FarmedHere, LLC v. Just Greens, LLC d/b/a AeroFarm Systems, LLC, No. 14 C 370, Slip Op. (N.D. Ill. June 16, 2014) (Holderman, Sen. J.).
Judge Holderman granted defendant AeroFarm’s Fed. R. Civ. P. 12(b)(3) motion to dismiss plaintiff FarmedHere’s Lanham Act and declaratory judgment patent claims related to the parties’ aeroponic, locally grown farming businesses because AeroFarm had filed for arbitration. AeroFarms entered a Distribution Agreement with CityPonics, but the principal of CityPonics never formed the entity, instead forming FarmedHere, allegedly to gain the benefits of the Distribution Agreement without the obligations. The Distribution Agreement contains a mandatory arbitration clause.
This case was different than a typical arbitration clause because the Court had to make a threshold determination regarding whether FarmedHere was bound by the Distribution Agreement. FarmedHere at least bound itself to the Distribution Agreement for the purpose of allowing the Court to decide whether it had jurisdiction over FarmedHere’s complaint.
The Court held that FarmedHere’s principal bound it to the Distribution Agreement for at least the following reasons:
- The principal requested substituting FarmedHere for CityPonic in the Distribution Agreement;
- The principal drafted a document attempting to formally allow FarmedHere to exploit the technology;
- FarmedHere and CityPonic shared an address; and
- FarmedHere chose not to provide any countervailing documents outside of its complaint.
Having found that FarmedHere was bound by the Distribution Agreement, the Court held it lacked jurisdiction based upon the arbitration clause. The Court, therefore, dismissed without prejudice so that to the extent that the arbitration or a New York court proceeding refused to address all of FarmedHere’s claims, it could refile in this Court.
Ignite USA, LLC v. Pacific Market Int’l, LLC, No. 14 C 845, Slip Op. (N.D. Ill. May 29, 2014) (Holderman, J.).
Judge Holderman granted defendant Pacific Marketing International’s (“PMI’s”) motion to stay plaintiff Ignite USA’s patent litigation case pending the results of PMI’s Inter Partes Review (“IPR”) seeking to invalidate Ignite USA’s asserted patent regarding a drinking container.
Ignite USA would not be prejudiced by a stay. PMI promptly filed its IPR petition and the litigation was in its early stages. Ignite USA’s own delay in filing the suit after learning of the alleged infringement — from March 2012 to April 2014 — suggested that Ignite USA would not be prejudiced by the delay. Additionally, Ignite USA’s failure to seek a preliminary injunction suggested that its claims of lost market share were not as severe as it claimed.
The stay would streamline the case. Patent Office statistics suggest an “82% probability” that the Patent Office will institute the IPR and a greater than 92% likelihood that at least one claim will be amended or cancelled outright. In fact, even an IPR decision upholding all of the claims would simplify issues by reducing PMI’s invalidity arguments. To avoid additional delay, the parties were required to report to the Court within seven days of the Patent Office’s decision on the IPR petition.
Finally, the reduced litigation burden counseled in favor of the stay. Whatever the outcome of the IPR, it would reduce the scope of the case and the work required by the parties and the Court.
Digital Design Corp. v. Kostan, No. 11 C 6243, Slip Op. (N.D. Ill. Oct. 7, 2013) (Holderman, J.).
Judge Holderman denied the parties’ joint motion for entry of a consent judgment. The Court previously granted the parties agreed stipulation of dismissal and dismissed the parties’ claims with prejudice. Seventh Circuit precedent prevents district courts from retaining jurisdiction after dismissing with prejudice. Had the parties wanted a consent judgment entered they should have dismissed without prejudice or sought the consent judgment before dismissing with prejudice.