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

Late last week, President Bush signed the appointment papers for the Northern District's newest judge, the Honorable Robert M. Dow, Jr.  Judge Dow was sworn-in last Friday by Chief Judge Holderman and is sitting in the Northern District's Eastern Division.  Here is some biographical information about Judge Dow from the Northern District’s announcement of his appointment (click here for the announcement):

From 1993 to 1994, Judge Dow served as Law Clerk to The Honorable Joel M. Flaum of the United States Court of Appeals for the Seventh Circuit. Since 1995, Judge Dow has been employed at Mayer Brown, LLP, where he specialized in general and appellate litigation, with particular emphasis on telecommunications, state and federal constitutional law, jurisdiction, civil procedure, preemption, mass tort and products liability, admissibility of expert testimony, and class actions. Judge Dow has been acclaimed as a “superb” lawyer in the field of communications and technology law, as recognized by Chambers USA's Guide to America's Leading Business Lawyers. In his spare time, Judge Dow serves as Secretary for the Committee of Selection for the Rhodes Scholarships, State of Illinois, and on the Development and Academic Committees of Joliet Catholic Academy. Judge Dow was himself named a Rhodes Scholar in 1990. 

Judge Dow has had a distinguished academic career, with degrees from Yale University (B.A., 1987), University of Oxford (M. Phil. in International Relations, 1990; D. Phil. in International Relations, 1997), and Harvard Law School (J.D., 1993). While at Harvard Law School, in addition to graduating with honors, Judge Dow served as supervising editor of the Harvard Journal on Legislation, a member of the Editorial Board for the Harvard Human Rights Journal, and a Teaching Fellow at Harvard College.

Welcome to the Northern District Judge Dow. Judge Dow’s investiture ceremony is scheduled for Friday, January 11, 2008 at 4:00 pm.

 

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Kammin v. Smartpros, Ltd., No. 07 C 2665, 2007 WL 3046128 (N.D. Ill. Oct. 9, 2007) (Guzman, J.)

Judge Guzman transferred this copyright case to the Southern District of New York pursuant to 28 U.S.C. Section 1404. While plaintiff’s choice of forum is usually given significant weight, no party was a resident of the Northern District – both parties were New York residents. Furthermore, the non-party witnesses were closer to New York. And New York had a significant interest in deciding a case between its citizens regarding a dispute arising within New York.

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Mitchell v. First Northern Credit Union, No. 07 C 1891, 2007 WL 2948374 (N.D. Ill. October 4, 2007) (Norgle, J.).

Judge Norgle granted defendant Arizona State Credit Union’s ("ASCU") motion to transfer to the District of Arizona pursuant to 28 U.S.C. Section 1404 in this patent dispute. The Court acknowledged that plaintiff’s chosen forum was given significant weight. But the ease of access to the evidence in Arizona dictated that the case be transferred. Plaintiff was an Arizona resident, at least as of his filing date. And ASCU, all of its documents and all of its employees were in Arizona.

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Fast Food Gourmet, Inc. v. Little Lady Foods, Inc., No. 05 C 6022, 2007 WL 2156665 (N.D. Ill. Jul. 26, 2007) (Cole, M.J.)

Judge Cole granted in part defendant Little Lady Foods’ (“LLF”) Fed. R. Civ. P. 37 motion to bar evidence of allegedly late–identified trade secrets. Plaintiff Fast Food Gourmet (“FFG”) originally identified four trade secret elements of its process for making thin crust frozen pizza (you can read more about this case in the Blog's archives). FFG’s Vice President of Operations Crause identified four additional elements during his deposition. And FFG later identified two additional elements. LLF argued that FFG should be limited to the first four elements because FFG never updated its interrogatory responses to include the six additional elements. The Court held that the four additional elements disclosed during the deposition had “otherwise been made known” pursuant to Fed. R. Civ. P. 26(e) and, therefore, were not required to be added to FFG’s interrogatory responses. The Court excluded the other two elements. FFG argued that it had identified the elements by identifying documents containing the elements in its interrogatory responses pursuant to Fed. R. Civ. P. 33(d). But the Court held that the documents FFG identified only identified the two elements sporadically, and in connection with elements that were not trade secrets. This, combined with Crause’s testimony that he had identified all of the trade secret elements, made FFG’s Rule 33(d) statements insufficient.

Practice Tip: Rule 33(d) is often seen as a simple escape from answering cumbersome or difficult interrogatories. Of course, it is also often warranted. But when you use Rule 33(d), make sure to identify the correct documents, and make sure the identified documents fully support your position.

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According to the Boston Globe, the Boston Patent Law Association ("BPLA"), headed by Boston attorney Lee Carl Bromberg, is trying to make the District of Massachusetts the next hot patent court.  The BPLA is working to create patent rules for D. Mass. and case deadlines similar to those found in "rocket dockets" like E.D. Texas, W.D. Wis. and E.D. Va.  Bromberg also touts the intelligent judiciary in Boston as a reason D. Mass. should be the next patent court. 

I am all for districts adopting patent rules.  Regardless of their specific content, the certainty of patent-specific rules for claim construction and the exchange of infringement and invalidity contentions benefits all parties.  Local rules also save the expense of the numerous discovery motions parties often use to resolve these issues in the absence of local rules.  But I think what matters most, is getting a judge that is interested in or at least willing to tackle a patent case.  Judge Ward's interest in patent cases (and now the interests of his E.D. Texas colleagues) is really what made the E.D. Texas a patent hot-bed, his local rules were just an off-shoot of that.  Similarly, the chief reason that the Northern District is a top five patent district is that there are a critical mass of judges that have taken an interest in patent cases.  And although the Northern District lacks patent local rules, the judges that seem to preside over the most patent cases tend to have set or preferred procedures for patent cases that take the place of broader patent-specific rules.  For example, Judge St. Eve has a standing order setting a claim construction schedule.

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Statistics compiled by the Patent Troll Tracker* blog show that the Northern District continues to play a prominent role in deciding the nation's patent disputes and, as a result, its IP disputes more generally.  Filings of patent cases for 2007 (through the end of July), show that the Northern District had the fourth most patent filings:

2007 Patent Filings (through July)

District	Cases	Defendants
E.D. Texas	202	705
C.D. Cal.	148	329
D.N.J.	98	169
N.D. Ill.	81	163
N.D. Cal.	78	156
D. Del.	75	199
S.D.N.Y.	67	167

Another interesting statistic from this data:  with the exception of the E.D. Texas, all of the districts have a rough average of two to three defendants per case.  E.D. Texas averages about three and a half defendants per case.  I would have expected that E.D. Texas would average closer to five to ten defendants per case.  Perhaps all of the large patent licensing company cases that garner so much attention in Marshall are balanced by disputes between individual parties.

If readers are interested in these statistics, let me know and I will compile my own data and make it a regular (maybe quarterly) feature.

*  I appreciate the Patent Troll Tracker's statistics and even the effort he performs keeping track of cases filed by patent licensing companies, but as I have explained before I am no fan of name calling (by either plaintiffs' or defendants' counsel).  As such, I prefer the neutral term "patent licensing company."

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United States Gypsum Co. v. LaFarge N. Am., Inc., No. 03 C 6027, 2007 WL 2091020 (N.D. Ill. Jul. 18, 2007) (Hart, J.).

Judge Hart granted in part defendants motion to enforce the Court’s order and denied plaintiff’s motion to compel discovery. The Court previously ruled upon the parties’ cross-motions for summary judgment, holding that plaintiff’s state law claims were not preempted by the Illinois Trade Secrets Act, but significantly limiting the claims and removing some defendants (you can read more in the Blog’s archives). Defendant sought reconsideration of the Court’s preemption ruling. But the Court held that the motion, filed three months after the Court’s opinion, was untimely and that it presented no new arguments. The Court granted defendant’s request that plaintiff be limited to the trade secrets it identified during fact discovery and prior to summary judgment briefing.

Finally, the Court denied plaintiff’s motion to compel fact discovery. The motion was filed after the close of fact discovery and two months after plaintiff represented to the Court that only expert discovery remained to be completed.

Practice tip: File motions in a timely manner. It is especially important to file discovery motions during or at least near the discovery period.

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Coilcraft, Inc. v. Inductor Warehouse, Inc., No. 98 C 0140, 2007 WL 2071991 (N.D. Ill. Jul. 18, 2007) (Cole, J.).

Judge Cole recommended that the Court grant plaintiff’s motion for contempt. The parties previously settled this trademark case and agreed to a consent judgment which required, among other things, that defendants include “prominent” disclaimers on any advertisements, including webpages, offering plaintiff’s products for sale from the secondary market. Plaintiff filed a motion for contempt arguing that defendant’s website did not include prominent disclaimers. The Court agreed, explaining that prominence could be achieved in several ways, but that “fine print” was not one of them:

Being a relational and contextual concept, “prominence” may be achieved in any number of ways: placement of words, type size, typeface, text color, etc. Prominence, however, is not achieved by the use of fine print disclaimers that are substantially smaller than any other print on a page.

Practice tip: When drafting settlement agreements, or other contracts, watch out for subjective words like “prominence.”  If you expect that you may need to enforce the agreement* later, try to define subjective terms in more objective ways. For example, plaintiff in this case could have required that the disclaimer be at the top of each page in bolded font at least four points larger than the largest print on the page.

* If you expect that the agreement might be enforced against you, subjective terms may be beneficial.

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Meyer Intellectual Props. Ltd. V. Bodum, Inc., __ F.Supp.2d __, 2007 WL 2110931 (N.D. Ill. Jul. 24, 2007) (Shadur, J.).

Judge Shadur granted plaintiff’s motion for attorneys’ fees and costs related to a motion discovery dispute won by plaintiff, but modified its original award based upon defendant’s explanations (you can read more about this case in the Blog’s archives). The Court explained that the relevant Federal Rule, Fed. R. Civ. P. 37(a)(4)(A), could be paraphrased as “loser pays,” unless the Court finds the losing parties actions or lack of actions were justified or that other circumstances make a fee award unjust. The Court held that defendant’s explanation warranted reducing the original award by 50%. While the Court did not detail the explanation, this case identifies the broad discretion courts have in determining whether to award attorneys’ fees and costs, as well as the size of those awards.

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Meyer Intellectual Props. Ltd. V. Bodum, Inc., No. 06 C 6329, Slip Op. (N.D. Ill. Jul. 24, 2007) (Shadur, J.).*

Judge Shadur denied defendant’s motion to amend its answer adding an equitable estoppel defense. The Court noted that amendments were usually “generously” allowed, but defendant provided no justification for not including equitable estoppel in its original answer. Defendant argued that it required investigation to discover its equitable estoppel defense, but the Court noted that the information defendant relied upon was in defendant’s possession. So, there was no reason that defendant could not have conducted its investigation before filing its answer.

 

*  A copy of the Opinion is available here.

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Am. Needle, Inc. v. New Orleans Louisiana Saints, __ F. Supp.2d __, 2007 WL 2042764 (N.D. Ill. Jul. 11, 2007) (Moran, J.).

Judge Moran granted defendants, the NFL, NFL Properties and each of the thirty two teams (collectively the “NFL”) as well as Reebok International, Ltd. (“Reebok”), summary judgment on plaintiff’s Sherman Act antitrust claims, finding that the NFL acts through NFL Properties as a single entity for IP licensing purposes. For more than twenty years, NFL Properties licensed plaintiff to use various trademarks on its headwear. Plaintiff filed this suit after NFL Properties entered an exclusive license with Reebok, ending plaintiff’s license rights. Plaintiff argued that the NFL teams collectively, as well as in concert with Reebok, violated the antitrust laws by acting together through NFL Properties to license their collective intellectual property rights exclusively to Reebok (plaintiff argued that the NFL did not violate antitrust laws when it licensed to numerous parties, including plaintiff, through NFL Properties). But the Court held that licensing coordination between the NFL and its teams was equivalent to coordination between a corporation and its wholly-owned subsidiary. Because the Supreme Court treats corporations and their wholly-owned subsidiaries as single entities, there could be no conspiracy and no antitrust violation.

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The Northern District and the City of Chicago are working together to provide free wireless access in the Northern District’s Dirksen Federal Courthouse. The wireless connection is not available in any of the courtrooms (although it could be very useful during trials or hearings to have an internet connection), but it is available free of charge in the lobby and the second floor cafeteria. So, next time you arrive early for a hearing, take a few minutes to catch the Blog’s latest post.

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The Blog previously discussed Judge Pallmeyer's letter seeking information about the Northern District's history on behalf of the Northern District's Historical Association.  The Historical Association has now taken the next step, developing a website that includes lots of interesting information.  The site includes a history of Northern District judgeships, including biographies for all current and former judges -- who knew that the first appointee to the Northern District's fourth judgeship, Judge Barnes, was a University of Michigan Law graduate and a basset hound breeder for the last years of his life, including some or all of his last two years on the bench.  If you are interested in joining the Historical Association, this page provides the necessary contact information.

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

The Federal Circuit denied defendant AD-II Engineering’s (“AD-II”) writ of mandamus seeking to prevent Judge Gettleman from considering plaintiff SRAM Corp.’s (“SRAM”) motion to amend its complaint to add infringement allegations on a new claim and related summary judgment motion as to infringement of that claim. SRAM sued AD-II alleging infringement of SRAM’s patent for a system of shifting bicycle gears that prevents overshifting. The Northern District Court previously construed the claims of the claim initially asserted by SRAM, found the patent claim valid and entered judgment in favor of SRAM and an injunction against AD-II, a subset of these decisions are set out at SRAM Corp. v. AD-II Eng’ing, Inc., 326 F. Supp.2d 903 (N.D. Ill. 2005). On AD-II’s appeal of that decision, the Federal Circuit overturned the claim construction and, therefore, vacated the final judgments on validity and infringement – SRAM Corp., 465 F.3d 1351 (Fed. Cir. 2006). On remand, SRAM sought to amend its complaint asserting an additional claim and moved for summary judgment of infringement of the claim to be added. At a hearing on SRAM’s motions, the Northern District Court noted that there were problems with SRAM’s late effort to amend its complaint and add infringement allegations, but set a briefing schedule for SRAM’s summary judgment motion. AD-II then filed this writ of mandamus. The Federal Circuit refused to prevent briefing of SRAM’s summary judgment motion, reasoning that AD-II’s writ was premature because the Northern District Court had not yet decided whether to allow SRAM to assert its additional claim. 

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

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

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Steiner Indus., Inc. v. Auburn Mfg., Inc., No. 07 C 668, 2007 WL 1834176 (N.D. Ill. Jun. 22, 2007) (Darrah, J.).

Judge Darrah denied declaratory judgment defendant Auburn Manufacturing’s (“Auburn”) motion to dismiss. Auburn argued that plaintiff’s (collectively “DJ Plaintiffs”) suit improperly anticipated Auburn’s complaint which alleged Lanham Act claims of false designation and false advertising, as well as related state law claims. Auburn filed its complaint in the District of Maine within a week of DJ Plaintiffs’ filing. Auburn alleged that DJ Plaintiffs’ use of “FM Approved” and “Made in the USA” in their catalogs and website advertising in connection with their welding blankets constituted false designation and false advertising. DJ Plaintiffs were aware of the allegations before they filed suit because, as part of an ongoing negotiation with plaintiffs, Auburn had provided plaintiffs a copy of its complaint. The Court acknowledged its discretion to dismiss the case in favor of Auburn’s later filed complaint, but did not dismiss the case. The two cases mirrored each other, so either could resolve the parties’ dispute. And because both cases were filed in federal courts, there was no concern that the DJ case would cause friction between federal and state courts. The deciding issue was whether the Maine Court could offer a full remedy. DJ Plaintiffs had a motion to transfer or dismiss pending before the Maine Court. In that motion, DJ Plaintiffs argued that the Maine Court lacked personal jurisdiction over two of the three DJ Plaintiffs – Steiner Industries, Inc. and Lab Safety Supply, Inc. DJ Plaintiffs, therefore, asked the Maine Court to transfer the case to the Northern District of Illinois or to dismiss the case.  The Court held that if the Maine Court transferred the case to the Northern District or dismissed Steiner and Lab Safety for lack of jurisdiction, those factors would weigh in favor of maintaining the DJ action. If, however, the Maine Court denied DJ Plaintiffs’ motion and held that it had jurisdiction over all DJ Plaintiffs, then the Main Court could more effectively decide the dispute than the Northern District. The Court, therefore, denied the motion to dismiss with leave to refile if the Maine Court finds it has jurisdiction over all DJ Plaintiffs and does not transfer the case to the Northern District.

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Lexion Medical, LLC v. Northgate Techs., Inc., No. 04 C 5705, Slip Op. (N.D. Ill. May 29, 2007).*

Judge Rosenbaum (a visiting judge, who is the Chief Judge for the District of Minnesota) granted in part plaintiff’s Fed. R. Civ. P. 59(e) and 60(a) motion to alter or amend the judgment, altering the judgment to include all post-verdict sales of infringing product. The court held a trial in October 2006 resulting in a jury verdict that defendants’ insufflator (a device that blows a powder, gas or vapor into a body cavity) infringed plaintiff’s patent, but that the infringement was not willful. The Court entered judgment in February 2007. Shortly after the judgment, defendant Northgate Technologies (“Northgate”) informed plaintiff that after the verdict, but before the judgment was entered, Northgate sold its remaining inventory. Plaintiff sought damages for the post-verdict sales and argued that the Court should find the post-verdict sales willful and declare the case exceptional. The Court held that the post-verdict sales infringed the patent, but that they were not willful because Northgate received an oral opinion of counsel prior to shipping any post-verdict product. The oral opinion was based upon three factors: 1) a belief that the jury’s verdict was unreasonable; 2) the fact that the Court had not yet entered a permanent injunction; and 3) Northgate’s post-trial arguments that were pending before the Court. The Court noted that the second factor could not support Northgate’s decision. But the remaining justifications were not “so flawed as to alert Northgate to reject [the oral opinion] as ‘obviously bad legal advice.”

But because Northgate’s decision to sell infringing product post-verdict “needlessly multiplied” the case, the Court held that the post-verdict sales were exception and awarded plaintiff’s attorneys fees and costs incurred by the post-verdict sales motion. Additionally, the Court entered a permanent injunction.

*You can read the opinion here.

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Fast Food Gourmet, Inc. v. Little Lady Foods, Inc., No. 05 C 6022, 2007 WL 1673563 (N.D. Ill. Jun. 8, 2007) (Cole, J.).

Judge Cole denied plaintiff Fast Food Gourmet, Inc.'s ("FFGI") motion to compel responses to interrogatories, in this trade secret case involving frozen pizzas (you can read more about this case in the Blog's archives).  FFGI served defendants with an interrogatory seeking information regarding which brands of frozen pizza (aside from the accused DiGiorno Thin Crispy Crust Pizza) defendants baked in the ovens which were allegedly part of FFGI's trade secret crust-making process for stone hearth oven, thin crust, frozen pizzas.  Defendants objected to the interrogatory, which led to a meet and confer between the parties on February 15, 2007, two weeks before the close of fact discovery on March 1.  The meet and confer did not resolve the dispute.  On April 1, FFGI submitted its expert reports and then, six weeks after the close of discovery, FFGI moved to compel responses to the interrogatories.  But FFGI failed to notice the motion until more than one month later on May 18.  The Court noted that, while it had discretion to grant the motion, motions to compel filed after the close of fact discovery are generally held to be untimely unless accompanied by a "reasonable and persuasive justification" for the delay.  FFGI, however, provided no justification for its delay. 

But the Court ultimately denied FFGI's motion not because it was untimely, but because the evidence lacked evidentiary value.  FFGI assured the Court that it would not seek any other discovery after receiving the interrogatory responses.  FFGI had also repeatedly taken the position that its trade secrets crust-making process involved the combination of various elements and processes including the ovens that were the focus of FFGI's interrogatories, but that the ovens alone were not a trade secret.  The interrogatory responses alone , therefore, were of no value.  They would necessarily require additional discovery to be relevant to the case.  For example, it was not enough to know which other pizzas were baked in the ovens.  FFGI would need to know how each pizza baked in the oven was prepared in order to determine whether the pizzas were made using the FFGI trade secrets.  That would require additional fact discovery, but fact discovery was already closed.  The Court, therefore, denied FFGI's motion to compel. 

Practice tip:  File your discovery motions on or before the close of discovery.  And always explain to the Court why you need documents or interrogatory responses, particularly if you are seeking them after the close of discovery.

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Rosenthal Collins Group, LLC v. Trading Techs. Int'l, Inc., No. 05 C 4088, 2007 WL 1597928 (N.D. Ill. May 16, 2007) (Moran, Sen. J.).

Judge Moran granted declaratory judgment defendant Trading Technologies' ("TT") motion to compel documents and things identified by third party declarant Walter Buist during his deposition, despite declaratory judgment plaintiff Rosenthal Collins Group's ("RCG") assurances that the documents and things had already been produced.  RCG previously filed a motion for summary judgment of invalidity of TT's patents based upon a declaration by Buist regarding software that he developed, at least partially, more than a year before TT filed its patent applications.  In a previous opinion, the Court held that RCG's motion was "somewhat misleading" and possibly "disingenuous," but refused to dismiss the case (you can read the Blog's discussion of that opinion here, as well as more on this case generally in the Blog's archives). 

After RCG filed its motion, TT deposed Buist regarding, among other things, the creation of his declaration and his interactions with RCG's counsel related thereto.  During that deposition, Buist stated, among other things, that various drafts of his declaration were created, that he created a "differences" list and provided it to RCG's counsel and that he had used various computers during his work related to the case.  TT sought all drafts of the declaration, a list of any destroyed drafts, the differences list, any drives or computers used by Buist and all documents reflecting communications between Buist or his associates and RCG and its counsel or associates. 

In light of RCG's statements that it had already produced many of the requested documents and things, the Court ordered RCG to:  1) reproduce all such documents; 2) produce any remaining responsive documents (including the computers requested); and 3) produce documents reflecting relationships between Buist and RCG or its counsel, so long as such documents are not privileged.  The Court also required that RCG produce Buist for an additional deposition to answer questions related to the compelled documents, as well as Buist's relationship with RCG and its counsel, so long as the questioning does not violate Buist's attorney-client privilege.

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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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Days Inns Worldwide, Inc. v. Lincoln Park Hotels, Inc., No. 06 C 2960, 2007 WL 1455798 (N.D. Ill. May 16, 2007) (Der-Yeghiayan, J.)

Judge Der-Yeghiayan granted in part defendants' motion for reconsideration of the Court's award of plaintiff's attorneys fees' and costs for preparing summary judgment motions.  Plaintiff owns various marks relating to its Days Inn chain (the "Days Inn Marks").  Plaintiff licensed defendants Lincoln Park Hotels, Inc. and Richard Erlich (collectively "LPH") to use the Days Inn Marks in connection with the operation of a hotel in Chicago's Lincoln Park neighborhood.  In 2005, LPH sold the hotel to defendant Gold Coast Investors ("GCI") without informing plaintiff, in violation of the parties' license agreement.  GCI continued operating the hotel using the Days Inn Marks without licensing the rights to the marks from plaintiff.  As a result, plaintiff brought this suit against defendants alleging that, among other things, GCI infringed plaintiff's Days Inn Marks and LPH contributorily infringed plaintiff's Days Inn Marks by selling the hotel to GCI with the knowledge that GCI intended to continue using the Days Inn Marks and without informing plaintiff of the sale or removing the Days Inn Marks from the hotel, as required in the parties' license agreement.  In February, the Court granted plaintiff's summary judgment motion on twelve of fifteen counts and dismissed the remaining three counts as moot (you can find discussion of that opinion in the Blog's archives).  The Court also awarded plaintiff its attorneys' fees, approximately $150,000, for preparing its summary judgment motion.  Defendants moved the Court to reconsider, arguing that the Court should have required the parties to meet to resolve the attorneys fees dispute pursuant to  Local Rule 54.3 before ruling on the fees and that the Court should specifically apportion the fees between defendants.  The Court held that it was not required to follow the Local Rule 54.3 procedure in this case because defendants did not object to plaintiff's requests for fees made in its summary judgment briefing and because additional briefing required by the rule would not have benefited the Court because of its intimate knowledge of the case.  The Court did, however, apportion the fees that it was able to identify as only applicable to one group of defendants.  And the Court awarded an additional $35,000 of fees and costs that had not been presented in the initial motion.

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The Northern District of Illinois has implemented a new attorney search feature on its website.  You can enter some or all of a name and find out the attorney's:  name; contact information; when they were admitted to the Northern District's general bar; and if and when they were admitted to the trial bar.  The Northern District states that the database will be updated weekly, but that it may not include members of either bar that were admitted before June 1991and have not appeared in a case since June 1991.  It appears to be an excellent tool.

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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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Vanguard Prods. Group, Inc. v. Diam USA, Inc., No. 05 C 1323, Slip Op. (N.D. Ill. May 16, 2007) (Bucklo, J.).*

Judge Bucklo granted plaintiffs summary judgment of infringement and denied defendants summary judgment of invalidity.  The Court first construed the two claim terms at issue -- "electrically coupled" and "via the modular connector."  In both cases, the Court adopted the plaintiffs' construction after a detailed review of the intrinsic and extrinsic evidence.  Because neither term was in the original application or appears in the specification, the intrinsic evidence focused on the use of the terms within the claims.  Defendants also attempted to use claim language from a parent application to support their constructions, but the Court held that the prosecution of a term in a parent application generally does not limit different terms in its progeny.  In the instant case, the Court found that the parent application had used the broader term "electrical connection" instead of "electrically coupled" which weighed against defendants' construction.  Having ruled in plaintiffs' favor on the claim construction, the Court held that defendants' products infringed the asserted claims of plaintiffs' patents.  And the Court held that defendants' asserted prior art did not anticipate plaintiffs' patents.

*  Because I beat Westlaw on this one, you can access a copy of the Court's opinion here.  Please note that the Court issued a subsequent order modifying the opinion by deleting footnotes three and four, which were not intended to be part of the opinion.

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Late last week, President Bush signed the appointment papers for the Northern District's newest judge, the Honorable Frederick J. Kapala.  Judge Kapala was sworn-in late last week and is sitting in the Northern District's Western Division.  Here is some biographical information about Judge Kapala from the Northern District's announcement of his appointment:

Judge Kapala graduated from Marquette University and received his law degree from the University of Illinois in 1976. He served as an Assistant State’s Attorney and then went into private practice, where he was appointed as a Special Assistant Attorney General to manage consumer fraud cases in Northern Illinois. He began his judicial career in 1982 as an Associate Judge in Illinois’ 17th Judicial Circuit, serving as Presiding Judge of the Juvenile Court from 1989 to 1991. Judge Kapala was elected a Circuit Judge in 1994 and appointed Presiding Judge of the Criminal Division one year later. In 2001, Judge Kapala was assigned to the Appellate Court of Illinois, Second District, where he served on the Illinois Judicial Conference Committee on Discovery Procedures and the Illinois State Judicial Inquiry Board. Judge Kapala is a captain in the U.S. Army.

Welcome to the Northern District Judge Kapala.

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According to yesterday's Chicago Daily Law Bulletin -- Trial Courts May Take on Patent Cases (subscription required, but a free, 15-day trial is available) -- the Northern District of Illinois judges are split on the value of  a proposed pilot program.  The program would provide judges who volunteer to take patent cases with extra training and the assistance of specialized law clerks.  Cases would continue to be randomly assigned.  But after a patent case was randomly assigned, if the assigned judge rejected the case it would be reassigned to a judge participating in the patent program.

Chief Judge Holderman is a proponent of the pilot program.  Chief Judge Holderman explained that the system would benefit the patent bar and that is not new to the federal courts because senior judges already have the option of rejecting cases, which are then reassigned.   You can read more about Chief Judge Holderman's views on patent litigation in the district courts in an article he recently authored with his law clerk, Halley B. Guren, advocating, among other things, providing district judges with specialized patent training and reassigning patent cases to those judges -- "The Patent Litigation Predicament in the United States."*

Judge Kocoras, on the other hand, is "not crazy about" the program, believing that district judges are generalists who "should all take the luck of the draw."  He sees the patent pilot program opening the door to other areas of specialization among Article III judges.

Judge Moran likes the program and says he would volunteer for it.  Although, he notes that allowing "judges over 50 [to] handle computer software issues may be a violation of due process."

* The link is to a draft of the article which is in the process of being finalized for publication in the University of Illinois's Journal of Law, Technology & Policy.

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Ortho-Tain, Inc. v. Rocky Mountain Orthodontics, Inc., No. 05 C 6656, 2007 WL 1238917 (N.D. Ill. Apr. 25, 2007) (Leinenweber, J.).

Judge Leinenweber granted plaintiff's Fed. R. Civ. P. 12(f) motion to strike, dismissing without prejudice defendants' respective patent misuse affirmative defenses and all patent-related statements in defendants' counterclaims.  Plaintiff, Ortho-Tain ("OT"), sued Rocky Mountain Orthodontics ("RMO") and Planmeca Oy ("Planmeca") alleging that RMO breached the distributorship agreement between the OT and RMO.  Pursuant to the Agreement, OT manufactured dental appliances (allegedly covered by OT's patents) and RMO sold those appliances in France.  RMO allegedly breached the Agreement by sourcing equivalent dental appliances from Planmeca.  RMO counterclaimed for, among other things, declaratory judgment of noninfringement and unenforceability of OT's relevant United States patents.  The Court previously dismissed defendants' patent-related declaratory judgment counterclaims for lack of subject matter jurisdiction.  OT now argues that the Court should strike RMO's and Planmeca's respective patent misuse affirmative defenses because they are insufficient.  The Court first held that patent misuse was a proper affirmative defense, negating the first prong of a Rule 12(f) analysis. 

But neither RMO nor Planmeca met their Fed. R. Civ. P. 8 notice pleading obligations as to the defense.  RMO's and Planmeca's statement of their defenses were identical:  "[OT's] claims are barred by the doctrine of patent misuse."  The defense pled no facts and failed to identify which of OT's "many patents" were allegedly misused.  The Court, therefore, dismissed the affirmative defenses without prejudice.  And because the defenses were not well pled, the Court did not address the third prong of a Rule 12(f) analysis -- whether the defense could withstand a Fed. R. Civ. P. 12(b)(6) motion to dismiss.  The Court also briefly looked at whether Rule 8 notice pleading or Fed. R. Civ. P. 9(b) heightened pleading was required for a patent misuse defense, noting that at least one court had used Rule 9(b) pleading, but did not reach the issue, as the defenses did not meet the Rule 8 standard.

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Super Wash, Inc. v. Allen, No. 06 C 50169, Slip Op. (N.D. Ill. Apr. 20, 2007) (Mahoney, Mag. J.).

Magistrate Judge Mahoney recommended dismissing one group of defendants' ("Genecor defendants") motion to enforce the settlement agreement and the other group's ("MJR defendants") motion for judgment and sanctions.  Plaintiff alleged that defendants infringed its trademarks related to its "Super Wash" car washes, engaged in Lanham Act unfair competition, falsely designated its origins pursuant to the Uniform Deceptive Trade Practices Act and related state law claims.  Shortly after the case was filed, it was stayed to allow settlement discussions and a settlement conference was held by the Court.  At that conference the parties agree that an agreement was reached, but disagree as to its scope and power.  Plaintiff alleged that a settlement had been reached on some terms subject to resolving the remaining terms and memorializing the agreement in writing.  The defendants, on the other hand, all agree that a binding settlement was agreed to and read aloud by the Court.  Defendants agreed that they were required to:  1) pay plaintiff a sum of money; 2) stop using plaintiff's marks; 3) provide plaintiff reasonable assistance in removing the marks from the internet, phone books, etc. and 4) were not required to admit liability.  But the Genecor defendants believe the agreement stipulated that neither the settlement agreement or any discovery from the case could be used in a pending state court case.  The MJR defendants believe there was no limitations on the use of information from or about the instant case in the pending state court case.  The Court, therefore, held that it could not grant defendants' motions to enforce the agreement or enter sanctions related to it.  There was no evidence of a meeting of the minds as to the use of information from the case in the state court case, which was a material term of the agreement.  And Illinois law required a meeting of the minds on a settlement's major terms in order to have an enforceable oral settlement agreement.

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Gencor Pacific, Inc. v. Nature's Thyme, LLC, No. 07 C 167, 2007 WL 1225362 (N.D. Ill. Apr. 24, 2007) (Kocoras, J.).

Judge Kocoras granted defendants' Fed. R. Civ. P. 12(b)(2)&(3) motion to dismiss for lack of personal jurisdiction and venue and dismissed the case.  Plaintiff brought this Lanham Act false advertising and copyright infringement case alleging that defendants used portions of plaintiff's copyrighted studies regarding the efficacy of a weight-loss and appetite suppressant containing Caralluma Fimbriata extract.  Defendants, a business and two individuals employed by the business, were residents of New Jersey and had a single sale to an Illinois customer, valued at $300.  Defendants only other contacts with Illinois were an interactive website accessible in Illinois and the fact that one or two of defendants' general solicitations may have been sent to Illinois.  Defendants did not own property in Illinois and there was no proof that any defendants sent any of the allegedly infringing information to Illinois.  The Court held these contacts were not sufficient to create either general or specific jurisdiction.  The Court also held that venue was not proper in the Northern District of Illinois because defendants were not residents of Illinois and the acts at issue in the suit did not occur in the Northern District.