Civil Procedure

February 16, 2012

Southern District Allows CleanTech to Amend Complaint to Add Patent to Ethanol Patent Litigation

Indianapolis, IN –Senior Judge Larry J. McKinney of the Southern District of Indiana has allowed an additional patent to be added to a complex patent infringement suit over Ethanol byproducts. The plaintiff in this case, GS CleanTech Corporation of New York, New York had requested to amend its complaint to add infringement claim regarding patent no. 8,008,516, which has been issued by the US Patent Office, to the lawsuit. As orgininally filed, CleanTech had filed a patent infringement lawsuit alleging that twenty-two defendants had infringed patent no. 7,601,858, Method of processing ethanol byproducts and related subsystemsTITLE.

The court describes the ‘516 patent as a continuation of the ‘858 patent and directed to the same technology. The ‘516 patent was issued by the US Patent Office on August 30, 2011. Court found that Cleantech’s motion to amend did not involve undue delay, bad faith or a dilatory motive. The court found that adding the ‘516 patent “serves the goal of furthering the efficient adjudication of the case because the ‘516 and ‘858 patents are directed to similar technology and involve similar claim terms.” Three defendants objected to the amendment of the complaint, however, the court did not find any of the objections sufficient to prevent the amendment of the complaint.

As we blogged in October 2011, Judge McKinney has already held a Markman hearing: Indiana Court issues Markman Ruling in GS Cleantech v. Big River for Ethanol Processing Patents.

Practice Tip: The litigation over the ‘858 patent has been pending for several years and involves many parties. This is a very complex case from a procedural standpoint. While the Markman ruling has already been issued, the court’s order pointed out that the discovery process has not been started.
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February 1, 2012

Southern District Dismisses AirFX’s Patent Infringement Suit Against Custom Cycle Control Systems Over Motorcycle Suspension

By Overhauser Law Offices, LLC

Indianapolis, IN – The Southern District of Indiana has dismissed a patent infringement lawsuit, finding that the complaint failed to give fair notice of the patent infringement claim. Patent attorneys for AirFX, LLC of Indianapolis, Indiana had filed a lawsuit against Custom Cycle Control Systems, Inc. of Las Vegas, Nevada, alleging Custom had infringed patent no. 7,559,396 Motorcycle air suspension System.

AirFX’s complaint alleged that AirFX received a defective product made by Custom Cycle Control Systems from a customer, who believed he had purchased a genuine AirFX product that utilized the patented technology. AirFX claims that Custom Cycle has been manufacturing and selling products that infringe its patent and that the inferior products of Custom Cycle have damaged the reputation of AirFX. Patent attorneys filed an amended complaint in September.

In this entry by Chief Judge Richard L. Young, the court noted several “deficiencies that concern the court” in the amended complaint. The court pointed out that the Plaintiff failed to identify the means or theory of infringement and simply alleged the defendant infringed the patent. Further, the complaint included a period before the patent was assigned to AirFX. Finally, the court noted that the Plaintiff’s patent attorney failed to attach a copy of the patent to complaint. The Plaintiff did attach a copy of a patent, however, it was not the patent at issue in this case. In sum, the court found the complaint failed to give the defendants sufficient notice of the claims against it. The court gave AirFX only 15 days to file a second amended complaint.

Practice Tip: As we blogged about last June, AirFX filed this patent infringement case at the same time as a second patent infringement case against J.D. Braun and other out-of-state defendants. The patent infringement case against J.D. Braun was dismissed in November for lack of personal jurisdiction. See our blog on the dismissal. Unless AirFX is able to amend their complaint sufficiently within the short 15 day deadline, AirFX’s patent infringement attorneys will have struck out in the Southern District.
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January 13, 2012

Northern District Denies Motion To Amend Protective Order In Patent Infringement Case Over Mobile Banking Vehicle

By Overhauser Law Offices, LLC

Fort Wayne, IN – The Northern District of Indiana has denied a Motion to Amend a Stipulated Protective Order in a patent infringement case. Romary Associates Inc. of Fort Wayne, Indiana had filed a patent infringement lawsuit in the Northern District of Indiana alleging that KIBBI LLC d/b/a Renegade Custom Coaches and Trailers, McKibbin Enterprises, Inc. and KIBBI, Inc. all of Bristol, Indiana infringed patent no. 7,475,809, MOBILE BANKING VEHICLE, which has been issued by the US Patent Office. The invention is essentially a bank branch that can be.

The parties entered a Stipulated Protective Order in February 2011. Romary had moved to have the stipulated protective order amended to have certain “strategic” information designated “Highly Confidential – Outside Attorneys’ Eyes Only.” The original protective order allows the other party’s attorneys as well as officers and employees to view confidential information. Romary now argued that KIBBI is seeking market analysis and strategic planning documents in discovery and that such document should be subject to heightened protection. Romary argued this type of disclosure was not foreseeable.

The court, in summary, held that these types of disclosures should have been foreseeable to Romary when the original protective order was entered. Therefore, the court failed to find “good cause to amend the protective order.

Practice Tip: This case raises issues of how litigation can cause trade secret protection to be impaired if a protective order is not carefully drafted. Protective orders, which can designate certain trade secrets “attorneys’ eyes only,” are intended to prevent the disclosure of trade secrets and other intellectual property.
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November 9, 2011

Update: Coach Trademark Infringement Suit against Novelty Inc. Has Settled

By Overhauser Law Offices, LLC

Indianapolis, Indiana – A trademark infringement case in the Southern District of Indiana has recently settled. In May 2010, intellectual property counsel for Coach, Inc. and Coach Services, Inc., both of New York, NY, had filed an infringement suit alleging Novelty, Inc. of Greenfield, IN, has infringed numerous COACH trademarks which have been registered with the U.S. Trademark Office, as well as infringed copyrighted design elements and product trade dress. The case was blogged about by Indiana Intellectual Property Law and News. The case has recently been dismissed from the court’s docket with a notice that an undisclosed settlement had been reached.

Coach’s trademark attorneys had accused Novelty of offering products bearing source-identifying indicia and design elements which are “studied imitations” of the plaintiffs’ intellectual property. Novelty failed to file an answer to the complaint on time, and Coach obtained a default judgment in August 2010. Novelty then successfully petitioned the court to set aside the default judgment, arguing that it had not answered the complaint because settlement discussions were ongoing. The parties apparently had a discovery dispute relating to the extent to which a protective order concerning confidential information should be in place and whether certain disclosures should be limited to “attorney eyes only.” In July, Magistrate Baker sided with Coach in the discovery dispute noting “The Defendant has not shown sufficient cause for an “attorney’s eyes only” provision, and Defendant’s other objections, while not unreasonable, are not more compelling than Plaintiffs’ proposal.” The case has now been settled.

Practice Tip: In this case, Novelty argued that the default judgment should be set aside because settlement negotiations were ongoing at the time. Although Novelty successfully had the default set aside, other courts have not allowed this excuse for failing to file an answer or seek an extension of time. See U.S. v. Topeka Livestock Auction, Inc., 392 F.Supp. 944 (D.C. Ind. 1975). This illustrates the importance of complying with the deadline for answering a complaint, even if settlement seems likely.

This case was assigned to Chief Judge Richard L. Young and Magistrate Judge Tim A. Baker in the Southern District of Indiana, and assigned case no. 1:10-cv-00615-RLY-TAB.

November 8, 2011

Northern District of Indiana Rolls Out Proposed Changes to Local Rules

By Overhauser Law Offices, LLC

Fort Wayne, IN – The Northern District of Indiana has published proposed changes to the local rules. The proposed changes would affect many rules, however, are not intended to change the substance of the local rules. Rather, the changes are proposed in order to simplify and clarify the language of the rules. The court has released “Guiding Principles” to the revisions, stating the goals of the revisions include: conforming to the style, organization, format and terminology of the Federal Rules of Civil Procedure and to follow generally accepted American-English sentence construction. The numbering system of the local rules will also be changed slightly under new proposal.

The public and bar are invited to comment on the proposed local rule changes through a link provided on the Court’s website.

October 18, 2011

Federal Circuit Advisory Council Unveils a New Model Order for E-Discovery in Patent Cases

By Overhauser Law Offices, LLC

Washington, D.C. – The Federal Circuit Advisory Counsel has unveiled a new model order for e-discovery in patent infringement cases. The model order is intended to assist litigants in patent cases in dealing with electronically stored information. The Counsel notes that e-discovery is often overbroad and expensive. The Counsel noted that the advancing technology and increased reliance upon it makes e-discovery often necessary. Text of the model order is below.

Practice Tip: The Seventh Circuit Court of Appeals, which has appellate jurisdiction over the Southern District of Indiana and the Northern District of Indiana, has already an
“E-discovery” Pilot Program, which has the goal of “the early resolution of disputes regarding the discovery of electronically stored information (“ESI”) without Court intervention.”
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August 4, 2011

Federal Circuit Court Affirms Attorney Fee Award and Rule 11 Sanctions Of More Than $600,000 in Patent Infringement Case

By Overhauser Law Offices, LLC

Washington, D.C. – In an unusual decision; the Court of Appeals for the Federal Circuit has affirmed attorney’s fees and sanctions against a plaintiff who filed a meritless patent infringement lawsuit and committed other litigation misconduct. The case was appealed from the Western District of Washington, which had awarded Flagstar $489,150 in attorney’s fees and costs and $141,984 in Rule 11 sanctions.

EON-NET is a patent holding company and owning the patents at issue in this suit, patent numbers, 6,683,697, Information processing methodology, 7,075,673, Information processing methodology, and 7,184,162, Information

processing methodology, which have been issued by the US Patent Office. EON-NET had a long history of litigating claims related to these patents, including filing suit against Flagstar Bancorp, which became the decision here. Essentially, the district court had concluded that the lawsuit filed by EON-Net against Flagstar was meritless and little more than an attempt to extort a settlement from the defendants.

The appellate court found “the district court correctly construed the claims of the asserted patents, did not commit clear error in its exceptional case finding under 35 U.S.C. § 285, and did not abuse its discretion in invoking Rule 11 sanctions[.]” Therefore, the court affirmed. Judge Lourie, writing for the court, noted that “[m]eritless cases like this one unnecessarily require the district court to engage in excessive claim construction analysis before it is able to see the lack of merit of the patentee’s infringement allegations.” He further noted that Eon-Net’s settlement offer of less than 10 percent of what Flagstar spent defending its suit, “effectively ensured that Eon-Net’s baseless infringement allegations remained unexposed, allowing Eon-Net to continue to collect additional nuisance value settlements.”

Practice Tip: Federal Rule of Civil Procedure 11 allows for sanctions when a claim or defense is presented for an improper purpose such as “to harass, cause unnecessary delay, or needlessly increase the cost of litigation [,]” is a frivolous argument, or is not supported by factual evidence. Of particular note, the court may impose sanctions on the party, the party’s attorney or both. An award of sanctions under Rule 11 is rare, however, when awarded; the punishment is quite severe, as it was in this case.

August 2, 2011

Gian Biologics v. Biomet, Patent Infringement Lawsuit Over Centrifuge Tube Assembly, Transferred to the Northern District of Indiana

By Overhauser Law Offices, LLC

South Bend, IN – A patent infringement lawsuit that was originally filed in the District Court of Delaware was transferred to the Northern District of Indiana. Patent lawyers for Gian Biologics LLC of Delaware filed a patent infringement suit in the District Court of Delaware alleging Biomet, Inc. of Warsaw, Indiana infringed patent no.6,835,353 CENTRIFUGE TUBE ASSEMBLY, which has been issued by the US Patent Office.

The patent at issue is used for holding blood and separating blood product in to discrete components. The complaint alleges that Biomet makes, uses, sells, offers for sale and/or imports infringing products, namely several Biomet product lines including Plasmax Concentrator and Gravitational Platelet Separation Systems. The complaint alleges one count of patent infringement and seeks injunction, damages, attorney’s fees and costs. Gian’s patent attorneys filed the complaint in October 2010.

The case has now been transferred to the Northern District of Indiana by stipulation of the parties. It appears that initially Gian resisted transfer, and the Delaware District Court allowed limited discovery on the issue of transfer. According to the Delaware IP Law Blog, it was revealed that Gian had only been incorporated in Delaware for four months before the lawsuit was filed. The Delaware District Court had then stayed further discovery until the venue issue was resolved and noted it had doubts about whether the case should remain its court. In the parties’ stipulation agreeing to transfer, it was noted that “In order to conserve resources – and in light of the fact that the parties are engaged in a parallel patent infringement case in Germany that is scheduled for a bench trial on November 8, 2011 – Gian has concluded that the most efficient resolution would best be accomplished through a stipulated transfer at this time.”

Practice Tip: 28 U.S.C. 1404 allows transfer of a case from one district court to another by order of the court or by stipulation and consent of the parties.

July 26, 2011

Saeilo Enterprises Sues Scottwerx in Hamilton County for Trademark Infringement of Tommy Gun Mark: Case Removed to Federal Court

By Overhauser Law Offices, LLC

Indianapolis, IN – A trademark infringement lawsuit filed in Hamilton County, Indiana Superior Court was removed to Southern District of Indiana. Trademark lawyers for Saeilo Enterprises, Inc. of Pearl River, New York had filed a trademark infringement lawsuit in the Hamilton County Superior Court alleging Scottwerx LLC of LaCrescenta, California infringed trademark registration no.2,885,628 for the mark TOMMY GUN which has been registered with the US Trademark Office.

The complaint alleges that Scottwerx has manufactured, produced and sold replica firearm kits that bear Saeilo’s registered trademarks without authorization from Saeilo. The complaint has attached a picture from Scottwerx’s website of the allegedly infringing product. The complaint alleges Indiana courts have jurisdiction because Scottwerx offers the product for sale in Indiana. However, the complaint does not mention any specific sales in Indiana and only refers to Scottwerx’s website. Saeilo’s complaint asserts claims of federal trademark infringement, federal trademark dilution, false designation of origin, false advertising, trade dress infringement, common law trademark infringement, unfair competition, conversion, forgery, counterfeiting, and deception. The complaint seeks a permanent injunction, damages, treble damages, profits, attorney’s fees and costs.

Practice Tip: Last month, Saeilo filed a very similar trademark infringement lawsuit in Hamilton County that was also removed to federal court. Indiana Intellectual Property Law News blogged about that case here. That case alleged that Buzz Bee Toys infringed the same trademarks that are at issue in this lawsuit. According to PACER, trademark attorneys have reached a settlement in the Buzz Bee case. The terms of the settlement are undisclosed.

June 22, 2011

Update to Harvest Scents v. KMI Jury Trial: Settlement Reached Before Case Sent to Jury

By Overhauser Law Offices, LLC

Indianapolis, IN – In May, Indiana Intellectual Property Law News blogged about the jury trial in the copyright infringement case Harvest Scents v. KMI. The jury trial began on May 2, 2011 in the Southern District of Indiana and was presided over by Senior Judge Larry J. McKinney. According to PACER, on May 9^that the conclusion of the presentation of evidence on day six of the jury trial, the Court heard several additional motions. The plaintiff moved for a judgment as a matter of law, which Judge McKinney denied. At that point, rather than waiting for a jury verdict, the parties reached a settlement, and the jury was dismissed.

According to PACER, on June 22, 2011, the court approved a joint stipulation of the parties regarding settlement and dismissed the case with prejudice. The terms of the settlement appear to be confidential.