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

Lorillard v. Montrose Wholesale Candies & Sundries, Inc., No. 03 C 5311 & 4844, 2008 WL 1775512 (N.D. Ill. Apr. 17, 2008) (Aspen, J.).

Judge Aspen adopted Magistrate Judge Cole's Report and Recommendation, denying defendants' Fed. R. Civ. P. 59(e) motion to alter the Court's judgment against defendants – click here to read more about that Report and click here to read more about this case in the Blog's archives. The Court awarded plaintiff Lorillard $2.5M in statutory damages for defendants’ sales of counterfeit cigarettes using Lorillard's trademarks. Defendants objected to, among other things, a statutory damages award in excess of $1M. Defendants argued that 15 U.S.C. § 1117(c)(2) only allowed $1M in statutory damages per type of goods sold. Because this case only involved one type of goods, cigarettes, defendants argued statutory damages could not exceed $1M. But the Court held that the limitation was $1M per counterfeit mark per type of good. Because Lorillard alleged five counterfeit marks were used, the statutory damages limit was $5M. 

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Lorillard Tobacco Co. v. Montrose Wholesale Candies & Sundries, Inc., No. 03 C 5311 & 0844, 2008 WL 954161 (N.D. Ill. Apr. 8, 2008) (Cole, Mag. J.).

Judge Cole denied plaintiff's motion for inspection and seizure of assets in its trademark counterfeiting case. The Court previously entered judgment for plaintiff – click here for more about this case in the Blog's archives. Plaintiff brought this motion seeking to identify and seize cash, checks and other financial instruments to satisfy the judgment. The Court held that the motion essentially sought a search warrant directed by plaintiff and utilizing Federal Marshals:

The reality is that the motion is tantamount to a request for a search warrant for Lorillard to enter and search the home of Ray and Sandra Hazemi and the business premises of Montrose Wholesale Candies and Sundries, Inc. (which is owned by them) and for permission to seize any cash, checks or other negotiable instruments belonging to the Hazemis and Montrose and to seize or at least copy all of their financial and accounting records. Nothing in the Motion, itself, suggests that the search and seizure will be accomplished by anyone other than Lorillard. It is not until one looks at the Proposed Order granting the motion that there is even a motion of United States Marshals. But even then, it is Lorillard, through its counsel of record, who is to carry out the search and seizure. The Marshals are merely to accompany Lorillard.

The Court held that the Federal Rules of Civil Procedure did not authorize search warrants. The Court further held that the request was not like a seizure of counterfeit goods, which was authorized by 15 U.S.C. § 1116(d)(1)(A), because it sought a post-judgment search to satisfy a judgment.

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Autotech Techs. Ltd. Partnership v. Automationdirect.com, Inc., No. 05 C 5488 2008 WL 783301 (N.D. Ill. Mar. 25, 2008) (Cole, Mag. J.).*

Judge Cole granted in part defendant Automationdirect.com's ("ADC") motion to compel additional records from plaintiff Autotech's database. The parties agreed that an ADC expert would be allowed to develop queries which Autotech would run on its database. After a dispute regarding how to produce the results of the search, the Court ordered production of the documents, which related to records of, among other things, customer confusion. Upon review of the records, ADC demanded that Autotech supplement them with information such as the date of the communication and the identity of the Autotech employees involved. Autotech eventually supplemented the documents with an index identifying, among other things, the identity of the Autotech employee involved in each communication, but not the dates of the communications. ADC moved to compel the production of all fields in Autotech's database for each entry identified by ADC's query. But Autotech countered that it had produced all fields generated by ADC's expert's query. Had the query generated all available fields, they, presumably, would have been produced them all. Because Autotech produced the information generated by ADC's search and supplemented that production with an index, sanctions were not warranted. But the Court did order production, at ADC's expense, of the dates of each communication. The Court also ordered the parties to meet and confer to determine how to produce the dates in a useful format.

*Click here for more of this case in the Blog's archives.

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Autotech Techs. Ltd. Partnership v. Automationdirect.com, Inc., No. 05 C 5488, 2008 WL 783303 (N.D. Ill. Mar. 25, 2008) (Cole, Mag. J.).*

Judge Cole granted in part plaintiff Autotech's motion to compel communications between defendant Automationdirect.com, Inc. ("ADC") and any third party regarding ADC's competing C-More touch screen panel. The Court held that ADC need not produce documents related to source code for the C-More product. The Court previously denied Autotech's motion to amend its complaint adding claims related to that source code. But the Court held that ADC's third party communications could be relevant to show whether ADC has complied with its contractual obligation to use its best efforts to sell Autotech's product, or if its C-More sales efforts interfered with sales of Autotech's products. The Court also held that any communication evidencing customer confusion must be produced.

Practice Tip: Do not employ new arguments in reply briefs. The Court did not consider Autotech's reply brief because it changed the scope of its argument on reply. Autotech's opening brief sought ADC's third party communications with the exception of those regarding ADC's source code because claims regarding ADC's software were not in the case. But on reply, Autotech also sought the source code related communications.

*Click here for more about this case in the Blog's archives.

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Am. Fam. Mutual Ins. Co. v. Roth, No. 05 C 3839 & 3869, 2008 WL 168693 (N.D. Ill. Jan. 15, 2008) (Guzman, J.).

Judge Guzman adopted Magistrate Judge Cole’s Report and Reconsideration in full, holding defendants in contempt for violating the Court’s injunctions requiring that defendants return various customer information taken from plaintiff, defendant’s former employer – click here for more on the prior opinions in the Blog’s archives. It was defendants’ responsibility to ensure that defendants’ former counsel, who had copies of relevant documents, comply with the injunction by turning the documents over to plaintiff. The fact that defendants did not have direct control over their former counsel’s copies did not matter.

Additionally, the Court held that it did not matter that plaintiff did not originally make a “big deal” out of defendant’s non-compliance. Defendants argued that they presumed there was no need to comply with the Court’s injunctions because nobody was making a “big deal” about the return of the materials. That presumption was flawed. Neither party moved to modify either the preliminary injunction or the amended preliminary injunction. Thus, defendants had a duty to comply with the Court’s injunctions as written.

Practice Tip: Do not fall in to the trap of believing that substantial compliance with a court order is sufficient. While that could be true in some cases, you should always contact the court if you have a problem complying with an order. Compliance with orders is one case where the adage that you are better off asking forgiveness than asking permission does not hold true.

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Autotech Techs. Ltd. Ptnshp. V. Automation Direct.com Inc., No. 05 C 5488, 2007 WL 2746654 (N.D.Ill. Sep. 18, 2007) (Cole, Mag. J.).*

Judge Cole denied plaintiffs’ (collectively “Autotech”) motion to compel production of defendant Koyo Electronics’ (“Koyo”) touchscreen source code. In Autotech’s Third Amended Complaint – filed without the leave of Court required by Fed. R. Civ. P. 15, but later allowed by Chief Judge Holderman – Autotech alleged that defendants infringed Autotech’s copyrights in its touchscreen display images. Autotech also alluded to source code infringement, but did not explicitly claim it. 

In a later interrogatory response, Autotech stated that it was not claiming that defendants’ source code infringed Autotech’s copyrights, but reserved the right to amend the complaint adding such charges. Because Autotech had not sought leave to add source code infringement claims to its complaint, the Court held that the requested source code was not relevant and production was not required. The Court also noted that the request seeking source code was improper because it was served less than thirty days before the fact discovery close in violation of Local Rule 16.1. It did not matter that the deadline was ultimately extended because the extension was granted after the original fact discovery close and after the deadline for responding to the document requests.

Practice tip: Whenever a Court issues a fact discovery close, get out your calendar, count backward thirty days and mark the last day for serving discovery requests. You would be amazed at how many litigators do not take note of this important date.

*Click here for more on this case in the Blog's archives.

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Flentye v. Kathrein, No. 06 C 3492, Slip Op. (N.D. Ill. Oct 2, 2007) (Cole, Mag. J.).*

Judge Cole continued defendants’ motion to compel for one week because defendants had not conducted a Local Rule 37.2 conference before filing their motion. But the Court also provided its thoughts on the prosecution of discovery, both in this specific case and generally. The Court noted that after one year of discovery, “not a single document was produced in response to the 70 paragraph document request!”

But what is most interesting about the opinion is the Court’s quotes on various discovery issues. On discovery generally: 

“[D]iscovery is the bane of modern federal litigation.” Rossetto v. Pabst Brewing Co., Inc., 217 F.3d 539, 542 (7th Cir. 2000). It is intrusive, unpleasant, time-consuming and costly. It is, like life itself, “nasty [and] brutish …” Hobbes, Leviathan, Chapt XIII. Unfortunately, it is not generally “short.”

On Fed. R. Civ. P. 37(a)(4) sanctions:

The great operative principle of Rule 37(a)(4) is that the loser pays. Fee shifting, when the judge must rule on discovery disputes, encourages their voluntary resolution and curtails the ability of litigants to use the legal process to heap detriments on adversaries without regarding to the merits of the claim.

Quoting Rickels v. City of South Bend, Indiana, 33 F.3d 785, 786 (7th Cir. 1994) (Easterbrook, J.) (internal quotes omitted).

On the less-than-civil nature of “modern” litigation:

Unfortunately, what has occurred here thus far is not uncommon, and the often needless disputes arising in discovery are but the current manifestation of the difficulties about which Learned Hand lamented almost three quarters of a century ago. In an address to the Bar Association of the City of New York in 1921, Hand, then a young district judge, spoke about the “atmosphere of contention over trifles, the unwillingness to conceded what ought to be conceded, and to proceed to the things which matter. Courts have fallen out of repute; many of you avoid them whenever you can, and rightly. About trials hang a suspicion of trickery and a sense of a result depending upon cajolery or worse. I wish I could say that it was all unmerited. After now some dozen years of experience I must say that as a litigant I should dread a lawsuit beyond almost anything else short of sickness and death.” Lectures on Legal Topics, Learned Hand, The Deficiencies Of Trials To Reach the Heart of the Matter, 105 (The MacMillan Co. 1926).

On bad blood between litigants:

What Chief Judge Easterbrook recently said in another case seems to apply here: “There is a grudge match.” Redwood v. Dobson, 476, F.3d 462 (7th Cir. 2007). The parties are free to entertain whatever animus they possess towards each other. Judges have no business in trying to regulate thought and emotion. But they do have an obligation to regulate how parties deal with each other and with ensuring that they comply with the discovery provisions of the Federal Rules of Civil Procedure.

*  For more about this case in the Blog's archives click here.

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Coilcraft, Inc. v. Inductor Warehouse, Inc., No. 98 C 0140, 2007 WL 2728754 (N.D. Ill. Sep. 13, 2007) (Guzman, J.).

Judge Guzman conducted a Fed. R. Civ. P. 72 de novo review of Magistrate Judge Cole’s report which recommended that the Court hold defendant in contempt for violating the Court’s permanent injunction limiting defendant’s use of plaintiff’s Coilcraft mark (click here for further discussion in the Blog’s archive). The Court adopted Judge Cole’s Report in its entirety and gave plaintiff fourteen days to submit a proposed order and proof of its attorneys' fees and costs related to this motion. The Court also held that Judge Cole was not required to hold an evidentiary hearing before issuing the Report because there were no genuine issues of material fact. The dispute was governed by the language of the Court’s injunction which was not disputed. And the only issue was whether defendant’s advertisements, the contents of which were not disputed, violated the injunction – a matter of law.

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Lorillard Tobacco Co. v. Montrose Wholesale Candies & Sundries, Inc., No. 03 C 5311 & 4844, 2007 WL 2580491 (N.D. Ill. Sep. 10, 2007) (Cole, Mag. J.).

Judge Cole recommended awarding plaintiff $2.5M in statutory damages. The Court had previously entered a Fed. R. Civ. P. 37(b) default judgment against defendants for sales of counterfeit Newport cigarettes in violation of the Lanham Act.* The Court recommended that a damages hearing was not necessary because of defendants’ four year pattern of avoiding discovery obligations leading to a default judgment, including failing to produce damages documents. Having actively avoided producing the information for four years, defendants were not now entitled to seek opportunities to present evidence in their defense. Furthermore, the Court reported that a $2.5 M award was reasonable. $2.5M was half of plaintiff’s estimate of defendants’ infringing sales and it was half of the potential $1M statutory award for each of the five marks defendants infringed.

* For more on this case, see the Blog’s archives.

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Am Fam. Mutual Ins., Co. v. Roth, No. 05 C 3839, 2007 WL 2410074 (N.D. Ill. Aug. 16, 2007) (Cole, Mag. J.).

Judge Cole granted in part plaintiff’s motion to strike evidence and bar its use. The documents at issue were commission statements including plaintiff’s customer information. The Court previously ordered defendants to return to plaintiff all documents in its possession including plaintiff’s customer information in this trade secret matter. After that order, defendants filed the commission statements, including customer information, with the clerk as an exhibit to another document. The Court held that filing of the commission statements was public disclosure which violated the Court’s order that defendants not retain or disclose such information. But the Court held that plaintiff’s preferred sanction for retaining and filing the documents, barring their use as evidence at trial, was not proportional with defendants’ wrong in keeping the document and filing them publicly with the Court. 

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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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Lorillard Tobacco Co. v. Montrose Wholesale Candies & Sundries, Inc., No. 03 C 5311 & 03 C 4844, Slip Op. (N.D. Ill. Jul. 27, 2007) (Cole, J.).*

Judge Cole recommended granting plaintiff Lorillard Tobacco’s (“Lorillard”) petition for attorneys fees, but reduced the requested fees by about $80,000. Lorillard received a default judgment against defendants in 2006 and, as a result, brought this petition seeking its fees and costs. The Court’s opinion is an excellent guide for anyone preparing a fee petition. The Court refused to consider Lorillard’s costs because although Lorillard submitted a list of costs, it did not total the costs or discuss them in its petition and supporting declaration. Next, the Court accepted most of the costs for the four attorneys whose billing rates were explained in the supporting declaration, but denies any fees for the other nineteen people whose fees were not explained in the declaration. The Court notes that these nineteen people could be partners, associates or paralegals, but the Court cannot assess the reasonableness of their rates or billed activities without knowing their roles. And even for the four, the Court notes that it would have preferred some explanation of each attorney’s experience in past Lanham Act cases, in order to judge whether the attorneys’ billing rates were commensurate with their experience. 

Finally, the court refused a subset of the fees for the four attorneys that were inadequately described, unnecessarily billed by multiple attorneys or clerical in nature. For example, the Court disallowed two eighteen minute bills for attorneys reviewing a one-sentence minute order changing the date of a status hearing.

Practice tip: Generate thorough bills and have someone with perspective on a case do a sanity check to make sure your client is not being billed for unreasonable work or duplicative efforts. Also, when preparing a fee petition, make sure to support the rates and fees billed by all attorneys and paralegals with detailed affidavits.

*  You can read a copy of the opinion here.

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Coilcraft, Inc. v. Inductor Warehouse, Inc., No. 98 C 0140, 2007 WL 2071991 (N.D. Ill. Jul. 18, 2007) (Cole, J.).

Judge Cole recommended that the Court grant plaintiff’s motion for contempt. The parties previously settled this trademark case and agreed to a consent judgment which required, among other things, that defendants include “prominent” disclaimers on any advertisements, including webpages, offering plaintiff’s products for sale from the secondary market. Plaintiff filed a motion for contempt arguing that defendant’s website did not include prominent disclaimers. The Court agreed, explaining that prominence could be achieved in several ways, but that “fine print” was not one of them:

Being a relational and contextual concept, “prominence” may be achieved in any number of ways: placement of words, type size, typeface, text color, etc. Prominence, however, is not achieved by the use of fine print disclaimers that are substantially smaller than any other print on a page.

Practice tip: When drafting settlement agreements, or other contracts, watch out for subjective words like “prominence.”  If you expect that you may need to enforce the agreement* later, try to define subjective terms in more objective ways. For example, plaintiff in this case could have required that the disclaimer be at the top of each page in bolded font at least four points larger than the largest print on the page.

* If you expect that the agreement might be enforced against you, subjective terms may be beneficial.

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Fast Food Gourmet, Inc. v. Little Lady Foods, Inc., No. 05 C 6022, 2007 WL 1673563 (N.D. Ill. Jun. 8, 2007) (Cole, J.).

Judge Cole denied plaintiff Fast Food Gourmet, Inc.'s ("FFGI") motion to compel responses to interrogatories, in this trade secret case involving frozen pizzas (you can read more about this case in the Blog's archives).  FFGI served defendants with an interrogatory seeking information regarding which brands of frozen pizza (aside from the accused DiGiorno Thin Crispy Crust Pizza) defendants baked in the ovens which were allegedly part of FFGI's trade secret crust-making process for stone hearth oven, thin crust, frozen pizzas.  Defendants objected to the interrogatory, which led to a meet and confer between the parties on February 15, 2007, two weeks before the close of fact discovery on March 1.  The meet and confer did not resolve the dispute.  On April 1, FFGI submitted its expert reports and then, six weeks after the close of discovery, FFGI moved to compel responses to the interrogatories.  But FFGI failed to notice the motion until more than one month later on May 18.  The Court noted that, while it had discretion to grant the motion, motions to compel filed after the close of fact discovery are generally held to be untimely unless accompanied by a "reasonable and persuasive justification" for the delay.  FFGI, however, provided no justification for its delay. 

But the Court ultimately denied FFGI's motion not because it was untimely, but because the evidence lacked evidentiary value.  FFGI assured the Court that it would not seek any other discovery after receiving the interrogatory responses.  FFGI had also repeatedly taken the position that its trade secrets crust-making process involved the combination of various elements and processes including the ovens that were the focus of FFGI's interrogatories, but that the ovens alone were not a trade secret.  The interrogatory responses alone , therefore, were of no value.  They would necessarily require additional discovery to be relevant to the case.  For example, it was not enough to know which other pizzas were baked in the ovens.  FFGI would need to know how each pizza baked in the oven was prepared in order to determine whether the pizzas were made using the FFGI trade secrets.  That would require additional fact discovery, but fact discovery was already closed.  The Court, therefore, denied FFGI's motion to compel. 

Practice tip:  File your discovery motions on or before the close of discovery.  And always explain to the Court why you need documents or interrogatory responses, particularly if you are seeking them after the close of discovery.

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Murata Mfg., Ltd. v. Bel Fuse, Inc., __ F.R.D. __, 2007 WL 1317100 (N.D. Ill. May 2, 2007) (Cole, Mag. J.).

Judge Cole granted in part defendants' motion to compel the testimony of plaintiff's former employee, Sakamoto, who was a named inventor on the patent in suit residing in Japan.  Earlier in the litigation, defendants argued for a longer discovery period because of the time it would take to secure Sakamoto's deposition.  But through a series of miscommunications, delays and unfortunate circumstances, defendants had not been able to secure  Sakamoto's agreement to be deposed, in Japan or elsewhere, until near the close of discovery.  As a result, defendants filed the instant motion to compel plaintiff to produce Sakamoto for deposition in the United States either as a managing agent pursuant to Fed. R. Civ. P. 30(b)(1) or based upon language in the patent assignement document which obligated Sakamoto to aid plaintiff in patent-related matters.  As an initial matter, the Court denied plaintiff's request to dismiss the motion for failure to meet and confer pursuant to Local Rule 37.2.  The Court explained that based upon the parties' history on the issue, compliance would have been futile and, therefore, it excused defendants' alleged non-compliance.

Turning to the substance of the motion, the Court held that Sakamoto was not a managing agent pursuant to Rule 30.  Sakamoto was a retired inventor who had never had any degree of control over plaintiff's affairs.  But the agreement Sakamoto signed, along with his co-inventors, assigning his patent rights to plaintiff did obligate plaintiff to produce Sakamoto.  The agreement required that Sakamoto perform "all acts necessary" to enforce or defend the patent in "any proceeding in any country."  Based upon that language, Sakamoto was obligated to be deposed at plaintiff's request.  And the Court required that plaintiff request that Sakamoto submit to a deposition.  But the Court held that nothing in the assignment agreement required Sakamoto to leave Japan for the deposition, and the Court did not extend the discovery deadline.  So, defendants were granted the right to depose Sakamoto, but likely were not able to take the deposition.

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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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Murata Mfg. , Ltd. v. Bel Fuse, Inc., No. 03 C 2934, 2007 WL 781252 (N.D. Ill. Mar. 8, 2007) (Cole, Mag. J.).

Judge Cole held that plaintiff's inequitable conduct defense did not waive its privilege and, therefore, denied defendant's motion to compel privileged documents.  Defendant asserted that plaintiff engaged in inequitable conduct by failing to disclose an allegedly material piece of prior art during prosecution of the patent-in-suit.  Defendant's defense was essentially that their counsel and inventors fully understood their disclosure obligations and chose not to disclose the alleged prior art because  it was not material or even similar to the patent-in-suit.  Defendant argued that plaintiff waived its privilege when its 30(b)(6) deponent testified that:  1) he had been told that plaintiff's in-house counsel instructed its prosecuting attorneys to disclose all relevant prior art to the PTO; and 2) that he was confident that the inventors understood their duties of disclosure based upon their past experience as patentees and the fact that they had each had several conversations with plaintiff's prosecution counsel.  But the Court held that disclosure of the occurrence of these conversations, without disclosing any of the contents did not act as waiver.   The Court noted that if disclosure of the existence of these conversations without elaboration constituted wavier, then the exchange of privilege logs would also constitute waiver.

Defendant also argued that plaintiff impliedly waived its privilege by arguing that the allegedly material art was not material.  Defendant argued that this argument calls into question the understanding and beliefs of prosecution counsel, thereby waiving the privilege.  But the Court held that plaintiff's contentions can be tested without any privileged information, simply by reviewing the prior art reference and comparing it to the patented invention.  The Court also noted that if it found waiver, any patentee faced with an inequitable conduct charge would be forced to choose between defending the charge and waiving privilege or acquiescing to the inequitable conduct charge to maintain its privilege.

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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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Clarus Transphase Scientific, Inc. v. Q-Ray, Inc., No. 06 C 4634, 2006 WL 4013750 (N.D. Ill. Oct. 6, 2006) (Cole, Mag. J.).

Magistrate Judge Cole denied plaintiff's motion for a preliminary injunction holding that plaintiff had not demonstrated a likelihood of success on its trademark, trade dress and copyright infringement claims.  Plaintiff marketed and sold pendants incorporating its "Sympathetic Resonance Technology" which it claimed enhanced the human biofield under its "Q-Link" mark.  Defendants sold a line of pendants and bracelets under the "Q-Ray" mark which they claim are "bio-magnetic ionized" which they claim enhance a person's overall well-being.  The Court held that there was no likelihood of success on the trademark infringement claims because the three most important likelihood of confusion factors -- the similarity of the marks, defendants' intent and evidence of actual confusion -- all favored defendants.  The marks, "Q-Link" and "Q-Ray" share only one letter, "Q," and a hyphen and use substantially different fonts, making even the Q's employed in each mark look different.  Plaintiff's actual confusion evidence consisted of a declaration from plaintiff's employee stating that she had added a Professional Golfers Association ("PGA") trade show at which "a number of attendees" were confused as to whether plaintiff sold the "Q-Ray" pendants.  The Court noted that the number of attendees that stated there confusion could have been as low as two.  As a result, the Court could not find a likelihood of success on the issue of actual confusion. 

The Court also held that plaintiff had not shown sufficient likelihood of success on its trade dress infringement claim.  The trade dress claim went to a coiled piece of metal arranged in each of plaintiff's pendants.  Plaintiff explained the coil as an "amplifying antenna," but distinguished the coil as non-functional because the antenna could be made into any number of shapes, it was not necessary that it be in a coil to operate.  Among other reasons, the Court held that plaintiff had only provided attorney argument, not any evidence, of sales or advertising to prove that the coil had generated secondary meaning.

Finally, the Court held that plaintiff had not shown sufficient likelihood of success on its copyright infringement claim because plaintiff stated that its pendants were designed by an international design team, but provided no evidence or basis for determining that the design team worked for plaintiff, that the team's work constituted a work for hire owned by plaintiff or that the team had assigned plaintiff its rights in the team's work.

Practice tip:  When you make factual arguments in briefs, particularly regarding interim injunctive relief, make sure that you support the attorney argument which includes the facts with actual evidentiary support for the facts.  This is a simple step that attorneys often forget, assuming perhaps reasonably that the Court will rely on counsel's truth and veracity as an officer of the Court, and which can cause substantial problems for the parties.

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American Fam. Mutual Insur. Co. v. Roth, No. 05 C 3839, 2007 WL 63983 (N.D. Ill. Jan. 10, 2007) (Cole, Mag. J.).

Judge Cole recommended denying defendants' motion to modify Judge Guzman's preliminary injunction for lack of jurisdiction.  Judge Guzman, following Judge Cole's recommendation, issued a preliminary injunction to prevent defendants from using a list of confidential information regarding plaintiff's policy holders.  Defendants ultimately appealed the preliminary injunction and then filed a motion to clarify seeking modifications to the injunction  equivalent to what they were asking to be overturned on appeal.  After an exhaustive analysis of the procedural rules, the Court recommended denying the motion to modify for lack of jurisdiction because once defendants appealed the injunction, the district court loses jurisdiction over the appealed issues.

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Martin Eng. Co. v. CVP Group, Inc., No. 06 C 4687, 2006 WL 3541777 (N.D. Ill. Dec. 7, 2006) (Cole, J.).

Judge Cole granted defendant's motion for a 21 day extension to respond to written discovery requests.  Plaintiff refused to agree to the extension (for discovery due eight months prior to the close of fact discovery) and filed a written objection to defendant's motion citing a "pattern of dilatory conduct."  As examples of the pattern, plaintiff identified two items.  First, that it took defendant two weeks to respond to plaintiff's settlement offer, and only then after repeated calls from plaintiff.  And second, that defendant's Rule 26 disclosures were served nearly two weeks late.  The Court made clear that it did not condone a party ignoring the Court's deadlines or delay more generally, but noted that "not all delays are the same."

Plaintiff's objection to the extension ignored defendant's justification for its request.  Defendant's counsel, a solo practitioner, was involved in another case in the Northern District in which Judge Kocoras had recently ordered that fact discovery close a few weeks after defendant's responses were do in this case, requiring that defendant's counsel devote "significant time" to the other case.

Based on defendant's explanation, the Court stated that "the request was reasonable, and the plaintiff's response (and ensuing written objection) quite the opposite and needlessly required the expenditure of time that could have been more profitably utilized."  The Court also noted general concerns among some of the Northern District judges regarding "the needless conflict involved in the day-to-day interactions among lawyers" citing articles by Judge Gettleman, We Can Do Better, 25 LITIGATION 3 (Summer 1999), Judge Kennelly, From Lawyer To Judge, 2001 LITIGATION 3 (Summer 2001), and Judge Shadur, Hardball Litigators, 20 LITIGATION 21 (1993).  Unfortunately, the articles are no longer available online, but you may be able to get copies from the ABA here.

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Autotech Techs. Ltd. Partnership v. Automationdirect.com, Inc. 237 F.RD. 405 (N.D. Ill. 2006). (Cole, Mag. J.).

In this impressively detailed opinion, Magistrate Judge Cole grants defendant's motion for a protective order limiting plaintiff's in-house counsel's access to sensitive customer information and communications.  The parties faced a common problem, they had agreed that customer information, including customer identities and communications, would be limited to attorneys' eyes only, but could not agree as to whether plaintiff's in-house counsel could access the information.  Plaintiff argued that its in-house counsel played a lead role in the case and, therefore, required access to the information.  Defendant argued that in-house counsel were corporate decision makers, in addition to counselors, and would not be able to separate the knowledge of defendant's customers they would be exposed to when performing business-related functions.

The Court first stated that it believed counsel's assurances that they would not violate the Court's protective order or their ethical obligations, noting that that was "the beginning and not the end of [the] analysis."  The Court held that:

. . . proper analysis requires a careful and comprehensive inquiry into in-house counsel's actual (not nominal) role in the affairs of the company, his association and relationship with those in the corporate hierarchy who are competitive decision makers, and any other factor that enhances the risk of inadvertent disclosure.  That risk must then be balanced against the harm that will result to the party employing in-house counsel from restrictions on the latter's access to the protected information.

The Court then performed a detailed analysis of plaintiff's counsel's responsibilities and place in plaintiff's corporate hierarchy.  The Court ultimately held that in-house counsel could not have access to customer information because of in-house counsel's central importance to plaintiff and because restricting access would not harm plaintiff's ability to litigate the case. 

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