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Monthly Archives: January 2015

Oakley, Inc. Files a Lawsuit Against Hundreds of Partnerships and Unincorporated Associates in the Northern District of Illinois

Oakley filed a trademark infringement case in the Northern District of Illinois against hundreds of partnerships and unincorporated associates in the Federal District Court for the Northern District of Illinois. The few hundreds of partnerships and unincorporated associates are located in People’s Republic of China or other foreign jurisdictions. Oakley alleged Trademark Infringement and Counterfeiting, False Designation of Origin, Claim for Injunctive Relief Under The Anticybersquatting Consumer Protection Act as to the Defendants Operating a Defendant Domain Name Incorporating the Oakley Trademarks, and Violation of Illinois Uniform Deceptive Trade Practices Act against these Chinese partnerships and unincorporated associates.

The case is Oakley, Inc. v. The Partnerships and Unincorporated Associations, Case No. 15-CV-843.

Atty Ad:  The Law Offices of Konrad Sherinian, LLC with offices in Chicago and Naperville, has successfully defended numerous trademark cases alleging trademark infringement and Counterfeiting, False Designation of Origin, Claim for Injunctive Relief Under The Anticybersquatting Consumer Protection Act, and Violation of Illinois Uniform Deceptive Trade Practices Act. Call (630) 318-2606 or (312) 981-5004 today for a free consultation if you have been notified by the plaintiff.

U.S. Pays $134,000 for Fake Facebook Page

Back in 2012, Sondra Arquiett was arrested, found guilty on a drug conspiracy charged, and sentenced to time served. The DEA, not satisfied with getting Arquiett, setup a fake Facebook page based on information from her cell phone.

Arquiett found out about the fake Facebook page – probably after one or more of her “friends” were busted – and sued the DEA. After initially defending its actions, the DEA has now settled with Arquiett for $134,0000. The DEA did not admit wrongdoing for its actions.

Non-Compete Agreements – Not Just for High Paid Execs Anymore

Recently, a number of stories have been published about everyday employees being forced to sign non-competes by their employers. For example, a number of stories have broken about Jimmy Johns forcing delivery drivers and behind-the-counter employees to sign non-competes. Many workers are concerned about the ramifications and enforceability of those agreements.

Non-compete agreements are enforced in limited circumstances in most states. In particular, most states recognize that employers are less likely to hire and train an employee if that employee can turn around and compete with the employer; especially after the employee develops a relationship with the employer’s customers. Therefore, in this context, non-compete agreements actually promote job growth. However, in states that allow non-compete agreements, the courts balance this against the clear restraint of trade created by the non-compete; an enforceable non-compete prevents a worker in the marketplace from utilizing her skills in the most valuable fashion. Accordingly, those states that allow non-compete agreements do so within a framework that accounts for all parties interests, although the high courts of the various states have balanced those interests different.

The test in Illinois is set forth in Reliable Fire Equipment v. Arredondo, which requires a non-compete agreement to 1) be no greater in scope than is required to protect a legitimate business interest of the employer; 2) no impose an undue burden on the employee; and 3) not be injurious to the public. There is extensive case law on all of those elements.

Nonetheless, it is clear that non-compete agreements have been upheld in cases similar to the Jimmy John’s example, such as in a case where a saddler was not allowed to work for a competing store, and where a sales person was not allowed to work for a competitor. However, the case of delivery drivers and behind the counter workers at a Jimmy John’s presents some special circumstances, in that such an employee has no way of significantly impacting the business of their former employer. It is also likely that this issue will make its way to the courts in the near future.

Monster Energy Company files suit in the Northern District of Illinois against numerous alleged counterfeiters

Monster Energy Company filed a trademark infringement case in the Northern District of Illinois against numerous alleged parternships and unincorporated associations in the Federal District Court for the Northern District of Illinois. The partnerships and unincorporated associations are located in the People’s Republic of China and other foreign jurisdictions. Monster Energy alleges Trademark Infringement and Counterfeiting, False Designation of Origin, a Claim for Injunctive Relief Under The Anticybersquatting Consumer Protection Act as to the Defendants Operating a Defendant Domain Name Incorporating the Monster Energy Trademarks, and violation of Illinois Uniform Deceptive Trade Practices Act against the partnerships and unincorporated associations.

The case is Monster Energy Company v. The Partnerships and Unincorporated Associations Identified on Schedule A; N.D. Ill. Case No. 2015-CV-00277.

Atty Ad:  The Law Offices of Konrad Sherinian, LLC with offices in Chicago and Naperville, has successfully defended numerous trademark and counterfeiting cases. Call (630) 318-2606 or (312) 981-5004 today for a free consultation.

Deckers Outdoor files another suit in the Northern District of Illinois against numerous alleged counterfeiters

Deckers Outdoor Corp. filed another trademark infringement case in the Northern District of Illinois against numerous alleged partnernships and unincorporated associations in the Federal District Court for the Northern District of Illinois. The partnerships and unincorporated associations are located in the People’s Republic of China and other foreign jurisdictions. Deckers Outdoor alleges Trademark Infringement and Counterfeiting, False Designation of Origin, a Claim for Injunctive Relief Under The Anticybersquatting Consumer Protection Act as to the Defendants Operating a Defendant Domain Name Incorporating the Deckers Outdoor Trademarks, and violation of Illinois Uniform Deceptive Trade Practices Act against the partnerships and unincorporated associations.

The case is Deckers Outdoor Corp. v. The Partnerships and Unincorporated Associations Identified on Schedule A; N.D. Ill. Case No. 2015-CV-153.

Atty Ad:  The Law Offices of Konrad Sherinian, LLC with offices in Chicago and Naperville, has successfully defended numerous trademark and counterfeiting cases. Call (630) 318-2606 or (312) 981-5004 today for a free consultation.

Michael Kors Files Another Suit in the Northern District of Illinois Against Numerous Alleged Counterfeiters

Michael Kors, L.L.C. filed a trademark infringement case in the Northern District of Illinois against numerous alleged parternships and unincorporated associations in the Federal District Court for the Northern District of Illinois. The partnerships and unincorporated associations are located in the People’s Republic of China and other foreign jurisdictions. Michael Kors alleges Trademark Infringement and Counterfeiting, False Designation of Origin, a Claim for Injunctive Relief Under The Anticybersquatting Consumer Protection Act as to the Defendants Operating a Defendant Domain Name Incorporating the Michael Kors Trademarks, and violation of Illinois Uniform Deceptive Trade Practices Act against the partnerships and unincorporated associations.

The case is Michael Kors, L.L.C. v. The Partnerships and Unincorporated Associations Identified on Schedule A; N.D. Ill. Case No. 2015-CV-00124.

Atty Ad:  The Law Offices of Konrad Sherinian, LLC with offices in Chicago and Naperville, has successfully defended numerous trademark and counterfeiting cases. Call (630) 318-2606 or (312) 981-5004 today for a free consultation.

Rhino Boxed In by Poor Secrecy Pact

Industrial design firm nClosures, Inc. designed the Rhino and Rhino Elite, which are “point of sale” enclosures for computer tablets.  Before sharing its plans with manufacturer Block & Co., nClosures insisted on a confidentiality agreement, which Block signed.  The confidentiality agreement permitted Block to use nClosures’ designs solely for the parties “business relationship with respect to iPad Enclosures.”

The parties swapped three separate versions of a written production agreement, none of which were ever executed.  Nonetheless, for approximately a year, Block manufactured the designs under an oral agreement and paid nClosures $33.75 a unit.  Block then developed its own competing enclosure.

nClosures sued Block in the Northern District of Illinois alleging breach of contract and, based on an alleged partnership, breach of fiduciary duty.  Block moved for summary judgment, which the District Court granted.  nClosures appealed and the 7th Circuit affirmed.

Judge Flaum started by setting forth the elements of a typical breach of contract claim under Illinois law; i.e., “(1) the existence of a valid and enforceable contract; (2) substantial performance by the plaintiff; (3) a breach by the defendant; and (4) resultant damages.”  TAS Distribution v. Cummins Engine, 491 F.3d 625 (7th Cir. 2007).  The Court then examined the additional considerations that arise when enforcing a confidentiality agreement.  In particular, the Court cited to Tax Track v. New Investor World, 478 F.3d 783 (7th Cir. 2007).  In particular, a court “will enforce confidentiality agreements only when the information sought to be protected is actually confidential and reasonable efforts were made to keep it confidential.”

While nClosures and Block did sign a confidentiality agreement at the outset of their business relationship, no additional confidentiality agreements were required of individuals who accessed the design files for the Rhino or Rhino Elite devices.  Additionally, neither the Rhino nor the Rhino Elite drawings were marked as confidential or proprietary.  In addition, access to the drawings were not sufficiently controlled – they were not maintained under lock and key or kept on a computer with limited access.

Accordingly, the breach of contract claim failed as nClosures did not engage in reasonable steps to protect the confidentiality of its proprietary information.

With regards to the breach of fiduciary duty claim, the district court held that Block and nClosures did not share profits and did not form a partnership, and therefore, nClosure’s breach of fiduciary duty claim lacked merit.  The 7th Circuit agreed.

The Court started by noting that the Illinois Uniform Partnership Act defines a partnership as “the association of two or more persons to carry on as co-owners of a business for profit.”  805 Ill. Com. Stat. 206/202(a).  The intent of the parties and sharing of profits are both factors in determining the existence of a partnership.  In particular, Illinois law states that “a person who receives a share of the profits of a business is presumed to be a partner,” 805 Ill. Comp. Stat. 206/202 (c)(3), unless the individual received the profits as compensation as an independent contractor or an employee.

In this case, however, the relationship was one of manufacturer and marketer.  The Court cited to its previous decision in Autotech, where it also found no breach of fiduciary duty.  In Autotech, the agreement between the manufacturer and marketer specified that neither party had the right or responsibility to assume or to create any obligations or responsibilities expressed or implied on behalf of or in the name of the other or to bind the other party in any manner whatsoever.”  The unexecuted agreements between nClosures and Block were similar; while the agreements did not legally bind the parties, they did evidence the parties intentions.

Accordingly, even though nClosures argued that profit sharing took place based on their recovery of $33.75 per unit, the Court ruled against them.  In particular, the Court explained that even if the $33.75 payments did evidence profit sharing, this alone was not sufficient to establish a partnership.  Rather, the parties did not sign a partnership agreement, did not file joint tax returns, and did not hold themselves out to be partners in any way.

While the partnership / fiduciary duty decision was not extraordinary in any way, design houses need to pay heed to the confidentiality decision.  The enforceability of a confidentiality clause depend on how the parties behave before and after instituting the clause.  To be safe, the confidentiality agreement or an accompanying document should set forth a comprehensive plan as to how proprietary information is to be protected.  Without such steps, the confidentiality clause is literally worth less than the paper it is written on.