GL Trade Ams., Inc. v. Trading Techs Int’l., Inc., No. 11 C 1558, Slip Op. (N.D. Ill. Jan. 23, 2012) (Holderman, C.J.).
Judge Holderman granted defendant Trading Technologies’ (“TT”) Fed. R. Civ. P. 12(b)(6) and 9(b) motion to dismiss plaintiff GL Trade Americas’ (“GL”) false advertising, unfair competition and deceptive trade practices claims based upon allegedly misrepresenting the scope of TT’s patents. GL alleged that TT falsely and misleadingly caused others to believe that its patents covered electronic trading software with automatic recentering functionality, even after Judge Moran held that TT’s patents did not cover automatic recentering.
Preemption by the Patent Act
TT argued that GL’s claims were preempted by the marking provisions of the Patent Act. But the Court held that the Lanham Act claims were not preempted because they required an additional showing of bad faith.
Allegations of Bad Faith
GL contended that it sufficiently pled bad faith, without using the words bad faith, by alleging that TT knew the scope of its patents, but despite that marked its products incorporating automatic recentering with its patents. Noting that patent marking allowed for “[s]ome inexactness”, the Court held that it was legally plausible for TT to believe that its accused produts were coverd by the patents. And the Court found no support for the proposition that a patent holder must notify users of which components in a program were covered by patents and which were not. As such, it was enough that a single mode of the software package did not have the patented feature, and TT was not required to identify to the user which aspects might read on the patents and which might not. Because GL had not pled bad faith, both its Lanham Act and deceptive trade practices act claims were dismissed.
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