The Intellectual Property Law Association of Chicago is hosting what is promised to be a lively and informative presentation on advertising law basics presented by Nerissa Coyle McGinn of Loeb & Loeb, LLP. The presentation will be held on October 17, 2018 from noon to 1:15pm CT at the offices of K&L Gates, 70 W. Madison, Suite 3300. Registration is $20 for IPLAC members, $25 for non-members, $15 for students, and includes lunch.
Two Open N.D. Illinois Magistrate Positions
The Northern District is accepting applications for two full-time United States Magistrate Judge positions. One Magistrate Judge position is stationed in the Eastern Division, at the Everett McKinley Dirksen United States Courthouse at Chicago, Illinois. The second Magistrate Judge position is stationed in the Western Division, at the Stanley J. Roszkowski United States Courthouse at Rockford, Illinois. The deadline for submissions is 4:30 pm CT on Friday, October 12. Appointments are expected in April or May 2019.
IPLAC: 2018 Supreme Court IP Review
The Intellectual Property Law Association of Chicago (IPLAC) is hosting a 2018 Supreme Court IP Review on Friday, September 21, from 8:30am-6:15 pm at the Chicago-Kent College of Law at Illinois Tech — 565 W. Adams St.
They are offering 6.5 hours of CLE credit for topics including:
- Reviews of last terms cases, including WesternGeco, Oil States and SAS Institute.
- Analytics regarding last year’s Supreme Court IP cases.
- A preview of cases to watch in the upcoming term.
- Various PTAB updates.
- N.D. California’s Judge Alsup discussing how courts manage large patent dockets.
Laches Defense is a Fact-Based Defense Not Generally Amenable to Early Dismissal
Billy Goat IP LLC v. Billy Goat Chip Co., LLC, No. 17 C 9154, Slip Op. (N.D. Ill. Aug. 7, 2018) (Dow, J.).
Judge Dow denied defendant Billy Goat Chip’s (“BG Chip”) Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Billy Goat IP’s (“Billy Goat”) Lanham Act trademark infringement, unfair competition and related state law claims in this case involving the iconic Billy Goat marks in relation to food and beverage sales.
As an initial matter, because BG Chip filed an answer immediately before filing its motion to dismiss, presumably pursuant to the requirements of the Mandatory Initial Discovery Program, the Court treated BG Chip’s motion as a Fed. R. Civ. P. 12(c) motion for judgment on the pleadings. Additionally, the first pages of the opinion provide a succinct history of the Billy Goat Tavern and the Curse of the Billy Goat.
Laches
Because the Lanham Act does not have an explicit statute of limitations, in Illinois the Court’s look to the three year statute of limitations for the ICFA. Courts generally disfavor granting summary judgment on laches, let alone on a Rule 12 motion. And in this case, there were too many unknown and disputed facts to allow for judgment on the pleadings. While it appeared at this stage that Billy Goat had constructive notice of BG Chip’s marks in 2010 and actual notice in 2014, the Court could not determine from the pleadings whether Billy Goat’s alleged delay was inexcusable. Similarly, the Court could not determine from the pleadings whether BG Chip would be prejudiced by the alleged delay in filing suit.
Additionally, Billy Goat’s allegation that BG Chip had bad faith intent to cause consumer confusion and trade on Billy Goat’s good will might prevent BG Chip’s laches defense because unclean hands may bar laches.
State Law Claims
Billy Goat’s state law claims also have three year statutes of limitation. Based upon the pleadings, the complaint was filed more than three years after Billy Goat had actual notice in 2014. But BG Chip’s alleged wrongs are continuing acts. Statutes of limitation do not begin to run on continuing wrongs until the wrong is over. The ongoing nature of the alleged acts, therefore, prevent dismissal based upon laches.
Complaint’s “Flawed,” “Circular” Reasoning Dooms Patent Claims
Grecia v. True Value Co., No. 18 C 1886, Slip Op. (N.D. Ill. Aug. 9, 2018) (Kocoras, J.).
Judge Kocoras granted defendant True Value’s Fed. R. Civ. P. 12(b)(6) motion to dismiss and dismissed plaintiff Grecia’s patent complaint in this patent dispute involving point of sale terminals. While the Court was “skeptical” that Grecia’ could “resurrect” his claims by re-pleading, the Court gave Grecia the opportunity to re-plead before dismissing his claims with prejudice.
The Court held that Grecia’s complaint failed for “circular reasoning” which “obfuscated” the pleadings and briefing “destroying” his claims. Required to point to a single element of True Value’s accused system that satisfied the claims’ “communications console” requirement, Grecia pointed to both a customer’s mobile device or chip card and the bank or credit card company’s EMV Token Service Provider. In addition to claiming that two separate items are the communications console, neither identified item was a part of True Value’s point of service device. In light of that and Grecia’s other arguments, the communications console was responsible for four logical paradoxes:
- Receiving a request from itself;
- Establishing a connection with itself;
- Requesting information from itself; and
- Receiving the requested information from itself.
Grecia’s reasoning was “flawed” and “circular.” Grecia’s complaint “disprove[d] his infringement claim by identifying the communications console as something outside of the True Value device.”
Pre-Patenting Sales Need Not be Marked
Judge Chang denied defendant Artsana USA f/k/a Chicco’s summary judgment motion, except for a specific limitation on willful infringement, in this patent dispute involving infant play gyms.
First, the Court held that a jury could reasonably determine that Artsana’s connectors pivotally connected to the mat. The original design was a fold of fabric with a snap. The snap connected the play gym to the mat and the fabric could be found to pivot at its seam. In the first and second redesigns, while a fabric strap sewn into the mat could not pivot, the fabric loop at the end of the strap could be found to pivot. In the second redesign, the play gym arms were connected at a hub. That hub could be reasonably held to be a pivotal connection. The Court, therefore, denied summary judgment.
The Court held that Artsana could not be found to willfully infringe before the date of a phone call from Kolcraft’s CEO to Artsana’s CEO that allegedly referenced the patent at issue. That call, to the extent that a jury credits it as creating knowledge, was the earliest Artsana could be found to willfully infringe.
A lack of marking did not limit Kolcraft’s damages claims because during the relevant period, Kolcraft was not making a covered product and, therefore, had no marking obligation.
Kolcraft did not need to prove use for every instance of method claim infringement in order to be awarded damages. Kolcraft presented evidence that at least one person performed the claimed method. From their reasonable royalty damages could potentially be based upon other expert analysis and calculations.
Finally, fact issues did not allow the Court to resolve Artsana’s claims that the patents did not properly name all of the inventors. Those issues would have to be resolved by the jury at trial.
The View from Alexandria: New Perspectives at the USPTO
In late May, I attended the sixteenth annual Rocky Mountain IP Institute. I also spoke at the Institute about best practices for communicating between in-house team and outside counsel (more on that later). The Rocky Mountain IP Institute has grown to be one of the largest two IP conferences in the country. More importantly than that, for years it has been one of the best, if not the best, IP conference in the country in terms of quality and varied content. If you practice IP law and need / want to learn about what is going on in any area of IP, the Institute is the place to be at the end of May every year. The opening plenary session was a presentation by Joseph Matal, Associate Solicitor at the U.S. Patent Office and former interim director of the Patent Office. Matal’s remarks were very interesting. Here are some highlights:
- He referenced the Wright Brothers’ fundamental patents describing their inventions of controlling the pitch, yaw and roll of an aircraft. While others had invented components of the airplane before or contemporaneous with the Wright Brothers, no one had figured out how to control them in flight.
- Patent protection was critical to the Wright Brothers and remains so today for inventive, transformative inventions, inventors and companies.
- No system should be defined by its flaws.
- It is critical for the Patent Office and its systems to be “reliable and predictable.”
- It took 67 years to issue patent 1M under the new numbering system. It took about 15 years to go from 4M to 5M in 1991. Going from 8M to 9M took about three years. Patent 10M is expected to issue later this year. The speed of innovation is dramatically increasing, at least as measured by patenting.
- The Patent Office has a stable workforce. More than 100 examiners have been with the Patent Office for more than thirty years.
- Patent pendency has declined to about 15.5 months for a first office action and 24 months for a final action. The Patent Office plans to get faster achieving at least the PTA goals of 14 months for a first action and 36 months for final issuance.
- PTAB proceedings:
- The goal of the PTAB was to dig out from the mess of slow and complex inter partes reexams.
- The idea under the AIA was that there would be unknowns that would come up after the PTAB was created. So, the PTAB was given relatively broad ability to set its rules to address those unknowns as they arose. An example of this is the PTAB’s recent request for public comment regarding normalizing the PTAB’s claim construction standard with the district court’s standard.
- The PTO is looking at revising its expanded panel process.
- The ultimate goals are to focus on reliability and predictability. The PTO wants stakeholders to know what they are getting and what to expect in PTAB processes.
- The SAS case was “somewhat surprising.” The Justice Department thought the PTO would win the case, although, or because, the statute was silent on the issue.
- There is value in it, however, because it makes sure that all issues are resolved at the PTAB making a cleaner distinction between the PTAB and the district court. It also removes burden from the district court.
- The PTAB will have to guard against “kitchen sink” petitions with one or two strong arguments and numerous weak claims, he suspects the PTAB will reject the entire petition to force petitioners to bring strong petitions that focus on the real invalidity issues.
I look forward to returning to the seventeenth edition of the Rocky Mountain IP Institute in May 2019. You should join me.
Chicago Federal Court “Under Seige” Waiting for New Judges
The Northern District of Illinois has a critical number of vacancies. Judge St. Eve just left for the Seventh Circuit. Judge Zagel took senior status in October 2016. Judge Zagel took senior status in March 2017 and passed away shortly thereafter. Judge Der-Yeghiayan retired in February 2018. Senior Judge Shadur (who maintained a very full docket) also retired early this year, shortly before he passed away. Judge Kapala in the Western Division plans to take senior status in 2019. With approximately 15,000 civil cases in the Northern District at any given time, being down four judges, as well as several senior judges, is a significant issue for the Court. It will eventually translate into slower justice.
Senators Durkin and Duckworth sought applications to fill the spots with application packets due February 1. So, hopefully the vetting and nomination process is well underway and we will have several appointments this year.
Sign-in-Wrap Did Not Create Personal Jurisdiction
TopstepTrader, LLC v. OneUp Trader, LLC, No. 17 C 4412, Slip Op. (N.D. Ill. Apr. 18, 2018) (Leinenweber, J.).
Judge Leinenweber granted in part defendant OneUp Trader’s Fed. R. Civ. P. 12(b)(6) motion to dismiss and defendant Alsabah’s Fed. R. Civ. P. 12(b)(2) & (6) motion to dismiss for lack of personal jurisdiction and failure to state a claim in this copyright dispute involving electronic trading systems.
Personal Jurisdiction
Alsabah had to enter an agreement to use TopstepTrader’s software in which he allegedly consented to jurisdiction in Illinois. The Court held that the contract was on a spectrum between a clickwrap and a browsewrap agreement, in a type of agreement referred to as sign-in-wrap. Alsabah did not take an affirmative action to explicitly agree to the site terms, but there was affirmative action in that Asabah had to sign up for an account. During the sign up process, Alsabah would have been informed that by creating an account, he accepted the terms of service, along with a hyperlink to those terms. In fact, Alsabah clicked a “sign up” button next to a hyperlink for the terms. Without doing so, he could not have activated an account and gotten access to TopstepTrader’s website. But the “sign up” button did not clearly state that by clicking on it Alsabah was accepting the terms. So, while it was a close call, the terms and their forum selection clause were not enforceable against Alsabah.
Regarding specific jurisdiction, TopstepTrader’s location in Illinois and harm in Illinois was not sufficient to create personal jurisdiction. But Alsabah specifically sought out TopstepTrader’s website, created an account and then received multiple communications which identified TopstepTrader as an Illinois-based company. While walking into a brick and mortar store in Illinois would have been better evidence of specific jurisdiction, signing up with an Illinois business under the particular circumstances that Alsabah did was sufficient to create specific jurisdiction.
Failure to State a Claim
While OneUp Trader is correct that short, common phrases may not be copyright-protectable, OneUp Trader failed to address Topstep Trader’s argument that it is the combination of elements such as text, graphic size screen layouts, colors, charts, unique terms, etc. that is protectable. And even if the alleged copying identified in the complaint was only a small portion of the total content, that could be sufficient. Topstep Trader did not need to detail each copied element. It was enough to provide examples of the copying at the complaint stage. And a review of the exhibits showed sufficient alleged copying.
The Court dismissed Topstep Trader’s breach of contract claim, but gave Topstep Trader leave to replead with sufficient facts to show that a contract was formed that would support Topstep Trader’s breach claim.
Finally, Alsabah argued that the claims against him should be dismissed because the complaint only specifically mentioned him in limited instances. Topstep Trader, however, defined a term that combined OneUp Trader and Alsabah and referred to it collectively throughout the complaint.
Court Focuses on Grammar to Construe Patent Terms
Kolcraft Enters., Inc. v. Chicco USA, Inc., No. 09 C 3339, Slip Op. (N.D. Ill. Apr. 13, 2018) (Chang, J.).
Judge Chang construed claims in this patent dispute involving infant play gyms for a second time, this time focused upon certain apparatus claims.
Of particular note, the Court construed the following:
- “Connector” was not a means plus function term. It was “clearly” a structural term and would be understood as such by one of ordinary skill in the art. This was supported by the specification, which “frequently” used “connector” to denote structure. While Federal Circuit decisions construing “connector” in relation to other patents were not controlling, they were instructive because of similarities between the patent in suit and the patents in the Federal Circuit cases.
- “Fastener” disclosed sufficient structure. It is a commonly understood noun referring to fastening or attaching structures. And the specification gave examples of fasteners, such as velcro and rivets.
- “Pivotably coupled” was construed as “linked, connected, or fastened such that the leg [or connector] can rotate, turn, or move around a fixed point.” The Court also noted that hinges and ball-and-socket joints, which are bendable joints, could be included within pivotably coupled joints.
- The reference to plural “connectors” was not indefinite for failing to specifically identify which connectors were referred to. The plural connectors could be either the “at least one connector” and/or the “plurality of connectors.” The Court did, however, note that if further evidence suggested that “connectors” was not an umbrella term referring to either or both sets of connectors, the parties could later raise the issue for reconsideration.
