Chicago IP Attorney & Lawyer : R. David Donoghue : Chicago IP Litigation Blog

Civix-DDI, LLC v. Hotels.com, L.P., No. 05 C 6869, Slip Op. (N.D. Ill. Jan. 19, 2011) (St. Eve, J.).

Judge St. Eve granted in part plaintiff Civix-DDI's ("Civix") motion to strike defendants' (collectively "Hotels.com") allegedly "new defenses and witnesses" in this patent case. The Court held as follows:

• Hotels.com was free to update its corporate witnesses based upon changed jobs and responsibilities, so long as the new witnesses were made available for deposition if they might potentially be called at trial.
   
• Disclosure of a new piece of prior art ten months after the close of fact discovery would prejudice Civix, and Hotels.com did not justify its late disclosure. The prior art was, therefore, excluded pursuant to Fed. R. Civ. P. 37.
   
• The Court also excluded a license for Google technology that was executed in relevant part in August 2010, about three months before Hotels.com's supplemental interrogatory response disclosing the license. While a three month delay was sometimes acceptable, it was not in this case. Fact discovery closed seven months before the agreement was executed and ten months before the supplemental response identifying the license. And expert discovery was set to close four months after the supplement. Civix, therefore, would have been prejudiced by Hotels.com's three month delay in this case. So, the license was excluded.
   

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Civix-DDI, LLC v. Hotels.com, L.P., No. 05 C 6869, Slip Op. (N.D. Ill. Jan. 19, 2011) (St. Eve, J.).

Judge St. Eve granted in part plaintiff Civix-DDI's ("Civix") motion to strike defendants' (collectively "Hotels.com") allegedly "new defenses and witnesses" in this patent case. The Court held as follows:

• Hotels.com was free to update its corporate witnesses based upon changed jobs and responsibilities, so long as the new witnesses were made available for deposition if they might potentially be called at trial.
   
• Disclosure of a new piece of prior art ten months after the close of fact discovery would prejudice Civix, and Hotels.com did not justify its late disclosure. The prior art was, therefore, excluded pursuant to Fed. R. Civ. P. 37.
   
• The Court also excluded a license for Google technology that was executed in relevant part in August 2010, about three months before Hotels.com's supplemental interrogatory response disclosing the license. While a three month delay was sometimes acceptable, it was not in this case. Fact discovery closed seven months before the agreement was executed and ten months before the supplemental response identifying the license. And expert discovery was set to close four months after the supplement. Civix, therefore, would have been prejudiced by Hotels.com's three month delay in this case. So, the license was excluded.

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Rosenthal Collins Group, LLC v. Trading Techs. Int'l, Inc., No. 95 C 4088, Slip Op. (N.D. Ill. Jun. 29, 2010) (Kim, Mag. J.).

Judge Kim granted declaratory judgment defendant Trading Technologies ("TT") approximately $290,000 of $375,000 requested in fees and costs pursuant to Fed. R. Civ. P. 37(b)(2) in this patent case.* On March 14, 2007, the Court held that declaratory judgment plaintiff Rosenthal Collins Group's ("RCG") summary judgment motion was "misleading," "disingenuous" and "prematurely filed" – click here to read more about the opinion in the Blog's archives. The Court, therefore, found RCG's conduct sanctionable, struck the motion without prejudice, struck the supporting Buist declaration, and ordered RCG to pay costs for TT's software consultants, and attorney's fees and costs related to the sanction motion.

On July 17, 2008, the Court denied RCG's motion to vacate the sanction order and again ordered RCG to pay: 1) TT's consultant; 2) TT's deposition of the Buists; and 3) TT's prosecution of the sanctions motions. The Court also ordered the parties to comply with Local Rule 54.3 by trying to come to agreement on the issues.

Initially, the Court observed that "contentiousness and obvious material distrust" demonstrated by both sides had "leached" into the parties briefing. The Court awarded TT the full amount of its expert fees and costs because those fees and costs were specifically awarded by Judge Moran and because TT showed that all of the expert's work was impacted by or resulted from the misconduct. Those fees were approximately $52,000.

The Court also awarded TT's attorney's fees and costs of approximately $157,000 related to the depositions of the experts at issue. The only reduction was for a series of identical, cryptic time entries for "preparation of Buist witness kit". The court could not determine whether the fees were justified. The Court awarded TT its actual costs, instead of limiting the costs to the Fed. R. Civ. P. 54(d) limits because this sanction award was pursuant to Fed. R. Civ. P. 37 and, therefore, was not limited by Rule 54(d). The Court finally awarded $86,000 in fees and costs related to TT's sanctions motion. The Court generally found TT's fees and expenses reasonable, with limited exceptions. The Court limited fees for writing a "simple" two-page motion to two hours. The Court also deleted approximately $11,000 in apparently duplicative time entries.

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Rosenthal Collins Group, LLC v. Trading Techs. Int'l, Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Jul. 17, 2008) (Moran, Sen. J.).

Judge Moran denied declaratory judgment plaintiff Rosenthal Collins Group's ("RCG") motion to vacate the Court's March 14, 2007 order awarding declaratory judgment defendant Trading Technologies' ("TT") Fed. R. Civ. P. 37 sanctions – click here to read the Blog's post about that opinion and click here to read much more about this case and the related cases. In that earlier order, the Court held that RCG's motion for summary judgment of invalidity was "somewhat misleading" and possibly "disingenuous." Instead of dismissing the case as TT requested, the Court struck the declaration underlying RCG's motion, denied RCG's summary judgment motion with leave to refile a motion "supported by proper evidence" and awarded TT its costs and attorneys fees associated with the Rule 37 motion, as well as its software expert's fees.

In this motion, RCG argued that the Court should vacate that sanctions order because the Court held that TT had not proved by clear and convincing evidence that RCG acted willfully or with bad faith. But the Court held that Rule 37 sanctions could be based upon willfulness, bad faith or fault. Fault went to the reasonableness of the party's content, not necessarily intent. And the Court held that RCG's actions met the standard for fault. Furthermore, while clear and convincing was the burden of proof for dismissal, clear and convincing proof is not required for lesser sanctions.

Finally, the Court held that the categories of fees and costs sought by TT were within the scope of the Court's order, but ordered the parties to brief the reasonableness of the specific fees sought by TT, using the Local Rule 54.3 requirements (a rule usually used for post-judgment fees and costs).

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Chicago Architecture Foundation v. Domain Magic LLC, No. 07 C 764, Slip Op. (N.D.Ill. October 12, 2007) (Norgle, J.).

Judge Norgle denied defendant’s Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. Although defendant was a Florida corporation, defendant’s website – www.chicagoarchitecturefoundation.com – played upon plaintiff Chicago Architecture Foundation’s (“CAF”) name and only included links to other Chicago businesses. The Court, therefore, held that defendant’s website targeted the Northern District creating general personal jurisdiction.

Additionally, as a Fed. R. Civ. P. 37 sanction for failing to answer interrogatory responses as the Court ordered, the Court held that defendant generated revenue from the use of CAF’s trademark. 

Practice tip: Answer discovery requests on time and, if you cannot for some reason, at least answer them by the Court ordered deadline. 

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Fast Food Gourmet, Inc. v. Little Lady Foods, Inc., No. 05 C 6022, 2007 WL 2156665 (N.D. Ill. Jul. 26, 2007) (Cole, M.J.)

Judge Cole granted in part defendant Little Lady Foods’ (“LLF”) Fed. R. Civ. P. 37 motion to bar evidence of allegedly late–identified trade secrets. Plaintiff Fast Food Gourmet (“FFG”) originally identified four trade secret elements of its process for making thin crust frozen pizza (you can read more about this case in the Blog's archives). FFG’s Vice President of Operations Crause identified four additional elements during his deposition. And FFG later identified two additional elements. LLF argued that FFG should be limited to the first four elements because FFG never updated its interrogatory responses to include the six additional elements. The Court held that the four additional elements disclosed during the deposition had “otherwise been made known” pursuant to Fed. R. Civ. P. 26(e) and, therefore, were not required to be added to FFG’s interrogatory responses. The Court excluded the other two elements. FFG argued that it had identified the elements by identifying documents containing the elements in its interrogatory responses pursuant to Fed. R. Civ. P. 33(d). But the Court held that the documents FFG identified only identified the two elements sporadically, and in connection with elements that were not trade secrets. This, combined with Crause’s testimony that he had identified all of the trade secret elements, made FFG’s Rule 33(d) statements insufficient.

Practice Tip: Rule 33(d) is often seen as a simple escape from answering cumbersome or difficult interrogatories. Of course, it is also often warranted. But when you use Rule 33(d), make sure to identify the correct documents, and make sure the identified documents fully support your position.

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Rosenthal Collins Group, LLC v. Trading Techs. Int'l, Inc., No. 05 C 4088, 2007 WL 844610 (N.D. Ill. Mar. 14, 2007) (Moran, Sen. J.).*

Judge Moran denied in part and granted in part declaratory judgment defendant Trading Technologies' ("TT") Rule 37 motion for sanctions.  The Court held that declaratory judgment plaintiff Rosenthal Collins Group's ("RCG") motion for summary judgment of invalidity was "somewhat misleading" and possibly "disingenuous," but refused to dismiss the case.  Instead the Court struck the declaration underlying RCG's motion, denied RCG's summary judgment motion with leave to refile a motion "supported by proper evidence" and awarded TT its costs and attorneys fees associated with the Rule 37 motion, as well as its software expert's fees.  RCG filed a summary judgment motion arguing that TT's patents covering "double click" methods for executing an electronic trade were anticipated by the alleged prior art system "Wit DSM" as embodied in a software package RCG presented to the Court and TT on a laptop and claimed was essentially the software as it is existed more than one year prior to TT's patent filing.  TT's software expert identified that several lines of code had been added to the software by RCG's declarant, and that the added code performed certain functionalities required for anticipation.  When RCG's declarant was deposed, he stated that he had not written the "double click" portion of the original code and could not be sure that it was in the alleged prior art version of the WIT DSM.  These facts did not warrant dismissal of the case or barring of any evidence because RCG and its declarant had not made any false statements, although they had made deliberately vague statements.  Furthermore, while RCG did not identify that the software package included added code which the Court found disturbing, it did include a comparison program on the laptop it provided to TT and the Court which would have identified the added code.

This case involves the several of the same patents as the other TT case before Judge Moran.

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Se-Kure Controls, Inc. v. Vanguard Prods. Group, Inc., No. 02 C 3767, 2007 WL 781250 (N.D. Ill. Mar. 12, 2007) (Cole, Mag. J.).

Judge Cole denied plaintiff's motion to exclude plaintiff's document as a Rule 37 sanction for defendants' failure to identify its potential reliance upon the document and the person who created it.  During the discovery process, plaintiff produced a "Contact Report" listing calls made by one of its sales employees (who eventually left plaintiff's employ).  Defendants sought to rely upon the document as part of their 35 USC Section 102(b) on sale bar defense (similar to the issue in the Court's last opinion in this case).  Plaintiff argued that defendants should not be allowed to rely upon the document because:  1) defendants failed to identify the Contact Report in their responses to plaintiff's invalidity interrogatory; and 2) defendants did not identify the Contact Report's author (plaintiff's former employee) in their Rule 26 disclosures.  As with plaintiff's previous Rule 37 arguments, the Court denied them because defendants made plaintiff aware of the documents during discovery.  The Court noted that plaintiff was arguing defendants should be barred from relying on a document plaintiff produced for failure to identify plaintiff's document to plaintiff.  The Court was not swayed by defendants' failure to identify the Contact Report's author because he was plaintiff's ex-employee and because he had passed away and, therefore, would not be brought as a witness.  Finally, the Court explained that while a party has a right to be apprised of an opposing party's evidence, but not necessarily the weight or significance the opposing party places on that evidence.

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Se-Kure Controls, Inc. v. Vanguard Prods. Group, Inc., No. 02 C 3767, 2007 WL 781253 (N.D. Ill. Mar. 7, 2007) (Cole, Mag. J.).

Judge Cole denied plaintiff's motion to exclude two defense witnesses as a Rule 37 sanction for failing to properly disclose the witnesses.  During the discovery process, defendants identified two witnesses, through declarations signed by the witnesses, as having knowledge of a 35 USC Section 102(b) on sale bar.  Although defendants provided plaintiff the witnesses' declarations and otherwise identified the witnesses to plaintiff, defendants failed to add the witnesses to their respective Rule 26 disclosures and they failed to supplement their respective responses to plaintiff's interrogatory seeking details of all of defendants' invalidity defenses.  Plaintiff argued that these failures led to plaintiff's decision not to depose the witnesses and that defendants' should be barred from relying upon the witnesses for failure to update their Rule 26 disclosures and interrogatory responses.  The Court, however, held that while nondisclosure would generally result in exclusion, exclusion was not warranted in the instant case because defendants did disclose the witnesses in writing.  As a result, "[s]upplementation would have availed nothing required by the [Federal] Rules and was thus unnecessary."

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