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

HyperQuest, Inc. v. N'Site Solutions, Inc., No. 08 C 483, 2008 WL 1968554 (N.D. Ill. May 1, 2008) (Shadur, Sen. J.).

Judge Shadur dismissed plaintiff's copyright infringement case for lack of subject matter jurisdiction. Plaintiff argued that it was the exclusive licensee of the copyright. But the Court held that plaintiff's license was nonexclusive because licensor retained various rights, including, the rights to:

• Make derivative works;
  
• Reproduce the work; and
  
• Sell the copyrighted software.

But the Court's adoption of defendants' reply was its most notable feature:

To that end [defendants’] Reply addressed fully every aspect of [plaintiff’s] attempt to characterize itself as an exclusive licensee . . . and it completely scotched HQ's position. Because the Reply has covered the waterfront so thoroughly and persuasively, this Court finds it unnecessary to reiterate the analysis there piece by piece-instead it simply adopts [defendants’] presentation as proffered in the Reply.

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Prominent Consulting LLC v. Allen Bros., Inc., No. 07 C 6357, 2008 WL 373217 (N.D. Ill. Feb. 11, 2008) (Dow, J.).

Judge Dow held that the Court had jurisdiction over plaintiff Prominent Consulting’s (“PC”) copyright claim and denied defendant Allen Brothers’ motion to stay based upon Colorado River abstention. The Court had subject matter jurisdiction over PC’s copyright infringement claim – based on source code PC wrote for Allen Brothers’ websites – because the claim was not controlled solely by the parties’ contract. At least some of PC’s copyrights existed before the parties entered the contract because PC wrote some of the code before signing the contract.

The case appeared ripe for Colorado River abstention: the parties were involved in state court proceedings paralleling the federal case; both cases arose out of the parties’ website-related agreement; and PC’s available relief was identical in each case because PC’s late federal registration prevents statutory copyright damages. But the Court’s exclusive jurisdiction over the copyright claim prevented abstention. The Court cited Colorado River for the proposition that district courts lack discretion to stay cases involving exclusively federal claims.

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Goss Int’l Ams., Inc. v. A-Am. Mach. & Assembly Co., No. 07 C 3248, 2007 WL 4294744 (N.D. Ill. Nov. 30, 2007) (Gettleman, J.).

Judge Gettleman denied defendant’s Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff’s copyright for lack of subject matter jurisdiction. Plaintiff alleged that defendant violated plaintiff’s copyrights in its simplified machine drawings of its commercial printing machines by placing them on the internet without authorization. The Court held that plaintiff’s simplification of its drawings and addition of part numbers were sufficient to meet copyright’s originality requirement. The Court also looked to the Fifth and Eighth Circuits and held that the registration requirement was met when plaintiff filed its copyright registration, as opposed to when the Copyright Office acted on it. In this case, plaintiff filed its application in May 2007 and was waiting on registration as of the date of the opinion. The Court reasoned that because plaintiff would also have a cause of action if the registration was denied, there was no reason to make plaintiff wait until the Copyright Office acted.

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Ortho-Tain, Inc. v. Rocky Mountain Orthodontics, Inc., No. 05 C 6656, 2006 WL 3782916 (N.D. Ill. Dec. 20, 2006) (Leinenweber, J.).

Judge Leinenweber dismissed defendant's, Rocky Mountain Orthodontics ("RMO"), patent-related declaratory judgment counterclaims for lack of subject matter jurisdiction.  Plaintiff, Ortho-Tain ("OT"), sued RMO alleging that RMO breached the distributorship agreement between the parties pursuant to which OT manufactured dental appliances (allegedly covered by OT's patents) and RMO sold those appliances in France.  RMO counterclaimed for, among other things, declaratory judgment of noninfringement and unenforceability of OT's relevant United States patents.  RMO argued that OT's breach of contract and tortious interference suit combined with OT's warnings to RMO's customers that RMO was no longer authorized to sell OT products created the requisite reasonable apprehension of suit.  The Court, however, held that there was no reasonable apprehension.  OT's suit had been pending for over a year and OT had not added patent claims.  OT had also repeatedly stated that the suit was only a contract and tortious interference action.  While OT's statements stopped short of an affirmative disavowal of suit, they were sufficient to prevent a reasonable apprehension of suit.

Additionally, there was no present activity by RMO which constituted infringement.  RMO's counterclaims identified only United States patents, but RMO's sales activities were all in France.  Because there was no evidence submitted of infringing activity in the United States, there was no subject matter jurisdiction for a declaratory judgment action.

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Underwriters Labs. Inc. v. Hydrofilm L.P., No. 05 C 5509, 2006 WL 2494748 (N.D. Ill. Aug. 23, 2006) (Guzman, J.).

Although this opinion deals solely with non-IP issues, it is interesting because it addresses how corporate websites fit into a personal jurisdiction analysis.  Judge Guzman held that while the Court had subject matter jurisdiction over plaintiff's declaratory judgment claims (based upon defendants's voluntary withdrawal without prejudice of a related suit against plaintiff), the Court lacked personal jurisdiction over the defendants. 

Defendants' sole contacts with Illinois were:  1) two contracts signed with plaintiff that were purportedly "made" in Illinois; and 2) a website that can be accessed from anywhere with an internet connection, including in Illinois.  These contacts were insufficient to confer general jurisdiction.  The Court noted that contracts alone cannot create general jurisdiction, and further held, after a survey of cases from other jurisdictions, that a website cannot create general jurisdiction. Otherwise, the Court noted, a website would create general jurisdiction "over any defendant in any state for any cause of action."

The Court also held that it did not have specific jurisdiction.  The website alone did not create specific jurisdiction because the case was not related to the website.  Without more, contracts with an Illinois party did not create personal jurisdiction.  The Court also noted that, while the contract purported to be "made" in Illinois, defendants dealt exclusively with plaintiff's New York office and had no direct business contacts with plaintiff in Illinois.

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