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

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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APC Filtration v. Becker, No. 07 C 1462, 2007 WL 3046233 (N.D. Ill. Oct. 12, 2007) (Ashman, J.)

Judge Ashman granted in part plaintiff’s motion for discovery sanctions based upon defendant William Becker’s (“Becker”) disposal of his personal computer, which had allegedly crashed, in a dumpster twenty miles from Becker’s home, after plaintiff filed its Complaint. The Court held that Becker’s post-filing destruction of evidence was in bad faith and ordered sanctions pursuant to the Court’s inherent powers and Fed. R. Civ. P. 37. The Court did not grant a default judgment, but held that the destruction prejudiced plaintiff’s misappropriation claims. And as an intermediate sanction, the Court held that defendant Becker had communications with two third-party customers of plaintiff during Becker’s employment with plaintiff for the purpose of inducing the third parties to enter exclusive agreements with defendant SourceOne Plus, Becker’s new employer. The Court also awarded plaintiff certain related attorney’s 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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