Threat to Enforce Confidentiality Provision Not Intimidation

Posted on June 16, 2008 by R. David Donoghue

Amari Co. v. Burgess, No. 07 C 1425, ___ F.Supp.2d ___, 2008 WL 656072 (N.D. Ill. May 7, 2008) (Ashman, Mag. J.).

Judge Ashman denied plaintiff Amari Co.’s motion for a protective order to prevent defendants’ alleged intimidation of Amari's non-party witnesses in this Racketeering Influenced and Corrupt Organization Act ("RICO"). Amari argued, among other things,* that defendants were intimidating ex-employees of former defendant International Profits Associates ("IPA"), which was run by defendants, by threatening to enforce confidentiality agreements signed by all IPA employees.

The Court held that it could not grant Amari its requested relief for two reasons. First, to be effective the injunction would have had to enjoin non-party IPA from suing its ex-employees to enforce the agreements. The Court could not enjoin IPA without proof it was working in concert with defendants or that IPA was defendants’ alter ego.  And before enjoining IPA, IPA would have to be given notice of the motion and an opportunity to respond.

Second, Amari sought a blanket injunction from enforcing the agreements against IPA’s ex-employees, but did not allege that the agreement was unenforceable. While confidentiality agreements cannot be used to hide a company's potential impropriety, they can be used to protect proprietary information. Without identification of specific ex-employees allegedly threatened with a suit, the Court could not determine whether IPA might have been using the confidentiality agreement for enforceable or unenforceable ends. And if Amari identified a specific individual, it could subpoena them, removing the need for an injunction.

*Amari alleged other forms of intimidation, but they are not related to IP and are, therefore, not discussed in this post.

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Using Trademarked Terms As Internet Advertising Keywords Violates the Lanham Act

Posted on February 12, 2007 by R. David Donoghue

International Profit Assocs., Inc. v. Paisola, 461 F. Supp.2d 672 (N.D. Ill. Nov. 14, 2006) (Bucklo, J.).

Judge Bucklo held that plaintiff was likely to succeed on its Lanham Act and cyberpiracy or cybersquatter, 15 U.S.C. Section 1125(d), claims and issued a temporary restraining order ("TRO") preventing defendants from conduct that likely infringed plaintiff's trademarks.  Based upon the cyberpiracy claim, Defendants were ordered to stop making content available through their website, www.ipaopinion.com, which was likely confusingly similar to plaintiff's site, www.ipaopinions.com.  The Court also ordered defendants to stop using plaintiff's trademarks as search terms in Google's Adwords program. 

An Adwords user specifies search terms relevant to its business or website, so that whenever a search with those terms is performed on the Google site, the Adwords user's advertisement or website is displayed on the search results page.  The Court noted that the Seventh Circuit had not ruled on whether using trademarks as keywords in online search programs was a use "in commerce" as required by the Lanham Act, but noted that other courts had held that it was a use "in commerce."  The Court also held that defendants' use of plaintiff's marks was leading to "incalculable" loss.
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