Panoramic Stock Images, Ltd. d/b/a Panoramic Images v. John Wiley & Sons, Inc., No 12 C 10003, Slip Op. (N.D. Ill. Sep. 2, 2014) (Feinerman, J.). Judge Feinerman granted in part plaintiff Panoramic’s partial summary judgment motion and denied defendant Wiley’s partial summary judgment motion as to Panoramic’s fraud and contributory copyright infringement claims in … Continue Reading
Francescatti v. Germanotta p/k/a Lady Gaga, No. 11 C 5270, Slip Op. (N.D. Ill. June 17, 2014) (Aspen, Sen. J.). Judge Aspen granted defendants’ Fed. R Civ. P. 56 motion for summary judgment because no reasonable trier of fact could find defendant Lady Gaga’s song “Judas” substantially similar to plaintiff’s song “Juda.” Local Rule 56.1 … Continue Reading
Spitz v. Proven Winners N. Am., LLC, No. 11 C 3997, Slip Op. (N.D. Ill. Aug. 22, 2013) (Hart, Sen. J.). Judge Hart granted defendants’ motion for summary judgment in this trade secret case involving alleged trade secrets identifying pet-friendly plants. Plaintiff alleged that defendants used plaintiff’s trade secret identification of pet-friendly plants without paying … Continue Reading
Hearthware, Inc. v. E. Mishan & Sons, Inc., No. 11 C 5233, Slip Op. (N.D. Ill. Aug. 10, 2012) (Nolan, J.). Judge Nolan granted defendant E. Mishan & Sons (“EMS”) motion for summary judgment on plaintiff Hearthware’s copyright, Lanham Act and related state law claims related to EMS’s alleged copying of Hearthware’s Nu Wave halogen … Continue Reading
Morningware, Inc. v. Hearthware Home Prods., Inc., No. 09 C 4348, Slip Op. (N.D. Ill. Sep. 4, 2012) (St. Eve, J.). Judge St. Eve granted in part plaintiff Morningware’s motion for summary judgment as to defendant Hearthware’s Deceptive Trade Practices Act, Lanham Act and related state law counterclaims. As an initial matter, the parties’ Local … Continue Reading
Morningware, Inc. v. Hearthware Home Prods., Inc., No. 09 C 4348, Slip Op. (N.D. Ill. Aug. 27, 2012) (St. Eve, J.). Judge St. Eve denied plaintiff Morningware’s and defendant Hearthware’s cross-motion for summary judgment regarding Morningware’s Lanham Act, Deceptive Trade Practices Act and related state law claims in this Lanham Act and patent infringement case. … Continue Reading
Bone Care Int’l., LLC v. Pentech Pharms., Inc., No. 08 C 1083, Slip Op. (N.D. Ill. Mar. 22, 2012) (Dow, J.). Judge Dow held that plaintiff’s U.S. Patent No. 6,903,083 (the “’083 patent”) was invalid based upon a sale more than one year before the ‘083 patent’s filing date and denied defendants’ motion to find … Continue Reading
Turina v. Crawley, No. 10 C 4292, Slip Op. (N.D. Ill. Feb. 16, 2012) (Darrah, J.). Judge Darrah granted pro se defendant summary judgment as to plaintiff’s copyright claims and dismissed plaintiff’s remaining state law claims for lack of jurisdiction. As an initial matter, the Court treated those portions of defendant’s response that disputed facts … Continue Reading
Judge Dow granted defendants summary judgment of invalidity based upon several prior art references in this patent case involving color combinations for a printing system. As an initial matter, the Court excluded the following for failure to comply with Local Rule 56.1:
Legal conclusions or unsupported statements of fact;
Denials without proper factual support were deemed admitted;
Any additional facts in a brief, but not in a Rule 56.1 statement as supplemental statements; and
Facts shoe-horned into Rule 56.1 responses.
Of particular note:
The Court denied plaintiff's motion to strike defendant's supplemental expert declaration. While the reports included new opinions, plaintiffs were not prejudiced because the declarations were served during discovery and before the depositions of the experts.
While the Court could have stopped its analysis after the first piece of art invalidated the remaining claims, the Court analyzed each piece of art for the sake of completeness.
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International Tax Advisors, Inc. v. Tax Law Assocs., LLC, No. 08 C 2222, Slip Op. (N.D. Ill. Feb. 15, 2011) (Valdez, Mag. J.)
Judge Valdez denied plaintiffs' (collectively "ITA") motion for summary judgment, and granted defendants' (collectively "TLA") motion for summary judgment as to ITA's copyright claim, and chose not to retain supplemental jurisdiction over ITA's remaining state law claims. While ITA may have had evidence to support its copyright claim, it did not properly cite to that evidence via its Local Rule 56.1 statement of uncontested material facts. And to the extent ITA cited directly to evidence it did so generally by description, without exhibit numbers or specific page cites.
The Court granted TLA summary judgment of noninfringement because ITA did not properly cite to facts in its Local Rule 56.1 statement showing a question of material fact.
The Court also granted TLA summary judgment as to ITA's RICO claim because ITA only alleged one of the required two predicate acts.
Finally, the Court declined to exercise supplemental jurisdiction over the remaining claims.
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Several significant trends are developing as I read this year's N. D Illinois patent decisions. The trends are largely, although not all, Chicago-specific. And they appear to be largely influenced by the not-so-new Local Patent Rules.
Faster Settlement Times. Patent cases are settling faster. While the economy may still be playing a role, I believe that the LPR 2 initial contentions are driving early settlements. When parties take them seriously and make their best early cases, it is causing opponents to reconsider their positions and driving earlier settlements. Maybe more importantly, armed with more substantive analysis up-front, parties are talking more and more settlement discussions lead to more settlements. No doubt this is one of the impacts that the Court expected when it developed the LPR 2 initial contentions.
False Patent Marking is Dying. In early 2010, the Northern District was among the top three districts for false patent marking filings, in particular those cases brought by marking trolls (non-competitors in the defendant's industry). Unlike the Eastern District of Texas (which applied Rule 8 notice pleading to the intent requirement), the Northern District was split with many judges applying Rule 9 heightened pleading and a few applying Rule 8 notice pleading. That slowed the flow of cases to a degree, but what seems to have finished them is a combination of the Federal Circuit's BP Lubricants decision (requiring Rule 9(b) pleading for the intent requirement) and a decision this spring holding that corporate intent was not recognized in the Seventh Circuit, so the required intent must be shown in at least one employee, officer or agent of the corporation.
LR 56.1 Summary Judgment Decisions are on the Decline. There seem to be fewer decisions granting or denying summary judgment for failure to comply with the Local Rule 56.1 requirements for statements of material facts. Having tracked five years worth of intellectual property summary judgment decisions chastising parties for failure to comply with Local Rule 56.1, I cannot imagine that there is a trend toward strict compliance with Local Rule 56.1. Furthermore, this does not appear to be true in the trademark, copyright or trade secret realms. So, my suspicion is that this trend is really about fewer summary judgment decisions. And there are fewer summary judgment decisions for at least two reasons: 1) earlier settlement which avoids summary judgment motions; and 2) the Local Patent Rule 6.1 comment that judges have discretion to delay "early" summary judgment motions until the end of the discovery and the LPR 1.1 authority to delay motions raising claim construction issues until after the claim construction opinion issues.
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Healix Infusion Therapy, Inc. v. HHI Infusion Servs., Inc., No. 10 C 3772, Slip Op. (N.D. Ill. Jan. 27, 2011) (Zagel, J.).
Judge Zagel denied plaintiff Healix's motion for summary judgment as to defendant HHI's alleged tortious interference and denied HHI's motion to dismiss Healix's tortious interference claim. The motion to dismiss was premised upon application of Washington law, but the Court held that Texas law applied and the claim was properly plead.
Regarding summary judgment, both parties "cried foul" as to the other's Local Rule 56.1 compliance. The Court held that both parties were correct. But in light of the mutual non-compliance, the Court considered the substance of the motion, instead of resolving it on procedural grounds. Additionally, the Court held that emails offered as evidence were admissible over a hearsay objection as business records pursuant to FRE 803(6). Finally, the Court held that there was a question of fact as to whether HHI's alleged interference was willful and intentional.
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Eazypower Corp. v. Jore Corp., No. 04 C 6372, Slip Op. (N.D. Ill. Oct. 20, 2010) (Zagel, J.).
Judge Zagel denied defendant Jore's ("Jore") motion for summary judgment of invalidity in this patent dispute regarding screwdrivers with flexible extension shafts. As a preliminary matter, plaintiff Eazypower repeatedly failed to comply with Local Rule 56.1 regarding statements of material fact. Despite that, the Court accepted Eazypower's additional facts and responses to Jore's statements of fact because Jore had sufficient opportunity to respond to them.
Jore argued that a particular screwdriver with a flexible extension shaft, the FB-19, was sold in the United States in the mid-1980s and was invalidating prior art. Eazypower did not dispute that the FB-19 taught each element of the identified patent claims. But Eazypower did dispute that the FB-19 was in fact prior art. First, Eazypower argued that Jore had not sufficiently corroborated its evidence that the FB-19 was sold in the United States in the mid-1980s. Jore's corroborating evidence - several third parties with knowledge - was sufficient. But there was evidence conflicting with Jore's position. An age analysis of the FB-19 packaging suggested that it had been built in the late 1970s or early 1980s, but it also showed traces of an adhesive that was not available in the mid-1980s. Additionally, Eazypower showed that relevant shipping records for the period did not show any sales or import of FB-19s. The Court, therefore, held that there was a question of material fact and denied summary judgment.
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This is the third installment of my twenty five tips for Northern District of Illinois litigation practice, with a focus on IP litigation. The tips are gleaned from my practice in the Northern District, my time as a law clerk for the Hon. Gordon J. Quist in the Western District of Michigan, and my reading of all of the Northern District of Illinois intellectual property opinions over the last four years. As you read them, let me know if you come up with others. I will be glad to include them as I go. Here are tips eleven through fifteen:
11. Respect Twombly / Iqbal pleading standards. The Northern District is no different than the rest of the country's district courts -- patent infringement requirements have not changed from the form in the Federal Rules. But that is not necessarily the case for Lanham Act, copyright or trade secret claims. There are numerous decisions dismissing, often with leave to amend, these more fact-specific intellectual property claims. And even in the patent context plaintiffs benefit from pleading with more particularlity. The more detail a defendant has the more information they should disclose about their accused products or systems as part of their Local Patent Rule 2.1(b) initial disclosure document production requirements. That means that the plaintiff will have more material with which to prepare its Local Patent Rule 2.2 intial infringement contentions. Finally, regardless of the type of claim, many and perhaps most judges rely upon Twombly / Iqbal to require more than a bare recitation of the elements of affirmative defenses. So, it is especially important to add some facts to your affirmative defenses.
12. Prepare Local Rule 56.1 statements with care. This is probably the most frequent Local Rule hang up in Northern District of Illinois opinions. It is critical that movants meet the Local Rule 56.1 requirements, among others, a numbered statement of undisputed material facts supported by admissible evidence. If the facts are not supported or if they are legal conclusions, judges routinely strike or disregard them.
13. Respond to Local Rule 56.1 statements with evidence. Far too often, parties respond to Local Rule 56.1 statements without evidence. Those responses are almost always deemed admissions. Without admissibile evidence to counter statements of fact they are almost always admitted.
14. Watch your judge's webpage. Each judge maintains the equivalents of standing orders on their webpage, often in multiple places and links across the page. It is critical that you read them at the beginning of your case and that you recheck them regularly. At a minimum, check them before you file anything with the Court. I find that the website instructions change with much greater frequency than the old, paper standing orders did. And while judges try to make it easy to see what they change, if you are not looking you will miss it.
15. Always file notices of motion. In some districts, notices of motions are not required or even discouraged. In the Northern District of Illinois, they are required of every motion. If you fail to file one, you will likely hear from the Clerk's office. Also, make sure to file the notice after the motion, not before. If you file the notice before the motion, you will generally have to refile it.
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Eva's Bridal Ltd. v. Halanick Enterprises, Inc., No. 07 C 1668, Slip Op. (N.D. Ill. May 19, 2010) (Darrrah, J.).
Judge Darrah granted in part defendants' and denied plaintiffs' summary judgment motions in this Lanham Act case over the use of the name "Eva's Bridal." The Court granted defendants' summary judgment as to plaintiffs' trademark infringement claim because plaintiffs presented no evidence that they federally registered the "Eva's Bridal" trademark.
Plaintiffs' Lanham Act unfair competition and trademark dilution claims did not require a federally registered trademark. But because the mark was not registered, plaintiffs had the burden of proving ownership of the mark. Plaintiffs created at least a question of fact as to ownership with evidence that plaintiffs' business was a continuation of the original use of the mark. And because the mark was based upon a first name and not a last name the mark was not necessarily descriptive. The Court, therefore, held there was a question of fact as to whether the mark was descriptive.
Defendants agreed that plaintiffs abandoned the mark by licensing it without maintaining any quality control. Plaintiffs, however, presented sufficient evidence of control to create a question of fact.
Defendants' argument that plaintiffs had not shown a likelihood of confusion was not relevant to a dilution analysis. And defendants' argument that the Eva's Bridal mark was not famous failed because it was not developed. Defendants' argument was a single sentence without elaboration or support.
There was also a question of fact as to defendants' laches and acquiescence claims. Plaintiffs cited evidence that during the alleged delay the parties engaged in various negotiations and defendants made various payments.
Finally, the Court denied plaintiffs' summary judgment motion. Plaintiffs failed to comply with Local Rule 56.1(a)(3) requiring a statement of uncontested material facts supported by admissible evidence. Plaintiffs' statements were largely taken verbatim from its amended complaint, were largely irrelevant to the summary judgment issues and were largely not supported by cites to the record. The Court, therefore, denied plaintiffs' motion without analyzing it on the merits.
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Minemyer v. B-Roc Reps., Inc., No. 07 C 1763, Slip Op. (N.D. Ill. Oct. 27, 2009) (Cole, Mag. J.)*
Judge Cole granted summary judgment of invalidity based upon the §102(b) on-sale bar and denied summary judgment as to invalidity based upon §102(b) public use and obviousness.
Plaintiff argued that its pipe coupler patent was entitled to the priority date of its provisional application because the provisional application disclosed in the drawings the tapered threads at issue, although they were not described in the specification. The Court held that figures showing tapered threads would be sufficient, but that the figures did not show tapered threads. Plaintiff alleged that enlargements of the figures showed a 1% taper. But the Court held that the original drawing did not "convey" the tapered threads with "reasonable clarity." Even the enlargement showed "no true tapers." Because the provisional application did not disclose the taper, the patent's priority date was its filing date.
The Court held that plaintiff admitted he offered the patented couplers for sale more than one year before the filing date, also known as the critical date. Plaintiff also admitted both in interrogatory responses and at deposition that his invention had been reduced to practice at the time of the offer. Plaintiff claimed that the use was experimental, but the court held that the claim was not properly supported by evidence in plaintiff's Local Rule 56.1 statement of material facts.
Public Use Bar
The Court denied summary judgment based upon the public use bar. The alleged prior art device was asserted against other claims in defendants' invalidity contentions, but not against the claim at issue, claim 12. Furthermore, the evidence of the alleged prior art coupler was provided by a witness that was not disclosed in defendants' Rule 26 disclosures or their interrogatory responses. He was first identified in a subpoena at the end of fact discovery.
Defendant's obviousness arguments were based upon the same prior art as the public use bar prior art. So, summary judgment was not appropriate for similar reasons. Additionally, defendants arguments were cursory and did not even cite case law.
* Click here for more on this case in the Blog's archives.
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Here are a few stories you do not want to miss:
The Wisconsin Law Journal has an article based upon a Northern District of Illinois case in which a summary judgment decision hinged upon a failure to substantively answer one of the other party's Local Rule 56.1 statements of material fact. In that case, a procedural objection was made, but no substantive answer was given. So, when the objection was denied, the fact was deemed admitted. This is a point I have made often: follow Local Rule 56.1 closely and carefully.
The Blog of the Legal Times reported that in a recent interview the Federal Circuit's Chief Judge Michel suggested that the next nominees to the Federal Circuit should have the following backgrounds: a patent-experienced district judge; a trial lawyer with patent experience; or a chief corporate lawyer with patent experience.
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Single Source, Inc. v. Harvey, No. 07 C 1201, 2008 WL 927902 (N.D. Ill. Apr. 7, 2008) (Der-Yeghiayan, J.).
Judge Der-Yeghiayan denied defendants' summary judgment motion. Defendant Harvey was employed by plaintiff Single Source ("SS") as, among other things, its Sales Director. When Harvey was promoted to the Sales Director position he signed a confidentiality agreement which required that Harvey maintain the secrecy of SS's trade secrets and only use them for SS's benefit. SS alleged that Harvey became disgruntled and took a position with defendant Food Marketing Concepts ("FMC"). Before giving SS notice and leaving SS's employ, Harvey allegedly solicited SS's customers for FMC and used an SS expense account to pursue customers for FMC. Defendants argued that because Harvey was not an SS officer or director he did not owe SS a duty of loyalty. The Court, however, held that an employee owes it employer a duty not to compete with the employer or solicit the employer's customers before terminating the employment. The Court also held that the parties' competing evidence regarding whether Harvey had actually solicited SS's customers prior to ending his employment with SS created a material question of fact.
Practice Tip: You must respond to Local Rule 56.1 statements of material facts. The Court noted that defendants did not respond to SS's statement of additional facts. Because of that, the Court deemed each additional material fact admitted. The Court did not identify whether its decision turned on any of these admitted facts, but it is easy to imagine the circumstance in which the case could have turned on an inadvertently admitted fact.
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FM Indus., Inc. v. Citicorp Credit Servs., Inc., No. 07 C 1794, 2008 WL 717792 (N.D. Ill. Mar. 17, 2008) (Conlon, J.).
Judge Conlon granted Citicorp defendants and denied defendant Gelfand summary judgment of copyright infringement. Plaintiff FM Industries ("FMI") alleged that Gelfand infringed FMI's copyright in its TUCANS debt-collection software by continuing to use it after Gelfand's license expired. Gelfand argued that FMI could not prove ownership of the copyright because it could not produce the written assignment. But the Court held that FMI's deposition testimony was sufficient to create a material question of fact and, therefore, denied summary judgment.
Citicorp was accused of encouraging and inducing its outside attorneys to use the TUCANS software after their licenses expired. But at least in part because FMI failed to respond to Citicorp's Local Rule 56.1 statements or to submit its own responsive statements of fact, the Court accepted as true Citicorp's evidence that it told its outside attorneys to stop using TUCANS before licenses expired and that Citicorp was unaware that the attorneys continued using TUCANS.
Practice Tip: I cannot say it enough: you must strictly comply with Local Rule 56.1 Click here to read about other opinions considering Local Rule 56.1
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Murata Mfg. Co., Ltd. v. Bel Fuse, Inc., No. 03 C 2934, Order (N.D. Ill. Mar. 5, 2008) (Gottschall, J.).*
Judge Gottschall denied plaintiffs' summary judgment motion without prejudice for failure to comply with both Local Rule 56.1 and the Court's Standing Order -- the Standing Order further explained that each short, numbered statement of fact required by Local Rule 56.1 should contain one fact and no attorney argument. Despite Local Rule 56.1's clear requirements and the Standing Order's directive to strictly comply with Local Rule 56.1, the Court held that nearly one-third of plaintiff's 145 statements of fact did not comply with the rules:
Many were long;
One contained no facts;
Several focused on an expert's methodology instead of his results; and
The rest contained inferences, argument, or legal conclusions.
The Court explained that the case's complexity required strict adherence to Local Rule 56.1:
The court simply does not possess the resources to comb through the parties' statements of fact in an attempt to sift out usable fact from impermissible argument or inference. ... The Standing Order and LR 56.1 are composed in plain English and their meaning is clear; the court properly expects experienced and sophisticated attorneys to adhere to them strictly, particularly given the complex and sophisticated nature of this litigation.
The Court, therefore, used its discretion to deny plaintiff's summary judgment motion without prejudice for not complying with Local Rule 56.1 and the Standing Order.
Practice Tip: I write this tip frequently, but it merits repetition.** Strict compliance with Local Rule 56.1 is difficult, time consuming, and it goes against many lawyers' natures to write facts devoid of argument. But strict compliance is the best, and maybe only, way to win, or defeat, summary judgment in the Northern District. And if you write your Rule 56 statements well, you make the Court's job easier, which can only help your case.
* Click here to read more about this case in the Blog's archives and here for the order.
** Click here to read about other Local Rule 56.1 opinions.
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Here is some recent Northern District news:
Judge Coar recently updated his case management procedures (click here to read them) to state that pursuant to Local Rule 5.2(e), parties are no longer to provide courtesy copies of electronically filed papers to Judge Coar's chambers, except for papers pertaining to Fed. R. Civ. P. 56 or Local Rule 56.1 (summary judgment papers).
Magistrate Judges Brown (Eastern Division -- Chicago) and Mahoney (Western Division -- Rockford) are both up for reappointment in early 2008. Pursuant to federal law, the Court has established a citizen's panel to consider their reappointments. Members of the bar, as well as the general public, are requested to forward comments regarding the reappointments no later than January 18, 2008, to:
Magistrate Judge Advisory Panel
c/o Mr. Michael W. Dobbins
Clerk of Court
U.S. District Court
219 South Dearborn St. -- Rm. 2050
Chicago, IL 60604
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Gencor Pacific, Inc. v. Federal Labs., Corp., No. 07 C 168, 2007 WL 2298367 (N.D. Ill. Aug. 3, 2007) (Guzman, J.).
Judge Guzman granted defendants' Fed. R. Civ. P. 12(b)(3) motion to dismiss for lack of venue. Plaintiff Gencor Pacific ("Gencor") and defendant Federal Laboratories ("Fedlabs") both distribute products including caralluma powder. Gencor alleged that Fedlabs infringed Gencor's copyrights, engaged in unfair competition and other related state law claims by using various Gencor studies and literature to promote Fedlabs's products. Gencor also alleged that Fedlabs's Chairman defendant Jeffery Taub left a defamatory voicemail message for an Illinois-based Gencor distributor. Because defendants are all New York residents, venue was only proper in the Northern District if a substantial part of the events at issue occurred in Illinois. Gencor argued that the Illinois voicemail and various Fedlabs mailings to Illinois residents including the copyrighted studies constituted a substantial part of the events at issue. In support of its contentions, Gencor submitted only a transcript of the alleged voicemail. Gencor did not submit any mailings that had been sent to Northern District residents or a declaration stating that the voicemail had been received at a Northern District telephone number. The Court held that Gencor's unsupported "bare allegations" did not meet Gencor's burden of proving that venue was proper.
Practice tip: You must support factual allegations with evidence. Local Rule 56.1 forces parties to follow this advice for summary judgment motions (although many fail to follow the rule). But the requirement, although unwritten, is no less important for other motions. If you are ever not sure whether an allegation requires evidentiary support, err on the side of providing the support. I have never seen an argument lost because a party unnecessarily supported its factual allegations.
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DJ Photog. v. Wibert, Inc., No. 06 C 2215, Slip Op. (N.D. Ill. Jul. 11, 2007) (Zagel, J.).*
Judge Zagel dismissed plaintiff's copyright infringement claim, held that its quantum meruit claim was preempted by the Copyright Act and, therefore, entered judgment in the case in favor of defendants. Plaintiff DJ Photography argued that defendants infringed its copyrights in pictures of a burial vault and mourners at a graveside service. But in their Local Rule 56.1 Statement of Undisputed Facts, defendants stated that the copyrights asserted were both registered by an individual, Donald Johnson, not DJ Photography. Because DJ Photography did not dispute that Johnson owned the copyrights, the Court held that DJ Photography could not prove ownership of the copyrights and, because it did not own the copyrights, DJ Photography lacked standing to bring the suit. The Court also held that the quantum meruit claim was preempted by the Copyright Act.
* Because the opinion has not been published electronically, you can read a copy of it here.
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Republic Tobacco L.P. v. North Atlantic Trading Co., No. 06 C 2738, 2007 WL 1424093 (N.D. Ill. May 10, 2007) (Der-Yeghiayan, J.).*
Judge Der-Yeghiayan granted plaintiff/counter-defendant Republic Tobacco's ("Republic") motion for summary judgment on defendant/counter-plaintiff North Atlantic Trading's ("North Atlantic") counterclaims and granted North Atlantic's motion for summary judgment as to each of Republic's claims. Republic brought claims against North Atlantic for Lanham Act false advertising, violation of the Illinois Uniform Deceptive Trade Practices Act ("IDTPA") and other state law claims, all arising out of an allegedly "false and misleading" presentation entitled "Cigarette Paper Review" ("CPR") which North Atlantic allegedly gave to various Republic customers. The CPR allegedly criticized Republic, saying among other things that Republic's cigarette rolling papers were the same as North Atlantic's and that Republic's Chairman Donald Levin had "lied" about the composition of Republic's cigarette papers. North Atlantic filed counterclaims alleging Lanham Act false advertising, violation of the IDTPA and other state law claims, all arising out of Republic's alleged sales of orange cigarette papers similar in color and size to North Atlantic's orange Zig-Zag papers, for the purpose of confusing or deceiving consumers.
Because Republic could not establish that the statements in the CPR were literally false, as opposed to just misleading, and because many of the statements were subject to innocent constructions, Republic could not prove its false advertising or IDTPA claims.
Republic sought summary judgment of all of North Atlantic's claims because, among other reasons, the license agreement governing North Atlantic's use of the Zig-Zag marks and cigarette papers did not allow North Atlantic to bring its counterclaims. Republic argued that the licensor of the Zig-Zag marks, Bollore, had the right and duty to bring the suit and, if at all, North Atlantic could only bring the counterclaims after North Atlantic notified Bollore of the counterclaims and Bollore had decided not to file them. North Atlantic argued that Bollore was aware of the suit and had not attempted to stop North Atlantic from prosecuting its counterclaims, but provided no evidence that it ever provided Bollore notice of Republic's alleged infringement, as required by the agreement. The agreement required that either party notify the other of any infringements, and provided Bollore sole discretion to prosecute infringements. North Atlantic was allowed to pursue infringers "which Bollore determines not to commence or diligently pursue . . . ." Because North Atlantic did not provide evidence to counter Republic's Local Rule 56.1 statement of material fact that Bollore never gave North Atlantic consent to bring the counterclaims, the Court deemed that fact admitted. The Court, therefore, granted Republic summary judgment on North Atlantic's counterclaims because Bollore never consented to North Atlantic's filing of them, as required by the agreement.
* More on a similar case between the parties can be read in the Blog's archives.
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