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

BorgWarner, Inc. v. Hilite Int’l., Inc., No. 07 C 3339, 2008 WL 3849908 (N.D. Ill. Aug. 14, 2008) (Zagel, J.)

Judge Zagel denied defendant Hilite’s 23 U.S.C. §1404(a) motion to transfer. Plaintiff BorgWarner filed this patent infringement suit over variable camshaft timing (“VCT”) in June 2007. Hilite answered and counterclaimed in March 2008. Five days after answering, Hilite filed a suit in the District of Delaware alleging that BorgWarner infringed Hilite’s VCT patent. Hilite reasoned that its VCT case was related to a prior Delaware patent case filed by BorgWarner on the patent currently at issue in the Northern District, and, therefore, by the transitive property this suit and BorgWarner’s closed Delaware case were related.

While the Seventh Circuit does not strictly follow the first-to-file rule, its use was warranted in this case. BorgWarner’s choice of forum deserved some deference. And the Northern District, while equivalent to Delaware in terms of time to trial, was significantly faster for average disposition without court actions – 6.2 months in the Northern District to 12.5 months in Delaware. Convenience factors were neutral, and therefore weighed in favor of keeping the case in the Northern District.

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Personified, LLC v. Sales Consultants of Cary, LLC, No. 08 C 3123, 2008 WL 3200842 (N.D. Ill. Aug. 8, 2008) (Der-Yeghiayan, J.)

Judge Der-Yeghiayan granted declaratory judgment (“DJ”) defendant Sales Consultants of Cary’s (“SCC”) Fed. R. Civ. P. 12(b)(6) motion to dismiss DJ plaintiff Personified’s trademark case in favor of SCC’s later-filed District of North Carolina action. Shortly after its parent registered the trademark “Personified,” Personified began using the name and allegedly received a cease and desist letter from SCC who offered staffing services using the name “Personified.” SCC’s letter allegedly demanded that Personified immediately change its name and pay SCC damages. In response, Personified filed this suit seeking a declaratory judgment that it had not violated trademark laws or engaged in unfair competition. SCC countersued in the District of North Carolina several days later.

The Court had federal question jurisdiction because of the Lanham Act issues.  Personified was the first to file, but the Court noted that the Seventh Circuit did not strictly follow the first-to-file rule. And the Court exercised its “wide discretion,” declining to exercise jurisdiction over the declaratory action. SCC was the natural plaintiff. Instead of filing suit after receiving the cease and desist letter, Personified could have gone to SCC to resolve the dispute. Additionally, Personified was already preparing a motion to transfer the North Carolina action to the Northern District. The Court also denied a motion to stay its ruling pending a decision by the District of North Carolina. If the North Carolina Court transferred the case to the Northern District, Personified would not face substantial hardship by having to replead its DJ claim.

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The Patent Reform Act is on the Senate’s calendar and is expected to be voted on in February. The version voted out of the Senate Judiciary Committee is different than the version passed by the House. Experts expect that, instead of forming a joint committee to resolve the differences which generally requires a second vote by both chambers, the House will vote on any version of the Patent Reform Act passed by the Senate.

That means that it is time to take a close look at the Senate version of the Patent Reform Act. The damages and venue provisions continue to be some of the most significant and hotly-contested. And it is no surprise that the various stakeholders are making their positions heard loudly again. I considered analyzing each provision of the current Senate bill, but Patent Docs beat me to it and did an excellent job:

• First to File
  
• Assignee Filings, Mandatory Publication, and Third Party Submissions
  
• Interlocutory Decisions & Venue
  
• Damages
  
• Applicant Quality Submissions & Micro-Entities
  
• Post-Grant Procedures
  
• Inequitable Conduct Provisions
  
• Late Patent Filings         

Several other blogs are also keeping a close eye on the stakeholders and the sausage-making aspects of the Patent Reform Act, among the best:

• 271 Patent Blog
  
• Filewrapper
  
• IP Biz
  
• Patent Baristas
  
• Patently-O
  
• Maryland IP Law Blog (and here regarding the increased internet coverage of Patent Reform during February)

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