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

Modern Trade Comms., Inc. v. PSMJ Resources, Inc., No. 10 C 5380, Slip Op. (N.D. Ill. Aug. 19, 2011) (Pallmeyer, J.).

Judge Pallmeyer granted defendants PSMJ Resources' ("PSMJ") and Oser Communications' ("Oser") motion to dismiss for lack of personal jurisdiction in this Lanham Act case involving plaintiff Modern Trade Communications' ("MTC") rights in its Metal Construction News mark for a metal industry trade publication. At the Metalcon tradeshow in 2010, Oser distributed a daily publication entitled Metal Daily News at PSMJ's direction. MTC alleged that the Metal Daily News title infringed its Metal Construction News mark, which MTC used to publish an official show guide at the same conference. 

PSMJ was a Massachusetts company without offices or personnel in Illinois. It approximated that 3% of its revenue at the 2009 Metalcon show in Florida was from Illinois residents. PSMJ's website was not interactive. PSMJ did produce six training seminars unrelated to Metalcon in Illinois. PSMJ's small revenues from Illinois residents did not create general jurisdiction. While related to Metalcon, PSMJ's contract with a third party in Illinois did not create specific jurisdiction. And PSMJ's production of the 2002 Metalcon in Illinois did not create specific jurisdiction because the accused Metal Daily News was only distributed at the 2010 Metalcon in Las Vegas. The Court, therefore, had neither general nor specific jurisdiction over PSMJ.

Oser was an Arizona company without offices or personnel in Illinois, although Oser did distribute publications at two to three trade shows per year in Chicago. Oser's website was passive, except that the 2010 Metal Daily News was available on the site for downloading. Attendance at two to three trade shows each year in Chicago did not create the systematic contacts necessary for general jurisdiction. Oser's website was not sufficient to create specific jurisdiction. MTC made no allegation that the website was targeted at Illinois, and the availability of the publication as a free download was not sufficient either. And MTC did not allege how Oser's alleged infringement in Las Vegas was tied to Oser's Illinois activities. Furthermore, the sale of an advertisement in the Metal Daily News to an Illinois resident, even combined with the website allegations, was not sufficient to create specific jurisdiction.

The Court also denied MTC's motion to amend because it did not allege any new facts that might create personal jurisdiction.

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Cement-Lock v. Gas Tech. Institute, No. 05 C 0018 (N.D. Ill. Oct. 5, 2009) (Pallmeyer, J.).

Judge Pallmeyer issued an order dismissing this patent case with prejudice based upon the parties' settlement.  The Court previously presided over a jury trial resulting in a verdict for plaintiffs Cement-Lock LLC and Alderman Richard Mell on behalf of Cement-Lock Group (collectively "CLG") on various RICO and breach of fiduciary duty claims. The jury awarded CLG $15M in damages, which was resolved by the settlement.

This was a dispute over the control and use of Cement–Lock technology (the “Technology”) which decontaminated certain waste products and used the decontaminated waste as a beneficial cement additive. CLG asserted various IP claims, including Lanham Act unfair competition, deceptive trade practices and trademark infringement. GTI also allegedly claimed to own and have developed the Technology.

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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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Heathcote Holdings Corp., Inc. v. Maybelline LLC, No. 10 C 2544, Slip Op. (N.D. Ill. Mar. 15, 2011) (Pallmeyer, J.).

Judge Pallmeyer granted in part defendants' (collectively "Maybelline") motion to dismiss plaintiff Heathcote's false patent marking case. The Court also granted Maybelline's motion to transfer the case to the Southern District of New York. In this pre-BP Lubricants case, the Court held that Heathcote had sufficiently pled intent to deceive by pleading the allegedly false statement and Maybelline's knowledge of the false statement. These are the type of allegations specifically held to be in sufficient by BP Lubricants.

Heathcote did not oppose Maybelline's motion to dismiss L'Oreal USA Creative, so long as it was given leave to replead if it later found Maybelline's representations were wrong.

Finally, the Court transferred the case to Maybelline's home district, the Southern District of New York. One key factor was that the alleged conduct would have largely occurred at Maybelline's headquarters, in New York. The Court also held that the sources of proof in the case will be more accessible in New York than in Illinois.
 

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The Federal Bar Association - an excellent group that is worth joining (disclosure: I am a member) - recently held a panel of Northern District judges. Here are my notes regarding Judge Pallmeyer's comments:

• Judge Pallmeyer does not like hearings by phone, but will allow them in appropriate circumstances.
   
• She reads briefs as they come in, but has clerks write some opinions. She also avoids unnecessary opinions.
   
• When possible and appropriate, Judge Pallmeyer encourages live argument and immediate decision. So, show up for hearings prepared to argue.
   
• Judge Pallmeyer uses a two-page questionnaire tailored to each case for voir dire. She then asks follow up and gives counsel brief opportunities to follow up, followed by preemptory challenges.
   

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LegalMetric Research has been running an interesting series of reports on nationwide patent litigation statistics by district. And in each case, the Northern District remains among the top patent district courts. 2009 was the rare year that the Northern District slipped out of the top five districts in terms of filings, but it only fell to sixth. And the combination of the new Local Patent Rules and the false marking cases will change that significantly for 2010 (more on both of those issues in the next few weeks). Here are the top ten districts by the number of patent suits filed in 2009:

1. C.D. California

2. E.D. Texas

3. D. Delaware

4. N.D. California

5. D. New Jersey

6. N.D. Illinois

7. S.D. New York

8. S.D. California

9. D. Massachusetts

10. E.D. Virginia

The Northern District is also one of six districts that produce half of all claim construction decisions. Not surprisingly, the Eastern District of Texas, the Northern District of California and the District of Delaware produce the most, with the Northern District of Illinois, the Southern District of New York and the Central District of California filling out the six. And these six districts also issue 43% of all reexam stays.

Finally, Judge Pallmeyer is the lone Northern District of Illinois on the list of top 30 patent judges by the number of 2009 patent cases assigned to them. Pallmeyer came in at number 23. The top five spots were held by Eastern District of Texas and District of Delaware. It is not surprising to see only a single Northern District judge on this list because the bench is relatively large, in particular compared to some of the other top patent districts like the Eastern District of Texas and the District of Delaware. But more Northern District judges will likely be in the top 30 next year because of increased filings through the first quarter, as well as the fifty or so false patent marking suits filed in the Northern District beyond the usual patent cases.

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totes Isotoner Corp. v. Panther Vision Corp.,  No. 09 C 1604, Slip Op. (N.D. Ill. Jan. 4, 2010) (Pallmeyer, J.).

Judge Pallmeyer construed plaintiffs' claims for its patent covering headgear equipped with LEDs for illuminating the wearer's line of sight. Here are some constructions of note:

• The Court rejected both parties' construction of "array" instead opting for a dictionary definition;
   
• The Court rejected both parties' constructions of "contiguous beam" in favor of a dictionary definition "a single, unbroken beam of light."
   
• The Court held that "connected" and "attached" were interchangeable, but preferred "attached."
   
• The Court rejected both parties' constructions of "adjacent" construing it as "closely proximate."

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Rudnicki v. WPNA 1490 AM, No. 04 C 5719, Slip. Op. (N.D. Ill. Dec. 10, 2009) (Pallmeyer, J.).

Judge Pallmeyer granted plaintiff summary judgment of copyright registration of six of  his Polish radio broadcasts.  The Court also granted defendants summary judgment that plaintiff lacked standing to bring his copyright infringement suit.  But the Court gave plaintiff thirty days to seek reconsideration if he was able to get an assignment of plaintiff's radio broadcasts from his employer RadioZET during that time.  The Court also granted in part defendants' motion to strike plaintiff's summary judgment declarations.

As an initial matter, the Court held that pursuant to the Berne Convention, Polish law controlled copyright ownership issues as the country most closely related to the work and that U.S. law controlled infringement issues.

Copyright Ownership

The Court held that plaintiff's radio news reports were protectable pursuant to Polish law, although the reported facts were not protectable.  Furthermore, plaintiff's reports dealt with political issues which is a type of reporting Polish law specifically provided should be compensated.  Plaintiff's six copyrighted broadcasts, therefore, were protectable and the copyrights were owned by plaintiff or his assignee.

Standing

Plaintiff's contract with RadioZET provided a transfer of rights to RadioZET in plaintiff's broadcasts that was "unlimited in time and space."  Based upon that contract, plaintiff was not the exclusive copyright holder either in Poland or anywhere in the world where a copyright was held, including in the United States.  The Court, however, gave plaintiff thirty days to get an assignment from RadioZET and seek reconsideration of the standing decision based upon the assignment.

Entitlement to Damages

Plaintiff's deposition statement that he did not incur economic loss from defendant's alleged infringement did not prevent plaintiff from an award of actual damages.  The Court noted that actual damages could be determined in the range of $20-$38 per broadcast based upon what plaintiff was originally paid for his reports, including the copyrighted reports.  If plaintiff proved all 53 alleged infringements that would result in damages of $1,060 to $2,014.  The Court did not consider whether statutory damages were available.

Copyrighted Works

The Court held that plaintiff had properly registered his copyright in the six broadcasts deposited with the Copyright Office.

Motion to Strike

The Court did not strike the declaration of a previously undisclosed witness because the witness was only required because the equipment required to playback recordings of the broadcasts at issue unexpectedly failed.

The Court did, however, strike portions of two declarations by plaintiff's RadioZET supervisors.  There was no evidence that the supervisors drafted or negotiated the contract.  The fact that the witnesses were not disclosed in Rule 26 disclosures was not relevant, however, because they were disclosed during plaintiff's deposition.

 

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SP Techs., LLC v. Garmin Int'l., Inc., No. 08 C 3248, Slip Op. (N.D. Ill. Nov. 3, 2009) (Pallmeyer, J.).*

Judge Pallmeyer denied the individual inventor's ("Inventor) motion to intervene in this patent case.  Inventor sought to intervene in this case arguing that the assignment of his patent to plaintiff SP Technologies ("SPT") was invalid because SPT coerced Inventor to sign it.  The Court held that Inventor's argument was unpersuasive.  Inventor admitted signing the assignment, but argued it was under duress.  But the Court held that Inventor could not intervene, even if Inventor could prove the duress.  Inventor failed to explain why SPT would not adequately represent Inventor's interests in the case.  In fact, Inventor even agreed that his interests were aligned with SPT.  Intervention, therefore, was not proper.  Inventor was, however, free to pursue his claims in a separate suit against SPT.

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

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SP Techs., LLC v. Garmin Int'l., Inc., No. 08 C 3248, Slip Op. (N.D. Ill. Sep. 30, 2009) (Pallmeyer, J.)

Judge Pallmeyer denied defendants' motion for summary judgment of inequitable conduct in this patent infringement case. Plaintiff SP Technologies ("SPT") asserted a patent for a touch screen keyboard that cannot be moved, resized or closed by a user. Defendants argued the patent should be held unenforceable based upon the inventor's alleged failure to disclose to the Patent Office twenty lines of code for disabling a close button allegedly copied from a website and used in the patent, as well as certain alleged prior art Palm Pilot devices.

Intent to Deceive

The Court held there were questions of fact as to the investor's alleged intent to deceive the Patent Office as to both alleged pieces of prior art. With respect to the code, there was evidence that the inventor believed there was no need to submit any evidence about a portion of the code because only the entirety of the code was relevant to patenting. Regarding the Palm devices, the inventor believed he had disclosed the Palm Pilots because they were mentioned in articles submitted to the Patent Office. 

Materiality

Regarding the allegedly copied code, the Court noted that few inventors could be considered the sole inventor of every aspect of their invention. Almost all inventions include some known components. And defendants did not prove that the single component of the invention represented by the allegedly copied code was central to patentability. The Court did, however, note that it appeared the code was likely copied as it was identical to that on the website and in other manuals, down to a misspelling. The Court accepted as evidence a printout of a copy of the website at issue from the relevant 1999 date. The copy of this website was maintained by the Internet Archive, or the Way Back Machine. The printout was authenticated by an Internet Archive employee that explained the Internet Archive’s process of maintaining historic copies of websites.

Similarly, defendants did not present sufficient evidence of the materiality of the Palm devices. Defendants offered only pictures without proof, such as a manual, that a user could not move, resize or close the keyboard.

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SP Techs., LLC v. Garmin Int’l, Inc., No. 08 C 3248, Slip Op. (N.D. Ill. Oct. 9, 2009) (Pallmeyer, J.).

Judge Pallmeyer construed the claims of plaintiff SP Technologies' (“SPT”) patent to a method for inputting data on a touch-screen display using a keyboard that cannot be resized, moved or closed by a user. As an initial matter, the Court noted that, contrary to SPT’s argument, the Court was not required to consider the accused products when construing the claims. Instead, the Court had discretion to consider the accused devices. And because the parties did not provide a reason to consider them, the Court chose not to include the accused products in its analysis. Here are constructions of note:

• “Plurality of date input fields” was defined as more than one field, but the fields need not simultaneously appear on the same screen.

• “Termination” referred to terminating or closing the keyboard, but not resizing or moving the keyboard as defendants argued. The ordinary meaning of terminate controlled over some statements the inventor made during prosecution that could have been read more broadly.

• “Derived input” was defined as information requested by a computer application or program, as opposed to information “desired” by a user.

Finally, the Court noted a problem with the defendants’ presentation of the evidence that will be remedied by the Local Patent Rules. Defendants cited to documents within the prosecution history by title, as opposed to using Bates numbers, making it hard for the Court to find the relevant portions of the 250 page prosecution history.  Local Patent Rule 4 requires that parties file a Joint Appendix as part of the claim construction process that is paginated and includes the prosecution history, among other documents. Click here for much more on the Local Patent Rules in the Blog’s archives.

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Geisha LLC d/b/a Japonais v. Tuccillo, No. 05 C 5529, Slip Op. (N.D. Ill. Mar. 13, 2009) (Pallmeyer, J.).*

Judge Pallmeyer denied plaintiff's motion for summary judgment regarding its Lanham Act false designation claim. Plaintiff began using the Japonais mark in conjunction with its Chicago area European/Japanese fusion restaurant in 2003. Plaintiff later opened New York and Las Vegas locations. But plaintiff did not register the Japonais mark. In 2004, defendant filed an intent to use trademark application for the Japonais mark to be used in connection with restaurants. In order to receive the registration, defendant was required to use the mark in commerce. Once that use occurred and was properly documented, defendant's mark would have a 2004 constructive use date, as opposed to the later date of actual first use. Defendant has filed a verified statement of use, so the parties agree that defendant's registration is a formality. Plaintiff, however, believed that it would succeed in a cancellation proceeding against the mark.

The Court noted that as the senior user, plaintiff had a right to use the mark in the Chicago area. But there was a question of fact as to whether plaintiff's later opened New York restaurant had sufficiently penetrated the New York market before defendant's 2004 constructive use date. Furthermore, to the extent plaintiff had actual notice of defendant's application, any rights plaintiff might have had in New York would not be enforceable against defendant. Furthermore, the Court noted that granting plaintiff's motion could result in the bizarre outcome of defendant being liable for violating plaintiff's trademark today, but tomorrow, after issuance of defendant's mark, defendant may be able to assert the trademark against plaintiff.

* For more on this case, click here to read the Blog's archives about the case or here for a Las Vegas Trademark Attorney post about the case.

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Illinois Computer Research, LLC v. Google Inc., No. 07 C 5081 (N.D. Ill.) (Pallmeyer, J.).

The parties in this case filed a Stipulation of Dismissal this week -- click here to read it.  Of course, details of the settlement were not disclosed.  But this appears to close what had been a very contentious dispute -- click here to read the Blog's coverage of the case. 

One other note about the case, I had been meaning to cover plaintiff's motion to strike some of defendant's pleadings for using variations of the term "shell corporation," arguing that the term is derogatory in a manner similar to the "patent troll" moniker.  Judge Pallmeyer ruled on the motion in a Minute Order stating that the Court would no longer use the terms, but denying the motion to strike.  Because the Minute Order does not provide much analysis and because the issue was already covered very well by Joe Mullin at The Prior Art blog -- click here to read Mullin's post -- I will not do a separate post on the motion.  But if you are interested in the historical, legal use of the term, the pleadings on the motion are an excellent information source.
 

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Capitol Indemnity Corp. v. Elston Self Serv. Wholesale Grocs., Inc., No. 04 C 6536, 2008 WL 696919 (N.D. Ill. Mar. 13, 2008) (Pallmeyer, J.).

Judge Pallmeyer held that the advertising injury claim in plaintiff Capitol Indemnity's ("CI") insurance policy required that it defend defendants the "Elston Grocery" defendants in the underlying trademark infringement, unfair competition and Illinois Deceptive Trade Practices Act ("IDTPA") claims. In the underlying litigation, Lorillard Tobacco accused Elston Grocery of selling counterfeit Newport cigarettes using Newport cigarette advertisements.

The advertising injury clause covered infringement of "copyright, title, or slogan" and "[m]isappropriation of advertising ideas." The Court held that "title" does not mean just the title of a work, but also encompasses, among other things, trademarks and names. CI, therefore, had a duty to defend Elston Grocery against Lorillard's trademark infringement claims. A duty to defend was also created by the trademark infringement claims because they accused Elston Grocery of misappropriating Lorillard's advertising ideas – its trademarks and advertisements.

CI argued that there was an exclusion for allegedly intentional acts. But the Court held the exclusion did not apply, even though Lorillard pled intent, because intent was not required for trademark infringement.

Additionally, it did not matter that the policy covered only compensatory damages. Lorillard sought punitive damages, but they would only be awarded if compensatory damages were awarded. So, the punitive damages exclusion did not alter CI's duty to defend.

Finally, the Court declined to rule on indemnity because Lorillard's claims had not been finally resolved. An indemnity ruling regarding an ongoing case was inappropriate because it would be an advisory opinion.

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Dennis Crouch at Patently-O is reporting that Cisco has amended its employee blogging policy to require that any Cisco employee blogging about issues involving or related to Cisco identify themselves as a Cisco employee and provide a disclaimer that the opinions are those of the employee alone and not necessarily Cisco.  This is a reasonable policy.  It provides Cisco's employees the freedom to blog while protecting both Cisco and its employees.  And it prevents future occurences of the mistake Troll Tracker made (anonymously commenting on cases his employer was involved in), as I discussed in my post on anonymous blogging last week, click here for the post.

Cisco also told Crouch that Troll Tracker would be free to continue blogging, presumably as long as he follows the policy.  Hopefully, that means that Troll Tracker will return to the patent litigation conversation soon, although it is easy to believe that this experience may have soured him on blogging or changed his voice substantially.  Here is Cisco's explanation of Troll Tracker's status from Cisco's official blog, The Platform:

As an employee, Rick is free to continue his personal blog, Patent Troll Tracker, in compliance with the revised policy. Rick has many fans who appreciate the information he collects and disseminates on patent litigation trends and recognize his blog as an important voice in the on-going national dialogue on patent issues.

IP Law360 (subscription required) has a detailed article this morning outlining Troll Tracker's history, including several quotes from Ray Niro of Niro Scavone who received substantial media attention after offering a reward for Troll Tracker's identity.  Niro reportedly likened Cisco's policy to "repairing a sidewalk after someone was hurt" and said that some of Troll Tracker's statements were "hurtful, harmful and, in many cases, 100% inaccurate."  According to the article, Niro plans to depose Troll Tracker in Illinois Computer Research, LLC v. Fish & Richardson, No. 07 C 5081 (N.D. Ill.) (Pallmeyer, J.) -- click here to read more about the case in the Blog's archives.

Another note on anonymous blogging and commenting, Rob LaGatta at LexBlog addressed the Troll Tracker situation and my anonymous blogging post last week with an important point, click here for Rob's post.  Anonymous blogging and commenting is a relatively small part of legal blogging and most anonymous material is not problematic.  It is easy to get side-tracked by the occasional offensive anonymous content.  But the vast majority of legal blogs operate without problems with either unprofessional or anonymous content.

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Cement-Lock v. Gas Tech. Institute, No. 05 C 0018 (N.D. Ill. Mar. 11, 2007) (Pallmeyer, J.).

Judge Pallmeyer presided over a jury trial resulting in a verdict for plaintiffs Cement-Lock LLC and Alderman Richard Mell on behalf of Cement-Lock Group (collectively "CLG") on various RICO and breach of fiduciary duty claims.  The jury awarded CLG $15M in damages.  The jury also returned a verdict for defendants on CLG's trademark infringement and Illinois Uniform Deceptive Trade Practices Act claims.  Click here for Judge Pallmeyer's Order entering the verdict and here for the jury instructions (Count IX is the trademark infringement count and Count XI is the Illinois Deceptive Trade Practices Act count).

This was a dispute over the control and use of Cement–Lock technology (the “Technology”) which decontaminated certain waste products and used the decontaminated waste as a beneficial cement additive. CLG asserted various IP claims, including Lanham Act unfair competition, deceptive trade practices and trademark infringement. CLG alleged that defendants permitted defendant Gas Technology Institute (“GTI”) to secure funding for Technology-related activities, despite defendants’ knowledge that GTI had no license to use the Technology and kept knowledge of the funding from CLG. GTI also allegedly claimed to own and have developed the Technology.

For more about this case and the verdict, check out:

• The Blog's archives; and
  
  
• The Chicago Sun-Times.
  

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Illinois Computer Research, LLC v. Google Inc., No. 07 C 5081 (N.D. Ill.) (Pallmeyer, J.).

Judge Pallmeyer is presiding over this case, which began as a standard case of a patent holding company, Illinois Computer Research (“ICR”) suing a large defendant, in this case Google, for patent infringement. The complaint was a standard three page notice pleading complaint alleging that Google infringed ICR’s patents based upon its Book Search functionality – click here for the original complaint. But the case quickly morphed into a dispute between a law firm, Fish & Richardson (“Fish”), and its former partner, the inventor and former owner of the patents in suit Scott Harris. ICR amended its complaint adding Fish and turning it in to a speaking complaint alleging that Fish forced Harris to resign because of the suit against Google and seeking a declaratory judgment that Harris, not Fish, owned the patent in suit – click here for the amended complaint. 

Fish answered the amended complaint – click here for the answer – and filed speaking counterclaims alleging that Harris breached his partnership contract and fiduciary duties, and seeking a declaratory judgment that Fish owned the patents – click here for the counterclaims. Harris responded with his own speaking counterclaims alleging tortious interference and defamation – click here for Harris’s counterclaims and click here for Fish’s answer. Shortly after Fish’s second answer, Google was voluntarily dismissed with prejudice, but the case regarding Harris and Fish continued.

Fish filed a motion for expedited discovery, which the Court granted in court, without an opinion detailing the discovery allowed. Fish also filed a Fed. R. Civ. P. 12(c) motion for judgment on the pleadings seeking to dismiss plaintiffs’ tortious interference and defamation claims. That motion has been briefed, but not decided yet. And last week, Fish filed a motion to amend its counterclaims and third-party complaint naming six additional entities – click here for the motion.  The motion does not identify the new parties specifically except to say that some are unnamed Doe defendants and that they are all related or believed to be related to Harris’s and ICR’s law firm Niro Scavone. Fish appears to be making a Propat-style argument that some or all of the additional defendants have or had an interest in the patent in suit and, therefore, are necessary parties. I will cover these opinions as they come out, but in light of all of the coverage this case has been getting – for example, see this recent Troll Tracker post and this case timeline at Joe Mullin’s The Prior Art Blog which Mullin promises to update periodically – I thought readers would be interested in some detailed background of the case. More to come as the Court issues opinions.

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Cement-Lock v. Gas Tech. Institute, No. 05 C 0018, 2007 WL 3374401 (N.D. Ill. Nov. 8, 2007) (Pallmeyer, J.).

Judge Pallmeyer granted in part defendants’ summary judgment motion. This is a dispute over the control and use of Cement –Lock technology (the “Technology”) which decontaminated certain waste products and used the decontaminated waste as a beneficial cement additive. Plaintiffs Cement-Lock LLC and Richard Mell, a Chicago Alderman, brought this derivative action on behalf of the Cement-Lock Group (“CLG”) which owns the Technology. Plaintiffs asserted various IP claims, including Lanham Act unfair competition, deceptive trade practices and trademark infringement. This opinion focused primarily on plaintiff’s state law claims, including alleged breach of fiduciary duties. So, I will not address most of the opinion, but I will discuss the most IP-related breach of fiduciary duty allegations. Plaintiffs alleged that defendants permitted defendant Gas Technology Institute (“GTI”) to secure funding for Technology-related activities, despite defendants’ knowledge that GTI had no license to use the Technology and kept knowledge of the funding from CLG. GTI also allegedly claimed to own and have developed the Technology. The Court held that there was no written license between CLG and GTI regarding the Technology. But there was a question of fact as to whether GTI’s efforts to secure finding for the Technology was improper. Additionally, there was a question of fact as to whether GTI misrepresented its ownership or control over the Technology.

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Discover Financial Servs. LLC v. National Union Fire Insur. Co. of Pittsburgh, PA, No. 06 C 4359, 2007 WL 2893624 (N.D. Ill. Sep. 26, 2007) (Pallmeyer, J.).

Judge Pallmeyer granted summary judgment that defendant National Union Fire Insurance Co. (“National Union”) did not have a duty to defend plaintiff Discover Financial Services (“Discover”) pursuant to Discover’s insurance policy (the “Policy”). Discover argued that its alleged infringement of a telephone call processing system patent was advertising injury covered by the Policy because Discover advertised various services when its customers used Discover’s phone system. But the Court held that the alleged infringement did not arise solely from advertising activities, as is required by the Policy. While Discover advertised services to callers, the main purpose of its system was conducting financial business and the underlying patent complaint against Discover alleged infringement without identifying any Discover advertising as infringing. The advertising, therefore, could not be considered the sole cause of the alleged injury.\

Practice tip: When responding to Local Rule 56.1 statements, make sure to support denials with admissible evidence. The parties in this case each made arguments that the Court disregarded because the opposing Rule 56.1 statements had not been refuted with evidence.

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Everything Baseball Ltd., LLC v. Team Athletic Goods, Inc., No. 05 C 5526, 2007 WL 2608551 (N.D. of Ill. Sep. 4, 2007) (Pallmeyer, J.).*

Judge Pallmeyer construed the claims of plaintiff’s patent to a baseball catcher’s chest protector with flexible shoulder guards. Defendant argued that the “scope and content of the prior art” should be determined before construing the claims, citing the Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) dissent. But the Court held that it need not survey the prior art before construing the claims. And the Court noted that the quoted portion of the Phillips dissent argued that obviousness should receive de novo review, as does claim construction. The dissent was not attempting to add additional claim construction steps.

Additionally, and maybe most importantly for Cubs fans (like me) still smarting over being swept out of the playoffs this season, the Court explained in a footnote Javy Lopez’s (who wore a patented chest protector for at least one year) connection to the Tommy John surgery from which Cubs’ ace Kerry Wood has arguably never fully recovered. If Kerry Wood were still the 20 K kid he once was, maybe the Cubs would have given the Colorado Rockies a run in the NLCS, setting up a Cubs-Red Sox Series that would have been a dream for Cubs fans, baseball historians and network executives. Unfortunately, the Cubs curse (or at least lack of postseason success) lives another year and the Rockies get a chance to complete an amazing rags to riches story.

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

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Geisha, LLC v. Tuccillo, No. 05 C 5529, 2007 W> 2608558 (N.D. Ill. Sep. 4, 2007) (Pallmeyer, J.).

Judge Pallmeyer held that the Court lacked jurisdiction over plaintiff Geisha’s declaratory judgment claim. Geisha operates a series of restaurants, each called Japonais – Japonais Chicago, Japonais New York and Japonais Las Vegas. Between the openings of Japonais Chicago and Japonais New York, defendant Roy Tuccillo (“Tuccillo”) filed an intent to use trademark application for a nearly identical Japonais mark, with the “firm intent” to open a restaurant using the mark. Geisha registered Japonais with the State of Illinois, but never federally registered the mark. Geisha sought, among other things, a declaratory judgment that Geisha owned the Japonais mark and that Tuccillo’s opening of a Japonais restaurant would infringe Geisha’s mark. The Court noted that the Seventh Circuit looks to patent law when considering whether there is an actual controversy in a trademark declaratory judgment action. The Court, therefore, relied upon the Supreme Court’s recent MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 765 (2007), decision which required that a controversy be “real and immediate,” overturning the Federal Circuit’s reasonable apprehension of suit test. The Court held that there was no “real and immediate” controversy. While Tuccillo had filed for registration of a Japonais mark nearly identical to Geisha’s and expressed his firm intent to open a Japonais restaurant, Tuccillo’s actions did not suggest that there was “imminent danger” that he would actually open a restaurant when the suit was filed. Tuccillo testified that he had generally looked at some properties to purchase for the restaurant, but he did not remember when he had done that and could not identify specific properties. Additionally, Tuccillo purchased a Chinese restaurant in 2002, but leased the space without opening a Japonais restaurant in 2003, two years before Geisha filed this suit.

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Eolas Techs. Inc. v. Microsoft Corp., No. 99 C 626 (N.D. Ill.) (Pallmeyer, J.).

Speculation regarding Judge Pallmeyer's delay of the Eolas v. Microsoft trial is over.  Eolas announced that it settled with Microsoft in a letter to shareholders (available from theSeattle Post-Intelligencer).  No details of the settlement were available, but Eolas told its shareholders to expect a dividend from the settlement of up to $60-$72 per share.  Here is more coverage of the settlement:*

• Vnunet.com
  
• Todd Bishop's Microsoft Blog -- discussing the letter to Eolas shareholders.
  
• Wall Street Journal (subscription required)
  
• Patent Prospector

*  As I have explained in previous posts, I will not comment on any news from this case because of my family's connection to it, but feel free to discuss the case in the comments.

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Everything Baseball Ltd., LLC v. Team Athletic Goods, Inc., No 05 C 5526, Slip Op. (N.D. Ill. Aug. 16, 2007) (Pallmeyer, J.).

Judge Pallmeyer denied defendant Team Athletic Goods, Inc.’s (“TAG”) Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of standing. The inventors of the patent at issue, for baseball chest protectors, assigned their rights in the patent to Everything Baseball Ltd. (“EB Ltd.”), but the correct corporate name was Everything Baseball Limited, LLC (“EBL LLC”). Plaintiffs argued that because EBL LLC was not the assignee when it filed suit, the Court should dismiss the case. But the Court held that the assignment to EB Ltd. was a clerical error and that the parties’ clear intent was to assign to plaintiff EBL LLC. The Illinois’s records show that while EBL LLC was incorporated, EB Ltd. never existed. Furthermore, some months after TAG identified the error, EBL LLC amended their assignment with the PTO. But the Court did note that the amended assignment could not create standing in this suit. The Federal Circuit case law is clear that where standing does not exist when the suit is filed, it cannot be corrected during the suit. The difference in this case was the Court’s ruling that the intent of the assignment agreement was to assign the patent in suit to EBL LLC, not EB Ltd., which did not exist.

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Eolas Techs. Inc. v. Microsoft Corp., No. 99 C 626 (N.D. Ill.) (Pallmeyer, J.).

Speculation regarding Judge Pallmeyer's delay of the Eolas v. Microsoft trial is starting in the MSM and on the internet.  The Seattle Post-Intelligencer and the Internetnews.com both have pieces reporting that Eolas and Microsoft are working toward settlement.  Both stories quote a Microsoft spokesperson as saying, "[Microsoft is] in active discussions with Eolas Technologies regarding a possible settlement ."

As I said in my previous posts, I will not comment on any news from this case because of my family's connection to it, but feel free to discuss the case in the comments.

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Eolas Techs. Inc. v. Microsoft Corp., No. 99 C 626, Min. Order (N.D. Ill. Jul. 30, 2007) (Pallmeyer, J.).

Late yesterday Judge Pallmeyer entered a minute order striking the Eolas v. Microsoft trial scheduled for this week and setting a status conference for August 30.  As I said in my previous post, I will not comment on any news from this case because of my family's connection to it, but feel free to discuss the order in the comments.

And thank you to all of you who were interested in guest blogging the trial.  I will get in touch if the trial is rescheduled.  If anyone else is interested email me.

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Eolas Tech. Inc.v. Microsoft Corp., No. 99 C 626 (N.D. Ill.) (Pallmeyer, J.).

The second Eolas v. Microsoft trial starts Monday, July 30.  The first trial, held before Judge Zagel, was about as close to a media frenzy as patent cases get.  I would love to live blog some or all of the trial.  But I cannot do it because my wife, Laura Donoghue, is a member of Microsoft's trial team.  However, if one of the Blog's readers wants to guest blog about the trial, send me an email and we can work something out.  If I do not get a guest blogger for the trial, I will post links to news coverage of the case without any commentary, for obvious reasons.

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Judge Pallmeyer, as the Chair of Northern District's Historical Association, sent a letter to the Chicago Association of Law Libraries seeking any historical information about the Court and significant cases before it that local firms or practitioners may have in their archives.  Here is Judge Pallmeyer's request in her own words:

We are aware that some of the local law firms themselves maintain archives that might relate to our court's history.  Might your firm maintain such an archive?  If you have retained materials that might be of interest to our Association, would you please contact me?  One of the members of our Association, or a legal historian who is working with us, would very much appreciate the opportunity to review them.  I can be reached at (312) 435-5636 or by e-mail CourtHistory_ILND@ilnd.uscourts.gov.

If you have something, send it on and let them know you saw the request here.

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