Articles Posted in New Decisions

The United States Court of Appeals for the Seventh Circuit issued an opinion reversing the denial of attorney’s fees, remanding for an entry BlogPhoto-300x96of a reasonable fee reward under 15 U.S.C. § 1117(a), and affirming all other aspects of the judgment of the district court in the case of 4SEMO.com Incorporated (“4SEMO”) versus Southern Illinois Storm Shelters, Inc. (“SISS”), et al. (collectively “Defendants”). While the Defendants originally sued 4SEMO in this case, the case was reconfigured as above for the July 2017 bench trial and decision, which was on appeal.

According to the opinion, 4SEMO began selling storm shelters manufactured by SISS in 2005. 4SEMO is a Missouri-based home-remodeling firm while Robert Ingoldsby and his brother Scott (the “Ingoldsbys”) run the Illinois based company, SISS. 4SEMO began marketing the storm shelters under a wordmark “Life Saver Storm Shelters” and a matching logo (the “Marks”) that it affixed to the shelters it sold in Missouri and Arkansas pursuant to an exclusive dealership agreement with SISS. The Ingoldsbys were granted a limited license to use the 4SEMO Marks for shelters marketed in southern Illinois. However, the Ingoldsbys violated the limited license by using the 4SEMO Marks on shelters sold throughout the country.

SISS sued 4SEMO for trademark infringement over the “Life Saver” wordmark, claiming they had used it prior to 4SEMO and that they had ownership of the wordmark. 4SEMO counterclaimed for trademark infringement and false endorsement, along with various state-law claims. After SISS’s claim did not survive summary judgement, 4SEMO’s counterclaims were tried to the bench and the district court found in favor of 4SEMO on all counts and awarded $17,371,003 in damages for profit disgorgement and $26,940 for breach of contract. However, 4SEMO’s motion for vexatious-litigation sanctions and attorney’s fees under 28 U.S.C. § 1927 and the Lanham Act, respectively, was denied.

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LHO Chicago River, LLC (“LHO”) filed a trademark infringement suit against Joseph J. Perillo, Rosemoor Suites, LLC, and Portfolio HotelsBlogPhoto1-300x138 & Resorts, LLC (collectively the “Defendants”) in the Northern District of Illinois, Eastern BlogPhoto2-300x172District. The case was voluntarily dismissed by LHO and after being denied their Lanham Act attorney fees, the Defendants appealed to the United States Court of Appeals for the Seventh Circuit. The Court of Appeals held the Supreme Court’s decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014), which was a patent case, should guide district courts when facing attorney fee applications under the Lanham Act.

LHO’s upscale hotel in downtown Chicago underwent a branding change to become “Hotel Chicago” in February 2014. Just over two years later, the Defendants opened their own “Hotel Chicago” about three miles from LHO’s hotel. LHO then sued “for trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a), and for trademark infringement and deceptive trade practices under Illinois state law.” After litigating for over one year, LHO moved to voluntarily dismiss its claims and the judgment was entered on February 21, 2018.

After judgment was entered, pursuant to 15 U.S.C. § 1117(a), Defendants made a post-judgment request for attorney fees. In their brief, the Defendants cited two different standards for determining if attorney fees should be granted: (1) the Seventh Circuit’s prevailing standard, “that a case is exceptional under § 1117(a) if the decision to bring the claim constitutes an ‘abuse of process’; and (2) the more relaxed totality-of-the-circumstances approach under the Patent Act” from the Octane case. The district judge acknowledged Octane in his findings but did not adopt that approach and denied Defendants request for attorney fees.

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Indianapolis, IndianaThe case of AWGI, LLC and Atlas Van Lines, Inc. versus American Wide Relocation Inc. d/b/a Atlas Moving and Storage (“American Wide”) was filed by Plaintiffs alleging American Wide infringed their rights in two separate United States Registered Trademarks. American Wide failed to appear or respond to Plaintiffs’ Complaint and upon Motion for Final Default Judgment, the Court granted default judgment to the Plaintiffs on October 1, 2019.

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In accordance with the default judgment, American Wide and all those persons who receive actual notice of the Court’s Order are permanently enjoined and restrained from: causing likelihood of confusion; “directly or indirectly falsely designating or representing that any goods or services are authorized, approved, associated with, or originate from, Plaintiffs”; “directly or indirectly using the ‘Atlas’ mark and the Infringing Logo or any confusingly similar variants”; utilizing the “Atlas” mark and the Infringing Logo; and “publishing, assembling, marketing, distributing, or otherwise utilizing any literature . . . which bear the ‘Atlas’ mark and the Infringing Logo”.

American Wide was further ordered: to destroy all literature, advertisements, etc. that bear the “Atlas” mark and the Infringing Logo; to notify its customers that the “Atlas” mark and Infringing Logo are not connected with Plaintiffs; and to immediately comply with the Court’s Order including filing “a statement, under oath and penalty of perjury, that each and every injunctive provision has been fully and completely complied with.” Finally, American Wide was ordered to transfer all internet domains and social media accounts that incorporate the term “Atlas” to the Plaintiffs.

Hammond, IndianaThe Northern District of Indiana, South Bend Division, issued its Opinion and Order denying a Motion for Preliminary Injunction in the case of Furrion Property Holding Limited, and Furrion Limited (collectively “Furrion”) versus Way Interglobal Network, LLC (“Way Interglobal”). This case was filed by Furrion-BlogPhoto-300x173Furrion in July 2019 alleging Way Interglobal’s oven infringed Furrion’s 2 in 1 Range Oven. Furrion then moved for a preliminary injunction, barring any further sales of the allegedly infringing product until the lawsuit was decided. The Court held Furrion “failed to meet its burden of showing irreparable harm”, and therefore denied the Motion for a Preliminary Injunction.

Furrion, as evidence of intentional copying and infringement, claims the user manual produced by Way Interglobal utilizes identical language to Furrion’s manual. While that could be an exceptional coincidence, Judge Simon found the images included in Way Interglobal’s manual included images of Furrion’s 2 in 1 Range Oven including Furrion’s trademarked logo. Way Interglobal’s CEO and president, Wayne Kaylor, testified that he was unaware of the similarities in the user manuals and speculated that the Chinese manufacturer who writes the user manual may have taken a shortcut when preparing the manual. Kaylor further testified that Way Interglobal had heard rumors that Furrion was alleging Way Interglobal’s range oven infringed Furrion’s patents in or around July 2018 and that “Way Interglobal changed the metal grate of its gas range to distinguish it from Furrion’s” without admitting any infringement.

To find in favor of Furrion’s motion for preliminary injunction, Furrion must show “(1) a likelihood of success on the merits . . . ; (2) a likelihood of irreparable harm if the injunction is not granted; (3) the balance of hardships between the parties favors an injunction; and (4) the public interest likewise favors an injunction.” PHG Techs., LLC v. St. John Companies, Inc., 469 F.3d 1361, 1365 (Fed. Cir. 2006). “[I]f the moving party fails to clear the likelihood of success and irreparable harm hurdles, ‘a court’s inquiry is over and the injunction must be denied” in the Seventh Circuit. Abbott Labs v. Mead Johnson & Co., 971 F.2d 6, 11 (7th Cir. 1992). However, if the moving party shows all four elements, the court weighs he factors in deciding whether to grant the injunction.

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The Petitioner, Lippert Components, Inc. (“Lippert”), filed a Petition for inter partes review of claims 12 and 13 of Days Corporation’s (“Days”) United States Patent No. 6,619,693 B1 (the “‘693 Patent”) for “Apparatus andLippert-BlogPhoto-300x214 Method for Automatically Leveling an Object”. In addition to filing its Reply and Sur-Reply to the inter partes review, Days also filed a Motion to Amend the ‘693 Patent. Days also filed a Motion to Exclude Evidence prior to the oral hearing. The United States Patent Trial and Appeal Board (the “PTAB”) determined claims 12 and 13 of the ‘693 Patent are unpatentable, denied Days’ Motion to Amend, and dismissed Days’ Motion to Exclude as moot.

The ‘693 Patent “discloses an apparatus for automatically leveling a vehicle, such as a recreational vehicle, that is located on uneven terrain or an out-of-level surface.” The vehicle to be leveled contains four adjustable legs that can be manually lowered and raised to achieve a feeling of true level relative to horizontal in the interior of the vehicle. The leveling process can also be performed automatically with the use of a controller. The person having ordinary skill in the art for the Court’s analysis was found to be a person having “either a bachelor’s degree in engineering, preferably mechanical or electrical, or at least five years of work experience in the field of vehicle leveling systems and related equipment.”

The PTAB interpreted the claims 12 and 13 of the ‘693 Patent using the “broadest reasonable construction in light of the patent’s specification.” See 37 C.F.R. § 42.100(b) (2018). The term “reference level plane”, when referring to a pre-set vehicle orientation plane, may be construed to be a plane in which the vehicle feels at true level to horizontal. In claims 12 and 13, there are two identical “Sensor Limitations”. Those Sensor Limitations are “a sensor . . . to sense pitch and roll of the vehicle relative to a reference level plane,” and “the sensor produces an orientation signal representing the vehicle pitch and roll.” In this case, the PTAB agreed with Lippert in that when construed “under the broadest reasonable construction in light of the ‘693 patent specification, claims 12 and 13 do not require the sensor to be aligned directly along the vehicle’s longitudinal and lateral axes.” The PTAB further stated that “[c]onstruing claims 12 and 13 to be limited to a sensor that must be aligned directly along the vehicle’s longitudinal and lateral axes would improperly incorporate a limitation into the claims from the specification.”

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Indianapolis, Indiana – Attorneys for Plaintiff, Tenstreet, LLC (“Tenstreet”) of Tulsa, Oklahoma, filed suit in DriverReach-BlogPhotothe Southern District of Indiana alleging that Defendant, DriverReach, LLC (“DriverReach”) of Indianapolis, Indiana, infringed its rights in United States Patent No. 8,145,575 (the “‘575 Patent”) for “Peer to Peer Sharing of Job Applicant Information”. Defendant moved to dismiss the Complaint and the Court has now granted that motion.  This case was described on this site here.

Tenstreet develops products for the transportation industry such as its XchangeTM network to help share job applicant verification data between employers, past and present, for commercial truck drivers. The ‘575 Patent, obtained by Tenstreet on March 27, 2012, claims to streamline the verification process between past and prospective employers while giving the drivers a chance to review and correct information before it is sent to the prospective employer. DriverReach allegedly sells its own employment verification product, VOE Plus Solutions. Tenstreet claimed VOE Plus Solutions infringed on the ‘575 Patent. DriverReach moved the Court to dismiss Tenstreet’s claims “on the ground that the ‘575 patent is patent-ineligible subject matter under 35 U.S.C. § 101.”

Pursuant to 35 U.S.C. § 101, patentable subject matter is “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” However, the Supreme Court has held “that this provision contains an important implicit exception[:] Laws of nature, natural phenomena, and abstract ideas are not patentable.” Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013) (quoting Mayo Collaborative Servs. V. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012)). In this case, the Court discusses the abstract idea exception. When determining if a patent claims an abstract idea, the Court first looks to whether the claims are directed to a patent-ineligible concept. Second, the Court looks for an “inventive concept” which transforms the claim into a patent-eligible application.

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Indianapolis, Indiana – Judge Richard L. Young of the Southern District of Indiana issued a decision on cross-motions for attorneys’ fees and costs in the case of Richard N. Bell (“Bell”) versus Michael Maloney (“Maloney”). The Court first entered judgment in favor of Bell on June 11, 2019 granting him $200 in statutory damages, and costs. Bell sought $33,536,25 in attorney’s fees and $4,719.80 in costs. Maloney made a cross-motion “for leave to file a Bill of Costs totaling $2,183.77 and to enforce the Rule 68 offer. The Court found that the Rule 68 offer should be enforced and Maloney is entitled to the costs he incurred after the offer was rejected.

Bell sent a demand letter to Maloney for $5,000.00 prior to filing this suit. After Bell filed suit, Maloney filed his Answer and then sent Bell an Offer of Judgment pursuant to FRCP 68. This offer was for $2,500.00 for Bell to take judgment against Maloney and would include all attorney’s fees and costs. Bell denied the Rule 68 offer and after the denial of cross-motions for summary judgment, the case went to a bench trial. After the one-day bench trial, the Court found Bell was the prevailing party and was entitled to $200 in statutory damages. Bell filed his motion for fees and costs eleven months after the bench trial occurred.

FRCP 68 provides in part, “[i]f the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.” The court in Payne v. Milwaukee Cty., 288 F.3d 1021, 1024 (7th Cir. 2002), found that “Rule 68 is designed to provide a disincentive for plaintiffs from continuing to litigate a case after being presented with a reasonable offer.” In determining if a final judgment obtained is less favorable than a Rule 68 offer, “the attorney’s fees and costs that accrued before the offer must be added to the judgment.” Lawrence v. City of Philadelphia, 700 F.Supp. 832, 836 (E.D. PA. 1988).

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The U.S.Court of Appeals for the Federal Circuit (“CAFC”) issued its Opinion in the case of Curver Luxembourg, SARL (“Curver”) versus Home Expressions Inc., (“Home Expressions”) to construe claim language of a design patent to limit the scope of the claimed design. Curver, the Plaintiff-Appellant in this case, is the assignee ofCurver-BlogPhoto-300x229 United States Design Patent No. D677,946 (the “‘946 Patent”) for “Pattern for a Chair” that claims “an ornamental design pattern for a chair.” While the ‘946 Patent claims the pattern for the chair, the figures for the design patent are disembodied from any article of manufacture. Curver instituted litigation against Home Expressions alleging that it made and sold baskets that incorporated Curver’s patented design and were thus infringing the ‘946 Patent. The District Court found in favor of Home Expressions as it found the ‘946 Patent was limited to chairs only. Curver then appealed to the CAFC which affirmed the District Court’s decision that the claim language limited the scope of the claimed design to apply to chairs only.

Curver filed for the ‘946 Patent in 2011 with the original title “patent directed to a pattern for furniture.” During prosecution, the examiner objected to many things including the title because under 37 C.F.R. § 1.153, a design patent’s title must designate a “particular article” for the design. Curver allegedly accepted the examiner’s suggestion to direct its pattern to be used for a chair and amended its application accordingly without amending the attached figures.

Home Expressions allegedly makes and sells baskets that have a similar Y-shape to Curver’s ‘946 Patent. Because of this, Curver filed a complaint against Home Expressions alleging its baskets infringed the ‘946 Patent. Pursuant to FRCP Rule 12(b)(6), Home Expressions filed a Motion to Dismiss Curver’s Complaint for failing to plead a plausible claim of infringement, which was granted by the district court. As part of a two-step analysis, the District Court first construed the scope of the ‘946 Patent to be limited to a design pattern for a chair. For part two of the analysis, “the district court found that an ordinary observer would not purchase Home Expression’s basket with the ornamental “Y” design believing that the purchase was for an ornamental “Y” design applied to a chair, as protected by the ‘946 patent.” As such, Curver’s Complaint was dismissed.

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FBlogPhoto-300x199ort Wayne, Indiana – Attorneys for Plaintiff, Design Basics, LLC and W.L. Martin Home Designs, LLC, filed suit in the Northern District of Indiana alleging that Defendants, Heller & Sons, Inc. d/b/a Heller Homes and Heller Development Corporation, infringed numerous copyright registrations. The Court granted the Defendants’ Motion for Summary Judgment on June 24, 2019. Design Basics filed its Notice of Appeal on July 19, 2019. Although Design Basics had filed its Notice of Appeal, Defendants submitted their Petition for Attorney Fees and Costs and were awarded $310,759.34.

According to the Opinion and Order dated September 3, 2019, the “Court invited Defendants to file a request for attorneys’ fees pursuant to 17 U.S.C. § 505, and further invited Design Basics to file a response in opposition.” The Court cites an exception from general rules of jurisdiction following a filing of a notice of appeal from Terket v. Lund, 623 F.2d 29, 33-34, in which a district court may enter an award for attorneys’ fees while the merits of the case are on appeal. In this case, Defendants submitted their Petition for Attorney Fees and Costs and Design Basics submitted its response in opposition.

District courts consider at least four different factors listed in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n. 19 (1994) when determining whether to award attorneys’ fees, including: “(1) frivolity of the claim; (2) motivation in filing the claim; (3) objective reasonableness of the claim; and (4) considerations of compensation and deterrence.” Here, the Court found that while the Defendants argued the Seventh Circuit’s decision in Design Basics, LLC v. Lexington Homes, Inc., 858 F.3d 1093 (7th Cir. 2017) rendered all copyright cases filed by Design Basics frivolous, Design Basics may still recover on copyright infringement claims although it may be difficult. When analyzing Design Basics’ motivation for filing its infringement claims, the Court noted that Design Basics “realized approximately $5 million in net litigation profits in 2016 and 2017 alone, while the gross revenues for Design Basics during the same period of time were approximately $2.5 million.” Based off this finding, among others, the Court believes that this case, and most infringement cases filed by Design Basics, are filed due to a financial motive.

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Indianapolis, Indiana – Judge Richard L. Young in the Southern District of Indiana granted default judgment in favor of Engineered by Schildmeier, LLC (“Engineered”) and against WUHU Xuelang Auto Parts Co., LTD and Amazing Parts Warehouse (collectively the “Defendants”). Engineered filed suit seeking a declaratory judgment of both patent and trade dress infringement in late 2018. The patentEngineered-BlogPhoto-300x254 allegedly infringed in the complaint is United States Patent No. D 816,584 (the “‘584 Patent”) for a “Pair of Bed Rail Stake Pocket Covers”.

When a defendant fails to plead or defend a case against them within the allotted time frame, they are in default. A plaintiff may motion the court for a default judgment, which is a binding judgment of the court for failure of the defendant to answer the allegations. The court can then grant a default judgment. If a proof of damages hearing is necessary, the judge can order such a hearing, but the defendant may not appear at that point to defend the amount of damages asserted by the plaintiff. A default judgment may be set aside upon request of the defendant, but they must show a good defense and legitimate excuse as to why they were in default to the court.

In this case, neither of the Defendants plead or otherwise defended themselves against the allegations set forth in Engineered’s complaint. As such, the court granted Engineered’s motion for default judgment and awarded damages accordingly. First, the Court found that the Defendants infringed the ‘584 Patent. Second, the Court found the Defendants violated Section 43(a) of the Lanham Act by infringing Engineered’s trade dress. Third, the Defendants were enjoined from importing, selling, or offering for sale any imitations of the ‘584 Patent. Finally, Engineered was awarded a total of $1,424,070.00. The damages award was calculated by adding $470,020.00 in lost profits; $940,040.00 in treble damages for willful infringement; $13,610.00 in attorneys’ fees; and $400.00 in court costs. By failing to appear and defend themselves, not only will defendants have default judgments granted against them, but as shown in this case, extremely large damages may also be imposed.

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