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

LimitNone v. Google, Inc., No. 08 C 4178 (Manning, J.).

Last month I posted that LimitNone, a Chicago company, sued Google for trade secret misappropriation seeking $1B -- click here for that post.  Earlier this week, Google removed the case to the Northern District, arguing that LimitNone's Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA") claim sounded in copyright and, therefore, was preempted by the Copyright Act creating federal question jurisdiction (click here for Google's removal papers). 

In its complaint, LimitNone alleged that Google entered a nondisclosure agreement with LimitNone to review LimitNone's gMove software -- software that helps Microsoft Outlook users migrate data to the Google platform.  Google allegedly assured LimitNone that it would not offer a competing product.  But after receiving LimitNone's trade secrets, including its software code, and promoting the $19 gMove software, Google allegedly began offering a free, competing software package which allegedly used LimitNone's trade secrets.   LimitNone has not filed any responsive papers or pleadings yet, but I will keep you updated if LimitNone challenges the removal.

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The Northern District had 40 copyright cases filed during the first half of 2008. That is only about one-third of 2007's total of 129 cases -- click here to read about the 2007 case filings. So, while patent and trademark infringement filings remain strong, copyright actions have started slowly in 2008.

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Blawg Review #168 is available at Jeffrey Mehalic’s West Virginia Business Litigation blog (another LexBlog blog) – click here for the post. It is another excellent review, although it is a bit light on IP. Additionally, Mehalic has a very even-handed post about the settlement of a West Virginia suit between West Virginia University and Rich Rodriguez, the new football coach of my University of Michigan Wolverines. While the subject matter of that dispute is not necessarily relevant to Chicago IP litigators (Coach Rodriguez is paying his full $4M buyout over time, much of it funded by the University of Michigan), Mehalic has an interesting side note about a contract the court reporters put on each transcript in the case requiring that no copies be made or used without paying the court reporter for them – click here for the post. My first reaction is, and always has been, that the reporters hold the copyright because the transcript is their interpretation and compilation of what was said. But Mehalic disagrees, and makes a good point. The copyright in a (usually) verbatim recitation of a proceeding has to have a very thin copyright, if any.

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Rosen v. Mystery Method, Inc., No. 07 C 5727, 2008 WL 723331 (N.D. Ill. Mar. 14, 2008) (Kocoras, J.).

Judge Kocoras granted defendants' Fed. R. Civ. P. 9(b) & 12(b)(6) motion to dismiss plaintiff Rosen's claims. Rosen, on behalf of himself and others similarly situated, alleged that defendant Mystery Method Corp. (“MMC”), in concert with various other business partners, violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) by continuing to market MMC's Mystery Method dating products as endorsed or otherwise approved by the original creator of the Mystery Method, Erik Von Markovick (“EVM”). EVM created a “sophisticated system . . . to help men meet and attract women” known as the Mystery Method. EVM offered personal training in his methods and eventually partnered with MMC to administer the business of his related Mystery Method website. Eventually, EVM left MMC and started his own website www.venusianarts.com. When EVM left, MMC maintained control of the Mystery Method website.

The Court held that Rosen had not sufficiently pled the predicate act of copyright infringement.* Rosen only pled general allegations:

[T]he predicate acts alleged herein cluster around criminal copyright infringement, trafficking in certain goods bearing counterfeit marks, mail fraud and wire fraud . . . .”

The Court held that these general allegations did not meet the Fed. R. Civ. P. 9(b) heightened pleading requirements for fraud. Rosen did not allege:

• That MMC owned a valid copyright for the products or services offered on its Mystery Method website;

• That EVM owned a valid copyright covering products or services offered on the Mystery Method website; or

• How MMC's products and services were counterfeit

Furthermore, Rosen's complaint suggested that MMC was permitted to continue using the Mystery Method name. Rosen alleged that MMC entered an agreement with EVM to develop products and services via the Mystery Method website. And Rosen alleged that MMC maintained control of the Mystery Method website after EVM left MMC.

*  RICO requires that defendants have participated in at least two predicate acts. Copyright infringement was one of the predicate acts alleged by Rosen. The Court also dismissed on other RICO-specific grounds, but those will not be discussed here because they are not IP-specific.

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Nordstrom Consulting, Inc. v. M&S Techs., Inc., No. 06 C 3234, Slip Op. (N.D. Ill. Mar. 4, 2008) (Darrah, J.).*

Judge Darrah granted in part and denied in part the parties' cross-motions for summary judgment. Plaintiff and counter-defendant (collectively "NCI") developed visual eye chart software that defendants and counter-plaintiffs (collective "M&S") incorporated into their visual acuity system which was sold to ophthalmalic distributors and end users. For a period of time, the parties worked together, selling and servicing product and sharing office space. But eventually the relationship broke down and NCI began selling a competing system. The parties charged each other with various IP claims and related state law claims. Each of the IP-related claims is addressed below.

Copyright Infringement

The Court held that NCI was the sole owner of the copyright and that its principal Nordstrom was the sole author of the copyrighted software. M&S argued that its principal Marino contributed to the software. But the Court held that Nordstrom wrote the software and Marino only offered direction and ideas.

The Court granted M&S summary judgment for all copyrighted software sales during the terms of the parties' agreements, but not as to sales outside of the agreement dates. And the Court granted summary judgment of non-infringement as to M&S's new software package "Sports Vision Testing" ("SVT"). NCI argued that SVT was an infringing derivative work. But NSI failed to produce evidence or expert testimony refuting M&S's evidence that it created its SVT software independent of NCI's software using clean room procedures.

Digital Millennium Copyright Act ("DMCA")

NCI alleged that M&S violated the DMCA by circumventing protections on a computer containing the software code in order to aid an NCI licensee of the code. Because the code was accessed to aid a licensee, NCI could not show that the password had been bypassed for the purpose of infringing NCI's copyright. The Court, therefore, granted summary judgment for M&S. 

The Court also denied summary judgment as to M&S's claim that NCI violated the DMCA by accessing a portion of M&S's computer system for which NCI lacked authorization and passwords. Summary judgment was not appropriate because the parties disputed whether NCI accessed the computers and whether the accessed material was copyrighted.

Lanham Act

The Court denied M&S summary judgment on NCI's Lanham Act false advertising claim and its related state law claims. M&S argued that it had not made any statements likely to cause customer confusion. But NCI countered that M&S stated in advertising that it had used the same system for five years. NCI argued that the statement must be false because M&S switched to its new SVT software during that time. Because of these disputed facts, summary judgment was not appropriate.

Illinois Trade Secret Act

The parties agreed that prior to terminating their relationship, NCI took various information from M&S's offices and computers. But the parties disagreed as to whether M&S took reasonable measures to protect the information's confidentiality. The parties agreed that M&S password protected the information. But NCI argued passwords alone were not enough and suggested other protections that allegedly could and should have been employed. The Court held that password protection alone was not per se insufficient. But the Court required more information regarding M&S's actions and the feasibility of alternative protections before it could rule on summary judgment.

The Court also denied summary judgment as to M&S's claim that NCI violated the DMCA by accessing a portion of M&S's computer system for which NCI lacked authorization and passwords. Summary judgment was not appropriate because the parties disputed whether NCI accessed the computers and whether the accessed material was copyrighted.

Lanham Act

The Court denied M&S summary judgment on NCI's Lanham Act false advertising claim and its related state law claims. M&S argued that it had not made any statements likely to cause customer confusion. But NCI countered that M&S stated in advertising that it had used the same system for five years. NCI argued that the statement must be false because M&S switched to its new SVT software during that time. Because of these disputed facts, summary judgment was not appropriate.

Illinois Trade Secret Act

The parties agreed that prior to terminating their relationship, NCI took various information from M&S's offices and computers. But the parties disagreed as to whether M&S took reasonable measures to protect the information's confidentiality. The parties agreed that M&S password protected the information. But NCI argued passwords alone were not enough and suggested other protections that allegedly could and should have been employed. The Court held that password protection alone was not per se insufficient. But the Court required more information regarding M&S's actions and the feasibility of alternative protections before it could rule on summary judgment.

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

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Watts v. Cypress Hill, No. 06 C 3348, 2008 WL 697356 (N.D. Ill. Mar. 12, 2008) (Ashman, Mag. J.).

Judge Ashman struck plaintiffs' expert report pursuant to Fed. R. Civ. P. 37(c)(1). Plaintiffs' authored the song "Is It Because I'm Black" in 1968. Plaintiffs' alleged that defendants, the musical group Cypress Hill (click here for some of the group's music on their MySpace page), infringed their copyright in the song by using parts of it in their Black Sunday album. Cypress Hill contended that plaintiffs sold the copyright pursuant to a 1969 songwriters contract. Plaintiffs argued that the contract was a fraud.

Plaintiffs submitted an expert report (the "Report") to support that the contract was fraudulent. In six paragraphs, the expert stated that he ran various tests and concluded that the 1969 contract was a fraud because it was printed and signed by an inkjet printer — inkjet printers were developed in the 1970s or 1980s. When Cypress Hill complained that the Report was incomplete, plaintiffs supplemented it with pictures of the testing.

But the Court held that the supplemented Report was not sufficient because it did not explain the expert's methodology. There was no way to know how the expert translated data into conclusions. And no reputable rebuttal expert could test the expert's methodology or opine that the data was misinterpreted. It did not matter that the missing information could likely be obtained in a deposition. Rule 26 requires that an expert report include "the basis and reasons" for the expert's opinions. Because the Report did not disclose the expert's methodology and reasoning, and because Cypress Hill was prejudiced by the late-served, incomplete Report, the Court struck the Report.

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Goss Int’l Ams., Inc. v. A-Am. Mach. & Assembly Co., No. 07 C 3248, 2007 WL 4294744 (N.D. Ill. Nov. 30, 2007) (Gettleman, J.).

Judge Gettleman denied defendant’s Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff’s copyright for lack of subject matter jurisdiction. Plaintiff alleged that defendant violated plaintiff’s copyrights in its simplified machine drawings of its commercial printing machines by placing them on the internet without authorization. The Court held that plaintiff’s simplification of its drawings and addition of part numbers were sufficient to meet copyright’s originality requirement. The Court also looked to the Fifth and Eighth Circuits and held that the registration requirement was met when plaintiff filed its copyright registration, as opposed to when the Copyright Office acted on it. In this case, plaintiff filed its application in May 2007 and was waiting on registration as of the date of the opinion. The Court reasoned that because plaintiff would also have a cause of action if the registration was denied, there was no reason to make plaintiff wait until the Copyright Office acted.

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There were 129 copyright cases filed in the Northern District during 2007, a 37% decrease from the 206 patent cases filed in 2006.  2006 was an exceptionally busy copyright year for the Northern, 100-150 copyright cases is the Northern District's norm over the last several years.  Of 2007's 129 copyright cases, 81 or 63% were disposed of during 2007 -- nearly double the percentage of patent cases that were resolved within the year. The fact that substantially more copyright cases settled during the calendar year in which they were filed is not surprising as copyright cases tend to be more straightforward and less document intensive than patent cases.

A list of each case, the case number, the filing date and, where appropriate, the date the case was resolved are provided after the jump. Earlier this week, I did a similar post regarding patent filings (click here for the post). Look for a similar trademark post next week.

A hat tip to the Maryland Intellectual Property Law Blog for its 2007 IP review series that pushed me to start my own review of 2007 IP cases.

1:07-cv-00194

Sacha v. McDougal Littell et al

filed 01/10/07

1:07-cv-00223

The Ashton-Drake Galleries, Ltd. v. Kozub

filed 01/12/07   closed 09/05/07

1:07-cv-00289

Ostrowski v. 22nd Century Media, LLC et al

filed 01/17/07   closed 05/04/07

1:07-cv-00356

Gestalt, LLC v. Best Buy Co. Inc. et al

filed 01/18/07   closed 05/24/07

1:07-cv-00651

Microsoft Corporation v. Chicago Computer Broker Inc. et al

filed 02/02/07   closed 02/28/07

1:07-cv-00733

Twentieth Century Fox Film Corporation v. Perkins

filed 02/07/07   closed 10/16/07

1:07-cv-00734

Warner Bros. Entertainment Inc. et al v. Kent

filed 02/07/07   closed 12/20/07

1:07-cv-00735

Paramount Pictures Corporation et al v. Guzman

filed 02/07/07

1:07-cv-00736

Columbia Pictures Industries, Inc. et al v. Rogers

filed 02/07/07   closed 04/03/07

1:07-cv-01716

Goss International Americas, Inc. v. Central Graphic Corp.

filed 03/28/07

1:07-cv-01794

FM. Industries, Inc. v. Citicorp Credit Services, Inc., et.al.

filed 04/02/07

1:07-cv-01839

Software For Moving, Inc. v. La Rosa Del Monte Express, Inc. et al

filed 04/03/07   closed 12/07/07

1:07-cv-01863

Broadcast Music, Inc. et al v. Foundry, LLC, The et al

filed 04/04/07   closed 08/29/07

1:07-cv-02043

Warner Bros. Records Inc. et al v. Does

filed 04/12/07   closed 06/05/07

1:07-cv-02047

O'Leary v. Warner Books et al

filed 04/13/07   closed 05/25/07

1:07-cv-02089

Child Support Savings Corp. v. Wilson et al

filed 04/16/07   closed 09/07/07

1:07-cv-02105

Ashley Furniture Industries, Inc. et al v. Fisher Printing, Inc.

filed 04/16/07   closed 11/07/07

1:07-cv-02133

Broadcast Music, Inc. et al v. Triangle Inn, Inc. et al

filed 04/17/07   closed 05/23/07

1:07-cv-02242

Aftermath, Inc. v. Action Bio-Care, Inc. et al

filed 04/24/07

1:07-cv-02252

Priority Records LLC et al v. Turner

filed 04/24/07   closed 07/12/07

1:07-cv-02253

Interscope Records et al v. Rasheeduddin

filed 04/24/07   closed 07/05/07

1:07-cv-02255

Warner Bros. Records Inc. et al v. Mitchell

filed 04/24/07   closed 07/10/07

1:07-cv-02257

Virgin Records America, Inc. et al v. Mock

filed 04/24/07   closed 06/21/07

1:07-cv-02258

Warner Bros. Records Inc. et al v. Williams

filed 04/24/07   closed 07/11/07

1:07-cv-02259

Elektra Entertainment Group, Inc. et al v. Hepper

filed 04/24/07   closed 06/01/07

1:07-cv-02260

Elektra Entertainment Group Inc. et al v. Romero

filed 04/24/07   closed 10/11/07

1:07-cv-02261

Atlantic Recording Corporation et al v. Reese

filed 04/24/07   closed 07/12/07

1:07-cv-02263

Priority Records LLC et al v. Aviles

filed 04/24/07   closed 07/11/07

1:07-cv-02264

Atlantic Recording Corporation et al v. Roscoe

filed 04/24/07   closed 08/22/07

1:07-cv-02265

Elektra Entertainment Group Inc. et al v. Belk

filed 04/24/07   closed 08/10/07

1:07-cv-02267

Capitol Records Inc et al v. Campos

filed 04/24/07   closed 01/08/08

1:07-cv-02268

Atlantic Recording Corporation et al v. Phalesia Visione

filed 04/24/07

1:07-cv-02269

Elektra Entertainment Group, Inc. et al v. Baker

filed 04/24/07   closed 07/17/07

1:07-cv-02270

Virgin Records America, Inc. et al v. Younger et al

filed 04/24/07   closed 07/06/07

1:07-cv-02271

UMG Recordings, Inc. et al v. Strickland

filed 04/24/07   closed 06/26/07

1:07-cv-02273

Warner Bros. Records Inc. et al v. Roman

filed 04/24/07   closed 06/28/07

1:07-cv-02274

Elektra Entertainment Group, Inc. et al v. Mayhew

filed 04/24/07   closed 08/06/07

1:07-cv-02275

Interscope Records et al v. Farias

filed 04/24/07   closed 07/30/07

1:07-cv-02277

Virgin Records America, Inc. et al v. Lamb

filed 04/24/07   closed 07/11/07

1:07-cv-02278

Priority Records LLC et al v. Hickman

filed 04/24/07   closed 09/26/07

1:07-cv-02280

Sony BMG Music Entertainment et al v. Summers

filed 04/24/07   closed 08/22/07

1:07-cv-02285

UMG Recordings, Inc. et al v. Lapczynski

filed 04/24/07   closed 08/07/07

1:07-cv-02286

Lava Records LLC et al v. Ricobene

filed 04/24/07   closed 07/06/07

1:07-cv-02288

Atlantic Recording Corporation et al v. Hodel

filed 04/24/07

1:07-cv-02299

Elektra Entertainment Group, Inc. et al v. Belk

filed 04/24/07   closed 08/20/07

1:07-cv-02301

Warner Bros. Records, Inc. et al v. Keith

filed 04/24/07   closed 07/19/07

1:07-cv-02302

Warner Bros. Records Inc. et al v. Wagner

filed 04/24/07   closed 07/17/07

1:07-cv-02303

Warner Bros. Records Inc. et al v. White

filed 04/24/07   closed 09/07/07

1:07-cv-02305

UMG Recordings, Inc. et al v. Gordon

filed 04/24/07   closed 09/05/07

1:07-cv-02306

UMG Recordings, Inc. et al v. Garcia

filed 04/24/07   closed 07/03/07

1:07-cv-02308

UMG Recordings Inc et al v. McPartlin

filed 04/24/07

1:07-cv-02310

Virgin Records America, Inc. et al v. Ribic

filed 04/24/07   closed 07/09/07

1:07-cv-02313

Elektra Entertainment Group Inc. et al v. Guyton

filed 04/24/07   closed 06/26/07

1:07-cv-02315

Elexa Consumer Products Inc. v. Creative Concepts International LLC

filed 04/26/07   closed 07/18/07

1:07-cv-02360

Click Commerce, Inc. v. Stewart

filed 04/27/07

1:07-cv-02387

Skyline Design, Inc. v. S.A. Bendheim Company, Inc.

filed 04/30/07

1:07-cv-02421

Sony BMG Music Entertainment et al v. Does 1-9

filed 05/01/07   closed 07/20/07

1:07-cv-02485

James H. Anderson, Inc. v. Northwestern University et al

filed 05/03/07

1:07-cv-02536

Matteo v. Rubin

filed 05/07/07

1:07-cv-02665

Kammin v. SMARTPROS, Ltd.

filed 05/10/07   closed 10/09/07

1:07-cv-02935

Scholz Design, Inc. v. Iacoponi et al

filed 05/24/07

1:07-cv-03051

M.L.E. Music et al v. JJDH, Inc. et al

filed 05/31/07   closed 08/24/07

1:07-cv-03223

Broadcast Music, Inc. et al v. Hedgehogs, Inc. et al

filed 06/07/07

1:07-cv-03248

Goss International Americas, Inc. v. A-American Machine & Assembly Co.

filed 06/08/07

1:07-cv-03280

DeVry/Becker Educational Development Corp. v. Does

filed 06/11/07

1:07-cv-03335

Arista Records LLC et al v. Does

filed 06/13/07   closed 08/03/07

1:07-cv-03506

Broadcast Music, Inc. et al v. Clearwater Productions, LLC et al

filed 06/21/07

1:07-cv-03567

Goss International Americas, Inc. v. All Press Parts, Inc.

filed 06/26/07

1:07-cv-03568

Scholz Design, Inc. v. Amro et al

filed 06/26/07

1:07-cv-03596

Jewel America, Inc. v. Combine International, Inc. et al

filed 06/26/07

1:07-cv-03608

DeVry/Becker Educational Development Corp. v. Elliott

filed 06/27/07   closed 11/19/07

1:07-cv-03646

Pro Marketing Systems, Inc. v. Jim Mudd Advertising, Inc.

filed 06/28/07   closed 11/28/07

1:07-cv-03674

Fishbein et al v. Kivisto Niemira Gallery, LLC

filed 06/29/07   closed 12/27/07

1:07-cv-03709

Unicus Performance Training, LLC et al v. Advocate Health Care, Inc. et al

filed 07/02/07

1:07-cv-03819

BaliJewel, Inc. v. John Hardy Limited

filed 07/09/07

1:07-cv-03844

Kulig v. Magmedix, Inc. et al

filed 07/10/07   closed 12/11/07

1:07-cv-03854

Elektra Entertainment Group Inc. et al v. Phillips

filed 07/10/07   closed 09/24/07

1:07-cv-03859

Virgin Records America, Inc. et al v. Jenkins

filed 07/10/07   closed 09/25/07

1:07-cv-03861

Elektra Entertainment Group Inc. et al v. Bolon

filed 07/10/07

1:07-cv-03864

Capitol Records, Inc. et al v. Maciejewska

filed 07/10/07   closed 08/20/07

1:07-cv-03865

UMG Recordings, Inc. et al v. Juerez

filed 07/10/07   closed 08/30/07

1:07-cv-03867

Warner Bros. Records, Inc. et al v. Lathon

filed 07/10/07   closed 11/21/07

1:07-cv-03868

UMG Recordings, Inc. et al v. Cabrero

filed 07/10/07   closed 11/19/07

1:07-cv-03870

Elektra Entertainment Group Inc. et al v. Fasel

filed 07/10/07   closed 10/31/07

1:07-cv-03972

International Union of Operating Engineers, Local 150, AFL-CIO v. Team 150 Party Inc et al

filed 07/13/07

1:07-cv-04255

Harwin Music Corp. et al v. O'Hare Gaslight Club, Inc. et al

filed 07/30/07   closed 12/05/07

1:07-cv-04305

Ho et al v. Taflove et al

filed 07/31/07

1:07-cv-04425

Capitol Records, Inc. et al v. Maid Hajdarovic

filed 08/07/07   closed 12/03/07

1:07-cv-04484

BMG Music et al v. Doe

filed 08/09/07

1:07-cv-04485

Warner Bros. Records Inc. et al v. Does

filed 08/09/07

1:07-cv-04486

Arista Records LLC et al v. Does 1-9

filed 08/09/07   closed 11/05/07

1:07-cv-04487

Wesley Development, Inc. v. Qpack, Inc.

filed 08/09/07   closed 10/23/07

1:07-cv-04613

Broadcast Music, Inc. et al v. MSS Ventures, Inc. et al

filed 08/15/07

1:07-cv-04760

Broadcast Music, Inc. et al v. TLCC, Inc. et al

filed 08/23/07   closed 01/02/08

1:07-cv-04955

Interscope Records et al v. Velez

filed 09/04/07

1:07-cv-04956

Sony BMG Music Entertainment et al v. Gardner

filed 09/04/07   closed 10/24/07

1:07-cv-04957

Atlantic Recording Corporation et al vs. Napolitano

filed 09/04/07   closed 10/15/07

1:07-cv-04958

Sony BMG Music Entertainment et al v. Hammonds

filed 09/04/07

1:07-cv-04981

Warner Bros. Entertainment Inc. v. Foster et al

filed 09/05/07

1:07-cv-04983

Warner Bros. Entertainment Inc, v. Burns

filed 09/05/07   closed 01/08/08

1:07-cv-04984

Columbia Pictures Industries, Inc. et al v. White

filed 09/05/07

1:07-cv-04985

Warner Bros. Entertainment Inc. v. Payan

filed 09/05/07   closed 01/08/08

1:07-cv-05034

Annazach Software, Inc. v. Exelon Corporation et al

filed 09/06/07

1:07-cv-05106

Warner Bros. Records Inc. et al v. Ruddy

filed 09/11/07   closed 01/07/08

1:07-cv-05108

Elektra Entertainment Group Inc. et al v. Duenas

filed 09/11/07

1:07-cv-05180

American Medical Association v. Practice Management Information Corporation

filed 09/13/07   closed 09/27/07

1:07-cv-05529

Kasi Designs, PC v. First Step Child Care Center, Inc. et al

filed 10/01/07   closed 11/08/07

1:07-cv-05556

UMG Recordings, Inc. et al v. Avila

filed 10/02/07   closed 01/09/08

1:07-cv-05557

Sony BMG Music Entertainment et al v. Bledsoe

filed 10/02/07   closed 11/16/07

1:07-cv-05558

Interscope Records et al v. Brandon

filed 10/02/07

1:07-cv-05865

Arista Records LLC et al v. Does 1-6

filed 10/17/07   closed 01/02/08

1:07-cv-05968

Senario, LLC v. Geckler Companies, Inc.

filed 10/22/07   closed 11/12/07

1:07-cv-05971

Juris v. Jaffe et al

filed 10/23/07   closed 12/20/07

1:07-cv-06058

Cobra Fixations Cie Ltee-Cobra Anchors Co. Ltd. v. Powers Fasteners, Inc. et al

filed 10/26/07

1:07-cv-06128

Crowe Chizek and Company LLC v. Guitar Center, Inc. et al

filed 10/30/07   closed 12/17/07

1:07-cv-06261

Krueger v. Tradeguider Systems, LLC et al

filed 11/05/07   closed 11/27/07

1:07-cv-06357

Prominent Consolting, LLC v. Allen Brothers, Inc.

filed 11/08/07

1:07-cv-06369

Nova Design Build, Inc. et al v. Grace Hotels, LLC et al

filed 11/09/07

1:07-cv-06401

Windy City Marketing, Inc. v. Places Advertising, Inc.

filed 11/12/07

1:07-cv-06505

Wound Care Education Institute v. Thomas

filed 11/16/07

1:07-cv-06717

Warner Bros. Records Inc. et al v. Does

filed 11/29/07

1:07-cv-06752

Compliance Software Solutions, Corporation v. Moda Technology Partners, Inc. et al

filed 11/30/07

1:07-cv-06843

Gottlieb et al v. DDB Chicago, Inc. et al

filed 12/05/07

1:07-cv-06881

Group One Trading LP v. DeLuca et al

filed 12/06/07

1:07-cv-07043

Cornerstone Architects, Ltd. v. Lakeland Development Group, Inc. et al

filed 12/14/07

1:07-cv-07055

American Mortgage Consultants Inc., v. Opus Capital Markets Consultants, LLC et al

filed 12/14/07

1:07-cv-07288

Johnson v. Jackson et al

filed 12/28/07

3:07-cv-50030

Northgate Builders, Inc. v. Knuckey et al

filed 02/20/07   closed 12/11/07

3:07-cv-50225

Jades Creations LLC v. White

filed 11/16/07

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Krueger v. TradeGuider Sys., LLC, No. 07 C 6261, Slip Op. (N.D. Ill. Nov. 27, 2007) (Kendall, J.)*

Judge Kendall granted plaintiff Todd Krueger’s (“Krueger”) motion to remand this breach of Employment Agreement (“Agreement”) suit to Cook County Circuit Court. Krueger originally filed his Complaint in Cook County Circuit Court. Defendants (collectively “TradeGuider”) remanded the case to the Northern District, arguing that Krueger’s claim for breach of the Agreement, which governed his employment as TradeGuider’s CEO, was a federal copyright claim. TradeGuider reasoned that determining whether it had breached the Agreement required a determination of whether Krueger’s works were works for hire. The Court cited the Seventh Circuit’s narrow view of copyright preemption for contract claims – generally a contract involving copyrights is of a different scope than the copyrights because the contract is a private agreement between parties and a copyright is a right against the world. The alleged breach, therefore, was not essentially a copyright claim because it included rights beyond the copyright. Additionally, the Court reasoned that there was no evidence that suggested any copyright law would have to be interpreted to construe the contract or rule upon the alleged breach.

*Click here for a copy of the opinion.

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Bryant v. Gordon, __F.Supp.2d__, 2007 WL 2440208 (N.D. Ill. August 30, 2007) (Kennelly, Jr.).*

Judge Kennelly denied defendants James Gordon’s (“Gordon”) and Mach 1’s motions for judgment as a matter of law (“JMOL”) and entered an injunction against Gordon’s and Mach 1’s continued use of the copyrighted pictures at issue – pictures of a parachutist and a sniper used in motivational posters. Gordon and Mach 1 argued that the jury’s verdict that Gordon and Mach 1 infringed plaintiff’s copyrights was inconsistent with the jury’s verdict that defendant John Urtis (“Urtis”) – who took the infringing sniper photo – did not infringe plaintiff’s copyright. But the Court held that JMOL cannot be used to harmonize jury verdicts. Furthermore, the Court held that the infringement verdicts were supported by the facts.

Because of a threat of continued infringement, the Court granted a permanent injunction against Gordon and Mach 1. But the Court held that it could not issue the injunction against Urtis because the jury’s verdict was in Urtis’s favor. The Court did, however, caution Urtis not to aid the other defendants in violating their injunction.

* For more on this case, click here in the Blog’s archives.

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Vaughn v. Kelly, No. 06 C 6427, Slip Op. (N.D. Ill. Jul. 16, 2007) (Manning, J.).

Judge Manning denied defendant R. Kelly’s (“Kelly”) motion to dismiss plaintiff Vaughn’s case arguing that Vaughn’s state law claims were preempted by copyright law. The Court previously dismissed Vaughn’s motion to remand the case to state court, holding that his unjust enrichment claim sounded in copyright law and giving Vaughn time to amend his complaint to remove the copyright elements (you can read more about the case in the Blog’s archives). Kelly now moves to dismiss the amended complaint. As in the original complaint, Vaughn alleged that he introduced Kelly to stepping, taught him how to step, helped him write a stepping-based song entitled "Step in the Name of Love," and collaborated with Kelly to develop a video for the song.  The Court held that Vaughn’s unjust enrichment claim was preempted by copyright law, but granted Vaughn leave to refile the claim as one for copyright infringement. The Court refused to consider Vaughn’s proposed amended unjust enrichment claim because Vaughn failed to amend the unjust enrichment claim when the Court first offered Vaughn a chance to amend and because it is improper to consider amendments as part of a motion to dismiss. The Court held that Vaughn’s breach of oral contract claim was not preempted by copyright law because it could be for less than co-ownership of the copyright, which would be preempted. 

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Stafford Trading, Inc. v. Lovely, No. 05 C 4868, 2007 WL 1512417 (N.D. Ill. May 21, 2007) (Coar, J.).

Judge Coar granted in part declaratory judgment plaintiffs' (collectively "Stafford") motion to dismiss and denied Stafford's summary judgment motion.  The Court dismissed defendants' fraud and unjust enrichment counterclaims after holding that they were preempted by the Illinois Trade Secret Act.  The Court also dismissed defendants' fraudulent concealment.  The material fact that Stafford allegedly failed to disclose was the opinion that Stafford owned the RIVAS electronic options trading platform outright.  But the Court held that an allegedly withheld opinion could not support a fraudulent concealment claim.

The Court's summary judgment decision turned largely upon whether RIVAS was a computer program protected by copyright or a "methodology" protected as a trade secret.  The Court held that it had insufficient evidence to make the determination.  Furthermore, neither party briefed the issue of what effect the copyright/methodology would have upon defendants' alleged oral contract between the parties which allegedly made the parties co-owners of RIVAS.  The Court denied summary judgment as to defendants' breach of contract counterclaim because the existence of an oral contracts and its terms were both disputed facts.  Finally, the Court denied summary judgment as to defendants' trade secret counterclaim because, whether RIVAS was determined to be protected by copyright or trade secret, the parties disputed whether defendants employed sufficient means to protect RIVAS's secrecy.

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Gencor Pacific, Inc. v. Nature's Thyme, LLC, No. 07 C 167, 2007 WL 1225362 (N.D. Ill. Apr. 24, 2007) (Kocoras, J.).

Judge Kocoras granted defendants' Fed. R. Civ. P. 12(b)(2)&(3) motion to dismiss for lack of personal jurisdiction and venue and dismissed the case.  Plaintiff brought this Lanham Act false advertising and copyright infringement case alleging that defendants used portions of plaintiff's copyrighted studies regarding the efficacy of a weight-loss and appetite suppressant containing Caralluma Fimbriata extract.  Defendants, a business and two individuals employed by the business, were residents of New Jersey and had a single sale to an Illinois customer, valued at $300.  Defendants only other contacts with Illinois were an interactive website accessible in Illinois and the fact that one or two of defendants' general solicitations may have been sent to Illinois.  Defendants did not own property in Illinois and there was no proof that any defendants sent any of the allegedly infringing information to Illinois.  The Court held these contacts were not sufficient to create either general or specific jurisdiction.  The Court also held that venue was not proper in the Northern District of Illinois because defendants were not residents of Illinois and the acts at issue in the suit did not occur in the Northern District.

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Vaughn v. Kelly, No. 06 C 6427, 2007 WL 804694 (N.D. Ill. Mar. 13, 2007) (Manning, J.).

Judge Manning denied plaintiff Vaughn's motion to remand his case to state court, but gave plaintiff leave to file an amended complaint.  Vaughn sued defendant R. Kelly ("Kelly") in Illinois state court alleging breach of contract, fraud and unjust enrichment, among other things.  Vaughn alleged that he introduced Kelly to stepping, taught him how to step, helped him write a stepping-based song entitled "Step in the Name of Love," and collaborated with Kelly to develop a video for the song.  Kelly had the case removed to the Northern District based upon an argument that the claims sound in copyright law.  In his motion to remand, Vaughn argued that his case was not about copyright, but about Kelly's alleged theft of his uncopyrightable ideas and the breach of the contract governing the exchange of those ideas.  The Court noted that Vaughn's fraud and breach of oral contract claims were close questions, but held that Vaughn's unjust enrichment claim sounded in copyright.  The unjust enrichment was based upon fixed works -- Kelly's song and video -- and the unjust enrichment claim is equivalent to allegations of Kelly's infringement of Vaughn and Kelly's alleged joint work.  The Court acknowledged that Vaughn was likely to amend his complaint to force remand and gave Vaughn a deadline for filing any such amended complaint.

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Bucciarelli-Tieger v. Victory Records, Inc., No. 06 C 4258, 2007 WL 684047 (N.D. Ill. Mar. 1, 2007) (Moran, Sen. J.).

Judge Moran held that the parties' contract was not exclusive and, therefore, granted in part and denied in part defendants' Rule 12(c) motion to dismiss.  Plaintiffs are members of an Ohio-based band called Hawthorne Heights (collectively "HH").  HH entered into a contract (the "Agreement") with defendants to produce and promote four albums.  The first album was created and promoted seemingly without incident, but just before release of the second album the relationship soured.  HH sent defendants a letter which purported to terminate the Agreement and listed several ways that defendants had allegedly harmed HH.  This suit arose from that dispute.  Plaintiffs allege breach of contract, as well as copyright and trademark infringement for promotions and sales after the date of HH's letter allegedly terminating the Agreement and related state law claims.  The Court held that the Agreement was not exclusive because it did not contain any exclusivity provisions, which meant that HH was free to record other songs or records with another company during the life of the Agreement.  The Court also held that the only way HH's songs can be considered a work-for-hire owned by defendants is if HH were defendants' employees.  But the Court was unable to decide that issue on the pleadings.  As a result, the Court also could not decide HH's copyright and trademark infringement claims on the pleadings because whether defendants could have infringe requires a determination of whether HH or defendants own the marks.  The opinion also contains a very detailed analysis of Illinois choice of law issues for the related state law claims.

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Allied Ins. Co. v. Bach, No. 05 C 5945, 2007 WL 627635 (N.D. Ill. Feb. 27, 2007) (Leinenweber, J.).

Judge Leinenweber granted declaratory judgment defendants/counter-plaintiffs (collectively "defendants") summary judgment DJ plaintiff/counter-defendant's ("plaintiff") duty to defend defendants against Lanham Act and related state law claims.  Defendants were sued by third party Acushnet which accused defendants of willful and intentional violation of Acushnet's marks related to its Titlest Pro VI golf ball based upon defendants' alleged marketing of counterfeit golf balls.  Defendants sought defense and indemnification from plaintiff, their insurer.  Defendants' insurance policy covered, among other things, defendants' infringement of third party marks or copyrights in defendants' advertising so long as the infringement was not done with knowledge or intent of the infringement.  Although the Complaint charges defendants' with willful and intentional violations of the marks, the Lanham Act provides claims without regard to intent.  Because not all of Acushnet's claims require intent, plaintiff has a duty to defend defendants' against the suit.  The Court did note, however, that should Acushnet prove that defendants' acts were willful and intentional, plaintiff would have no duty to indemnify.

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Sheppard Mullin's Intellectual Property Law Blog (another LexBlog creation) has an excellent post on The Top Ten Ways Copyright Law Can Mess Up Your Transaction.  The post will go a long way towards keeping any company or individual out of the Northern District for copyright infringement issues.  But it does not address one of the biggest copyright dangers -- not addressing the use of potentially copyrighted materials within an organization.  Every modern business relies upon information, often that information is gathered from copyrighted sources, for example the internet, television, books or newsletters and magazines.  It is important to educate your employees to respect the copyrights covering their information sources and to set up corporate policies to make it clear that the company respects copyrights.  The fix for this problem is inexpensive and quick, but it can head off very expensive mistakes -- statutory damages for copyright infringement can be astronomical.

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