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

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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Integrated Cards, L.L.C. v. McKillip Industries, Inc., No. 06 C 2071, 2008 WL 3286981 (N.D. Ill. Aug. 8, 2008) (Kendall, J.).

Judge Kendall denied defendant’s motion for summary judgment of laches and equitable estoppel, and set a bench trial on the two defenses. Plaintiff charged defendant with infringing its patent covering a card (such as an ID card) integrated with a letter – Illinois attorneys get their ARDC cards in a similar form.

Defendant made and sold versions of the accused product for at least nine to ten years. Defendants argued that plaintiffs had actual constructive knowledge of the accused product beginning in 1998 or 1999, longer than the six years before the filing date required for a presumption of laches pursuant to 35 U.S.C. § 282. That presumption would have shifted the burden of proof from defendants to plaintiffs.

Defendants alleged plaintiffs’ knowledge was based upon various conversations, working relationships and trade show attendance. But the Court held that plaintiffs raised material questions of fact as to each communication or trade show. The Court did, however, note that it had doubts about some of plaintiffs’ testimony explaining their lack of knowledge from trade shows. But on summary judgment, the Court would not make credibility determinations against plaintiffs, the non-moving party.

Because the Court did not grant summary judgment as to the presumption of laches, defendants retained the burden of proof. And the Court held that because of defendants’ burden and because the parties disputed whether defendants were prejudiced by plaintiffs’ alleged delay in filing suit, summary judgment was not appropriate.

The Court also denied summary judgment of equitable estoppel, relying upon its laches reasoning. And the Court set a bench trial on laches and inequitable conduct to be held before the liability trial.

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Trading Techs. Int'l., Inc. v. eSpeed, Inc., No 04 C 5312, Slip Op. (N.D. Ill. Aug. 20, 2007) (Moran, Sen. J.).*

Judge Moran denied defendant eSpeed, Inc.'s (“eSpeed”) renewed motion to bifurcate willfulness and damages from the liability phase of the trial.  The Court denied eSpeed's original bifurcation motion.  The Court noted that since the initial motion, the Court had issued claim constructions largely favorable to eSpeed and summary judgment of noninfringement as to the majority of eSpeed's accused products.  But the Court had also denied eSpeed's motions for summary judgment of invalidity, leaving invalidity to be resolved by the jury.  The Court reasoned that the Real v. Bunn-O-Matic, 195 F.R.D. 618 (N.D. Ill. 2000) factors weighed in favor of not bifurcating the trial or were neutral.  The Court's summary judgment of noninfringement rulings severely limited the damages case and "significantly simplified" the infringement issues. 

The Court also held that eSpeed would not be prejudiced because of a Quantum dilemma.  The Court explained that the Quantum dilemma -- created when a defendant had to choose between maintaining privilege and defending itself against willfulness allegations by producing an opinion letter -- was substantially limited by the Federal Circuit's Knorr-Bremse Sys. v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004) decision eliminating the adverse inference where defendant did not obtain or produce an opinion of counsel.  The Court also noted that any potentially prejudicing evidence at trial could be cured with a limiting instruction.

Trial is set to start in this case the week of September 10. Between now and then expect to see several more opinions (including another this week on a bifurcation issue) in this case and its related cases. Additionally, I have some other obligations that week, but am planning to blog some of the trial. Stay tuned.

*You can download this opinion here  and you can read much more about this case and related cases in the Blog's archives.

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