Injunctions

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Square D Co. v. Elec. Soln’s, Inc., No. 07 C 6294, Slip Op. (N.D. Ill., Jul. 22, 2008) (Moran, Sen. J.).
Judge Moran granted plaintiffs’ motion to reopen discovery and compel production of certain documents, but tabled plaintiff’s motion for sanctions. Plaintiffs alleged that defendants were selling counterfeit electrical products using plaintiffs’ trademarks. The parties entered an agreed preliminary injunction pursuant to which defendant agreed not to sell any products with plaintiffs’ trademarks, and to plaintiffs’ inspection of defendants’ inventory on or before February 29, 2008, unless the parties agreed to a later date.
When plaintiffs performed their inspection in April 2008, defendants had almost no inventory, had continued to sell trademarked products, and had few sales records. Defendants countered that they believed they were free to continue selling after February 29 because no injunctions had occurred as of that date. The Court ordered production of sales and other documents, and withheld judgment on sanctions for any violation of the preliminary injunction.
Practice Tip: When agreeing to an injunction, or any joint document, make sure the language is clear as to the parties’ obligations and that the parties agree on them.
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Continue Reading Court Compels Discovery and Withholds Judgment on Sanctions

Amari Co. v. Burgess, No. 07 C 1425, ___ F.Supp.2d ___, 2008 WL 656072 (N.D. Ill. May 7, 2008) (Ashman, Mag. J.).
Judge Ashman denied plaintiff Amari Co.’s motion for a protective order to prevent defendants’ alleged intimidation of Amari’s non-party witnesses in this Racketeering Influenced and Corrupt Organization Act (“RICO”). Amari argued, among other things,* that defendants were intimidating ex-employees of former defendant International Profits Associates (“IPA”), which was run by defendants, by threatening to enforce confidentiality agreements signed by all IPA employees.
The Court held that it could not grant Amari its requested relief for two reasons. First, to be effective the injunction would have had to enjoin non-party IPA from suing its ex-employees to enforce the agreements. The Court could not enjoin IPA without proof it was working in concert with defendants or that IPA was defendants’ alter ego. And before enjoining IPA, IPA would have to be given notice of the motion and an opportunity to respond.
Second, Amari sought a blanket injunction from enforcing the agreements against IPA’s ex-employees, but did not allege that the agreement was unenforceable. While confidentiality agreements cannot be used to hide a company’s potential impropriety, they can be used to protect proprietary information. Without identification of specific ex-employees allegedly threatened with a suit, the Court could not determine whether IPA might have been using the confidentiality agreement for enforceable or unenforceable ends. And if Amari identified a specific individual, it could subpoena them, removing the need for an injunction.
*Amari alleged other forms of intimidation, but they are not related to IP and are, therefore, not discussed in this post.
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Continue Reading Threat to Enforce Confidentiality Provision Not Intimidation

Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 2008-1392 & 1393 (Fed. Cir.).*
As Judge Moran predicted, the parties have appealed this case to the Federal Circuit.* The parties’ appeals were consolidated, leaving a single appeal with a substantial number of issues. The great, new Patent Appeal Tracer* reported that plaintiff Trading Technologies (“TT”) is appealing at least the following decisions (click here to read Tracer’s post on the cross-appeals):
Claim constructions, specifically constructions of “static price axis” and “order entry region” (click here and here and here for the Blog’s posts regarding claim construction opinions);
Summary judgment of noninfringement of most of defendant eSpeed’s software packages, including the following titles: Dual Dynamic, eSpeedometer, and modified eSpeedometer programs (click here for the Blog’s post regarding this opinion);
Partial summary judgment for TT regarding prior use (click here for the Blog’s post regarding this opinion); and
Judgment as a matter of law overturning the jury’s willfulness finding (click here for the Blog’s post regarding this opinion).
And eSpeed is appealing, at least, the following decisions:
The permanent injunction regarding certain of eSpeed’s software packages (click here for the Blog’s post regarding the Court’s permanent injunction).
* Thanks to Patent Tracer for linking to the Blog’s TT v. eSpeed coverage. Click here to read much more about this case in the Blog’s archives.
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Continue Reading Trading Technologies v. eSpeed: The Appeals Begin

Nat’l. Spiritual Assembly of the Baha’is of the U.S.A. Under the Hereditary Guardianship, Inc. v. Nat’l. Spiritual Assembly of the Baha’is of the U.S.A., Inc., ___ F.Supp.2d ___, 2008 WL 1839078 (N.D. Ill. Apr. 23, 2008) (St. Eve, J.).
Judge St. Eve denied defendant the National Spiritual Assembly of the Baha’is of the United States’ (the “NSA”) motion to hold non-parties Franklin D. Schlatter, Joel B. Marangella, the Provisional National Baha’i Council (“PNBC”), the Second International Baha’I Council (d/b/a Baha’is Under the Provisions of the Covenant)(“SIBC”), and the Baha’i Publishers Under the Provisions of the Covenant (“BPUPC”)(collectively the “Alleged Contemnors”) in contempt for violating the 1966 permanent injunction against plaintiff The National Spiritual Assembly of the Baha’is of the United States Under the Hereditary Guardianship, Inc.’s (the “NSA-UHG” or “UHG”) use of the NSA’s trademarks. Shortly after the injunction was entered, the NSA-UHG dissolved. NSA argued that its former officers, Schlatter and Marangella, remained bound by the injunction. But the Court held that officers or agents of an entity that are not personally named in an injunction are only bound while acting for the named entity or a subsequent entity formed to avoid the injunction. Schlatter’s and Marangella’s alleged contempt, therefore, is dependent on their new entity PNBC’s status.
The Court held that PNBC was not in privity with NSA-UHG. NSA-UHG followed the directives of its spiritual leader, Mason Remey. PNBC, however, followed the directives of its spiritual leader Marangella, not Remey. Furthermore, Marangella specifically instructed PNBC and its members not to violate the injunction. PNBC, Schlatter and Marangella, therefore, were not in privity with NSA-UHG and not bound by the injunction.
Similarly, non-parties Jensen, SIBC and BPGPC were not in privity with NSA-UGH, even though they admitted to being successors-in-interest to Remey. Jensen disassociated themselves from the NSA-UGH and Remey several years before the injunction was issued.
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Continue Reading Former Officers Not Bound by Company’s Injunction

Trading Techs. Int’l, Inc. v. eSpeed, Inc., No. 04 C 5312, Slip Op. (N.D. Ill. May 22, 2008) (Moran, Sen. J.).*
After a jury held that certain of defendants’ (collectively “eSpeed”) products willfuly infringed two of plaintiff Trading Technologies’ (“TT”) futures trading software patents (the Court previously reversed the willfulness finding), the Court entered a permanent injunction preventing future sales of the infringing software — a previous opinion granted summary judgment of noninfringement of eSpeed’s current software and all software except that sold during a six month period shortly after TT’s patents issued. The Court looked at each of the four standard injunction elements, as required by the Supreme Court in eBay Inc. v. MercExchange, LLC.
Irreparable Harm
The Court held that TT would be irreparably harmed by any continued sales of infringing product because TT’s successful business was built around its patented technology and, therefore, direct competitors with infringing products irreparably harmed TT. The Court agreed with eSpeed that general claims of competition were insufficient pursuant to eBay, but the Court held that TT’s direct competition assertions were supported by trial testimony.
Inadequate Remedy at Law
eSpeed argued that TT’s numerous licenses proved that monetary damages could compensate TT, as the eBay district court held after remand. but the Court distinguished eBay. eBay was premised upon a combination of plaintiff MercExchange’s:
willingness to license;
choice not to practice the patent;
failure to seek preliminary injuctive relief; and
consistent, clear statements that it desired monetary damages.
In contrast, TT manufactured a patented product and only licensed as an alternative to litigation. And the Court acknowledged TT’s concern that providing monetary damages after trial without an injuction would force a compulsory license on TT.
Balance of Hardships
The Court held that TT would be more harmed without an injunction than eSpeed would be harmed by an injunction. eSpeed no longer made or sold the infringing software, so an injunction would cause eSpeed little or no harm. Furthermore, eSpeed manufactured numerous non-infringing products. So, the extent of any harm was further minimized.
Public Interest
eSpeed argued that the public interest weighed against granting injunctions regarding patents in reexamination. But TT’s patents had since been upheld in the reexam. So, the only public interest factor was enforcement of TT’s patent rights.
For these reasons, the Court entered a permanent injunction. Click here to read the Permanent Injunction Order.
* Click here to read much more about this case in the Blog’s archives and click here for this opinion.
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Continue Reading Trading Technologies v. eSpeed: Permanent Injunction

Little Tikes Co. v. Kid Station Toys, Ltd., No. 08 C 1935, 2008 WL 1805379 (N.D. Ill. Apr. 18, 2008) (Gottschall, J.).
Judge Gottschall denied plaintiff Little Tikes’ Motion for Temporary Restraining Order (“TRO”) to prevent defendant Kid Station Toys, Ltd. (“Kid Station”) from selling Kid Station electric toys using Little Tikes’ trademarks. From 2003 until February 2008, the parties had a license agreement (“Agreement”) pursuant to which Kid Station sold its electric toys using the Little Tikes trademarks. In February 2008, Little Tikes canceled the Agreement pursuant to a provision allowing it to do so for, among other reasons, unsafe toys. Kids Station allegedly had a toy cellphone recalled because it was a potential choking hazard. Kids Station disputed the validity of the termination and continued selling its toys using the Little Tikes trademarks.
The Court held that Little Tikes had shown sufficient likelihood of success on the merits. Its trademarks ownership was undisputed and its success regarding the validity of its Agreement termination was “better than negligible.” Additionally, in the parties’ Agreement, Kids Station stipulated to Little Tikes’ irreparable harm.
But the Court held that Kid Station would be irreparably harmed by a TRO because it would not be able to meet its customer obligations, which would be a serious blow to its business. And, the Court held that Kid Station’s irreparable harm from a TRO outweighed Little Tikes’ irreparable harm without a TRO. While Kid Station may not be able to recover its customers, Little Tikes had already approved Kid Station’s existing toys and could recover royalties for any sales. The Court, therefore, denied the TRO.
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Continue Reading TRO Denied: Defendant’s Harm More Irreparable Than Plaintiff’s

Recycled Paper Greetings, Inc. v. Davis, No. 08 C 236, __ F. Supp.2d __, 2008 WL 282687 (N.D. Ill. Feb. 1, 2008) (Bucklo, J.).
Judge Bucklo denied plaintiff’s, Recycled Paper Greetings (“RPG”), motion for a temporary restraining order in this trade secret misappropriation action. RPG argued that it was either part of a joint venture or, at least, a confidential relationship with defendant Kathy Davis to develop a signature line of greeting cards. RPG contends that Davis took confidential information regarding the greeting card line to a competitor. Davis countered that she had terminated her contract with RPG pursuant to the contract’s termination provision before working with RPG’s competitor and there was, therefore, no breach or misappropriation. At an initial hearing, the Court suggested that live testimony might be required to fully resolve the motion for the TRO. But both parties told the Court that their respective witnesses would not be available during the necessary time frame to testify. Because no witnesses were available, the Court denied the TRO, holding that it lacked sufficient information to determine that RPG maintained its alleged trade secrets with sufficient secrecy or the nature of the relationship between RPG and Davis.
Practice tip: If you are seeking a TRO, line up commitments from your potential witnesses to be available both flexibly and quickly. Not many judges will grant TROs if plaintiff cannot present requested witnesses.
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Continue Reading No Temporary Restraining Order Without Live Witnesses

Chamberlain Group, Inc. v. Johnson Controls Interiors LLC, No. 2007-1314-1467, Slip Op. (Fed. Cir. Feb. 19, 2008).
The Federal Circuit reversed Judge Moran’s construction of “binary code” and, therefore, reversed the limited preliminary injunction entered by the Northern District – click here and here for the Blog’s posts regarding the injunction. The Northern District construed “binary code” as a code represented by two values, but not necessarily a binary number – click here and here for the Blog’s posts regarding the Northern District’s claim and construction opinions. The Federal Circuit praised the Northern District’s claim construction analysis, but reversed the construction:
The district court commendably strove to follow this court’s rules for claim construction. See Phillips, 415 F.3d at 1318-19. In this regard, the trial court weighed the intrinsic evidence along with the extrinsic evidence and properly sought to avoid importing a limitation from the specification into the claims. See id. Nonetheless, this court discerns that the ‘544 patent specification gives particular limiting meanings to the language in the claims.
The Federal Circuit held that “binary code” required a binary (or base two) number. Otherwise, any values would meet the limitation because all values, whether in base two, three, the more standard ten or any other, are represented by computers using two values – 1 and 0. Because the revised claim construction called into question the Northern District’s likelihood of success analysis, the Federal Circuit reversed the preliminary injunction.
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Continue Reading Construction Reversed Despite “Commendable” Analysis

Brian Higgins’s Maryland IP Law Blog post about the progeny of In re Seagate, 497 F.3d 1360 (Fed. Cir. 2007), inspired me to do follow up posts identifying Northern District cases discussing recent major IP decisions. The first looks at cases discussing eBay Inc. v. MercExchange, L.L.C., 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006). Here they are:*
Black & Decker Inc. v. Robert Bosch Tool Corp., No. 04 C 7955, 2006 WL 3446144 (N.D. Ill. Nov. 29, 2006) (St. Eve, J.). — Granting a permanent injunction in a case between competitors.
Chamberlain Group, Inc. v. Lear Corp., No. 05 C 3449, 2007 WL 1017751 (N.D. Ill. Mar. 30, 2007) (Moran, J.). — Granting a preliminary injunction in a case between competitors and holding that in eBay the Supreme Court limited the automatic presumption of irreparable harm based upon infringement.
For further analysis of post-eBay decisions, check out my post about Michael Smith’s analysis (click here) and my post discussing Ray Nimmer’s thoughts on the potential for compulsory licensing regimes because of eBay (click here).
* A brief note on methodology: this was not a thorough study and does not include cases that granted or denied injunctions without discussion. For a more comprehensive list of decisions nationwide (updated through the end of 2007) go to the Fire of Genius.
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Continue Reading Injunctions Post-eBay

Am. Fam. Mutual Ins. Co. v. Roth, No. 05 C 3839 & 3869, 2008 WL 168693 (N.D. Ill. Jan. 15, 2008) (Guzman, J.).
Judge Guzman adopted Magistrate Judge Cole’s Report and Reconsideration in full, holding defendants in contempt for violating the Court’s injunctions requiring that defendants return various customer information taken from plaintiff, defendant’s former employer – click here for more on the prior opinions in the Blog’s archives. It was defendants’ responsibility to ensure that defendants’ former counsel, who had copies of relevant documents, comply with the injunction by turning the documents over to plaintiff. The fact that defendants did not have direct control over their former counsel’s copies did not matter.
Additionally, the Court held that it did not matter that plaintiff did not originally make a “big deal” out of defendant’s non-compliance. Defendants argued that they presumed there was no need to comply with the Court’s injunctions because nobody was making a “big deal” about the return of the materials. That presumption was flawed. Neither party moved to modify either the preliminary injunction or the amended preliminary injunction. Thus, defendants had a duty to comply with the Court’s injunctions as written.
Practice Tip: Do not fall in to the trap of believing that substantial compliance with a court order is sufficient. While that could be true in some cases, you should always contact the court if you have a problem complying with an order. Compliance with orders is one case where the adage that you are better off asking forgiveness than asking permission does not hold true.
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Continue Reading Violating Injunctions is a “Big Deal”