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Chicago IP Litigation Tracking Northern District of Illinois IP Cases

Tag Archives: Conlon

Damages Awarded on Lanham Act Default Judgment

Posted in Damages

O.A. Cargo, Inc. v. OA Cargo Chicago, No. 12 C 5763, Slip OP. (N.D. Ill. Mar. 13, 2014) (Zagel, J.).

Judge Zagel awarded damages in this Lanham Act case after he and Judge Conlon entered default judgment against the defendants.

Pursuant to its “considerable discretion” to award damages based upon a default judgment, the Court awarded the following damages:

  1. Expenses incurred in setting up Defendants’ business – $36,826.24
  2. Franchise fee – $50,000
  3. Ongoing licensing fees of $8,633.33 per month for 16.5 months – $142,449.95 + $35,612.49 = $178,062.44
  4. Attorneys’ fees and costs – $35,816.47
  5.  Statutory interest

The Court did not award damages for the entire 26 month period for which plaintiff sought the ongoing licensing fees.  The Court held that the evidence did not support the full 26 months.  Instead, the evidence supported 16.5 months.  The Court awarded damages for 16.5 months.  The Court also held that there was evidence that defendants’ conduct was willful.  The evidence warranted a 25% increase in the award of ongoing licensing fees, but not the trebling sought by plaintiff.  Finally, the Court denied damages based upon plaintiff’s alleged reputational harm because the damages were “insufficiently supported.”

Court Grants Summary Judgment Based Upon No Likelihood of Confusion

Posted in Local Rules, Summary Judgment

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 oven and its related trademarks and infomercial.  As an initial matter, the parties both failed to comply with the Local Rule 56.1 requirements for statements of fact and responses thereto, largely by failing to sufficiently support statements with citation to evidence. 

Copyright

While there were many similarities between the parties’ infomercials – two hosts hugging when they met, a chef knocking frozen food against a counter, and time-lapse photography of food cooking in the oven – for each allegedly copied element EMS offered proof of many infomercials before Hearthware’s that had the same elements.  So, to the extent there was copying or at least similarity, those commonalities were unprotectable scenes a faire.  And “threadbare” allegations of direct copying could not save the claim.

Trademark

There was no likelihood of confusion between Hearthware’s NUWAVE and EMS’s SUPER WAVE marks.  While both marks contain the term “wave” the marks are presented “entirely” differently.  For example, EMS focuses upon its connection to Sharper Image.  The similarities of the products – both halogen ovens – favored confusion, as did the fact that both parties sell their products nationally in similar locations.  Neither party addressed the degree of care exercised by consumers.  Hearthware’s mark was not strong in light of the sixteen other non-halogen ovens that have registered a mark with “wave” in it.  There was no evidence of actual confusion.  There was also no evidence that EMS was attempting to palm off its product as Hearthware’s.  Balancing the factors, the Court held that any finding of likelihood of confusion would be improperly based upon conjecture.  There was, therefore, no likelihood of confusion.

Without likelihood of confusion, summary judgment was warranted on all of Hearthware’s Lanham Act and related state law claims.

Lucasfilms Strikes Back Getting Attorney’s Fees

Posted in Trial

Lucasfilms Ltd. v. Skywalker Outdoor, Inc., No. 10 C 733, Slip Op. (N.D. Ill. Sep. 22, 2011) (Conlon, J.).

Judge Conlon entered an award of plaintiff Lucasfilm’s attorney’s fees and costs in this trademark dispute. The Court previously entered a default judgment and permanent injunction against defendant Skywalker Outdoor. Skywalker objected to Lucasfilm’s 21 hours spent drafting its complaint. The Court, however, held that 21 hours was not unreasonable to fashion a complaint, nor was having three attorneys prepare or revise the complaint unreasonable.

Counsel’s Inattentiveness is Not Excusable Neglect

Posted in Trial

Lucasfilm Ltd. v. Skywalker Outdoor, Inc., No. 10 C 733, Slip Op. (N.D. Ill. Mar. 11, 2011) (Conlon, J.).

Judge Conlon denied defendant Skywalker Outdoor’s motion to modify or vacate the default judgment entered in favor of plaintiff Lucasfilm in this Lanham Act dispute. Skywalker Outdoor did not answer Lucasfilm’s complaint and then did not attend the hearing on Lucasfilm’s default motion. The Court entered default judgment after that hearing. First, Skywalker Outdoor received sufficient notice of the hearing – more than the required ten days pursuant to Fed. R. Civ. P. 55(b)(2). Furthermore, Skywalker Outdoor’s claim that it believed its counsel would attend the hearing was irrelevant. Counsel’s inattentiveness is not excusable neglect pursuant to Fed. R. Civ. P. 60(b)(1).

Questions of Fact re Alleged Enjoined Imitations Prevent Contempt

Posted in Legal News

Liquid Dynamics Corp. v. Vaughan, No. 08 C 6934, Slip Op. (N.D. Ill. Oct. 20, 2008) (Conlon, J.).

Judge Conlon denied plaintiff’s objections to the Magistrate’s Report and Recommendations and denied plaintiff’s contempt motion. In a prior case, a jury found plaintiff’s patent valid and willfully infringed. The Court trebled plaintiff’s damages, awarded plaintiff attorney’s fees, and entered a permanent injunction preventing defendant from making, using or selling any of 47 mixing systems, or colorable imitations thereof, at issue in the case. Plaintiff brought a second case alleging infringement of 22 additional mixing systems and then filed a contempt motion arguing that the 22 new mixing systems were imitations of the original 47. After an extensive evidentiary hearing, the Magistrate found questions of fact as to whether the 22 mixing systems were colorable imitations of the enjoined systems and, therefore, denied the contempt motion. After a de novo review, the Court affirmed the Magistrate’s Recommendation The 22 new mixing systems were not exact duplicates of the enjoined systems and there were questions of fact as to whether the differences were sufficiently minimal to make the new systems colorable imitations. The contempt motion was, therefore, denied, but the infringement case continued.

Abstention Not Appropriate Because Foreign Action Does Not Address All US Issues

Posted in Jurisdiction

Heriot v. Byrne, No. 08 C 2272, Slip Op. (N.D. Ill., Jul. 21, 2008) (Conlon, J.).

Judge Conlon denied defendants’ motion to dismiss plaintiffs’ copyright and related state law claims based upon forum non conveniens, Colorado River abstention, and for lack of standing. Plaintiffs alleged that they were co-owners of defendants’ copyrights in the popular books and movies associated with The Secret, a self-help program. Defendants previously filed a suit in Australia seeking a declaratory judgment that defendants owned the copyright in The Secret.

 

Forum Non Conveniens

 

The Court held that the Australian Court would not be able to resolve US copyright ownership, and, therefore, was not an adequate forum. Furthermore, much of the evidence for plaintiffs’ unjust enrichment and equitable accounting claims was located in the US, as were the key witnesses. 

 

Colorado River Abstention

 

Although both suits focused on the same works, the Australian case did not include and would not resolve plaintiffs’ equitable claims for unjust enrichment and the equitable accounting. Because the Australian case would not resolve all issues in the US case, abstention was no appropriate.

 

Standing

 

The Court held that plaintiffs had standing to make its copyright claims because plaintiffs alleged copyright ownership in their complaint.

Chicago Seminars Create Personal Jurisdiction

Posted in Jurisdiction

Wound Care Educ. Institute v. Thomas, No. 07 C 6505, Slip Op. (N.D. Ill. Jun. 17, 2008) (Conlon, J.).

Judge Conlon denied defendants’ (collectively “Wound Care Plus”) motion to dismiss plaintiff Wound Care Education Institute’s (“WCEI”) trademark and copyright infringement case for lack of personal jurisdiction, improper venue and forum non conveniens. WCEI provided wound treatment education to health professionals across the country using copyrighted materials, and is largely based in the Northern District. It alleged that Wound Care Plus attended three of its seminars and then began running competing seminars, including at least one in Chicago, using course materials that were substantially similar to or exact copies of WCEI’s copyrighted course materials. Wound Care Plus also operated a website which allowed its customers to register online for the Wound Care Plus seminars.

Personal Jurisdiction

The Court held that it had specific personal jurisdiction over Wound Care Plus, a New York resident, because it advertised its Chicago seminars in national publications seeking to register Illinois customers. Additionally, Wound Care Plus’s website created jurisdiction because it was an active, commercial website that allowed Wound Care Plus’s customers to register for, among others, its Chicago seminar online.

Venue

Venue was proper in the Northern District, despite the fact that Wound Care Plus did not reside in Illinois because a substantial part of the events giving rise to WCEI’s claims, the Chicago seminars, occurred within the Northern District.

Forum Non Conveniens

The Court noted that the motion should have been brought pursuant to 28 U.S.C. Section 1404(a), instead of the common law forum non conveniens.  Forum non conveniens was inapplicable to this case because the alternate forum was not abroad or a state court. 

Summary Judgment for Failure to Comply with Local Rule 56.1

Posted in Legal News

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

Rule 9(b) Pleading Standards for Lanham Act False Advertising Claims

Posted in Jurisdiction

CardioNet, Inc. v. LifeWatch Corp., No. 07 C 6625, 2008 WL 567031 (N.D. Ill. Feb. 27, 2008) (Conlon, J.).

Judge Conlon granted in part counter-defendant CardioNet’s Fed. R. Civ. P. 12(b)(6) motion to dismiss counter-plaintiffs’ (collectively, “LifeWatch”) Lanham Act false advertising and related Uniform Deceptive Trade Practices Act (“UDTPA”) and Consumer Fraud and Deceptive Trade Practices Act (“CFA”) claims. LifeWatch alleged that CardioNet improperly acquired one of LifeWatch’s prescription-only heart monitoring devices, the Life Star ACT. The device monitors a person’s heart rate and uses a cell phone to transmit irregular readings to a monitoring station. CardioNet allegedly inspected and tested the device. Then based on its tests, CardioNet allegedly misappropriated LifeWatch’s trade secrets and intentionally made false and misleading statements about the LifeStar ACT in its advertising. LifeWatch’s Lanham Act, UDTPA and CFA claims were all based upon CardioNet’s allegedly false advertising.

LifeWatch identified the allegedly false statements with specificity, but because LifeWatch did not plead who made them or when and where they were made, LifeWatch’s claims did not meet Rule 9(b) heightened pleading standards. The Court, therefore, dismissed the Lanham Act, UDTPA and CFA claims.

Trade Secret Act Preempts State Claims Based Upon Confidential Information

Posted in Jurisdiction

CardioNet, Inc. v. LifeWatch Corp., No. 07 C 6625, 2008 WL 567223 (N.D. Ill. Feb. 27, 2008) (Conlon, J.).

Judge Conlon granted in part defendants’ (collectively, “LifeWatch”) motion to dismiss plaintiff CardioNet’s state law claims as preempted by the Illinois Trade Secrets Act (“ITSA”). CardioNet alleged that LifeWatch improperly obtained one of CardioNet’s prescription-only MCOT remote heart monitoring devices by getting a false prescription for it. LifeWatch then tested the MCOT by, among other things, simulating a heart attack. Based upon the tests, LifeWatch gathered allegedly trade secret information from the MCOT.

The Court held that CardioNet’s conversion claim was preempted to the extent it was based upon gathering trade secret information from the MCOT because conversion of trade secrets is a restatement of misappropriation. But the claim was not preempted as it related to conversion of the MCOT device.

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Interlocutory Motions for Reconsideration are Brought Pursuant to FRCP 54(b)

Posted in Federal Rules

Varitalk, LLC v. Lahoti, No. 07 C 1771, 2007 WL 1576127 (N.D. Ill. May 30, 2007) (Conlon, J.).

Judge Conlon denied defendant Dave Lahoti’s (“Lahoti”) Fed. R. Civ. P. 60(b) motion for reconsideration of the Court’s previous opinion denying Lahoti’s motion to dismiss for lack of personal jurisdiction, improper venue and forum non conveniens (you can read more about the previous decision in the Blog’s archives). Lahoti, a California resident, operated a website from California using the domain name www.veritalk.com. Lahoti’s site was an internet portal which allowed visitors to his site to click through links to buy various products or services. The Court held that Lahoti’s website fell in the gray area between active websites (which create specific jurisdiction) and passive websites (which do not create specific jurisdiction). But the portal’s interactive and commercial nature combined with plaintiff Varitalk’s evidence that some consumers were confused and erroneously visited Lahoti’s website created personal jurisdiction. Lahoti argued for reconsideration because he contends that his website did not link to businesses located in or doing business in Illinois, and that a third party puts the content on his website. The Court denied both of these arguments, explaining that Varitalk had put presented evidence that Lahoti’s website included links to business with substantial Illinois operations and that whether Lahoti or an agent of his placed the content on his website did not change the Court’s analysis. But the Court’s procedural analysis may be the most useful part of this case for litigators. The Court notes that Lahoti styled his motion as a Fed. R. Civ. P. 60(b) motion for reconsideration, but that it is actually a Fed. R. Civ. P. 54(b) motion. Rule 60(b) is for reconsideration of final judgments, where as Rule 54(b) is for interlocutory decisions. A denial of a motion to dismiss is necessarily interlocutory.

Portal Website Creates Specific Jurisdiction

Posted in Jurisdiction

Varitalk, LLC v. Lahoti, No. 07 C 1771, 2007 WL 1576127 (N.D. Ill. May 30, 2007) (Conlon, J.).

Judge Conlon denied defendant Dave Lahoti’s (“Lahoti”) motion to dismiss plaintiff Varitalk’s complaint for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2), improper venue pursuant to Fed. R. Civ. P. 12(b)(3) and forum non conveniens. Varitalk had a principal place of business in Chicago, where it developed software to relay highly customizable pre-recorded audio messages to consumers that were indistinguishable from live human voice. Varitalk registered a trademark in its name “Varitalk” for use in connection with this business. Lahoti is an individual residing in California where he operates various businesses using websites, such as www.omegaworks.com and www.crosspath.com. Lahoti registered the domain name www.veritalk.com, where he set up an internet portal which allowed visitors to his site to click through links to buy various products or services. The Court held that Lahoti’s website fell in the gray area between active websites (which create specific jurisdiction) and passive websites (which do not create specific jurisdiction). But the portal’s interactive and commercial nature – Lahoti earned income from the site based on how many visitors clicked on links on the site and whether they bought products from the linked sites – combined with Varitalk’s evidence that some consumers were confused and erroneously visited Lahoti’s portal, create specific jurisdiction over Lahoti. On the other hand, Lahoti’s email exchange with Varitalk’s CEO Frederick Lowe, initiated by Lowe, regarding whether Lahoti would sell his portal to Varitalk did not create specific jurisdiction because the exchange was limited and not initiated by Lahoti.

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“Means” Terms Are Not Always Means Plus Function

Posted in Claim Construction

Goss Int’l Am., Inc. v. K & M Newspaper Serves., Inc., __ F. Supp.2d __, 2006 L 3883318 (N.D. Ill. Dec. 29, 2006) (Colon, J.).

In this claim construction opinion, Judge Colon considered several issues regarding whether "means" terms were actually means plus function terms.  The patented technology at issue is "inserts" which are machines that insert advertising materials into newspapers at specific locations within the newspaper.  The Court first held that "article feeder means" was no means plus function language governed by Section 112, para. 6.  Citing the Federal Circuit’s MIT v. Abacus Software, 462 F.3d 1344 (Fed. Cir. 2006) decision, the Court concluded that "article feeder," like "circuitry" in the MIT case, described a known structure in the industry.  Additionally, the patent’s prosecution history showed that both the examiner and the patienter understood "article feeder" to refer to a specific structure.  And dictionaries definitions of "feeder" were consistent with its use in the patent-at-issue.  Furthermore, the claims that included the term described the location of the article feeder and certain of its components, giving it structural definition.  Finally, defendant’s means plus function definition failed because it sought to import structures that were not necessary to the "article feeder’s" function and because certain of the structures were recited in independent claims, violating the doctrine of claim differentiation.

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Arbitration Clause Not Waived by Counsel’s Delay In Seeking Arbitration Because Counsel Did Not Have Actual Knowledge of the Provision

Posted in Legal News

DeVore Family Partnership LLP v. McDougal Littell, No. 06 C 3484, 2006 WL 3393844 (N.D. Ill. Nov. 22, 2006) (Conlon, J.).

Having already refused to dismiss this case (here), Judge Conlon held that defendants had not waived the arbitration clause in the parties’ Agreement and stayed the case pending the results of the arbitration.  Plaintiff argued that defendants waived the arbitration clause by their delay in seeking arbitration.  Defendants countered that they had not delayed because when their counsel sought copies of the agreement on several occasions, defendants’ employee sent copies of the front pages of the agreement, but omitted the back pages which included a set of preprinted terms and conditions including the arbitration clause at issue.  Defendants’ counsel received the full agreement several months after the case was filed and sought arbitration and a stay of this proceeding within two weeks of reading the full agreement.

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Liberal Pleading Standards Preserve a Claim for Copyright Infringement Profits

Posted in Pleading Requirements

DeVore Family Partnership LLP v. McDougal Littell, No. 06 C 3484, 2006 WL 2861116 (N.D. Ill. Sept. 26, 2006) (Conlon, J.).

Judge Conlon refused to dismiss or strike plaintiff’s claim for defendants’ profits from sales of a textbook which allegedly included plaintiff’s copyrighted photograph.  Plaintiff alleged that it licensed defendants to include plaintiff’s photograph of the Himalaya Mountains in a run of no more than 40,000 textbooks, but that defendants made almost 1.5 million copies of the book.  Plaintiff sought, among other things, defendants’ profits from the allegedly infringing textbooks.

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