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

Integrated Genomics, Inc. Kyrsides, No. 06 C 6706, 2008 WL 63065 (N.D. Ill. Mar. 4, 2008) (Lefkow, J.).

Judge Lefkow dismissed defendant Ivanova for lack of subject matter jurisdiction, held that the Court had subject matter jurisdiction over defendant Kyrsides, and denied defendants' Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff's claims based upon preemption. Plaintiff alleged that defendants' breached their non-compete agreements and otherwise named plaintiff when defendants resigned from plaintiff, where they worked with genome software, and joined plaintiff's competitor in similar roles. Defendants each argued that plaintiff had not sufficiently pled diversity jurisdiction because plaintiff had not shown that $75,000 or more was in controversy. In response, plaintiff alleged that they lost customers to defendants' new employer after defendants resigned. But that was insufficient because plaintiff did not allege that defendants were responsible for, or the cause of, those lost customers. The Court, therefore, dismissed defendant Ivanova. But for Kyrisides, plaintiff also relied upon an email sent from Kyrsides to plaintiff's employees explaining Krysides's view that his resignation cost plaintiff a very large number of contracts. Kyrsides statements were sufficient proof that the amount in controversy exceeded $75,000.

The Court held that a motion to dismiss was not the appropriate vehicle for deciding the scope of the relevant non-compete agreements. The scope of a non-compete was fact-intensive and best determined after additional discovery.

Finally, the Court held that plaintiff's claims were not preempted by the Illinois Trade Secret Act ("ITSA"). While the claims could encompass trade secret information, they were based upon the broader category of confidential information. Because the claims were potentially broader than trade secrets, they were not preempted.

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Ty, Inc v. Softbelly's, Inc., No. 00 C 5230, 2007 WL 734394 (N.D. Ill. Mar. 6, 2007) (Lefkow, J.).

Judge Lefkow granted plaintiff's, Ty, motion to make the case exception and grant it attorneys' fees and expenses.  A jury previously returned a verdict against defendant, Softbelly's, for violations of the Lanham Act and common law unfair competition.  The Court held that the case was exceptional because "Softbelly's made an aggressive, uncounseled, and persistent endeavor to trade on the success and reputation of Ty's marks."

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Bergt v. McDougal Littell, No. 06 C 4645, 2006 WL 3782919 (N.D. Ill. Dec. 21, 2006) (Lefkow, J.).

Judge Lefkow denied defendants' motion to dismiss plaintiff's copyright and fraud case which alleged that defendants' use of plaintiff's copyrighted painting "Primavera" in textbooks exceeded the number of copies allowed by the parties' license agreement.  Defendants sent plaintiff, via his agent ("Agent"), a request to use copies of his painting in a run of no more than 40,000 textbooks.  Agent responded shortly thereafter with a document labeled "Invoice" which granted defendants the right to use Primavera in textbooks without specifying any limitations, for example limiting use to the run of 40,000 textbooks as per defendants' initial request.  Defendants argued that Agent's letter was a counteroffer which changed the terms of the parties' license.  But the Court held that defendants' initial letter, specifying the price and the limited run, was an offer and that Agent's letter was the acceptance.  The Court reasoned that Agent's letter did not require a response, suggesting it was an acceptance, and that defendants could not have reasonably believed that Agent was modifying the offer to allow unlimited use of Primavera, instead of a limit of 40,000 copies, without increasing the $200 license fee.

There is also what appears to be a similar case, although brought by a different plaintiff, addressed in this post.

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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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Huthwaite, Inc. v. Randstad General Partner (US), L.L.C., No. 06 C 1548, 2006 WL 3065470 (N.D. Ill. Oct. 24, 2006) (Lefkow, J.).

Plaintiff, a corporate sales training services provider, contacted defendant, an employment services provider, to discuss improving defendant's sales training offerings.  Plaintiff told defendant that it knew defendant's current training materials incorporated techniques from plaintiff's copyrighted books -- "SPIN Selling" and "Major Account Sales Strategy" -- but assured defendant that it would not file a copyright infringement suit.  As discussions between the parties progressed, plaintiff asked to review defendant's training materials and promised defendant that it would not bring a copyright suit if the materials contained plaintiff's copyrighted information.   Defendant ultimately gave plaintiff its training materials, but only after signing a nondisclosure agreement requiring that the documents not be used for, among other things, filing a copyright infringement suit.  Two days after receiving defendant's documents, plaintiff filed a copyright infringement suit.  In response, defendant filed fraud and breach of contract counterclaims alleging that plaintiff was engaged in a broad scheme to leverage its copyrights be gaining the trust of potential infringers through marketing discussions and that the suit breached the nondisclosure agreement between the parties.

Judge Lefkow dismissed the fraud claim because in Illinois promissory fraud claims require pleading a scheme to defraud.  The Court held that the allegations did not rise to the level of a scheme because -- although plaintiff's filing two days after receiving defendant's training materials was a strong suggestion that it never intended to honor its promise not to sue -- defendant was aware of the risk that plaintiff would file suit and plaintiff's specific misrepresentations were not sufficiently egregious.

The breach of contract claim, however, was not dismissed because the use of defendant's training materials provided pursuant to the nondisclosure agreement would likely have been required to file an infringement suit (plaintiff's original suggestion that its techniques were being used was not sufficient to show copyright infringement because copyright does not protect techniques or ideas).

The Court also dismissed defendant's lack of standing affirmative defense based on an allegation that plaintiff lacked a sufficient ownership interest in the copyrights.  The Court noted that plaintiff has the burden to prove standing and that standing was best resolved by a motion to dismiss, rather than as a defense.

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