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Indianapolis and Hammond, Indiana — Indiana’s federal district courts have recently amended their local rules. Some of the recent changes have implications for Indiana intellectual property attorneys filing patent, trademark, and copyright lawsuits.

Effective January 1, 2011, the Southern District Court of Indiana amended its discovery rules to “encourage informal resolution of discovery disputes, including disputes that might otherwise derail a deposition.” Specifically, Local Rule 37.1 is amended to require that if attorneys’ good faith efforts to resolve a discovery dispute are unsuccessful, attorneys “are encouraged” to contact the Magistrate’s office for assistance in resolving the dispute by telephone or other informal methods. If this conference does not resolve the dispute, the amended rule allows counsel to file motions raising the dispute. The motion must recite the efforts to resolve the dispute in the motion, rather than the prior rule’s requirement of a separate statement discussing these efforts. Effective January 1, 2011, Local Rule 37.3, “Mode of Raising Discovery Dispute with the Court,” is deleted.

The Southern District Court of Indiana also amended Local Rule 83.7 to require that an attorney’s motion to withdraw include the client’s contact information. Local Rule 23.1, regarding class action lawsuits, was deleted to eliminate the 90-day waiting deadline for certification of a class.

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Washington, D.C. — The Court of Appeals for the Federal Circuit recently overturned a patent infringement decision by the Southern District of Indiana. Attorneys for Centillion Data Systems, of Indianapolis, Indiana, brought a patent infringement lawsuit against Qwest Communications, a Denver, Colorado company. Centillion, which has merged with CTI Group, owns U.S. Patent Number 5,287,270, a system for collecting, processing, and delivering information from a service provider, such as a telephone company. According to Centillion’s patent attorneys, several of Qwest Communication’s billing systems infringe upon Centillion’s patent. Qwest’s systems performed backend tracking automatically, but also allowed customers to download an application to their home computers to track their usage “on-demand.” Patent attorneys for Qwest argue that it did not infringe upon the patent because home users, not Qwest, performed some of the functions of the patented system.

Judge Tinder of the Southern District of Indiana heard the case and granted summary judgment in favor of Qwest. Centillion appealed to the Court of Appeals for the Federal Circuit, which reversed the decision below. The Court of Appeals examined the definition of “use” in § 271(a) of the patent infringement statute and held “that to “use” a system for purposes of infringement, a party must put the invention into service, i.e., control the system as a whole and obtain benefit from it.” The court found that it does not matter that “the user did not have physical control over the relays, the user made them work for their patented purpose, and thus “used” every element of the system by putting every element collectively into service.” The court sent the case back to the district court to resolve the disputed factual issues.

Practice Note: This type of situation is sometimes referred to as joint or divided infringement. In this case, for example, it seemed that Qwest invited its customers to infringe Centillion’s patent. This case illustrates the importance of carefully drafting patent infringement claims when joint infringement may be an issue.

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Indianapolis — This week, an attorney from the United States International Trade Commission (USITC) asked Indiana-based Eli Lilly for clarification regarding Lilly’s allegations of patent infringement over the chemotherapy drug gemcitabine. Eli Lilly owns U.S. Patent Number 5,606,048, which is a process of preparing the gemcitabine. The FDA approved gemcitabine for treatment of breast, lung, ovarian, and pancreatic cancer. Lilly alleges that its process is the only commercially viable process of producing the drug and that several companies, including Illinois-based Hospira Incorporated, are making and selling a generic version of the drug using the patented process. In a letter this week, the USITC has asked Lilly to explain why it believes its patented process is being used.

In January, patent attorneys for Eli Lilly filed a complaint with the USITC that alleges patent infringement by unlawful importation and sale of the drug. Lilly seeks an exclusion order from USITC that would ban the importation of the drug into the United States. Lilly alleges that manufactures in China and India use the patented process to make the drug, which Hospira imports and sells in the United States. Patent attorneys for Hospira and Lilly have been litigating over alleged infringement the patent in U.S. and foreign courts for several years. In September, Hospira filed a suit in the United States District Court for Northern Illinois (Case Number 1:2010cv06275) seeking a declaratory judgment stating that Hospira is not infringing Lilly’s patent. According to the Indiana Business Journal, Lilly’s global sales the drug fell 14%, or about $906 million, in the first three quarters of 2010.

Practice Note – When an imported product infringes on a patent, the patent holder can seek an exclusion order from the United States International Trade Commission. USITC patent attorneys will investigate whether the imported product violates U.S. patent law. In prior litigation it appears that Eli Lilly had difficulty proving that its patented process is being used rather than another process. Lilly claims it has been unable to do so because Hospira and the foreign manufacturers have not complied with discovery requests. Nonetheless, it appears from this week’s letter that the USITC is concerned about this factual issue.

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Washington, D.C. – The United States Supreme Court denied certiorari in an appeal from three Vanderbilt University scientists who claimed that they should share ownership of the patent rights to Cialis. The Cialis patents in question, U.S. Patent numbers 5,859,006 and 6,140,329, were filed by Icos Corporation, which was acquired by Indiana-based Eli Lilly in 2007. According to coverage by the Indianapolis Star, Cialis sales exceeded $400 million in the third quarter of 2010.

The three scientists researched phosphodiesterase enzyme (“PDE5”), the active ingredient in Cialis, and claimed that they were joint inventors of Cialis. The scientists performed initial identification of and research on PDE5. This initial research was funded by Glaxo Inc., which later sold the rights to Icos Corporation. Patent attorneys for the scientists filed a lawsuit in the U.S. District Court of Delaware alleging that the scientists should be added to the patents as joint inventors. The district court, however, granted judgment in favor of Icos. Attorneys for the scientists appealed. The Court of Appeals for the Federal Circuit affirmed and clarified the statutory standard for joint ownership of a patent in their written opinion. The court stated “a group of co-inventors must collaborate and work together to collectively have a definitive and permanent idea of the complete invention.” The court concluded that the scientist had failed to show this. Patent attorneys for the scientists sought review by the U.S. Supreme Court, which has now declined to hear the case.

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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.

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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.

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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:

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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:

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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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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 

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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

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Contact Information
Indiana Intellectual Property: IP Litigation, Patents, Trademarks, Copyrights
  • Seventh Circuit
  • Northern District of Indiana
  • Southern District of Indiana
Paul B. Overhauser
Overhauser Law Offices, LLC
Greenfield
18 E Main St #202
Greenfield, IN 46140
Phone: 317.467.9100
Fax: 866.283.8549
Indianapolis
101 W Ohio St #2000
Indianapolis, IN 46204
Phone: 317.891.1500
Fax: 866.283.8549

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