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Tag Archives: Zagel

TRO Partially Delayed for Impending Trade Show

Posted in Damages

Dental USA, Inc. v. McClellan, No. 13 C 260, Slip OP. (N.D. Ill. Aug. 16, 2013) (Zagel, J.).

Judge Zagel granted in part plaintiff Dental USA’s motion for a temporary restraining order and injunction in this trademark and design patent infringement case.  Dental USA had a trademark for DENTAL USA, as well as POWER ELEVATOR for a tooth extraction machine.  Dental USA also had a design patent for the tooth extraction machine.  Defendants are former employees of Dental USA who allegedly formed United Dental USA, which competed with Dental USA, including by selling a Misch Power Elevator that performs the same function as Dental USA’s Power Elevator.  Dental USA also alleged that defendants improperly used Dental USA’s copyrighted images on defendants’ website.  Dental USA sought an order enjoining defendants from:  1) using the United Dental USA name at upcoming trade shows; 2) selling Misch Power Elevators, along with any related tools; 3) selling infringing products on defendants’ website; and 4) using Dental USA’s copyrighted works on defendants’ website.  Dental USA also sough seizure of counterfeit goods. 

Defendants were barred from using the name United Dental USA at any future trade shows until the Court reached a decision on the merits.  Defendants had already agreed not to use the name at one, upcoming tradeshow in San Francisco.  Defendants were ordered to take down their uniteddentalusa.com website until at least a final judgment was issued in the case. 

The Court held that DENTAL USA and UNITED DENTAL USA were “self-evidently very similar marks.”  Adding “United” did little to change that analysis, particularly because the U in USA was an abbreviation for “united.”  Dental USA also had at least some evidence of actual confusion.  There was also evidence that Defendants were using Dental USA’s part numbers and product images, adding to the likelihood of confusion.  There was also at least some evidence of actual confusion.

The Court noted that Lanham Act violations are presumed to be irreparable harm, and the evidence in this case bolstered that — the similarity of the products and the fact that the parties compete at the same trade shows.

The balance of equities favored Dental USA.  In particular, defendants used two names — United Dental USA and Misch Instruments.  Because Misch Instruments was the dominant name, defendants were unlikely to be harmed by an injunction.

The public had a strong interest in enforcing intellectual property which was somewhat balanced by an interest in healthy competition.  If the Court felt that the injunction would put defendants out of business, it might have changed the analysis, but that was unlikely. 

The Court, however, denied Dental USA’s motion to enjoin sales of the Misch Power Elevator.  But the Court enjoined the use of the MISCH POWER ELEVATOR trademark or any other POWER ELEVATOR mark, for similar reasons.  The Court did, however, delay the injunction until after the San Francisco trade show.  Having enjoined the products so close to that trade show would have seriously harmed defendant’s business.

2013 PWC Patent Litigation Study: N.D. Illinois Remains a Key Patent District

Posted in Legal News

PWC has published the latest installment in its excellent yearly patent litigation survey.  This year’s survey looks at data for every year from 1995 through 2012.  One interesting aspect of this year’s study was a focus upon individual districts and judges.  Here are some of the key takeaways regarding the Northern District:

  • The Northern District (a top five patent district in terms of number of filings) is the fifteenth fastest district to trial with 35 cases going to trial during the period (1995-2012) in a median time of 3.67 years.  That is relatively slow as compared to the Eastern District of Virginia’s .97 years mediation or the Western District of Wisconsin’s 1.07 years.  But those times to trial do not take into account the number of trials — 32 for the Northern District, 22 for Virginia and 10 for Wisconsin — nor do they consider the relative complexity of those cases. 
  • In those trials, plaintiff’s have a 24.8% success rate with median damages of almost $5.9M.  That puts the Northern District 8th in terms of largest median damages awarded, and 13th in plaintiff’s success rate.
  • The Northern District is 2nd in terms of number of reported NPE decisions with 32 decisions and 133 total patent decisions.  In those decisions, the NPEs’ success rate was 12.5%.
  • The Northern District is also the 4th district in ANDA filings with twelve.

The PWC study also looks at individual judges, with Northern District judges ranking high in all categories:

  • Judge Darrah was the 11th judge nationwide in terms of patent decisions with 10 total.  Plaintiffs’ success rate was 10% on those decisions.  Seven of the ten decisions were summary judgment decisions.  Judge Darrah is ranked 8th for summary judgment decisions nationwide with seven decisions and a 0% success rates for plaintiffs.
  • Judge Kendall was 18th with nine decisions (88.9% were summary judgment decisions).  Kendall had an 11.1% success rate for plaintiffs.  Judge Kendall is ranked 6th for summary judgment decisions nationwide with eight decisions and a 12.5% success rates for plaintiffs.
  • Judge Bucklo was 21st with eight decisions (62.5% were summary judgment decisions).  Bucklo had a 50% success rate for plaintiffs.  Judge Bucklo is ranked 24th for summary judgment decisions nationwide with five decisions and a 20% success rates for plaintiffs.
  • Judge Guzman was 34th with seven decisions (71.4% were summary judgment decisions) with a 14.3% success rate for plaintiffs.  Judge Guzman is ranked 26th for summary judgment decisions nationwide with five decisions and a 20% success rates for plaintiffs.
  • Judge Zagel was 35th with six decisions (66.7% were summary judgment decisions) with a 66.7% success rate for plaintiffs.  Judge Zagel is ranked 36th for summary judgment decisions nationwide with four decisions and a 50% success rates for plaintiffs.
  • Judge St. Eve was 41st with six decisions (83.3% were summary judgment decisions) with a 16.7% success rate for plaintiffs.  Judge St. Eve is ranked 35th for summary judgment decisions nationwide with five decisions and a 0% success rates for plaintiffs.
  • Judge Kennelly is ranked 31st for summary judgment decisions nationwide with five decisions and a 0% success rates for plaintiffs.

The judge-by-judge statistics are interesting, but because of the relatively low number of decisions and the relatively simple statistics offered, they likely do not tell us much.  It is hard to draw many clear conclusions from sample sets of, in most cases, four to six summary judgment decisions spaced over years with varied parties and circumstances. It is also curious that Judge Pallmeyer did not make any of the lists, although she has been on a number of lists as one of the busiest patent judges in the nation over the almost seven years that I have been writing this blog.

AIA False Marking Limitations Upheld as Constitutional

Posted in Jurisdiction

Heathcote Holdings Corp., Inc. v. Suncast Corp., No. 11 C 1010, Slip Op. (N.D. Ill. Jul. 25, 2012) (Zagel, J.).

Judge Zagel held that the America Invents Act (“AIA”) provisions limiting false patent marking standing to persons that suffered a competitive injury, even in ongoing cases, was not an unconstitutional taking.  Defendant allegedly marked several different snow shovel models with stickers indicating that the shovels were covered by expired design and utility patents - the allegedly false marking.  After the filing of the suit, the AIA retroactively required that the plaintiff have suffered a competitive injury in order to have standing to maintain its false marking suit.  Plaintiff Heathcote acknowledged that it lacked standing pursuant to the new standard, but argued that the retroactive elimination of its claim was an unconstitutional taking.  

The Court held, citing to several decisions in other districts, that Congress was free to create qui tam actions and free to remove them.  Congress had the authority to invite private citizens to enforce its laws and the authority to remove that right when Congress decided that the volume of cases was too great, for whatever reason. 

New Arguments Improper in Motion for Reconsideration

Posted in Summary Judgment

llinois Corporation Research LLC v. Best Buy Stores, L.P., No. 10 C 4298 Slip. Op. (N.D. Ill. Sep. 12, 2011) (Zagel, J.). 

Judge Zagel denied plaintiff Illinois Computer Research’s (“ICR”) motion to reconsider the Court’s opinion granting summary judgment in this patent case for the following reasons:

·       ICR’s argument that defendant Best Buy’s agreement was based upon an improper definition of “affiliate” was improper for reconsideration because it was a new argument; 

·       ICR’s argument that Singapore law controlled was also new and, therefore, improper.

Court Reconsiders Ruling re Patent Settlement Agreement

Posted in Settlement

Balshe LLC v. Ross, No. 08 C 3256, Slip Op. (N.D. Ill. Jul. 7, 2011) (Zagel, J.).

Judge Zagel granted in part defendants’ motion to reconsider the Court’s prior ruling regarding the parties’ settlement agreement in this case regarding a patent to a system of pooling life insurance policies to create a predictable income stream. Pursuant to the agreement, defendants were to transfer their respective interests in the patent to newly-created, third party Institutional Pooled Benefits LLC ("IPB"). Defendants refused to transfer their rights, arguing that provisions of IPB’s operating agreement were in tension with the agreement.

The Court held that, while the agreement did not require that defendants sign IPB’s operating agreement, terms of the operating agreement did require defendants’ signature. Those signatures, however, were mere formalities.

Defendants’ argument that they did not agree to naming the Newco contemplated by the agreement IPB was no different than the argument in defendants’ original papers and was, therefore, improper as a motion for reconsideration.

The Court denied defendants’ request, in its reply brief, for additional relief. Defendants were limited to the relief sought in their motion to reconsider.

Normally, courts do not consider new evidence presented in a reply. But in light of the particular circumstances of this case, the Court considered defendants’ new evidence offered in their reply.

Vendor’s Patent License Covers Private Label Resellers

Posted in Summary Judgment

Illinois Computer Research, LLC v. Best Buy Stores, L.P., No. 10 C 4298, Slip Op. (N.D. Ill. Jun. 29, 2011) (Zagel, J.).

Judge Zagel granted defendants (collectively "Best Buy") summary judgment that its Rocketfish sound cards were already licensed because they were designed and manufactured by license from Creative Products ("Creative") for Best Buy.

First, Best Buy’s vendor Ectiva was an Affiliate of Creative. Best Buy’s documents showed a clear relationship between the parties. The fact that Best Buy’s evidence was only authenticated by counsel’s declaration did not prevent considering the evidence for several reasons:

  1. FRE 902(3) allows the Court discretion to consider certain evidence that had not been finally authenticated.
  2. Plaintiff offered no evidence or even argument that the documents were fraudulent or otherwise amendable.
  3. Best Buy ultimately produced certified copies of the evidence.

The Court also held that the Rockefish sound cards were Creative products. The Court already held that Ectiva was an Affiliate of Creative, and plaintiff did not dispute that the soundcards were manufactured for Creative and its affiliates, including Ectiva.

Finally, Creative was not acting as a foundry for Best Buy. Best Buy’s uncontroverted declarations established that Creative, not Best Buy, designed the soundcards.

Northern District of Illinois Patent Program Begins

Posted in Legal News

The patent pilot program started this month in the Northern District and across the country.  The pilot program is a ten-year look at ways to handle patent cases more effectively.  The main component of the pilot program is judges in pilot districts, including the Northern District, self-selecting as patent judges.  Patent cases will continue to be randomly assigned to all Northern District judges.  But when a non-patent judge is assigned a patent case that judge will have thirty days to order reassignment of the case.  When reassignment is ordered, the case will be randomly reassigned to one of the patent judges.  There will also be patent-related education and programs offered for the patent judges across the country. 

One unanswered question about the pilot program remains:  If a non-patent judge was assigned a patent case less than thirty days before the program kicked off on September 19, can the non-patent judge order the patent case reassigned pursuant to the pilot program?  I have not seen it happen yet, but I suspect it could over the next week or two.

The Northern District issued the following list of judges who have self-selected as patent judges:

  • Chief Judge James F. Holderman

  • Judge Ruben Castillo
  • Judge John W. Darrah
  • Judge Gary S. Feinerman
  • Judge Virginia Kendall
  • Judge Matthew F. Kennelly
  • Judge Joan Humphrey Lefkow
  • Judge Rebecca R. Pallmeyer
  • Judge Amy J. St. Eve
  • Judge James B. Zagel
  • Mutual Non-Compliance With Local Rule 56.1 Avoids Procedural Grant or Denial

    Posted in Local Rules

    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.

    Allegations of Defendant’s Acts as a Group Sufficient to Plead Copyright and Trademark Infringement

    Posted in Pleading Requirements

    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 granted in part defendants’ motion to dismiss plaintiff Healix Infusion Therapy’s ("Healix") complaint, which included copyright infringement, trademark infringement and tortious interference claims, all related to the parties’ competition for medical infusion services, as follows:

                                                                           Copyright

    The Court dismissed Healix’s claims for statutory damages on its copyright claims. The record showed that Healix filed for its copyright registrations after defendants began the alleged infringements, and more than three months after first publication. As a result, statutory damages were not recoverable. Healix could only receive actual damages. Furthermore, the Court denied Healix’s request to amend its pleadings to include a demand for actual damages because Healix had already filed four complaints in the case and never sought actual damages.

                                                                           Trademark

    Although sparse, Healix’s trademark claims were sufficiently plead. Defendants argued that Healix had not pled use in commerce. But it was sufficient that Healix pled that Defendants displayed Healix’s marks to the public and that Defendants allegedly copied Healix’s marks with intent to use them in selling Defendants services to the consuming public.

                                                                      Tortious Interference

    The Court took Defendants’ motion to dismiss Healix’s tortious interference claim under advisement, in favor of a fully briefed summary judgment motion on the issue that more fully set out the relevant facts.

    The Court denied the defendant’s motion to dismiss defendant Metro Infectious Disease Consultants ("Metro"). Defendants argued that Metro was never specifically accused to have committed any acts in the complaint. Instead, Healix defined as a single entity three defendants, including Metro. But the Court held that it was sufficient in this instance for Healix to group Metro with two other defendants and make all allegations against Metro as part of the defined entity.

    Court Dismisses Case and Considers Unenforceability With Exceptional Case Motion

    Posted in Damages

    Gordon-Darby Sys., Inc. v. Applus Techs., Inc., No. 10 C 1863, Slip Op. (N.D. Ill. Dec. 23, 2010) (Zagel, J.).

    Judge Zagel granted plaintiff’s motion to dismiss its patent infringement claims regarding vehicle emissions testing with prejudice and to dismiss defendants’ noninfringement, invalidity and unenforceability claims without prejudice. After the parties engaged in some discovery, plaintiff determined that it no longer wanted to pursue its claims and gave defendants a covenant not to sue. Based upon that covenant, the parties agreed that all of their claims should be dismissed, except for defendants’ inequitable conduct claims. Defendants argued that those claims were related to its 35 U.S.C. Section § 285 claim to make the case exceptional and award defendants their attorney’s fees. Citing the Federal Circuit’s decision in Monsanto Co. v. Bayer Bioscience N.V., 514 F.3d 1229 (Fed. Cir. 2008), the Court held that, although the Federal Circuit had not squarely decided the issue, the precedent was clear that the covenant divested the Court of subject matter jurisdiction over the inequitable conduct declamatory judgment claim.

    The Court, however, retained independent jurisdiction over defendants’ Section § 285 claim to make the case exceptional and award defendants their attorney’s fees. And the Court acknowledged that it could consider unenforceability as part of the exceptional case analysis, which could trigger a holding that the patents in suit were unenforceable due to inequitable conduct.

    N.D. Illinois Judicial Panel: Judge Zagel

    Posted in Legal News

    The Federal Bar Association – an excellent group that is worth joining (disclosure: I am a member) – recently held a panel of Northern District judges. Here are my notes regarding Judge Zagel’s comments:

    • The most valuable cost control tool Judge Zagel has found is an early deposition, often of a 30(b)(6) designee, allowing for a second deposition later in the case. The early deposition tends to narrow discovery and case issues.
    • Clerks write first drafts of Judge Zagel’s opinions, with one clerk taking even cases and the other taking odd numbered cases. Clerks can write first drafts because a majority of cases are inadequately prosecuted or defended and, therefore, do not result in motions that are difficult, close calls.
    • Judge Zagel writes 10-15% of his own opinions.
    • Judge Zagel does voir dire by himself. Counsel do not ask questions.

    Defendant Waived Personal Jurisdiction by Its Actions, If Not Its Filings

    Posted in Jurisdiction

    Salud Natural Entrepreneur, Inc. v. Nutricento Internacional, Inc., No. 09 C 4417, Slip Op. (N.D. Ill. Jan. 27, 2011) (Zagel, J.).

    Judge Zagel denied defendant Azteca Products’ ("Azteca") Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction in this Lanham Act case. Azteca’s officer, a non-lawyer, purported to file an answer on Azteca’s behalf. Azteca then hired counsel who participated in Rule 26 scheduling conferences. Azteca’s officer then filed a Rule 12(b)(2) motion to dismiss without counsel, which the Court struck because it was not filed by counsel, and a corporate entity cannot act pro se. The Court then entered a default judgment and an injunction against Azteca. Azteca hired counsel and asked through counsel that the default be vacated. The Court vacated the judgment and agreed to consider whether Azteca’s personal jurisdiction arguments had been waived. Noting the "bizarre posture of the case, the Court held that Azteca had not preserved its jurisdiction arguments.

    The answer did not waive Azteca’s arguments because as a pro se filing it was treated as never having been filed. But counsel did participate in Rule 26(f) conferences, although he filed no notice of appearance, and offered no suggestion that Azteca would challenge jurisdiction during that time. Furthermore, jurisdiction was challenged for the first time more than thirty days after the other defendants settled based upon discussions that Azteca did not participate in. Regardless of the legal impact of Azteca’s filings, by the time Azteca challenge jurisdiction, plaintiff had developed a "reasonable expectation" that Azteca would defend itself in Illinois.

    Lack of Documentation Regarding Use at the Relevant Time Prevents Summary Judgment

    Posted in Summary Judgment

    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.

    Court Tries Lanham Act Case on the Papers

    Posted in Trial

    RNA Corp. v. The Procter & Gamble Co., No. 08 C 5953, Slip Op. (N.D. Ill. Oct. 21, 2010) (Zagel, J.).

    Judge Zagel held that defendant Procter & Gamble’s ("P&G") intellectual property rights could not be held infringed based upon the available evidence and held that on the available record, the Court could not grant attorney’s fees because a prevailing party could not be determined, in this Lanham Act case regarding P&G’s alleged trademarks and trade dress in its Herbal Essence hydrating shampoos and conditioners. Through a series of settlement conferences, the parties agreed to the scope of a preliminary and then a permanent injunction, but were unable to determine money damages issues. The parties, therefore, agreed to submit the remaining issues to trial by the Court on the papers. The Court, therefore, ruled based upon the parties’ written submissions. In my experience, this is a relatively unique way to resolve and especially to try a case in federal court. And it is an excellent example of how willing the Northern District bench tends to be to find cost-effective ways to resolve what are otherwise often prohibitively expensive intellectual property disputes.

    Discovery Motion Denied for Failure to Meet and Confer

    Posted in Pleading Requirements

    Healix Infusion Therapy, Inc. v. HHI Infusion Servs., Inc., No. 10 C 3772, Slip Op. (N.D. Ill. Aug. 9, 2010) (Zagel, J.).

    Judge Zagel denied plaintiff Healix’s motion to compel and its motion for sanctions. The motion to compel was denied without substantive analysis for failing to meet and confer with defendant pursuant to Local Rule 37.2. The motion for contempt was denied because defendant had complied with the Court’s general orders to produce documents and respond to subpoenas. Defendant did produce documents and respond to the subpoenas. Defendant did not violate those orders by refusing to produce specific documents while producing others.

    Marking With Expired Patent Sufficient for Pleading Intent

    Posted in Pleading Requirements

    Simonian v. Bunn-O-Matic Corp., No. 10 C 1203, Slip Op. (N.D. Ill. Aug. 23, 2010) (Zagel, J.).

    Judge Zagel stayed plaintiff Simonian’s false patent marking case pending the Federal Circuit’s standing decision in Stauffer – which has since issued, holding that any person has standing without regard to injury in fact.

    The Court also indicated that, once the stay was lifted, it would deny defendant’s Fed. R. Civ. P. 12(b)(6) motion to dismiss Simonian’s complaint for failure to adequately plead intent to deceive pursuant to Fed. R. Civ. P. 9(b). Simonian pled that defendant knowingly marked its coffeemakers with expired patents. That was sufficient to meet the rebuttable presumption of intent as set out in Solo Cup. It did not matter that Simonian’s claims were generic as evidenced by the use of nearly identical allegations in more than forty false patent marking cases Simonian had filed in the Northern District of Illinois.

    Supreme Court Intellectual Property Preview at Chicago-Kent

    Posted in Legal Seminars

    Chicago Kent has an excellent program coming up on September 30, 2010 at 1:00pm. Kent has gathered a very impressive group of experts to kick off its inaugural Supreme Court Intellectual Property Review. The Northern District’s own Judge Zagel will be a featured speaker.

    The program promises to address the big IP decisions from last year’s Supreme Court: American Needle, Inc. v. NFL, Bilski v. Kappos, and Reed Elsevier, Inc. v. Muchnick. The event will also look at significant IP cases that await certiorari decisions, including Costco v. Omega, S.A., and Schwarzenegger v. Entertainment Merchants Ass’n.

    In addition to Judge Zagel, the impressive panel includes:

    • Donald Chisum, author of Chisum on Patents, Patent Law Digest and Chisum Patent Law Reference Guides;
    • Roy T. Englert, Jr., of Robbins, Russell, Englert, Orseck, Untereiner & Sauber LLP (counsel for Costco);
    • Randal C. Picker, Paul H. and Theo Leffmann Professor of Commercial Law at the University of Chicago Law School; and
    • Paul M. Smith of Jenner & Block LLP (counsel for Entertainment Merchants Association and Entertainment Software Association).

    Other speakers include: 

    • Thomas C. Goldstein of Akin Gump Strauss Hauer & Feld LLP and publisher of SCOTUSblog;
    • Deborah Jones Merritt, John Deaver Drinko-Baker & Hostetler Chair in Law at Moritz College of Law, Ohio State University (court-appointed amicus in Reed Elsevier);
    • Jeffrey M. Carey, general counsel of American Needle, Inc.; and
    • Scott E. Gant of Boies, Schiller & Flexner LLP.

    The program is free of charge, but requires registration. Contact Patricia O’Neal at (312) 906-5128 or ipconference@kentlaw.edu for registration or more information.

    Court Enters Judgment on Trademark Damages and Attorneys Fees in Accordian Case

    Posted in Damages

    Gabbanelli Accordions & Imports, L.L.C. v. Italo-Am. Accordion Mfg. Co., No. 02 C 4048, Slip. Op. (N.D. Ill. Sept. 21, 2009) (Zagel, J.).

    Judge Zagel entered judgment on behalf of plaintiffs in the amount of $151,200 in lost profits after the Seventh Circuit affirmed the Court’s judgment.* The Court also held defendants jointly and severally liable for $147,576.12 in plaintiff’s attorneys’ fees.

    * Click here for more on this case in the Blog’s archives.

    N.D. Illinois Local Patent Rules Will Drive Cases to Chicago

    Posted in Local Rules

    The most popular posts on the Blog during 2009, in terms of both views and reader questions, were those on the Local Patent Rules.  Because of high interest, I have plans for additional analysis this year.  This is the first of those posts.  In late 2009, I had an article published in Bloomberg Law discussing why the new Rules will drive patent cases to the Northern District of Illinois.  Bloomberg generously allowed me to post a pdf version of the story — click here to download it — and to repost it on the blog.  Here is the article:

    The Northern District of Illinois enacted Local Patent Rules ("LPR" or "Rules") on October 1, 2009. The purpose of the Rules is to normalize patent litigation in the Northern District of Illinois and to streamline the patent litigation discovery process. See LPR, Preamble. The rules also make clear that the court does not intend to become a "rocket docket." In fact, the Rules create a schedule that would have cases ready for trial in a little over two years, although cases would not necessarily be tried at that time. That is at most a modest change from the court’s average time to trial for all cases—about twenty-seven months, according to the most recent Federal Court Management Statistics.

    The Northern District of Illinois did not intend that its new Rules would drive patent cases to Chicago, as has happened when other courts enacted local patent rules, such as the Eastern District of Texas. But despite its intentions, the Northern District of Illinois’s plan to normalize patent litigation practice and streamline discovery will significantly increase patent filings in Chicago. To understand why the Rules will increase case filings, it is important to understand the process created by the Rules, and then look at the impact specific Rules will have for both patentholders and accused infringers.

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    IP News Shorts

    Posted in Legal News

    Here are several stories that I have been wanting to blog about, but have not been able to get to because of the new Local Patent Rules, my webinar on reducing IP litigation costs (I was glad to see that so many of you attended and found the presentation valuable) and pressing client matters:

    • Judge Zagel was interviewed by Metropolitan Corporate Counsel.  He discussed how his docket has been impacted by the recession and  noted, among other things, that parties have been much more interested in and willing to agree to staying cases or slow discovery — click here to read the story.  He also briefly discusses discovery of electronically stored information.
    • Seattle Trademark Lawyer Michael Atkins has an excellent series of posts on the US Olympic Committee’s enforcement of the Olympic marks, to which it has almost absolute rights based upon federal law — click here, here, here, here and here.  I had planned to write about these issues myself early this week while Chicago enjoyed winning the 2016 Summer Olympics, but as you all likely know by now that is not quite how the vote went.

    Same Patent Not Enough for Reassignment of Plaintiff’s Suits to One Judge

    Posted in Local Rules

    Bajer Design & Marketing Inc. v. Ware Mfg. Inc., No. 09 C 1425, Min. Order (N.D. Ill. Jun 11, 2009) (Kendall, J.).

    Judge Kendall denied plaintiff Bajer’s motion to reassign its second filed patent infringement suit pending before Judge Zagel asserting the patent in suit to Judge Kendall pursuant to Fed. R. Civ. P. 42 and Local Rule 40.4. The cases met two of the four Rule 40.4(b) requirements for reassignment because both cases were pending in the Northern District and because both cases were at similar stages with defendants having just answered, such that reassignment would not slow progress of the first case. The Court also noted that a single Markman proceeding and set of claim constructions was a benefit of reassignment. But the potential for a uniform claim construction was outweighed by the fact that defendants’ accused products and, therefore, noninfringement positions were significantly different. Based upon the differing noninfringement positions and other possible differences in the parties defenses, the Court held that reassignment would not achieve the required substantial savings of judicial time and effort.

    Product Sales Including Infringing Product is Evidence of Commercial Success

    Posted in Trial

    Krippelz v. Ford Motor Co., No. 98 C 2361, Min. Order (N.D. Ill. Dec. 5, 2008) (Zagel, J.).

    Judge Zagel ruled upon various motions in limine.  Of particular interest, the Court denied defendants motion for reconsideration of the Court’s grant of summary judgment of infringement.  The Court held that the evidence defendant used to create a material question of fact was inadmissible.  And while the motion could be construed to include new arguments, they were too late to overcome summary judgment.

    The Court also granted plaintiff’s motion to preclude defendant’s evidence of noninfringing alternatives because plaintiff was only seeking a reasonable royalty, not lost profits.  Finally, the Court denied defendant’s motion to exclude evidence of defendant’s vehicle sales as evidence of commercial excess.  While it is unlikely that anyone purchased a vehicle because of the infringing puddle lamp, the fact that defendant used the lamps in its vehicles and sold a "fair number" is evidence of commercial success.

    Seventh Circuit American Jury Project

    Posted in Trial

    The Seventh Circuit instituted a Commission to study the implementation of the ABA Jury Project.  The Northern District was heavily represented on the Commission.  The following Northern District Judges were members of the Commission:  Bucklo, Brown, Coar, Darrah, Denlow, Der-Yeghiayan, Gottschall, Holderman, Kennelly, Lefkow, Moran, Schenkier, St. Eve, and Zagel.  The Commission recently published its report — click here to read it.  The report describes a two phase analysis.  In the first phase, district judges tested the following seven ABA Principles:

    1.       Twelve-Person Juries;

     

    2.       Jury Selection Questionnaires;

     

    3.       Preliminary Substantive Jury Instructions;

     

    4.       Trial Time Limits;

     

    5.       Juror Questions;

     

    6.       Interim Trial Statements by Counsel; and

     

    7.       Enhanced Jury Deliberations.

    Other Principles, such as juror notebooks and allowing jurors to take notes, were already in such widespread use that they were not tested.  Click here for the Phase One Project manual detailing the principles, the rationales and authority behind them, and suggested procedures.  Phase One resulted in questionnaires from 22 participating federal trial judges, 74 participating attorneys and 303 jurors from 38 trials that used one or more of the seven Principles.  Based upon the analysis of Phase One results and questionnaires, the Commission focused Phase Two on the following four Principles:

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    Motion to Transfer Filed 11 Months After the Complaint is Denied

    Posted in Jurisdiction

    BorgWarner, Inc. v. Hilite Int’l., Inc., No. 07 C 3339, 2008 WL 3849908 (N.D. Ill. Aug. 14, 2008) (Zagel, J.)

    Judge Zagel denied defendant Hilite’s 23 U.S.C. §1404(a) motion to transfer. Plaintiff BorgWarner filed this patent infringement suit over variable camshaft timing (“VCT”) in June 2007. Hilite answered and counterclaimed in March 2008. Five days after answering, Hilite filed a suit in the District of Delaware alleging that BorgWarner infringed Hilite’s VCT patent. Hilite reasoned that its VCT case was related to a prior Delaware patent case filed by BorgWarner on the patent currently at issue in the Northern District, and, therefore, by the transitive property this suit and BorgWarner’s closed Delaware case were related.

    While the Seventh Circuit does not strictly follow the first-to-file rule, its use was warranted in this case. BorgWarner’s choice of forum deserved some deference. And the Northern District, while equivalent to Delaware in terms of time to trial, was significantly faster for average disposition without court actions – 6.2 months in the Northern District to 12.5 months in Delaware. Convenience factors were neutral, and therefore weighed in favor of keeping the case in the Northern District.