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Flair Airlines, Ltd. v. Gregor LLC, No. 18 C 2023, Slip Op. (N.D. Ill. Sep. 17, 2018) (Guzman, J.).

Judge Guzman granted in part plaintiff’s Fed. R. Civ. P. 12(b)(6) motion to dismiss certain of defendants’ counterclaims in this case involving Lanham Act trademark infringement and deceptive trade practices, copyright and related state law claims.

This post only addresses the motion as to declaratory judgment copyright ownership claims, not the related state note claims because they do not add anything of interest related to intellectual property issues. The Court granted the motion to dismiss as to the DJ copyright ownership claim because defendants’ allegation of plaintiff’s continued use of the copyrighted material did not create a controversy regarding copyright ownership. Having dismissed the claim, the Court did not need to reach plaintiff’s argument that a limited liability corporation could not own copyright, absent a written agreement regarding transfer. The Court also was not required to address whether defendants’ claim was deficient for not specifically identifying the copyright’s authors or what the copyrighted works were with particularity. Because defendants did not sufficiently plead an ownership controversy, the claim was dismissed.

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Kapoor v. National Rifle Association of Am., No. 18 C 4252, Slip Op. (N.D. Ill. Oct. 23, 2018) (Lee, J.).

Judge Lee granted in part defendant National Rifle Association’s (“NRA”) Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal jurisdiction or, in the alternative to transfer to the Eastern District of Virginia pursuant to 28 U.S.C. §1404(a) in this copyright dispute involving plaintiff Kappor’s Chicago-based Cloud Gate sculpture, commonly known as the Bean.

The Court acknowledged that the Bean was located in Chicago and that the alleged infringing video of the Bean was necessarily taken in Chicago. But the NRA claimed that it received the footage from a third party that was not the NRA’s agent. Kapoor argued that the third party was the NRA’s agent, but the Court could not determine that issue without discovery and factual analysis. Furthermore, other portions of the alleged infringement, for example distribution and decisions regarding the alleged infringement occurred outside of Chicago in the E.D. Virginia.

But the Court did not need to reach the agency issue because the Court held that transfer was appropriate pursuant to §1404(a), for at least the following reasons:

  • As a London resident, Kapoor did not have a particular connection to Illinois, except the location of his statue.
  • The NRA is headquartered in the E.D. Virginia, its witnesses live and work nearby, and its documents are largely there.
  • There were no non-party witnesses to consider.
  • The E.D. Virginia typically resolves cases faster than the N.D. Illinois.
  • While Illinois may have an interest in the Bean and while it is a popular tourist attraction in the N.D. Illinois, Kapoor offered no support for the proposition that such general public interests outweighed the NRA’s interest in its First Amendment right to advocate for the Second Amendment.
  • Aside from the location of the Bean, the only factor weighing in Kapoor’s favor was his choice of forum. But that held little weight because he had no other significant connection to the N.D. Illinois.
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As part of the Northern District of Illinois’ continuing 200th anniversary celebration, the Northern District of Illinois Court Historical Association, the Seventh Circuit Bar Association, and the Federal Bar Association are hosting a program on March 20, 2019 from 3:00-4:30 pm CT in courtroom 2525 highlighting federal judicial trailblazers:

  • Chief Judge Ruben Castillo – First Hispanic Chief Judge in the Northern District of Illinois;
  • Judge Ilana Diamond Rovner – First woman judge appointed to the Seventh Circuit;
  • Judge Ann Claire Williams (Ret.) – First woman judge of color to serve in a district court within the Seventh Circuit and the first judge of color appointed to the Seventh Circuit;
  • Attorney Willoughby Anderson Will discussing some of the first federal judges appointed in Illinois;
  • Judge Edmond E. Chang – First Asian-Pacific American Article III federal judge in Illinois;
  • Judge Susan Pierson Sonderby (Ret.) – First woman appointed as a Bankruptcy Judge and as a Chief Bankruptcy Judge in the Seventh;
  • Circuit Judge Thomas M. Durkin Will discuss Hon. Stanley Roszkowski, the first full-time district court judge in the Western Division of the Northern District of Illinois.

The panel will be moderated by Judge Geraldine Soat Brown (Ret.). The program is free and 1.5 hours of professional responsibility credit are expected for Illinois, Indiana and Wisconsin. The program is free, but space is limited. RSVP to dgroboski@ag-ltd.com.

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On Wednesday, March 27, 2019 from 1:15-2:45pm CT, John Marshall’s Center for Intellectual Property, Information & Privacy Law is hosting George Mason Law Professor Adam Mossoff for a discussion of the implication of the Supreme Court’s decision holding that patents are public rights which can be taken back by the government, in this case via the Patent Trial & Appeal Board (PTAB). Professor Mossoff will consider whether the Supreme Court’s ruling will be limited to the ability to challenge patents at the PTAB, or whether it is the beginning of a broader reframing of patents as special entitlements, and the implications of both.

Register here to attend this free CLE program.

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Clarivate’s Karl Doane wrote the below article focusing upon trade dress and industrial design searching and its increasing import.

If you have an article you would like published on the Chicago IP Litigation blog, please reach out. I am glad to consider submissions.

Infringement on the rise: 35% of brands suffer Industrial Design infringement

By: Karl Doane, Senior Product Manager, CompuMark

The ongoing globalization of markets and the ease to reach consumers online, has resulted in more and more trademarks being filed to take advantage of commercial opportunities. Today, there are more trademarks than ever before and according to the World Intellectual Property Organization (WIPO), the number of trademark application filings is rising exponentially[1].

With the proliferation of trademark registrations globally, brand owners are finding it increasingly difficult to register a trademark that is unique and meaningful without infringing on an existing mark. On top of this, once they obtain a unique trademark, they must keep an eye out for infringement by others on their existing portfolios. This underscores the importance of both trademark research ahead of registration and vigilance afterwards.

Infringement on the rise

While brands are trying to minimize the impact of potential infringement, it is still on the rise. According to recent research conducted by CompuMark, eighty-one percent of respondents said they experienced instances of infringement in 2018 – this is nearly 10% more than in 2017[2].

Infringement is not just being experienced across traditional marks, like business and brand names, but also industrial design. One in three brands experienced infringement of their industrial design trademarks over the past year[3].

What this means for trademark professionals is that they need to monitor their existing industrial designs and conduct thorough research before they file a new one.

The risks of missing a mark

While instances of infringement are rising, it is the consequences that have a real bearing on the brand. A brand that isn’t completely sure about their research process is at risk of paying a high price for it.

The first hazard is obvious: not having a registered trade dress or industrial design trademark (depending on your filing strategy). When a brand operates without properly registering its trade dress or industrial design, it opens the door for competitors to copy and capitalize on already-developed design equity. As a result, if a copycat competitor starts using their assets, it may have to engage in costly legal procedures to regain ownership of their own design. These procedures can get even more complicated if the copycat brand has actually registered the trade dress or industrial design, regardless of who was using it first.

Another hazard brands face when not conducting research is the fact that there isn’t any way for them to know if they have the rights to use a design. Therefore, they might be infringing upon other trade dress or industrial designs without even knowing it.

Finally, a design that conflicts with an existing design will likely be rejected by the examiner – months after you’ve filed it. Therefore, searching before you file reduces the risk of that happening and will save you time when launching a product.

As trademark registrations continue to rise, the importance of search is undeniable. But the question is, can this process become easier and more time and cost efficient for brands?

Technology is leading the way

When it comes to trade dress and industrial design research, technology plays a fundamental role in optimizing and making the process more efficient.

Trade dress and Industrial Design registration is a visual process. Codes and classes are included to classify them but what really matters is how a design looks. While the human brain is best at comparing two images, artificial intelligence and image recognition technology can help identify identical and similar images out of a database of millions of images far faster than a human ever could.

Through the learning of patterns and a much more intuitive interaction, technology enables a different type of analysis. And by doing so, it focuses the search, and delivers more accurate results – quickly.

With just a few clicks, this tool can compare a trade dress or industrial design, creating a complete analysis of similarities and deliver an evaluation on whether a specific design infringes on any other design.

The future of the industrial design trademark research

By making this process more accessible, easy-to-use, AI-powered image recognition software is bound to become a powerful industrial design trademark research tool, especially when combined with human knowledge and expertise.

With over 12 million trademark applications filed worldwide last year, which according to WIPO indicators represents an increase of 26.8% from the year before , trademark research is becoming increasingly important. Therefore, as the amount of businesses filing trademarks keeps growing, the need for faster, simpler and more effective ways to research will become more essential.

This powerful technology changes trade dress and industrial design trademark research by making it more practical, avoiding irrelevant results, optimizing time and broadening the search to achieve precision on a whole other level. It also adds value and creates new opportunities for different types of businesses to build a strategy that adjusts to their needs, without having to compromise budgets, time frames or goals.

[1] https://www.wipo.int/pressroom/en/articles/2018/article_0012.html

[2] http://www.compumark.com/check-the-pulse-of-the-trademark-ecosystem/

[3] http://www.compumark.com/check-the-pulse-of-the-trademark-ecosystem/

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The Northern District and the Chicago Chapter of the Federal Bar Association are seeking nominations – no later than March 15, 2019 – for outstanding pro bono and public interest representation in civil and criminal matters before the Court.

Factors considered include:

  • dedication to pro bono or public interest work;
  • outstanding achievement resulting from the representation of a large group of indigents, successful representation in a difficult case, outstanding negotiation and settlement skills in achieving a result without trial;
  • extraordinary number of hours committed to pro bono work; or
  • other distinguished performance.

Nominations must be based upon work in the Northern District on matters that are complete and no longer pending before the Court.

Nominations using this fillable form may be emailed to: ProBonoAwards@ilnd.uscourts.gov.

Awards will be presented at the Court’s twentieth annual awards ceremony on Wednesday, May 1, 2019, at 1:00pm.

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After Magistrate Judge Mason’s retirement and Magistrate Judge Rowland’s nomination to the district court, the Northern District has selected Jeffrey Cummings and Sunil Harjani to become magistrate judges. Both have strong, diverse experience and will be excellent additions to the bench. And kudos to the Northern District for moving so quickly while the Court is already overburdened. Here are some details about the background of our newest magistrates:

  • Jeffrey Cummings, who takes the first open magistrate position, began his career as a clerk for Judge Ann Claire Williams, then on the Northern District and now on the Seventh Circuit. Since clerking, Cummings was a commercial litigator with Miner, Barnhill & Galland PC where he litigated a broad range of cases for both plaintiffs and defendants.
  • Sunil Harjani began his career clerking for Judge Conlon on the Northern District. He left his clerkship to join Jenner & Block as a commercial litigator. He left Jenner for the Securities and Exchange Commission. He then joined the U.S. Attorney’s Office, where he was for about the last eleven years, rising to deputy chief of the Securities and Commodities Fraud Section. He also served pro bono as a mediator for the Cook County courts. That will be great experience for Northern District settlement conferences.

Welcome to the Northern District.

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Flair Airlines, Ltd. v. Gregor LLC, No. 18 C 2023, Slip Op. (N.D. Ill. Jan. 17, 2019) (Guzman, J.).

Judge Guzman denied plaintiff’s Fed. R. Civ. P. 12(b)(6) motion to dismiss certain of defendants’ counterclaims in this case involving Lanham Act trademark infringement and deceptive trade practices, copyright and related state law claims.

Of particular note, the Court held as follows:

  • Defendants’ breach of contract claim were sufficiently pled because they identified parties to the alleged joint venture. Open-ended references to additional identified members did not doom the claims, but no unnamed parties would be included in any future judgment.
  • Regarding the account stated claims, unidentified amounts would not be recoverable without evidence that the amounts were properly “stated.”

Defendants’ claims that plaintiff asserted ownership over the alleged copyrighted materials – route schedules, reservation system and website, a booking engine and website, airline seat forecasting templates, reservation manuals, and call center manuals – were sufficient for defendants’ declaratory judgment claim of copyright ownership. Furthermore, disputes over whether the works at issue were works for hire are not resolvable at the Rule 12(b) stage.

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Life After Hate, Inc. a/k/a ExitUSA v. Free Radicals Project, Inc., No. 18 C 6967, Slip Op. (N.D. Ill. Jan. 10, 2019) (Cole, Mag. J.).

Magistrate Judge Cole granted plaintiff’s motion for a protective order limiting discovery to information reasonably relevant to plaintiff’s motion for preliminary injunction in this Lanham Act counterfeiting, infringement and deceptive trade practices case.

As an initial matter, the Court noted that because the parties had not conducted the required Fed. R. Civ. P. 26(f) conference, full discovery could not have started yet. If defendant wanted to conduct broad discovery, at a minimum it would need to schedule a Rule 26(f) conference in order to trigger the opening of discovery. In the absence of that, the parties were limited by Judge Kendall’s order allowing early discovery. The “only possible (and sensible) interpretation” of the order was that discovery was limited to issues surrounding the preliminary injunction motion.

Based upon that limitation, broad requests seeking “all documents” related to “any allegations and claims contained in the Complaint” or “regarding all current board members, employees, volunteers, contractors, and any and all others associated with Life After Hate . . .” were “well beyond” the scope of the preliminary injunction. The Court did note, however, that plaintiff could not withhold a document that was relevant to the Lanham Act claims at issue because it was also relevant to additional claims not at issue in the preliminary injunction.

The Court further explained its reasoning in more descriptive language, that defendant was free to “cast a net limited to those two claims and just happen to catch some fish relevant to the other claims as well . . . .” Defendants failure was in “target[ing] all the fish.”

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Republic Technologies (NA), LLC v. BBK Tobacco & Foods, LLP, No. 16 CV 3401, Slip Op. (N.D. Ill. Nov. 20, 2018) (Schenkier, Mag. J.).

Magistrate Judge Schenkier denied plaintiffs’ (collectively “Republic Tobacco”) Fed. R. Civ. P. 37 sanctions motion based upon defendants’ (collectively “HBI”) alleged improper identification of the source of rolling papers and tobacco products sold by HBI in this Lanham Act false advertising case involving organic hemp tobacco rolling papers.

During discovery and, eventually, pursuant to a Court order, HBI repeatedly confirmed that its only supplier of organic hemp rolling papers was SWM. HBI produced no documents and made no statements disputing those statements. During summary judgment briefing, however, HBI pointed to statements by a Republic Tobacco witness and a Republic Tobacco internal email stating Republic Tobacco’s belief that HBI used another supplier, Delfort, for its papers from 2009 through 2011 in order to create a question of material fact. Because HBI did not produce a document or supplement statement contradicting its statement about SWM being its sole supplier and only relied upon Republic Tobacco discovery that Republic Tobacco timely produced and was aware of, there was no basis for discovery sanctions.

Having denied sanctions, the Court noted that HBI’s summary judgment tactics were “peculiar” and “too cute by half.” But those issues were best resolved as part of the summary judgment analysis, not in the instant sanctions motion.

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