American Fam. Mut. Ins., Co. v. Roth, No. 05 C 3839, 2007 W LL377335 (N.D. Ill. Aug. 16, 2007) (Cole, Mag. J.).

Judge Cole recommended that plaintiff’s motion be granted in part requiring defendants to comply with the Court’s preliminary injunction and holding defendants in contempt for failing to comply with the Counts TRO and PI. The Court first explained that no injunction could be a general prohibition against using trade secrets. Rather, an injunction – whether temporary, preliminary or permanent – must include specific recitals limiting defendants’ actions or requiring that actions be performed. The Court then analyzed whether defendants’ actions or inactions violated specific provisions of the TRO and the PI issued by the Court. The Court reported that defendants had retained possession of plaintiff’s customer list and defendants failed to provide a list of their customer contacts with sufficient detail. The Court, therefore, recommended that defendants be held in contempt for failing to comply with the TRO and the PI.

Am Fam. Mutual Ins., Co. v. Roth, No. 05 C 3839, 2007 WL 2410074 (N.D. Ill. Aug. 16, 2007) (Cole, Mag. J.).

Judge Cole granted in part plaintiff’s motion to strike evidence and bar its use. The documents at issue were commission statements including plaintiff’s customer information. The Court previously ordered defendants to return to plaintiff all documents in its possession including plaintiff’s customer information in this trade secret matter. After that order, defendants filed the commission statements, including customer information, with the clerk as an exhibit to another document. The Court held that filing of the commission statements was public disclosure which violated the Court’s order that defendants not retain or disclose such information. But the Court held that plaintiff’s preferred sanction for retaining and filing the documents, barring their use as evidence at trial, was not proportional with defendants’ wrong in keeping the document and filing them publicly with the Court. 

Sunstar, Inc. v. Alberto-Culver Co., No. 01 CV 736 & 5825, 2007 WL 2410069 (N.D. Ill. Aug. 22, 2007) (Guzman, J.).

Judge Guzman denied defendants’ Fed. R. Civ. P. 59 motion for a new trial and Fed. R. Civ. P. 50(b) motion for judgment as a matter of law and granted plaintiff’s motion for a permanent injunction, among other things assigning all trademarks at issue to plaintiff and enjoining defendants from using plaintiff’s trademarks. The Court held that the jury’s verdict of a breach of contract without a damages award was not inconsistent and, therefore, did not warrant a new trial. The jury was free to find that the contract was breached and to award nominal damages. But because plaintiff did not argue for nominal damages an award of no damages was warranted. Defendants also argued that the jury’s verdict was not supported by the evidence because plaintiff’s survey was not sufficient proof actual confusion. But the Court held that plaintiff’s breach-by-infringement claim only required proof of likely confusion. The jury could have considered the survey sufficient to prove likely confusion. Furthermore, plaintiff introduced fact evidence in addition to the survey which supported the jury’s findings, including the similarity of the marks at issue and the sale of similar products using the marks in the same areas as plaintiff’s trademarked products.

Continue Reading Breach of Contract Verdict Without Damages Award Not Inconsistent

Minemyer v. R-Boc Reps., Inc., No. 07 C 1763, 2007 WL 2461666 (N.D. Ill. Aug. 24, 2007) (Coar, J.).

Judge Coar denied individual defendant Timothy Grimsley’s (“Grimsley”) motion to dismiss for lack of personal jurisdiction. Grimsley argued that all of his involvement in allegedly infringing plaintiff’s patented couplers was undertaken within the scope of his employment for defendant Dura-Line and, therefore, was protected by the fiduciary shield doctrine. But the Court disagreed. The parties provided conflicting evidence regarding whether Grimsley was an officer of Dura-Line and Grimsley’s level of control over Dura-Line’s coupler business. Additionally, the parties provided conflicting evidence regarding whether Grimsley was aware that Dura-Line’s couplers infringed plaintiff’s patents, but continued to market and sell them despite that knowledge, acts which would go beyond the scope of his employment because of his knowledge of their illegality. The Court, therefore, held that based on the current evidence the fiduciary shield doctrine was not available to Grimsley. But the Court acknowledged that further evidence may reverse that analysis and allowed Grimsley to refile his motion should discovery present that additional evidence.

Glenayre Elecs., Inc. v. Jackson, No. 02 C 0256, 2007 WL 2492105 (N.D. Ill. Aug. 30, 2007) (Leinenweber, J.).

Judge Leinenweber denied a motion for an injunction against declaratory judgment defendant Jackson (“Jackson”) making arguments in a related malpractice case against Jackson’s prior counsel Niro Scavone (“Niro”). In the original case, the jury returned a verdict for Jackson finding direct infringement and awarding him $12.1M. Jackson accepted a remittitur of $2.65M which the Court ruled prevented Jackson from pursuing further indirect infringement claims against declaratory judgment plaintiff Glenayre Electronics (“Glenayre”). Jackson appealed the issue to the Federal Circuit which upheld the Court’s decision. Jackson then sued his Niro in Illinois state court for, among other things, malpractice. Niro brought the instant motion in this case seeking to prevent Jackson from taking any position that contradicts the principle that the $2.65M remittitur represented all possible damages in the case. Because Niro had already moved the state court to prevent the arguments at issue, the Court had to determine whether the relitigation exception applied to allow the Court to reconsider the decision rendered by the state court. The Court held that the exception did not apply for two reasons. First, Counsel showed no “equitable entitlement” to the relitigation exception. Counsel may still appeal the state court decision through the state appellate system. And the costs of litigation are not a sufficient equitable consideration. Second, the characterization of the Court’s ruling was incorrect. The Court held only that once he accepted the remittitur, Jackson was not entitled to any further damages for the infringement. The Court did not hold that Jackson had never been entitled to more than the $2.65M remittitur.

On Friday, I promised an explanation of what was included in the Patent Reform Act passed by the House.  As I was preparing to write it, I found that Patent Docs had done it already.  Patent Docs’ strong feelings about the Act shine through their analysis, but whether you agree with their position or not, their explanation of the Act’s various components is very thorough.  Thanks for doing my work for me Mr. Noonan.

Canadian Thermal Windows, Inc. v. Magic Window Co., No. 07 C 1784, 2007 WL 2481295 (N.D. Ill. Aug. 27, 2007) (Moran, Sen. J.).

Judge Moran granted defendant’s Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. Defendant’s business is focused on southeastern Michigan. Defendant’s only connections to Illinois were a passive website, which cannot create jurisdiction, and purchases of certain supplies which were wholly unrelated to defendant’s alleged infringing activities. The Court, therefore, held that it lacked personal jurisdiction. In addition, the Court awarded defendant its attorneys fees and costs for moving to transfer or dismiss the case because plaintiff knew that defendant’s business was localized in southeastern Michigan without any ties to Illinois based on the parties’ ongoing business relationship.

The House of Representatives passed the Patent Reform Act 225-175 this afternoon.  I have not been able to find the final version of the bill yet or any information on the final version of the venue and damages provisions, but it appears that the bill includes revisions to current law in both areas.  I will post more once the final version is available.  The Senate is scheduled to consider the Act next month and it is unlikely the Senate will pass an identical version.  So, the Act still has a few hurdles before it makes its way to the White House.

I, along with many others, blogged last week that the Patent Reform Act had stalled in Congress.  But Congress has changed its mind and today the House is debating its version of the bill (available here).  And experts expect some version of the bill to be passed by the House at the end of today’s debate.  You can find an excellent summary of key amendments to the House bill at Tech Daily Dose.  If you want a list of each amendment to the bill, by Congressperson, go to the House website.  And it should come as no surprise that with the Patent Reform Act moving forward again both the MSM and blogs are full of commentary.  Here is some of the best:

  • Chicago Tribune surveys the opinions of some Chicago-area companies.
  • 271 Patent Blog weighs in with the President’s view and a survey of news stories on the Act.
  • FileWrapper says that the House will likely pass some form of the Patent Reform Act today, but that the Senate is not expected to consider it until October.
  • IP Central is watching the House debate on CSPAN and says that most of it centers on procedural issues, not substance.