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

Akoo Int’l, Inc. v. Harris, No. 10 C 1685 Slip. Op. (N.D. Ill. Sep. 9, 2011) (Coleman, J.). 

Judge Coleman denied plaintiff Akoo International (“AI”) a preliminary injunction to prevent rapper Clifford Harris from using the Akoo mark for his clothing line. The Court held that AI had not shown a sufficient likelihood of confusion:

• AI’s advertising system was very different than Harris’ clothing line.
   
• The parties sold in different channels.
   
• There was no evidence that Harris began using the mark to confuse AI’s customers.

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Free Green Can, LLC v. Green Recycling Enterprs., LLC, No. 10 C 5764, Slip Op. (N.D. Ill. June 20, 2011) (Coleman, J.).

Judge Coleman granted the individual defendant Menas' motion to dismiss the counterclaims against him and granted in part defendant Green Recycling Enterprises' ("GRE") motion to dismiss plaintiffs' (collectively "FGC") counterclaim in this trademark case regarding recycling can systems with integral advertising.

The Court's significant holdings included: 

• GRE did not plead sufficient facts showing Menas was PGC's alter ego that would warrant piercing the corporate veil. GRE only pled that Menas made significant investment in FGC and that Menas directed FGC without any factual support or detail.
   
• GRE's deceptive trade practices act claims were all based upon actions taken before Menas invested. So, Menas could not be liable for them. 

The holdings with respect to FGC's motion were all related to Nebraska causes of action. So, I am not addressing them here. 

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Rosenthal Collins Group, LLC v. Trading Techs. Int'l., Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Jul. 19, 2011) (Coleman, J.).

Judge Coleman granted declaratory judgment plaintiff Rosenthal Collins Group's ("RCG") motion for protective order and to quash third party subpoenas as to third party CQG. The subpoenas sought information regarding RCG's use of CQG's trading software. The Court previously entered judgment against RCE and the only issue left in the case is a January 23, 2012 damages trial. But the judgment and the damages trial were limited to RCG's use of its software, not other third parties that have not yet been held to infringe, such as CQG's software.
 

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Rosenthal Collins Group, LLC v. Trading Techs. Int'l., Inc., No. 05 C 4088, Slip Op. (N.D. Ill. June 1, 2011) (Coleman, J.).

Judge Coleman denied plaintiff Rosenthal Collins Group's ("RCG") motion to reconsider or clarify the Court's February 23, 2011 Order entering defendants judgment in favor of declaratory judgment defendant Trading Technologies ("TT") and sanctioning RCG $1 million. While the discovery misconduct - which the Court described as "attempted fraud" - related to invalidity, it was appropriate to enter default judgment as to infringement because TT's infringement case would have been "futile" if the "fabricated" evidence had been successfully used to invalidate the patents. Furthermore, RCG should not be allowed to benefit from the thwarting of its misconduct.
Finally, the Court's sanctions were not criminal, they were made pursuant to Fed. R. Civ. P. 37 and the Court's inherent powers.
 

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Simonian v. Astellas Pharma US Inc., No. 10 C 1539, Slip Op. (N.D. Ill. Mar. 28, 2011) (Coleman, J.).

Judge Coleman granted defendant Astella's Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Simonian's false patent marking claims for failure to meet the Fed. R. Civ. P. 9(b) heightened pleading standards, but did so without prejudice. The Court held that Simonian's complaint contained "precisely the same" general allegations -- a "sophisticated company" that "knew or should have known" of the expired patent -- that the Federal Circuit rejected as deficient in BP Lubricants.
 

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E.B.N. Enters., Inc. v. C.L. Creative Images, Inc., No. 09 C 6279, Slip Op. (N.D. Ill. Mar. 28, 2011) (Coleman, J.)

Judge Coleman granted in part plaintiff's ("Fantastic Sams") preliminary injunction motion in this case involving a non-compete agreement related to a terminated Fantastic Sams hair salon franchise. The Court granted a preliminary injunction regarding Fantastic Sams' operations manual which defendants were contractually required to return to Fantastic Sams. The Court denied the remainder of the requested injunction. Fantastic Sams alleged that defendant's decision to operate a new salon at the same location breached the two-year requirement that defendants not operate a salon within five miles of the prior Fantastic Sams location. Fantastic Sams made an uncontested showing that defendants breached that agreement. But Fantastic Sams did not sufficiently show irreparable harm. There is no question of irreparable harm from breach of a non-compete agreement. Fantastic Sams did not ever show that another franchise wanted defendants' territory. Finally, there was no evidence that defendants' customers continued using defendants because of features unique to Fantastic Sams.

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Newt LLC v. Nestle USA, Inc., No. 09 C 4792, Slip Op. (N.D. Ill. Mar. 28, 2011) (Coleman, J.)

Judge Coleman denied defendants' Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, but dismissed the false patent marking case pursuant to Rule 12(b)(6) for failure to sufficiently plead intent to deceive. The Court held that plaintiff Newt had standing to sue without proof of particularized injury, citing Stauffer v. Brooks Bros., Inc., 619 F. 3d 1321, 1327 (Fed. Cir. 2010).

Newt alleged that defendant Graphic Packaging ("GPI") falsely marked the products and sold them to the customer defendants. GPI made no allegations that the customer defendants marked the accused products. The customer defendants were, therefore, dismissed.

Further, all defendants were dismissed because Newt only made generalized intent allegations -- e.g., that defendants were "sophisticated companies." 

Finally, the Complaint was dismissed because Newt made only general allegations against all defendants, rather than particular allegations against each defendant.

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Sullivan v. Jamison, No. 06 C 5240, Slip Op. (N.D. Ill. Mar. 8, 2011) (Coleman, J.).

Judge Coleman denied plaintiff's motion for summary judgment that defendants' counterclaims to music royalties from the group Survivor were stopped for failure to disclose them in bankruptcy petitions. In fact, both individual defendants had sufficiently identified their alleged rights to Survivor's music royalties in their bankruptcy petitions or amendments thereto.
 

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Free Green Can, LLC v. Green Recycling Enters., LLC, No. 10 C 5764, Slip Op. (N.D. Ill. Jan. 28, 2011 (Coleman, J.).

Judge Coleman granted the individual defendants' and Aslan Financial Group's Fed. R. Civ. P. 12(b) motion to dismiss plaintiff Free Green Can's trademark infringement and related state law claims. As an initial matter, the Court lacked subject matter jurisdiction as to all state law claims because while Free Green Can pled diversity of citizenship, it did not plead that the amount in controversy exceeded $75,000. Because Aslan Financial Group was only accused of state law claims, it was dismissed.

The federal trademark claims against the individual defendants were dismissed pursuant to Fed. R. Civ. P. 12(b)(6) because the individual defendants were accused of infringement based upon corporate acts of defendant Green Recycling Enterprises, of which each was an officer. But in order to state a claim for infringement, or any tort, by corporate officers or employees Free Green Can was required to allege each individual defendant had actively participated in the tortious acts. Because there were no such allegations, the infringement claims were dismissed.
 

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In late January, the Northern District's six newest judges attended a Federal Bar Association* panel to offer insights into their practices and chambers. The recurring theme of the discussion was a call for civility: Civility in court. Civility in briefs. Civility in emails. Over the next several weeks, I will provide summaries of each judge's comments and insights. This post (the sixth in the series) focuses upon Judge Coleman:

• "Come prepared"
   
• Do not argue when the Court is not expecting argument
   
• Civility
   
• Consent to magistrates
   
• Often does not require argument of motions, but gives a ruling date
   
• For arguments, she will often identify issues to be addressed
   
• Arguments are 15-30 minutes, "tops."

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Trading Technologies, Inc. v. BGC Partners, Inc., No. 10 C 715, Slip Op. (N.D. Ill. Feb.3, 2011) (Kendall, J.).*

Judge Kendall consolidated plaintiff Trading Technologies' ("TT") patent infringement cases that were filed in 2010 - Judge Coleman previously denied TT's motions to consolidate the cases filed in 2005 with those filed in 2010. The Court held that the 2010 cases were sufficiently related pursuant to Local Rule 40.1. While the products were not identical and the asserted patents were not identical for each defendant, the accused products were similar and were all accused of infringing one or more of three of TT's patent families. Additionally, consolidation would conserve substantial time and effort without causing delay.

The Court also ordered the parties to file a summary of all pending motions and discovery status.

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

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Sullivan d/b/a Survivor v. Jamison, No. 06 C 5240, Slip Op. (N.D. Ill. Dec. 1, 2010) (Coleman, J.).

Judge Coleman denied counter-defendants' (collectively "Survivor Music") Fed. R. Civ. P. 12(b)(6) motion to dismiss counter-plaintiffs' breach of contract and related claims in this dispute over royalties due based upon the copyrighted songs of the band Survivor -- Eye of the Tiger was one of their big hits. Although counter-plaintiffs were not signatories to the agreements from which the song royalties flowed, they were replacement members of Survivor and as such had agreed in writing to be bound by and enjoy the benefits of the agreements. As to Survivor Music's statute of limitations claim, although the claim was older than five years, counter-plaintiffs did not discover it until less than five years before filing their counterclaims.

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Rosenthal Collins Group, LLC v. Trading Technologies Int'l, Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Nov. 23, 2010) (Coleman, J.).

Judge Coleman denied plaintiff Trading Technologies' ("TT") Local Rule 40.4 motion to consolidate TT's sixteen pending patent cases,* involving nine patents. Initially, the Court noted that TT did not seek consolidation of all sixteen cases in a single case, but consolidation of the four remaining cases that TT filed in 2005, and separately the twelve cases TT filed in 2010. LR 40.4 requires that a motion to consolidate be filed in the lowest number case. So, while the instant case was the lowest number of the 2005 cases, it was not the lowest number 2010 case. As to the 2010 cases, therefore, the Court did not address consolidation. As to the 2005 cases, TT failed to show that the cases were sufficiently related -- while they involved common patents, the accused products operated in "very different manner[s]." Furthermore, while Judge Moran previously coordinated discovery of all of the 2005 cases before the cases were reassigned, TT did not demonstrate that consolidating the 2005 cases would conserve resources.
 

*  Click here for much more on these cases in the Blog's archives.

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Rosenthal Collins Group, LLC v. Trading Techs. Int'l, Inc., No. 05 C 4088, Slip Op. (N.D. Ill. Feb. 23, 2011) (Coleman, J.).*

Judge Coleman granted defendant/counter-plaintiff Trading Technologies' ("TT") motion for evidentiary sanctions and default judgment.  Judge Moran previously dismissed plaintiff/counter-defendant Rosenthal Collins Group's ("RCG") motion for summary judgment regarding the alleged prior art Buist trading program for discovery abuse, ordered RCG to produce additional documents and things related to the Buist program, and ordered RCG to pay certain of TT's attorney's -- click here for the Blog's post on that decision.  Initially, the Court the severity of a default judgment as a sanction, calling it "extreme," and noted that the Seventh Circuit required a showing of willfulness, bad faith or fault by a preponderance of the evidence in order to justify dismissing a case.

The Court held that the high standard was met in this case, for at least the following reasons:

• During his deposition, Buist admitted modifying and overwriting source code in 2006 that he and by extension RCG held out as having been created in 1998 or 1999.  And in the face of clear evidence of these facts, RCG continued to deny them, even calling the claims "libelous," "audacious," and "Oliver Stone-esque."
   
• Buist later admitted "wiping" or erasing six of seven zip disks that originally contained the relevant source code and that were later produced by RCG because they allegedly contained the code.  The seventh was also wiped, although there was a dispute regarding whether Buist or others had access to it when it was wiped.  But the Court held that it was "impossible to believe that it is merely coincidence that the seventh disk happened to be wiped on May 2, 2006, which just happened to be the same day that TT was scheduled to inspect it."
   
• There was evidence that "virtually every piece of media ordered produced by the Court in May 2007 and July 2008 was wiped, altered, or destroyed after those orders were entered . . . ." (emphasis in original).
   
• Even if RCG and its counsel had no knowledge of the destruction of the evidence, the destruction might have been avoided if RCG had timely complied with the Court's orders to produce the materials.  And regardless, RCG and its counsel should have preserved the evidence by taking custody of it.
   
• Buist was RCG's agent and, therefore, RCG was bound by Buist's behavior and actions.

Based upon these determinations, the Court found clear and convincing evidence that "RCG, and its counsel, acted in bad faith and with willful disregard for the rules of discovery and this Court's orders."  And because a monetary sanction alone was not sufficient, the Court entered a default judgment in favor of TT and dismissed RCG's complaint and struck its defenses to TT's counterclaim.  The Court also fined RCG $1,000,000 for "egregious conduct before the Court" and ordered RCG's counsel to pay TT the attorney's fees and costs related to TT's motion for default judgment.

*  I have a few earlier opinions from the Trading Technologies cases, but this one was significant enough that I moved it up.  Click here for more on the case in the Blog's archives.

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Tuesday, the Senate confirmed Illinois Appellate Court Justice Sharon Johnson Coleman as the Northern District of Illinois's next district judge.  From 1996 until 2008, Justice Coleman served as a judge of the Circuit Court of Cook County, Illinois.  Between 1993 and 1996, she held the position of Deputy State’s Attorney and Bureau Chief for the Public Interest Bureau of the Cook County State’s Attorney’s Office.  From 1989 to 1993, Justice Coleman served as an Assistant United States Attorney in the Northern District of Illinois.  From 1984 until 1989, she was an Assistant State’s Attorney in Cook County.  Justice Coleman received her J.D. in 1984 from Washington University School of Law in St. Louis and her B.A. in 1981 from Northern Illinois University.

Welcome to the Northern District of Illinois bench Judge Coleman.

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This week President Obama appointed Illinois Appellate Court Justice Sharon Johnson Coleman and Sidley Austin partner Gary Scott Feinerman to the Northern District of Illinois bench.  Here is biographical information from President Obama's press release:

• Justice Sharon Johnson Coleman sits on the Illinois Appellate Court in Chicago, a position she has held since 2008.  From 1996 until 2008, Justice Coleman served as a judge of the Circuit Court of Cook County, Illinois.  Between 1993 and 1996, she held the position of Deputy State’s Attorney and Bureau Chief for the Public Interest Bureau of the Cook County State’s Attorney’s Office.  From 1989 to 1993, Justice Coleman served as an Assistant United States Attorney in the Northern District of Illinois.  From 1984 until 1989, she was an Assistant State’s Attorney in Cook County.  Justice Coleman received her J.D. in 1984 from Washington University School of Law in St. Louis and her B.A. in 1981 from Northern Illinois University.
   
• Gary Scott Feinerman is a partner in the Chicago office of Sidley Austin LLP, where he practices in the general litigation and appellate practice groups.  He received his B.A., summa cum laude¸ from Yale College in 1987 and his J.D. from Stanford, where he was a member of the Order of the Coif and the Law Review, in 1991.  After law school, Feinerman clerked for Judge Joel M. Flaum of the Seventh Circuit and for Justice Anthony M. Kennedy of the Supreme Court of the United States.  After his clerkships, Feinerman worked in the Justice Department’s Office of Policy Development (now known as the Office of Legal Policy).  From 2003- 2007, Feinerman served as Solicitor General of Illinois, where he received  Best Brief Awards from the National Association of Attorneys General in each year from 2004-2007.

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