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

EnVerve, Inc. v. Unger Meat Co., No 11 C. 472, Slip Op. (N.D. Ill. Apr. 26, 2011) (Castillo, J.).

Judge Castillo denied plaintiff EnVerve's motion for preliminary injunction in this copyright infringement action involving advertisements. The Court first held that EnVerve had only shown a minimal likelihood of success on the merits:

• EnVerve's arguments were "very conclusory" and that "brevity [was] fatal."
   
• There was a significant dispute regarding who owned the copyrights based upon a contract between the parties. 
   

• EnVerve's evidence of copying was an unsupported conclusion that defendant use constituted copying.

• EnVerve failed to address defendant's best argument - that EnVerve's claim sounded in contract, not copyright. 

The Court also held that there was no irreparable harm:

• Money damages were an adequate remedy and were readily calculable based upon the contract, EnVerve's invoices and defendant's payments.
   
• EnVerve's claims are reputational harm and defendant's potential insolvency were too speculative to be considered irreparable harm.

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Peerless Indus., Inc. v. Crimson AV, LLC, No. 11 C 1768, Slip Op. (N.D. Ill. Jun. 10, 2011) (Lefkow, J.).

Judge Lefkow denied plaintiff Peerless' motion for a preliminary injunction in this patent and tortious interference case involving audio-visual mount equipment. Peerless had a manufacturing agreement with Sycamore Manufacturing ("Sycamore") which was terminated no later than March 2010. The agreement included a non-compete clause that prevented Sycamore from selling the products it made for Peerless or any similar products, with a very broad definition of similarity. After the March 2010 termination and before the end of the non-compete term, in March 2011, Sycamore began selling similar products to defendant Crimson. The Court held that Peerless had "negligible" likelihood of success because the non-compete clause was likely unenforceable because it was broader than necessary to protect Peerless' interests. The scope of similar products was far too broad. The scope should have been limited to substantially similar products. Additionally, the definition of similar products was "unworkably difficult to determine."

Peerless also could not show irreparable harm. As an initial matter, the non-compete term had ended before the date this Opinion issued. An injunction barring Crimson from selling product the agreement now allowed it to sell would have improperly extended the term of the non-compete. Additionally, because the alleged unauthorized sales were complete, the damages were readily quantifiable.
 

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Flava Works, Inc. v. Gunter d/b/a myVidster.com, No. 10 C 6517, Slip Op. (N.D. Ill. Jul. 27, 2011) (Grady, J.).

Judge Grady granted plaintiff Flava Works' motion for a preliminary injunction in this copyright case involving adult movies, and ordered the parties to confer on language for the preliminary injunction. Defendants' myVidster website is a "social video bookmarking" site which allows users to post or link to video content. When a user posts or links to the content, myVidster crawls the website hosting the video to gather data about the video, creates a thumbnail image of the video and embeds the video on the myVidster site.

Likelihood of Success

The Court held that there was a likelihood of success on at least Flava Works' contributory copyright infringement claim. It could not be "seriously disputed" that third parties have directly infringed Flava Work's works by posting video content on myVidster. And defendants knew or should have known about the infringement based upon Flava Works' seven DMCA take down notices outlining instances of the infringement to defendants. In fact, the email exchanges surrounding the notices show that defendants were not cooperative in addressing the notices. And myVidster's repeat infringer policy was the "epitome" of willful blindness. Furthermore, there was significant evidence that defendants encouraged the infringement. For example, myVidster encouraged sharing of video content without warning of potential copyright infringement issues.

Defendants were not protected by the DMCA's safe harbor provision. A threshold requirement for safe harbor is that a party adopt and reasonably implement a policy providing for termination of users that are repeat infringers. Defendants policy did not require or directly provide for termination of repeat infringers. And defendants did not consider copyright infringement to be part of the defintion of "infringer."

Irreparable Harm

Defendants failed to rebut the presumption of irreparable harm in copyright cases. Flava Works' did not delay in bringing the suit and then the injunction motion. Prior to filing suit, Flava Works attempted to resolve the issue with several DMCA take down notices and the Court would not penalize Flava Works for attempting to avoid litigation.

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E.B.N. Enters., Inc. v. C.L. Creative Images, Inc., No. 09 C 6279, Slip Op. (N.D. Ill. Mar. 28, 2011) (Coleman, J.)

Judge Coleman granted in part plaintiff's ("Fantastic Sams") preliminary injunction motion in this case involving a non-compete agreement related to a terminated Fantastic Sams hair salon franchise. The Court granted a preliminary injunction regarding Fantastic Sams' operations manual which defendants were contractually required to return to Fantastic Sams. The Court denied the remainder of the requested injunction. Fantastic Sams alleged that defendant's decision to operate a new salon at the same location breached the two-year requirement that defendants not operate a salon within five miles of the prior Fantastic Sams location. Fantastic Sams made an uncontested showing that defendants breached that agreement. But Fantastic Sams did not sufficiently show irreparable harm. There is no question of irreparable harm from breach of a non-compete agreement. Fantastic Sams did not ever show that another franchise wanted defendants' territory. Finally, there was no evidence that defendants' customers continued using defendants because of features unique to Fantastic Sams.

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Kastaris v. Eggstacy LLC, No. 10 C 35614917, Slip Op. (N.D. Ill. Oct. 20, 2010) (Gilbert, Mag. J.).

Judge Gilbert denied plaintiff's motion for preliminary injunction in this Lanham Act matter. Plaintiffs claimed infringement of its Yolk trademark for a breakfast restaurant by defendants' New Yolk New Yolk ("NYNY") breakfast restaurant. Yolk was not generic when used to describe restaurants, although it was generic for the center of an egg.

Plaintiff did not show a likelihood of success on the merits. First, the marks were dissimilar both visually and aurally. While both marks use "Yolk", NYNY is intended to invoke New York, New York.

Second, the area and manner of use is not concurrent. Yolk is in downtown Chicago, while NYNY is in the western suburbs of Chicago. Third, based upon strong reviews for both sets of restaurants, consumer were likely to exercise reasonable care in choosing to dine at either restaurant. Fourth, plaintiff had established a Chicago-area reputation for Yolk, giving the trademark some weight. Fifth, plaintiff alleged evidence of actual confusion was not supported by sufficient evidence. Sixth, defendant knew about Yolk before opening NYNY, but there was no evidence showing passing off. NYNY's theme was clearly New York City, and Yolk's was not.

Balancing the factor, the Court held that plaintiffs did not have greater than negligible chances of showing likelihood of confusion. Plaintiffs were, therefore, required to show a proportionally larger irreparable harm, the presumption of irreparable harm in Lanham Act cases was not alone sufficient. Because of the significant harm to defendant in changing its name, a preliminary injunction was not appropriate.
 

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Lettuce Entertain You Enters., Inc. v. Leila Sophie AR, LLC, No. 09 CV 2582, Slip. Op. (N.D. Ill. Feb. 26, 2010), (Lefkow, J.). 

Judge Lefkow granted plaintiff Lettuce Entertain You ("LEYE") a preliminary injunction against defendants' use of the name "Lettuce Mix" in their salad bar restaurant in Lincoln Park. LEYE argued that the defendants' "Lettuce Mix" name would infringe its family of "Lettuce" marks for use in restaurant services.

Likelihood of Success

LEYE's Lettuce marks were not generic as used for restaurant services. While some of LEYE's meals included lettuce, LEYE was not in the business of lettuce sales. And defendant's intent to use its Lettuce Mix name was sufficient for use in commerce.

The Court held there was a likelihood of confusion. Both parties marks focus upon "lettuce" and use it as a pun for "let us." This is true even though LEYE's logo, which includes a waiter opening a covered a dish was different from defendant's logo. Additionally the parties' services in the restaurant industry were similar.

Both parties used the marks in the same area and manner. They directly compete for restaurant customers, and at least one of LEYE'S 70 restaurants is within one mile of Lettuce Mix. To the extent both parties cater to patrons seeking inexpensive, casual meals, the patrons are assumed to use a lesser degree of care, even though some of LEYE's restaurants are more expensive.

LEYE's family of Lettuce markers was strong, and defendants' argument to the contrary was their genericness argument that the Court previously denied.

LEYE, however, did not provide evidence of actual confusion, although actual confusion is not required. And there was no evidence that defendants intended to pass themselves off as affiliated with LEYE. Finally, defendants' was not a fair use because lettuce was not descriptive of their service.

Irreparable Harm

Trademark infringements are presumed to result in irreparable harm. LEYE would, therefore, have been irreparably harmed by any trademark infringement from defendants.

Balancing Harm

Defendants would not suffer significant harm from the injunction given that they had already stopped using the allegedly infringing name. And any loss of defendants' goodwill would be attributable to their own actions.

Public Interest

The public interest would not be harmed by the preliminary injunction. Enforcement of trademarks serves the public good, and LEYE had shown a "substantial" likelihood of confusion.

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Scala's Original Beef & Sausage Co., LLC v. Alvarez d/b/a Michaelangelo Foods, No. 09 C 7353 (N.D. Ill. Dec. 22, 2009 (Dow, J).

Judge Dow denied plaintiff Scala's motion for a temporary restraining order ("TRO") in this Lanham Act case regarding Scala's and Scala's Preferred marks for giardiniera.

Likelihood of Success

Scala's made a "fairly strong showing" that defendants' (collectively "Michaelangelo Foods") labels using the marks were likely to cause consumer confusion. Scala's also met its burden to show some likelihood of success that its trademark license to Michaelangelo Foods was terminable at will, even though the license lacked a termination provision. Finally, Scala's showed some likelihood of success as to its argument that licensee estoppel barred Michaelangelo Foods' challenges to Scala's marks. The Court noted, however, that at the early stages of the litigation it appeared that Michaelangelo Foods might be able to overcome licensee estoppel upon equitable grounds.

Irreparable Harm

Irreparable harm is presumed in trademark cases, and Michaelangelo Foods did not challenge the presumption. Instead, Michaelangelo Foods argued that Scala's harm was not sufficiently immediate because Scala's was not selling competing products. But the fact that Scala's did not make a product, did not eliminate the harm. Scala's was harmed by not being able to control Michaelangelo Foods' quality. Additionally, Scala's was using the marks with other products.

But the Court noted that the facts of this case mitigated the strength of Scala's irreparable harm. In particular, Scala's licensed the marks at least in part because Scala's was unable to consistently pay suppliers or deliver products to its customers. And Michaelangelo Foods took substantial steps to fix those relationships, thereby enhancing the marks' value.

Balance of Harm

The Court held that Michaelangelo Foods would be harmed by a TRO. A TRO would allow the sale of existing inventory, but individual defendant invested a significant portion of his savings into the business and the business had relatively low profits. A TRO would, therefore, likely do substantial damage to Michaelangelo Foods' finances. This financial harm combined with Michaelangelo Foods' efforts to rebuild the marks and the business tipped the balance of harm in Michaelangelo Foods' favor.

Conclusion

While it was a close call, the Court denied a TRO. In view of the importance of a decision to both parties, the Court set an expedited discovery, briefing and hearing schedule for Scala's preliminary injunction motion.

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Aguila Records, Inc. v. Nueva Generacion Music Group, Inc., No. 07 C 3399, Slip Op. (N.D. Ill. Nov. 4, 2009) (Der-Yeghiayan, J.).

Judge Zagel granted in part and denied in part plaintiffs', collectively "Aguila Records") motion for a preliminary injunction in this trademark and copyright infringement dispute.  Aguila Records, a music management and recording agency, was in a dispute with defendants' musical group Alacranes Musical (“Alacranes”).  Based upon that dispute, Aguila Records sought a preliminary injunction preventing defendants' use of the Alacranes word mark and scorpion logo.

                                               Likelihood of Success

Because the parties agreed that the Alacranes marks were protectable and that there was a likelihood of confusion if two groups used the marks, the only likelihood of success issue was whether Aguila Records owned the marks.  The Court held that the proof of ownership was at best "in conflict" and that the agreements were contradictory.

                                               Irreparable Harm

The Court held that a preliminary injunction against performing using the Alacranes Musical mark would irreparably harm defendants who would be forced to negotiate with Aguila Records for rights to use the name or change their name, but it was undisputed that the band's success was intertwined with its name.  Alternatively, if the Court did not grant an injunction defendants would continue performing using the name and would likely continue to grow in popularity and earn additional income, which would be lost to Aguila Records.  But that harm would not be irreparable because it could be repaid financially. 

                                               Conclusion

While Aguila Records did not demonstrate a strong likelihood of success, it did demonstrate a "greater than negligible chance of winning."  The Court, therefore, enjoined defendants from using the marks on compact disks, other recording media and merchandise such as t-shirts and hats, all uses for which Aguila Records had trademark registrations.  But the Court did not enjoin the use of the marks for live performances because Aguila Records did not have registered marks for live performances and the balance of harms tipped in defendants' favor for live performances.

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DeVry Inc. v. Int'l Univ. of Nursing d/b/a Robert Ross Int'l Univ. of Nursing, No. 06 C 3364, Slip Op. (N.D. Ill. Jun. 30, 2009) (Guzman, J.).

After a bench trial, Judge Guzman issued findings of facts and conclusions of law, holding plaintiffs Ross University marks infringed and enjoining defendants from using the Ross name in conjunction with medical or nursing schools.  Plaintiffs operated the Ross University School of Medicine and the Ross University School of Veterinary Medicine, both off which plaintiffs bought along with the related trademarks from Robert Ross.  Both institutions are offshore and cater to US students.  Ross later associated himself with defendant, after which defendant, an offshore nursing school, began using the Ross name.  Defendant claimed plaintiffs' claims were moot because defendant stopped using the Ross name.  But the Court held that an injunction could be appropriate to guarantee that the misconduct does not restart after the case.

The Court held that defendants' "Robert Ross International University of Nursing" mark was confusingly similar to plaintiffs' "Ross University" marks for the following reasons:

• Defendant's marks were "strikingly similar" to plaintiffs' in both appearance and suggestion;
   
• Both sets of marks represent offshore medical institutions;
   
• The parties promote their institutions and hire faculty and staff through the same channels; and
   
• There have been numerous instances of actual confusion.

Having held that plaintiffs' mark was infringed, the Court held that injunctive relief was appropriate.  Plaintiffs were irreparably harmed  because of the ongoing actual confusion between the parties' marks and plaintiffs' inability to control its image when confusion occurs.  Furthermore, the balance of hardships weighed in favor of plaintiffs.  Plaintiffs faced "potential devastation" if an injunction was not issued, but defendant's only harm was Ross's temporary inability to use his name in connection with offshore medical services.  And the public would not be harmed by an injunction.  In fact, the injunction would serve the public interest by clarifying the source of medical education services for consumers.

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Mintel Int’l. Group Ltd. v. Neergheen, No. 08 C 3939, 2008 WL 2782818 (N.D. Ill. Jul. 16, 2008) (Dow, J.).

Judge Dow granted plaintiff a limited temporary restraining order (“TRO”) in this trade secret and non-compete case. After defendant gave plaintiff his notice of resignation from plaintiff’s marketing department, plaintiff began monitoring defendant’s computer use. This monitoring allegedly showed that defendant copied, emailed or printed various pieces of confidential information, including plaintiff’s client and vendor lists. Defendant then allegedly used those documents, in violation of defendant’s employment agreements, with defendant’s new employer, plaintiff’s alleged competitor.

The Court held that plaintiff had shown at least some likelihood of success regarding its trade secret misappropriation and Computer Fraud and Abuse Act claims based upon the alleged copying, emailing or printing of plaintiff’s client lists and other strategic documents. The Court also held that plaintiff showed a strong likelihood of success on elements of its breach of the non-compete and employment agreement claims. But the Court noted that it appeared likely that some provisions of the agreements were not enforceable.

The Court determined that plaintiff’s alleged harm would be irreparable – the use of plaintiff’s trade secret documents would result in lost sales and clients. Because plaintiff had shown a likelihood of success on the merits and irreparable harm, the Court entered a TRO. The Court ordered defendant and his agents not to use, reference or copy any documents misappropriated from plaintiff, and to return any such documents to plaintiff. The Court also enjoined defendant from soliciting any of plaintiff’s customers or clients whom defendant had contact with during the previous twelve months. And the Court enjoined defendant from soliciting plaintiff’s employees. The Court also ordered defendant to produce forensic copies of any of his personal computers.

But the Court did not enjoin defendant from working for his new employer. The Court noted that a TRO was an extraordinary remedy. And based on the available evidence, the Court was unwilling to use a TRO to end defendant’s employment, even for a limited period.

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Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. May 22, 2008) (Moran, Sen. J.).*

After a jury held that certain of defendants' (collectively "eSpeed") products willfuly infringed two of plaintiff Trading Technologies' (“TT”) futures trading software patents (the Court previously reversed the willfulness finding), the Court entered a permanent injunction preventing future sales of the infringing software -- a previous opinion granted summary judgment of noninfringement of eSpeed's current software and all software except that sold during a six month period shortly after TT's patents issued.  The Court looked at each of the four standard injunction elements, as required by the Supreme Court in eBay Inc. v. MercExchange, LLC.

Irreparable Harm

The Court held that TT would be irreparably harmed by any continued sales of infringing product because TT's successful business was built around its patented technology and, therefore, direct competitors with infringing products irreparably harmed TT.    The Court agreed with eSpeed that general claims of competition were insufficient pursuant to eBay, but the Court held that TT's direct competition assertions were supported by trial testimony.

Inadequate Remedy at Law

eSpeed argued that TT's numerous licenses proved that monetary damages could compensate TT, as the eBay district court held after remand.  but the Court distinguished eBay.  eBay was premised upon a combination of plaintiff MercExchange's:

• willingness to license;
  
• choice not to practice the patent;
  
• failure to seek preliminary injuctive relief; and
  
• consistent, clear statements that it desired monetary damages.

In contrast, TT manufactured a patented product and only licensed as an alternative to litigation.  And the Court acknowledged TT's concern that providing monetary damages after trial without an injuction would force a compulsory license on TT.

Balance of Hardships

The Court held that TT would be more harmed without an injunction than eSpeed would be harmed by an injunction.  eSpeed no longer made or sold the infringing software, so an injunction would cause eSpeed little or no harm.  Furthermore, eSpeed manufactured numerous non-infringing products.  So, the extent of any harm was further minimized.

Public Interest

eSpeed argued that the public interest weighed against granting injunctions regarding patents in reexamination.  But TT's patents had since been upheld in the reexam.  So, the only public interest factor was enforcement of TT's patent rights.

For these reasons, the Court entered a permanent injunction.  Click here to read the Permanent Injunction Order.

* Click here to read much more about this case in the Blog’s archives and click here for this opinion.

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Little Tikes Co. v. Kid Station Toys, Ltd., No. 08 C 1935, 2008 WL 1805379 (N.D. Ill. Apr. 18, 2008) (Gottschall, J.).

Judge Gottschall denied plaintiff Little Tikes' Motion for Temporary Restraining Order ("TRO") to prevent defendant Kid Station Toys, Ltd. ("Kid Station") from selling Kid Station electric toys using Little Tikes' trademarks. From 2003 until February 2008, the parties had a license agreement ("Agreement") pursuant to which Kid Station sold its electric toys using the Little Tikes trademarks. In February 2008, Little Tikes canceled the Agreement pursuant to a provision allowing it to do so for, among other reasons, unsafe toys. Kids Station allegedly had a toy cellphone recalled because it was a potential choking hazard. Kids Station disputed the validity of the termination and continued selling its toys using the Little Tikes trademarks.

The Court held that Little Tikes had shown sufficient likelihood of success on the merits. Its trademarks ownership was undisputed and its success regarding the validity of its Agreement termination was "better than negligible." Additionally, in the parties' Agreement, Kids Station stipulated to Little Tikes' irreparable harm.

But the Court held that Kid Station would be irreparably harmed by a TRO because it would not be able to meet its customer obligations, which would be a serious blow to its business. And, the Court held that Kid Station's irreparable harm from a TRO outweighed Little Tikes' irreparable harm without a TRO. While Kid Station may not be able to recover its customers, Little Tikes had already approved Kid Station's existing toys and could recover royalties for any sales. The Court, therefore, denied the TRO.

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Geneva Int’l Corp. v. Petrof, Spol, S.R.O., No. 07 C 4214, 2007 WL 4522621 (N.D. Ill. Dec. 14, 2007) (Moran, Sen. J.).

Judge Moran denied plaintiff Geneva International’s preliminary injunction motion and the parties’ cross motions for summary judgment on Geneva’s anticipatory breach of contract claim.* Geneva signed a variety of agreements with defendant Petrof making Geneva the exclusive U.S. distributor of Petrof’s pianos and the exclusive U.S. licensee of the “Petrof” trademark for use with Petrof’s pianos, through 2012. In 2007, Petrof gave Geneva the required six months notice to terminate the parties’ contract (but not their trademark license agreement which did not have the same termination provisions) and notified Geneva that Petrof planned to start selling its pianos using its trademark in the U.S.

Geneva sough a preliminary injunction to stop Petrof’s U.S. sales because Geneva continued to be the exclusive licensee of the Petrof trademark. But the Court held Geneva would not be irreparably harmed without the preliminary injunction. Geneva’s alleged irreparable harm — lost goodwill of its customers because Geneva would not be Petrof’s exclusive distributor — was caused by the contract, not breach of the trademark license. Petrof’s contract termination meant that Geneva could not be Petrof’s U.S. distributor, exclusive or otherwise. Because the alleged irreparable harm did not stem from the license at issue, the Court denied the injunction.

* Because they are not IP-specific, I will not fully address the contract issues. I will say that the disputes arose from the fact that the three agreements were signed on the same day, but did not all mention each other and had differing integration clauses, some mentioning the other agreements and some not. Practice tip: When drafting parallel agreements, make very clear how the agreements relate or that they do not.

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Bucciarelli-Tieger v. Victory Records, Inc., No. 06 C 4258, Slip Op. (N.D. Ill. May 17, 2007) (Moran, Sen. J.).

Judge Moran granted plaintiffs a preliminary injunction preventing defendants from interfering with plaintiffs' right to record new music with producers or record labels of plaintiffs' choice.  The Court also denied defendants an opposing preliminary injunction that would have prevented plaintiffs from recording new music with anyone other than defendants.  Plaintiffs are members of an Ohio-based band called Hawthorne Heights (collectively "HH") -- in addition to clicking on "Hawthorne Heights" to go to the band's website, you can also read about them on Wikipedia, listen to them online or see them live June 12th in Urbana, Illinois's Canopy Club.  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.  In a prior opinion (discussed in the Blog's archives), the Court held that the Agreement was not exclusive because it did not contain any exclusivity provisions, which left HH free to record other songs or records with another company during the life of the Agreement.  Based upon the Court's ruling, HH moved the Court for a preliminary injunction confirming that defendants could not interfere with any of HH's efforts to record new music with a third party.  Defendants cross-moved to prevent HH from working with anyone but defendants.  The Court held that HH showed a likelihood of success on the merits based upon the Court's prior ruling that the Agreement was not exclusive.  Similarly, the Court held that defendants did not show a likelihood of success in light of the same ruling.  Because defendants had no likelihood of success, their motion for a PI was denied.  Defendants argued that HH could not base a motion for preliminary injunction upon claims for declaratory relief, but the Court held that numerous courts had granted preliminary injunctive relief based upon claims for declaratory judgment.

The Court found that HH would suffer irreparable harm without an injunction.  The parties agreed that bands have a short shelf-life and because without an injunction HH would not be allowed to record new music with parties of its choice in the immediate future, HH would be irreparably harmed without an injunction.  The Court also held that despite the non-exclusivity of the Agreement, HH was obligated to produce records with defendants in a timely fashion. HH would be required to record the agreed-upon number of albums with defendants "within a reasonable time."

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Chamberlain Group, Inc. v. Lear Corp., No. 05 C 3449, 2007 WL 1238908 (N.D. Ill. Apr. 25, 2007) (Moran, J.).

Judge Moran denied defendant Lear's motion to stay the Court's preliminary injunction pending appeal to the Federal Circuit,* but did allow third party General Motors ("GM") to intervene of right and modified the PI to limit harm to defendant and GM.  In a March 30, 2007 opinion and order, the Court granted plaintiffs' motion for a preliminary injunction, preventing defendant from marketing and selling its garage door opener transmitters based upon the Court's prior claim constructions (these opinions are available in the Blog's archives).  The Court held that Lear could not show a likelihood of success on the merits, in part because the Court's "Markman decision and subsequent reconsideration dealt an enormous blow to [Lear's] case."  The Court acknowledged that while plaintiff would suffer irreparable harm without the PI, both Lear and GM could suffer irreparable harm because of the PI.  In order to resolve the irreparable harm issue, the Court revised the PI to exempt Lear's sales to GM.  Because GM was Lear's only client and because the exemption allowed GM to continue sourcing Lear's product  the revised PI would remove harm to GM and substantially reduce Lear's harm.  While Lear would not be able to add new customers, it would not have to idle its related workers and factories because Lear would not lose any customers.  Because the removal of GM sales from the PI substantially limits Lear's potential harm, the Court denied Lear's motion, supported by GM, to increase the bond from $10,000,000 to $50,000,000.

While GM was not a party to the suit, the Court, in a footnote, allowed GM to intervene of right pursuant to Fed. R. Civ. P. 24(a)(2) for the limited purposes of arguing for an exemption from the PI or a stay of it and to seek a higher injunction bond. 

*  Lear has already appealed the PI and the claim construction decision.

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Chamberlain Group, Inc. v. Lear Corp., No. 05 C 3449, 2007 WL 1017751 (N.D. Ill. Mar. 30, 2007) (Moran, J.).

Judge Moran granted plaintiffs' motion for a preliminary injunction, preventing defendant from marketing and selling its garage door opener transmitters.  Relying upon its two prior claim construction decisions (which can be found in the Blog's archives), the Court first determined that plaintiffs had proven a likelihood of success on its infringement claims.  Then the Court considered plaintiffs' irreparable harm claims.  The Court denied plaintiffs' argument that its showing of a strong likelihood of success creates a presumption of irreparable harm.  Citing eBay, Inc.  v. Merc Exchange, L.L.C., 126 S. Ct. 1837 (2006), the Court held that the Supreme Court limited the automatic presumption of irreparable harm based upon infringement.  Instead, the Court determined that plaintiffs' had shown that they were irreparably harmed because defendant's sales had eroded its prices and strained its customer relations.

Because defendants entered no declarations or affidavits detailing its loss of revenue, sales or good will should a preliminary injunction be entered, the Court ruled that the balance of hardships tipped in plaintiffs' favor based upon its irreparable harm evidence.  Finally, the Court noted that there is a public interest in protecting valid patents.  Based upon these findings, the Court issued a preliminary injunction and required plaintiffs to post a $10,000,000 bond pursuant to Fed. R. Civ. P. 65 (c).

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SMC Corp., Ltd. v. Lockjaw, LLC, __ F. Supp.2d __, 2007 WL 983850 (N.D. Ill. Apr. 3, 2007) (Castillo, J.).

Judge Castillo granted plaintiff's motion for a preliminary injunction, enjoining defendants from breaching the parties' agreement, unless plaintiff acted in a manner triggering the agreement's termination provision, and from contacting plaintiff's customers for any purpose without plaintiff's consent.  Plaintiff was the exclusive distributor of defendants' patented Lockjaw pliers in certain Western European countries.  For about eighteen months, plaintiff's distributed defendants' pliers without incident.  But then defendants altered payment terms, which was their right if they followed certain procedures.  Plaintiff alleges that defendants did not follow those procedures and based on this dispute the relationship appears to have broken down.  Shortly after defendants altered the payment terms, plaintiff filed this suit seeking, among other things, a declaratory judgment that the agreement is binding and enforceable, and that defendants breached the agreement.  Plaintiff also sought an injunction to prevent the defendants from terminating the agreement and/or contacting plaintiff's customers.  Relying upon the UCC, the Court found that plaintiff had a likelihood of success on the merits based upon, among other things, the fact that its brief (and cured) nonpayment for two shipments likely did not constitute a breach of the agreement.

The Court also held that plaintiff would likely suffer irreparable harm without an injunction.  Plaintiff's goodwill would be damaged by loss of customers and harm to plaintiff's reputation.  Plaintiff's potential loss of goodwill tipped the balance of harms in its favor.  The Court also held that the public interest was served when courts enforce valid contracts.  As a result, the Court granted a preliminary injunction against defendants.

But in order insure defendants against an erroneous injunction, the Court ordered plaintiff to post a $500,000 bond to protect defendants' potential lost profits, should plaintiff lose or fail to pay for any orders placed with defendants.  The Court also required that plaintiff provide defendants with letters of credit to prove its ability to pay defendants.

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