Header graphic for print
Chicago IP Litigation Tracking Northern District of Illinois IP Cases

Tag Archives: Holderman

Transfer Warranted Based Upon Minimal N.D. Illinois Contacts

Posted in Jurisdiction

Red Pine Point LLC v. Amazon.Com, Inc., Slip Op. (N.D. Ill. Jul 16, 2014) (Holderman, J.).

Judge Holderman granted defendants’ joint motion to transfer these consolidated patent cases to the N.D. California, pursuant to 28 U.S.C. § 1404(a).  First, the generic reasons plaintiff Red Pine Point cited in support of keeping the case in the Northern District — neutrality, Local Patent Rules, the Patent Pilot Program, and judicial expertise — were all equally true of the N. D. California and plaintiff’s choice of forum warranted little deference because the Northern District had, at most, minimal ties with the dispute.  Finally, the companies that designed the accused technologies, the witnesses and the documents, were in or near the N.D. California.  The interests of justice also, therefore, required transfer.


Illinois Savings Clause Revives Third Party Claims

Posted in Pleading Requirements

Fujitsu Ltd. v. Tellabs Ops., Inc., No. 12 C 3229, Slip Op. (N.D. Ills. Apr. 18, 2014) (Holderman, Sen. J.).

Judge Holderman denied defendants’ (collectively “Tellabs”) Fed. R. Civ. P. 12(c) motion to dismiss two Fujitsu entities’ trade secret and other tort counterclaims based upon the relevant statute of limitations in this patent case.  The Court held that while the claims were otherwise time-barred, they were preserved by the Illinois Savings Clause which waives the statute of limitation for counterclaims where plaintiff’s original claim arose before the counterclaim was time-barred.  Here the Fujitsu defendants presented evidence that Tellabs’ patent claims arose before Fujitsu’s counterclaims were time-barred.  And although at least one Fujitsu defendant was technically a third party, the cases were sufficiently related to warrant application of the Savings Clause. 

Related Party Bound to Agreement’s Arbitration Clause

Posted in Jurisdiction

FarmedHere, LLC v. Just Greens, LLC d/b/a AeroFarm Systems, LLC, No. 14 C 370, Slip Op. (N.D. Ill. June 16, 2014) (Holderman, Sen. J.).

Judge Holderman granted defendant AeroFarm’s Fed. R. Civ. P. 12(b)(3) motion to dismiss plaintiff FarmedHere’s Lanham Act and declaratory judgment patent claims related to the parties’ aeroponic, locally grown farming businesses because AeroFarm had filed for arbitration. AeroFarms entered a Distribution Agreement with CityPonics, but the principal of CityPonics never formed the entity, instead forming FarmedHere, allegedly to gain the benefits of the Distribution Agreement without the obligations.  The Distribution Agreement contains a mandatory arbitration clause.

This case was different than a typical arbitration clause because the Court had to make a threshold determination regarding whether FarmedHere was bound by the Distribution Agreement.  FarmedHere at least bound itself to the Distribution Agreement for the purpose of allowing the Court to decide whether it had jurisdiction over FarmedHere’s complaint.

The Court held that FarmedHere’s principal bound it to the Distribution Agreement for at least the following reasons:

  • The principal requested substituting FarmedHere for CityPonic in the Distribution Agreement;
  • The principal drafted a document attempting to formally allow FarmedHere to exploit the technology;
  • FarmedHere and CityPonic shared an address; and
  • FarmedHere chose not to provide any countervailing documents outside of its complaint.

Having found that FarmedHere was bound by the Distribution Agreement, the Court held it lacked jurisdiction based upon the arbitration clause.  The Court, therefore, dismissed without prejudice so that to the extent that the arbitration or a New York court proceeding refused to address all of FarmedHere’s claims, it could refile in this Court.

Stay Pending Inter Partes Review Warranted by Plaintiff’s Delay in Filing Suit

Posted in Local Rules

Ignite USA, LLC v. Pacific Market Int’l, LLC, No. 14 C 845, Slip Op. (N.D. Ill. May 29, 2014) (Holderman, J.).

Judge Holderman granted defendant Pacific Marketing International’s (“PMI’s”) motion to stay plaintiff Ignite USA’s patent litigation case pending the results of PMI’s Inter Partes Review (“IPR”) seeking to invalidate Ignite USA’s asserted patent regarding a drinking container.

Ignite USA would not be prejudiced by a stay.  PMI promptly filed its IPR petition and the litigation was in its early stages.  Ignite USA’s own delay in filing the suit after learning of the alleged infringement — from March 2012 to April 2014 — suggested that Ignite USA would not be prejudiced by the delay. Additionally, Ignite USA’s failure to seek a preliminary injunction suggested that its claims of lost market share were not as severe as it claimed. 

The stay would streamline the case.  Patent Office statistics suggest an “82% probability” that the Patent Office will institute the IPR and a greater than 92% likelihood that at least one claim will be amended or cancelled outright.  In fact, even an IPR decision upholding all of the claims would simplify issues by reducing PMI’s invalidity arguments.  To avoid additional delay, the parties were required to report to the Court within seven days of the Patent Office’s decision on the IPR petition.

Finally, the reduced litigation burden counseled in favor of the stay.  Whatever the outcome of the IPR, it would reduce the scope of the case and the work required by the parties and the Court.

Court May Not Maintain Jurisdiction After Dismissal With Prejudice

Posted in Jurisdiction

Digital Design Corp. v. Kostan, No. 11 C 6243, Slip Op. (N.D. Ill. Oct. 7, 2013) (Holderman, J.).

Judge Holderman denied the parties’ joint motion for entry of a consent judgment.  The Court previously granted the parties agreed stipulation of dismissal and dismissed the parties’ claims with prejudice.  Seventh Circuit precedent prevents district courts from retaining jurisdiction after dismissing with prejudice.  Had the parties wanted a consent judgment entered they should have dismissed without prejudice or sought the consent judgment before dismissing with prejudice.

The State of the Northern District Remains “Good”

Posted in Legal News

Chief Judge Holderman offered his final State of the Court speech last month.  Judge Castillo takes over as Chief Judge July 1, 2013.  Here are the highlights from the address:

  • “Filings are up and funding is down.”  While the state of the court is good, prposped further budget cuts and reduced funding may force reduced services in the future.
  • For the fifth year in a row, overall civil filings were up .
  • Jury trials dropped, going from 177 in 2011 to 168 in 2012.
  • The combined jury trials for 2011 and 2012, however, are the largest number of trials in any two year period as far back as court records go.
  • Patent filings increased from 239 in 2011 to 247 in 2012..  This continued a trend of increased patent filings in every year since the Northern District instiuted its Local Patent Rules in 2009.
  • The Northern District remains in the top 10% of courts in terms of median time to disposition — 6.5 months for civil cases.
  • The Northern District avoided the expected furloughs by not filling staff vacancies.  The Clerk’s office is down to two-thirds of its allocated staff.  Probation Department personnel may face three day furloughs because of fudning issues in that unit.
  • Three new Article III judge joined the Court — Judges Durkin, Lee and Tharp.
  • The Eastern Division added two magistrates — Magistrate Judges Rowland and Martin.
  • The Western Division added Magistrate Judge Johnston.
  • The Northern District has four judicial vacancies.

Parent Cannot Seek Lost Profits Based Upon Subsidiaries Sales

Posted in Damages

Fujitsu Ltd. v. Tellabs, Inc., No. 09 C 4530, Slip Op. (N.D. Ill. Dec. 21, 2012) (Holderman, C.J.).

Judge Holderman granted defendants (collectively “Tellabs”) summary judgment that plaintiff Fujitsu Limited was not able to seek lost profits in this patent litigation.  Fujitsu, the patent holder, did not sell a covered product in the United States (a requirement for lost profits), but its subsidiary Fujitsu Network Communications (“FNC”) did.  Fujitsu Limited argued that the profits of FNC inexorably flowed to Fujitsu Limited warranting lost profits. Fujitsu Limited argued that various payments from FNC to Fujitsu Ltd. represented profits from sales of patented goods.  The Court, however, held that the payments were for use of trademarks, employees working for FNC and part of a corporate tax planning.  Because the payments did not represent the profits from patented goods, Fujitsu Ltd. could not seek lost profits.


Spoliation Sanctions were Premature Until the Parties Determined Whether Evidence was Actually Destroyed

Posted in Discovery

Digital Design Corp. v. Kostan, No. 11 C 6243, Slip Op. (N.D. Ill. Dec. 7, 2012) (Holderman, C.J.).

Judge Holderman denied without prejudice plaintiff’s motion for sanctions based upon alleged spoliation of evidence in this copyright case involving InVision software.  Defendant acknowledged deletion of a copy of the InVision software from his harddrive which allegedly contained metadata showing when he worked on the software.  But defendant argued that a copy of the program was recovered as part of a forensic scan in a related state court case.  Plaintiff replied that the recovered copy may not have all of the relevant metadata as it originally existed and that the terms of the state court protective order did not allow plaintiff access to the recovered file.  The Court ordered that defendant waive the relevant terms of the protective order so that plaintiff could access the file for purposes of this case.  And the Court denied the motion for sanctions with leave to refile after the parties reviewed the recovered file.


Motion to Add Counterclaim Granted Where Schedule has Ample Time for Discovery

Posted in Discovery

CIVIX-DDI, LLC v. Loopnet, Inc., No. 12 C4968, 7091 & 8632, Slip Op. (N.D. Ill. Feb. 6, 2013) (Holderman, C.J.).

Chief Judge Holderman granted defendant Loopnet’s Fed. R. Civ. P. 15(a)(2) motion to amend its answer and counterclaims add a counterclaim for breach of contract alleging that plaintiff CIVIX-DDI breached a license between the parties by filing this suit.  The Court held that the case schedule provided CIVIX-DDI ample time to seek discovery on Loopent’s counterclaim.  Additionally, Loopnet’s prior refusal to produce documents regarding the defense was not a reason to deny Loopnet’s motion.  Should Loopnet continue refusing to produce after entry of the counterclaim, CIVIX-DDI may move to compel the necessary information.


CLE: Loyola University Program on Patents, Innovation & Freedom to Use Ideas

Posted in Legal Seminars, Uncategorized

On Thursday, April 11 at Loyola University Law School, the Loyola University Chicago Law Journal is putting on a program called:  Patents, Innovation & Freedom to Use Ideas.  Click here for the program brochure.  The program has an interesting mix of theoretical and practical discussions.  Among the more interesting topics are:

  • Chief Judge Holderman discussing Innovations to Improve Juror Understanding in Patent Trials
  • Emory University’s Professor Timothy Holbrook (a former Chicagoan), Boston University’s Professor Michael Mueur (who has written interesting articles regarding the costs of NPE suits); and University of San Diego Professor Ted Sichelman discussing Shortcomings in the Patent System.

This looks like an excellent program.

Nominations Open for Northern District Excellence in Pro Bono and Public Interest Service Awards

Posted in Legal News

The Northern District and the Chicago Chapter of the Federal Bar Association are seeking nominations (by April 11, 2013) for attorneys who have provided outstanding pro bono and public interest representation in civil and criminal matters before the Northern District that are complete and no longer pending. In the words of the Northern District:

The nominee should be someone who has demonstrated excellence in commitment to pro bono or public interest work by handling a matter in this district as a court-appointed attorney, pro bono attorney, or staff attorney for a not‑for‑profit agency, representing an indigent party in a civil or criminal matter.

Factors 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; and
  • other distinguished performance.  

Click Here for the nomination form.  Send your nominations via e-mail to: ProBono_ILND@ilnd.uscourts.gov.  For any questions contact:

Chambers of Chief Judge James F. Holderman
2548 Dirksen Courthouse
219 South Dearborn Street
Chicago, Illinois 60604
Telephone: 312-435-5600 

Local Patent Rules: Party Limited to Arguments Made in Final Contentions

Posted in Summary Judgment

Fujitsu Ltd. v. Tellabs, Inc., No. 09 C 4530, Slip Op. (N.D. Ill. Sept. 26, 2012) (Holderman, C.J.).

Chief Judge Holderman granted defendant Tellabs’ motion for summary judgment of invalidity in this patent case.  As an initial matter, the Court held that Tellabs was limited to the arguments set forth in its Local Patent Rule 3.1 final invalidity contentions.  The Court, therefore, disregarded Tellabs’ anticipation arguments, which were not in the final contentions, and focused upon the obviousness arguments, which were in the final contentions.

The Court held that the asserted prior art was a printed publication because of undisputed testimony that the article was presented at a standards setting meeting and that at the meeting 25 copies of the article were distributed without restriction.  The Court acknowledged that Tellabs had not provided any evidence of an individual that actually received one of the reports.  But it was enough that Tellabs had provided “substantial” circumstantial evidence corroborating its testimony.  For example, subsequent articles written by third parties referenced the prior art paper. 

Finally, the Court considered the obviousness arguments.  Fujitsu failed o challenge Tellabs four page obviousness arguments, except to argue that the prior art reference was not enabling.  However, the Court held that a prior art need not be enabling, it simply must teach the elements of the claims in suit. 

Reduction to Practice is a Question of Disputed Fact

Posted in Summary Judgment

Tellabs Ops., Inc. v. Fujitsu Ltd., No. 08 C 3379, Slip Op. (N.D. Ill. Jul. 27, 2012) (Holderman, C.J.). 

Chief Judge Holderman denied plaintiff Tellabs’ motion for summary judgment of invalidity.  As an initial matter, there was a question of fact regarding whether defendant Fujitsu could swear behind Tellabs’ prior art references based upon an alleged reduction to practice.  The Court could not determine based upon undisputed facts or as a matter of law whether or when Fujitsu reduced its invention to practice.

Ability to Consolidate Prevents Transfer

Posted in Jurisdiction

CoStar Realty Information, Inc. v. CIVIX-DDI, LLC, No. 12 C 4968, Slip Op. (N.D. Ill. Oct. 18, 2012) (Holderman, C. J.).

Chief Judge Holderman denied patent holder CIVIX-DDI’s motion to transfer this patent dispute to the E.D. Virginia.

Convenience of the Parties

Plaintiff CoStar’s choice of forum was given deference despite not being resident in Illinois because of defendant CIVIX-DDI’s prior and existing litigation involving the same patents in this district.  The likely location of documents in Washington, DC did not weigh in favor of transfer because they would likely be transferred electronically.  The third party witnesses were in or near the E.D. Virginia, weighing in favor of transfer.

Public Interest

Both jurisdictions were familiar with the law.  The E.D. Virginia had a greater interest in the dispute because CoStar was located there.  The ability to try related cases together, however, weighed against transfer.  Balancing the locations, the ability to consolidate outweighed the other factors.

No Inequitable Conduct Where Multiple Inferences Can be Drawn as to Intent

Posted in Summary Judgment

Fujitsu Ltd. v. Tellabs Ops., Inc., No. 09 C 4530, Slip Op. (N.D. Ill. Jul. 31, 2012) (Holderman, C.J.).

Judge Holderman granted plaintiff Fujitsu’s motion for summary judgment of no inequitable conduct.  The inventors allegedly failed to disclose two prior art references which had been disclosed in prior patent prosecutions, each of which was disclosed during prosecution of the patents in suit.  There was a question of fact as to whether each reference was duplicative of other disclosed art and, therefore, was material.  But defendant Tellabs did not show the required specific intent the specific intent “must be the single most reasonable inference able to be drawn from the evidence.”  Therasence, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290 (Fed. Cir. 2011).  In each case, it was reasonable to infer intent to deceive from the undisputed facts.  But it was also reasonable to infer that the inventors believed the references were cumulative or that the inventors forgot to include the references.  Because multiple inferences could be drawn, there was no intent as a matter of law.

Term Used as an Adjective in Specification Required Constructive When Used as Verb in Claims

Posted in Claim Construction

Fujitsu Ltd. v. Tellabs Ops., Inc., No. 09 C 4530, Slip Op. (N.D. Ill. Jul. 27, 2012) (Holderman, C.J.).

Chief Judge Holderman construed an additional claim term “transmitting” one month before trial in this patent involving optical transmission systems.  “Transmitting” was used as an adjective modifying “terminal,” and as a verb describing what a terminal did.  Constructing “transmitting” as an adjective was unnecessary because it was used throughout the patent and one of ordinary skill would have understood the meaning.  But “transmitting” was only used as a verb in the claims, warranting construction.  “Transmitting” was construed to mean “engaged in the transmission of.”  The Court declined to construe terms that were not in the claims to be tried in one month.

Court Declines to Decide Speculative Motion to Strike

Posted in Pleading Requirements

Fujitsu Ltd. v. Tellabs Ops., Inc., No. 09 C 4530, Slip Op. (N.D. Ill. Jul. 19, 2012) (Holderman, C.J.).

Chief Judge Holderman denied plaintiff Fujitsu’s motion to strike defendant Tellabs’ unclean hands defense and its unfair competition claim.  Neither count was pled.  They were only identified in Tellabs’ supplemental initial disclosures.  Tellabs reasoned that it could not ascertain whether it needed to seek leave to amend adding the claims to the pleadings until after a Rule 30(b)(6) corporate deposition.  Regardless, the Court held it need not address Fujitsu’s concerns until Tellabs actually sought leave to amend its pleadings.

Disputed Reduction to Practice Dates Prevents Invalidity Summary Judgment

Posted in Summary Judgment

Tellabs Ops., Inv. v. Fujitsu Ltd., No. 08 C 3379, Slip Op. (N.D. Ill. July 27, 2012) (Holderman, C. J.). 

Judge Holderman denied plaintiffs’ (collectively “Tellabs”) motion for summary judgment of invalidity in this patent case.  Tellabs’ two pieces of prior art were both dated before the patents’ earliest priority date.  But defendant Fujitsu offered inventor testimony corroborated by a technical paper that the invention was reduced to practice before the prior art dates.  As a result, there was a question of fact as to whether Tellabs’ references were, in fact, prior art. 

Additionally, the Court denied Tellabs’ motion as to obviousness.  While Tellabs’ references proved that one of ordinary skill would have known that optical transmission systems had a variable number of channels.  But the prior art did not teach the patents’ particular solutions.

Patent Marking Based Lanham Act Claims Require Showing of Bad Faith

Posted in Pleading Requirements

GL Trade Ams., Inc. v. Trading Techs Int’l., Inc., No. 11 C 1558, Slip Op. (N.D. Ill. Jan. 23, 2012) (Holderman, C.J.).

Judge Holderman granted defendant Trading Technologies’ (“TT”) Fed. R. Civ. P. 12(b)(6) and 9(b) motion to dismiss plaintiff GL Trade Americas’ (“GL”) false advertising, unfair competition and deceptive trade practices claims based upon allegedly misrepresenting the scope of TT’s patents.  GL alleged that TT falsely and misleadingly caused others to believe that its patents covered electronic trading software with automatic recentering functionality, even after Judge Moran held that TT’s patents did not cover automatic recentering.

Preemption by the Patent Act

TT argued that GL’s claims were preempted by the marking provisions of the Patent Act.  But the Court held that the Lanham Act claims were not preempted because they required an additional showing of bad faith.

Allegations of Bad Faith

 GL contended that it sufficiently pled bad faith, without using the words bad faith, by alleging that TT knew the scope of its patents, but despite that marked its products incorporating automatic recentering with its patents.  Noting that patent marking allowed for “[s]ome inexactness”, the Court held that it was legally plausible for TT to believe that its accused produts were coverd by the patents.  And the Court found no support for the proposition that a patent holder must notify users of which components in a program were covered by patents and which were not.  As such, it was enough that a single mode of the software package did not have the patented feature, and TT was not required to identify to the user which aspects might read on the patents and which might not.  Because GL had not pled bad faith, both its Lanham Act and deceptive trade practices act claims were dismissed.

** For much more on this case and related cases, check out the Blog’s archives.




State of the N.D. Illinois is “Good”

Posted in Legal News

Chief Judge Holderman recently gave the Northern District’s annual state of the court address.  The address led with a moment of silence for the late Judge Hibbler.  Pronouncing the state of the Court “good,” Holderman addressed existing vacancies on the bench:

  • There were five vacancies on the bench but two are being filled by new Judges Lee and Tharp, confirmed in May.
  • Magistrate Judges Nolan and Denlow are retiring, both effective October 1, 2012.  The Court is reviewing applications to fill those upcoming vacancies.

The Court is also getting busier:

  • Civil case filings increased 8.2% in 2011 to 9,652 cases.
  • Civil jury trials increased 51% to 127 in 2011.  From 2009 to 2011, civil jury trials increased 160%.
  • The N.D. Illinois remains in the top 10% of districts in efficiency of resolving civil cases, with a median disposition time of 6.6 months.

The Court Clerk is investigating ways to make the Court’s website even more useful  And the Court continues its participation in two pilot programs:

  1. Cameras in the Courtroom; and
  2. Patent Pilot Program.

Finally, the Court’s judges currently preside over more than 60 multi-district litigation cases.

Rest in Peace Judge Ashman

Posted in Legal News

This morning, the Northern District lost a great judge when Judge Ashman passed away at the age of 81.  Judge Ashman retired in 2009 and then was recalled, continuing to serve as a magistrate judge until he passed away.  Chief Judge Holderman had some particularly kind words about Judge Ashman in the Court’s statement today:

Marty was an outstanding jurist, a warm, gregarious human being, a tremendous mentor to younger judges, a true gentleman, and a wonderful colleague. We will miss him greatly and our hearts go out to his entire family.

I will personally miss him and the warm friendship we shared during our years together on the bench.

Patent Act Does Not Preempt Patent-Related Lanham Act Claims

Posted in Legal News

GL Trade Ams., Inc. v. Trading Techs. Int’l., Inc., No. 11 C 1558, Slip Op. (N.D. Ill. Jan. 23, 2012) (Holderman, C. J.).

Judge Holderman granted defendant Trading Technologies’ (“TT”) Fed. R. Civ. P. 12(b)(6) and 9(b) motion to dismiss plaintiff GL Trade’s false advertising, unfair competition and deceptive trade practices case alleging that TT misrepresented the scope of its patents. Initially, GL Trade’s Lanham Act false advertising and unfair competition claims were not preempted by patent law. The Federal Circuit held that Lanham Act unfair competition claims based upon marketplace statements were not preempted because the Lanham Act claim required a showing of bad faith. And the allegedly false patent markings were marketplace statements. As a matter of law, TT’s actions could not have been bad faith, although what constitutes bad faith in patent-related communications was “somewhat nebulous.” TT’s belief that the marked products read on the marked patents was legally plausible. GL Trade, therefore, could not have acted in bad faith. Similarly, it was legally plausible for TT to believe that it could mark covered products even when they were not being used in a patented way.

Case Transferred to Defendant’s Home District

Posted in Jurisdiction

Lewis v. Grote Indus., Inc., No. 11 C 7069, Slip Op. (N.D. Ill. Jan. 24, 2012) (Holderman, C.J.).

Judge Holderman granted defendant Grote Industries’ (“Grote”) motion and transferred this patent case involving high-powered LED lights to the Southern District of Indiana. The cases sole connection to the Northern District of Illinois was that Grote sold product here, as it did in many other states. That weak connection diminished the preference for plaintiff’s choice of forum. Additionally, most of the witnesses and documents were at Grote’s facilities in the Southern District of Indiana. And while plaintiff, a UK resident, would be inconvenienced in any district, Grote would be far less inconvenienced in the Southern District of Indiana, its home district.

Rest in Peace Judge Hibbler

Posted in Legal News

On Monday morning, the Northern District lost a great judge and a better man when Judge Hibbler unexpectedly passed away at the age of 65.  Chief Judge Holderman issued a touching statement and the Tribune ran a strong obituary.  The following quotes from those two documents explain Judge Hibbler’s importance to the Northern District of Illinois both legally and personally:

  • Chief Judge Holderman:  “Bill was an outstanding jurist, a warm and personable human being, a true gentleman, and a wonderful colleague. We will miss him greatly, and our hearts go out to his entire family.”
  • Judge Ann Claire Williams (7th Cir.):  “He was a man of such warmth, compassion and depth that when word spread of his passing there was so many sad faces around the courthouse . . . . He had such a strong sense of fairness. He connected with people from all walks of life.”
  • U.S. Attorney Patrick Fitzgerald:  “He was a wonderful judge and wonderful person, who treated everyone who appeared before him with great respect.”

Judge Hibbler will be missed by those of us that had the opportunity to practice before him.  My condolences go out to the Hibbler family and all of his friends and colleagues at the Northern District.