Pumponator Inc. v. Watersports, LLC, No. 11 C 3956, Slip Op. (N.D. Ill. April 5, 2012) (Aspen, Sen. J.).

Judge Aspen denied the Ketz defendant’s (“Ketz”) Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction in this Lanham Act case involving water-balloon filling devices.  The Court did not address whether

Judge Holderman denied defendants’ motion to stay plaintiffs’ (collectively “USWAY”) trademark and copyright case involving its USWAY mark based upon the Colorado-River abstention doctrine. The Court did not have to address the ten-factor test because, as a threshold matter, the parties state and federal cases were not parallel, as required by the doctrine. The federal action — based upon USWAY’s alleged intellectual property — was unrelated to defendants’ state court suit focusing on allegations of unpaid loans, unissued shares and deceptive business practices. And as a result, the evidence required for the two cases was completely different. The state court case would turn on loan documents, billing records, proof of product defects and the written communications between the parties. The federal case turned upon evidence about the actions of each of the nine defendants related to their respective use of the marks. Finally, the cases were unrelated even though the state case could have a negative impact upon the federal case. A finding in defendants’ favor in their state court case could result in defendants being held to own USWAY’s intellectual property. But hypothetical outcomes could not be the basis of abstention.

Continue Reading Hypothetical Outcomes Cannot be the Basis for Abstention

Judge Aspen denied defendant Teachbook’s motion to dismiss plaintiff Facebook’s Lanham Act complaint. As an initial matter, the Court refused to consider the 300 pages of additional materials outside of Facebook’s complaint that Teachbook sought to introduce. The Court declined to take judicial notice of public records, and would have had to convert the motion to a summary judgment motion to consider the remaining materials.
The Court denied Teachbook’s claims that the -Book suffix in the FACEBOOK mark was generic as a matter of law. As an initial matter, although it was within the Court’s discretion, the Court did not believe it was appropriate to isolate and review the -BOOK suffix separate from the FACEBOOK mark. Additionally, Facebook was using its mark to offer social networks, not books, ebooks or otherwise. Facebook sufficiently plead the visual and aural similarities between the two marks. Facebook’s decision not to plead actual confusion was not fatal to its claim. Actual confusion is not a required element of trademark infringement.
Facebook also sufficiently pled intent. Facebook alleged that Teachbook adopted its mark to call to mind Facebook. The Court also noted that teachers might think that Teachbook was Facebook’s response to some school’s banning teachers Facebook use.

Continue Reading Facebook Sufficiently Pleads Lanham Act Claims Against Teachbook

The U.S. Senate has confirmed Edmond E. Chang as a district judge for the Northern District of Illinois. Chang had served as an Assistant U.S. Attorney in the Northern District of Illinois since 1999. He was the Chief of Appeals for the Criminal Division for the last five years. He previously worked at Sidley Austin in Chicago, and served as a law clerk to Judge Marvin Aspen in the Northern District and Judge James Ryan on the U.S. Court of Appeals for the 6th Circuit. Judge Chang’s confirmation leaves the Northern District with three vacancies on the bench.
Welcome to the Northern District bench Judge Chang.

Continue Reading Senate Confirms Edmond Chang as District Judge for the N.D. Illinois

MPC Containment Sys., Ltd. v. Moreland, No. 05 C 6973, 2008 WL 2875007 (N.D. Ill. Jul. 23, 2008) (Aspen, Sen. J.).*
Judge Aspen granted in part and denied in part defendants’ summary judgment motion regarding plaintiffs’ copyright, Lanham Act, trade secret and related state law claims.** Plaintiffs and defendants both design, manufacture and sell flexible fuel storage tanks. Corporate defendant MIL was formed by at least individual defendants John and Lawrence, both of whom previously worked for plaintiffs in various capacities and later worked for MIL in direct competition with plaintiffs over, at least, a United States Air Force contract.
Trade Secret Misappropriation
The Court held that plaintiffs’ pricing and warranty provisions were not trade secrets and, therefore, granted summary judgment in defendants’ favor. But the Court held that there was a question of fact as to whether plaintiffs’ tank designs were trade secrets. Additionally, the Court noted that the question of whether sufficient efforts were used to maintain secrecy of the alleged trade secrets was a question of fact for jurors in all, but the most extreme cases. Because plaintiffs identified several precautions taken to protect their trade secrets, the Court denied summary judgment. The fact that tank designs were provided to plaintiffs’ independent contractors without confidentiality did not warrant summary judgment for defendants. There are circumstances where independent contractors have independent, professional duties of confidentiality regardless of whether agreements were signed.
Copyright Infringement
Defendants argued that plaintiffs’ copyrighted fuel tank drawings were not original, as required for copyright ownership, because defendant John authored the drawings, not plaintiffs. The Court held that there was a question of fact as to the ownership because the parties disputed John’s employment status when he made the drawings. If John was an employee, plaintiffs owned the copyrights based upon the work for hire doctrine.
The Court also found a question of fact as to the degree of creativity employed in making plaintiffs’ drawings. A comparison of plaintiffs’ drawings and defendants’ drawings, which defendants alleged plaintiffs copied, left a question of fact as to whether plaintiffs’ drawings showed sufficient differences to rise to the level of creativity.
Compute Fraud and Abuse Act (“CFAA”)
The Court granted defendants summary judgment as to CFAA § 1030(a)(4) because plaintiffs did not respond to defendants’ claims and, therefore, waived their defenses. But the Court found questions of fact as to the two other charged sections of the CFAA, §§ 1030 (a)(2)(c) and (a)(5). First, there was a question of fact as to whether defendant John was authorized to access the documents he allegedly misappropriated. While John may have received the documents at issue during the normal course of his employment with plaintiffs, there was a dispute as to whether John exceeded his authorization by allegedly breaching his duty of loyalty to plaintiffs.
Additionally, there was a question of fact as to whether John passively received all accused documents by email or “accessed” the documents pursuant to the CFAA actively by email or otherwise.
Illinois Deceptive Trade Practices Act (“IDTPA”)
The IDTPA only provides for injunctive relief, not monetary damages. As a result, the IDTPA only addresses ongoing harms. The Court, therefore, granted defendants’ summary judgment as to defendants’ past acts. The Court also explained that it would not grant an IDTPA injunction to eliminate an existing commercial advantage, as courts sometimes do in trade secrets cases.
* Click here for more on this case in the Blog’s archives.
** This post does not cover some of the non-IP specific state law claims.

Continue Reading Pricing and Warranty Agreement Provisions Were Not Trade Secret

Lorillard v. Montrose Wholesale Candies & Sundries, Inc., No. 03 C 5311 & 4844, 2008 WL 1775512 (N.D. Ill. Apr. 17, 2008) (Aspen, J.).
Judge Aspen adopted Magistrate Judge Cole’s Report and Recommendation, denying defendants’ Fed. R. Civ. P. 59(e) motion to alter the Court’s judgment against defendants – click here to read more about that Report and click here to read more about this case in the Blog’s archives. The Court awarded plaintiff Lorillard $2.5M in statutory damages for defendants’ sales of counterfeit cigarettes using Lorillard’s trademarks. Defendants objected to, among other things, a statutory damages award in excess of $1M. Defendants argued that 15 U.S.C. § 1117(c)(2) only allowed $1M in statutory damages per type of goods sold. Because this case only involved one type of goods, cigarettes, defendants argued statutory damages could not exceed $1M. But the Court held that the limitation was $1M per counterfeit mark per type of good. Because Lorillard alleged five counterfeit marks were used, the statutory damages limit was $5M.

Continue Reading Counterfeiting Statutory Damages are up to $1M/Trademark