12(b)(3)

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Channel Clarity, Inc. v. Optima Tax Relief, LLC, 14 C 8945, Slip Op. (N.D. Ill. Feb. 18, 2015) (Durkin, J.).

Judge Durkin granted declaratory judgment defendant Optima’s Rule 12(b) motion to dismiss arguing that declaratory judgment plaintiff Channel Clarity did not have proper declaratory standing. Channel Clarity filed a declaratory judgment suit regarding Optima’s…

FarmedHere, LLC v. Just Greens, LLC d/b/a AeroFarm Systems, LLC, No. 14 C 370, Slip Op. (N.D. Ill. June 16, 2014) (Holderman, Sen. J.).

Judge Holderman granted defendant AeroFarm’s Fed. R. Civ. P. 12(b)(3) motion to dismiss plaintiff FarmedHere’s Lanham Act and declaratory judgment patent claims related to the parties’ aeroponic, locally grown farming …

The Ticketreserve, Inc. v. Viagogo, Inc., No. 08 C 502, Slip Op. (N.D. Ill. Aug. 11, 2009) (Kendall, J.).
Judge Kendall denied defendants’ Fed. R. Civ. P. 12(b)(3) motion in limine for improper venue and granted defendant Viagogo, Inc.’s (“Viagogo”) Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. Defendants agreed that venue was improper based on an arbitration clause in a nondisclosure agreement the parties requested when they explored a joint venture. Defendants agreed that the patented technology was disclosed pursuant to the nondisclosure agreement.
But because plaintiff’s international patent on the same technology as the U.S. patent, issued before the nondisclosure agreement the patent infringement claim was expressly excluded from the nondisclosure agreement and its arbitration claims.
The Court then dismissed Viagogo for lack of personal jurisdiction. Viagogo had no contract with Illinois to create personal jurisdiction. And while the viagogo.com interactive website likely created specific jurisdiction for its owner, the evidence suggested that Viagogo Ltd., which did not contest personal jurisdiction owned and operated the website, not Viagogo, Inc.
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Continue Reading Nondisclosure Arbitration Clause Does Not Include Patent Infringement Claims

Genender Int’l, Inc. v. Skagen Designs, Ltd., No. 07 C 5993, Slip Op. (N.D. Ill. Apr. 14, 2008) (Grady, J.).
Judge Grady denied defendant Skagen’s Fed. R. Civ. P. 12(b)(3) motion to dismiss plaintiff Genender’s declaratory judgment (“DJ”) case. The Court also granted in part Skagen’s Fed. R. Civ. P. 12(b)(6) motion to dismiss, dismissing Genender’s tortious interference claim. Skagen argued that Genender’s DJ suit should be dismissed in favor of Skagen’s later-filed suit for design patent and trade dress infringement filed in the District of Nevada. Skagen argued that dismissal was required by the Seventh Circuit’s standard as set forth in Tempco Elec. Heater Corp. v. Omega Eng., Inc., 819 F.2d 746 (7th Cir. 1987). The Court, however, held that Federal Circuit law controlled because of the design patent claims. And the Federal Circuit explicitly rejected Tempco in Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931 (Fed. Cir. 1993) (abrogated on other grounds). Instead, the Federal Circuit required that Skagen provide a “sound reason” that proceeding with the DJ would be unjust or inefficient. Skagen provided no such reason and, in fact, Skagen’s counsel agreed at argument that it did not matter whether the case was tried in the Northern District or in the District of Nevada.
The Court dismissed without prejudice Genender’s tortious interference claim. Genender alleged that Skagen interfered with Genender’s business relationship with customer Sears by copying Sears personnel on cease and desist letters. But the claim was deficient because Genender did not allege that it lost any Sears business because of Skagen’s actions.
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Continue Reading Federal Circuit Controls Patent DJ Jurisdiction

U.S. Gypsum Co. v. 3M Innovative Props. Co., No. 07 C 6381, 2008 WL 514976 (N.D. Ill. Feb. 20, 2008) (Darrah, J.).
Judge Darrah granted defendants’ (collectively “3M”) Fed. R. Civ. P. 12(b)(3) motion to dismiss for lack of venue. Plaintiff United States Gypsum (“Gypsum”) filed this action asserting its own patent and seeking declaratory judgments regarding 3M’s patents, all to low dust construction compounds. Shortly thereafter, 3M filed a corresponding suit in the District of Minnesota. Prior to filing their suits, the parties were in extended negotiations regarding cross-licensing of their patents. Pursuant to those negotiations, the parties entered a confidentiality agreement (“Agreement”) requiring that all disputes “arising from the subject matter of this Agreement shall be brought . . . exclusively in [D. Minn.]” Because the express subject matter of the Agreement was the patents in suit and because the Agreement, negotiated by sophisticated parties, set D. Minn. as the exclusive jurisdiction, the Court dismissed the case in favor of 3M’s action filed in the D. Minn.
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Continue Reading Forum Selection Clause Destroys Venue

Varitalk, LLC v. Lahoti, No. 07 C 1771, 2007 WL 1576127 (N.D. Ill. May 30, 2007) (Conlon, J.).
Judge Conlon denied defendant Dave Lahoti’s (“Lahoti”) motion to dismiss plaintiff Varitalk’s complaint for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2), improper venue pursuant to Fed. R. Civ. P. 12(b)(3) and forum non conveniens. Varitalk had a principal place of business in Chicago, where it developed software to relay highly customizable pre-recorded audio messages to consumers that were indistinguishable from live human voice. Varitalk registered a trademark in its name “Varitalk” for use in connection with this business. Lahoti is an individual residing in California where he operates various businesses using websites, such as www.omegaworks.com and www.crosspath.com. Lahoti registered the domain name www.veritalk.com, where he set up an internet portal which allowed visitors to his site to click through links to buy various products or services. The Court held that Lahoti’s website fell in the gray area between active websites (which create specific jurisdiction) and passive websites (which do not create specific jurisdiction). But the portal’s interactive and commercial nature – Lahoti earned income from the site based on how many visitors clicked on links on the site and whether they bought products from the linked sites – combined with Varitalk’s evidence that some consumers were confused and erroneously visited Lahoti’s portal, create specific jurisdiction over Lahoti. On the other hand, Lahoti’s email exchange with Varitalk’s CEO Frederick Lowe, initiated by Lowe, regarding whether Lahoti would sell his portal to Varitalk did not create specific jurisdiction because the exchange was limited and not initiated by Lahoti.
The Court held that venue was proper in Illinois because a substantial part of the events giving rise to the claims occurred in Illinois and because Varitalk alleged that Illinois consumers were confused by Lahoti’s portal.
Finally, the Court dismissed Lahoti’s forum non conveniens argument because the doctrine only applies where the alternative forum is outside the United States or its territories. Where the alternate venue is California, or any other state, the defendant would have to move to transfer venue pursuant to 28 U.S.C. Section 1404(a).
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Continue Reading Portal Website Creates Specific Jurisdiction

Gencor Pacific, Inc. v. Nature’s Thyme, LLC, No. 07 C 167, 2007 WL 1225362 (N.D. Ill. Apr. 24, 2007) (Kocoras, J.).

Judge Kocoras granted defendants’ Fed. R. Civ. P. 12(b)(2)&(3) motion to dismiss for lack of personal jurisdiction and venue and dismissed the case.  Plaintiff brought this Lanham Act false advertising and copyright infringement…

Junction Solutions, LLC v. MBS DEV, Inc., No. 06 C 1632, 2007 WL 114306 (N.D. Ill. Jan. 9, 2007) (Gottschall, J.).

Judge Gottschall denied defendants’ motion to dismiss plaintiff’s, Junction Solutions, trade secret and tortious interference case for lack of venue and denied plaintiff’s motion to remand the case to Cook County Circuit Court, from where defendants removed the case.  Individual defendants, Jeffrey Ernest, Mitch Tucker and Kenneth Paul, were plaintiff’s employees and helped it develop it its Junction Multi-Channel Distribution Software ("JMCD Software").  Shortly after developing the JMCD Software, the individual defendants left Junction Solutions and joined its competitor MBS DEV.  MBS DEV then began marketing software that competed with the JMCD Software.  Junction Solutions sued MBS DEV in the District of Colorado in 2004.  The parties eventually settled that case, a settlement which was also signed by the individual defendants.  In 2006, MBS partnered with Iteration2 and again began planning to market a software product very similar to the JMCD Software.  In response, plaintiff filed the instant suit in Cook County Circuit Court and defendants removed it to the Northern District.Continue Reading Settlement Agreement Extinguishes Related Employment and Confidentiality Agreements