Chicago IP Litigation Blog

Court Proposes Dismissing Declaratory Judgment Counterclaims as Duplicative of Plaintiff's Patent Claims

R. David Donoghue — Mon, 08 Feb 2010 04:47:58 -0600

Continental Datalabel, Inc. v. Avery Dennison Corp., No. 09 C 5980, Slip. Op. (N.D. Ill. Dec. 9, 2009 (Shadur, Sen. J.).

Judge Shadur ordered the parties to be prepared to discuss at a status conference why defendants' respective noninfringement and invalidity declaratory judgment counterclaims should not be stricken as duplicative of plaintiff's patent infringement claims.

* Click here for more on this case in the Blog's archives.

Chicago IP Colloquium: District Courts as Patent Laboratories

R. David Donoghue — Fri, 05 Feb 2010 04:59:28 -0600

The annual Chicago IP Colloquium continues this Tuesday, February 9, 2010. The Chicago IP Colloquium is jointly sponsored by Chicago-Kent College of Law and Loyola University Chicago School of Law to discuss a range of issues in intellectual property and cyberspace law based upon papers by six nationally renowned intellectual property scholars. The sessions are uniformly excellent, and well worth your time. The next session will be Tuesday, February 9 from 4:10 pm to 5:50 pm at Loyola and will feature Professor Jeanne C. Fromer, Fordham University School of Law, discussing her paper District Courts as Patent Laboratories.

N.D. Illinois Appoints Three New Magistrate Judges

R. David Donoghue — Wed, 03 Feb 2010 04:28:10 -0600

Chief Judge Holderman announced that the Northern District of Illinois has appointed three new magistrate judges to seven year terms. All three new magistrates are former Northern District law clerks. Here are the biographies of each new judge as provided by the Northern District (emphasis added):

Jeffrey T. Gilbert received his law degree from Northwestern University (1980). He is a partner with Reed Smith in its Chicago office and is a member of the firm’s regulatory litigation group. Mr. Gilbert originally practiced with Sachnoff & Weaver, which combined with Reed Smith in 2007. Prior to entering private practice, Mr. Gilbert served as Law Clerk to The Honorable Marvin E. Aspen, U.S. District Court for the Northern District of Illinois. He has been recognized as an Illinois Super Lawyer by 2010. Mr. Gilbert is also an Adjunct Professor of Trial Advocacy at Northwestern University Law.
Administrative Law Judge Young B. Kim was born in South Korea. He received his law degree from Loyola University of Chicago School of Law (1991). Judge Kim began his legal career as an Assistant Public Defender in Cook County, working in various misdemeanor courtrooms and in the Domestic Violence Division. Two years later, he served as Law Clerk to The Honorable Charles R. Norgle, Sr., U.S. District Court for the Northern District of Illinois. After his clerkship, Judge Kim joined the U.S. Attorney’s Office for the Northern District of Illinois, where he litigated both civil and criminal cases. During his seven-year service, Judge Kim focused on healthcare fraud, medical malpractice, and employment discrimination cases. In 2001, Judge Kim accepted an appointment with the United States Equal Employment Opportunity Commission as an Administrative Law Judge. Judge Kim is one of the recipients of the National Asian Pacific American Bar Association’s "2004 Best Lawyers Under 40" award.

Sheila M. Finnegan received her law degree from the University of Chicago (1986) and currently co-chairs Mayer Brown’s Chicago litigation practice, handling civil and criminal trials. In 2008, 2009, and 2010, she was recognized as one of the top 50 women lawyers in Illinois by Super Lawyers. Prior to joining Mayer Brown, Ms. Finnegan served as Chief of the Criminal Division in the U.S. Attorney’s Office for the Northern District of Illinois. She also served for several years on the Financial Fraud Task Force. Ms. Finnegan served as Law Clerk to The Honorable Milton I. Shadur, U.S. District Court for the Northern District of Illinois, and is an Adjunct Professor of Trial Advocacy at Northwestern University Law School.

Welcome to the Northern District bench Judges Finnegan, Gilbert and Kim.

No Reverse Confusion Because of Dissimilar Trademarks

R. David Donoghue — Mon, 01 Feb 2010 05:09:08 -0600

World Wide Sales, Inc. v. Church & Dwight Co., Inc., No. 08 C 1198, Slip Op. (N.D. Ill. Nov. 9, 2009) (Kennelly, J.).

Judge Kennelly granted defendant Church & Dwight (“CD”) summary judgment on each of plaintiff World Wide Sales’ (“WWS”) claims for trademark infringement, Lanham Act unfair competition and fraud on the Patent and Trademark office. WWS claimed that CD infringed and unfairly competed with WWS’s Forever Fresh for the Fridge trademark, used with a refrigerator odor elimination product, by using CD’s Fridge Fresh mark with its Arm & Hammer refrigerator deodorizer product.

Lanham Act

The parties stipulated that CD’s mark was protectable for purposes of this motion. The only issue, therefore, was whether there was a likelihood of confusion. Generally, a court would consider whether consumers believed CD’s mark referred to WWS’s product. But WWS relied upon a theory of reverse confusion, arguing that CD had so saturated the market with its junior mark that consumers believed WWS’s products were CD’s products. Courts apply the same likelihood of confusion factors in both reverse confusion and confusion cases, although the factors are weighted differently:

Similarity of Products. The products had similar deodorizing uses, but they were presented so differently that there was little chance of consumer confusion.
Degree of Similarity. Beyond both using “Fridge” and “Fresh” the marks were not similar. Among other things, WWS’s mark was surrounded by pictures of refrigerated food stored with or without its product, CD’s mark was against a yellow-orange background, similar to other Arm & Hammer products without any pictures of food. The factor weighed strongly in CD’s favor as it was “extraordinarily unlikely” that consumers would be confused.
Use and Manner of Concurrent Use. The parties' distribution channels were vastly different. WWS offered no evidence of the products being sold in the same store or advertised in the same publication.
Strength of Mark. WWS’s mark was descriptive and relatively little had been invested in promoting the mark. As a result, the Court held that the mark was relatively weak.
Consumers’ Degree of Care. While the products at issue were relatively inexpensive, the Court still held that there was little chance consumers would confuse the products.
CD’s Intent. Because the junior user does not seek to profit from the senior user’s mark in reverse confusion cases, CD’s intent was irrelevant.
Actual Confusion. WWS offered no evidence of actual confusion.

Based upon the factors, the Court held that no reasonable fact finder could find a likelihood of confusion.

Fraud on the PTO

Because WWS’s registration disclaimed the exclusive use of “fridge” and “fresh,” no reasonable fact finder could have found that CD lacked a reasonable belief that “fridge” and “fresh” were unprotected words. And therefore, failing to disclose WWS’s "Forever Fresh for the Fridge" registration to the PTO during the prosecution of CD's "Fridge Fresh" mark was not fraud.

Court Enters Judgment on Trademark Damages and Attorneys Fees in Accordian Case

R. David Donoghue — Wed, 27 Jan 2010 04:33:07 -0600

Gabbanelli Accordions & Imports, L.L.C. v. Italo-Am. Accordion Mfg. Co., No. 02 C 4048, Slip. Op. (N.D. Ill. Sept. 21, 2009) (Zagel, J.).

Judge Zagel entered judgment on behalf of plaintiffs in the amount of $151,200 in lost profits after the Seventh Circuit affirmed the Court's judgment.* The Court also held defendants jointly and severally liable for $147,576.12 in plaintiff's attorneys' fees.

* Click here for more on this case in the Blog's archives.

Case Stayed Pending Reexam of Unasserted Claims

R. David Donoghue — Mon, 25 Jan 2010 05:23:18 -0600

Card Activation Techs. V. Bebe Stores, Inc., No. 09 C 406, Slip Op. (N.D. Ill. Nov. 20, 2009) (Gottschall, J.).

Judge Gottschall stayed the case pending reexamination of plaintiff's patent. The fact that the asserted claims were not being reexamined did not weigh against a stay. The reexamined claims were narrower than the asserted claims. So, if the narrower claims were rejected the broader claims could be found invalid as well. And all of the claims used similar language. As a result, the reexam's prosecution history would, at a minimum, be pertinent to the case. And delay caused by a stay would not prejudice plaintiff because it could be compensated with money damages. Additionally, the Court allowed either party to move to begin full or limited discovery at a status conference eight months after the opinion issued, if the reexam was still pending at that time.

Chicago IP Colloquium: Sequential Musical Creation & Sample Licensing

R. David Donoghue — Fri, 22 Jan 2010 12:49:25 -0600

The annual Chicago IP Colloquium returns this Tuesday, January 26, 2010. The Chicago IP Colloquium is jointly sponsored by Chicago-Kent College of Law and Loyola University Chicago School of Law to discuss a range of issues in intellectual property and cyberspace law based upon papers by six nationally renowned intellectual property scholars. The sessions are uniformly excellent, and well worth your time. The first session of 2010 will be Tuesday, January 26 from 4:10 pm to 5:50 pm in Room 305 at Chicago-Kent and will feature Professor Peter C. DiCola, Northwestern University School of Law, discussing his paper: Sequential Musical Creation and Sample Licensing.

N.D. Illinois Introduces Online Transcript Ordering

R. David Donoghue — Fri, 22 Jan 2010 05:01:14 -0600

When I wrote the title to this post it was difficult to capture how significant this story is to practitioners. The Northern District of Illinois has introduced an online transcript ordering system that can be used to order transcripts from any judge and court reporter in the Northern District. The Northern District believes this is the first system like it in the federal courts. This simple form -- click here to access it -- transforms what used to be an individualized process that was often difficult to navigate for both practitioners and the court reporters themselves because it required identifying the particular court report and then trying to reach the reporter, who likely spends most of the business day in court or back at their office performing the complex task of turning the rough transcript into the record of the court's proceedings. And it further simplifies the process by identifying the available delivery and timing options for the transcripts, so that the reporters do not have to explain the options to each attorney that calls them.

IP for Your Business: Protecting Your Brand on Twitter & Stopping Twitter Squatters

R. David Donoghue — Wed, 20 Jan 2010 04:36:31 -0600

My latest IP for Your Business column, published in the Southeast Texas Record, and its sister publications the West Virginia Record and the Madison (Illinois) Record, focused upon protecting your brand on Twitter and stopping Twitter squatters. With the Record's permission I am reposting the article on the Blog. Click here and here to read the column at the Record. And if you are an executive or business owner that is reading this and thinking that you do not need to worry about Twitter, at least skim the article and then do a search for your company name on Twitter. You will likely change your mind. Here are five steps for leveraging and protecting your brand on Twitter:

More and more frequently, longtime clients call me with desperation and frustration in their voices.

In each case, we have a conversation that goes very much like this:

Client: Dave, I just learned that someone is using my company's identity on Twitter [Twitter squatting]. They have thousands of followers and growing everyday. They have been tweeting for weeks [or even months], and we had no idea until someone told us.

Me: We can take care of this.

Client: But I already tried to contact them and they are anonymous.

Me: They are not as anonymous as you, or they, think they are. I have a plan to resolve this, protect your brand and we can even build your business in the process.

Client: Thank you. [Sigh of relief.]

Unfortunately, instead of my plan, too many lawyers and business owners throw up their hands, unsure how to proceed because Twitter issues have not been around long enough to be fully crystallized by law schools, case law or legal treatises.

And worst of all, many lawyers counsel their clients not to worry about Twitter because it does not matter and no one is paying attention to it.

In fact, Twitter has a massive user base - many estimates suggest 5 to 10 million users and growing quickly. Businesses that ignore Twitter are walking away from one of the most powerful marketing/referral systems in existence.

Here are five steps for protecting your brand on Twitter and stopping Twitter squatters:

1. Claim Your Names

Before you do anything else - in fact, today as soon as you finish reading this article - secure your names, trademarks and brands on Twitter.

Then strongly consider using one or all of the Twitter monikers to find and engage your customers. You can also use those accounts to warn people that a stolen Twitter moniker is not you or your company. This both locks in your Twitter identity and gives a place for your customers to communicate with and about you.

When your customers tweet praise or complaints using your Twitter name they are automatically added to a "Replies" list that you can access through your Twitter account. That allows you to know when anyone mentions you on Twitter, and to respond to them as appropriate.

2. Play Sherlock Holmes

Use the squatting account's description and website links to identify the squatter's address and identity.

If the account does not list a name, use a service like www.whois.com or www.godaddy.com to determine the registered owner of any listed websites. Often, the registrar will provide a real name, address, phone number or email.

If they do not, try using whatever information is provided to track down the individual's other identifying and contact information using any of various internet background checking and identity services, such as www.intelius.com.

If that does not work, review the squatter's tweets to see if they provide identifying information. The squatter will often disclose their geographic location by discussing favorite sports teams, regional news stories or favorite restaurants.

3. Get Your Name Back

If you think the squatting is unintentional, email, call or direct message (via Twitter) the squatter and ask them to drop the name. If they drop it, you can immediately register it as yours. This can be easily accomplished by having the squatter change its Twitter moniker.

Twitter will automatically change the squatter's moniker with all of its followers and on all of the squatter's past tweets. So there is minimal, if any, cost to the squatter and you can claim the name as soon as the squatter drops it.

In addition to changing the name, have the squatter tweet something like the following:

I have changed my name from @TRADEMARK to @squatter to avoid confusion with TRADEMARK.

If the squatting is intentional, asking does not work or if you just do not want to take the time to find out if it will work, send a strongly worded cease and desist letter backed with the threat of legal action.

The power of a stern letter from legal counsel threatening a lawsuit should not be underestimated. Just the letter will often get the Twitter moniker returned to you and the explanatory tweet sent.

Remember that just as you may be uncertain about the value and return on investment of Twitter, the squatter likely has similar questions and is not interested in an expensive legal battle.

4. Take Action

If asking and letters do not work, take action. If the squatter's moniker is a clear and direct infringement of a registered trademark, the action can be as simple as sending abuse@twitter.com an email explaining the infringement and asking that the account be suspended.

The only downside is that Twitter suspends infringing monikers rather than transferring them and they only do it for very straightforward infringements, they do not make judgment calls.

If the infringement is direct or if you want the moniker back, file a lawsuit. Depending on your particular circumstances, you can file claims for trademark infringement, passing off or various tortious interferences. This is the most drastic option, but it will show the squatter you are serious, protect your brand and act as a deterrent to future squatters.

5. Use Your New Twitter Identity

This is the step that can generate new business, increased customer satisfaction and even cash flow. Begin following your customers, potential customers, ideal customers and competitors. And run regular searches either on Twitter (where you can save searches to rerun periodically) or at sites such as search.twitter.com for your trademarks, your products, important customers and your competitors.

Use those searches to build followers and to begin engaging your customers, potential customers and even competitors.

Your searches will allow you to identify when a customer praises or complains about your products and services and respond to them. You can explain or resolve complaints or amplify praise be retweeting it in.

These five steps may seem simple in hindsight, but they make up a powerful and important program that is critical for most modern businesses. Too many business people underestimate the power and importance of social media tools like Twitter.

Businesses need to monitor Twitter just like they do other trademark use and media channels. And you must enforce your marks on Twitter just like you do in every other channel of commerce.

R. David Donoghue is a partner in the Intellectual Property Group of Holland & Knight in Chicago, Ill. He may be contacted at (312) 578-6553 or david.donoghue@hklaw.com.

N.D. Illinois: 2009 Intellectual Property Filings

R. David Donoghue — Mon, 18 Jan 2010 04:45:42 -0600

The Northern District of Illinois continued its historically busy intellectual property docket in 2009. For the first time in several years, there was a slight decrease in patent case filings. Of course, that is not surprising in light of a difficult economy and patent filings being down across the country. And I suspect that the new Local Patent Rules* will result in an increase in patent litigation filings for 2010. Trademark cases bucked their downward trend over the last several years, and were up by about 10% over 2008. Finally, copyright cases continued a relatively steep decline. But despite the decline, the Northern District maintains one of the most active copyright dockets in the country. This chart shows the number of yearly patent, trademark and copyright cases filed in the Northern District during calendar years 2006 through 2009 (data gathered from the Stanford IP Clearinghouse and Pacer):

Northern District IP Case Filings
Case Type	2006	2007	2008	2009
Patent	126	141	151	137
Trademark	136	130	128	136
Copyright	194	123	81	41

* Click here for much more on the Local Patent Rules in the Blog's archives.

N.D. Illinois Local Patent Rules Will Drive Cases to Chicago

R. David Donoghue — Fri, 15 Jan 2010 04:33:37 -0600

The most popular posts on the Blog during 2009, in terms of both views and reader questions, were those on the Local Patent Rules. Because of high interest, I have plans for additional analysis this year. This is the first of those posts. In late 2009, I had an article published in Bloomberg Law discussing why the new Rules will drive patent cases to the Northern District of Illinois. Bloomberg generously allowed me to post a pdf version of the story -- click here to download it -- and to repost it on the blog. Here is the article:

The Northern District of Illinois enacted Local Patent Rules ("LPR" or "Rules") on October 1, 2009. The purpose of the Rules is to normalize patent litigation in the Northern District of Illinois and to streamline the patent litigation discovery process. See LPR, Preamble. The rules also make clear that the court does not intend to become a "rocket docket." In fact, the Rules create a schedule that would have cases ready for trial in a little over two years, although cases would not necessarily be tried at that time. That is at most a modest change from the court's average time to trial for all cases—about twenty-seven months, according to the most recent Federal Court Management Statistics.

The Northern District of Illinois did not intend that its new Rules would drive patent cases to Chicago, as has happened when other courts enacted local patent rules, such as the Eastern District of Texas. But despite its intentions, the Northern District of Illinois's plan to normalize patent litigation practice and streamline discovery will significantly increase patent filings in Chicago. To understand why the Rules will increase case filings, it is important to understand the process created by the Rules, and then look at the impact specific Rules will have for both patentholders and accused infringers.

The Rules

The Rules were drafted and revised after public comment by a committee comprised of practitioners representing a cross-section of the District's patent bar and four Northern District of Illinois judges: Chief Judge James F. Holderman, Judge Matthew F. Kennelly, Judge James B. Zagel, and Judge Amy J. St. Eve. The Rules were then enacted by the Northern District of Illinois judges.

The Rules require early discovery through substantial production obligations accompanying all parties' Initial Disclosures. The Rules also require parties to take early positions on the merits of their claims and defenses in the form of Initial Contentions, presumably based upon documents exchanged with Initial Disclosures. Finally, the Rules position claim construction at the end of fact discovery, and show a preference against summary judgment motions prior to claim construction.

Here is a more detailed look at the schedule and duties contemplated by the Rules:

Protective Order. A standard two-tier protective order is deemed entered when Initial Disclosures are served. LPR 1.4. Any party is free to seek modifications to the protective order. Id. The automatic entry of the order prevents discovery delays while parties negotiate a proposed protective order and reduces legal fees for the negotiation.

Initial Disclosures & Production. Two weeks after the accused infringer answers, or two weeks after the patentholder answers any counterclaims, the parties must exchange substantive, non-evasive Fed. R. Civ. P. 26(a) Initial Disclosures. LPR 2.1. And along with the Initial Disclosures, the parties must exchange initial document production.

LPR 2.1(a) requires patentholders to produce all documents regarding: 1) any sale, offer for sale or use of the patented invention before filing; 2) design, reduction to practice, or invention of the patented technology generally; 3) all communications with the U.S. Patent and Trademark Office (the prosecution history) for the patents in suit and any patents from which they claim priority; and 4) ownership of the patent. LPR 2.1(b) requires that along with its Initial Disclosures, an accused infringer produce: 1) documents sufficient to show the operation and construction of each element of any product or process specifically accused in the Complaint; and 2) copies of all known prior art. Additionally, all parties are required to identify which documents, by Bates number, fall into each required production category. For cases in which there are lengthy lists of accused products, both the production and the identification of documents by categories could be a significant undertaking early in a case.

Initial Contentions. Two weeks after Initial Disclosures are served, parties claiming patent infringement serve Initial Infringement Contentions that will likely be substantive because the patentholder should have the accused infringer's Initial Disclosure document production. LPR 2.2. Two weeks after Initial Infringement Contentions are served, accused infringers serve Initial Non-infringement, Unenforceability and Invalidity Contentions. LPR 2.3. Along with these contentions, accused infringers must produce any additional documents relied upon including prior art and technical information. Two weeks later, patentholders must serve an Initial Response to Invalidity Contentions. LPR 2.5.

Final Contentions. Twenty-one weeks after Initial Infringement Contentions, parties claiming infringement serve Final Infringement Contentions, and accused infringers serve Final Unenforceability and Invalidity Contentions at the same time. LPR 3.1. Four weeks later, accused infringers serve Final Non-infringement Contentions and parties claiming patent infringement serve Final Enforceability and Validity Contentions (after the final contentions, leave of Court is required for any amendments). LPR 3.2. This gives the parties about four months to complete the bulk of their technical discovery and depositions.

Final Contentions are not amendable without a Court order upon a showing of good cause and an absence of unfair prejudice to the opposing party. LPR 3.4. In a comment, the court noted that its adoption of a new, unargued claim construction would be an example of good cause.

Deadline for Stays Pending Reexamination. No party can seek a stay pending reexamination after serving its Final Contentions. LPR 3.5. The Rule, however does not create a presumption for staying cases pending reexamination prior to the cutoff date. Id.

Claim Construction. The claim construction process begins two weeks after defendant's Final Invalidity Contentions are served with an exchange of terms and proposed constructions. LPR 4.1(a). Within seven days of exchanging terms, the parties must meet and confer to agree upon no more than ten terms for construction by the court. Presenting more than ten terms requires prior leave of court and requires a showing of good cause. LPR 4.1(b).

Claim Construction Briefing. Five weeks after exchanging terms, accused infringers file opening claim construction briefs along with a joint appendix by all parties including the patents in suit and their prosecution histories consecutively paginated. LPR 4.2(a)-(b). Parties claiming patent infringement have four weeks to file response briefs. LPR 4.2(c). Accused infringers have fourteen days to file a reply. LPR 4.2(d). Any party offering witness testimony must include a sworn declaration and promptly make the witness available for deposition. If witness testimony is included in a response brief, the reply deadline is extended by seven days.

After the reply brief is filed, the parties have seven days to file a joint claim construction chart setting out each claim term, the proposed constructions, and the parties' proposal for a claim construction hearing.

Claim Construction Hearing. The Rules contemplate a claim construction hearing four weeks after the reply brief, but the judge can decline a hearing. LPR 4.3. The lack of a hearing may be a reason to allow a sur-reply brief. Id. A judge also may decide not to accept a reply brief. The parties must exchange all exhibits, including demonstratives, at least three days before a claim construction hearing. Id.

Fact Discovery Close. Fact discovery closes six weeks after the claim construction rulings, which triggers expert discovery followed by a dispositive motion deadline. LPR 1.3. Fact discovery is also suspended from four weeks after the LPR 4.1(a) exchange of claim terms, until the Court enters a claim construction ruling. LPR 1.3. This leaves parties free to focus on claim construction briefing without dealing with discovery issues at the same time.

Expert Discovery. Three weeks after the close of fact discovery, parties must make their initial expert witness disclosures for non-claim construction issues on which they have the burden of proof. LPR 5.1(b). Five weeks later, rebuttal expert witness disclosures are due. LPR 5.1(c). Expert depositions must be finished five weeks later. LPR 5.2. Supplementation of expert reports after the LPR 5.1 deadlines is presumed prejudicial and is not allowed absent a showing that the material could not have been added or amended earlier and that there is no unfair prejudice. LPR 5.3.

Trial. Cases should be trial ready approximately two years after the filing of the complaint. This would be slightly faster than the Northern District of Illinois's average time to trial of twenty seven months. But the Rules do not require that trial occur at that time, just that the case is ready for trial.

The Rules Will Drive Patent Cases to Chicago

While the Northern District has made clear that it is not transforming itself into a "rocket docket" like the District of Virginia or the Western District of Wisconsin, the newly enacted Rules will significantly increase patent litigation filings in Chicago. The cases will not proceed to trial faster than the Northern District's average for Eastern all cases of slightly more than twenty-seven months, but the path to trial will be significantly different as described above. The changes are even-handed, with Rules benefiting patentholders being largely offset by the Rules that benefit accused infringers. One might expect even-handed Rules to have little impact on filings, but in this case patentholders will conclude that the Rules provide enough value to overcome the Rules that benefit accused infringers. The Rules, therefore, will draw patent cases to the Northern District. Here are the particular elements of the Rules that will attract patent plaintiffs to the Northern District, along with an analysis of how the Rules nevertheless also benefit accused infringers.

1. Substantive Initial Disclosures & Document Production.

LPR 2.1 requires that parties exchange significant discovery along with their Initial Disclosures. In particular, accused infringers must produce documents sufficient to show how all specifically accused products or processes operate. LPR. 2.1(b). This early document production, which is generally contemplated by Rule 26 but almost never done in practice, will be a major draw for patentholders. The ability to get immediate technical information in discovery, without the expense of serving document requests, is significant. It allows patentholders to have information before preparing their Initial Infringement Contentions. Patentholders will also get a preview of invalidity defenses and patentholders receive all of this information early in the case, before they incur significant discovery costs.

But while LPR 2.1 will attract patent plaintiffs, it also benefits accused infringers. As described above, patentholders must make an initial document production as well, and their obligation is more significant. LPR 2.1(a). Additionally, as with accused infringers, patentholders must identify which documents correspond to each of the four categories. Having this early information will allow accused infringers to evaluate their defenses early in the case and prepare for early dispositive motions such as motions challenging ownership or validity based upon a bar date. And the documents will allow accused infringers to update affirmative defenses or add counterclaims before there could be any prejudice.

Finally, the accused infringers' production obligation regarding its products is only triggered if the patentholder specifically identifies the accused products in its complaint. This will strongly encourage plaintiffs to identify the accused products in the complaint. A standard which comports with the Twombly/Iqbal pleading standards and will lead to more focused patent litigations. R. David Donoghue, The Uneven Application of Twombly in Patent Cases: An argument for Leveling the Playing Field, 8 J. Marshall Rev. Intell. Prop. 1.1 (2008).

2. Defendant opens and closes Markman briefing.

Most Districts either have two rounds of concurrent claim construction briefing or a traditional opening-response-reply schedule with the patentholder opening and replying. Significantly, the Rules provide for a single set of briefs, with the accused infringer—not the patentholder—submitting the initial and final briefs. The court reasoned that this briefing schedule provided the best, most coherent set of papers because a patentholder's opening brief often argues for "ordinary" meanings of most terms without specific proposed definitions. Then after the accused infringer offers constructions in its response, the patentholder offers detailed constructions of those terms for the first time on reply. That scenario either leaves the accused infringer without a chance to answer the patentholder's constructions on the papers, or it requires a sur-reply. Similarly, concurrent briefing results in the parties arguing past each other, generating briefs that do not fully crystallize the issues for the court. Writing first and last, of course, benefits the accused infringer. But the patentholder saves money by only writing one brief and can make any follow up arguments during a hearing or seek a sur-reply if the court does not hold a hearing.

3. Late Claim Construction briefing.

The final major draw for patentholders is the late claim construction proceedings. In addition to cost savings in the briefing process, claim construction is set during the end of a floating fact discovery period that is scheduled to end forty-five days after the court rules on claim construction. Maintaining pre-claim construction uncertainty through most of discovery benefits patentholders. Furthermore, the Rules make clear that a judge can disregard early dispositive motions that would require claim construction before the claim construction contemplated by the Rules. LPR 1.1. So, patentholders may face fewer early summary judgment motions.

Conclusion

The Northern District of Illinois's Local Patent Rules are evenhanded, benefiting both patentholders and accused infringers. But the specific benefits afforded patentholders will drive patentholders to file in the Northern District of Illinois over other courts, some that may have faster times to trial.

R. David Donoghue is a litigation partner in Holland & Knight's Intellectual Property Group focusing on patent disputes. His practice spans diverse technology areas including cellular telephony, computer software, internet technologies, pharmaceuticals, automotive technologies, television production equipment, nutritional supplements, and numerous medical devices. He also has extensive intellectual property licensing experience. Mr. Donoghue was previously with Delphi, the world's largest automotive supplier, where he was a founding member of Delphi's Technology Licensing and Litigation group. Additionally, Mr. Donoghue founded and authors the Chicago IP Litigation Blog where he analyzes intellectual property cases in the Northern District of Illinois (www.chicagoiplitigation.com). He can be reached by phone at 312.578.6553 or by email at david.donoghue@hklaw.com.

© 2009 Bloomberg Finance L.P. All rights reserved. Originally published by Bloomberg Finance L.P in the Vol. 3, No. 48 edition of the Bloomberg Law Reports – Intellectual Property. Reprinted with permission. The views expressed herein are those of the authors and do not represent those of Bloomberg Finance L.P. Bloomberg Law Reports® is a registered trademark and service mark of Bloomberg Finance L.P.

Online Legal-ease: Fair Use, Copyright and Content Aggregation Issues in the Digital Age

R. David Donoghue — Wed, 13 Jan 2010 04:26:28 -0600

On March 8, I will be speaking at the Publishing Business Conference & Expo in New York City with Camille Miller of Cozen O'Connor. Our panel is titled Online Legal-ease: Fair Use, Copyright and Content Aggregation Issues in the Digital Age, and here is the program description:

With the advent of digital publishing, social networking and user-generated content, publishers are faced with a litany of new legal issues to consider. A pair of legal experts will arm you with strategies to protect yourself -- and your content -- in this increasingly litigious age.

We have a lot to cover in a one hour program, so it promises to be a lively discussion. If you are interested in attending the premier conference for book and magazine publishers click here for registration information.

Defining 'Patenable': A Discussion of Bilski and Business Method Patents

R. David Donoghue — Mon, 11 Jan 2010 05:05:43 -0600

Tomorrow, January 12, at noon, I will be participating in a panel discussion of the Bilski case as we await the Supreme Court's decision that could significantly change patentability of business method and potentially software patents. Here is Northwestern's description of the panel:

Currently pending in the Supreme Court, the Bilski case stands to redefine the boundaries of what is patentable and has captured the attention of major software and technology giants like Microsoft and Google. Practicing IP attorneys will discuss the potential ramifications of this case on patent law and the issues presented by patenting abstract business practices and innovations.

Joining me on the panel will be:

Andrea Augustine from Foley & Lardner; and
Thomas Donovan from Barnes & Thornburg.

The panel is open to the public, so please join us January 12 at noon in Northwestern Law's Room RB140.

Greater than Negligible Likelihood of Success Sufficient for Preliminary Injunction

R. David Donoghue — Fri, 08 Jan 2010 04:49:18 -0600

Aguila Records, Inc. v. Nueva Generacion Music Group, Inc., No. 07 C 3399, Slip Op. (N.D. Ill. Nov. 4, 2009) (Der-Yeghiayan, J.).

Judge Zagel granted in part and denied in part plaintiffs', collectively "Aguila Records") motion for a preliminary injunction in this trademark and copyright infringement dispute. Aguila Records, a music management and recording agency, was in a dispute with defendants' musical group Alacranes Musical (“Alacranes”). Based upon that dispute, Aguila Records sought a preliminary injunction preventing defendants' use of the Alacranes word mark and scorpion logo.

Likelihood of Success

Because the parties agreed that the Alacranes marks were protectable and that there was a likelihood of confusion if two groups used the marks, the only likelihood of success issue was whether Aguila Records owned the marks. The Court held that the proof of ownership was at best "in conflict" and that the agreements were contradictory.

Irreparable Harm

The Court held that a preliminary injunction against performing using the Alacranes Musical mark would irreparably harm defendants who would be forced to negotiate with Aguila Records for rights to use the name or change their name, but it was undisputed that the band's success was intertwined with its name. Alternatively, if the Court did not grant an injunction defendants would continue performing using the name and would likely continue to grow in popularity and earn additional income, which would be lost to Aguila Records. But that harm would not be irreparable because it could be repaid financially.

Conclusion

While Aguila Records did not demonstrate a strong likelihood of success, it did demonstrate a "greater than negligible chance of winning." The Court, therefore, enjoined defendants from using the marks on compact disks, other recording media and merchandise such as t-shirts and hats, all uses for which Aguila Records had trademark registrations. But the Court did not enjoin the use of the marks for live performances because Aguila Records did not have registered marks for live performances and the balance of harms tipped in defendants' favor for live performances.

No Heightened Originality Standard for Derivative Works

R. David Donoghue — Wed, 06 Jan 2010 04:57:51 -0600

Schrock v. Learning Curve Int’l, No. 08-1296, 2009 WL 3644331(7th Cir. Nov. 5, 2009).

The Seventh Circuit reversed and remanded Judge Shadur's decision in this copyright case.* The Court held that plaintiff's photographs of defendant's Thomas the Tank Engine trains were derivative works, and that absent a contractual provision to the contrary, plaintiff had a copyright in the derivative work. Because plaintiff had permission to create the derivate works, plaintiff had a copyright in his derivative works. And the Court could not decide whether the agreements prevented plaintiff from getting a copyright in the derivative work because the agreements were not part of the appellate record. Additionally, the Court pointed out that the requirement that a derivative work be "substantially different" from the original did not create a heightened originality standard for derivative works. The Court noted that plaintiff's photographs of defendant's Thomas the Tank engines had sufficient originality.

* Click here for more about this case in the Blog's archives.

Court Questions Infringement Case Against Unrelated Parties

R. David Donoghue — Mon, 04 Jan 2010 04:13:10 -0600

Continental Datalabel, Inc. v. Avery Dennison Corp., No. 09 C 5980, Slip Op. (N.D. Ill. Nov. 19, 2009) (Shadur, J., Sen.).

Judge Shadur sua sponte notified the parties to be prepared to discuss plaintiff Continental Datalabels' (“CDL”) addition of defendant Memorex in this patent infringement and Lanham Act dispute. CDL added Memorex by amending CDL’s complaint pursuant to Fed. R. Civ. P. 15(a) of right, before the original defendant Avery Dennison Corp. (“ADC”) answered. The Court noted that Memorex’s and ADC’s accused products appeared to be unrelated. The infringement proofs, therefore, were unlikely to have much overlap, although the invalidity cases would likely have commonality.

Unjust Enrichment Claim Based Upon Non-US Acts Not Preempted by Copyright Act

R. David Donoghue — Wed, 30 Dec 2009 05:06:31 -0600

Zimnicki v. Neo-Neon Int'l, Ltd., No. 06 C 4879 (N.D. Ill. Nov. 9, 2009) (Norgle, J.)

Judge Norgle denied defendant Neo-Neon International's ("Neo-Neon") Fed. R. Civ. P. 12(c) motion for judgment on the pleadings regarding plaintiff's unjust enrichment claim in this copyright dispute. Plaintiff sued Neo-Neon and others for alleged infringement of plaintiff's copyrighted decorative holiday lighting products. Plaintiff also asserted an unjust enrichment claim against Neo-Neon alleging that Neo-Neon profited from making, using and selling products based upon plaintiff's designs. The unjust enrichment claim met the first prong of the preemption test because plaintiff admitted the designs at issue were copyrighted. But the second prong was not met. Neo-Neon's accused acts occurred outside the US, in China. Because the alleged acts were extraterritorial, they did not fall within the exclusive rights granted to copyright holders pursuant to §106. This was true even though the same acts in the US would presumably have been covered and, therefore, preempted.

* Click here for more on this case in the Blog's archives.

Possible Mistake Allows Correction of Inventorship Claim to Survive

R. David Donoghue — Mon, 28 Dec 2009 04:20:18 -0600

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.

Bilski, Regional IP Blogs & Farewell to Mark Herrman

R. David Donoghue — Wed, 23 Dec 2009 04:42:06 -0600

Heading into the long holiday weekend, here are several items that client responsibilities have prevented me from devoting full posts to:

Next week, on December 28, new trademark rules go into effect that are intended to codify current PTO practice. Click here for the excellent new Pittsburgh IP Law Blog's take on the new rules. Welcome to the world of regional IP blogs. I look forward to reading your local IP analysis.
If you are looking for some top notch CLE or just want a broader view of the Bilski argument, check out Doug Lichtman's IP Colloquium where Lichtman and his UCLA students do a dramatic reading of the argument. It is a great way to absorb the transcript and is an hour of free CLE.
Congratulations to Mark Herrman of Jones Day and the Drug and Device Law Blog. Herrman is leaving both the firm and the blog at the end of the month to take a senior litigation position with Aon. Herrman will be greatly missed in the blogosphere. Although I do not practice Herrman's area of law, Drug and Device Law is a must read blog for me because of both Herrman and his blogging counterpart Jim Beck of Dechert, who is continuing to write the blog.

No Protection for Wholly Functional Trade Dress

R. David Donoghue — Mon, 21 Dec 2009 04:15:01 -0600

Minemyer v. B-Roc Reps., Inc., No. 07 C 1763, Slip Op. (N.D. Ill. Oct. 27, 2009), (Cole, Mag. J.).

Judge Cole granted defendants' motion for summary judgment regarding plaintiff's Lanham Act trade dress and related state law claims. Plaintiff alleged that defendants infringed his trade dress in certain plastic pipe couplers. The trade dress consisted of the coupler's length, diameter, internal lead-in taper, flutes, arrows, the solid reinforced area between the flutes and end taper, and the base coloring of the material. But the Court held that plaintiff admitted that each element of his alleged trade dress was functional. Of particular note, the coupler's color was dictated by the parties' customers. And the flutes were the subject of a utility patent held by plaintiff. The fact that the flutes could have been designed using another shape did not matter. The Court held that once an element is functional, you need not consider whether there are other ways to obtain the function.

Although the case was resolved on functionality grounds, the Court also considered plaintiff's secondary meaning arguments. But plaintiff provided no direct evidence of secondary meaning. Instead of survey evidence or consumer testimony, plaintiff relied upon direct copying. But event assuming defendants copied plaintiff's coupler, that alone did not create secondary meaning. Plaintiff also needed to show that defendants intended to steal plaintiff's goodwill. No such evidence was offered.

The Court also held that there was not a likelihood of confusion. Defendants printed their names on their products. And the parties' customers were very sophisticated purchasers and were unlikely to be confused. The customers competitively bid its purchases of the couplers, so purchasing decisions were made directly with the parties, not by looking at the products in bins side-by-side at a hardware store.

Finally, the Court held that plaintiff's state law Consumer Fraud and Deceptive Trade Practices Act claim were coterminous with the Lanham Act claim. The Court, therefore also granted summary judgment as to the state law claims.

* Click here fore more on this case in the Blog's archives.