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

Fasteners for Retail, Inc. v. Andersen, No. 11 C 2164 Slip. Op. (N.D. Ill. Aug. 30, 2011) (Kennelly, J.). 

Judge Kennelly denied defendant Andersen’s motion to dismiss this patent and trade secret case. The Court had personal jurisdiction over Andersen because he worked for defendant K International, an Illinois entity, and Andersen had solicited his former customers in Illinois.

Venue was also proper in the Northern District. A substantial part of the facts at issue occurred in Illinois. The parties’ prior agreement did not release plaintiff’s trade secret claims because they were not contemplated when plaintiff signed the agreement.

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Hollister Inc. v. Convatec Inc., No. 10 C 6431, Slip Op. (N.D. Ill. June 21, 2011) (Kennelly, J.).

Judge Kennelly granted defendant Convatec's summary judgment because of earlier settlement agreement released plaintiff Hollister's patent infringement claims involving bowel management systems as to then existing products. Here are the key holdings:
 

• The release provisions in the agreement made clear that the parties intended to release future sales of existing product lines.
   
• The accrued products did not have new, infringing features that would have brought them outside the bonds of the agreement.
   
• Hollister cited no case supporting its argument that in New Jersey releases would only be for past and current sales, not future.
   
• Hollister offered no case law supporting its arguments that a patent application cannot be released before it is issued.

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Irrevocable Trust of Anthony J. Antonious v. Tour Edge Golf Manufacturing, Inc., No. 10 C 5552, Slip Op. (N.D. Ill. Apr. 17, 2011) (Kennelly, J.).

Judge Kennelly sanctioned two counsel, Silverman and Daghighian, for false statements made in Silverman's pro hac vice application which was filed by Daghighian in this patent case. Daghighian prepared and filed Silverman's application, without his consent or review, based upon prior applications the two had filed in other courts. In doing so, Daghighian stated for Silverman that he had never been suspended from practice and that he had not been held in contempt. The Court later learned that both statements were false. The Court noted that it would likely have granted Silverman's application had he explained the two instances that should have been identified, but despite that the misstatements were material.

The Court ordered that: 1) Silverman provide a copy of the Court's opinion to his state disciplinary authority; 2) Silverman pay a $5,000 fine to the Clerk to be put into the pro bono fund; and 3) Silverman was barred from seeking pro hac vice admission to the Northern District for three years without prior permission from the Court's Executive Committee. Silverman received the more severe sanctions of the two because he was significantly more experienced and because he failed to take personal responsibility in the declaration he provided the Court.

Daghighian received lesser sanctions because he had only been practicing five years and, while his violations were more egregious in some ways, he took responsibility for his actions in his declaration. The Court ordered that: 1) Daghighian provide a copy of the Court's opinion to his state disciplinary authority, but suggested that the authorities consider the mitigating factors the Court noted in rendering its decision; 2) Daghighian pay a $1,000 fine to the Clerk to be put into the pro bono fund; and 3) Daghighian's appearance and pro hac vice application were not stricken.
 

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Hollister Inc. v. ComvaTec Inc., No. 10 C 6431, Slip Op. (N.D. Ill. Jun. 21, 2011) (Kennelly, J.).

Judge Kennelly granted defendant ConvaTec's motion for summary judgment that its accused bowel management systems were covered by a patent cross-license agreement between ConvaTec and plaintiff Hollister's predecessor Zassi. The agreement released each party for "any and all past, present or future claims" including patent infringement claims involving the parties then existing product lines.

The agreement excerpted new features from the release. But ConvaTec's accused Flexi-Seal products had the same designs as ConvaTec's products at the time of the agreement.

Hollister's argument that only covenants not to sue, not releases, may discharge future claims was not founded in the law. Hollister cited no cases that stood for that point.

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The patent pilot program started this month in the Northern District and across the country.  The pilot program is a ten-year look at ways to handle patent cases more effectively.  The main component of the pilot program is judges in pilot districts, including the Northern District, self-selecting as patent judges.  Patent cases will continue to be randomly assigned to all Northern District judges.  But when a non-patent judge is assigned a patent case that judge will have thirty days to order reassignment of the case.  When reassignment is ordered, the case will be randomly reassigned to one of the patent judges.  There will also be patent-related education and programs offered for the patent judges across the country. 

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Affymax, Inc. v. Johnson & Johnson, No. 04 C 6216, Slip Op. (N.D. Ill. Mar. 21, 2011) (Kennelly, J.).

Judge Kennelly granted in part plaintiff Affymax's motion to vacate the arbitration award between the parties, remand the case to the arbitration panel for further determination of the inventorships of foreign patents. The parties previously undertook two years of discovery before a three-member AAA panel. That panel held that Affymax and defendants (collectively "Johnson & Johnson") were joint inventors on several U.S. Patents and that Johnson & Johnson was the sole inventor as to one patent, and therefore, its foreign counterparts. Noting that it could not vacate the arbitration decision even for "gross" misapplication of the law, the Court considered Affymax's arguments to vacate the award as to the patents held to be solely owned by Johnson & Johnson:
 

1. The evidence suggested that the panel did conduct the claim-by-claim analysis required by the Agreement as to the US patents and claims. It did not matter that they did not detail the analysis for each US claim.
    
2. The arbitrator's decision clearly and thoroughly stated the law of joint inventorship. Affymax's disagreement with the application of the law is not grounds for vacating an arbitration award.
    
3. The arbitrator had the relevant evidence before them. The trail of documents connecting Affymax to the documents was not relevant because the arbitrators disagreed with Affymax regarding the conclusions drawn from the documents.
    
4. The arbitrators manifestly disregarded the law by finding that the foreign patents had the same ownership interests as their U.S. counterparts without performing the required claim-by-claim inventorship analysis. The Court, therefore, vacated the award regarding the foreign patents and rewarded the arbitration panel for determination of inventorship of the foreign patents.

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Avery Dennison Corp. v. Continental Datalabel, Inc., No. 10 C 2744, Slip Op. (N.D. Ill. Nov. 30, 2010) (Kennelly, J.).

Judge Kennelly granted plaintiff Avery Dennision's ("ADC") Fed. R. Civ. P. 12(b)(6) motion to dismiss defendant Continental Datalabel's ("CDI") inequitable conduct, Walker Process fraud and sham litigation counterclaims in this patent dispute regarding labels with a tear off liner to expose a portion of a label column for easy removal.

Inequitable Conduct

CDI alleged two bases of inequitable conduct. First, ADC allegedly intentionally failed to tell the examiner that certain limitations outlined in a series of bullet points were from a particular prior art reference. That claim filed because ADC had previously disclosed the prior art reference at issue to the examiner - once a reference is before an examiner, it cannot be found to have been withheld from the examiner. Second, ADC allegedly intentionally failed to disclose to the examiner that curling up of labels is an inherent characteristic of adhesive labels. But ADC had disclosed the inherent curling up by disclosing various prior art references regarding adhesive labels that taught the inherent curling up, combined with the examiner's presumed experience in the art.

Walker Process Fraud Claim

Because CDI's Walker Process claim was premised upon the alleged inequitable conduct, CDI's Walker Process claim failed. The Court further noted that because inequitable conduct is a broader concept than Walker Process fraud, a party that fails to make its case for inequitable conduct, cannot make a Walker Process fraud claim.

Sham Litigation

CDI's sham litigation claim was based upon allegations that ADC knew the patent was invalid based upon the Brady prior art reference, which was before the examiner, and because had ADC tested CDI's accused labels, ADC would have realized its suit was baseless. Because the Brady reference was before the examiner, however, the Court could not find that the claim was "objectively baseless" as required for sham litigation. ADC could have reasonably believed that after the examiner considered Brady and granted ADC's patent, ADC's patent was in fact valid over Brady.

And ADC's alleged failure to test the accused CDI product was not sufficient for a sham litigation claim. Sham litigation requires more than an unsuccessful suit. While CDI may eventually prove that it did not infringe, ADC's failure to perform one test identified by CDI does "not permit the court to infer more than the mere possibility" that ADC's suit was in bad faith.

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DH Holdings, LLC v. MeridianLink. Inc., No. 10 C 2351, Slip Op. (N.D. Ill. Aug. 23, 2010) (Kennelly, J.).

Judge Kennelly denied defendant MeridianLink's motion for sanctions pursuant to Fed. R. Civ. P. 11, § 1927 and the Court's inherent powers. Plaintiff DH Holdings originally filed its Northern District patent infringement case in 2008, and Judge Norgle entered a default against MeridianLink when it failed to answer the complaint. MeridianLink later got the judgment overturned for improper service in the Central District of California, and then filed a declaratory judgment action in that district. DH Holdings responded by filing the instant case and simultaneously asking Judge Norgle to reopen the 2008 case. MeridianLink claimed that DH Holding unnecessarily multiplied the litigation by seeking to reopen the 2008 case and filing the instant case. But the Court held that DH Holding simply took prudent actions to maintain the status quo. DH Holding could not be certain that its original case would be reopened. So, filing a new case was a reasonable precaution.
 

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World Wide Sales, Inc. v. Church & Dwight Co., Inc., No. 08 C 1198, Slip Op. (N.D. Ill. Nov. 9, 2009) (Kennelly, J.).

Judge Kennelly granted defendant Church & Dwight (“CD”) summary judgment on each of plaintiff World Wide Sales’ (“WWS”) claims for trademark infringement, Lanham Act unfair competition and fraud on the Patent and Trademark office. WWS claimed that CD infringed and unfairly competed with WWS’s Forever Fresh for the Fridge trademark, used with a refrigerator odor elimination product, by using CD’s Fridge Fresh mark with its Arm & Hammer refrigerator deodorizer product.

Lanham Act

The parties stipulated that CD’s mark was protectable for purposes of this motion. The only issue, therefore, was whether there was a likelihood of confusion. Generally, a court would consider whether consumers believed CD’s mark referred to WWS’s product. But WWS relied upon a theory of reverse confusion, arguing that CD had so saturated the market with its junior mark that consumers believed WWS’s products were CD’s products. Courts apply the same likelihood of confusion factors in both reverse confusion and confusion cases, although the factors are weighted differently:

• Similarity of Products. The products had similar deodorizing uses, but they were presented so differently that there was little chance of consumer confusion.
   
• Degree of Similarity. Beyond both using “Fridge” and “Fresh” the marks were not similar. Among other things, WWS’s mark was surrounded by pictures of refrigerated food stored with or without its product, CD’s mark was against a yellow-orange background, similar to other Arm & Hammer products without any pictures of food. The factor weighed strongly in CD’s favor as it was “extraordinarily unlikely” that consumers would be confused.
   
• Use and Manner of Concurrent Use. The parties' distribution channels were vastly different. WWS offered no evidence of the products being sold in the same store or advertised in the same publication.
   
• Strength of Mark. WWS’s mark was descriptive and relatively little had been invested in promoting the mark. As a result, the Court held that the mark was relatively weak.
   
• Consumers’ Degree of Care. While the products at issue were relatively inexpensive, the Court still held that there was little chance consumers would confuse the products.
   
• CD’s Intent. Because the junior user does not seek to profit from the senior user’s mark in reverse confusion cases, CD’s intent was irrelevant.
   
• Actual Confusion. WWS offered no evidence of actual confusion.

Based upon the factors, the Court held that no reasonable fact finder could find a likelihood of confusion.

Fraud on the PTO

Because WWS’s registration disclaimed the exclusive use of “fridge” and “fresh,” no reasonable fact finder could have found that CD lacked a reasonable belief that “fridge” and “fresh” were unprotected words. And therefore, failing to disclose WWS’s "Forever Fresh for the Fridge" registration to the PTO during the prosecution of CD's "Fridge Fresh" mark was not fraud.

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The most popular posts on the Blog during 2009, in terms of both views and reader questions, were those on the Local Patent Rules.  Because of high interest, I have plans for additional analysis this year.  This is the first of those posts.  In late 2009, I had an article published in Bloomberg Law discussing why the new Rules will drive patent cases to the Northern District of Illinois.  Bloomberg generously allowed me to post a pdf version of the story -- click here to download it -- and to repost it on the blog.  Here is the article:

The Northern District of Illinois enacted Local Patent Rules ("LPR" or "Rules") on October 1, 2009. The purpose of the Rules is to normalize patent litigation in the Northern District of Illinois and to streamline the patent litigation discovery process. See LPR, Preamble. The rules also make clear that the court does not intend to become a "rocket docket." In fact, the Rules create a schedule that would have cases ready for trial in a little over two years, although cases would not necessarily be tried at that time. That is at most a modest change from the court's average time to trial for all cases—about twenty-seven months, according to the most recent Federal Court Management Statistics.

The Northern District of Illinois did not intend that its new Rules would drive patent cases to Chicago, as has happened when other courts enacted local patent rules, such as the Eastern District of Texas. But despite its intentions, the Northern District of Illinois's plan to normalize patent litigation practice and streamline discovery will significantly increase patent filings in Chicago. To understand why the Rules will increase case filings, it is important to understand the process created by the Rules, and then look at the impact specific Rules will have for both patentholders and accused infringers.

The Rules

The Rules were drafted and revised after public comment by a committee comprised of practitioners representing a cross-section of the District's patent bar and four Northern District of Illinois judges: Chief Judge James F. Holderman, Judge Matthew F. Kennelly, Judge James B. Zagel, and Judge Amy J. St. Eve. The Rules were then enacted by the Northern District of Illinois judges.

The Rules require early discovery through substantial production obligations accompanying all parties' Initial Disclosures. The Rules also require parties to take early positions on the merits of their claims and defenses in the form of Initial Contentions, presumably based upon documents exchanged with Initial Disclosures. Finally, the Rules position claim construction at the end of fact discovery, and show a preference against summary judgment motions prior to claim construction.

Here is a more detailed look at the schedule and duties contemplated by the Rules:

Protective Order. A standard two-tier protective order is deemed entered when Initial Disclosures are served. LPR 1.4. Any party is free to seek modifications to the protective order. Id. The automatic entry of the order prevents discovery delays while parties negotiate a proposed protective order and reduces legal fees for the negotiation.

Initial Disclosures & Production. Two weeks after the accused infringer answers, or two weeks after the patentholder answers any counterclaims, the parties must exchange substantive, non-evasive Fed. R. Civ. P. 26(a) Initial Disclosures. LPR 2.1. And along with the Initial Disclosures, the parties must exchange initial document production.

LPR 2.1(a) requires patentholders to produce all documents regarding: 1) any sale, offer for sale or use of the patented invention before filing; 2) design, reduction to practice, or invention of the patented technology generally; 3) all communications with the U.S. Patent and Trademark Office (the prosecution history) for the patents in suit and any patents from which they claim priority; and 4) ownership of the patent. LPR 2.1(b) requires that along with its Initial Disclosures, an accused infringer produce: 1) documents sufficient to show the operation and construction of each element of any product or process specifically accused in the Complaint; and 2) copies of all known prior art. Additionally, all parties are required to identify which documents, by Bates number, fall into each required production category. For cases in which there are lengthy lists of accused products, both the production and the identification of documents by categories could be a significant undertaking early in a case.

Initial Contentions. Two weeks after Initial Disclosures are served, parties claiming patent infringement serve Initial Infringement Contentions that will likely be substantive because the patentholder should have the accused infringer's Initial Disclosure document production. LPR 2.2. Two weeks after Initial Infringement Contentions are served, accused infringers serve Initial Non-infringement, Unenforceability and Invalidity Contentions. LPR 2.3. Along with these contentions, accused infringers must produce any additional documents relied upon including prior art and technical information. Two weeks later, patentholders must serve an Initial Response to Invalidity Contentions. LPR 2.5.

Final Contentions. Twenty-one weeks after Initial Infringement Contentions, parties claiming infringement serve Final Infringement Contentions, and accused infringers serve Final Unenforceability and Invalidity Contentions at the same time. LPR 3.1. Four weeks later, accused infringers serve Final Non-infringement Contentions and parties claiming patent infringement serve Final Enforceability and Validity Contentions (after the final contentions, leave of Court is required for any amendments). LPR 3.2. This gives the parties about four months to complete the bulk of their technical discovery and depositions.

Final Contentions are not amendable without a Court order upon a showing of good cause and an absence of unfair prejudice to the opposing party. LPR 3.4. In a comment, the court noted that its adoption of a new, unargued claim construction would be an example of good cause.

Deadline for Stays Pending Reexamination. No party can seek a stay pending reexamination after serving its Final Contentions. LPR 3.5. The Rule, however does not create a presumption for staying cases pending reexamination prior to the cutoff date. Id.

Claim Construction. The claim construction process begins two weeks after defendant's Final Invalidity Contentions are served with an exchange of terms and proposed constructions. LPR 4.1(a). Within seven days of exchanging terms, the parties must meet and confer to agree upon no more than ten terms for construction by the court. Presenting more than ten terms requires prior leave of court and requires a showing of good cause. LPR 4.1(b).

Claim Construction Briefing. Five weeks after exchanging terms, accused infringers file opening claim construction briefs along with a joint appendix by all parties including the patents in suit and their prosecution histories consecutively paginated. LPR 4.2(a)-(b). Parties claiming patent infringement have four weeks to file response briefs. LPR 4.2(c). Accused infringers have fourteen days to file a reply. LPR 4.2(d). Any party offering witness testimony must include a sworn declaration and promptly make the witness available for deposition. If witness testimony is included in a response brief, the reply deadline is extended by seven days.

After the reply brief is filed, the parties have seven days to file a joint claim construction chart setting out each claim term, the proposed constructions, and the parties' proposal for a claim construction hearing.

Claim Construction Hearing. The Rules contemplate a claim construction hearing four weeks after the reply brief, but the judge can decline a hearing. LPR 4.3. The lack of a hearing may be a reason to allow a sur-reply brief. Id. A judge also may decide not to accept a reply brief. The parties must exchange all exhibits, including demonstratives, at least three days before a claim construction hearing. Id.

Fact Discovery Close. Fact discovery closes six weeks after the claim construction rulings, which triggers expert discovery followed by a dispositive motion deadline. LPR 1.3. Fact discovery is also suspended from four weeks after the LPR 4.1(a) exchange of claim terms, until the Court enters a claim construction ruling. LPR 1.3. This leaves parties free to focus on claim construction briefing without dealing with discovery issues at the same time.

Expert Discovery. Three weeks after the close of fact discovery, parties must make their initial expert witness disclosures for non-claim construction issues on which they have the burden of proof. LPR 5.1(b). Five weeks later, rebuttal expert witness disclosures are due. LPR 5.1(c). Expert depositions must be finished five weeks later. LPR 5.2. Supplementation of expert reports after the LPR 5.1 deadlines is presumed prejudicial and is not allowed absent a showing that the material could not have been added or amended earlier and that there is no unfair prejudice. LPR 5.3.

Trial. Cases should be trial ready approximately two years after the filing of the complaint. This would be slightly faster than the Northern District of Illinois's average time to trial of twenty seven months. But the Rules do not require that trial occur at that time, just that the case is ready for trial.

The Rules Will Drive Patent Cases to Chicago

While the Northern District has made clear that it is not transforming itself into a "rocket docket" like the District of Virginia or the Western District of Wisconsin, the newly enacted Rules will significantly increase patent litigation filings in Chicago. The cases will not proceed to trial faster than the Northern District's average for Eastern all cases of slightly more than twenty-seven months, but the path to trial will be significantly different as described above. The changes are even-handed, with Rules benefiting patentholders being largely offset by the Rules that benefit accused infringers. One might expect even-handed Rules to have little impact on filings, but in this case patentholders will conclude that the Rules provide enough value to overcome the Rules that benefit accused infringers. The Rules, therefore, will draw patent cases to the Northern District. Here are the particular elements of the Rules that will attract patent plaintiffs to the Northern District, along with an analysis of how the Rules nevertheless also benefit accused infringers.

1. Substantive Initial Disclosures & Document Production.

LPR 2.1 requires that parties exchange significant discovery along with their Initial Disclosures. In particular, accused infringers must produce documents sufficient to show how all specifically accused products or processes operate. LPR. 2.1(b). This early document production, which is generally contemplated by Rule 26 but almost never done in practice, will be a major draw for patentholders. The ability to get immediate technical information in discovery, without the expense of serving document requests, is significant. It allows patentholders to have information before preparing their Initial Infringement Contentions. Patentholders will also get a preview of invalidity defenses and patentholders receive all of this information early in the case, before they incur significant discovery costs.

But while LPR 2.1 will attract patent plaintiffs, it also benefits accused infringers. As described above, patentholders must make an initial document production as well, and their obligation is more significant. LPR 2.1(a). Additionally, as with accused infringers, patentholders must identify which documents correspond to each of the four categories. Having this early information will allow accused infringers to evaluate their defenses early in the case and prepare for early dispositive motions such as motions challenging ownership or validity based upon a bar date. And the documents will allow accused infringers to update affirmative defenses or add counterclaims before there could be any prejudice.

Finally, the accused infringers' production obligation regarding its products is only triggered if the patentholder specifically identifies the accused products in its complaint. This will strongly encourage plaintiffs to identify the accused products in the complaint. A standard which comports with the Twombly/Iqbal pleading standards and will lead to more focused patent litigations. R. David Donoghue, The Uneven Application of Twombly in Patent Cases: An argument for Leveling the Playing Field, 8 J. Marshall Rev. Intell. Prop. 1.1 (2008).

2. Defendant opens and closes Markman briefing.

Most Districts either have two rounds of concurrent claim construction briefing or a traditional opening-response-reply schedule with the patentholder opening and replying. Significantly, the Rules provide for a single set of briefs, with the accused infringer—not the patentholder—submitting the initial and final briefs. The court reasoned that this briefing schedule provided the best, most coherent set of papers because a patentholder's opening brief often argues for "ordinary" meanings of most terms without specific proposed definitions. Then after the accused infringer offers constructions in its response, the patentholder offers detailed constructions of those terms for the first time on reply. That scenario either leaves the accused infringer without a chance to answer the patentholder's constructions on the papers, or it requires a sur-reply. Similarly, concurrent briefing results in the parties arguing past each other, generating briefs that do not fully crystallize the issues for the court. Writing first and last, of course, benefits the accused infringer. But the patentholder saves money by only writing one brief and can make any follow up arguments during a hearing or seek a sur-reply if the court does not hold a hearing.

3. Late Claim Construction briefing.

The final major draw for patentholders is the late claim construction proceedings. In addition to cost savings in the briefing process, claim construction is set during the end of a floating fact discovery period that is scheduled to end forty-five days after the court rules on claim construction. Maintaining pre-claim construction uncertainty through most of discovery benefits patentholders. Furthermore, the Rules make clear that a judge can disregard early dispositive motions that would require claim construction before the claim construction contemplated by the Rules. LPR 1.1. So, patentholders may face fewer early summary judgment motions.

Conclusion

The Northern District of Illinois's Local Patent Rules are evenhanded, benefiting both patentholders and accused infringers. But the specific benefits afforded patentholders will drive patentholders to file in the Northern District of Illinois over other courts, some that may have faster times to trial.

R. David Donoghue is a litigation partner in Holland & Knight's Intellectual Property Group focusing on patent disputes. His practice spans diverse technology areas including cellular telephony, computer software, internet technologies, pharmaceuticals, automotive technologies, television production equipment, nutritional supplements, and numerous medical devices. He also has extensive intellectual property licensing experience. Mr. Donoghue was previously with Delphi, the world's largest automotive supplier, where he was a founding member of Delphi's Technology Licensing and Litigation group. Additionally, Mr. Donoghue founded and authors the Chicago IP Litigation Blog where he analyzes intellectual property cases in the Northern District of Illinois (www.chicagoiplitigation.com). He can be reached by phone at 312.578.6553 or by email at david.donoghue@hklaw.com.

© 2009 Bloomberg Finance L.P. All rights reserved. Originally published by Bloomberg Finance L.P in the Vol. 3, No. 48 edition of the Bloomberg Law Reports – Intellectual Property. Reprinted with permission. The views expressed herein are those of the authors and do not represent those of Bloomberg Finance L.P. Bloomberg Law Reports® is a registered trademark and service mark of Bloomberg Finance L.P.

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Click here for the Seventh Circuit's new proposed pattern trademark jury instructions.*  The committee that prepared the instructions included Northern District of Illinois Judges Kendall and Kennelly, as well as a broad spectrum of attorneys from academic, government and private practice.

The pattern instructions are impressive for their thoroughness. They are also very well cited, making them an excellent primer on Seventh Circuit trademark law. Of particular note, the instructions do not include a dilution instruction because since Congress's 2006 revision of the dilution laws, there has not been sufficient appellate interpretation. 

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Loyola University's and the Chicago Intellectual Property Alliance's annual IP Day In Chicago is next week, Tuesday, November 3 at the law school, 25 East Pearson Street in Chicago.  This is a do not miss event every year.  This year's program includes a keynote speech by the Northern District of Illinois's Judge Kennelly and impressive panels discussing topics including the new proposed generic top-level domains and protecting patents and trade secrets and policing false advertising.  Click here for a brochure with more details and registration information.

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Frayne v. Chicago 2016, No. 08 C 5290, Slip Op. (N.D. Ill. Oct. 2, 2009) (Kennelly, J.). 

Judge Kennelly denied defendants Chicago 2016's and the United States Olympic Committee's ("USOC") motion for summary judgment regarding its Stevens Act and Anticybersquatting Consumer Protection Act ("ACPA") claims regarding plaintiff's www.chicago2016.com website. And the Court granted defendants summary judgment as to plaintiff's federal and state constitutional claims, and plaintiff's laches defense. Plaintiff registered the Chicago2016.com domain in 2004, and after the sale, the domain registrar maintained a parking page on the site which included advertising links. Revenues for the links went to the registrar, not plaintiff.

Stevens Act*

The Court held that the parking page was commercial. But there was a question of fact as to whether plaintiff "used" the trademark, in this case the domain, for commercial purposes as required by the Stevens Act. Plaintiff did not receive revenues from the parking page and it was even unclear whether plaintiff knew of the parking page or consented to the registrar's use of the parking page.

The Court also analyzed whether Chicago 2016 was a mark that fell within the Stevens Act. While city-plus-Olympic-year combinations were not automatically protectable marks within the scope of the Stevens Act, certain city-plus-Olympic-year combinations can acquire an association with the USOC and the Olympics. Chicago 2016 likely gained that association by April 2007 when the USOC picked Chicago as a 2016 Olympic candidate. But the parties did not brief the issue of when the association occurred, so the determination required further proceedings.

ACPA

The ACPA claim was not ripe for summary judgment because it depended upon a determination that Chicago 2016 was a protected mark pursuant to the Stevens Act which the Court had held required further proceedings. Additionally, there was a question of fact as to whether plaintiff had a bad faith intent to profit from the Chicago 2016 mark.

Laches

The Court granted defendants summary judgment on plaintiff's laches claim. Plaintiff argued that if he had been aware of defendants' intent to pursue this suit, he would have challenged defendants' Chicago 2016 mark in the Patent & Trademark Office. But defendants second Chicago 2016 mark application was published concurrently with their first threat to take action against plaintiff. Plaintiff did not, however, challenge that application. No reasonable fact-finder could find plaintiff was prejudiced in those circumstances.

Constitutional Claims

The Court granted defendants summary judgment as to plaintiff's constitutional claims based upon the Noer-Pennington doctrine. Noer-Pennington protects a party's right to file a lawsuit so long as the suit is not a sham. Defendants' claims regarding their Chicago 2016 mark were backed by precedent. Defendants cited several cases in which WIPO ruled for Olympic organizations regarding city-plus-Olympic-year combination marks. 

* For more on the Steven Act, which grants the USOC absolute rights in certain Olympics-related trademarks click here. 

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Frayne v. Chicago 2016, No. 08 C 5290, Slip Op. (N.D. Ill. Jan. 8, 2009) (Kennelly, J.).

Judge Kennelly granted defendants' motion to dismiss as to plaintiff's Lanham Act Section 114(2)(D) reverse domain name highjacking and attempted highjacking claims.*  Plaintiff registered Chicago2016.com in 2004 at which time plaintiff was not aware that Chicago intended to bid for the 2016 Olympics.  In 2007, plaintiff was contacted by a representative of Chicago 2016 and asked whether plaintiff would entertain offers for the website.  Plaintiff refused and defendants eventually initiated proceedings before the World Intellectual Property Organization alleging that plaintiff registered the domain name in bad faith and in violation of the Uniform Domain-Name Dispute Resolution Policy ("UDRP").  Plaintiff's domain name, however, was never suspended, disabled or transferred to defendants.

Plaintiff conceded that highjacking claim should be dismissed because the domain name had not been suspended, disabled or transferred.  And the Court held that the Lanham Act did not create a cause of action for attempted highjacking.  The text of the statute specifically required that the domain name actually be suspended, disabled or transferred.

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Rowe Int'l. Corp. v. ECast, No. 06 C 2703, Slip Op. (N.D. Ill. Nov. 28, 2008) (Kennelly, J.).

Judge Kennelly construed the terms of plaintiff's computer jukebox patents -- click here for more on this case in the Blog's archives, including more on claim construction.  Of particular interest, the Court held that "programmable computer memory" and "programmable memory" both mean a computer memory that can be programmed, requiring little construction.  The Court rejected defendant's construction that would have limited the term to random access memory. 

The parties both sought further construction of "user attract", but the Court had previously construed the term and saw no basis to revisit the construction without a clear and succinct explanation from counsel as to why it was required.

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 Bobak Sausage Co. v. Bobak Orland Park, Inc., No. 06 C 4747, Slip Op. (N.D. Ill. Nov. 3, 2008) (Kennelly, J.).*

Judge Kennelly denied without prejudice plaintiff Bobak Sausage Co.'s ("Bobak") motion to compel defendant's interest in Bobak Fifty Third Street LLC (“Bobak 53”). Bobak makes and sells meat products and operates a related restaurant in Chicago.  Bobak's founder, Frank Bobak, transferred ownership of Bobak's to his sons.  In early 2006, Bobak's reorganized, leaving two of the sons owning Bobak's and a third, defendant, owning a grocery store that Bobak's had been building.  All of the brothers maintained as interest in Bobak 53. As part of the reorganization, Bobak's granted two entities rights to use Bobak's trademarks at retail locations for a six month period.  After the six month period ended, Bobak's filed suit against defendants (including the third son and the licensed retail locations) for, among other things, trademark infringement based upon the continued use of the Bobak's marks.  The parties settled that dispute based at least in part upon a stipulated permanent injunction, which the Court entered, setting various limits on what marks each defendant could use, requirements that the defendants remove and change their signage and requirements that defendants use disclaimers that they were not affiliated with Bobak's.  The Court later held certain defendants in contempt for violating the permanent injunction and entered a remedial fine of $150,000. When defendants failed to pay the fine, the Court added interest to it.

Because defendants continue not to pay the fine, Bobak moved the Court for an order compelling the transfer of defendant's interest in Bobak 53 pursuant to Fed. R. Civ. P. 69(a) and 70. The Court, however, held that Rule 70 only allows for enforcement of money judgment in very narrow circumstances, circumstances that were not yet met in this case.

Rule 69(a) allows for a writ of execution in accord with the rules of the state where the court is located, Illinois in this case. Illinois law says that the debtor's property delivered for repayment is to be sold by the sheriff at public auction. But because defendant's interest in Bobak 53 is relatively non-liquid – plaintiffs, the other owners of Bobak 53, retain substantial sale over any sale or subsequent sale. The restrictions on ownership and sale of Bobak 53 make a public sale impractical. But the Court could order that any distributions be paid to plaintiff. The Court, therefore, denied plaintiff's motion without prejudice. But the Court also ordered defendant to show cause why the Court should not appoint a receiver for defendant's interest in Bobak 53 and enjoin the state court proceedings regarding Bobak 53.

* Click here for more on this case in the Blog's archives.

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The Seventh Circuit instituted a Commission to study the implementation of the ABA Jury Project.  The Northern District was heavily represented on the Commission.  The following Northern District Judges were members of the Commission:  Bucklo, Brown, Coar, Darrah, Denlow, Der-Yeghiayan, Gottschall, Holderman, Kennelly, Lefkow, Moran, Schenkier, St. Eve, and Zagel.  The Commission recently published its report -- click here to read it.  The report describes a two phase analysis.  In the first phase, district judges tested the following seven ABA Principles:

1.       Twelve-Person Juries;

2.       Jury Selection Questionnaires;

3.       Preliminary Substantive Jury Instructions;

4.       Trial Time Limits;

5.       Juror Questions;

6.       Interim Trial Statements by Counsel; and

7.       Enhanced Jury Deliberations.

Other Principles, such as juror notebooks and allowing jurors to take notes, were already in such widespread use that they were not tested.  Click here for the Phase One Project manual detailing the principles, the rationales and authority behind them, and suggested procedures.  Phase One resulted in questionnaires from 22 participating federal trial judges, 74 participating attorneys and 303 jurors from 38 trials that used one or more of the seven Principles.  Based upon the analysis of Phase One results and questionnaires, the Commission focused Phase Two on the following four Principles:

1.       Juror Questions;

2.       Interim Trial Statements by Counsel;

3.       Twelve-Person Juries; and

4.       Preliminary Substantive Jury Instructions.

These Principles were chosen because of Phase One popularity (78% of jurors reported that being able to ask questions increased their satisfaction with the process) and because of a desire to study the Principles more.  Click here for the Phase Two manual.

In Phase Two, 108 jurors from 12 trials employing one or more of the Phase Two Principles filled out questionnaires.  In addition, 12 attorneys and 4 district judges that participated also filled out questionnaires.  The results are interesting, but more importantly create the opportunity to powerfully impact the trial system across the Seventh Circuit in ways that benefit all of the stakeholders in the trial process -- the litigants, the jurors, the judge and the judge's chambers, and the litigators.

All four of the Phase Two Principles showed significant benefits to the trial process.  83% of jurors reported an increased understanding of the facts when allowed to ask written questions through a judge -- the questions were reworded to meet evidentiary rules.  And 75% of judges and 65% of attorneys thought the questions benefited jurors.  Similarly, preliminary substantive jury instructions were found to improve trials by jurors (80%), judges (85%) and attorneys (70%).  And the same was true for interim statements to the jury -- jurors (80%) and judges (85%).  Finally, twelve-person juries were found not to harm efficiency, while increasing juror diversity.

Each of the four Phase Two Principles, as well as several of the additional three Phase One Principles deserve more attention and analysis.  So, over the next several weeks I will provide follow up posts discussing the findings of those Principles in greater detail.  I will start with the idea of juror questions, which I find particularly important, later this week or early next.

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Rowe Int’l. Corp. v. Ecast, Inc., No. 06 C 2708, 2008 WL 4133516 (N.D. Ill. Aug. 25, 2008) (Kennelly, J.)

Judge Kennelly granted in part plaintiff’s patent infringement summary judgment motion and denied defendants’ noninfringement summary judgment motion.* Of particular interest, the Court held that defendant Ecast could directly infringe the patents in suit, despite the fact that it did not make or assemble all components of the system – Ecast contributed the memory and the network, while the other defendants supplied the jukebox components. But the Court held that Ecast could directly infringe the patent for at least two reasons. First, Ecast produced promotional and technical materials advertising complete jukebox systems. Second, the evidence showed that Ecast directed and controlled the other defendants’ production of computer jukeboxes specifically designed to work with Ecast’s system.

* For more on this computer jukebox infringement case in the Blog’s archive click here.

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Liquid Dynamics Corp. v. Vaughan Co., No. 06 C 5611, 2008 WL 3007996 (N.D. Ill. Aug. 4, 2008) (Kennelly, J.).

Judge Kennelly construed “approximately” as used in plaintiff Liquid Dynamic’s (“LD”) patent for wastewater treatment tanks, and denied defendant Vaughan Co.’s (“Vaughan”) motion for summary judgment.  The claim at issue required that flow generators were located “between approximately 30 percent and 70 percent” of the radial distance from the center to the inside wall of the tank.  LD argued that approximately was defined by industry standard tolerances of 10%.  Vaughan argued that approximately was limited to 5% based upon the broadest range of 25%-75%.

The Court held that the intrinsic evidence – patent’s specification and prosecution history – made clear that 25%-75% were not the outer limits of flow generator placement.  But the intrinsic evidence did not clarify what those outer limits were or what approximately meant.  The Court, therefore, relied upon the extrinsic evidence – plaintiff’s expert’s affidavit – and held that 10% was an industry standard.

The Court denied Vaughan’s motion for summary judgment that argument-based estoppel precluded doctrine of equivalents. Vaughan argued that LD gave up any range beyond 25% - 75% during prosecution. For the same reasons the Court defined approximately as extending beyond the 25% - 75% range, the Court held that LD had not surrendered equivalents beyond the 25%- 75% range.
 

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Wausau Business Ins. Co. v. Fisher Printing Co., No. 07 C 3732, 2008 WL 2704874. (N.D. Ill. Jul. 8, 2008) (Kennelly, J.).

Judge Kennelly granted in part defendant’s motion for summary judgment of insurance coverage and denied plaintiff’s cross motion. Defendant-insured was charged with copyright and trademark infringement for allegedly using a third party’s trademarks in various advertisements the insured printed. Insured sought defense and indemnity from plaintiff-insurer based upon the advertising injury clause in the parties’ insurance policy. Insurer contended that a prior publication exclusion denied coverage insured’s case because the accused infringement began before the policy’s effective date and was allegedly knowing and intentional. But because the complaint alleged that some of insured’s infringement commenced after the policy’s effective date, the exclusion did not preclude coverage. All that is required to trigger coverage is that one allegation falls within the policy.

Insurer also argued that a knowing violation exclusion denied coverage because the complaint alleged willful and intentional copyright and trademark infringement. But because copyright infringement could be proven without regard to insured’s intent, the exclusion did not apply.

Finally, the Court denied summary judgment as to insured’s bad faith litigation claim. The Court held that there was at least a question of fact as to whether insurer had a plausible defense to the coverage.

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While Judge Filip heads to Washington as Deputy Attorney General, the Northern District has reassigned his cases — click here for the Executive Committee’s Order. At least the following IP cases have been reassigned:

Judge Andersen

1:07-cv-05666             Dicam, Inc. v. United States Cellular

Judge Dow

1:07-cv-02883             Kids Hope USA, Inc. v. Kids Hope United

Judge Kennelly

1:06-cv-05611             Liquid Dynamics Corporation v. Vaughn Co.

Judge Zagel

1:07-cv-03339             Borg Warner Inc. et al. v. Hilite International, Inc. et al.

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Abbott Labs. V. Church & Dwight, Inc., No. 07 C 3428, 2007 WL 3120007 (N.D. Ill. Oct. 23, 2007) (Kennelly, J.).

Judge Kennelly denied defendant Church & Dwight’s (“C&D”) 28 U.S.C. Section 1404(a) motion to transfer this patent case to the District of New Jersey, where a related case between the parties was pending, and granted C&D’s motion to dismiss a claim that the New Jersey Court previously dismissed for lack of standing. In New Jersey, C&D sued plaintiff Abbott Laboratories (“Abbott”) alleging infringement of patents covering lateral flow immunology devices, and pregnancy and ovulation testing methods. Abbott counterclaimed alleging infringement of three patents, including U.S. Patent No. 6,534,320 (the “’320 patent”). The New Jersey Court ultimately dismissed Abbott’s counterclaim, holding that Abbott was a nonexclusive licensee of the ‘320 patent and, therefore, lacked standing. The New Jersey Court also held that standing could not be cured by Abbott’s effort to involuntarily join its licensor Inverness pursuant to Fed. R. Civ. P. 19.  Based upon the New Jersey Court’s ruling, this Court held that issue preclusion prevented Abbott from re-litigating its standing to sue. Unless Abbott revised its license agreement with Inverness, giving Abbott additional rights, the New Jersey Court’s ruling was preclusive. The Court, therefore, dismissed Abbott’s ‘320 patent infringement claim.

The Court denied C&D’s motion to transfer the case to New Jersey. The Court gave Abbott’s choice of forum deference. And the Court gave little weight to the parties’ ongoing New Jersey patent suit because the New Jersey Court dismissed Abbott’s counterclaims before making any substantive rulings. The New Jersey Court, therefore, would not have been in a better position to decide any issues in the case. 

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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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Top Tobacco, L.P. v. North Atlantic Op. Co., No. 08 C 950, 2007 WL 2688452 (N.D. Ill. Sep. 6, 2007) (Kennelly, J.).

Judge Kennelly previously granted defendant summary judgment on all claims in this trademark infringement case regarding plaintiff’s “TOP and “Fresh-Top Canister” marks and awarded defendant’s attorneys’ fees pursuant to 15 U.S.C. § 1117(a).* The Court reduced the rates charged by defendant’s counsel Kirkland & Ellis’ summer associates from $185 to $125, more in line with paralegal rates. The Court acknowledged that Kirkland & Ellis’s attorneys showed skill “commensurate with its… high rates,”** but reduced Kirkland & Ellis’s rates because that skill did not result in the time savings (as required by the Seventh Circuit). Kirkland & Ellis billed roughly 30% more hours than plaintiff’s counsel. The Court, therefore, reduced Kirkland & Ellis’s rates to those charged by plaintiff’s counsel.

* Click here to read more about this case and related cases in the Blog’s archives.

** Having worked with Kirkland & Ellis’s lead counsel on this matter, Paul Garcia, I can confirm the Court’s praise.

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Tillman v. New Line Cinema, No. 05 C 910, 2007 WL 2323302 (N.D. Ill. Aug. 9, 2007) (Kennelly, J.)

Judge Kennelly denied plaintiff’s motion for leave to file a second amended complaint, despite noting that Fed. R. Civ. P. 15A) requires that leave to amend be given “freely.” Plaintiff alleged that defendants collectively had access to his screen play “Kharisma Heart of Gold” about his experience with a sick child requiring heart surgery, stole it, produced it and released it as the movie “John Q.” Plaintiff filed his first complaint pro se alleging copyright infringement. Plaintiff then hired counsel and filed an amended complaint alleging copyright infringement and numerous other tort claims arising out of the alleged theft of plaintiff’s screen play. Various defendants filed motions to dismiss the amended complaint for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2) and for failure to state a claim regarding the non-copyright claims pursuant to Fed. R. Civ. P. 12(b)(6). Plaintiff did not respond to that complaint, but filed a motion for leave to file a second amended complaint. The Court* granted the motion to dismiss the individual defendants for lack of personal jurisdiction and the non-copyright claims against the remaining defendants. The Court also denied plaintiff leave to file its second amended complaint because it was futile. Plaintiff, again proceeding pro se, then sought leave to file a new second amended complaint. But the Court held that plaintiff’s current second amended complaint had no substantive changes from plaintiff’s original second amended complaint. The second amended complaint, therefore, was still futile. Additionally, the second amended complaint attempted to reassert claims against the individual defendants, who had been dismissed from the suit for lack of personal jurisdiction. Because the Court lacked personal jurisdiction, plaintiff could not draw the individual defendants back into the suit. 

* The case was originally before Judge Norberg, who decided the original motions to dismiss and motion for leave to file the second amended complaint, and has since been transferred to Judge Kennelly who heard this motion.

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Hickory Farms, Inc. v. Snackmasters, Inc., No. 05 C 4541, 2007 WL 1576124 (N.D. Ill. May 29, 2007) (Kennelly, J.).

Judge Kennelly denied plaintiff’s motion for reconsideration of the Court’s decision that plaintiff’s "Beef Stick" and "Turkey Stick" marks were generic and the Court’s cancellation of the Beef Stick mark (you can read more about that opinion in the Blog’s archives). The Court denied plaintiff’s argument that it should be given more time, pursuant to Fed. R. Civ. P. 56(f) to conduct a survey to show that the marks are not generic. But the Court reasoned that plaintiff was free to conduct such a survey in the fourteen months of discovery leading up to defendant’s summary judgment motion. Furthermore, in its responsive briefing plaintiff specifically stated that plaintiff would “not seek to delay the briefing of this matter with its own survey at this time.” Instead, plaintiff suggested that it would conduct a survey if the Court denied defendant’s summary judgment motion. The Court held that after these statements, plaintiff’s current request to perform a survey was almost “frivolous.”

The Court also held that plaintiff’s evidence of its advertising investment and market share had not effect on the Court’s ruling that the marks were generic. A company’s marketing and advertising expenditures cannot make a mark less generic. Additionally, the fact that there is another generic term (summer sausage) for beef sticks and turkey sticks does not mean that beef stick and turkey stick cannot also be generic.

Practice Tip:  If you think you need evidence to survive summary judgment make your Rule 56(f) motion before or with your response brief.  Do not wait for a motion for reconsideration.

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Rowe Int'l Corp. v. Ecast, Inc., No. 06 C 2703, 2007 WL 1498958 (N.D. Ill. May 17, 2007) (Kennelly, J.).*

Judge Kennelly issued this claim construction opinion construing the claims of eight patents related to computer jukeboxes and computer jukebox networks.  Of particular note, the Court construed "song selection means" in USPN 5,355,302 (the "'302 patent") as a keyboard separate from a display for generating a signal representing a song selected from the set of songs stored in the jukebox.  Plaintiffs sought a construction that would include a visual touchscreen, arguing that the Court should consider the following language from an unrelated patent by the same patentee (the "'398 patent"), that was not part of the patent in suit or its prosecution history:  "song selection means displayed on said visual screen."  Plaintiffs argued that this language showed that "song selection means" could include on-screen displays.  But the Court held that considering the language was not permissible and that, even if it were, the language only showed that the inventors were capable of claiming an on-screen display, but chose not to in the '302 patent.

*  You can read more about this case in the Blog's archives.

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Rowe Int'l Corp. v. Ecast, Inc., No. 06 C 2703, 2007 WL 1438370 (N.D. Ill. May 14, 2007) (Kennelly, J.).*

Judge Kennelly denied defendants' motion to dismiss plaintiffs' patent infringement complaint for lack of standing.  As to two patents that were not expressly assigned to plaintiffs before the suit was filed (the "Progeny Patents"), the Court used Illinois contract law to interpret the following blanket provision in the assignment agreement regarding the parent patent, which assigned the parent application and any improvements or related applications:

any and all other applications . . . which the undersigned may file . . . on said invention or improvements, and in any and all Letters Patent of the United States and foreign countries, which may be obtained on any of said applications . . . .

The Court held that this provision was unambiguous.  Pursuant to this provision, the inventors assigned plaintiffs any related patents or improvements to the original application.  Because the Progeny Patents were related to the parent patent, they were assigned to plaintiffs.  And, therefore, plaintiffs had standing to file suit.  Additionally, the Court noted that the express assignment of the Progeny Patents that plaintiffs received post-filing did not retroactively confer standing upon plaintiffs for this suit.

*  You can read more about this case in the Blog's archives.

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Top Tobacco, L.P. v. North Atl. Operating Co., No. 06 C 950, 2007 WL 118527 (N.D. Ill. Jan. 4, 2007) (Kennelly, J.).

Judge Kennelly granted defendants' motion for attorneys' fees and granted in part their bill of costs.  In January, Judge the Court granted summary judgment for defendants on plaintiff's trademark, unfair competition and dilution claims (read more about that decision in the Blog's archives).  The Court ruled that no reasonable jury could find that consumers were confused between plaintiffs' TOP mark and defendants' "Fresh-Top Canister" mark.  Defendants then filed the instant bill of costs and motion for attorneys' fees arguing that the case was exceptional.  The Court held the case exceptional for three reasons.  First, the Court found that plaintiffs' infringement and dilution claims were "exceptionally weak" stating that "a simple look at the canisters as they appeared on store shelves shows the virtual impossibility that consumers would be confused . . . ."  The Court disregarded plaintiffs' purported evidence of actual confusion, which it presented for the first time in its response to the motion for attorneys' fees.  Second, plaintiffs argued before the PTO that other "top" marks in the tobacco classification were narrow.  But before the Court plaintiffs took the "diametrically opposite" position, arguing that their TOP mark should enjoy broad protection.  Third, the Court found defendant Top Tobacco's chairman Donald Levin's testimony that the two products looked identical because they were both cans of tobacco "absurd."  The Court analogized Levin's argument to the position that all the books on library shelves are identical because they are all books, without regard to their titles, jacket designs or colors.

Taken together, the Court held that these three elements made the case exception and awarded defendants' reasonable attorneys fees.  But the Court cautioned defendants that its fee petition should exercise "billing judgment" and that billed time should be organized by activity as opposed to date or timekeeper.  The Court also noted that it would not wade through an unreasonable petition to make it reasonable. 

Finally, the Court reviewed defendants bill of costs.  Of particular note on the bill of costs, the Court only awarded transcription costs, not videography costs, for depositions with one exception.  In the one instance where there was specific evidence, beyond arguments that video testimony was value for impeachment purposes, of the need for video of the deposition, both transcription and video costs were awarded.

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Bryant v. Gordon, __ F. Supp.2d __, 2007 WL 461326 (N.D. Ill. Feb. 8, 2007) (Kennelly, J).

This opinion replaces Judge Kennelly's February 8, 2007 opinion.  The result is not altered, the Court granted summary judgment for defendants, Gordon and Mach 1 LLC ("Mach 1"), on plaintiff's, Bryant, claims of copyright infringement based upon copyrighted goods Mach 1 purchased free of encumbrances in a bankruptcy auction.  The only substantive change appears to be a statement that to the extent that Mach 1 acquired merchandise from the asset sale, Mach 1 was likely entitled to to depict that merchandise for advertising purposes, including on the internet.  But the Court stops short of holding that the goods depicted on Mach 1's internet site were all acquired from the asset sale.

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Bobak Sausage Co. v. Bobak Orland Park, Inc., No. 06 C 4747, 2007 WL 846505 (N.D. Ill. Jar. 19, 2007) (Kennelly, J.).

After an evidentiary hearing, Judge Kennelly held defendants in contempt for violating the stipulated permanent injunction entered by the Court and ordered defendants to comply with the injunction within three weeks or face daily fines.  Plaintiff Bobak Sausage Co. ("Bobak's") makes and sells meat products and operates a related restaurant in Chicago.  Bobak's founder, Frank Bobak, transferred ownership of Bobak's to his sons.  In early 2006, Bobak's reorganized, which led to two of the sons owning Bobak's and a third owning a grocery store that Bobak's had been building.  As part of the reorganization, Bobak's granted two entities rights to use Bobak's trademarks at retail locations for a six month period.  After the six month period ended, Bobak's filed suit against defendants (including the third son and the licensed retail locations) for, among other things, trademark infringement based upon the continued use of the Bobak's marks.  The parties settled that dispute based at least in part upon a stipulated permanent injunction, which the Court entered, which set various limits on what marks each defendant could use, requirements that the defendants remove and change their signage and requirements that defendants use disclaimers that they were not affiliated with Bobak's. 

But defendants did not  comply with the injunction.  The Court held that defendants did not replace their signage as required.  Additionally, instead of posting permanent signs at entry points to their establishments including disclaimers that the establishment did not sell Bobak's products, defendants placed sheets of paper at exit points which the Court held were intended to suggest that defendants were the "true inheritor of the Bobak tradition" and which only added the disclaimer as an afterthought.  Based upon these findings, the Court gave defendants three weeks to comply with the injunction, including ordering and paying for deposits on new, compliant signage.

Practice tip:  If you agree to an injunction, you must be prepared to abide by it.

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Rowe Int'l. Corp. v. Ecast, Inc., __ F. Supp.2d __, 2007 WL 831772 (N.D. Ill. Mar. 19, 2007) (Kennelly, J.).

Judge Kennelly held that plaintiff Arachnid waived its privilege as to a limited scope of information and held that Arachnid's related uses of the information did not rise to the level of the crime-fraud exception, even if they may have been inequitable conduct.  Arachnid filed a motion seeking the return of three inadvertently produced, privileged "patent reports."  Defendants filed a cross-motion to compel production of privileged materials arguing that Arachnid waived the privilege as to the three documents and that the crime-fraud exception destroyed the privilege to the extent it was not waived.  The Court agreed that the patent reports were inadvertently produced, but still held the privilege was waived on a limited scope of information.  In 1999, a former Arachnid employee testified that he learned from Arachnid's attorneys that "the only way we would receive [one of] the patent[s-in-suit] was if we included that information."  While a former employee cannot waive the privilege, Arachnid's attorneys attended the deposition in question and failed to object to the question or the answer.  Additionally, Arachnid later turned the transcript over to the PTO during prosecution of a subsequent application and to defendants during production in the instant case.  These actions combined to waive the privilege as to the specific information discussed by the ex-employee, the inclusion of figure 2 in the patent.

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Hickory Farms, Inc. v. Snackmasters, Inc., No. 05 C 4541, 2007 WL 772919 (N.D. Ill. Mar. 8, 2007) (Kennelly, J.).

Judge Kennelly held that plaintiff's "Beef Stick" and "Turkey Stick" marks were generic and canceled the Beef Stick mark, plaintiff had already let its "Turkey Stick" registration lapse.  Plaintiff alleged that defendant infringed its marks by marketing defendant's beef and turkey snacks in stick forms and labeling them "Beef Sticks" and "Turkey Sticks," respectively.  But defendant countered with evidence that numerous companies use the terms to refer to meat products sold sell in stick form.  For example, Trader Joe's, Flat Iron, Jimmy Dean, Slim Jim and Tombstone all sell meat stick products using the marks.  The Court held that the terms were generic because they name a class of goods -- meat packaged in a stick form.  The Court also noted that "it [was] difficult to imagine what else a seller would call a beef or turkey product packaged in stick form."

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Bryant v. Gordon, No. 05 C 3066, 2007 WL 461326 (N.D. Ill. Feb. 8, 2007) (Kennelly, J).

Judge Kennelly granted summary judgment for defendants, Gordon and Mach 1 LLC ("Mach 1"), on plaintiff's, Bryant, claims of copyright infringement based upon copyrighted goods Mach 1 purchased free of encumbrances in a bankruptcy auction.  Because Bryant had notice that copies of posters including his copyrighted photograph of U.S. Army snipers in Ghillie suits (the "Bryant photo") would be sold at the auction and he did not object, he had no claim of infringement for those copies.  The Court denied summary judgment for both Bryant and defendants on their cross-motions for summary judgment regarding infringement of a picture taken by defendant, Urtis, (the "Urtis photo") which allegedly copied the Bryant photo.  The Court held that the Bryant photo was copyrightable based upon Bryant's choice of composition, lighting, camera angle and other factors, but denied summary judgment as to whether the Urtis photo copied the Bryant photo.  The Court noted that both photos were "taken from the same angle, perspective, and with the same scene and terrain."  There were differences between the photos, but the Court could not say as a matter of law that the differences would be sufficiently obvious to an ordinary person.  The Court, therefore, held that a reasonable jury could find that the Urtis photo copied the Bryant photo or that it did not and denied summary judgment.

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Top Tobacco, L.P. v. North Atl. Operating Co., No. 06 C 950, 2007 WL 118527 (N.D. Ill. Jan. 4, 2007) (Kennelly, J.).

Judge Kennelly granted summary judgment for defendants on plaintiff's trademark, unfair competition and dilution claims.  Plaintiffs, Top Tobacco and Republic Tobacco ( collectively "Top Tobacco ") own various trademarks associating the word "top" or a picture of a toy top with tobacco products.  Both Top Tobacco and defendant, North Atlantic Operating and National Tobacco Company ("National Tobacco"), are large players in the "make your own" and "roll your own" cigarette market.  Top Tobacco alleged that its Top marks were infringed and diluted by National Tobacco's use of its "Fresh-Top Canister" mark.  The Court granted summary judgment of non-infringement because it ruled that no reasonable jury could find that consumers were confused between Top Tobacco's TOP mark and National Tobacco's "Fresh-Top Canister" mark.  The Court held that they were visually distinct and cited Top Tobacco's remarks to the USPTO during prosecution of its marks that its TOP marks were visually distinct from marks relating to lids, as does the National Tobacco mark.  Additionally, the Court noted that Top Tobacco had chosen not to present a consumer survey to show actual confusion and did not explain why no survey was done.

The Court also granted summary judgment for National Tobacco on the dilution claim because it held that the TOP marks were not famous.  Top Tobacco argued that the marks were famous within the smoking market.  But the Court held that the relative weakness of the marks, the vast number of similar marks held by others and Top Tobacco's admission during prosecution that the marks were weak collectively would not allow a finding that the TOP marks were famous.

But the most interesting part of the opinion was in a footnote.  The Court explained that the "Fresh-Top Canister" mark appears below a registered design of a Zouave and in a footnote explains:

A Zouave is a soldier in a particular French infantry unit that originated in Algeria in 1831.  According to legend, while fighting in the 1854-55 Siege of Sevastopol during the Crimean War, an unlucky Zouave had his clay pipe broken by a bullet.  Determined to smoke anyway, the Zouave rolled tobacco in a piece of paper torn from his bag of gunpowder.  The cigarette was born.  The French expression "faire le zouave" can be translated roughly as "to play the fool." . . . apt descriptor for the person who apparently first decided to smoke a cigarette.

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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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C/F Int’l., Inc. v. Payne, No. 06 C 1329, 2006 WL 22290992 (N.D. Ill. Aug. 3, 2006) (Kennelly, J.).

Plaintiff filed suit to enforce a copyright infringement and breach of contract judgment against individual defendant Payne, his wife and two companies run by Payne after Payne allegedly transferred both personal and corporate assets to his wife. Judge Kennelly denied defendants’ motions to dismiss and for judgment on the pleadings, and deferred ruling on defendants’ motion to stay based on one defendant’s Chapter 7 bankruptcy proceeding.

The Court further noted that it previously dismissed defendants’ summary judgment motion for failure to comply with Local Rule 56.1(a).  Once again, the folly of disregarding Local Rule 56.1 is illustrated. When filing for summary judgment in the Northern District of Illinois, you must submit Statements of Material Facts and you must do it according to Local Rule 56.1. Otherwise, you will likely lose the motion without regard to the merits of the case.

For the most part, this case has little to do with intellectual property issues. It does, however, provide a couple of interesting rulings. First, plaintiff’s fraudulent transfer claims, which are presumably brought pursuant to the Illinois Uniform Fraudulent Transfer Act, 740 ILCS 160/1, are held to federal notice pleading requirements as opposed to Illinois’s more elaborate fact pleading. Second, although one of the corporate defendants is in bankruptcy, the Court did not automatically stay the claims as to that defendant. Instead, the Court deferred ruling on the stay motion until further discovery can shed light upon the bankrupt defendant’s specific role in the allegedly fraudulent transfers.

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