Party Claiming Copyright Ownership Not a Rule 19 Necessary Party

Posted on May 24, 2010 by R. David Donoghue

Zimnicki v. General Foam Plastics Corp., No. 09 C 2132, Slip Op. (N.D. Ill. Mar. 24, 2010) (Grady, J.).

Judge Grady denied defendants' motion to dismiss or, in the alternative, to join a necessary party pursuant to Fed. R. Civ. P. 19 in this copyright case involving holiday decorations including  "decorative deer" designs. In an earlier-filed, ongoing litigation defendant Neo-Neon claimed that it owned the copyrights-in-suit and argued in the alternative, that the designs are generic. As an initial matter, the Court held that dismissal was not appropriate, even if Neo-Neon was a required party, because defendants did not attempt to show that Neo-Neon could not be joined.

Defendants did argue that their failure to join Neo-Neon would subject defendants to multiple or inconsistent obligations. While a theoretical interest in a litigation would not require joinder, Neo-Neon's actual claimed interest in the copyright was more than theoretical.  The Court had discretion to require joinder based upon that claim.

 

But the Court did not require joinder. Neo-Neon was determining its interests in a parallel proceeding in the Northern District – click here for more on that case. And while the ownership dispute generally put defendants in risk of multiple obligations, circumstances mitigated that concern. In addition to claiming ownership, Neo-Neon claimed the copyrights were generic. And there was no indication that Neo-Neon intended to use any interest it acquired to enforce the copyrights-in-suit.

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Prior Standing Ruling is Preclusive Absent License Revisions

Posted on November 15, 2007 by R. David Donoghue

Abbott Labs. V. Church & Dwight, Inc., No. 07 C 3428, 2007 WL 3120007 (N.D. Ill. Oct. 23, 2007) (Kennelly, J.).

Judge Kennelly denied defendant Church & Dwight’s (“C&D”) 28 U.S.C. Section 1404(a) motion to transfer this patent case to the District of New Jersey, where a related case between the parties was pending, and granted C&D’s motion to dismiss a claim that the New Jersey Court previously dismissed for lack of standing. In New Jersey, C&D sued plaintiff Abbott Laboratories (“Abbott”) alleging infringement of patents covering lateral flow immunology devices, and pregnancy and ovulation testing methods. Abbott counterclaimed alleging infringement of three patents, including U.S. Patent No. 6,534,320 (the “’320 patent”). The New Jersey Court ultimately dismissed Abbott’s counterclaim, holding that Abbott was a nonexclusive licensee of the ‘320 patent and, therefore, lacked standing. The New Jersey Court also held that standing could not be cured by Abbott’s effort to involuntarily join its licensor Inverness pursuant to Fed. R. Civ. P. 19.  Based upon the New Jersey Court’s ruling, this Court held that issue preclusion prevented Abbott from re-litigating its standing to sue. Unless Abbott revised its license agreement with Inverness, giving Abbott additional rights, the New Jersey Court’s ruling was preclusive. The Court, therefore, dismissed Abbott’s ‘320 patent infringement claim.

The Court denied C&D’s motion to transfer the case to New Jersey. The Court gave Abbott’s choice of forum deference. And the Court gave little weight to the parties’ ongoing New Jersey patent suit because the New Jersey Court dismissed Abbott’s counterclaims before making any substantive rulings. The New Jersey Court, therefore, would not have been in a better position to decide any issues in the case. 

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