Schultz v. iGPS Co., No. 10 C 71, Slip Op. (N.D. Ill. Aug. 16, 2011) (Hibbler, Sen. J.).
Judge Hibbler denied defendants’ motion to dismiss plaintiff’s patent infringement complaint for lack of standing. Defendants argued that plaintiffs did not hold enforceable title to the patents in suit. The patents in suit were intentionally abandoned by plaintiff’s co-owner, CHEP. When plaintiff learned of the abandonment, he asked the Patent Office to revive the patents, explaining that his failure to pay the maintenance fee was inadvertent. The only way plaintiff could truthfully claim inadvertence was if he referred only to himself and not CHEP, which intentionally abandoned. As such plaintiff was estopped from arguing that he also revived CHEP’s rights. Defendants argued that plaintiff had a fiduciary duty to assign his rights to his then employer, VTEC. But because VTEC never required plaintiff to assign his rights, the Court held that plaintiff had retained the remaining rights in the patents in suit based upon the facts alleged in the complaint. Plaintiff, therefore, had standing to sue.

Continue Reading Fiduciary Duty to Assign Patent Rights Does Not Guarantee Assignment

Moran Indus. Inc. v. Baker, No. 10 C 7653, Slip Op. (N.D. Ill. May 27, 2011) (Hibbler, Sen. J.).
Judge Hibbler granted in part defendant’s motion to dismiss and transfer in this Lanham Act case over Mr. Transmission and Meineke Car Care Center marks. Defendant allegedly violated franchise agreements with plaintiff Moran and plaintiff Meineke by using both plaintiffs’ trademarks at defendants’ auto repair shop. Moran’s franchise agreement had an exclusive jurisdiction provision requiring cases be brought in the Northern District of Illinois. So, Moran’s claims were not dismissed. Meineke’s agreement, however, had no such exclusive provision. So, Meineke’s claims were dismissed for lack of personal jurisdiction.

Continue Reading Case Split Based Upon Differing Forum Selection Clauses

Groupon Inc. v. MobGob LLC, No. 10 C 7456, Slip Op. (N.D. Ill. May 25, 2011) (Hibbler, Sen. J.).
Judge Hibbler granted plaintiff Groupon’s motion to strike defendant MobGob’s affirmative defenses and to dismiss MobGob’s counterclaims, and denied MobGob’s motion to dismiss Groupon’s claim in this patent dispute involving online marketing systems.
MobGob’s Motion to Dismiss
Groupon pled the intent elements of its indirect infringement claims upon information and belief. And that pleading was sufficient even though intent is governed by Fed. R. Civ. P. 9(b) because even pursuant to Rule 9(b), intent and knowledge can be pled generally. Additionally, it was reasonable to infer from Groupon’s allegations that MobGob created or had someone create the accused system and the public nature of Groupon’s patent that MobGob had actually knowledge of its accused infringement.
Groupon’s Motions to Strike and Dismiss
First, Groupon sought to strike MobGob’s affirmative defense of invalidity. The Court initially noted that motions to strike are disfavored because they are unlikely to streamline a case or make resolving the case more efficient. But the Court still struck MobGob’s invalidity defense. MobGob’s invalidity defense did nothing more than identify the relevant statutory sections, offering not a single fact, upon information and belief or otherwise. While the Court noted there were some policy reasons for not holding affirmative defenses and counterclaims to the Twombly/Iqbal standards, the Seventh Circuit required that they be met for any pleading. The Court, therefore, struck MobGob’s invalidity defense. And for the same reason, the Court dismissed MobGob’s invalidity counterclaim because it also offered no facts. The Court also noted that it would not excuse inadequate pleading because of the Local Patent Rule 2.3(b) invalidity contentions that MobGob would be required to serve shortly after answering. The LPR 2.3(b) disclosures require significantly more detail than Fed. R. Civ. P. 8 notice pleading. So, MobGob could meet its Rule 8 obligations without providing the level of detail required by LPR 2.3(b).
The Court also struck MobGob’s affirmative defense regarding ownership of Groupon’s patent because it also lacked factual support, and because it did not accept Groupon’s facts as true, as required by an affirmative defense, instead challenging Groupon’s facts.

Continue Reading Local Patent Rules Do Not Trump Rule 8 Pleading Requirements

Schultz v. iGPS Co. LLC, No. 10 C 71, Slip. Op. (N.D. Ill. Jan. 3, 2011) (Hibbler, Sen. J.)
Judge Hibbler granted in part defendant’s Fed. R. Civ. P. 15 motion to amend its affirmative defenses. The doctrine of assignor estoppel did not ban defendant’s invalidity and inequitable conduct defenses. An assignor is estopped from challenging the validity and enforceability of its assigned patent, but that estoppel is personal to the assignee. Because plaintiff was not the assignee, he had no right to assert estoppel. Furthermore, to determine whether defendants were in privity with the assignor would require facts beyond the complaint and was, therefore, not resolvable in a motion to dismiss.
The Court, however, did not accept defendants’ inequitable conduct defenses because they failed to plead the necessary intent with particularity. Defendants only alleged that patentee failed to pay its maintenance fees and then improperly revived the patents, without more. Defendants were granted leave to replead those defenses, if possible, with sufficient facts.

Continue Reading Patent Assignor Estoppel is Limited to the Assignee

Scandaglia v. Transunion Interactive, Inc., No. 09 C 2121, Slip. Op. (N.D. Ill. Jan 21, 2010) (Hibbler, J.)
Judge Hibbler granted in part plaintiffs’ discovery motion in this Lanham Act case involving the alleged infringement of plaintiffs’ “Always Know Where You Stand” registered trademark. After wading through the parties’ 267 pages of briefing and exhibits, the Court cautioned both parties to avoid bad faith and work together to resolve disputes:
Throughout its review of the parties’ materials it finds that both parties have acted in bad faith in this discovery dispute and therefore denies Plaintiffs’ request for attorneys fees. Both parties have obstinately drawn lines in the sand that have not been warranted: [Defendant] asserting, generally, that Plaintiffs are entitled to virtually nothing; Plaintiffs asserting, generally, that they are entitled to virtually everything. The Court has committed substantial judicial resources to reviewing the parties’ cumbersome materials and resolving a dispute that the parties should have been able to resolve themselves. Such resources have been diverted from resolving other claims.
The Court hopes that in the future the parties will demonstrate a greater degree of professionalism and collegiality and make a good faith effort to resolve their disputes before consuming the Court’s resources.
The Court held that defendant’s production of documents sufficient to show its revenues, profits, and expenditures was enough. Defendant need not produce every such document. On a related issue, the Court warned defendant that actual confusion was not required in the case, only a likelihood of confusion. And the Court warned against misrepresenting law or fact:
Lawsuits are not shell games in which counsel should try to hide the peanut from the Court’s eye. The Court will tolerate no further misrepresentation of fact or law to bolster an argument.
The Court also warned the parties against compound document requests because they were “bound to produce difficulties.” And the Court refused to compel further production without proof of withheld documents, pursuant to a request seeking “everything, including the kitchen sink.” This request sought all documents related to the Complaint, answer, counterclaim and affirmative defenses. The Court would only enforce it with evidence of withheld documents. The Court held that an interrogatory seeking proof supporting defendant’s request for admission denials did not contain discrete subparts, ordering defendants to answer the interrogatory.
The Court held that defendant’s identification of people that potentially had relevant knowledge was a sufficient response because it answered plaintiffs’ broad interrogatory. If plaintiffs wanted only those people with actual knowledge, it should have prepared a narrower interrogatory. The Court ordered defendant to supplement its Fed. R. Civ. P. 33(d) response to a contention interrogatory regarding defendant’s genericness defense as more documents were identified. And defendant was directed to provide a “general statement of its legal basis.”

Continue Reading Parties Warned to Cooperate in Discovery Disputes

Memorylink Corp. v. Motorola, Inc., No. 08 C 3301, Slip Op. (N.D. Ill. Oct. 15, 2009) (Hibbler, J.)
Judge Hibbler granted in part plaintiff Memorylink’s motion for reconsideration of the Court’s earlier opinion dismissing seventeen of Memorylink’s nineteen claims.
Correction of Inventorship
The Court previously held that Memorylink pled itself out of court because its complaint indicated that Memorylink was silent when Motorola gave Memorylink the opportunity to object to inventorship of the patents. But upon reconsideration, the Court reversed its decision for two reasons. First, the pleadings did not show whether Memorylink reviewed or approved the patent application. Second, the patent statute allowed for correction based upon mistake. It was possible Memorylink reviewed the application; but made a mistake regarding inventorship.
Statutes of Limitation
The Court held that it was correct in dismissing Memorylink’s claim based upon Motorola’s legal representation of Memorylink because Memorylink knew of its claims prior to the legal representation. One dismissed claim, however, was not based upon the legal representation. The Court treated Memorylink’s claim that the assignment at issue was void as a fraud claim. But the Court held that the claim sounded in contract, not fraud. Because the contract statute of limitation had not run, that claim was reinstated.
Patent Infringement
Because Memorylink’s contract claim could void the patent assignment, the Court reinstituted the related patent infringement claims which had been dismissed upon the basis that as a joint owner of the patents Motorola could not be liable for infringement. In the event that the assignment is held void, Motorola could be liable for infringement.
Unjust Enrichment
Motorola’s agreement that the memoranda of understanding at issue in this claim did not create any legal obligations did not change the Court’s determination that they created relevant legal obligations.

Continue Reading Possible Mistake Allows Correction of Inventorship Claim to Survive

The Northern District of Illinois and Chicago’s Federal Bar Association chapter are hosting their Ninth Annual Awards for Excellence in Pro Bono and Public Interest Service awards program this Tuesday, May 13 beginning at 3:30 pm in the James Benton Parsons Memorial Courtroom (2525) of the Dirksen United States Courthouse at 219 South Dearborn Street. The program is open to everyone and is free of charge.
The keynote speaker will be William Neukom, the President of the ABA and partner in K&L Gates. Prior to his private practice, Neukom was executive vice president of Law and Corporate Affairs for
Microsoft, where he managed Microsoft’s legal, government affairs and philanthropic
Seven “Awards for Excellence in Pro Bono and Public Interest Service” and one “Special
Recognition Award for Public Interest Service” will be presented to the following Chicago-area lawyers for their pro bono and public interest work before the Northern District:
Sara C. Arroyo and Rosa M. Tumialán, of Dykema Gossett PLLC (presented by the Judge Coar);
Anthony J. Masciopinto, of Kulwin, Masciopinto & Kulwin, LLP (presented by Judge Manning);
Myron Mackoff, of Richardson & Mackoff (presented by the Chief Judge Holderman and Magistrate Judge Valdez);
Joshua D. Lee and Amy M. Rubenstein, of Schiff Hardin LLP (presented by the
Judge Brown);
Catherine Caporusso and Margot Klein, of the Federal District Court’s Self-Help Assistance Program (presented by Judge Hibbler);
David A. Gordon, Michael B. Nadler, and Kristen R. Seeger, of Sidley Austin LLP (presented
by Magistrate Judge Schenkier);
Lisa R. Kane, of Lisa Kane & Associates, PC (presented by Chief Judge Holderman); and
Richard J. Gonzales, Clinical Professor of Law, Chicago-Kent (presented by Chief Judge Holderman).

Continue Reading Northern District’s Ninth Annual Pro Bono & Public Interest Awards

The Northern District has posted the Seventh Circuit’s new proposed pattern jury instructions for patent cases on its website — click here for a copy. The instructions include all of the recent revisions to the patent laws, including KSR and Seagate. The Seventh Circuit requested comments on the instructions be sent to:
Chief Judge Robert L. Miller, Jr.
325 Robert A. Grant Federal Building
204 S. Main St.
South Bend, IN 46601
Comments will be accepted until April 1st. Also, below is my list of IP jury instructions by Northern District judge, I am sure we will start to see some new ones soon in light of the turbulent 18 months patent law has had:

Continue Reading New Patent Pattern Jury Instructions

Global Computing, Inc. v. Hartford Cas. Ins. Co., No. 05 C 6753, 2007 WL 844618 (N.D. Ill. Mar. 14, 2007) (Hibbler, J.).

Judge Hibbler granted defendant-insurer summary judgment that it had no duty to indemnify or defend plaintiff-insured.  Microsoft brought suit against plaintiff alleging that plaintiff distrbuted counterfeit Microsoft software and used Microsoft logos