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

Strom v. Strom Closures, Inc., No. 06 C 7051, 2008 WL 489363 (N.D. Ill. Feb. 20, 2008) (Der-Yeghiayan, J.).

Judge Der-Yeghiayan granted plaintiff Victoria Strom’s (“Strom”) motion to dismiss defendants’ (collectively “SCI”) counterclaims. SCI filed an earlier suit charging Strom with patent infringement. The parties settled that suit pursuant to a Settlement Agreement (“Agreement”). SCI alleged that Strom breached the Agreement and was once again, therefore, infringing SCI’s patents. But the Court held that once a district court dismisses a case with prejudice, it cannot reopen the case for enforcement of a related agreement without independent jurisdiction. SCI’s appropriate claim was for breach of the Agreement, not patent infringement. Because breach of the Agreement was a state law claim and because there was no diversity (SCI pled that all parties were Illinois residents), the Court lacked jurisdiction. Finally, the Court held that there was not supplemental jurisdiction based upon Strom’s federal employment claims. Strom’s claims and the breach of the Agreement were not sufficiently related.

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Coilcraft, Inc. v. Inductor Warehouse, Inc., No. 98 C 0140, 2007 WL 2728754 (N.D. Ill. Sep. 13, 2007) (Guzman, J.).

Judge Guzman conducted a Fed. R. Civ. P. 72 de novo review of Magistrate Judge Cole’s report which recommended that the Court hold defendant in contempt for violating the Court’s permanent injunction limiting defendant’s use of plaintiff’s Coilcraft mark (click here for further discussion in the Blog’s archive). The Court adopted Judge Cole’s Report in its entirety and gave plaintiff fourteen days to submit a proposed order and proof of its attorneys' fees and costs related to this motion. The Court also held that Judge Cole was not required to hold an evidentiary hearing before issuing the Report because there were no genuine issues of material fact. The dispute was governed by the language of the Court’s injunction which was not disputed. And the only issue was whether defendant’s advertisements, the contents of which were not disputed, violated the injunction – a matter of law.

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Sitrick v. Freehand Sys., Inc., No. 02 C 1568, 2007 WL 2298362 (N.D. Ill. Aug. 3, 2007) (Guzman, J.).

Judge Guzman denied plaintiff’s motion to amend the Court’s final order dismissing plaintiff’s patent infringement case with prejudice pursuant to Fed. R. Civ. P. 41(a)(1). Plaintiff sought to amend the order to include the terms of the parties’ settlement agreement because in Lynch v. SamataMason, Inc., 279 F.3d 487, 489 (7th Cir. 2006), the Seventh Circuit held that a court only maintains ancillary jurisdiction to enforce settlement agreements if the dismissal order contains (not just by incorporation) the terms of the agreement. But the Court denied the motion for two reasons. First, the Court’s original order was a nullity because it was issued after the parties filed their unconditional stipulation of dismissal pursuant to Fed. R. Civ. P. 41(a)(1) which immediately ended the Court’s jurisdiction. Second, because the amendment was not clerical, sought within one year of entry of the order or otherwise justified, Fed. R. Civ. P. 60 prevented the Court from amending the order.

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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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