Federal Jurisdiction

March 3, 2021

Intellectual Property Case Noticed for Removal

Kenneth Zweigel, Content & Commerce, Inc., Kevin Detrude, and My K9 Behaves, LLC, the Defendants, filed a Notice of Removal from Hamilton County Superior Court 4 to the U.S. District Court for the Southern District of Indiana for a lawsuit originally filed by Show Colors, Inc., Donna Chandler and Derivative Plaintiff My K9 Behaves, LLC, the Plaintiffs. According to the Notice, the Southern District has jurisdiction pursuant to the Copyright Act, Lanham Act, and the Declaratory Relief Act (28 U.S.C. §§ 2201 and 2202).

Apparently, the Plaintiffs’ Complaint alleges and “seeks relief regarding the proper owner of various copyrights, trademarks, and the derivative works related thereto.” Therefore, the Defendants claim the “action cannot be adjudicated without the interpretation of federal laws of the United States.”

January 11, 2021

The Trustees of Purdue University Sue for Alleged Trademark Infringement

By Overhauser Law Offices, LLC

Indianapolis, Indiana – The Trustees of Purdue University (“Purdue”), the Plaintiff, claims to own a number of registered and common law trademarks relating to Purdue University and its mascot (the “Trademarks”). According to the Complaint, Defendants, Vintage Brand, LLC and Sportswear Inc., sell Purdue-branded products utilizing the Trademarks without authorization or a license from Purdue. Purdue seeks declaratory judgment that Purdue owns and enjoys common law rights in the Trademarks and that Purdue’s rights are superior to the Defendants’ claim of any rights. Further, Purdue is seeking judgment against the Defendants for trademark infringement pursuant to 15 U.S.C. § 1114. Finally, Purdue is suing for common law passing off/unfair competition and trademark infringement.

Purdue University’s Registered Trademarks

November 25, 2020

Netflix’s Attempt to Remove Lawsuit Thwarted

By Overhauser Law Offices, LLC

Indianapolis, Indiana –Plaintiffs, City of Fishers, Indiana, City of Indianapolis, Indiana, City of Evansville, Indiana, and City of Valparaiso, Indiana, on behalf of themselves and all others similarly situated filed suit on September 4, 2020 in Marion Superior Court (Case No. 49D01-2008-PL-026436) alleging that Defendants, Netflix, Inc., Disney DTC LLC, Hulu, LLC, Directv LLC, Dish Network Corp., and Dish Network LLC, violated the Indiana Video Service Franchises Act Ind. Code. § 8-1-34-1 et seq. Plaintiffs are seeking an order declaring Defendants provide video service in Indiana and to require Defendants to perform statutory duties including compensating Plaintiffs and all other units of government for unpaid fees for past service.

Defendant, Netflix, filed a Notice of Removal on September 9, 2020 from Marion County Superior Court 1 to the United Stated District Court for the Southern District of Indiana. Netflix asserted jurisdiction in the Southern District due to diversity jurisdiction and jurisdiction under the Class Action Fairness Act of 2005 (“CAFA”). Netflix noted that since Plaintiffs filed their Complaint in this case, three more cases have been filed against Netflix and Hulu alleging similar violations of various state video franchise acts in Texas, Ohio, and Nevada.

Following the Notice of Removal, the Plaintiffs filed a Motion to Remand the case under the doctrine of comity. In the Southern District’s Order, the Court explained, “[t]he comity doctrine encourages federal courts to avoid ‘interfer[ing] . . . with the fiscal operations of the state governments . . . in all cases where the Federal rights of the persons could otherwise be preserved unimpaired.’ Levin v. Commerce Energy, Inc., 560 U.S. 413, 422 (2010).” Therefore, the case was remanded back to Marion Superior Court.

Practice Tip: Removal of a putative class action under the CAFA is proper if: 1) there is a class action; 2) there is minimal diversity between the parties, such that at least one class member is a citizen of a state different from the state of any defendant; and 3) the aggregate amount in controversy exceeds $5,000,000, exclusive of interest and costs. See 28 U.S.C. § 1332(d)(2).

April 23, 2020

Syndicate Sales Gains Home-Field Advantage in Trademark Infringement Suit

By Overhauser Law Offices, LLC

Syndicate Sales Inc., an Indiana corporation, along with six other Defendants filed notice to remove a case initially filed in the Superior Court of California, County of Los Angeles by Plaintiff, Natural Pack, Inc. (“Natural Pack”). Defendants sought to remove the case to the United States District Court for the Central District of California pursuant to 28 U.S.C. §§ 1331, 1337, and 1441 for federal question and diversity jurisdiction.

The removed case is a civil action entitled Natural Pack, Inc. v. Syndicate Sales, Inc. et al. Case No 19TSCV32476 (the “State Action”). Natural Pack filed the State Action on September 12, 2019, asserting claims for violation of Uniform Trade Secrets Act, fraud, negligent misrepresentation, breach of contract, intentional interference with prospective economic relations, negligence, violation of the Lanham Act, and California Statutory and common law infringement. Following removal to the Central District of California, the Defendants filed a Motion to Dismiss under F.R.C.P. 12(b)(2) or in the alternative to Change Venue pursuant to 28 U.S.C. § 1401. The case was transferred to the Southern District of Indiana on January 21, 2020.

The Original Notice of Removal was filed October 15, 2019 in the Central District of California; and the case was transferred to the Southern District of Indiana on January 21, 2020 given Case No. 1:20-cv-00219-JRS-DLP and assigned to District Judge James R. Sweeney and Magistrate Judge Doris L. Pryor.

May 6, 2019

Indiana Patent Litigation: Dr. Rick C. Sasso Seeks Royalties from Warsaw Orthopedic, Inc. and its Affiliates

By Overhauser Law Offices, LLC

Kosciusko County, Indiana – Attorneys for Plaintiff, Rick C. Sasso, M.D. (“Dr. Sasso”) of Carmel, Indiana, originally filed suit in the Kosciusko County Superior Court in Indiana alleging that Defendants, Warsaw Orthopedic, Inc., Medtronic, PLC, and Medtronic Sofamor Danek, Inc., have denied him and his accounting firm access to their sales ledger per two separate agreements. Dr. Sasso is seeking an injunction ordering Defendants to provide full access to its sales ledger to determine royalties owed to Dr. Sasso under two separate agreements. As of April 12, 2019, Defendants filed a Notice of Removal to remove the case to the U.S. District Court for the Northern District of Indiana.

Per the complaint, Dr. Sasso is a board-certified orthopedic surgeon specializing in the treatment of the spine. Dr. Sasso claims the Defendants, together, are top manufacturers for spine implants. It is claimed Dr. Sasso entered into two separate agreements with Sofamor Danek Holding, Inc., which was later acquired by Warsaw Orthopedic through a merger. The first alleged agreement, is the 1999 Screw Delivery System Agreement on November 18, 1999 (the “1999 Agreement”). The second alleged agreement is the 2001 Vertex Agreement, entered into on July 26, 2001 (the “2001 Agreement”). Dr. Sasso claims that these agreements have clauses that enable him to “inspect, examine, audit, and copy [Defendants’] records” relating to the agreements once per calendar year.

In August 2013, Dr. Sasso filed a different suit against the Defendants for unpaid royalties under both the 1999 and 2001 Agreements. Dr. Sasso was granted royalties in the amount of $79,794,721.00 for the 1999 Agreement and $32,657,548.00 for the 2001 Agreement, which has been appealed by Defendants. According to the complaint, the 1999 Agreement requires the Defendants to continue paying royalties until the expiration of U.S. Patent No. 6,287,313 and U.S. Patent No. 6,562,046, on or about November 23, 2019. Dr. Sasso also claims the 2001 Agreement requires Defendants to pay royalties to him so long as “the Medical Device is covered by a valid claim of an issued patent arising out of the Intellectual Property Rights.”

August 21, 2018

Indiana Copyright Litigation: Attorney Bell’s Copyright Infringement Case Against a New York Publication Company Dismissed Due to Lack of Jurisdiction

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Attorney and Photographer Richard N. Bell of McCordsville, Indiana filed suit in the Southern District of Indiana alleging that Defendant, Halcyon Business Publications, Inc., of New York infringed his “Indianapolis Photo” which has been registered with the United States Copyright Office as Registration No. VA0001785115. After review of the Defendant’s Motion to Dismiss for Lack of Jurisdiction which was filed on December 29, 2017 the court granted the Motion to Dismiss on May 24, 2018.

Bell, who has brought many similar lawsuits for infringement of his Indianapolis Photo, initially filed this case on November 29, 2017 alleging violations of the Lanham Act and copyright infringement. Halcyon claimed that the Court lacked personal jurisdiction over the company as they do not maintain any offices in the state, have no employees in the state, and have no assets in the state of Indiana. They did admit that they hired one Indiana resident as an independent contractor to write for their publication, but that contractor did not write the article that utilized the Indianapolis Photo. Further, the total amounts of advertising sold to Indiana companies by Halcyon amounted to 3.26% and 4.55% in 2016 and 2017, respectively, and Indiana subscribers to the publication comprised less than 3% of their total subscribers.

Here, the Court must only look at whether the personal jurisdiction is consistent with the Federal Due Process Clause as Indiana’s long-arm statute is analyzed under this issue. For this, a defendant must have “minimum contacts” with the forum state and purposefully avail themselves “of the privilege of conducting activities within the forum [s]tate, thus invoking the benefits and protections of its laws.” Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102, 109 (1987). This allows a defendant to reasonably anticipate being brought into a forum in a foreign jurisdiction.

August 9, 2018

Indiana Trademark Litigation: Overhauser Law Offices, LLC Represent the Prevailing Parties Over Indiana-Based Vera Bradley

By Overhauser Law Offices, LLC

Fort Wayne, Indiana – Attorneys for Plaintiff, Vera Bradley Designs, Inc., of Roanoke, Indiana filed suit in the Northern District of Indiana alleging that Defendant, Austin Devin 2 Denny Boys, LLC, infringed multiple trademarks of the Plaintiff. Overhauser Law Offices, LLC represented the Defendant Austin Devin 2 Denny Boys LLC and Darlene Nicholas, who filed a Motion to Dismiss for improper venue and prevailed on July 30, 2018.

Plaintiff currently holds more than 900 copyright registrations, 35 federal trademark registrations, and has 17 pending federal trademark applications. The Plaintiff alleged in its complaint that the Defendants operate eBay accounts that they use to sell counterfeit Vera Bradley items and these acts infringe Vera Bradley’s trademarks and copyrights. All Defendants were sent cease and desist letters on behalf of the Plaintiff via counsel on July 26, 2017. On August 1, 2017, all Defendants party to the Motion to Dismiss responded through counsel and agreed to stop selling the counterfeit items, however, the Plaintiff alleged they did not cease their activities and filed suit.

The Defendants moved to dismiss Vera Bradley’s Complaint and claimed that because a substantial part of the events leading to the Plaintiff’s claims did not occur in the Northern District of Indiana, venue was improper. Further, Defendant Nicholas, claimed that the Court did not have personal jurisdiction over her. The Plaintiff countered that there were five specific instances in which the counterfeit merchandise was purchased by its employees within the Northern District of Indiana from the Defendants. They also claimed that venue was proper because they suffered harm in the District. As to Defendant Nicholas, the Court held that the Plaintiff did not give any persuasive argument as to how the Northern or Southern District Courts of Indiana could have general or specific personal jurisdiction over her in this case as she resides in Florida. Therefore, the Court was unable to transfer the case to the Southern District of Indiana, which may have been a proper venue for the other Defendants involved.

June 15, 2018

Federal Circuit Court of Appeals Affirms Ruling by Indiana Southern District Declining Award of Attorney Fees

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Stone Basket Innovations, LLC of Austin, Texas, filed a patent infringement lawsuit in the Eastern District of Texas which was transferred to the Southern District of Indiana alleging that Cook Medical, LLC of Bloomington, Indiana, infringed Patent No. 6,551,327 (“‘327 Patent”), Endoscopic Stone Extraction Device with Improved Basket, issued by the US Patent Office.

The initial Complaint for this case was filed on April 8, 2015. Defendant served their invalidity contentions in October 2015 and deposed the ‘327 patent’s inventor in January of 2016. During the deposition, the inventor stated in regards to an addition to overcome an examiner’s rejection, “I realize there is nothing novel about it.” Defendant then petitioned the U.S. Patent and Trademark Office for inter partes review (IPR) of all the claims. The District Court case was stayed pending the outcome of the petition for an IPR based off a joint motion.

After the IPR was instituted in September 2016, Plaintiff offered to license the ‘327 patent to Defendant for $150,000.00. Negotiations fell through and the settlement did not occur. Plaintiff then filed a motion requesting an adverse judgment in the IPR proceeding in December 2016 and moved to dismiss the District Court case with prejudice, both of which were granted.

August 12, 2016

Seventh Circuit Rules on Sanctions for Vexatious and Obstructive Conduct by Attorneys for Porno-Trolling Collective

By Overhauser Law Offices, LLC

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.

July 22, 2016

Indiana Patent Law: Court Rules on Invalidity of Patent for Obviousness

By Overhauser Law Offices, LLC

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.