evidence that its alleged harm – a lost contract – was based upon Nielsen’s accusations or its merit.

Declaratory Judgment Claim Dismissed as to Unasserted Patent Claims

Posted in Pleading Requirements

Sloan Valve Co. v. Zurn Indus., Inc., No. 10 C 204, Slip Op. (N.D. Ill. May 4, 2010) (St. Eve, J.).

Judge St. Eve granted in part plaintiff/counter-defendant Sloan’s Fed. R. Civ. P. 12 motions in the patent infringement case involving a flush valve handle assembly. The Court dismissed defendant/counter-plaintiff’s (collectively "Zurn") invalidity and noninfringement counterclaims to the extent they challenged patent claims other than those identified as allegedly infringed in Sloan’s complaint. The Court could have exercised jurisdiction over the counterclaims if Zurn had met the MedImmune standard independently for each of Sloan’s unasserted claims, but Zurn did not.

The Court denied Sloan’s Fed. R. Civ. P. 12(b)(6) motion to dismiss Zurn’s inequitable conduct counterclaim. Zurn met the materiality standard by pleading that Sloan should have known that admissions made in a prior, related reexamination proceeding were relevant to the Examiner in the later application. 

The Court dismissed Zurn’s estoppel and misuse affirmative defenses. Each were pled in a single sentence and without particularized facts.

The Court also dismissed Zurn’s lack of actual notice affirmative defense. Zurn also denied Sloan’s actual notice allegation in its answer. Because actual notice was denied in the answer, it was not a proper affirmative defense. Finally, the Court dismissed Zurn’s noninfringement and exceptional case affirmative defenses.  Neither was a proper affirmative defense. 

Court Lacks Jurisdiction Over Copyright Malpractice Claim

Posted in Jurisdiction

James H. Anderson, Inc. v. Johnson, No. 08 C 6202, Slip Op. (N.D. Ill. Jul 27, 2009) (Coar, J.).

Judge Coar granted defendants’  Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff’s copyright malpractice claim for lack of jurisdiction.  Plaintiff argued that the Court had jurisdiction over its state law malpractice claim based upon 28 U.S.C. Section 1338(a) which creates the federal court’s exclusive jurisdiction over patent and copyright cases.  The Court held that it did not have jurisdiction based upon the copyright claim in the underlying action.  Federal jurisdiction requires not just a contested federal issue, but a substantial federal issue.  The underlying was not a substantial issue. Furthermore, the federal interest in regulating malpractice was outweighed by the state interest.  And the Court reasoned that copyright malpractice was different than patent malpractice.  Copyright cases are fact intensive and do not require legal analysis of the claims, as required in patent law.

Trademark Claims Dismissed Because Dispute Sounds in Contract

Posted in Legal News

Mindy’s Restaurant, Inc. v. Watters, No. 08 C 5448, Slip Op. (N.D. Ill. Jun. 9, 2009) (Der-Yeghiayan).

Judge Der-Yeghiayan granted defendants’ Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction even though plaintiff brought a federal Lanham Act trademark infringement claim.  While Lanham Act claims are generally considered federal questions creating subject matter jurisdiction, plaintiffs claims were in essence breach of contract claims.  Plaintiff was a franchisor of Mindy’s Restaurants.  Defendants were franchisees, until they allegedly stopped making required franchise payments and plaintiff terminated the franchise agreement.  While plaintiff’s claims were for use of plaintiff’s trademarks when defendants allegedly continued operating their restaurant after the franchise agreement was canceled.  As a result, the Court held that the parties dispute and plaintiff’s claims sounded in contract, not the Lanham Act.  The reason the trademarks were allegedly infringed was the termination of the franchise agreement.

Trademark DJ Requires Allegations of Continued Rights in the Marks

Posted in Legal News

Publications Int’l. Ltd. v. LeapFrog Enters., Inc., No. 08 C 2800, Slip Op. (Dec. 4, 2008) (Guzmán, J.).

Judge Guzmán granted declaratory judgment defendant LeapFrog’s Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff Publication International’s (“PIL”) claim for declaratory relief regarding the POINGO mark used in association with a pen-like electronic reading device. PIL alleged, and LeapFrog admitted, that LeapFrog used the POINGO mark for a pen reader system in one presentation to a retailer, but never marketed or sold a pen reader using the name and never sought to register the mark with the PTO. PIL also alleged that LeapFrog sent PIL cease and desist letters warning that LeapFrog’s earlier use of the POINGO mark gave it priority in the mark. The Court held that PIL had not met its burden because it had not alleged that LeapFrog had used the mark on products in commerce or that LeapFrog had sufficient intent to use the mark in commerce. Without a use in commerce or an intent to use, the immediacy required for a declaratory judgment action was not present.

Allegation of Registration Without Certificate Sufficient for Copyright Claim

Posted in Legal News

Stereo Optical Co., Inc. v. Judy, No. 08 C 2512, 2008 WL 4185689 (N.D. Ill. Sep. 8, 2008) (Kocoras, J.).

Judge Kocoras granted in part defendants’ Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff’s copyright, trade secret and related state law claims. The Court noted that the Seventh Circuit required a registered copyright, not just pre-registration, to file a copyright complaint. But the Court held that it was sufficient to allege the registration and did not dismiss the claim because the registration was not attached. The Court did note, however, that the registration requirement was jurisdictional and the motion, therefore, should have been styled a Fed. R. Civ. P. 12(b)(1) motion for lack of jurisdiction.

The Court also denied defendants’ motion to dismiss plaintiff’s trade secret complaints. While plaintiff did not specifically identified the allegedly misappropriated trade secrets they did allege misappropriation of customer lists, vision test methodologies and other information that could be trade secrets.

Finally, the Court dismissed plaintiff’s unjust enrichment claim because it was preempted by the copyright and trade secret claims. The alleged unjust enrichment sought damages for either the alleged copyright infringement or the alleged trade secret misappropriation. Plaintiff’s other state claims, however, required additional elements and were not preempted.

Location of Family Major Factoring in Determining Citizenship

Posted in Jurisdiction

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.

Continue Reading

Court Does Not Consider Facts Beyond Complaint in Rule 12(b) Motions

Posted in Legal News

Nova Design Build, Inc. v. Grace Hotels, LLC., No. 08 C 2855, 2008 WL 4450305 (N.D. Ill. Sep. 30, 2008) (Der-Yeghiayan, J.).

Judge Der-Yeghiayan denied defendants’ motion to dismiss plaintiffs’ copyright infringement and related state law claims. Plaintiffs claimed that they developed plans for a Holiday Inn Express hotel defendants planned to build, and that defendants infringed the copyrights in plaintiffs’ plans by revising them with another firm and using them without plaintiffs’ permission. The Court held that plaintiffs’ copyright claim was sufficiently pled. Plaintiffs alleged ownership of a copyright, attaching the copyright registration, and that defendants infringed the copyright. Defendants’ argument that plaintiffs’ plan were a derivative work were beyond the pleadings and, therefore, not appropriate for a Fed. R. Civ. P. 12(b)(6) motion. 

Continue Reading

Dormant Infringement Accusation Creates Declaratory Jurisdiction

Posted in Jurisdiction

Tuthill Corp. v. ArvinMeritor, Inc., No. 07 C 2758, 2008 WL 4200888 (N.D. Ill. Sep. 5, 2008) (Gottschall, J.)

Judge Gottschall denied declaratory judgment (“DJ”) defendant ArvinMeritor’s Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. ArvinMeritor sent DJ plaintiff Tuthill Corp. a letter alleging that Tuthill infringed a group of patents to recreational vehicle suspension systems (the “RV patents”). Tuthill responded that its product did not infringe, that the patents were invalid, and that the accused products were not in production yet. Tuthill alleged that the parties had continuing discussions regarding the RV patents. ArvinMeritor claimed that the discussions went dormant as to the RV patents after it received Tuthill’s letter. Tuthill filed this suit after its accused products were put on the market. The Court held that regardless of whether the discussions went dormant, Tuthill’s claim met the Supreme Court’s MedImmune standard, as defined in the Federal Circuit’s SanDisk opinion. And ArvinMeritor never dissolved the controversy by providing Tuthill a covenant not to sue.

Breached Settlement Does Not Create Patent Jurisdiction

Posted in Jurisdiction

Strom v. Strom Closures, Inc., No. 06 C 7051, 2008 WL 489363 (N.D. Ill. Feb. 20, 2008) (Der-Yeghiayan, J.).

Judge Der-Yeghiayan granted plaintiff Victoria Strom’s (“Strom”) motion to dismiss defendants’ (collectively “SCI”) counterclaims. SCI filed an earlier suit charging Strom with patent infringement. The parties settled that suit pursuant to a Settlement Agreement (“Agreement”). SCI alleged that Strom breached the Agreement and was once again, therefore, infringing SCI’s patents. But the Court held that once a district court dismisses a case with prejudice, it cannot reopen the case for enforcement of a related agreement without independent jurisdiction. SCI’s appropriate claim was for breach of the Agreement, not patent infringement. Because breach of the Agreement was a state law claim and because there was no diversity (SCI pled that all parties were Illinois residents), the Court lacked jurisdiction. Finally, the Court held that there was not supplemental jurisdiction based upon Strom’s federal employment claims. Strom’s claims and the breach of the Agreement were not sufficiently related.

Application for Copyright Registration Creates Subject Matter Jurisdiction

Posted in Jurisdiction

Goss Int’l Ams., Inc. v. A-Am. Mach. & Assembly Co., No. 07 C 3248, 2007 WL 4294744 (N.D. Ill. Nov. 30, 2007) (Gettleman, J.).

Judge Gettleman denied defendant’s Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff’s copyright for lack of subject matter jurisdiction. Plaintiff alleged that defendant violated plaintiff’s copyrights in its simplified machine drawings of its commercial printing machines by placing them on the internet without authorization. The Court held that plaintiff’s simplification of its drawings and addition of part numbers were sufficient to meet copyright’s originality requirement. The Court also looked to the Fifth and Eighth Circuits and held that the registration requirement was met when plaintiff filed its copyright registration, as opposed to when the Copyright Office acted on it. In this case, plaintiff filed its application in May 2007 and was waiting on registration as of the date of the opinion. The Court reasoned that because plaintiff would also have a cause of action if the registration was denied, there was no reason to make plaintiff wait until the Copyright Office acted.

Clerical Error in Assignment Does Not Destroy Standing

Posted in Jurisdiction

Everything Baseball Ltd., LLC v. Team Athletic Goods, Inc., No 05 C 5526, Slip Op. (N.D. Ill. Aug. 16, 2007) (Pallmeyer, J.).

Judge Pallmeyer denied defendant Team Athletic Goods, Inc.’s (“TAG”) Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of standing. The inventors of the patent at issue, for baseball chest protectors, assigned their rights in the patent to Everything Baseball Ltd. (“EB Ltd.”), but the correct corporate name was Everything Baseball Limited, LLC (“EBL LLC”). Plaintiffs argued that because EBL LLC was not the assignee when it filed suit, the Court should dismiss the case. But the Court held that the assignment to EB Ltd. was a clerical error and that the parties’ clear intent was to assign to plaintiff EBL LLC. The Illinois’s records show that while EBL LLC was incorporated, EB Ltd. never existed. Furthermore, some months after TAG identified the error, EBL LLC amended their assignment with the PTO. But the Court did note that the amended assignment could not create standing in this suit. The Federal Circuit case law is clear that where standing does not exist when the suit is filed, it cannot be corrected during the suit. The difference in this case was the Court’s ruling that the intent of the assignment agreement was to assign the patent in suit to EBL LLC, not EB Ltd., which did not exist.

Northern District’s First Post-MedImmune DJ Decision

Posted in Jurisdiction

Black & Decker, Inc. v. Robert Bosch Tool Corp., No. 06 C 4440, Min. Order (N.D. Ill. Jul. 13, 2007) (Manning, J.).*

In the first Northern District opinion to address the Supreme Court’s MedImmune declaratory judgment standard, Judge Manning denied plaintiff Black & Decker’s (“B&D”) motion to dismiss defendant Robert Bosch Tool Corp.’s ("Bosch") declaratory judgment counterclaims for lack of subject matter jurisdiction. In a prior case between the parties before Judge St. Eve (numerous prior opinions are discussed in the Blog’s archives), B&D asserted that two models of Bosch’s Power Box radio (the "Old Power Box") infringed B&D’s two patents (the "Old Patents").  Shortly before Judge St. Eve held trial in the previous case, B&D brought this suit against Bosch asserting that Bosch’s new model of its Power Box radio (the "New Power Box") infringed a third patent (the "New Patent").  At about the same time, B&D sought leave to present evidence at trial before Judge St. Eve that the New Power Box infringed the Old Patents.  Judge St. Eve, however, held that B&D had not disclosed the New Power Box as an accused product and that Bosch would be prejudiced by adding it immediately before trial.  After the trial before Judge St. Eve, the jury returned a verdict that the Old Power Boxes willfully infringed certain claims of the Old Patents.

Continue Reading

Co-Ownership of an Asserted Copyright is an Affirmative Defense, Not Jurisdictional

Posted in Jurisdiction

Johnson v. Wright, No. 05 C 3943, 2007 WL 1079063 (N.D. Ill. Apr. 5, 2007) (Grady, J.).

Judge Grady denied defendants’ Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff’s amended complaint for lack of subject matter jurisdiction.  Defendants, record companies and related individuals, were accused of infringing plaintiff Syl Johnson’s copyright in his song "Is It Because I’m Black," as well as related state law claims.  Defendants argued that there was not federal jurisdiction because the co-owners of Johnson’s copyright had transferred their rights to one of the defendants.  The transfer, defendants argued, destroyed Johnson’s federal copyright claim, leaving only state claims over which the Court lacked independent jurisdiction.  But defendants conceded that Johnson stated a claim for federal copyright infringement.  The Court held that Johnson’s and defendants’ alleged co-ownership of the copyright was an affirmative defense, not a jurisdictional matter.  Because Johnson had a well-pled claim of federal copyright infringement, the Court denied defendants’ Rule 12(b)(1) motion to dismiss.  The Court also noted that defendants’ motion was "essentially" a copyright infringement summary judgment motion, but because it was styled as a Rule 12(b)(1) motion on the pleadings, Johnson was not given adequate opportunity to present his response.  Additionally, the Court identified several questions of fact that would have prevented a grant of summary judgment based upon the exhibits attached to the parties’ briefs.