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

Golden Golf Lighting, Inc. v. Greenwich Indus., L.P., No. 07 C 1086, Slip Op. (N.D. Ill. Jun. 18, 2010) (Andersen, J.).

Judge Andersen denied defendant Clarin's Fed. R. Civ. P. 8(a), 9(b) and 12(b)(6) motion to dismiss this Lanham Act case regarding Clarin's allegedly fraudulent procurement of a trademark related to folding seats.

First, 15 U.S.C. § 1120 limited recovery to injuries sustained "in consequence" of a trademark registered by fraud or false reasons. The damages need not be to a trademark, as Clarin argued. Plaintiff's alleged damage because its folding chairs were seized at the U.S. border based upon alleged infringement of Clarin's trademark and plaintiffs allegedly lost business based upon the seizure. Those facts were sufficient to plead that Clarin was the proximate cause of plaintiff's alleged damages.

Plaintiffs pled fraud with sufficient particularity by incorporating by reference the fraud-related decision in Specialized Seating v. Greenwich Indus., L.P., 472 F.Supp. 2d 999 (N.D. Ill. 1999). Finally, Plaintiffs did not violate Fed. R. Civ. P. 8(a) or 8(d)(1) by combining two claims into a single count. Notice pleading did not require separate headings for each claim.

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Kingsbury Int'l., Ltd. v. Trade the News, Inc., No 08 C 3110, Slip Op. (N.D. Ill. Oct. 28, 2008) (Lindberg, Sen. J.).

Judge Lindberg denied defendant's Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff's copyright infringement claim and defendant's alternative Fed. R. Civ. P. 12(e) motion for a more definite statement of the claim. Plaintiff alleged that it owned a copyright in its Chicago Business Barometer monthly business index; that it specifically informed its subscribers that the index was copyrighted and that it could not be reproduced or rebroadcast in any manner until plaintiff publicly released the index at 8:45 AM; and that defendant released unidentified “parts” of the May 2007 issue of the index at 8:42 AM, three minutes before plaintiff's public release. The Court held that these allegations met the Fed. R. Civ. P. 8(a) pleading standards, without specifically identifying which parts of the index were copied, noting that copyright claims did not require Fed. R. Civ. P. 9(b) heightened pleading. Furthermore, defendant's defense that, if anything, it copied only unprotected facts was not appropriate for a Rule 12(b) determination on the pleadings.

Finally, the Court held that the complaint was not “so vague or ambiguous” that it warranted requiring a more definite statement.

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Edge Capture L.L.C. v. Lehman Bros. Holdings, Inc., No. 08 C 24112, Slip Op. (N.D. Ill. Aug. 28, 2008) (Darrah, J.).

Judge Darrah denied defendants' motion to dismiss plaintiffs' patent complaint and defendants' motion to bifurcate invalidity and enforceability from liability and damages issues. Plaintiffs' complaint was sufficient for the Fed. R. Civ. P. 8(a) notice pleading standards. It pled ownership of a patent to a trading system and infringement by defendants “by making, selling, and using [the device] embodying the patent.” (brackets in the opinion). Plaintiffs were not required to plead infringement by specific devices.

While the Court had broad discretion to bifurcate issues and to stay discovery on the bifurcated issues, it was not warranted in this case because defendants did not meet their burden of proof. While bifurcating would significantly speed resolution if defendants' invalidity or inequitable conduct arguments succeeded, bifurcation could significantly delay the case should defendants lose their invalidity and inequitable conduct arguments. Because defendants had not proven that they were likely to succeed, the Court denied the motion to bifurcate.

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Nutrinova Nutrition Specialties & Food Ingredients GmbH v. Viachem, No. 07 C 4232, Min. Order (N.D. Ill. Nov. 27, 2007) (St. Eve, J.).

Judge St. Eve granted in part plaintiff’s Fed. R. Civ. P. 12(e) motion for a more definite statement regarding defendant The Ingredient House’s (“TIH”) affirmative defenses and counterclaim. The Court ordered TIH to amend its patent misuse affirmative defense to provide factual allegations outlining the alleged misuse. TIH’s original defense simply stated that plaintiff’s claims were “barred by patent misuse.” The Court also ordered TIH to amend “incongruous statements” in its pleading that appeared to be clerical errors.

The Court denied plaintiff’s motion as to TIH’s defamation counterclaim. TIH was not required to plead which state’s law governed TIH’s defamation claim.

Practice Tip: Defendants frequently plead affirmative defenses with an unsupported statement of the defense. The better practice, and the one that avoids Rule 12(e) motions, is to plead at least the basic facts underlying the defense.

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WMH Tool Group, Inc. v. Woodstock Int’l, Inc., No. 07 C 3885, Slip Op. (N.D. Ill. Nov. 14, 2007) (Darrah, J.).*

Judge Darrah denied defendants’ Fed. R. Civ. P 12(b)(6) motion to dismiss plaintiff WMH Tool Group’s (“WMH”) Lanham Act dilution claim and its related Illinois Consumer Fraud and Deceptive Business Practices Act (“Consumer Fraud Act”) claim. WMH registered a trade dress for the color white on its woodworking and metal working products, sold under its JET brand. WMH alleged that its white trade dress was both famous and exclusively associated with WHM’s tools. WMH further alleged that defendant Woodstock International (“Woodstock”) diluted WMH’s trade dress by selling woodworking and metal working tools in WMH’s distinctive white color under Woodstock’s Shop Fox brand. Similarly, WMH alleged that defendant Grizzly Industrial (“Grizzly”) diluted WMH’s trade dress by selling woodworking and metal working tools in WMH’s distinctive white color under Grizzly’s Grizzly or Grizzly Industrial brands. 

Defendants argued that WMH did not state a claim for dilution because the complaint did not specify the date when WMH’s trade dress became famous and that defendants’ allegedly infringing sales began after that date. But the Court held that notice pleading did not require that WMH plead specific dates. It was enough that WMH pled that the trade dress had become famous and that defendants' infringement of the trade dress occurred after the fame was acquired.

Defendants also argued that WMH lacked standing to bring a Consumer Fraud Act claim because WMH was not a “person” or a “consumer” pursuant to the Act.  But the Court held that 815 ILCS 505/1(1)(c) defined “persons” to include business entities, and that a plaintiff need not be an actual consumer to bring a claim pursuant to the Consumer Fraud Act.

* Click here for a copy of the opinion.

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Medallion Products, Inc. v. H.C.T.V., Inc., No. 06 C 2597, 2007 WL 3085913 (N.D. Ill. Oct. 18, 2007) (Darrah, J.).

Judge Darrah dismissed defendant Broadcast Arts Group (“BAG”) for lack of personal jurisdiction, but held that the Court had personal jurisdiction over defendant ICC, Woodridge Specialty Products Corp. and an individual defendant (collectively “ICC Defendants”). Plaintiffs argued that BAG’s tortious acts against plaintiffs, all Illinois residents, created personal jurisdiction based upon the effects test doctrine. But the Court held that the alleged tortious acts against were not sufficient for jurisdiction because BAG was a Florida resident and all of its allegedly tortious acts were performed in Florida or Pennsylvania, at the request of non-Illinois residents. 

The alleged tortious acts of the ICC Defendants, however, did create personal jurisdiction pursuant to the effects test doctrine. The ICC Defendants allegedly entered an agreement to develop, market and sell a counterfeit pet-stain removal product that was packaged in bottles using plaintiff’s “Urine Gone” logo. The alleged acts and resulting injury would have occurred in Illinois.

The Court also held that plaintiffs met the Fed. R. Civ. P. 8 pleading standards as clarified in Atlantic Corp. v. Twombly, ____ U.S. ____, 127 S. Ct. 1955 (2007). So, the Court denied defendant’s motion to dismiss plaintiffs’ state law claims.

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Ace v. Marn, No. 06 C 5335, 2007 WL 1541747 (N.D. Ill. Apr. 17, 2007) (St. Eve, J.).

Judge St. Eve granted in part and denied in part plaintiff/counterdefendant Ace Hardware Corp.'s ("Ace") Fed. R. Civ. P. 12(b)(6) motion to dismiss defendants/counter-plaintiffs' (collectively "Marn") counterclaims.  The Court denied the motion as to Marn's breach of contract claim and dismissed Marn's fraud and tortious interference claims.  Ace and Marn entered an agreement (the "Agreement") allowing Marn the right to use certain Ace trademarks and to purchase product for resale from Ace.  Marn alleged that Ace and its representatives breached the Agreement, made numerous misrepresentations leading up to the signing of the Agreement and failed to provide promised inventory.  Ace argued that Marn's breach of contract claim should be dismissed because it did not identify a specific provision of the Agreement that was breached, citing several Northern District cases.  But noted that each of Marn's cases came down before the Seventh Circuit's decision in Kolupa v. Roselle Park Dist., 438 F.3d 713, (7th Cir. 2006).  In Kolupa the Seventh Circuit explained the Rule 8(a)(2) requirements:

[i]t is enough to name the plaintiff and the defendant, state the nature of the grievance, and give a few tidbits (such as the date) that will let the defendant investigate. . . .  Any district judge (for that matter, any defendant) tempted to write "this complaint is deficient because it does not contain ..." should stop and think:  What rule of law requires a complaint to contain that allegation?  Any decision declaring "this complaint is deficient because it does not allege X" is a candidate for summary reversal, unless X is on the list in Fed. R. Civ. P. 9(b).

Kolupa at 714-15 (emphasis in original).  Based upon the Kolupa decision the Court held that Marn was not required to cite a specific breached section of the Agreement.

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Flentye v. Kathrein, __ F. Supp.2d __, 2007 WL 1175576 (N.D. Ill. Apr. 18, 2007) (Filip, J.).

Judge Filip denied defendants' motions to dismiss, except as to plaintiffs' claim for punitive damages for intentional infliction of emotional distress, because Illinois law does not allow punitives for IIED.  Plaintiffs (collectively "Flentye") promoted apartment rental services , including some properties owned by Flentye, using their family name, Flentye.  Defendants competed with Flentye promoting similar apartments, some of which were owned by defendant Kathrein LLC.  Flentye brought suit against defendants alleging violations of the Anti-Cybersquatting Consumer Protection Act ("ACPA"), Lanham Act unfair competition and related state law claims.  Flentye alleges that defendants lost a dispute before the UDRP and were forced to return certain domain names to Flentye, including timflentye.com, flentye.com and flentyeproperties.com.  Flentye alleged that defendants then registered new domain name timflentye-not.com and used it to direct traffic to defendants' competing websites.  Flentye also alleged that defendants improperly used the term "Flentye" in its meta tags (key words embedded into a site's source code to director search engines to the site) to direct users seeking information regarding Flentye to defendants sites. 

Defendants first argued that Flentye failed to plead its veil-piercing claims and that, therefore, corporate defendant Kathrein LLC should be dismissed because there were not sufficient allegations against it without a veil-piercing theory.  But the Court held that notice pleading was sufficient for a veil-piercing argument and that Flentye met the notice standard.  It was sufficient that Flentye pled that individual defendant Kathrein  created defendant Kathrein LLC "for the sole purpose of holding title to local real estate through which [Kathrein] operates Lee Street Management" and that in the caption Kathrein LLC was identified as "d/b/a Lee Street Management."  The Court noted that while these allegations might not be sufficient to prove that the veil was pierced, they were sufficient for Fed. R. Civ. P. 8(a) notice pleading.  The Court also noted that a claim of corporate veil-piercing did not require Fed. R. Civ. P. 9(b) heightened pleading.

Similarly, Kathrein LLC argued that the ACPA claim should be dismissed against it because Flentye made no specific allegations regarding Kathrein LLC's use of the domain name at issue or its intent to profit from the domain allegedly including Flentye's mark.  But the Court held that the allegations that Kathrein LLC acted as the alter ego of Kathrein and that Kathrein and Kathrein LLC registered the domain names at issue as a group were sufficient to state a claim.

Defendants argued that Flentye's Lanham Act claim should be dismissed because of numerous "bold disclaimers" on defendants' websites that the site was run by Kathrein.  But because screen shots of the site were not included in or referenced by the complaint, the Court refused to consider them on a Rule 12(b)(6) motion to dismiss.

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