New Decisions

November 5, 2019

Indiana Patent Litigation: Tenstreet, LLC’s Software Patent Held Invalid Due to Patent-Ineligible Claims

Indianapolis, Indiana – Attorneys for Plaintiff, Tenstreet, LLC (“Tenstreet”) of Tulsa, Oklahoma, filed suit in the Southern District of Indiana alleging that Defendant, DriverReach, LLC (“DriverReach”) of Indianapolis, Indiana, infringed its rights in United States Patent No. 8,145,575 (the “‘575 Patent”) for “Peer to Peer Sharing of Job Applicant Information”. Defendant moved to dismiss the Complaint and the Court has now granted that motion. This case was described on this site here.

Tenstreet develops products for the transportation industry such as its Xchange^TMnetwork to help share job applicant verification data between employers, past and present, for commercial truck drivers. The ‘575 Patent, obtained by Tenstreet on March 27, 2012, claims to streamline the verification process between past and prospective employers while giving the drivers a chance to review and correct information before it is sent to the prospective employer. DriverReach allegedly sells its own employment verification product, VOE Plus Solutions. Tenstreet claimed VOE Plus Solutions infringed on the ‘575 Patent. DriverReach moved the Court to dismiss Tenstreet’s claims “on the ground that the ‘575 patent is patent-ineligible subject matter under 35 U.S.C. § 101.”

Pursuant to 35 U.S.C. § 101, patentable subject matter is “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” However, the Supreme Court has held “that this provision contains an important implicit exception[:] Laws of nature, natural phenomena, and abstract ideas are not patentable.” Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013) (quoting Mayo Collaborative Servs. V. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012)). In this case, the Court discusses the abstract idea exception. When determining if a patent claims an abstract idea, the Court first looks to whether the claims are directed to a patent-ineligible concept. Second, the Court looks for an “inventive concept” which transforms the claim into a patent-eligible application.

October 30, 2019

Indiana Copyright Litigation: Prevailing Plaintiff Ordered to Pay Losing Defendant’s Costs After Rejecting Rule 68 Offer

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Judge Richard L. Young of the Southern District of Indiana issued a decision on cross-motions for attorneys’ fees and costs in the case of Richard N. Bell (“Bell”) versus Michael Maloney (“Maloney”). The Court first entered judgment in favor of Bell on June 11, 2019 granting him $200 in statutory damages, and costs. Bell sought $33,536,25 in attorney’s fees and $4,719.80 in costs. Maloney made a cross-motion “for leave to file a Bill of Costs totaling $2,183.77 and to enforce the Rule 68 offer. The Court found that the Rule 68 offer should be enforced and Maloney is entitled to the costs he incurred after the offer was rejected.

Bell sent a demand letter to Maloney for $5,000.00 prior to filing this suit. After Bell filed suit, Maloney filed his Answer and then sent Bell an Offer of Judgment pursuant to FRCP 68. This offer was for $2,500.00 for Bell to take judgment against Maloney and would include all attorney’s fees and costs. Bell denied the Rule 68 offer and after the denial of cross-motions for summary judgment, the case went to a bench trial. After the one-day bench trial, the Court found Bell was the prevailing party and was entitled to $200 in statutory damages. Bell filed his motion for fees and costs eleven months after the bench trial occurred.

FRCP 68 provides in part, “[i]f the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.” The court in Payne v. Milwaukee Cty., 288 F.3d 1021, 1024 (7^th Cir. 2002), found that “Rule 68 is designed to provide a disincentive for plaintiffs from continuing to litigate a case after being presented with a reasonable offer.” In determining if a final judgment obtained is less favorable than a Rule 68 offer, “the attorney’s fees and costs that accrued before the offer must be added to the judgment.” Lawrence v. City of Philadelphia, 700 F.Supp. 832, 836 (E.D. PA. 1988).

October 23, 2019

U.S. Court of Appeals for the Federal Circuit Limits Design Patent Scope

By Overhauser Law Offices, LLC

The U.S.Court of Appeals for the Federal Circuit (“CAFC”) issued its Opinion in the case of Curver Luxembourg, SARL (“Curver”) versus Home Expressions Inc., (“Home Expressions”) to construe claim language of a design patent to limit the scope of the claimed design. Curver, the Plaintiff-Appellant in this case, is the assignee of United States Design Patent No. D677,946 (the “‘946 Patent”) for “Pattern for a Chair” that claims “an ornamental design pattern for a chair.” While the ‘946 Patent claims the pattern for the chair, the figures for the design patent are disembodied from any article of manufacture. Curver instituted litigation against Home Expressions alleging that it made and sold baskets that incorporated Curver’s patented design and were thus infringing the ‘946 Patent. The District Court found in favor of Home Expressions as it found the ‘946 Patent was limited to chairs only. Curver then appealed to the CAFC which affirmed the District Court’s decision that the claim language limited the scope of the claimed design to apply to chairs only.

Curver filed for the ‘946 Patent in 2011 with the original title “patent directed to a pattern for furniture.” During prosecution, the examiner objected to many things including the title because under 37 C.F.R. § 1.153, a design patent’s title must designate a “particular article” for the design. Curver allegedly accepted the examiner’s suggestion to direct its pattern to be used for a chair and amended its application accordingly without amending the attached figures.

Home Expressions allegedly makes and sells baskets that have a similar Y-shape to Curver’s ‘946 Patent. Because of this, Curver filed a complaint against Home Expressions alleging its baskets infringed the ‘946 Patent. Pursuant to FRCP Rule 12(b)(6), Home Expressions filed a Motion to Dismiss Curver’s Complaint for failing to plead a plausible claim of infringement, which was granted by the district court. As part of a two-step analysis, the District Court first construed the scope of the ‘946 Patent to be limited to a design pattern for a chair. For part two of the analysis, “the district court found that an ordinary observer would not purchase Home Expression’s basket with the ornamental “Y” design believing that the purchase was for an ornamental “Y” design applied to a chair, as protected by the ‘946 patent.” As such, Curver’s Complaint was dismissed.

October 15, 2019

Design Basics Ordered to Pay Over $300,000.00 in Attorneys’ Fees and Costs

By Overhauser Law Offices, LLC

Fort Wayne, Indiana – Attorneys for Plaintiff, Design Basics, LLC and W.L. Martin Home Designs, LLC, filed suit in the Northern District of Indiana alleging that Defendants, Heller & Sons, Inc. d/b/a Heller Homes and Heller Development Corporation, infringed numerous copyright registrations. The Court granted the Defendants’ Motion for Summary Judgment on June 24, 2019. Design Basics filed its Notice of Appeal on July 19, 2019. Although Design Basics had filed its Notice of Appeal, Defendants submitted their Petition for Attorney Fees and Costs and were awarded $310,759.34.

According to the Opinion and Order dated September 3, 2019, the “Court invited Defendants to file a request for attorneys’ fees pursuant to 17 U.S.C. § 505, and further invited Design Basics to file a response in opposition.” The Court cites an exception from general rules of jurisdiction following a filing of a notice of appeal from Terket v. Lund, 623 F.2d 29, 33-34, in which a district court may enter an award for attorneys’ fees while the merits of the case are on appeal. In this case, Defendants submitted their Petition for Attorney Fees and Costs and Design Basics submitted its response in opposition.

District courts consider at least four different factors listed in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n. 19 (1994) when determining whether to award attorneys’ fees, including: “(1) frivolity of the claim; (2) motivation in filing the claim; (3) objective reasonableness of the claim; and (4) considerations of compensation and deterrence.” Here, the Court found that while the Defendants argued the Seventh Circuit’s decision in Design Basics, LLC v. Lexington Homes, Inc., 858 F.3d 1093 (7th Cir. 2017) rendered all copyright cases filed by Design Basics frivolous, Design Basics may still recover on copyright infringement claims although it may be difficult. When analyzing Design Basics’ motivation for filing its infringement claims, the Court noted that Design Basics “realized approximately $5 million in net litigation profits in 2016 and 2017 alone, while the gross revenues for Design Basics during the same period of time were approximately $2.5 million.” Based off this finding, among others, the Court believes that this case, and most infringement cases filed by Design Basics, are filed due to a financial motive.

October 7, 2019

Engineered by Schildmeier Granted Over $1.4 Million Dollars in Default Judgment

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Judge Richard L. Young in the Southern District of Indiana granted default judgment in favor of Engineered by Schildmeier, LLC (“Engineered”) and against WUHU Xuelang Auto Parts Co., LTD and Amazing Parts Warehouse (collectively the “Defendants”). Engineered filed suit seeking a declaratory judgment of both patent and trade dress infringement in late 2018. The patent allegedly infringed in the complaint is United States Patent No. D 816,584 (the “‘584 Patent”) for a “Pair of Bed Rail Stake Pocket Covers”.

When a defendant fails to plead or defend a case against them within the allotted time frame, they are in default. A plaintiff may motion the court for a default judgment, which is a binding judgment of the court for failure of the defendant to answer the allegations. The court can then grant a default judgment. If a proof of damages hearing is necessary, the judge can order such a hearing, but the defendant may not appear at that point to defend the amount of damages asserted by the plaintiff. A default judgment may be set aside upon request of the defendant, but they must show a good defense and legitimate excuse as to why they were in default to the court.

In this case, neither of the Defendants plead or otherwise defended themselves against the allegations set forth in Engineered’s complaint. As such, the court granted Engineered’s motion for default judgment and awarded damages accordingly. First, the Court found that the Defendants infringed the ‘584 Patent. Second, the Court found the Defendants violated Section 43(a) of the Lanham Act by infringing Engineered’s trade dress. Third, the Defendants were enjoined from importing, selling, or offering for sale any imitations of the ‘584 Patent. Finally, Engineered was awarded a total of $1,424,070.00. The damages award was calculated by adding $470,020.00 in lost profits; $940,040.00 in treble damages for willful infringement; $13,610.00 in attorneys’ fees; and $400.00 in court costs. By failing to appear and defend themselves, not only will defendants have default judgments granted against them, but as shown in this case, extremely large damages may also be imposed.

September 16, 2019

Indiana Copyright Litigation: Attorney Bell Ordered to Pay Over $70,000 in Fees and Costs After Summary Judgment Loss

By Overhauser Law Offices, LLC

Indianapolis, Indiana –Plaintiff and Attorney Richard N. Bell of McCordsville, Indiana filed suit in the Southern District of Indiana alleging that Defendants, David N. Powell and Midwest Regional Network for Intervention with Sex Offenders (“MRNISO”), infringed his rights in his copywritten photograph. In this case, the Court was faced with cross-motions for summary judgment, which it ruled in favor of the Defendants. After being granted summary judgment, the Defendants filed their separate Motions for Attorney Fees and Bill of Costs. While Powell’s motion was denied as moot, MRNISO’s motion was granted.

Bell, in his motion for summary judgment asserted that he was owed for damages caused by the Defendants for their unauthorized use of his photograph. However, Powell asserted Eleventh Amendment immunity against Bell’s claims and MRNISO claimed it was protected by the fair use doctrine. The Court agreed with both Powell and MRNISO and granted them summary judgment.

Following the final entry of judgment against Bell, Powell and MRNISO each filed a separate motion for attorney fees. According to the Court, Bell filed a “Report of Settlement Between Powell and Bell” and requested all deadlines for Powell’s motion be stayed. Powell did not file a response to the Report of Settlement and thus the dates were vacated by the Court. Powell’s motion was denied by the Court without prejudice leaving Powell the opportunity to refile his motion if the settlement was not able to be finalized.

August 29, 2019

Gatorade’s Use of the Term “Sports Fuel” Protected by Fair Use

By Overhauser Law Offices, LLC

Attorneys for Plaintiff-Appellant, SportFuel, Inc. (“SportFuel”), of Chicago, Illinois, originally filed suit against Defendants-Appellees, PepsiCo, Inc. (“Pepsi”) and The Gatorade Company (“Gatorade”) (collectively the “Appellees”), for trademark infringement in the United States District Court for the Northern District of Illinois, Eastern Division. After the District Court granted summary judgment for Gatorade and Pepsi, SportFuel appealed to the United States Court of Appeals for the Seventh Circuit. Circuit Judge Kanne wrote the opinion affirming the grant of summary judgment by the District Court.

SportFuel provides personalized nutrition services to professional and amateur athletes and sells its own brand of dietary supplements. SportFuel registered two trademarks for “SportFuel” the first of which was registered for “food nutrition consultation, nutrition counseling, and providing information about dietary supplements and nutrition.” Pursuant to 15 U.S.C. § 1065, the first registration became “incontestable” in 2013. The second registration for “SportFuel” was for “goods and services related to dietary supplements and sports drinks enhanced with vitamins.”

Gatorade, now a household name, was created in 1965. Although Gatorade is known for its traditional sports drinks, it also sells customizable sports drinks for individual professional athletes and other sports nutrition products. Starting in 2013, Gatorade began describing and marketing its products as “sports fuels” and registered the trademark “Gatorade The Sports Fuel Company” in 2016 with the United States Patent and Trademark Office (“PTO”). During the registration process, “Gatorade disclaimed the exclusive use of ‘The Sports Fuel Company’ after the PTO advised the company that the phrase was merely descriptive of its products.”

August 22, 2019

Design Patents Protect Spare Parts For Vehicles

By Overhauser Law Offices, LLC

This case, originally filed in the United States District Court for the Eastern District of Michigan on claims of patent infringement, was brought on appeal in the United States Court of Appeals for the Federal Circuit. The Court of Appeals issued an opinion affirming the district court’s summary judgment in favor of Defendant-Appellee, Ford Global Technologies, LLC (“Ford”), and against Plaintiff-Appellant, Automotive Body Parts Association (“Automotive”). The originally sealed opinion was issued on July 11, 2019 but was unsealed in full on July 23, 2019.

Ford owns U.S. Patent No. D489,299 (the “D’299 Patent”) and U.S. Patent No. D501,685 (the “D’685 Patent”) for “Exterior of Vehicle Hood” and “Vehicle Head Lamp”, respectively. These design patents were invented by artists that allegedly selected part designs for the Ford F-150 truck on based on aesthetic appearance alone and not a functional purpose. Automotive is comprised of a group of companies that distribute automotive parts.

Conflict between Automotive and Ford allegedly occurred when Ford accused several Automotive members of infringing the D’299 and D’685 Patents, among others, before the International Trade Commission (“ITC”). The administrative law judge in the ITC proceedings ruled that “‘respondents’ [invalidity] defense that the asserted patents do not comply with the ornamentality requirement of 35 U.S.C. § 171 has no basis in the law’ and that ‘there is no legal basis for respondents’ assertion of [unenforceability based on] either the patent exhaustion or permissible repair doctrines’”. The ITC action settled after the administrative law judge’s ruling.

June 25, 2019

Opinion: Seventh Circuit Issues Opinion Regarding Bodum USA, Inc.’s Trade Dress Case Against A Top New Casting Inc.

By Overhauser Law Offices, LLC

Bodum USA, Inc. (“Bodum”) originally filed this case against A Top New Casting Inc. (“A Top”) in the Northern District of Illinois on claims of trade dress infringement. After a jury verdict found for Bodum and awarded $2 million in damages, A Top brought this appeal in the United States Court of Appeals for the Seventh Circuit. The Court of Appeals affirmed the findings and damages awarded.

Bodum began selling French press coffeemakers in the 1970s and began distributing the Chambord French press at issue in this case in 1983. Bodum claimed it acquired exclusive distribution rights to the Chambord French press in 1991 and has since spent millions of dollars in marketing and advertising the product. A Top began selling their French press, the SterlingPro, through Amazon in 2014.

In March 2016, Bodum filed a complaint for “trade dress infringement under the Lanham Act, 15 U.S.C. § 1125(a); common law unfair competition; and violation of the Illinois Uniform Deceptive Trade Practices Act”. While A Top moved for summary judgment twice, these motions were denied, and a jury trial took place in March 2018. The jury found that A Top willfully infringed the Chambord trade dress and awarded Bodum $2 million in damages. The district court denied A Top’s motion for judgment as a matter of law and granted Bodum’s motion for enhanced damages to $4 million dollars and a permanent injunction against A Top selling the SterlingPro products.

June 11, 2019

Supreme Court Issues Decision in Mission Product Holdings, Inc. v. Tempnology, LLC

By Overhauser Law Offices, LLC

The United States Supreme Court issued a decision in the case of Mission Product Holdings, Inc. (“Mission”) versus Tempnology, LLC. The original case involved a trademark licensing agreement and whether the Tempnology’s rejection of the agreement during its bankruptcy deprived Mission’s right to use the trademark under the agreement. Justice Kagan delivered the opinion.

Tempnology utilized the brand name “Coolcore” for its manufactured clothing designed to stay cool during exercise. Mission and Tempnology entered into a non-exclusive licensing agreement for Mission to use the Coolcore trademarks anywhere in the world in 2012. While the agreement would have expired in July 2016, Tempnology filed for Chapter 11 bankruptcy in September 2015. Soon after, Tempnology asked for permission to “reject” the licensing agreement it had with Mission under Section 365(a). 11 U.S.C. § 365(a). Pursuant to Section 365 of the Bankruptcy Code, a debtor may reject any contract that neither party has finished performing. That rejection under Section 365 “constitutes a breach of such contract.” 11 U.S.C. § 365(a).

Both parties agreed that Mission has a claim for damages against Tempnology, however, under 365(g), Mission would be in the same boat as an unsecured creditor and would likely not receive its total damages. Tempnology also believed by rejecting the licensing agreement, Mission would no longer be able to utilize the Coolcore trademarks.