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

Nat'l. Spiritual Assembly of the Baha'is of the U.S.A. Under the Hereditary Guardianship, Inc. v. Nat'l. Spiritual Assembly of the Baha'is of the U.S.A., Inc., ___ F.Supp.2d ___, 2008 WL 1839078 (N.D. Ill. Apr. 23, 2008) (St. Eve, J.).

Judge St. Eve denied defendant the National Spiritual Assembly of the Baha'is of the United States' (the "NSA") motion to hold non-parties Franklin D. Schlatter, Joel B. Marangella, the Provisional National Baha'i Council ("PNBC"), the Second International Baha'I Council (d/b/a Baha'is Under the Provisions of the Covenant)("SIBC"), and the Baha'i Publishers Under the Provisions of the Covenant ("BPUPC")(collectively the "Alleged Contemnors") in contempt for violating the 1966 permanent injunction against plaintiff The National Spiritual Assembly of the Baha'is of the United States Under the Hereditary Guardianship, Inc.'s (the "NSA-UHG" or "UHG") use of the NSA's trademarks. Shortly after the injunction was entered, the NSA-UHG dissolved. NSA argued that its former officers, Schlatter and Marangella, remained bound by the injunction. But the Court held that officers or agents of an entity that are not personally named in an injunction are only bound while acting for the named entity or a subsequent entity formed to avoid the injunction. Schlatter's and Marangella's alleged contempt, therefore, is dependent on their new entity PNBC's status.

The Court held that PNBC was not in privity with NSA-UHG. NSA-UHG followed the directives of its spiritual leader, Mason Remey. PNBC, however, followed the directives of its spiritual leader Marangella, not Remey. Furthermore, Marangella specifically instructed PNBC and its members not to violate the injunction. PNBC, Schlatter and Marangella, therefore, were not in privity with NSA-UHG and not bound by the injunction.

Similarly, non-parties Jensen, SIBC and BPGPC were not in privity with NSA-UGH, even though they admitted to being successors-in-interest to Remey. Jensen disassociated themselves from the NSA-UGH and Remey several years before the injunction was issued.

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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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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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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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Black & Decker Inc. v. Robert Bosch Tool Corp., No. 04 C 7955, 2006 WL 3883937 (N.D. Ill. Dec. 27, 2006) (St. Eve, J.).

Judge St. Eve denied defendant's emergency motion to prohibit plaintiff from sending Rule 65(d) notice letters regarding the Court’s permanent injunction to defendant’s customers (more on this case and the injunction in the Blog's archives). But before analyzing defendant’s emergency motion, the Court first addressed defendant’s prior motion to clarify the injunction which the Court previously denied. In the motion to clarify, defendant stated that it had sold approximately 150,000 infringing radios to various resellers prior to being enjoined. Defendant argued that those resellers should be free to sell their supplies of infringing radios. The Court denied the motion because it was first raised in a sur-reply brief regarding plaintiff’s motion for a permanent injunction without presentation of any detailed facts, legal argument or supporting case law. 

Even in its motion to clarify, defendant “failed to adequately develop [its] argument with specific facts and relevant case law.” The Court warned that counsel served as both client advocates and officers of the Court. As the latter, the Court stated that:

[I]t is incumbent on trial counsel to assist the court and to fully and fairly represent the legal issues in the case within the applicable statutory and common law framework relevant to the factual dispute before the court for resolution.

Accordingly, [defendant’s] counsel-as officers of the court and advocates for their client-had the responsibility to raise the issue of the 145,377 [radios] in a cogent manner at the first possible opportunity and not in its motion to clarify or in a sure-reply. The Court cannot anticipate every relevant argument counsel should make on behalf of its clients nor is it the Court’s role to do so.

(citations omitted).  Having addressed defendant's prior motion to clarify, the Court acknowledged that its permanent injunction did not enjoin third parties, such as defendant’s customers, but noted that a Rule 65(d) notice letter regarding the enjoined conduct was the required first step before plaintiff could bring contempt proceedings against defendant’s customers for aiding and abetting any violation of the injunction by defendant. The Court also quoted the text of the notice letter and held that, while it could have used more precise language in parts, it did not direct the recipient to stop sales or state that the recipient was enjoined by the Court’s injunction. Additionally, any lack of precision in the letter’s wording was fixed by the inclusion of the permanent injunction itself.

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