Indiana Intellectual Property Law News

February 21, 2011

Indiana’s Southern District Court, Not Arkansas District Court, Will Hear Brandt Grain Cart Trademark Infringement Suit

Indianapolis, IN – Rulings by district courts in Indiana and Arkansas have ensured that the Southern District Court of Indiana will decide a longstanding trademark dispute over a mark used in agricultural machinery. Last week, the Southern District Court declined to transfer Brandt Industries Limited (BIL) v. Pitonyak Machinery Corporation (PMC) to the Eastern District of Arkansas, and the Eastern District Court of Arkansas has transferred its version of the case to Indiana’s Southern District Court.

On July 6, 2010, attorneys for BIL filed a trademark infringement suit in the Southern District of Indiana seeking a declaratory judgment regarding rights to the trademark.

The next day, July 7, trademark attorneys for PMC filed suit in the Eastern District of Arkansas, making a nearly identical trademark infringement claims. Indiana Intellectual Property Lawyer Blog previously wrote about the case here: https://www.iniplaw.org/2010/07/brandt-industries-sues-for-a-d.html#more. PMC then sought transfer of the Indiana case to Arkansas federal court, arguing that all the witnesses were in Arkansas and therefore Arkansas would be a more convenient location for the trial. PMC, based in Carlisle, Arkansas, also argued that Indiana did not have a significant connection to the litigation. BIL is a Canadian company. BIL, however, listed numerous Indiana locations where products with the disputed trademark are sold. The rulings by the two district courts last week settle this dispute over which court will hear the case.

Practice Tip: This case illustrates the importance of being the first party to file a lawsuit when there is a trademark dispute about a product sold in multiple jurisdictions. Certainly, PMC’s argument that it will be inconvenient for it to litigate in Indiana since it is located in Arkansas is well taken. However, inconvenience to PMC was not a sufficient reason for the district courts to transfer the case to Arkansas. Had attorneys for PMC filed the trademark dispute in their preferred court before BIL filed the Indiana case, PMC may have been able to avoid litigating in an inconvenient location.

February 17, 2011

Zimmer, Inc. Sues Personal Injury Attorneys for Trademark Infringement of Knee Replacement Line

By Overhauser Law Offices, LLC

South Bend; IN – Trademark lawyers for Zimmer, Inc. of Warsaw, Indiana filed a trademark infringement suit alleging that Ari Kresch, a Michigan attorney, and other law firms and attorneys in Michigan and Texas infringed various trademark registrations, including Trademark No. 647,921, Trademark No. 1,778,807 and Trademark No. 1,707, 954 registered with the US Trademark Office.

Zimmer develops, manufactures and sells a line of knee replacement devices called NexGen®. Zimmer’s trademark attorneys alleged that these attorneys and law firms have used Zimmer’s trademarked graphics and logos on their websites and television advertisements to attempt to attract personal injury clients relating to the NexGen® knee replacement line and other Zimmer products. The law firms and attorneys apparently sought to bring personal injury lawsuits against Zimmer that would allege Zimmer’s products caused injury. According to Zimmer’s complaint, these attorneys and law firms used false information about Zimmer’s products in these attempts to gain clients. Allegedly, the defendants also sent letters to Zimmer’s customers advising them of potential problems with Zimmer’s products. Zimmer’s attorneys allege that the defendants have also registered an internet domain name that also infringes on the Zimmer’s trademarks. Trademark attorneys for Zimmer alleged trademark infringement, false advertising, false designation of origin, and unfair competition under the Lanham Act, 15 U.S.C. § 1125. Zimmer has also made a claim of “cybersquatting” as a violation of the Lanham Act, 15 U.S.C. § 1125(d), stating that the domain name registered by the defendants was confusingly similar to Zimmer’s trademarks and was in bad faith. The complaint also alleges common law trademark infringement, defamation, tortuous interference with business relationships, product disparagement, and common law unfair competition. Zimmer is seeking a permanent injunction barring the use of their trademarked materials by the defendants, as well as damages and attorneys’ fees.

Practice Tip: This case raises interesting questions about trademark rights versus the first amendment right to free speech, particularly in the context of attorney advertising. Trademark rights are not a total bar to one party use of another’s trademark material to advertise another product or service. For example, the Lanham Act, 15 U.S.C. § 1125(c)(3)(A)‘s fair use doctrine discusses use for advertising for comparison to another product and criticizing a trademarked good or service. The defendants are likely to claim that their use of the trademarked materials falls under this category.

This case has been assigned to Judge William C. Lee and Magistrate Judge Christopher A. Nuechterlein in the Northern District of Indiana, and assigned case no. 3:11-cv-00063-WCL-CAN.
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February 16, 2011

Indiana’s Federal District Court Local Rule Changes Now in Effect

By Overhauser Law Offices, LLC

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.

February 14, 2011

Appeals Court Overturns Southern District Court of Indiana Decision in Centillion v. Qwest Communications

By Overhauser Law Offices, LLC

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.

February 10, 2011

USITC Seeks Clarification from Indiana’s Eli Lilly in Cancer Drug Patent Dispute

By Overhauser Law Offices, LLC

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.

February 9, 2011

U.S. Supreme Court Won’t Hear Cialis Patent Suit Against Indiana’s Eli Lilly

By Overhauser Law Offices, LLC

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.

February 7, 2011

Indiana’s District Courts Continue Busy Intellectual Property Dockets

By Overhauser Law Offices, LLC

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.

February 4, 2011

Dion Designs sues Allwin Powersports, et.al. for Copyright, Trademark Infringement and Misappropriation of Trade Secrets

By Overhauser Law Offices, LLC

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.

February 4, 2011

Senate Judiciary Committee Unanimously Approves Patent Reform Bill

By Overhauser Law Offices, LLC

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:

January 31, 2011

Noble Roman’s Sues Brabham Oil Alleging Trademark Infringement Over Use of Warmer Wrap

By Overhauser Law Offices, LLC

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: