Indiana Intellectual Property Law News

April 4, 2012

Continued Use of Trademark By Successor Company Relevant to “Piercing the Corporate Veil” and Successor Liability for Breach of Contract

Indianapolis, IN – The Indiana Court of Appeals has held that a successor company’s continued use of a trademark created a genuine issue of fact as to whether the successor should be liable for a breach of contract by its predecessor. Attorneys for Zeise & Sons Excavating, Inc. of Crown Point,Indiana had sued Boyer Construction Group Corporation (“Group”) of Highland, Indiana in the Lake County Superior Court for breach of contract and had argued that Group should be liable for the breach by its predecessor company, Boyer Construction Corporation (“Corporation”), under theories of breaching the corporate veil of an alter ego corporation. Zeise also argued that Group should be liable under a theory of successor liability. The contract in question involved construction of a retail development. It was undisputed that Zeise had performed all of its obligations under the contract and that Corporation had failed to pay as provided by the contract. The Lake County Superior court had granted Group a partial summary judgment in favor of Group, finding neither of Zeise’s theories created liability for Group.

The Court of Appeals reversed the summary judgment. The court noted that a decision to pierce to corporate veil requires a fact-sensitive inquiry. The court noted that Zeise had presented numerous facts to support piercing the corporate veil, including continued use of trademarks, logos and website address. In addition, the Court of Appeals found that continued use of trademarks, logos and website address created issues of material fact regarding Ziese’s successor liability claim. The court, however, declined to issue a summary judgment in favor of Ziese. Rather, the court found that Ziese raised a genuine question of a material fact and therefore summary judgment was not appropriate. The case has been remanded for trial.

Practice Tip: When a company sells its assets to another company, it is important to remember intellectual property such as trademarks, patents and copyrights. Failure to document an assignment or license can result the “piercing the corporate veil,” and personal liability of the business owners.

April 3, 2012

140 Trademark Registrations Issued to Indiana Companies in March 2012

By Overhauser Law Offices, LLC

The US Trademark Office issued the following 140 trademark registrations to persons and businesses in Indiana in March, 2012, based on applications filed by Indiana Trademark Attorneys:

	TM Number	Title
1	4,119,874	WORLD CLASS BEER	VIEW
2	4,118,716	ON THE BUBBLE	VIEW
3	4,118,715	HIT THE DECK	VIEW
4	4,119,863	BRAND POSITION ANALYSIS	VIEW
5	4,118,628	DISTINXION	VIEW

April 2, 2012

Indiana Patent Attorneys Obtain 119 Patents for Indiana Companies in March, 2012

By Overhauser Law Offices, LLC

Indiana patent attorneys obtained issuance of the following 119 patents from the US Patent Office to persons and businesses in Indiana in March, 2012:

	Patent No.	Title
1	RE43,266	Rotary attenuator and method of making it
2	D656,591	Wax-less integral skin toilet gasket
3	D656,581	Dairy teat sprayer
4	D656,327	Bench
5	8,144,263	Projection lens system and method

March 30, 2012

Buztronics sues Toy Investments, Inc. for Declaratory Judgment for Non-Infringement of Patents

By Overhauser Law Offices, LLC

Indianapolis, IN. Patent attorneys for Buztronics, Inc. of Indianapolis, Indiana have filed a patent suit seeking that three patents owned by Toy Smith Investments, Inc. of Sumner, Washington be declared invalid and not infringed by Buztronics’ products. The three patents, all entitled “WRIST TOY” are: 6,685,582, 6,971,963, and 7,833,115.

Buztronics alleges that Toysmith “accused Buztronics of infringement of Toysmith’s patent rights.”

Practice Tip: Declaratory judgment suits are often filed intellectual property cases after the first allegation of infringement is made. The strategy is for the accused infringer to obtain “home court advantage” by having the dispute litigated nearby. This makes it more expensive for the patent owner to litigate, because they must hire local counsel. Coincidentally, two days before Buztronics filed this suit, the Court of Appeals for the Federal Circuit issued an Order clarifying when threats of infringement rise to a level sufficient to trigger declaratory judgment jurisdiction. In 3M Company v. Avery Denison Corporation, the Court stated that declaratory judgment jurisdiction requires more than “a communication from a patent owner to a party merely identifying its patent and the other party’s product line.”

March 29, 2012

Supreme Court Of The United States Reversed The Federal Circuit On Method Claim For Treating Autoimmune Diseases Are Not Eligible For Patent Protection

By Overhauser Law Offices, LLC

Washington, D.C. – The United States Supreme Court has unanimously reversed a patent decision by the Court of Appeals for the Federal Circuit and has held that patent claims that are a “law of nature” are not patent eligible under 35 U.S.C. § 101. The decision built upon the Court’s 2010 decision in Bilski v. Kappos.

Patent lawyers for Prometheus Laboratories, Inc. of San Diego, California filed a patent infringement suit against Mayo Collaborative Services, doing business as Mayo Medical Laboratories of Rochester, Minnesota, alleging that Mayo infringed patent no. 6,355,623, Method of treating IBD/Crohn’s disease and related conditions wherein drug metabolite levels in host blood cells determine subsequent dosage and patent no. 6,680,302, Methods of optimizing drug therapeutic efficacy for treatment of immune-mediated gastrointestinal disorders which have been issued by the US Patent Office.

The patents at issue involve claims over an observed correlation between certain blood tests and patient health, specifically the correlation between the level of certain drug metabolites in the patient’s blood and the patient’s symptoms of gastrointestinal disease. The Court of Appeals for the Federal Circuit had twice ruled in Prometheus’s favor. Oral arguments were held December 7, 2011 at the United States Supreme Court. The Court decision essentially held that Prometheus’s “invention” was not patentable because it was effectively a law of nature. In other words, the relationship between the dosages and the effect on patient health was a natural phenomenon and therefore, unpatentable.

We blogged a preview of this case in October. This ruling is being criticized by the patent bar as making the law less clear. In particular, Robert S. Sachs of Fenwick & West LLP is examining the decision in a series of blogs on Patently-O in which he examines “just some of the logical and legal errors in the Court’s decision.” Sachs commentary also suggests that numerous patents should now be found invalid.

Practice Tip: The Court’s decision has immediately changed protocol at the patent examination office. The US Patent Office has issued new guidelines to patent examiners which are available here.
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March 28, 2012

Southern District Denies Certainteed’s Motion to Dismiss Patent Infringement Suit Brought By Knauf Insulation

By Overhauser Law Offices, LLC

Indianapolis; IN – The Southern District of Indiana has denied a motion to dismiss filed by CertainTeed Corporation in a patent infringement lawsuit. Knauf Insulation Limited of St. Helens, Merseyside, United Kingdom and Knauf Insulation GMBH of Shelbyville, Indiana, filed a patent infringement suit alleging that Certainteed Corporation had infringed patent 7,854,980, FORMALDEHYDE-FREE MINERAL FIBRE INSULATION PRODUCT, which was issued by the US Patent Office. We previously blogged about this case on January 16, 2012 and May 19, 2011.

Patent attorneys for Certainteed had filed the motion to dismiss arguing that Knauf did not have standing because it did not own the rights to the patent at issue and that a first-filed action by Certainteed in the District of Columbia should resolve this dispute, not the case filed with the Southern District of Indiana. The claim that Knauf did not own the patent in question was based upon Certaineed’s interpretation of an exclusive license agreement between the inventors and various divisions of Knauf. Specifically, the Knauf parties had entered a “quitclaim and assignment” agreement that was governed by the laws of the Belgium. Certainteed argued that the transfer of patent rights was not valid.

The court found no merit in Certainteed’s argument. The court found “The Quitclaim and Assignment executed [by Knauf] clearly contains what is referred to in common parlance as a ‘typo.'” The court found that the typo did not negate the parties intentions in entering the contracts. The court also declined to dismiss under the first filed rule, noting that the District of Columbia court had yet to determine whether it had jurisdiction.

Practice Tip: The case management plan had been suspended while this motion to dismiss was pending. This controversy has been slow to progress. It was first filed in February 2011 and was refilled in its current form in May 2011 so it has been nearly a year at this point. The court has quickly scheduled a conference for later this week, likely attempting to move it along.
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March 27, 2012

Digonex Technologies Sue QCUE Inc. for Patent Infringement of Ticket Pricing Software

By Overhauser Law Offices, LLC

Indianapolis, IN – Patent attorneys for Digonex Technologies, Inc. of Indianapolis, Indiana has filed a patent infringement suit in the Southern District of Indiana alleging that Qcue Inc., of Austin, Texas infringed patent numbers of the 8,095,424 and 8,112,303, which have been issued by the US Patent Office.

The plaintiff claims that the defendants sell dynamic pricing software products aimed at pricing tickets for events by a variety of names “Dynamic Pricing Dashboard,” “the Qcue Product,” and “software-based dynamic pricing solution” that infringe the patents held by Digonex. The technology is apparently marketed to sports teams and event promoters. The complaint alleges that Qcue has sold infringing products to Major League Baseball, Major League Soccer, National Basketball Association, National Hockey League and NASCAR. The complaint makes two claims of patent infringement and seeks a declaration of infringement, an injunction, damages, attorney fees and costs. The complaint also alleges that Qcue has the specific intent to induce others to infringe Digonex’s patents.

Practice Tip: The complaint alleges that Qcue has referenced the two Digonex patents in a Qcue patent application pending before the US Patent Office. This, in part, is Digonex’s “evidence” of willful infringement. Also, Patent Office’s records reveal that in prosecuting the 8,095,424 patent it submitted an Information Disclsosure Statement on September 30, 2011, after the claims had been allowed. However, the Patent Office refused to consider the IDS becuase it did not comply with Patent Office regulations. Therefore, there may be some question regarding the validity of this patent.

March 23, 2012

Northern District Denies Motion to Strike Expert’s Survey Regarding Likelihood of Confusion in Trademark Infringement Case of Dwyer Instruments v. Sensocon Inc

By Overhauser Law Offices, LLC

South Bend, IN – Judge Theresa Springmann of the Northern District of Indiana has denied a motion to strike the report of an expert who conducted an internet survey regarding the likelihood of confusion created by a trademark infringement defendant.

In January 2009, trademark attorneys for Dwyer Instruments of Michigan City, Indiana had filed a trademark infringement lawsuit in the Northern District of Indiana alleging that Sensocon, Inc. and Tony E. Kohl of Highland City, Florida infringed Dwyer’s federally registered trademarks that are placed on Dwyer’s pressure gauge lens covers by placing confusingly similar marks on Sensocon’s own products. The complaint also made claims of trade dress infringement, unfair competition, false designation of origin, counterfeiting, false designation of origin and copyright infringement.

The parties filed cross-motions for summary judgment, and Sensocon filed a motion to strike the report of Dwyer’s expert who had performed a survey on the likelihood of confusing that is created by the alleged trademark infringement. The Court denied the motion to strike, applying the standards for admission of expert evidence under Federal Rule 702 and Daubert v. Merrell Dow Pharmaceutical, Inc., 509 U.S. 579 (1993) and its progeny. The Court noted that similar surveys are routinely admitted into evidence in trademark infringement cases. The court quoted a Seventh Circuit case, stating “[w]hile there will be occasions when the proffered survey is so flawed as to be completely unhelpful to the trier of fact and therefore inadmissible, . . . such situations will be rare.” AHP Subsidiary Holding Co. v. Stuart Hale Co., 1 F.3d 611, 618 (7th Cir. 1993).

Practice Tip: The Court noted that Sensocon could still attack the expert’s report by calling its methods into question and asking the court to grant little weight to the report. The court also granted Sensocon permission to file a report of its own expert to rebut Dwyer’s expert.

March 21, 2012

Southern District Grants Motion to Dismiss for Pacific Coast Breaker, Inc. in Trademark Infringement Suit Over Circuit Breakers with the ZINSCO Mark

By Overhauser Law Offices, LLC

Indianapolis, IN – The Southern District of Indiana has granted a Motion to Dismiss in a trademark infringement lawsuit filed by Connecticut Electric, Inc. of Anderson, Indiana alleging that Pacific Coast Breaker, Inc. of McClellan, California and and PC Systems, Inc., also of California, infringed trademark registration no. 975,845 for the mark ZINSCO registered with the US Trademark Office.

The suit involves circuit breakers sold by Pacific Coast that are manufactured in China by PC and sold only to Pacific Coast. The plaintiff claimed that Pacific previously purchased its breakers from Connecticut, but stopped purchasing circuit breakers from plaintiff and began selling circuit breakers that look “identical in appearance to the ZINSCO circuit breakers.” We previously blogged about the case here.

The court granted this motion to dismiss finding a lack of personal jurisdiction because neither of the California defendants had sufficient contact with Indiana. Connecticut had argued that there were sufficient contacts with Indiana because Pacific Coast had sold 648 circuit breakers to Indiana residents over the last five years. However, the court could not distinguish whether these Indiana sales were of the allegedly infringing product or of the authentic product. At most, the court believe only $3,780 worth of sales were allegedly infringing products, which the court concluded was not substantial enough to create personal jurisdiction.

Practice Tip: The court also rejected Connecticut’s argument for personal jurisdiction because Pacific committed intentional torts of trademark infringement, trade dress infringement, unfair competition, forgery, and counterfeiting which were directed into Indiana.

March 20, 2012

Southern District Grants Summary Judgment for Coach in Trademark Infringement Case Over Knock-Offs

By Overhauser Law Offices, LLC

Indianapolis; IN – The Southern District of Indiana has issued a partial summary judgment in favor of Coach, Inc. and finding that Teresa Barnes, the owner of a Muncie store, had committed trademark infringement and counterfeiting for the sale of knock-off Coach goods.

In April 2011, trademark attorneys for Coach, Inc. and Coach Services, Inc. of New York, New York, had filed a trademark infringement lawsuit in the Southern District of Indiana alleging that Chaos of Muncie, Chaos on Campus, LLC and Teresa Barnes of Muncie, Indiana have been offering for sale and advertising Coach knock-off products. The complaint alleged that in February 2011, the store was offering for sale fifty-five Coach knock-off items including flip-flops, handbags, wallets, and sunglasses. The complaint made claims of trademark counterfeiting, trademark infringement, trade dress infringement, false designation of origin, false advertising, trademark dilution, copyright infringement, common law trademark infringement, common law unfair competition, forgery, and counterfeiting. We blogged about the case here.

In the court’s decision granting summary judgment, it noted that Coach had requested summary judgment and Ms. Barnes had failed to reply. The court then reviewed the elements of trademark infringement and counterfeiting, found there was no factual dispute and found that the Coach should be granted summary judgment on the issue of liability. The court has ordered Coach to submit evidence on its damages.

Practice Tip: As the court noted, “A corporate officer, director or shareholder is, as a general matter, personally liable for all torts which she authorizes or directs or in which she participates, even if she acted as an agent of the corporation and not on her own behalf.” The court also noted that “an officer of a corporation can be personally liable for trademark infringement if the officer is a moving, active conscious force behind the defendant corporation’s infringement.” Citing Bambu Sales, Inc. v. Sultana Crackers, Inc., 683 F.Supp. 899, 913-14 (E.D.N.Y.1988). In this case, the court held that Ms. Barnes is personally liable because she was the sole owner of Chaos and managed all of the store’s business decisions.