Declaratory Judgment

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The Nielsen Co. (US), LLC v. Truck Ads, LLC, No. 08 C 6446, Slip Op. (N.D. Ill. Jan. 24, 2011) (Pallmeyer, J.).
Judge Pallmeyer granted plaintiff Nielsen’s: 1) Fed. R. Civ. P. 12(b)(1) motion to dismiss defendant Truck Ads’ declaratory judgment claim for lack of copyright infringement; and 2) Fed. R. Civ. P. 56 motion for summary judgment regarding Truck Ads’ copyright misuse counterclaim in this copyright case regarding Nielsen’s designated marketing area (“DMA”) maps.
While the Court held that any copyright claim to raw census data would be “frivolous,” that was not Nielsen’s claim. Nielsen originally brought claims alleging infringement of its DMA regions and data, as well as the DMA maps. The current claims only accused infringement of the DMA maps. There was therefore, no case or controversy regarding the DMA regions or data. The Court also granted Nielsen summary judgment on Truck Ads’ copyright misuse claim. First, the Court held that counts were split on whether copyright misuse was a proper counterclaim, or an affirmative defense. But the Court did not have to decide the issue because Truck Ads could not prove that Nielsen’s claims were wholly lacking in merit. The DMA maps are original content that can warrant copyright protection, even though they may have been created based upon uncopyrighted data. And Nielsen’s allegation that Truck Ads’ alleged copying of the maps was unlawful was not frivolous, unsupported by law or clearly contradicted by record facts. Furthermore, Truck Ads offered no evidence that its alleged harm – a lost contract – was based upon Nielsen’s accusations or its merit.
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Continue Reading Maps, Not Underlying Data, Warrant Copyright Protection

Gordon-Darby Sys., Inc. v. Applus Techs., Inc., No. 10 C 1863, Slip Op. (N.D. Ill. Dec. 23, 2010) (Zagel, J.).
Judge Zagel granted plaintiff’s motion to dismiss its patent infringement claims regarding vehicle emissions testing with prejudice and to dismiss defendants’ noninfringement, invalidity and unenforceability claims without prejudice. After the parties engaged in some discovery, plaintiff determined that it no longer wanted to pursue its claims and gave defendants a covenant not to sue. Based upon that covenant, the parties agreed that all of their claims should be dismissed, except for defendants’ inequitable conduct claims. Defendants argued that those claims were related to its 35 U.S.C. Section § 285 claim to make the case exceptional and award defendants their attorney’s fees. Citing the Federal Circuit’s decision in Monsanto Co. v. Bayer Bioscience N.V., 514 F.3d 1229 (Fed. Cir. 2008), the Court held that, although the Federal Circuit had not squarely decided the issue, the precedent was clear that the covenant divested the Court of subject matter jurisdiction over the inequitable conduct declamatory judgment claim.
The Court, however, retained independent jurisdiction over defendants’ Section § 285 claim to make the case exceptional and award defendants their attorney’s fees. And the Court acknowledged that it could consider unenforceability as part of the exceptional case analysis, which could trigger a holding that the patents in suit were unenforceable due to inequitable conduct.
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Continue Reading Court Dismisses Case and Considers Unenforceability With Exceptional Case Motion

Trading Technologies Int’l, Inc. v. CQG, Inc., No. 10 C 718, Slip Op. (N.D. Ill. Jan. 24, 2011) (Shadur, Sen. J.).*
Judge Shadur sua sponte dismissed defendants’ (collectively “CQG”) noninfringement and invalidity counterclaims. The Court explained that “mirror image” noninfringement and invalidity patent counterclaims are “seemingly meaningless.” And the “amorphous nature” of CQG’s counterclaims resulted in them being especially unnecessary. The Court, therefore, dismissed the declaratory judgment counterclaims.
*Click here for much more on this and TT’s other cases in the Blog’s archives.
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Continue Reading Trading Technologies: “Mirror Image” Patent Counterclaims Struck Sua Sponte as “Meaningless”

Sloan Valve Co. v. Zurn Indus., Inc., No. 10 C 204, Slip Op. (N.D. Ill. May 4, 2010) (St. Eve, J.).
Judge St. Eve granted in part plaintiff/counter-defendant Sloan’s Fed. R. Civ. P. 12 motions in the patent infringement case involving a flush valve handle assembly. The Court dismissed defendant/counter-plaintiff’s (collectively “Zurn”) invalidity and noninfringement counterclaims to the extent they challenged patent claims other than those identified as allegedly infringed in Sloan’s complaint. The Court could have exercised jurisdiction over the counterclaims if Zurn had met the MedImmune standard independently for each of Sloan’s unasserted claims, but Zurn did not.
The Court denied Sloan’s Fed. R. Civ. P. 12(b)(6) motion to dismiss Zurn’s inequitable conduct counterclaim. Zurn met the materiality standard by pleading that Sloan should have known that admissions made in a prior, related reexamination proceeding were relevant to the Examiner in the later application.
The Court dismissed Zurn’s estoppel and misuse affirmative defenses. Each were pled in a single sentence and without particularized facts.
The Court also dismissed Zurn’s lack of actual notice affirmative defense. Zurn also denied Sloan’s actual notice allegation in its answer. Because actual notice was denied in the answer, it was not a proper affirmative defense. Finally, the Court dismissed Zurn’s noninfringement and exceptional case affirmative defenses. Neither was a proper affirmative defense.
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Continue Reading Declaratory Judgment Claim Dismissed as to Unasserted Patent Claims

Chicago Bd. Options Exchange Inc. v. Realtime Data, LLC d/b/a IXO, No. 09 C 4486, Slip. Op. (N.D. Ill. Jan. 8, 2009) (Lindberg, Sen. J.).
Judge Lindberg granted declaratory judgment for defendant Realtime’s Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. The parties agreed that the Court lacked general jurisdiction and focused their arguments on specific jurisdiction. Because plaintiff Chicago Board Options Exchange (“CBOE”) brought declaratory judgment claims, the analysis focused upon whether Realtime’s patent enforcement activities were directed at the jurisdiction. CBOE argued that specific jurisdiction was created by Realtime’s Texas patent infringement suit against, among others, Chicago-based defendants, including eventually CBOE. But the Court held that Realtime’s Texas action alone did not create specific jurisdiction, and the Court did not consider the Texas suit against CBOE because CBOE was not added to the Texas action until after the instant suit was filed.
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Continue Reading Jurisdiction Over Declaratory Patent Claims Based Upon Location of Enforcement

Loufrani v. Wal-Mart Stores, Inc., No. 09 C 3062, Slip. Op. (N.D. Ill. Nov. 12, 2009) (Kendall, J.).
Judge Kendall denied counterclaim defendants’ (collectively “Smiley Company”) Fed. R. Civ. P. 12(b)(6) motion to dismiss counterclaim plaintiff Wal-Mart’s Lanham Act and related state law declaratory judgment claims related to Smiley Company’s potential use of Wal-Mart’s Mr. Smiley Mark, from Wal-Mart’s well-known roll back campaign, after the Trademark Trial and Appeal Board (“TTAB”) held that Smiley Company’s mark was not distinctive and that the mark would create a likelihood of confusion with Wal-Mart’s Mr. Smiley Mark.
First, the Court held that Wal-Mart had plead sufficient facts to establish a controversy existed warranting Wal-Mart’s declaratory judgment claims. All of Wal-Mart’s claims related to likelihood of confusion. And the parties had developed “clear positions” on likelihood of confusion through their TTAB proceedings. Furthermore, Smiley Company had already raised numerous claims against Wal-Mart, evidencing an actual controversy. The Court also noted that this case was not like Geisha v. Tuccilli, 552 F. Supp. 2d 1002 (N.D. Ill. 2007) (click here to read more about the case in the Blog’s archives). In that case, the Court held there was no controversy, but declaratory judgment defendant had never used its mark and if he did use it by opening a restaurant, it would have been easy for declaratory judgment plaintiff to identify the use and alleged infringement. Smiley Company, however, admitted to using its mark internationally since the 1970s. Furthermore, Geisha was a summary judgment decision where the parties and the Court had the benefit of discovery.
Smiley Corp. also argued that the Court should only address its appeal of the TTAB decision and not Wal-Mart’s broader claims. The Court, however, held that a district court is free to decide infringement and likelihood of confusion issues as part of reviewing a TTAB decision. The TTAB review instituted by Smiley Company was both an appeal and a new action which allowed the Court to address new issues and to admit new evidence.
Finally, Wal-Mart’s Illinois Consumer Fraud and Deceptive Business Practices Act claim was not insufficient for failing to plead actual damages. While actual damages were required, they could not exist in a declaratory judgment claim seeking to prevent future acts and, therefore, future damages.
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Continue Reading Trademark Appeal is Both a New Case & an Appeal

Publications Int’l. Ltd. v. LeapFrog Enters., Inc., No. 08 C 2800, Slip Op. (Dec. 4, 2008) (Guzmán, J.).
Judge Guzmán granted declaratory judgment defendant LeapFrog’s Fed. R. Civ. P. 12(b)(1) motion to dismiss plaintiff Publication International’s (“PIL”) claim for declaratory relief regarding the POINGO mark used in association with a pen-like electronic reading device. PIL alleged, and LeapFrog admitted, that LeapFrog used the POINGO mark for a pen reader system in one presentation to a retailer, but never marketed or sold a pen reader using the name and never sought to register the mark with the PTO. PIL also alleged that LeapFrog sent PIL cease and desist letters warning that LeapFrog’s earlier use of the POINGO mark gave it priority in the mark. The Court held that PIL had not met its burden because it had not alleged that LeapFrog had used the mark on products in commerce or that LeapFrog had sufficient intent to use the mark in commerce. Without a use in commerce or an intent to use, the immediacy required for a declaratory judgment action was not present.
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Continue Reading Trademark DJ Requires Allegations of Continued Rights in the Marks

Tuthill Corp. v. ArvinMeritor, Inc., No. 07 C 2758, 2008 WL 4200888 (N.D. Ill. Sep. 5, 2008) (Gottschall, J.)
Judge Gottschall denied declaratory judgment (“DJ”) defendant ArvinMeritor’s Fed. R. Civ. P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. ArvinMeritor sent DJ plaintiff Tuthill Corp. a letter alleging that Tuthill infringed a group of patents to recreational vehicle suspension systems (the “RV patents”). Tuthill responded that its product did not infringe, that the patents were invalid, and that the accused products were not in production yet. Tuthill alleged that the parties had continuing discussions regarding the RV patents. ArvinMeritor claimed that the discussions went dormant as to the RV patents after it received Tuthill’s letter. Tuthill filed this suit after its accused products were put on the market. The Court held that regardless of whether the discussions went dormant, Tuthill’s claim met the Supreme Court’s MedImmune standard, as defined in the Federal Circuit’s SanDisk opinion. And ArvinMeritor never dissolved the controversy by providing Tuthill a covenant not to sue.
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Continue Reading Dormant Infringement Accusation Creates Declaratory Jurisdiction

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

Eva’s Bridal Ltd. v. Halanick Enter., Inc., No. 07 C 1668, Slip Op. (N.D. Ill. Jan. 24, 2008) (Darrah, J.)*
Judge Darrah denied plaintiff’s (collectively “Eva’s Bridal”) motion to dismiss defendants’ (collectively “Halanick”) counterclaims, including Halanick’s claim for declaratory judgment that Eva’s Bridal abandoned its Eva’s Bridal mark.** Halanick’s allegations that Eva’s Bridal caused its mark to lose significance by “destroy[ing]” its good name and failing to stop Halanick’s use of the mark after the parties’ business relationship ended were sufficient to state a claim.
* Click here for a copy of the opinion.
** Halanick had non-IP claims related to the business relationship between the parties, but they will not be addressed here.
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Continue Reading Alleged Destruction of Good Name States TM Abandonment Claim