Indiana Intellectual Property Law News

February 7, 2011

Indiana’s District Courts Continue Busy Intellectual Property Dockets

Indianapolis and Hammond, Indiana – Attorneys practicing in Indiana’s two federal district courts, the Northern District of Indiana and the Southern District of Indiana, expect numerous patent, copyright and trademark infringement lawsuits to be filed in 2011, continuing the trend of the last two years. In 2009 and 2010, the Indiana Northern and Southern District Courts had numerous intellectual property cases on their dockets.

The chart below shows the number of intellectual property cases filed in 2009 and 2010. The Southern District of Indiana had a total of 75 lawsuits filed making intellectual property claims, of which 46 were patent claims. Copyright attorneys filed 7 cases and trademark attorneys filed 22 cases in 2010. Attorneys in the Northern District of Indiana filed 43 intellectual property cases in 2010. Patent lawyers filed 11 cases in the Northern District of Indiana, while copyright lawyers filed 11 and trademark lawyers filed 20 lawsuits.

February 4, 2011

Dion Designs sues Allwin Powersports, et.al. for Copyright, Trademark Infringement and Misappropriation of Trade Secrets

By Overhauser Law Offices, LLC

Indianapolis, IN – Copyright lawyers for Dion Designs of Quebec, Canada have filed an infringement suit against Allwin Powersports, Corporation, Inc., Arthur Liao, MHR Helmet Co., Ltd., Foshan Shunde Fengxing Helmets, Ltd., and Jiangmen Pengcheng Helmets, Ltd. Plaintiff Dion claims he is a famous designer of helmets, who signed an agreement in 2005 with the Defendants to receive $0.50 for each helmet sold using Dion’s deigns. Defendants paid Dion for some helmets, but terminated the agreement around 2010. However, Dion claims that Defendants used some of Dion’s latest designs to make several new helmets. While some of these designs have been marketed by the Defendants in Europe, Dion fears that they will be offered in the US at the Dealer Expo 2011 on February 18 – 20, 2011 in Indianapolis. Dion claims that he filed copyright applications and design patent applications on his designs, although none of those applications has resulted in a registration or issued patent.

The complaint asserts a veritable “kitchen sink” of claims, such as a Lanham Act claim based on a misrepresentation that Defendants have “authority to import and sell such products, without disclosing the absence of a valid license or agreement with the designer.” Claims are also alleged for copyright infringement, trade secret misappropriation, breach of contract, conversion, unfair competition, and for declaratory relief. Dion’s complaint is also accompanied by a Motion for Preliminary Injunction seeking to bar the “displaying or promoting” of the allegedly infringing helmets at the Dealer Expo on February 18-20, 2011, or on the Internet.

Practice Note: The Plaintiffs’ complaint appears to have several inconsistencies. The Lanham Act claim based on a “failure to disclose” is highly unusual; normally, a Lanham Act claim is predicated on an overt misrepresentation as to source. Although Dion states that the Defendants’ claim that the helmets were “designed in Europe” is false, even if this is the case, it is hard to see how the Plaintiff is harmed, especially since the complaint states that “Dion’s plans to make commercial use of those designs have been placed on hold.” The copyright infringement claim is suspect because, as discussed elsewhere on this site, the Plaintiffs did not obtain a copyright registration before filing a suit. Also, to support the trade secret misappropriation claim, the plaintiff claims that his designs “derive substantial commercial value from not being generally known.” However, even if the Plaintiffs’ designs were once “not generally known,” they certainly are now since the Plaintiff: (a) attached them to his complaint, (b) filed them with the US Copyright Office, and because (c) the designs are alleged to been sold in Europe for some time. Dion’s claim for “conversion” also appears to be preempted by the Copyright Act. Finally, it seems that Dion will have difficulty establishing the “irreparable harm” factor necessary to obtain preliminary injunctive relief, since his predominant complaint is that he has not received his $0.50 per royalty license fee.

February 4, 2011

Senate Judiciary Committee Unanimously Approves Patent Reform Bill

By Overhauser Law Offices, LLC

In an action that would affect patent applicants in Indiana and other states, the Senate Judiciary Committee on February 3, 2011, approved an Amendment to S. 23, patent reform legislation to implement a first-inventor-to-file system, revise provisions on damages awards, create a new post-grant review system, and grant the PTO fee setting authority. The vote was 15-0.

The amendments approved were: (1) to delete provisions addressing willful infringement; (2) to delete provisions that would have repealed the requirement that Federal Circuit judges live within 50 miles of the District of Columbia; and (3) to add a provision addressed stating that the Federal Circuit’s exclusive appellate jurisdiction as including compulsory counterclaims arising under patent law.

Note: Some other changes have been made to the legislation to refine and clarify language or to make changes that conform to other provisions. For example:

January 31, 2011

Noble Roman’s Sues Brabham Oil Alleging Trademark Infringement Over Use of Warmer Wrap

By Overhauser Law Offices, LLC

Indianapolis, IN –

A trademark attorney for Noble Roman’s, an Indianapolis-based pizza maker, has filed a trademark infringement lawsuit against Brabham Oil, a South Carolina corporation. The compliant, filed by Noble Roman’s lawyer, alleges that Brabham Oil formerly operated seven Noble Roman’s franchise locations. According to the complaint, Brabham continued to use Noble Roman’s trade dress, specifically the Warmer Wrap Trade Dress, after the franchise agreements terminated. The attorney for Noble Romans claims that Brabham Oil has violated the terms of the franchise agreements. The complaint makes claims of trademark infringement, under the Lanham Act, 15 U.S.C. § 1125(a) and the common law as well as unfair competition, citing 15 U.S.C. § 1125, and breach of the franchise contracts. Noble Romans seeks an injunction and damages. This case has been assigned to Judge Sarah Evans Barker and Magistrate Judge Debra McVicker Lynch of the Southern District of Indiana, and assigned case no. 1:11-cv-00135-SEB-DML.

Practice Tip: When a franchise agreement terminates, typically the franchisee must promptly cease using and return all signs and other equipment containing trademarks. Failure to do so may result in a lawsuit for breach of contract as well as trademark infringement. Noble Roman’s has been particularly aggressive in enforcing franchise agreements. Since 2007 it has filed the following suits in the Southern District of Indiana:

January 31, 2011

Dataflow Systems, Inc. Sues Arrival Star S.A. and Melvino Technologies Limited, Seeking Declaratory Judgment on Vehicle Tracking Patents

By Overhauser Law Offices, LLC

Indianapolis, IN – Patent lawyers for Dataflow Systems, Inc. of Indianapolis, IN, filed a declaratory judgment suit seeking a ruling that the company has not violated certain patents held by Defendants Arrival Star S.A. or Melvino Technologies Limited.

The lawsuit concerns several patents, issued by the U.S. Patent Office, which cover “vehicle tracking and status messaging systems,” typically used in the shipping industry.

The complaint alleges that, early in 2011, the Defendants sent a letter to the Plaintiff asserting patent infringement and proposing a “highly favorable” license. The letter gave a two-week period for reply and threatened that the Defendants would “proceed accordingly here in the court system” if the deadline was not met. The day before the deadline, Plaintiff’s counsel responded, saying their analysis was not complete and promising a substantial reply early the next month, February. Defendants’ counsel then insisted on a reasonable settlement offer by February 1st or else litigation would be brought in the U.S. and Canada. Plaintiffs soon filed for declaratory relief and allege that none of their products include all the limitations of any of the asserted patents’ claims. They further allege that the Defendants, in bad faith, did not perform a pre-suit investigation into infringement.

The patents at issue are: Patent No. 6,486,801, BASE STATION APPARATUS AND METHOD FOR MONITORING TRAVEL OF A MOBILE VEHICLE; Patent No. 6,714,859, SYSTEM AND METHOD FOR AN ADVANCE NOTIFICATION SYSTEM FOR MONITORING AND REPORTING PROXIMITY OF A VEHICLE; Patent No. 6,317,060, BASE STATION SYSTEM AND METHOD FOR MONITORING TRAVEL OF MOBILE VEHICLES AND COMMUNICATING NOTIFICATION MESSAGES; Patent No. 6,748,320, ADVANCE NOTIFICATION SYSTEMS AND METHODS UTILIZING A COMPUTER NETWORK; Patent No. 6,952,645, SYSTEM AND METHOD FOR ACTIVATION OF AN ADVANCE NOTIFICATION SYSTEM FOR MONITORING AND REPORTING STATUS OF VEHICLE TRAVEL; Patent No. 7,030,781, NOTIFICATION SYSTEM AND METHOD THAT INFORMS A PARTY OF VEHICLE DELAY; and Patent No. 7,400,970, SYSTEM AND METHOD FOR AN ADVANCE NOTIFICATION SYSTEM FOR MONITORING AND REPORTING PROXIMITY OF A VEHICLE.
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January 29, 2011

148 Trademark Registrations Issued to Indiana Companies in January, 2011

By Overhauser Law Offices, LLC

The US Trademark Office issued the following 148 trademark registrations to persons and businesses in Indiana in January, 2011, based on applications filed by Indiana Trademark Attorneys:

	Reg. Number	Mark	Click to View
1	3,912,455	LINCOLN DURATIONGUARANTEE	View
2	3,911,120	THE ANGIE’S LIST BIG DEAL	View
3	3,911,107	{Detail}	View
4	3,910,954	ACA	View
5	3,910,777	ZESCO.COM	View

January 28, 2011

Indiana Patent Attorneys Obtain 105 Patents for Indiana Companies in January, 2011

By Overhauser Law Offices, LLC

Indiana patent attorneys obtained issuance of the following 105 patents from the US Patent Office to persons and businesses in Indiana in January, 2011:

	PAT. NO.	Title
1	D631,530	Fluid control handle
2	D631,396	Race car
3	7,877,303	System and methods for tracking the relative interests of the parties to an insurance policy
4	7,875,787	Apparatus and method for visualization of music using note extraction
5	7,875,780	Inbred corn line LLD20BM

January 27, 2011

Seventh Circuit Affirms Dismissal of Non-Exclusive Licensee’s Copyright Infringement Suit and Award of Attorney’s Fees

By Overhauser Law Offices, LLC

Chicago, IL – The Seventh Circuit Court of Appeals affirmed the dismissal of a copyright infringement suit. Lawyers for HyperQuest, Inc., of Buffalo Grove, Illinois, filed a suit against N’Site, Inc. and Unitrin Direct Insurance Company alleging copyright infringement of copyrighted software used to process insurance claims. The software, eDoc, had been registered by the US Copyright Office. Although the license agreement used the phrase “exclusive licenses,” the trial court concluded that the specific words in the license granted only a non-exclusive license. Thus, the trial court determined that HyperQuest did not have standing to bring the lawsuit and dismissed the case. The district court also ordered HyperQuest to pay N’Site and Unitrin’s attorney’s fees of $134,958.42 for defending the copyright infringement suit. The plaintiff appealed, but the Court of Appeals, decided that the Copyright Act limits who can sue for infringement of a copyright to “the legal or beneficial owner of an exclusive right under a copyright” and affirmed the district court’s dismissal. The Court of Appeals also affirmed the award of attorney’s fees to N’Site and Unitrin.

Practice Tips: When making a license agreement for the use copyrighted material, attorneys should carefully review whether the terms of the agreement reflect the parties’ intentions. Even if an agreement uses the phrase “exclusive license,” the terms of the agreement must reflect actually exclusivity for the licensee to bring a copyright infringement suit.

Plaintiffs should carefully consider whether to file a Copyright infringement suit. The Copyright Act is one of the few laws that allows a prevailing defendant to collect attorneys fees from the plaintiff if the suit is unsuccessful.

The Court’s Opinion is below.
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January 21, 2011

Consulting Engineer Sues, Claiming He Is Co-Inventor of Suros Surgical Patent Worth Millions

By Overhauser Law Offices, LLC

Indianapolis, IN – Patent lawyers for plaintiff Schwindt, claim the defendants Miller and Mark omitted Schwindt as an inventor on a patent application, that turned out to be worth millions. All three were early founders and investors in Suros Sugical Systems, an Indianapolis medical device manufacturer founded in 2000. Suros grew quickly, and was acquired for $240 million by Hologic in 2006.

Plaintiff Schwindt did some outside engineering consulting for Suros. He claims his contributions (suggesting a pneumatic control, a pressure switch and a pneumatic circuit manifold for a biopsy device) elevate him to the status of an “inventor” of the system on which he worked. Suros applied for and was issued several patents, including 6,758,824, although Schwindt was not named an “inventor” on the applications filed by Suros.

Schwindt later started his own company, Tissue Extraction Devices, and filed for his own patent applications for the same invention. This led to an interference proceeding, which remains pending. According to the complaint, in that proceeding, “the USPTO suggested that it is the district court and not the Office that is in the best position to fashion an equitable remedy to fit the facts in cases [such as this one] where inequitable conduct is established.” In contrast, Suros claims in the interference that Schwindt simply followed instructions to fabricate a circuit board and console for Suros’s device using off-the-shelf components and had no involvement in the biopsy device’s development.

Notwithstanding the ongoing interference proceeding, in the present suit, Schwindt asks the Court to declare him a co-inventor of the patents issued to Suros.

Practice Tip: This case highlights the importance of having clear intellectual property rights agreements when utilizing outside consultants. Even though a company may pay an outside firm to assist with developing a product, unless the agreement specifically calls for the assignment of inventions, the consultant will own the right to any resulting inventions, not the company commissioning the work.

It will be interesting to see how the Court addresses jurisdictional issues. The Complaint asserts claims for fraud/deception, unjust enrichment, and “accounting,” which are all state law claims that do not appear to invoke Federal jurisdiction. The only claim alleged to justify federal jurisdiction is that for declaratory judgment that the plaintiff is a co-inventor of the patents. However, patent ownership issues usually arise under state law. Jim Arnold Corp. v. Hydrotech Systems, Inc., 109 F.3d 1567 (Fed. Cir. 1197), cert. denied sum nom., 118 S. Ct. 338 (1997).

The complaint and more information about this suit is below.

January 20, 2011

Bald Spot Racing sues BSCI for Patent Infringement of Vehicle Seat Inserts

By Overhauser Law Offices, LLC

Indianapolis, IN – Patent lawyers for Bald Spot Racing, LLC of Indianapolis, IN have filed a patent infringement suit alleging BSCI, Inc. of Mooresville, NC infringed patent no. 6,733,710 VEHICLE PASSENGER RESTRAINT AND METHOD OF PRODUCING SAME, which has been issued by the US Patent Office. Despite the title of the patent, its single claim is limited to a method for making a car seat that is custom formed to a specific driver.

The single independent claim of the patent is:

1. A method of producing a restraint for a passenger of a vehicle comprising the steps of:
placing an enclosure of flexible plastic within a vehicle;

placing a passenger of the vehicle atop and adjacent said enclosure while in said vehicle;
allowing said flexible plastic to form around the passenger forming a plastic restraint;
removing the passenger from the vehicle;
causing the plastic restraint to harden;
removing the plastic restraint from the vehicle; scanning said plastic restraint to profile said plastic restraint; and, shaping solid plastic in accordance with the profile of the plastic restraint producing a passenger restraint.

This case has been assigned to Judge Jane E. Magnus-Stinson and Magistrate Judge Tim A. Baker in the Southern District of Indiana, and assigned case no. 1:11-CV-00095-JMS-TAB.

Practice Tip: The complaint alleges upon “information and belief” that the defendant “sold or offered for sale seat inserts for a racecar within this judicial district that were made by the defendant using a process protected by the patent . . .” An intriguing issue in this case is likely to be whether the defendant is subject to personal jurisdiction in Indiana if it did not actually practice the method in Indiana, and has no other contacts with Indiana. Personal jurisdiction could be more likely if there was an actual sale of a product of a seat insert to a customer in Indiana that was made using the patented method. It is not unusual for a patent owner to purchase one of the defendant’s products in the State where the patent owner plans to file suit, and then to reference that sale in the complaint to improve the odds so of acquiring personal jurisdiction over the defendant. The complaint here does not reference such a purchase.