Articles Posted in Civil Procedure

South Bend, IndianaJudge Robert L. Miller, Jr. of the Northern District of Indiana dismissed claims concerning trade dress infringement.

In this Indiana trademark lawsuit, Forest River, Inc. of Elkhart, Indiana sued Winnebago Industries, Inc. of Forest City, Iowa and its subsidiary Winnebago of Indiana, LLC alleging trademark infringement, trade dress infringement, unfair competition, false designation of origin, and false and misleading representations.

Overhauser Law Offices, LLC filed a partial motion to dismiss with the court, arguing that Forest River had neither sufficiently identified the features that constituted the claimed trade dress nor provided any factual support for its assertion that such features were non-functional.

The court noted that “to survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678.  The claim is deemed plausible if “the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

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In this litigation, such a showing required that Forest River define its trade dress.  It must also plead sufficient facts to show that the claimed trade dress is nonfunctional, has acquired secondary meaning and that a likelihood of confusion exists between its trade dress and Winnebago’s trade dress.

The court agreed with Winnebago, concluding that Plaintiff had relied on “conclusory and meaningless” assertions in its pleadings. Consequently, it granted Winnebago’s motion and dismissed without prejudice Forest River’s claims concerning trade dress infringement under the Lanham Act, 15 U.S.C. §1125(a) as well as similar claims made under common law.

Overhauser Law Offices represented Winnebago in obtaining this successful order dismissing the trade dress claims.

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Indianapolis, Indiana – The matter of Eli Lilly and Company, et al. v. Apotex Inc., et al. has been stayed pending a ruling by the U.S. Court of Appeals for the Federal Circuit.

This Indiana lawsuit was initiated by Lilly, an Indianapolis pharmaceutical company, in conjunction with other Plaintiffs.  Patent attorneys for Plaintiffs filed a lawsuit asserting patent infringement after Defendants filed an Abbreviated New Drug Application seeking approval to market a generic version of the drug Axiron® before various patents related to the drug expired.  Among Plaintiffs’ contentions were claims of patent infringement of seven patents pertaining to Axiron.861-Patent_Fig-2-300x219

In this motion, patent lawyers for Plaintiffs have asked the court to stay its proceedings pending a ruling in a similar case, Eli Lilly and Company, et al. v. Perrigo Company, et al.  The Perrigo case was filed in the Southern District of Indiana in 2013.  After a trial, the court issued findings including that one claim in one of the Axiron patents was invalid, while two claims pertaining to another Axiron patent were valid.  That ruling was appealed to the Federal Circuit; that appeal remains pending.

Fort Wayne, Indiana – The Northern District of Indiana has denied Defendant’s motion to dismiss for improper venue, citing the connection of the Northern District to the events underlying the litigation.

This Indiana trademark litigation, Family Express Corp. v. Square Donuts, Inc., was filed to resolve a dispute over the use of the words “Square Donuts” in connection with the sale of donuts by two different Indiana-based companies.

Defendant Square Donuts of Terre Haute, Indiana claims trademark rights to “Square Donuts” under federal and Indiana law. It currently sells its “Square Donuts” in bakeries located in southern and central Indiana, including locations in Terre Haute, Indianapolis, Bloomington, and Richmond.

Plaintiff Family Express of Valparaiso, Indiana operates convenience stores in northern Indiana and uses the term “Square Donuts” in conjunction with doughnut sales. Plaintiff states that both it and Defendant are expanding their respective businesses into new markets, with Defendant expanding to the north while Plaintiff expands to the south. Thus, territory in which both operate concurrently has become a possibility.

In 2006, Defendant sent a cease-and-desist letter to Plaintiff. Plaintiff and Defendant subsequently discussed the possibility of entering into a co-existence arrangement, but did reach an agreement.

This trademark lawsuit followed. Plaintiff asks the Indiana federal court to declare that its use of the term does not infringe on the trademark rights in “Square Donuts” asserted by Defendant. Plaintiff also asks the court to cancel Defendant’s existing Indiana and federal “Square Donuts” trademarks.

Trademark litigators for Defendant asked the court to dismiss the lawsuit, claiming that it had been filed in an improper venue. In evaluating whether venue in the Northern District was permissible, the court first noted that, while it “must resolve all factual disputes and draw all reasonable inferences in the plaintiff’s favor,” Plaintiff then bears the burden of establishing that venue is proper. It also noted that venue can be proper in more than one district.

The federal venue statute, 28 U.S.C. § 1391(b), provides that venue can exist in “(1) a judicial district in which any defendant resides, if all defendants reside [in the same state]” or “(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated.”

Plaintiff relied on subsection (b)(2), claiming that a substantial part of the events giving rise to the lawsuit took place in the Northern District of Indiana. To establish venue, Plaintiff pointed to the fact that Defendant’s cease-and-desist letter and other communications had been relayed to Plaintiff in the Northern District. At least some rulings by districts courts located within the Seventh Circuit have held that the requirements for venue “may be satisfied by a communication transmitted to or from the district in which the cause of action was filed, given a sufficient relationship between the communication and the cause of action.”

The Northern District of Indiana concluded that such communications, which would be a typical element of litigation under the Declaratory Judgment Act, would defeat the purpose of protecting a defendant from having to litigate “in the plaintiff’s home forum, without regard to the inconvenience to the defendant at having to defend an action in that forum or whether the defendant has engaged in substantial activities in that forum.”

Instead, the Indiana court considered the underlying substance of the dispute: “whether the Defendant’s Square Donuts trademark is valid and, if it is, whether the Plaintiff nevertheless has refrained from infringing on the trademark in connection with the sale of its Square Donuts.” The court concluded that, given the extent to which the claims and events at issue in the litigation took place in both the Northern and the Southern District of Indiana, venue was not improper in the Northern District of Indiana.

Practice Tip #1: If neither subsection (b)(1) nor (b)(2) of 28 U.S.C. § 1391 applies, a third subsection may be utilized. That subsection, 28 U.S.C. § 1391(b)(3), permits venue in “any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action.”

Practice Tip #2: An inquiry into proper venue for a lawsuit is different from one into personal jurisdiction. Personal jurisdiction “goes to the court’s power to exercise control over a party,” while venue is “primarily a matter of choosing a convenient forum.”

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Chicago, Illinois – The Seventh Circuit ruled in the ongoing intellectual property litigation between Plaintiff Lightspeed Media Corp. and Defendants Anthony Smith et al.

Attorneys for Lightspeed Media Corp. have filed numerous lawsuits nationwide in an apparent attempt to extract quick settlements from individual users who would rather avoid litigating their pornography consumption in open court. After pushback from Defendants and their internet service providers, as well as the imposition of sanctions by the Central District of California in a similar case, the attorneys began to voluntarily dismiss some of the cases.

The litigation against Defendant Smith was one such dismissed lawsuit. After the dismissal, Smith filed a motion for attorney’s fees. The Southern District of Illinois found that the Lightspeed lawsuit had been frivolous, baseless, and “smacked of bullying pretense,” and imposed sanctions of $261,025.11, jointly and severally, against three lawyers for Lightspeed: Paul Hansmeier, John Steele, and Paul Duffy.

Much legal wrangling ensued. While pleading to the court an inability to pay the sanctions, Steele withdrew over $300,000 from an account that he shared with his wife. Hansmeier withdrew a similar amount from one of his accounts. Each of these transfers was apparently an attempt to conceal the funds from the court and Smith. Other actions, also apparent attempts to conceal the funds, were also taken by the attorneys. Following these actions, Hansmeier filed for bankruptcy and Duffy passed away.

The Seventh Circuit was asked to consider the appropriateness of the sanction against the three attorneys. It declined to hear the matter as to Duffy, stating that because he was deceased he was “beyond [their] jurisdiction.” The appeals court dismissed the appeal as to Hansmeier, noting that, in a liquidation proceeding under Chapter 7 of the bankruptcy code, “only the trustee [of the bankruptcy estate] has standing to prosecute or defend a claim belonging to the estate.”

After a review of multiple instances of discovery misconduct, the appellate court held that the district court had acted within its discretion in imposing a discovery sanction against Steele for what it called a “pattern of vexatious and obstructive conduct” and “obviously egregious behavior.”

The appellate court then turned to the matter of the contempt sanction against Steele. Steele argued that the sanction was in fact criminal in nature, not civil. Thus, he contended, the district court had failed to abide by the enhanced procedural safeguards required for such a sanction.

The Seventh Circuit agreed. It held that, while “civil contempt may be imposed if proven by clear and convincing evidence, and without the full criminal procedural process,” imposing criminal contempt required more. Specifically, it required that the contemnor be “afforded the protections that the Constitution requires of such criminal proceedings.”

The appellate court also held that the fine, as ordered by the district court, was not “designed either to compel the contemnor into compliance with an existing court order or to compensate the complainant for losses sustained as a result of the contumacy,” as was appropriate for a finding of civil contempt. Instead, the sanctions that had been levied against Steele were punitive in nature, and “meant to vindicate the authority of the court.” Thus, they were properly deemed criminal sanctions.

Concluding that the procedures required under the Constitution for criminal contempt had not been applied, the Seventh Circuit vacated the contempt sanction.

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Evansville, Indiana – In the matter of Berry Plastics Corporation v. Intertape Polymer Corporation, Judge Richard L. Young of the Southern District of Indiana ruled on Defendant Intertape’s motion to reconsider the court’s conclusion of patent invalidity on the grounds of obviousness.

This Indiana patent litigation, filed in January 2010, sought a declaratory judgment of non-infringement of U.S. Patent No. 7,476,416 (the “‘416 patent”). Plaintiff Berry Plastics Corp. sued competitor Intertape Polymer Corp., which owns the ‘416 patent.

In the complaint, Berry asked the federal court to rule that it had not infringed the patent-in-suit, titled Process for Preparing Adhesive Using Planetary Extruder. In the alternative, it asked that the court rule that the patent was invalid and unenforceable. Among the reasons cited for this proposed conclusion were assertions that Intertape had engaged in improper conduct before the U.S. Patent and Trademark Office and that the patent was invalid as obvious.

The court held a jury trial in November 2014. The jury found, inter alia, that the ‘416 patent was not obvious. After the trial, the court heard additional argument on the issue of the validity of the patent and ruled for Berry, holding that the patent-in-suit was invalid as obvious.

In this recent entry, the court rules on Intertape’s motion to reconsider on the grounds that the court had ruled too broadly, inadvertently invalidating the entire patent instead of addressing only the asserted claims presented at trial. The court held that it was permitted under Fed. R. Civ. P. 54(b) to modify its previous order (“[A]ny order or other decision … that adjudicates fewer than all the claims …does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims …. “). It also concluded that, under Fed. R. Civ. P. 50, it had the authority to enter judgment against a party after a jury trial as long as “a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.”

The court first held that certain dependent claims had not been challenged as invalid at trial and, consequently, the court had no jurisdiction to rule on the validity of those claims. On these claims, it granted the motion to reconsider.

Regarding those dependent claims that had been asserted at trial, the court evaluated the evidence and testimony presented and concluded that the dependent claims added no patentable subject matter but were instead simply obvious selections of prior art used in an ordinary way. Consequently, the court denied Intertape’s motion to reconsider.

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Washington, D.C. – Reps. Hakeem Jeffries (D-NY), a member of the House Judiciary Committee, and Tom Marino (R-Pa) proposed legislation to create an alternative forum to facilitate the adjudication of “small” copyright claims. 

H.R. 5757, titled the Copyright Alternative in Small-Claims Enforcement (CASE) Act of 2016, would establish a Copyright Claims Board (“CCB”) within the U.S. Copyright Office. Adjudication with the CCB is intended to be simpler and less expensive than proceeding in federal court. These cases would be heard by a CCB panel of three Copyright Claims Officers. Adjudicating in the CCB forum would be voluntary and respondents could opt out. 

The jurisdiction under CASE would be limited to civil claims of copyright infringement of $30,000 or less in damages. The CCB would also be authorized to hear claims of abusive takedown notifications under the Digital Millennium Copyright Act. 

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Chicago, IllinoisMagistrate Judge Geraldine Soat Brown of the Northern District of Illinois granted the motion for summary judgment of John Doe, the anonymous Defendant sued by pornographer Malibu Media LLC (“Malibu”) on allegations of copyright infringement.

Plaintiff alleged that, between May 2013 and July 2013, Defendant infringed Malibu’s copyright in 24 movies by downloading them from the internet using file-sharing software known as BitTorrent. Copyright attorneys for Malibu filed a copyright infringement lawsuit against Defendant, stating that Defendant had been identified by the internet protocol (“IP”) address that had been used to infringe. Defendant was permitted to litigate anonymously as “John Doe” (“Doe”).

Malibu submitted various pieces of evidence to support its contentions that Doe had infringed the copyrights on Malibu’s works, including a declaration by the founder of Malibu and declarations of various experts, such as forensic investigators. Doe denied Plaintiff’s claims and contested its method of proof.

The court evaluated Malibu’s evidence, noting that some of it was simply pro forma and included no relevant and particularized statements about the copyright infringement that Malibu alleged had been committed by Doe. The court stated that at least one pleading was described by Malibu as containing attached materials that had not, in fact, been attached. Other material was described by Malibu as having been sent to the court, while the court indicated that it had never been received.

The court also reproached Malibu’s attorneys for misrepresenting to the court the court’s earlier statements regarding the relevant evidentiary requirements to prove Doe’s liability. It further noted that Malibu had failed to adhere to required procedures, such as the serving of several disclosures under Rule 26(a)(2). Because those disclosures had not been made, and because the court held that the failure to disclose was evidence of at least willfulness, if not bad faith, two of Malibu’s declarations were stricken in their entirety as were portions of a third declaration. All of Malibu’s statements of fact that relied upon the stricken material were also excluded from evidence.

The court subsequently concluded that “Malibu has no evidence that any of its works were ever on Doe’s computer or storage device,” stating that Malibu’s contention that Doe had used visualization software to infringe Malibu’s works was merely speculation:

Malibu admits that there is no evidence of visualization software on Doe’s computer, and not even any evidence of the deletion of visualization software. Malibu says that is “beyond fishy,” and speculates that Doe must have deleted visualization software from his computer in some way that hides the fact that it was deleted, and then extends the speculation to suggest that Doe must have done that deletion to hide his infringement of Malibu’s works. That is not evidence that Doe copied or distributed Malibu’s works.

The court granted Defendant’s motion for summary judgment. Plaintiff’s motion for summary judgment, which asked the court to conclude that Doe had infringed its copyrighted works, was denied.

Practice Tip #1: Malibu has filed a multitude of virtually identical lawsuits around the country. According to a recent case in New York, “Malibu is a prolific litigant: between January and May 2014, for example, Malibu was responsible for 38% of copyright lawsuits filed in the United States.” Malibu Media, LLC v. Doe, No 15 Civ. 4369 (AKH), 2015 WL 4092417, at *3 (S.D.N.Y. July 6, 2015).

Practice Tip #2: We have blogged about Malibu Media’s litigation exploits before. Some recent posts include:

Magistrate Rejects Malibu Media’s Request for Fees and Sanctions
Malibu Media Sues Nine Additional “John Does” Asserting Copyright Infringement
Fourteen New Lawsuits Asserting Copyright Infringement Filed by Malibu Media
Malibu Media Alleges Infringement of Thirty Copyrighted Works

Another John Doe Sued by Malibu Media on Allegations of Copyright Infringement

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Hammond, Indiana – Trademark litigation commenced in the Western District of Michigan in 2013 was transferred to the Northern District of Indiana yesterday.

This federal lawsuit, filed by trademark attorneys for Plaintiffs Texas Roadhouse, Inc. and Texas Roadhouse Delaware LLC, both of Louisville, Kentucky, alleges infringement of U.S. Service Mark Reg. No. 1,833,533, U.S. Service Mark Reg. No. 2,231,309, and U.S. Service Mark Reg. No. 2,250,966. These marks have been filed with the U.S. Patent and Trademark Office.

The Defendants listed in the Michigan complaint were Texas Corral Restaurants, Inc.; Switzer Properties, LLC; Texcor, Inc.; Texas Corral Restaurant II, Inc.; T.C. of Michigan City, Inc.; T.C. of Kalamazoo, Inc.; Chicago Roadhouse Concepts, LLC; Paul Switzer; Victor Spina; and John Doe Corp. Defendants filed a motion to dismiss or, in the alternative, transfer venue, with the Michigan court, which was granted. The lawsuit will continue in the Northern District of Indiana.

Plaintiffs, via their trademark lawyers, asserted the following claims:

• Count I: Trade Dress Infringement
• Count II: Federal Trademark Infringement
• Count III: Trademark Infringement Under Michigan Statutory Law
• Count IV: Trademark Infringement Under Indiana Statutory Law
• Count V: Trademark Infringement Under Common Law
• Count VI: Copyright Infringement

• Count VII: Unfair Competition Under Michigan and Indiana Common Law

Texas Roadhouse seeks equitable relief; damages, including punitive damages; costs and attorney fees.

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Changes to Delivery of E-mailed Notices of Electronic Filing (NEFs)

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Effective January 4, 2016, the United States District Court for the Southern District of Indiana will implement important new changes in the delivery of e-mailed Notices of Electronic Filing (“NEFs”). The court’s CM/ECF system will begin generating NEFs for both docketed and e-filed events in sealed cases and for sealed entries in non-sealed cases. For more information, click here.

Sealed filings are governed by Local Rule 5-11 and Local Criminal Rule 49.1-2. Attorney e-filers are encouraged to review updates to the court’s ECF Policies and Procedures Manual (Sections 11 and 18), which address changes in service requirements for sealed filings.

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Evansville, Indiana – District Judge Richard L. Young, writing for the Southern District of Indiana in the matter of Berry Plastics Corp. v. Intertape Polymer Corp., denied Berry’s motion in limine to prohibit Intertape from proffering testimony or evidence at trial which referred to reliance on counsel or good faith in prosecuting the patent applications for U.S. Patent No. 7,476,416 (the “‘416 patent”).

Plaintiff Berry Plastics Corp. of Evansville, Indiana filed a patent infringement lawsuit against competitor Intertape Polymer Corp., which owns the ‘416 patent. The court held a jury trial from November 3, 2014 to November 17, 2014.

The issue of Berry’s inequitable conduct claim against Intertape, which is headquartered in Montreal, Canada, remained unresolved after the jury trial and was set for a subsequent bench trial. To prevail on this claim, Berry would need to prove “by clear and convincing evidence that Intertape knew of a prior art reference, knew that it was material, and made a deliberate decision to withhold it.”

Prior to the trial on this claim, Plaintiff filed a motion in limine seeking to prohibit Defendant from proffering testimony or evidence at the bench trial that referred to reliance on counsel or good faith in prosecuting patent applications for the ‘416 patent. Full discovery regarding those issues had previously been denied to Berry and Berry argued to the court that it would unfairly prejudice its interests to deny it full discovery, yet leave open the possibility that Intertape would raise those defenses at trial.

The court denied Berry’s motion, noting three facts relevant to that decision. First, Defendant Intertape had indicated that it would not assert advice of counsel and counsel’s good faith during the bench trial. Second, the witnesses relevant to the defenses would not be called at the trial. And, finally, the court noted that it had already ruled that “the testimony upon which Berry bases its motion (and testimony strikingly similar to it) does not amount to an assertion of the defenses of reliance on advice of counsel or counsel’s good faith.”

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