New Decisions

January 13, 2012

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

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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January 4, 2012

Southern District Issues Partial Summary Judgment in Norwood Promotional Products v. Kustom Koozies Trademark Suit Over KOOZIE Mark

By Overhauser Law Offices, LLC

Indianapolis, IN – Judge Magnus-Stinson of the Southern District of Indiana has issued a partial summary judgment in a trademark infringement case. Trademark attorneys for Norwood Promotional Products, Inc. of Indianapolis, Indiana had filed a trademark infringement lawsuit in the Southern District of Indiana alleging that KustomKoozies, LLC and Steve Liddle of Raleigh, North Carolina infringed trademark registration no.3,240,989 for the KOOZIE mark registered with the US Trademark Office. Trademark attorneys for Norwood had sued Kustom in 2005 and 2006 over the use of the term “Koozie.” The parties reached a settlement of those lawsuits that included the terms that Kustom abandon its trademark application for the mark “KUSTOM KOOZIE”and accept a royalty-free license agreement regarding Norwood’s claimed mark, “Koozie.” In 2008, Norwood alleged that Kustom was not complying with terms of the license agreement, specifically it was required that KOOZIE be in all capital letter in any use and was not displaying ® after the mark. Further it was alleged that Kustom had registered internet domain names and sold products that were not allowed by the license agreement. The defendants attempted to cure the non-compliance, but in 2009 Norwood informed Kustom that it was cancelling the license agreement due to Kustom’s non-compliance and filed this lawsuit. Both parties moved for summary judgment.

One of Kustom’s counterclaims was that Norwood’s registered trademark for “KOOZIE” should be cancelled. Kustom argued that the mark was invalid. However, the Court rejected this claim finding that Kustom was estopped from challenging the legitimacy of the KOOZIE mark because it had voluntarily gave up the right to challenge this mark in the prior settlement agreement. The Court also cited the doctrine of “licensee estoppel” that a trademark licensee is barred from challenging the validity of the licensor’s mark. The Court granted summary judgment in favor of Norwood, finding that Kustom had breached the settlement and license agreements. The issue of damages was reserved for trial. The Court, however, granted summary for Kustom, finding that it had not infringed the trademark after the license agreement was cancelled. Several issues in this case remain pending for upcoming trial.

Practice Tip: In its opinion, the Court is critical of both parties’ trademark attorneys litigation strategies. The Court notes “The advocacy in this matter has been zealous if not always effective or efficient.” Later, the Court notes “the briefs have defined the issues with a preference for litigation tactics and strategy, as opposed to clarity.” The court then noted that the parties’ briefs were not well organized and noted it was structuring its opinion in a more logical organization.
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December 29, 2011

Eight Circuit Affirms Judgment for Rolls Royce over Trade Secrets

By Overhauser Law Offices, LLC

St. Louis, MO – The Eighth Circuit Court of Appeals has affirmed a lower court’s summary judgment in favor of Rolls Royce Corporation of Indianapolis and a jury’s award of $350,000. Intellectual property attorneys for Avidair Helicopter Supply, Inc. of Lee Summit, Missouri had filed a lawsuit seeking a declaration that it had not violated Indiana’s Trade Secret laws relating to trade secrets of the Rolls Royce Corporation of Indianapolis, Indiana. The case was originally filed in the Southern District of Indiana in 2006 but was transferred to the Missouri Western District Court in 2007.

The Court of Appeals affirmed the district court’s judgment. One issue that the Court of Appeals looked at was the definition of a trade secret. The Uniform Trade Secret Act provides that a trade secret is: “information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

Practice Tip: This case makes a claim under Indiana’s Trade Secrets Act, which allows a plaintiff to seek an injunction and damages when someone has misappropriated a trade secret. Indiana’s trade secret law is based upon the Uniform Trade Secret Act.
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December 23, 2011

Northern District Grants Default Judgment and Damages of Over $113,000 in favor of Century 21 in Trademark Infringement Case

By Overhauser Law Offices, LLC

Lafayette, IN – The Northern District of Indiana granted a default judgment, damages and a permanent injunction in a trademark infringement case involving a hold-over franchisee. Century 21 Real Estate, LLC of Parsippany, New Jersey had filed a trademark infringement lawsuit in the Northern District of Indiana alleging that Destiny Real Estate Properties LLC, f/d/b/a Century 21 Destiny Real Estate and Daniel Sutton of Lowell, Indiana infringed Century 21’s trademarks and service marks. Indiana Intellectual Property Law and News blogged about the case when it was filed. The defendants failed to file any response to the Century 21’s complaint. After finding that the defendants had been properly served, the court granted Century 21’s motion for a judgment by default.

The Court analyzed a legal question that has not yet been examined by the Seventh Circuit Court of Appeals and that different federal circuit courts have reached different results: “whether a hold-over franchisee’s continued unauthorized use of a franchisor’s mark constitutes counterfeiting[?]” The court found that the defendants use to Century 21’s mark was counterfeiting in this case and noted “The Court can conceive of no reason why an ex-franchisee should escape liability for counterfeiting simply because that person had access to franchise’s original marks because of the former relationship[.]” The court then analyzed the damages claims of Century 21 and awarded $113,656 plus attorneys fees of $5,419 and costs of $595 to Century 21. The Court also granted Century’s 21’s request for a permanent restraining order that prevents the defendants from using the Century 21 marks.

Practice Tip: Since the Court found that the defendant’s trademark infringement was counterfeiting, treble damages were available to Century 21. This case explains how intellectual property rights are generally well protected in statutory damages provisions and explains how the trebling of damages, ability to recover a defendant’s “profits” and recovery of attorney fees can lead to significant recoveries, even without the intellectual property owner having to prove “actual” damages.
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December 19, 2011

International Trade Commission to Revisit Ruling in Smart Phone Patent Infringement Claim

By Overhauser Law Offices, LLC

Washington, D.C. – The U.S. International Trade Commission announced that it will revisit a ruling by an administrative law judge finding that Apple had not infringed four of HTC’s patents. In May 2010, patent attorneys for HTC filed a complaint with the ITC alleging that Apple’s IPods, IPhones and IPads infringe upon HTC’s patents. HTC asked the commission to ban all imports of IPods, IPhones and IPads. In July, the ALJ issued a 200+ page ruling finding no patent infringement. Friday’s decision by the ITC will only review one of the four patents that HTC claims has been infringed. Now a panel of six commissioners will look at whether that patent was infringed.

Reuters.com described the case as “a proxy for the larger fight for market share between Google Inc’s Android cellphones and tablets, many of which HTC makes, and Apple’s products.” Patent attorneys for Apple have filed a similar complaint with the ITC and in the U.S. District Court of Delaware alleging that HTC’s smart phones infringe Apple’s patents.

Practice Tip: As the Reuters.com’s story points out, Apple, Samsung, HTC, Microsoft and Motorola all have current patent infringement litigation pending over smart phone technology. Expect to hear more about patent infringement cases involving smart phones.
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December 16, 2011

Now Pending: Appeal of Southern District’s Dismissal of False Patent Marking Suit and Award of Costs to Roche Diagnostics

By Overhauser Law Offices, LLC

Indianapolis, IN – An appeal is now pending of Judge Tanya Walton Pratt of the Southern District of Indiana‘s grant of a motion to dismiss in a qui tam patent false marking case. Intellectual property attorneys for David O’Neill, Promote Innovation LLC of Clarendon Hills, Illinois had filed a patent infringement lawsuit alleging that Roche Diagnostics of Indianapolis, Indiana, was marking its ACCU-CHEK® product packages with patents that were expired. The case was filed qui tam. The ACCU-CHEK® product line is diabetes blood glucose monitoring kits. The following expired patents alleged to wrongfully appear on the packaging of various products: 4,891,319 Protection of proteins and the like, 4,924,879 Blood lancet device and 4,999,582 Biosensor electrode excitation circuit, which have been issued by the US Patent Office. This was originally filed in the Northern District of Illinois and was transferred to the Southern District of Indiana in July of 2010. Indiana Intellectual Property Law and News blogged about the case here: O’Neill Sues Roche Diagnostics for False Patent Marking.

In June, Judge Pratt granted Roche’s motion to dismiss. Judge Pratt found that the complaint failed to allege patent false marking as a matter of law. The court found that the plaintiff failed to allege intent to deceive, which must be specifically plead and supported by factual allegations. The Court found the allegations of deceptive intent were similar to those in the Federal Circuit Court recent opinion, In re BPLubricants USA Inc., – F.3d -, 2011 WL 873147 (Fed. Cir. March 15, 2011) which had failed as a matter of law in that case. Therefore, the Court dismissed the case with prejudice.

The plaintiffs have filed an appeal. In addition, Roche had requested an award of costs of defending the action. In August, Judge Pratt awarded Roche $10,040.09 in costs. The plaintiffs have filed challenges to this award in the district court, and Magistrate Baker is currently reviewing this award.

Practice Tip: This appeal may present one of the first opportunities for the Federal Circuit Court of Appeals to invoke the patent reform legislation that was passed and signed earlier this year. The new law is expected to result in the immediate dismissal of most patent false marking cases.
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December 12, 2011

Federal Circuit Court of Appeals Affirms that It May Hear Legal Malpractice Claims Involving Patent Issue

By Overhauser Law Offices, LLC

Washington, DC – A recent decision in the Federal Circuit Court of Appeals in a legal malpractice claim involving a patent issue may have an impact on a recently filed Indiana case alleging patent attorneys committed legal malpractice, which was filed by Purdue Research Foundation late last month.

In Byrne v. Wood, Herron & Evans LLP, the Federal Circuit Court of Appeals vacated a summary judgment in favor of the law firm Wood, Herron & Evans, and remanded to the lower court for further proceedings. The plaintiff sued the law firm for legal malpractice for failing to secure a patent that was broad enough to secure his invention of a grass and weed trimmer. The plaintiff claimed that due to the law firm’s failure, he later lost a patent infringement lawsuit against Black & Decker. The court below granted summary judgment for the law firm, based in part on its decision that Mr. Byre was not an expert witness.

The appellate court also briefly took on the question of whether the federal courts have jurisdiction to hear legal malpractice claims, typically arising out of state law, when a patent issue is intertwined. The Court, citing Davis v. Brouse McDowell, L.P.A., 596 F.3d 1355 (Fed. Cir. 2010), confirmed that it did have jurisdiction over this case. However, the court acknowledged that other courts had disagreed.

The opinion is designated “non-precedential.” This was an appeal from the Eastern District of Kentucky.

Practice Tip: The basis of the legal malpractice claims in the Purdue case are substantially different that here, however, this case confirms that in most situations involving a patent issue is appropriate for the federal courts to hear legal malpractice cases.
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November 17, 2011

Southern District Dismisses Patent Infringement Case over Motorcycle Suspension for Lack of Personal Jurisdiction

By Overhauser Law Offices, LLC

Indianapolis, IN – The Southern District of Indiana has dismissed a patent infringement lawsuit finding a lack of personal jurisdiction over a California company accusing of patent infringement. Patent lawyers for AirFx LLC of Indianapolis, Indiana filed a patent infringement lawsuit in the Southern District of Indiana alleging J.D. Braun, of Los Angeles, California, doing business as Goldenstate Custom Cycles, Dr. V-Twin, Inc. of Sherman Oaks, California, infringed Patent No. 7,559,396 B2, Motorcycle air suspension system, which has been issued by the US Patent Office. Indiana Intellectual Property Law and News blogged about the case when it was filed in July.

The California defendant moved to dismiss the complaint, arguing that the court lacked personal jurisdiction. Patent attorneys for AirFX had argued that the Indiana district court had personal jurisdiction because the company had a website that was accessible in Indiana and listed an Indiana store where its products could be purchased. Judge William T. Lawrence, writing for the court, held that “the mere existence of nationally-accessible websites is a poor foundation on which to base personal jurisdiction.” Thus the court dismissed the case with prejudice.

Practice Tip: This case reiterates that simply having a website that is accessible within a district does not create personal jurisdiction. In order to achieve personal jurisdiction, the plaintiff must establish “minimum contacts” with the district.
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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 7, 2011

Eli Lilly & Co. Loses Appeal in British Supreme Court Over Patent Dispute Over Gene Sequence

By Overhauser Law Offices, LLC

London, U.K. – The Supreme Court of the United Kingdom has ruled against Indianapolis-based Eli Lilly & Company in a patent dispute. Lilly had challenged the validity of the patent of Human Genome Sciences, Inc., of Rockville, Maryland that covers the gene sequence of a protein called Neutrokine-α. Lilly had challenged the patent based on the fact that there is no known use of the protein. Thus, Lilly argued, the gene sequence was not patentable due to a lack of industrial application.

According to the Indianapolis Business Journal, Lilly continues to maintain the patent is invalid. The IBJ quoted a Lilly statement as stating “Human Genome Sciences seek to foreclose a whole area of research in a way that is not only harmful to the industry, but would ultimately and unjustifiably hinder the future development of new medicines.”

Practice Tip: The Court’s decision was based upon the European Patent Convention and United Kingdom patent doctrine requiring a patentable invention be susceptible to industrial application, which is similar to the U.S. patent doctrine of utility. The Court’s decision here holds that the U.S. doctrine of utility creates a higher bar to patentability that the E.U. and U.K. doctrine. The opinion explicitly rejected U.S. cases on the doctrine, including Brenner v Manson, 383 U.S. 519 (1966) and in re Fisher, 421 F.3d 1365 (2005).