More Cupcakes, LLC v. Lovemore LLC, No. 09 C 3555, Slip. Op. (N.D. Ill. Sep. 29, 2009) (Kocoras, J.)
Judge Kocoras denied defendants (collectively “Lovemore”) Fed. R. Cir. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction and Fed. R. Cir. P.12(b)(6) motion to dismiss the individual Lovemore defendants’ (collectively “Lovemore individuals”) based upon the fiduciary shield doctrine in this Lanham Act dispute regarding plaintiff More Cupcake’s LOVE MORE mark for use on t-shirts. The Court did, however, grant Lovemore’s §1404 motion to transfer the case to the Eastern District of New York.
The parties agreed that the Court lacked general jurisdiction and argued only specific jurisdiction. The Court held that it had specific jurisdiction based upon the effects test. Lovemore’s alleged infringing acts were aimed at More Cupcakes in Illinois when Lovemore approved sales of allegedly infringing t-shirts to Illinois addresses after being warned of the alleged infringement in a Patent & Trademark Office proceeding and in settlement talks with More Cupcakes. Lovemore’s interactive website coupled with sales to Illinois also created specific jurisdiction. The fact that Lovemore’s most recent Illinois sale was to More Cupcakes’ counsel did not impact the analysis. Lovemore still knowingly sold product within Illinois.
The fiduciary shield doctrine did not apply to the individual defendants, who were both owners and operators of Lovemore. The fiduciary shield doctrine denies personal jurisdiction over individuals who contact Illinois solely for the benefit of their employees and not themselves. But the doctrine does not apply to owners of a company that have discretion over whether or not they do business in Illinois. As Lovemore owners, therefore, the Lovemore individuals are not protected by the fiduciary shield doctrine.
For similar reasons, while corporate officers are generally not personally liable for corporate trademark infringement claims, More Cupcakes’ claims against the Lovemore individuals survived. Both individuals were owners of Lovemore and the Complaint alleged that they personally directed the allegedly infringing acts.
Finally, the Court transferred the case to the Eastern District of New York. While More Cupcakes’ chosen forum deserves deference, the material events regarding the alleged infringement all occurred in New York where the t-shirts were designed, made, offered for sale and sold. And the Court held that the convenience factors, such as locations of documents and witnesses, were all neutral.

Continue Reading Owner Can Be Personally Liable for Corporate Trademark Infringement

Poparic v. Lincoln Square Video, No. 08 C 3491, Slip Op. (N.D. Ill. Jun. 25, 2009) (Kocoras, J.).
Judge Kocoras granted defendant Taste of Europe’s Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. Plaintiff alleged that Taste of Europe sold a single copy of plaintiff’s copyrighted movie in its Indiana store and argued only that the Court had general jurisdiction over Taste of Europe, without addressing specific jurisdiction. Taste of Europe presented evidence that it was an Indiana-based business that did not advertise in Illinois or conduct any business in or with Illinois. Plaintiff did not present any evidence of Taste of Europe’s Illinois connections, but sought jurisdictional discovery. The Court, however, found that it lacked personal jurisdiction, holding that jurisdictional discovery was not appropriate where plaintiff had identified no evidence showing Illinois connections to overcome Taste of Europe’s proofs.

Continue Reading Request for Jurisdictional Discovery Does Not Overcome Lack of Evidence

SRAM Corp. v. Formula S.R.L., No. 06 C 1025 & 07 C 1565, Slip Op. (N.D. Ill. Apr. 3, 2009) (Kocoras, J.).
Judge Kocoras construed the terms of plaintiff SRAM’s patents to components of a hydraulic disc brakes for bicycles. Of particular interest, the Court construed the following terms:
* “One-piece lever” did not require further construction. Defendant’s proposed construction — a lever consisting of only one piece — was unnecessarily limiting. Furthermore, the use of patent term of art “consisting of” would have “drastic consequences” to the scope of the inventor’s protection. Similarly, defendant’s other construction — only one piece — was unnecessary. It did not add anything to the term “one-piece.”
* “Attached” did not require a direct connection between two components, as proposed by defendant. Defendant’s reliance upon the patent’s figures was pertinent, but not dispositive. In fact, the specification specifically identified an attachment between two components by a third component. Attached, therefore, meant the connection of two components, whether or not the connection used an intermediate component.
* I am posting about this decision on the eve of the first Grand Tour of 2009, the Giro d’Italia. Good luck to Lance Armstrong, Levi Leipheimer and the American teams, High Road and Slipstream.

Continue Reading Claim Constructions Should Not Use “Consisting of” Lightly

Fellowes, Inc. v. Aurora Corp. of Am., No. 07 C 7237, Slip Op. (N.D. Ill. Feb. 10, 2009) (Kocoras, J.).
Judge Kocoras granted defendants’ motion to stay the litigation as to U.S. Patent No. 7,311,276 (“‘276 patent”) pending the ‘276 patent’s reexamination. The Court previously denied defendants’ motion to stay the case as to the two other patents in suit. But the Court granted a stay as to the ‘276 patent based upon the substantial new question of patentability identified by the Patent Office in granting the reexam. The Court acknowledged that defendants would be able to challenge the ‘276 patent’s validity after the reexam, but held that a stay would still reduce the burden of the litigation on all parties and the Court.

Continue Reading Stay Pending Reexam Granted as to One of Three Patents

Stereo Optical Co., Inc. v. Judy, No. 08 C 2512, 2008 WL 4185689 (N.D. Ill. Sep. 8, 2008) (Kocoras, J.).
Judge Kocoras granted in part defendants’ Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiff’s copyright, trade secret and related state law claims. The Court noted that the Seventh Circuit required a registered copyright, not just pre-registration, to file a copyright complaint. But the Court held that it was sufficient to allege the registration and did not dismiss the claim because the registration was not attached. The Court did note, however, that the registration requirement was jurisdictional and the motion, therefore, should have been styled a Fed. R. Civ. P. 12(b)(1) motion for lack of jurisdiction.
The Court also denied defendants’ motion to dismiss plaintiff’s trade secret complaints. While plaintiff did not specifically identified the allegedly misappropriated trade secrets they did allege misappropriation of customer lists, vision test methodologies and other information that could be trade secrets.
Finally, the Court dismissed plaintiff’s unjust enrichment claim because it was preempted by the copyright and trade secret claims. The alleged unjust enrichment sought damages for either the alleged copyright infringement or the alleged trade secret misappropriation. Plaintiff’s other state claims, however, required additional elements and were not preempted.

Continue Reading Allegation of Registration Without Certificate Sufficient for Copyright Claim

Global Patent Holdings, LLC v. Green Bay Packers, Inc., No. 00 C 4623, Slip Op. (N.D. Ill. Apr. 23, 2008) (Kocoras, J.).
Judge Kocoras reassigned a related case consolidating it with this case and stayed the patent infringement cases pending a second reexamination proceeding. New defendant CDW argued that reassignment of the second case pursuant to Local Rule 40.4 was not appropriate because the first case, which was dismissed without prejudice in light of the first reexam, was filed by TechSearch LLC, instead of the current plaintiff Global Patent Holdings (“GPH”). But original plaintiff TechSearch reopened the case before moving to substitute GPH, the current assignee of the patent in suit and TechSearch’s parent, as plaintiff. Because TechSearch reopened the case, the first case retained its first-filed status. The fact that TechSearch and GPH were no longer related entities when the case was reopened was not relevant.
The Court also held that the two cases were related because both accused defendants’ websites of infringing the patent because they downloaded or induced others to download JPEG and other files.
Finally, reassignment benefited the judicial economy. Neither case had begun significant discovery, so neither would be delayed. Additionally, consolidation would allow one judge to hear the summary judgment motions, which were expected to be numerous, that would apply equally to all parties. The Court, therefore, reassigned the related case to itself.
The Court also stayed the cases pending the reexam. The first reexam resulted in cancellation of each of the original sixteen claims and the issuance of a single, new claim. GPH argued that a second reexam was unlikely to yield new rejections because the patent had been vetted twice. But the Court noted that the original ex parte reexam acted as a first examination of the single, new claim that issued from the reexam. Additionally, the original ex parte reexam did not allow for third party participation. The current inter partes reexam does, generating a more rigorous review of the claim. Finally, the case was delayed four years for the first reexam. Significant judicial resources would have been wasted had the case proceeded on the original sixteen claims, which the PTO ultimately rejected. The Court did not want to risk wasting judicial resources during the second reexam. And with only a single claim, the Court did not expect the second reexam to take four years. The case, therefore, was stayed pending the reexam.

Continue Reading Patent Case Stayed for Second Reexam

Rosen v. Mystery Method, Inc., No. 07 C 5727, 2008 WL 723331 (N.D. Ill. Mar. 14, 2008) (Kocoras, J.).
Judge Kocoras granted defendants’ Fed. R. Civ. P. 9(b) & 12(b)(6) motion to dismiss plaintiff Rosen’s claims. Rosen, on behalf of himself and others similarly situated, alleged that defendant Mystery Method Corp. (“MMC”), in concert with various other business partners, violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) by continuing to market MMC’s Mystery Method dating products as endorsed or otherwise approved by the original creator of the Mystery Method, Erik Von Markovick (“EVM”). EVM created a “sophisticated system . . . to help men meet and attract women” known as the Mystery Method. EVM offered personal training in his methods and eventually partnered with MMC to administer the business of his related Mystery Method website. Eventually, EVM left MMC and started his own website When EVM left, MMC maintained control of the Mystery Method website.
The Court held that Rosen had not sufficiently pled the predicate act of copyright infringement.* Rosen only pled general allegations:
[T]he predicate acts alleged herein cluster around criminal copyright infringement, trafficking in certain goods bearing counterfeit marks, mail fraud and wire fraud . . . .”
The Court held that these general allegations did not meet the Fed. R. Civ. P. 9(b) heightened pleading requirements for fraud. Rosen did not allege:
That MMC owned a valid copyright for the products or services offered on its Mystery Method website;
That EVM owned a valid copyright covering products or services offered on the Mystery Method website; or
How MMC’s products and services were counterfeit
Furthermore, Rosen’s complaint suggested that MMC was permitted to continue using the Mystery Method name. Rosen alleged that MMC entered an agreement with EVM to develop products and services via the Mystery Method website. And Rosen alleged that MMC maintained control of the Mystery Method website after EVM left MMC.
* RICO requires that defendants have participated in at least two predicate acts. Copyright infringement was one of the predicate acts alleged by Rosen. The Court also dismissed on other RICO-specific grounds, but those will not be discussed here because they are not IP-specific.

Continue Reading Copyright Predicate Acts for RICO Claim are Subject to Rule 9(b) Hightened Pleading

United Image Print Group, LLC v. Mullen, No. 07 C 6720, 2008 WL 62205 (N.D. Ill. Jan. 4, 2008) (Kocoras, J.).
Judge Kocoras held that the Court lacked sufficient information to rule on preemption of plaintiff’s Illinois Computer Tampering Act and breach of fiduciary duty claims by the Illinois Trade Secret Act. Both claims were based upon defendant’s alleged misappropriation of allegedly confidential information before defendant resigned and took a position with a competitor. The Court reasoned that confidential information could include both trade secrets and protected information that did not rise to the level of trade secrets. Because information outside of the complaint was required to decide the scope of the claims, preemption could not be resolved in defendant’s Fed. R. Civ. P. 12(b)(6) motion to dismiss.

Continue Reading Confidential Information is Potentially Broader Trade Secret Information

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

According to yesterday’s Chicago Daily Law Bulletin — Trial Courts May Take on Patent Cases (subscription required, but a free, 15-day trial is available) — the Northern District of Illinois judges are split on the value of a proposed pilot program. The program would provide judges who volunteer to take patent cases with extra training and the assistance of specialized law clerks. Cases would continue to be randomly assigned. But after a patent case was randomly assigned, if the assigned judge rejected the case it would be reassigned to a judge participating in the patent program.
Chief Judge Holderman is a proponent of the pilot program. Chief Judge Holderman explained that the system would benefit the patent bar and that is not new to the federal courts because senior judges already have the option of rejecting cases, which are then reassigned. You can read more about Chief Judge Holderman’s views on patent litigation in the district courts in an article he recently authored with his law clerk, Halley B. Guren, advocating, among other things, providing district judges with specialized patent training and reassigning patent cases to those judges — “The Patent Litigation Predicament in the United States.”*

Continue Reading Northern District Judges Split on Patent Pilot Program