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”) Fed. R. Civ. P. 60(b) motion for reconsideration of the Court’s previous opinion denying Lahoti’s motion to dismiss for lack of personal jurisdiction, improper venue and forum non conveniens (you can read more about the previous decision in the Blog’s archives). Lahoti, a California resident, operated a website from California using the domain name www.veritalk.com. Lahoti’s site was 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 combined with plaintiff Varitalk’s evidence that some consumers were confused and erroneously visited Lahoti’s website created personal jurisdiction. Lahoti argued for reconsideration because he contends that his website did not link to businesses located in or doing business in Illinois, and that a third party puts the content on his website. The Court denied both of these arguments, explaining that Varitalk had put presented evidence that Lahoti’s website included links to business with substantial Illinois operations and that whether Lahoti or an agent of his placed the content on his website did not change the Court’s analysis. But the Court’s procedural analysis may be the most useful part of this case for litigators. The Court notes that Lahoti styled his motion as a Fed. R. Civ. P. 60(b) motion for reconsideration, but that it is actually a Fed. R. Civ. P. 54(b) motion. Rule 60(b) is for reconsideration of final judgments, where as Rule 54(b) is for interlocutory decisions. A denial of a motion to dismiss is necessarily interlocutory.

Continue Reading Interlocutory Motions for Reconsideration are Brought Pursuant to FRCP 54(b)

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).

Continue Reading Portal Website Creates Specific Jurisdiction

Goss Int’l Am., Inc. v. K & M Newspaper Serves., Inc., __ F. Supp.2d __, 2006 L 3883318 (N.D. Ill. Dec. 29, 2006) (Colon, J.).

In this claim construction opinion, Judge Colon considered several issues regarding whether "means" terms were actually means plus function terms.  The patented technology at issue is "inserts" which are machines that insert advertising materials into newspapers at specific locations within the newspaper.  The Court first held that "article feeder means" was no means plus function language governed by Section 112, para. 6.  Citing the Federal Circuit’s MIT v. Abacus Software, 462 F.3d 1344 (Fed. Cir. 2006) decision, the Court concluded that "article feeder," like "circuitry" in the MIT case, described a known structure in the industry.  Additionally, the patent’s prosecution history showed that both the examiner and the patienter understood "article feeder" to refer to a specific structure.  And dictionaries definitions of "feeder" were consistent with its use in the patent-at-issue.  Furthermore, the claims that included the term described the location of the article feeder and certain of its components, giving it structural definition.  Finally, defendant’s means plus function definition failed because it sought to import structures that were not necessary to the "article feeder’s" function and because certain of the structures were recited in independent claims, violating the doctrine of claim differentiation.


Continue Reading “Means” Terms Are Not Always Means Plus Function

DeVore Family Partnership LLP v. McDougal Littell, No. 06 C 3484, 2006 WL 3393844 (N.D. Ill. Nov. 22, 2006) (Conlon, J.).

Having already refused to dismiss this case (here), Judge Conlon held that defendants had not waived the arbitration clause in the parties’ Agreement and stayed the case pending the results of the arbitration.  Plaintiff argued that defendants waived the arbitration clause by their delay in seeking arbitration.  Defendants countered that they had not delayed because when their counsel sought copies of the agreement on several occasions, defendants’ employee sent copies of the front pages of the agreement, but omitted the back pages which included a set of preprinted terms and conditions including the arbitration clause at issue.  Defendants’ counsel received the full agreement several months after the case was filed and sought arbitration and a stay of this proceeding within two weeks of reading the full agreement.


Continue Reading Arbitration Clause Not Waived by Counsel’s Delay In Seeking Arbitration Because Counsel Did Not Have Actual Knowledge of the Provision

DeVore Family Partnership LLP v. McDougal Littell, No. 06 C 3484, 2006 WL 2861116 (N.D. Ill. Sept. 26, 2006) (Conlon, J.).

Judge Conlon refused to dismiss or strike plaintiff’s claim for defendants’ profits from sales of a textbook which allegedly included plaintiff’s copyrighted photograph.  Plaintiff alleged that it licensed defendants to include plaintiff’s photograph of the Himalaya Mountains in a run of no more than 40,000 textbooks, but that defendants made almost 1.5 million copies of the book.  Plaintiff sought, among other things, defendants’ profits from the allegedly infringing textbooks.


Continue Reading Liberal Pleading Standards Preserve a Claim for Copyright Infringement Profits