Articles Posted in New Decisions

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Indianapolis, IN – Magistrate Judge Debra McVicker Lynch of the Southern District of Indiana has issued a decision in a discovery dispute in a copyright infringement lawsuit. Intellectual property attorneys for Kevin B. McCarthy of Indianapolis, Indiana, Albert H. Langsenkamp, Carmel, Indiana and BVM Foundation, Inc. of Batesville, Indiana had filed a lawsuit in the Southern District of Indiana making several claims against that Patricia Ann Fuller, also known as Sister Joseph Therese of Fostoria, Ohio and John Doe of Ohio. Ms. Fuller apparently has counterclaimed claiming trademark and copyright ownership of the copyrighted work OUR LADY OF AMERICA. Ms. Fuller apparently operates the website www.ourladyofamerica.com.

The Our Lady of America copyrighted works are drawings and statutes based upon a nun’s visions of the Virgin Mary that began in the 1950s. According to the complaint filed in the case, Ms. Fuller claims she owns the copyright to one of theOurLadyofAmerica.jpg Our Lady of America statute and the parties dispute the ownership. The plaintiffs disagree and believe Ms. Fuller is making numerous misrepresentations regarding the works and is fraudulently representing herself as the owner of the works and marks. In the original complaint, the plaintiffs made claims of defamation, intentional infliction of emotional distress, fraud, deception, theft, criminal conversion, and civil conspiracy. It appears that Ms. Fuller is claiming copyright and/or trademark rights to the images and statutes. The court’s discovery orders require her to disclose information such as “how the representation of the Virgin Mary was being used as a trademark in 1960.

Practice Tip: It appears that Ms. Fuller provided vague answers to numerous interrogatories sent to her. Federal Rule of Civil Procedure 26(e)(1)(A) requires parties to supplement their answers to discovery questions when the party learns that an answer provided is incomplete or incorrect.
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Indianapolis, IN – Chief Judge ROBB of the Court of Appeals for Indiana Indiana Court of Appeals.jpghas issued an opinion regarding An-Hung Yao and Yu-Ting Lin Houston, Texas; who were charged with counterfeiting, theft, and corrupt business influence Huntington County, Indiana Circuit Court based upon the sale of toy guns that allegedly infringement federally registered trademarks.

Defendant Lin operates a business in Houston, Texas called Generation Guns, which imports toy guns from Taiwan and sells the toy guns to the public, including the GA-112 Airsoft gun. Defendant Yao is the vice-president of a Houston bank and is a friend of Lin who allegedly occasionally helps Lin with the Generation Guns business. In 2009, firearms manufacturer Heckler & Koch engaged Continental Enterprises of Indianapolis, to investigate possible trademark infringement claims of H&K’s federally registered trademarks. Continental Enterprises placed orders with Generation Guns for several guns that it believed to infringe H&K’s trademarks and had the products delivered to addresses in Huntington County, Indiana. Continental Enterprises then filed a report with the Indiana State Police. The prosecuting attorney in Huntington County then charged Lin and Yao each with three counts of counterfeiting, three counts of theft, and one count of corrupt business influence “based upon the similarities between the GA-112 airsoft guns and H&K’s firearm.”

The defendants had filed a motion to dismiss in the trial court arguing that the court did not have jurisdiction since all the alleged act occurred in Texas and also argued that the toy gun was not a “written instrument” for the purposes of the counterfeiting crime. The trial court found that it did have jurisdiction, but dismissed the counterfeiting claim, finding that toy was not a “written instrument.” In this interlocutory appeal, the Court of Appeals reversed and held that the trial court should have dismissed the case since Indiana did not have territorial jurisdiction. The court looked to Indiana Code 35-41-1-1(b), which states that Indiana has jurisdiction if conduct or a result that is an element of the crime occurred in Indiana. The court noted that jurisdiction in a criminal case is a factual issue for the jury to determine. However, the court noted that there was no factual dispute about whether the acts occurred in Texas, and therefore, the case should have been dismissed as a matter of law. The court did not address the claim that the toy gun was not a written instrument.

Practice Tip: This case is interesting to Indiana intellectual property attorneys for a number of reasons. First, it involves Continental Enterprises, a frequent litigant in Indiana intellectual property lawsuit. Indiana Intellectual Property Law News has previously blogged about Continental Enterprises cases here.

Secondly, this case addresses the unique issue of territorial jurisdiction for criminal actions. In this case the court looked to Indiana Code 35-41-1-1(b), which states that Indiana has jurisdiction if conduct or a result that is an element of the crime occurred in Indiana. The court noted that jurisdiction in a criminal case is a factual issue for the jury to determine. However, the court noted that there was no factual dispute about whether the acts occurred in Texas, and therefore, the case should have been dismissed as a matter of law. This is a different standard than Indiana courts’ personal jurisdiction for purposes of civil liability.

Finally, the Court of Appeals decided that the trial court did not have jurisdiction, there by evading the issues of how a “product” like a toy gun, can be a “written instrument” for purposes of counterfeiting criminal offense. Another recent Court of Appeals opinion addressed the definition of a written instrument.
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Chicago, Ill. – The Seventh Circuit Court of Appeals has affirmed the Northern District of Illinois assignment of a “service agreement” in a bankruptcy case, despite a trademark license owner’s claim that the agreement was a trademark sub-license. In 2009, XMH Corp. filed for bankruptcy and requested the bankruptcy court’s permission to sell a subsidiary’s assets to a purchaser. The assets sold would have included an assignment of an executory contract between the subsidiary and Western Glove Works. The contract allowed XMH’s subsidiary to use the trademark and provided a share of the profits for Western Glove. The contract did not provide for assignment and was not explicitly called a trademark license agreement. Western Glove Works objected to the bankruptcy court’s assignment of the contract, arguing that the contract was a trademark license contract and therefore could not be assigned without its permission.

The questions before the court were (1) whether a trademark is assignable without the licensor’s permission and (2) whether a trademark license can be implied in an agreement that does not explicitly create a trademark license. This appeal was brought on behalf of Western Globe Works,JagJeans.jpg which owns a license to the trademark in question, titled “JAG JEANS” and registered with the US Trademark Office.

The appellate court held that the universal rule is that trademark licenses are not assignable in the absence of a clause expressly authorizing assignment.” The court noted that unauthorized assignments of a trademark license may result in diminished quality of the marked products and therefore damage to the brand reputation indicated by the trademark. However, since the parties in this case had not explicitly called their contract a trademark sublicense, the contract in question was not governed by this universal rule, and therefore could be assigned by the bankruptcy court. The judgment of the Northern District of Illinois was therefore affirmed.

Circuit Judge Richard Posner wrote the opinion of the court, which Circuit Judges Bauer and Williams joined. The case was In re XMH Corp., case numbers 10-2596, 10-2597, 10-2598, and 10-2599 in the Seventh Circuit Court of Appeals, an appeal from the Northern District of Illinois, Eastern Division.

Practice Tip: As illustrated in this case, trademark licenses cannot be assigned unless there is a specific provision in the license contract that allows assignment. See Miller v. Glenn Miller Productions, Inc., 454 F.3d 975, 988 (9th Cir. 2006) (per curiam).

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Indianapolis, IN – The Southern District of Indiana has issued a claim construction order in a patent infringement lawsuit. Cook Incorporated, of Bloomington, Indiana, had filed a patent infringement lawsuit in the Southern District of Indiana against Endologix, Inc., of Irvine, California. The patents at issue are owned by Cook and are patent nos. 5,035,706, PERCUTANEOUS STENT AND METHOD FOR RETRIEVAL THEREOF and 5,755,777, Thumbnail image for Cook Inc.jpgEXPANDABLE TRANSLUMINAL GRAFT PROSTHESIS FOR REPAIR OF ANEURYSM, which have been issued by the US Patent Office.

The patents at issue are medical devices that are used to treat abdominal aortic aneurysms, which are caused by the weakening of the aorta. The patented technologies are stents that strengthen the walls of the aorta and delivery systems. Cook alleges that Endologix’s Powerlink product infringes its patents. On April 15, 2011, the court held a Markman hearing to determine whether the patents cover the alleged infringer’s product. The parties disputed whether certain features of Endologix product were covered by Cook’s patents and the meaning of specific terms in the patent’s claims. Judge Pratt’s order set out the meaning of over thirty the disputed claim terms.

According to Yahoo Finance, Endologix has interpreted the rulings to be favorable.

Practice Tip: As the court described in its opinion, “[i]n order to win a patent infringement suit, a plaintiff must establish that the patent claim “covers the alleged infringer’s product or process.” Markman, 517 U.S. at 374 (citation and internal quotations omitted). Consequently, the first step in an infringement analysis involves determining the meaning and the scope of the words of the patent’s claims.” While resolution of disputed claim terms, such as what occurred in this opinion, does not resolve the controversy entirely, it is a significant step.

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[Disclosure: Overhauser Law Offices, LLC, the publisher of this website, represents a party in this litigation]

Chief Judge Philip P. Simon for the Northern District of Indiana has construed the claims of Patent No. 5,866,210, METHOD FOR COATING A SUBSTRATE.

The ‘210 patent describes a method of coating substrates such as those used in catalytic converters. Catalytic converters are typically found in automobile and truck engines, and their purpose is to reduce or remove harmful emissions from engine exhaust. The type of catalytic converter relevant here is principally composed of a core – or substrate – which sits inside a metal housing. The substrate is a single unit (a monolithic substrate) that has a number of honeycomb-like channels running parallel to each other within the metal frame. Through various methods, the inner walls of these channels are coated with a catalyst slurry made of precious metals. As engine exhaust flows through the substrate’s channels, the precious metals coating the channels’ inner walls cause a chemical reaction that converts the harmful engine emissions into more benign substances. But because the precious metals are expensive, care must be taken to sufficiently coat the channels without wasting the catalytic slurry.

The ‘210 patent teaches a methodThumbnail image for BASF Picture.jpg of coating the channels of the substrate through a process called vacuum infusion coating. Through this process, one end of the substrate is partially immersed in a dip pan of catalytic slurry. The dip pan, the size and depth of which may vary, is loaded with an amount of slurry exceeding the amount of coating necessary to coat the walls of the substrate to a desired level. A vacuum is applied to the other end of the substrate, which draws the slurry of precious metals up the channels of the substrate to coat the inner walls of the substrate’s channels. The vacuum continues to suck air through the channels as the substrate is removed from the pan, and then the coating dries to the channel walls. The ‘210 patent teaches that each of the channels of the substrate are coated to the same length, creating a “uniform coating profile.” And as the specification explains, “the typical coating operation requires the immersion of one end of the substrate into the coating media followed by drying and then the insertion of the opposed end of the substrate into the coating media followed by drying and curing.”

The Court’s ruling on claim terms proposed by patent attorneys for the parties were as follows:
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Fort Wayne, IN – The Northern District of Indiana has granted partial summary judgment in a patent infringement case. Geocel LLC,Geocel.jpg of Elkhart, Indiana, had filed a patent infringement lawsuit in the Northern District of Indiana seeking a declaratory judgment that patent no. RE 41,586, PITCH POCKET AND SEALANT, which has been issued by the US Patent Office and is owned by Chem Link Inc., of Schoolcraft, Michigan, is invalid and has not been infringed.

Geocel filed this patent infringement lawsuit seeking a declaratory judgment that some of claims in the ‘586 patent were invalid and that Geocel had not infringement the patent. Specifically, Geocel alleged claims 21-25 violate the rule against recapture based upon the fact that Chem Link Thumbnail image for Thumbnail image for ChemLink.jpghad previously applied for a patent of similar technology that had been repeatedly rejected by the U.S. Patent Office. The issue in this summary judgment decision was whether claims 21-25 of the ‘586 patent violate the rule against recapture, which “prevents a patentee from regaining through reissue subject matter that he surrendered in an effort to obtain allowance of the original claims.” The court here concluded that the claims did not violate the rule against recapture, and therefore granted partial summary judgment in favor of Chem Link, indicating that the patent is valid. There are still unresolved issues in the case and it remains on the docket.

Practice Tip: As the court explained, Title 35 of the United States Code, Section 251 provides in part that: “Whenever any patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid . . . by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent. No new matter shall be introduced into the application for reissue.” The rule against recapture “prevents a patentee from regaining through reissue subject matter that he surrendered in an effort to obtain allowance of the original claims.” MBO Labs., Inc. v.Becton, Dickinson & Co., 602 F.3d 1306, 1313 (Fed. Cir. 2010) (quoting Hester Indus., Inc. v.Stein, Inc., 142 F.3d 1472, 1480 (Fed. Cir. 1998)).
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This case involves companies who each use the trademark BRANDT for selling agricultural equipment, but in different geographic areas. Trademark attorneys for Pitonyak Machinery Corporation claimed it acquired rights to the trademark BRANDT when it purchased several businesses in 2002 from a Brandt family in Carlisle, Arkansas. During discovery, Pitonyak produced to lawyers for Brandt Industries, Ltd (the opposite party), the Asset Purchase Agreement but redacted (or blocked out) the purchase price, arguing it was not relevant. Brandt Industries filed a Motion to Compel Production of a non-redacted Version.

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Chicago, IL – The Seventh Circuit Court of Appeals affirmed that a toilet paper design was functional and not subject to trademark protection. Georgia-Pacific began selling Quilted Northern toilet paper about twenty years ago and obtained trademarks, copyrights, and patentsPictures from Opinion.jpg of the quilted design. Kimberly-Clark later began selling competing toilet paper that had a diamond design similar to Quilted Northern, called Cottonelle. Intellectual property attorneys for Georgia-Pacific then filed a trademark infringement lawsuit against Kimberly-Clark alleging their new product infringed the Quilted Northern trademark and was unfair competition. The Northern District of Illinois determined that the diamond design was functional and not subject to trademark protection, therefore granting summary judgment in favor of Kimberly-Clark. Georgia-Pacific appealed to the Seventh Circuit Court of Appeals, which affirmed the lower court.

Judge Evans wrote an unusually entertaining opinion for the court that begins: “Toilet paper. This case is about toilet paper. Are there many other things most people use every day but think very little about? We doubt it.” (Editorial Note – Sadly Judge Evans passed away on August 10, 2011, and this opinion may have been one of his last.) Judge Evans commented that the intellectual property attorneys representing both sides were “truly-first rate” and had cited over 119 cases and 20 federal statutes.

Quilted Northern TV Ad (2003) – YouTube.mht

Practice Tip: The registration of a trademark creates a strong presumption of validity. However, if a trademark is challenged as being a functional element of a product, rather than an identifying mark, the mark holder will then have the burden of proving that the mark is not merely functional. The U.S. Supreme Court addressed these types of claims in TrafFix Devices v. Marketing Displays, Inc. In its opinion, the Court in this case quoted the TrafFix opinion to describe the heavy burden of the mark holder to show that “the feature is not functional, for instance by showing that it is merely an ornamental, incidental, or arbitrary aspect of the device.”

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Indianapolis, IN – The Indiana Court of Appeals examined Indiana’s criminal counterfeiting law in affirming a criminal counterfeiting conviction and sentence. The defendant was charged with five counts of counterfeiting, a Class D felony, after he filled out mail order forms and caused an Indiana State Trooper INSTATEPOLICE.jpgto receive and become indebted for “various collectable items that neither he nor any member of his household had ordered.” The defendant argued that the verdict should be overturned because the order forms were not “written instruments” as defined by the criminal counterfeiting statute. The court found that the order forms were written instruments. They examined the definition, citing I.C. § 35-43-5-1(t) and noted “a written instrument is defined as ‘a paper, a document, or other instrument containing written matter and includes ‘a list of specific items and ‘other objects or symbols of value, right, privilege, or identification.’

The court also affirmed the trial court’s sentence of seven and a half years, suspended with five years of probation. The sentence represented eighteen months for each of the five counterfeiting convictions to run consecutively. The court noted that crimes were committed “to retaliate against Trooper Kaizer for carrying out his duties as a police officer by issuing Trainor a traffic citation.” The court described how the Trooper had cited Trainor for making an illegal U-turn just before committing the criminal acts. Trainor contended his actions were a “prank.”

Practice Tip: Intellectual property attorneys sometimes make additional claims in trademark and copyright infringement cases that allege violations of criminal laws, particularly Indiana’s counterfeiting and conversion criminal statutes.  For example, Indiana Intellectual Property Law News reported in February on a trademark infringement case that also made a claim of conversion, knowingly or intentionally exerting control over property of another.  In June, Coach filed two trademark infringement lawsuits that also made claims under Indiana’s criminal counterfeit and forgery laws.

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Wilmington, DE – Indianapolis-based Eli Lilly & Company has won patent infringement protection of the drug Lilly’s drug ALIMTA drug, which is a chemotherapy drug used to treat mesothelioma and other lung cancers. Lilly co-owns the patent with Princeton University. The lawsuit arose from an Abbreviated New Drug Application filed with the Food and Drug Administration that had been filed by Teva Parenteral Medicines of Israel, alleging APP Pharmaceuticals LLC of Schaumburg, Illinois, and Barr Laboratories of Montvale, New Jersey. Their ANDA sought approval to sell generic versions of ALIMTA prior to the expiration of the patent.

As soon as the ADNA was filed, Lilly’s patent attorneys filed a patent infringement lawsuit in the District Court of Delaware. The defendants had claimed that the ALIMTA patent, patent no. 5,344,932, N-(pyrrolo(2,3-d)pyrimidin-3-ylacyl)-glutamic acid derivatives,Lilly patent picture.jpg which has been issued by the US Patent Office, was invalid “under the doctrine of obviousness-type double patenting because the claimed invention is an obvious modification of inventions claimed in commonly-owned U.S. Patent Nos. 5,028,608 (“the ‘608 patent”) and 5,248,775 (“the ‘775 patent) in light of the relevant prior art.” The court held a five day bench trial in November 2010.

The Chief Judge Gregory Sleet wrote for the court in upholding the validity of the patent. “The court concludes that the examples found in the ‘775 patent specification do not support a finding of invalidity for obviousness-type double patenting because this case does not present a situation in which separate patents are sought for a claim to a compound and a claim to using that compound for the disclosed utility of the original compound.”

According to WISHTV.COM, Alimta was Lilly’s third best selling drug and had sales of $1.64 billion in first three quarters of 2010. The Alimta patent has been the subject of much litigation. On July 15, 2011, Lilly filed a patent infringement lawsuit regarding the same patent and against APP Pharmaceuticals, also a defendant in this case. Indiana Intellectual Law News blogged on the case here.

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Indiana Intellectual Property: IP Litigation, Patents, Trademarks, Copyrights
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