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

BlueStar Management, LLC v. The Annex Club, LLC, No. 09 C 4540, Slip Op. (N.D. Ill. Jul. 12, 2010) (Gettleman, J.).

Judge Gettleman granted in part defendants' Fed. R. Civ. P. 12(b)(6) and 9(b) motion to dismiss this Lanham Act case. Plaintiff Wrigley Done Right sued defendants, a number of other Wrigley Rooftops and one rooftop owner individually alleging that defendants harmed Wrigley Done Right by falsely advertising the Wrigley Done Right name and excluding Wrigley Done Right from websites and organizations. 

Lanham Act

The Court dismissed the Lanham Act claims as to all defendants except the individual defendant and one of his rooftops the Wrigley Rooftop Club. Wrigley Done Right sufficiently pled the who, what, where, when, and why of its claims as to those two defendants. Wrigley Done Right sufficiently pled false designation: 1) defendants sponsored an advertisement showing a picture of Wrigley Done Right linked to the Wrigley Rooftop Club; 2) defendants placed the ad in interstate commerce via the internet; and 3) Wrigley Done Right was harmed by business lost to the ad.

Wrigley Done Right also sufficiently pled false advertising. Wrigley Done Right pled that, for more than a year, defendants provided and advertised the availability of its Ivy League Club despite the fact that it was under construction. Further, the Ivy League Club's booked reservations during that time diverted sales from Wrigley Done Right. Because the legal inquiry for Wrigley Done Right's Deceptive Trade Practices Act and Consumer Fraud Act claims involved the same legal inquiry, the motion to dismiss was denied as to them as well.

Sherman Act

Wrigley Done Right's Sherman Act § 1 claim was dismissed. Wrigley Done Right pled a group boycott of it by defendants which prevented Wrigley Done Right from joining a rooftop association. But Wrigley Done Right did not plead that exclusion from the group would result in serious anticompetitive effects. And Wrigley Done Right pled no lost customers or revenues.

Tortious Interference

The Court dismissed Wrigley Done Right's tortious interference claim because the parties were competitors and defendants only engaged in protected competitive behavior.

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Chief Judge Holderman recently gave the annual State of the Court address, concluding that the Northern District continues to be an active, growing district court. Civil case filings were up 6.2% from 2008 to 2009, and the Northern District remains in the top 10% of district courts for median time to disposition – 6.2 months. 

The Court began 2009 with one vacant judgeship – created by Judge Filip's March 2008 resignation. The Court ended 2009 with from after Judges Bucklo, Coar and Gettleman took senior status. In February 2010, Judge Manning also took senior status. Judge Feinerman was confirmed last month, reducing the vacant seats by one, but there could be five vacancies again at the end of July when Judge Anderson retires. 

The magistrate bench was also active. Judges Ashman and Keys shifted to recalled status. Judges Finnegan, Gilbert and Kim joined the bench. 

Finally, the number of registered e-filers is up 18% to over 25,000. And the daily filing rate is up 15% to an average 867 documents per day. 

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Adams v. Pull'R Holding Co., LLC, No. 09 C 7170, Slip Op. (N.D. Ill. Apr. 20, 2010) (Gettleman, Jr.).

Judge Gettleman granted defendants' motion to dismiss as to plaintiff's civil conspiracy claim and granted in part plaintiff's motion to dismiss defendants' trade secret and related state law counterclaim in this case involving hoists, fence installation tools and other do it yourself tools. The Court dismissed plaintiff's civil conspiracy claim because it was not based upon an underlying tort claim. The purpose of a civil conspiracy is to extend tort liability to members of a conspiracy. 

The Court denied plaintiff's motion to dismiss as to defendants' breach of contract counterclaim.  The motion was premised upon plaintiff's argument that he was not a party to the agreement. But plaintiff was not allowed to make that argument after having pled in his complaint that he was a party to the agreement. 

The Court also denied plaintiff's motion as to defendants' trade secret misappropriation claim. It did not matter that defendants' allegations were all pled on information and belief. Defendants' pleading sufficiently provided plaintiff the what, where, when, why and how required by the pleading standards. 

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Chief Judge Holderman recently gave his annual State of the Northern District speech.  In a word, Judge Holderman said that the state of the District is "good."  Here are some of the highlights of the presentation (click here to read the Court's press release):

• Judge Gettleman intends to take senior status May 5 and Judge Coar intends to take senior status August 12.  Additionally, Magistrate Judge Ashman intends to retire later this year.
   
• Combined with the vacancy created when Judge Filip went to the Justice Department, when Judges Gettleman and Coar take senior status there will be three Article III and one magistrate vacancies on the Court.
   
• Civil filings were up 2.7% in 2008 over 2007.  And the Court resolves those disputes quickly.  The Northern District is in the top 10% of district court with its median time of 6.2 months to disposition.
   
• The Court is participating in a pilot program which allows jurors to fill out jury forms and get information about their service online.

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O’Leary v. Mira Books, No. 08 CV 8, 2008 WL 3889867 (N.D. Ill. Aug. 18, 2008) (Gettleman, J.)

Judge Gettleman granted defendant’s Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff’s copyright infringement and related state law claims. Plaintiff alleged that defendant – the author and publisher of the novel The Good Liar – infringed plaintiff’s copyright in plaintiff’s novel, What If, by publishing The Good Liar. The Court dismissed the copyright claim because plaintiff did not identify specific copied passages of her work or show substantial similarities between the works. What If was about a relationship between a paralegal and a rockstar. The Good Liar was about a counter-terrorist organization.  The similarities between the works were references to common places or things – both were set in Chicago and had blonde-haired characters.

The Court also dismissed plaintiff’s state law unfair trade practices and unfair competition claims. Both were preempted by the Copyright Act because they were based upon publishing and marketing of the allegedly infringing novel.

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Judge Gettleman denied defendant CMN's Fed. R. Civ. P. 12(b)(1), (6) & (7) motion to dismiss. Plaintiff Bral alleged that it was the exclusive supplier, with limited exceptions, for certain cartridges third party Johnstown used in its patented MegaFlow Door System for coal-carrying railroad cars. Despite knowledge of the exclusive relationship, CMN allegedly offered to provide Johnstown the cartridges at reduced prices, thereby interfering with Bral's contract with Johnstown.

First, CMN argued that the claim should be dismissed because it was not ripe until Bral resolved its breach of contract dispute with Johnstown. But it was sufficient that Bral pled a breach. Bral need not sue Johnstown to make its claim, it just had to prove the agreement was breached.

Second, CMN argued that the claim should be dismissed for failure to join necessary party Johnstown pursuant to Fed. R. Civ. P. 19(b). But the Court held that Johnstown was not a required party. The case could be resolved without Johnstown. And neither Johnstown nor CMN would be exposed to multiple inconsistent judgments without Johnstown. Furthermore, Johnstown had shown no interest in being joined. And the case's outcome would not affect Johnstown's ability to defend itself in subsequent cases.

Third, the Court held that Bral met notice pleading standards for each element of its claim. Bral was not required to plead specific facts providing that CMN's actions were "wrongful," just that CMN's actions were wrongful.

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Brian Higgins's Maryland IP Law Blog post about the progeny of In re Seagate, 497 F.3d 1360 (Fed. Cir. 2007), inspired me to do follow up posts identifying Northern District cases discussing recent major IP decisions -- click here for my post on injunctions after eBay Inc. v. MercExchange, L.L.C., 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006).  There have been a number of obviousness decisions in the Northern District since KSR Int’l Co. v. Teleflex Inc., __ U.S. __, 127 S.Ct. 1727 (2007).  Here they are:*

• Abbott Labs. v. Sandoz, Inc., No. 05 C 5373, 2007 WL 1549498 (N.D. Ill. May 24, 2007) (Coar, J.). -- Holding that the Court's pre-KSR analysis need not be reconsidered in light of KSR because an element was missing from the prior art, regardless of what standard was used.
  
• Herman Miller, Inc. v. Teknion Corp., No. 05 C 2761, 2007 WL 2230042 (N.D. Ill. Jul. 30, 2007) (Gettleman, J.). -- Noting that, in light of KSR, plaintiff issued a statement of non-liability and certain patents were removed from the suit.
  

• Lexion Medical, LLC v. Northgate Techs., Inc., No. 04 C 5705, Slip Op. (N.D. Ill. Jun. 8, 2007). -- Holding that the pre-KSR jury's decision would not have changed if given a KSR obviousness instruction.

These opinions suggest that KSR is not changing obviousness law in the Northern District much.  I suspect that is not true.  Once we have a larger sample of cases, including more where the initial analysis was not done pre-KSR, we will see more patents held invalid based upon obviousness.

*  A brief note on methodology:  this was not a thorough study and does not include cases that granted or denied injunctions without discussion.  For a more complete list of post-KSR decisions nationwide, go to the Fire of Genius.

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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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Federal Trade Comm. v. Trudeau, No. 03 C 3904, 2007 WL 4109607 (N.D. Ill. Nov. 16, 2007) (Gettleman, J.).

Judge Gettleman held defendant Kevin Trudeau ("Trudeau") in contempt for violating the Court's Stipulated Permanent Injunction (the "Injunction").  In 2003, plaintiff Federal Trade Commission ("FTC") filed suit against Trudeau* alleging, among other things, false advertising pursuant to the FTC Act, 15 U.S.C. Section 52(a).  The advertisements at issue included various informercials in which Trudeau allegedly claimed that the coral calcium in his supplement Coral Calcium Supreme could treat cancer, multiple sclerosis and heart disease, among other medical conditions.  In settlement of the FTC's suit, the parties agreed to and the Court entered the Injunction.  The Injunction generally prohibited Trudeau from producing infomercials, with the exception that he could make infomercials promoting books, so long as the infomercials did not misrepresent the books.  The FTC argued that a series of three infomercials promoting Trudeau's new book The Weigh Loss Cure "They" Don't Want You to Know About (the "Book") violated the Injunction because Trudeau made claims in the infomericals that the weight loss program described in the book was "easy,"  "simple" and prevented weight gain forever once complete. 

The weight loss plan had four phases, the last of which was to be followed for the remainder of a person's life.  Each phase had various requirements (or strong recommendations) including colonics, various organ cleansings, avoiding use of over the counter or prescription drugs, daily walks and eating only 100% organic foods.  Phase two also required daily injections of human chorionic gonadotrophin ("HCG").  HCG is available only by prescription in the US, but the FDA specifically stated that it should not be used for treating obesity.  Trudeau argued that the claims were mere puffery and opinion which, therefore, did not violate the Injunction.  But the Court held that Trudeau's claims that the Book detailed an "easy" diet were false.  Furthermore, Trudeau's claims that once the diet was complete you could eat anything you wanted were false because the fourth phase of the diet lasted for the remainder of the dieter's life.  The Court, therefore, held Trudeau in contempt  and set a hearing to determine an appropriate remedy.

This opinion is also an excellent example of engaging judicial writing.  It has one of the most engaging introductions I have read with appeal beyond just the legal community:

Kevin Trudeau is one heck of a salesman. He is also a prolific author, self-described consumer advocate and "exposer of corporate and government corruption." He is also an ex-felon and, as discussed below, a contemnor of this court's orders. His favorite marketing tool is the "infomercial," a lengthy television advertisement that takes the form of a mock interview. Through this medium Mr. Trudeau has sold various products that he claimed could: cure numerous diseases, such as multiple sclerosis, cancer, substance abuse addictions, and arthritis (among many others); reverse hair loss; improve memory; and (apropos to the matter before the court) cause dramatic and permanent weight loss.

(Footnotes omitted).  This is the sort of introduction that engages a reader and opens the law to those without legal degrees.

* Click here for a copy of the complaint.

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Herman Miller, Inc. v. Teknion Corp., No. 05 C 2761, 2007 WL 2230042 (N.D. Ill. Jul. 30, 2007) (Gettleman, J.).

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In re AD-II Eng’ing., Inc., Misc. Docket No. 07-852, Slip Op. (Fed. Cir. May 29, 2007).*

The Federal Circuit also held that it would be inappropriate for it to enter judgment that SRAM’s originally asserted claim was invalid based upon a third reexamination of SRAM’s patent. AD-II had not made a showing that it could not get the relief requested from the Northern District Court or through an appeal of any decision by the Northern District Court. The extraordinary step of mandamus was, therefore, not proper.

*  Because the Federal Circuit's opinion is not published, you can read it here.

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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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Judges Bucklo, Coar, Gettleman, Kennelly and Lefkow are instituting a joint trial call in 2007 (the N.D. Ill.'s statement about it is here).  Each judge is contributing cases to the call, apparently at the judge's discretion.  The cases in the call will be tried in order by one of the five judges, although not necessarily the judge originally assigned the case.  Each trial is expected to last no longer than five days and the attorneys and parties for a case on the call are expected to be ready for trial, including producing witnesses, on 48 hours notice.  I suspect that the five day trial limit will remove the typical patent case, although plenty of trade secret, trademark and copyright cases could end up on the joint call.  The judges on the call also intend to use suggestions from the Seventh Circuit Bar Association Jury Project Commission to speed the trials (more on the Commission's recommendations here).

This practice will make the Northern District, at least for some cases assigned to the participating judges, more like the Eastern District of Virginia, which randomly assigns judges to each new motion or trial throughout a proceeding.  It may also make it harder to delay a trial, turning up the heat on pre-voir dire settlement negotiations.

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