Feit Elec. Co., Inc. v. CFL Techs. LLC, No. 13 C 9339, Slip Op. (N.D. Ill. Dec. 20, 2019) (Coleman, J.).

Judge Coleman granted declaratory judgment plaintiff Feit’s motion for reconsideration of the Court’s grant of summary judgement that declaratory judgment defendant CFL’s ‘464 patent was unenforceable  based upon issue preclusion from a prior inequitable conduct determination.

An interlocutory appeal was appropriate for the following reason:

  • The issue was purely legal, not requiring an extensive review of the record;
  • The issue of whether the change of law provision applied in this case was different based upon which Federal Circuit case law was applied. As such, it was contestable;
  • An interlocutory appeal would expedite the litigation because both parties agreed that settlement was stalled by a lack of clarity on the issues; and
  • The request for interlocutory appeal was timely filed because moved within about a month of the Court’s underlying decision.

Life After Hate, Inc. a/k/a Exit USA v. Free Radicals Proj., Inc., No. 18 C 6967, Slip Op. (N.D. Ill. Sep. 30, 2019) (Kendall, J.).

Judge Kendall granted plaintiff Life After Hate a/k/a Exit USA’s (“LAH”) motion for preliminary injunction preventing defendants (collectively “Free Radicals”) from using LAH’s LIFE AFTER HATE, NO JUDGMENT. JUST HELP., and EXIT USA marks in this Lanham Act trademark infringement and cybersquatting dispute. The injunction also prevented use of LAH’s website, twitter handle, YouTube channels and videos.

As an initial matter, the Court noted that both plaintiff and defendants provide “critical” services helping people disengage from violence-based extremism, but “find themselves in an ugly trademark dispute that can only distract them from the important work they perform.”

Validity of the Marks

LAH’s LIFE AFTER HATE and EXIT USA marks were presumed valid because they were federally registered. Defendants argued that LIFE AFTER HATE was descriptive of helping people move on with their lives after leaving what are commonly referred to as hate groups. The Court held that the lack of evidence of similar organizations using the LIFE AFTER HATE mark was indicative that it was suggestive, not descriptive. The Court did note that the line between descriptiveness and suggestiveness was “difficult to draw.” The Court also employed the “degree-of-imagination” test holding that LIFE AFTER HATE required a leap of imagination to understand what services LAH offered and was, therefore, suggestion, not descriptive.

Applying the same pair of tests, EXIT USA was a closer call, but defendants were still not able to overcome the presumption of validity. A number of groups use the EXIT [country] naming internationally, including Exit Germany, Norway, U.K. and Slovakia. But even still, the use was not so widespread as to be proof of descriptiveness or genericness.

Ownership of the Marks

While the parties disputed ownership, the evidence was clear that the parties intended to create two entities using the LIFE AFTER HATE and EXIT USA marks. The parties did not intend that the marks would be used for the individual defendant’s services apart from the entities. Defendants’ claims that LAH procured its trademarks by fraud were not supported by evidence sufficient to overcome the evidence of LAH’s ownership.

Likelihood of Confusion

Regarding likelihood, the Court held as follows:

  • The parties largely did not dispute the similarity of the marks, nor did they dispute the similarity of the services. That weighs in LAH’s favor;
  • LAH and defendants primarily advertise online. That suggested direct competition, to the extent non-profits seeking to help individuals exit extremist hate groups can be said to compete. That weighed in LAH’s favor;
  • The evidence suggested that consumers exercised a high degree of care in selecting the parties’ services. That weighed in defendants’ favor;
  • The evidence suggested that the public associates the marks with LAH, weighing in LAH’s favor;
  • Weighing in its favor, LAH offered three undisputed examples of actual confusion; and
  • There was strong evidence that defendants intentionally copied LAH’s marks.

As a whole, the factors weigh in favor of an injunction.

Irreparable Harm

Lanham Act violations have a rebuttable presumption of causing irreparable harm. Defendants argued that LAH’s fourteen month delay in filing suit and seeking injunctive relief precluded a finding of irreparable harm. While it was a close call, the Court held that the delay was not sufficient to overcome the presumption because LAH presented evidence that it quickly hired counsel to look into how to handle the trademark issues at the Trademark Office and other lawyers to send cease and desist letters to defendants. Those actions overcame the delay.

Balancing Harms

Because LAH had a strong likelihood of success, it was not critical that the balance of harm be in LAH’s favor. Regardless, defendants did not offer any evidence that they would be harmed by an injunction. Defendants argued that they would lose goodwill and reputation, but defendants did not sufficiently explain how such damage would result from the injunction itself.

Public Interest

The public interests were served by enforcing trademarks and reducing consumer confusion. Furthermore, the injunction would not prevent defendants from performing their important work.

Bond

Because neither party addressed the issue of a bond for the preliminary injunction, the Court ordered defendants to submit a bond request within seven days of the preliminary injunction order.

Checksum Ventures, LLC v. Dell Inc., No. 18 C 6321, Slip Op. (N.D. Ill. Sep. 30, 2019) (Dow, J.).

Judge Dow granted defendant Dell’s Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff Checksum’s patent as invalid as unpatentable pursuant to 35 U.S.C. Section 101, with leave to amend in this patent dispute regarding a checksum data identifier – used to identify whether data is identical.

Of particular note, the Court held as follows:

  • The ‘906 patent claimed abstract ideas because it did “nothing more than ‘recite generalized steps to be performed on a computer using conventional computer activity.” Citing Enfish, 822 F.3d at 1338.
  • It was not enough to require that the writer enter the data such that it can be disaggregated and read apart from the metadata.
  • The claims taught only the result of having different readers analyze the same data in different ways. The claims did not require that readers read data differently, or that they use new methods for writing data;
  • The claims were written in functional terms, only claiming the results, not how the data was read or processed.
  • The Federal Circuit had previously ruled that writing and reading different types of data in different ways are abstract ideas, absent something more.
  • Also, the ‘906 patent’s claims would potentially preempt entire fields because of their breadth.
  • Dismissal was appropriate even in light of Berkheimer and Aatrix because the ‘906 patent itself raised no factual issue as to inventiveness of the checksum computation and writing technology.
  • Court construction was not required to decide patentability because even accepting Checksum’s construction, the Court held the ‘906 patent’s claims were invalid.

Seven Oaks Millwork Inc. d/b/a Royal Corinthian v. Royal Foam US, LLC, No. 19 C 6234, Slip Op. (N.D. Ill. Dec. 13, 2019) (Kocoras, J.).

Judge Kocoras granted defendants’ Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction and denied as moot defendants’ Fed. R. Civ. P. 12(b)(6) motion to dismiss for failure to state a claim in this copyright dispute over a copyrighted product catalog.

Plaintiff Royal Corinthian’s operation of an interactive website with sales capabilities did not alone create personal jurisdiction in Illinois. Furthermore, defendants’ use of targeted advertising was not sufficient to create specific jurisdiction because it was done after Royal Corinthian filed suit, not before. Finally, a single sale into Illinois did not create specific jurisdiction. And even limited jurisdictional discovery to identify additional sales was not warranted because Royal Corinthian had not met its burden to show a colorable claim of jurisdiction before discovery should be allowed. Finally, Royal Corinthian’s alleged injury did not arise from defendants’ alleged contacts with Illinois.

Having held that the Court lacked jurisdiction, there was no reason to consider whether Royal Corinthian had sufficiently stated its claims.

The Chicago chapter of the Federal Bar Association is hosting a CLE program designed to introduce the Northern District of Illinois’ newest magistrate judges on Tuesday, February 25, 2020 from 12pm until 1:30pm. Lunch will be provided, along with 1.25 hours of credit, pending approval. The event is being hosted at the Chicago Bar Association, 321 S Plymouth Court, in Chicago. The magistrates (identified below) will speak and answer questions about settlement conference advocacy, arguing discovery issues and other essential tips. Register here for the event.

 

Hon. Jeffrey I. Cummings
U.S. Magistrate Judge
Northern District of Illinois
  Hon. Sunil R. Harjani
U.S. Magistrate Judge
Northern District of Illinois
     
 
Hon. Gabriel A. Fuentes
U.S. Magistrate Judge
Northern District of Illinois
  Hon. Lisa A. Jensen
U.S. Magistrate Judge
Northern District of Illinois

 

TWD, LLC v. Grunt Style LLC, No. 18 C 7695, Slip Op. (N.D. Ill. Oct. 23, 2019) (Kocoras, J.).

Judge Kocoras granted in part defendant-counterclaimant Grunt Style’s Fed. R. Civ. P. 12(c) motion for judgment on the pleadings and granted Grunt Style’s Fed. R. Civ. P. 12(f) motion to strike plaintiff-counterdefendant TWD’s affirmative defenses in this Lanham Act case involving the THIS WE’LL DEFEND mark.

TWD brought a Lanham Act trademark infringement claim pursuant to the Lanham Act § 1114 and sought injunctive relief pursuant to § 1116. Grunt Style argued that the Court should dismiss the § 1116 claim because injunctive relief requires counterfeiting and TWD had made no counterfeiting allegations. The Court, however, held that § 1116 did not state a separate cause of action. Instead, it was a potential remedy for a § 1114 infringement claim. Because the claim merely sought a potential remedy and was not a separate claim, it could not be dismissed.

The Court dismissed TWD’s Lanham Act § 1125 unfair competition claim because it was based solely upon Grunt Style’s use of a ® with its unregistered mark. It was “devoid” of any claim of consumer confusion or that Grunt Style’s action harmed TWD’s reputation or sales. TWD, therefore, lacked standing because it did not plead injury and did not sufficiently plead its claim because it did not allege actual or likely confusion.

The Court struck TWD’s affirmative defenses because they were either a single sentence stating the legal standard for the defense without any tie to factual support, or because they were merely a statement of the defense, without factual or legal basis. While the Seventh Circuit had not ruled on whether Twombly / Iqbal plausible pleading applied to affirmative defenses, the Court reasoned that it did. The Court, therefore, struck each affirmative defense.

Crystal Visions, Inc. v. EC Grow, Inc., No. 17 C 7490, Slip Op. (N.D. Ill. Sep. 3, 2019) (Shah, J.).

Judge Shah denied declaratory judgement defendant EC Grow’s Fed. R. Civ. P. 56 motion for summary judgement as to likelihood of confusion and denied declaratory judgment plaintiffs / counter-defendants Crystal Visions and Salt Xchange (collectively “defendants”) counter motion in this Lanham Act case involving EC Grow’s LIGHTNING FAST mark for its ice-melt product and defendants’ LIGHTNING PREMIUM ICE MELTER mark for their ice-melt product.

As an initial matter, the Court pointed to the import of Local Rule 56.1 statements of undisputed material facts (“SOMF”) and noted that it is overlooked “too often.” SOMFs are not the place to argue facts. The responding party’s sole option is to admit the fact or deny it with factual support. Facts that are not properly denied with factual support are deemed admitted. Each party admitted certain facts, but added contexts and cites to support for the context or to supplemental facts. But that context and argument should be provided by asserting supplemental facts and / or argument in the party’s brief.

The Court also refused to treat Crystal Visions and Salt Xchange because they sell the same product. They are separate entities, with separate sales and strategies, which must be considered separately.

Of particular note, the Court held as follows:

  • While the use of the marks were similar in certain ways – they both used gray and blue, and feature a lightning image – the shades of the colors were different, the fonts were “very different,” and the lightning images were different.
  • EC Grow’s LIGHTNING FAST mark was descriptive because it explains that its ice-melter works quickly.
  • The similarity of the products and their markets favored EC Grow’s claim. The ice-melt pellets were different colors, but it was unclear that the pellet color impacted consumers. Otherwise, there was significant overlap in the target consumers.
  • At least some of the target consumers were not sophisticated and were unlikely to be able to differentiate between the two products.
  • There was evidence of at least one instance of actual confusion. One is not much, but it can be sufficient.
  • Weighing the evidence, the Court held that summary judgment must be granted in Crystal Visions’ favor.
  • The Court also granted Salt Xchange summary judgment. Its case was stronger because there was no evidence of its label and EC Grow’s mark was not strong.

Luxottica Group S.p.A. v. The Partnerships & Unincorporated Assocs. Identified on Schedule “A,” No. 18 C 2188, Slip Op. (N.D. Ill. Jun. 4, 2019) (Gottschall, J.).

Judge Gottschall denied plaintiff Luxottica’s motion for reconsideration that defendants were not properly served as to all but one defendant in this counterfeiting case involving Oakley sunglasses.

Of particular note, the Court held as follows:

  • Luxottica’s raised three factual issues: 1) that Alibaba, who hosted defendants stores, would not likely have given defendants’ addresses, 2) Luxottica received defendants’ addresses after filing the complaint, and 3) the names on the return addresses did not match the names of the defendants.
    • Each of Luxottica’s factual arguments could have been raised in its sur-reply and, therefore, were not appropriate for reconsideration.
    • Luxottica’s receipt of defendants’ packages was after the complaint was filed, but before the ninety day deadline for service. So, Luxottica could have waited for the packages to attempt service. And Luxottica did not show why its default damages were unable to make it whole.
    • Luxottica offered no authority for being unable to use the return addresses because the name on the address was not identical to defendants’ names.
    • Luxottica also overstated its costs in investigating the address. While there were 906 defendants, only six challenged service. So, it only had to investigate six. While $1,500 in costs for each of 906 defendants may be probative, $1,500 for the four addresses of the six entities that challenged service would only be $6,000.
  • Luxottica’s legal theories were each new and had not been raised in briefing the underlying motion. So, those arguments were improper as well.
  • The Court had not relied upon Supreme Court dicta, as Luxottica alleged. Instead, the Court looked at analogous Supreme Court precedent to determine how best to rule.
  • The Court noted that while Luxottica’s notice of supplemental authority was improper because Luxottica did not seek leave to file it – and it therefore could have been disregarded – but the Court considered the cases despite that.

On January 22, 2020, from 5:30-9:00 pm ET, the Intellectual Property Law Association of Chicago’s (IPLAC) Young Members’ Committee and Chicago-Kent’s Intellectual Property Law Society is hosting a CLE program regarding IP issues in the evolving recreational cannabis industry in Illinois. The event featured speakers include:

  • Nicole Cosby of Fyllo;
  • Nicole Grimm of McDonnell Boehnen Hulbert & Berghoff;
  • Emily Tupy of Cresco Labs; and
  • Adam Wolek of Taft Stettinius & Hollister.

The event is being held at the Chicago-Kent College of Law Auditorium and Lobby, 565 W. Adams St. The event costs $25 for members and seniors, $50 for non-members and $15 for students. Click here to register for this event.

UIC John Marshall’s Center for Intellectual Property, Information and Privacy has another excellent program, this one focuses on two key copyright issues – fair use and copyright data protection. Every practitioner can use some time working through the complexities of fair use. This program promises to be excellent. It will be led by McDermott Will’s Jennifer Mikulina and Catalina USA’s Executive Director & Senior Corporate Counsel Ariana Voight.

The program is on January 22, 2020, from 12pm to 1pm CT at John Marshall. The event is free, but registration is required.