Home » 2015 » February

Monthly Archives: February 2015

Employee Friendly Restrictive Covenant Doctrine Becomes More Entrenched in Illinois

Prairie Rheumatology Associates v. Maria Francis, Case No. 3-14-0338 (Ill. App. 3rd Dist. Dec. 11, 2014)

Now, both the Third and First District Appellate Courts have ruled that enforcement of a restrictive covenant, such as a non-compete agreement, against an at-will employee require at least two years of at-will employment.  This rule, first set down in Fifield v. Premier Dealer Services, 993 N.E. 2d 938 (Ill. App. 1st Dist. 2013); Fifield v. Premier Dealer Services, 374 Ill. Dec. 565 (Ill. 2013)(certiorari denied), is now the de facto law in Illinois, making it a bit easier in Illinois for employees to compete with their former employers.

In Prairie, a medical practice based in Joliet, Illinois sought an injunction against one of its former doctors, who had started working at a competitor in New Lenox, Illinois.  When she began working at Prairie, she had signed a Physician’s Agreement, including a non-compete with a fourteen mile radius and a two year term.  The New Lenox competitor was within fourteen miles of Prairie.

The trial court entered an injunction against the doctor, prohibiting her from treating Prairie’s present patients, but allowing her to continue to treat her past patients, and any new patients that she received.  Prairie appealed, and the doctor cross-appealed.

The appellate court found that there was insufficient consideration to support the restrictive covenant.  In particular, the 3rd District started by finding that, to be enforceable, a restrictive covenant must (1) be ancillary to either a valid transaction or a valid relationship, and (2) must be supported by adequate consideration.  As the doctor was not employed by Prairie for two years, there was not adequate consideration; i.e., the 3rd District followed the bright line rule set forth by the 1st District in Fifield.

Under this rule employers must show at least two years of at-will employment, or some other adequate consideration.  However, what else would constitute adequate consideration has not been determined.

Bravado International files suit in the Northern District of Illinois against numerous alleged counterfeiters

Bravado International Group Merchandising Services, Inc. filed a trademark infringement case in the Northern District of Illinois against numerous alleged infringers in the Federal District Court for the Northern District of Illinois. The alleged infringers are located in various jurisdictions including Illinois. Bravado International alleges Trademark Infringement and Unfair Competition as to the Defendants for infringing marks related to “Ariana Grande.”

The case is Bravado International Group Merchandising Services, Inc. v. Various Johns et al.; N.D. Ill. Case No. 15-1621.

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 Korsfiles 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-1618.

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.

2015 ISBA High School Mock Trial Invitational

Yesterday, I helped Judge the 2015 ISBA High School Mock Trial Invitational, which was held at Circuit Court in DuPage County.  I had a fantastic time; it was a real pleasure to see young men and women put their hearts and souls into the ISBA’s mock trial competition.  In the two rounds that I judged, I saw several great performances – the most memorable to me was from Marcel Sams of Homewood-Flossmoor, who put on a great opening statement and direct examination, all without notes.  One of the cross examinations by Benet, the closing statement from Highland Park, and Providence Catholic’s Direct Examinations stood out on a day of great performances as well.

Congratulations and good luck to all of the teams!

Prevailing Defendants Entitled to Minimal Recovery of e-discovery Costs

In In re Text Messaging Antitrust Litigation, N.D. Ill. Case No. 08-CV-7082 (Sept. 2, 2014), a number of wireless telephone companies were sued for alleged price-fixing. After prevailing on summary judgment, the companies filed a motion for more than $700,000 in costs pursuant to Fed. R. Civ. P. 54(d), which allows a prevailing litigant to recover its “costs.”

Statute and case law, however, have narrowed costs to “minor, incidental expenses.” 28 U.S.C. Sec. 1920. In particular, Sec. 1920 allows a prevailing party to recover the following:

  • fees of the clerk and marshal;
  • fees for printed or electronically recorded transcripts necessarily obtained for use in the case;
  • fees and disbursements for printing and witnesses;
  • fees for exemplification and the costs of making copies of any materials for use in the case;
  • docket fees; and
  • compensation of court appointed experts, interpreters, and special interpretation services.

The companies based their $700,000 request on the statutes allowance for exemplification and copying costs.  Based on a 3rd Circuit case-Racing Tires America v. Hoosier Racing Tire, 674 F.3d 158 (3rd Cir. 2012), Judge Kennelly determined that the only recoverable e-Discovery costs were those necessary to convert native ESI into image files and costs to scan hard copy into electronic documents.

Laches defense rescues competing former employee

Osler Institute v. Miller, Case No. 1-13-3899 (1st Dist. Jan. 9, 1997)

Osler Institute is a non-profit company based in Terre Huate, Indiana that helps doctors prepare for their board exams. Richard Miller worked for Osler, and allegedly setup a competing company called Nighthawk Medical Educators Ltd. while still employed at Osler, and even used Osler’s resources to compete against it.

Osler first filed suit in Cook County State Court against Miller in 2005 and the parties quickly entered a consent decree prohibiting Miller from competing with Osler or using its trade secrets. In 2006, Osler gave Miller notice that it would present a show-cause petition alleging that Miller worked for a competitor in Louisville, Kentucky offering the same course as taught by Osler using the same instructor on the same days. The Court granted the petition and sanctioned Miller $13,000.

Osler allegedly discovered that Miller violated the decree again by supposedly stealing Osler’s property and continuing to compete against it. However, Osler did nothing until shortly after the consent decree expired, when it filed suit in Indiana state court against Miller for misappropriating Osler’s confidential files and competing against it while the decree was in force. The trial court dismissed the complaint.

On appeal, the Indiana appeals court recognized that the parties had already in Cook County, Illinois and affirmed the dismissal of the trial court on res judicata. In particular, the Indiana Appellate Court noted that Osler was “aware of the newly alleged conversion almost two years before the expiration of the Illinois court’s jurisdiction to enforce the consent decree,” and that Osler could (and should) have raised its Indiana claims in the Illinois action.

Inexplicably, Osler waited another year and then refiled in Cook County. Miller raised the affirmative defense of laches in a motion to dismiss, noting that Osler waited five years after learning of the alleged violation to raise the issue. Miller further claimed that the delay prejudiced him, in that he could not secure or locate certain relevant witnesses, documents, website data, marketing materials and other critical exculpatory evidence. The circuit court granted Miller’s motion to dismiss based on laches and Osler appealed.

The 1st District affirmed, and, in particular, noted that Osler attempted to file a case in Indiana when the Cook County Circuit Court expressly retained jurisdiction to enforce the consent decree. In addition, Osler’s decision to wait a year after the Appellate Court raised affirmed the dismissal of Osler’s Indiana case was also relevant. The court concluded “that Osler lacked the required diligence in pursuing the present action.”

Interestingly, the 1st District was not particularly critical of Miller, who stood accused of misappropriating Osler’s intellectual property and using it to compete against Osler while still employed there. In particular, the Court stated that Miller was “lulled into doing that which he would not have done […] had the right been properly asserted.”

More than perhaps any recent case, this case shows that a litigant cannot stand on its rights, but must act quickly and decisively to assert those rights. If Osler had raised the issues while the consent decree was in place, it likely would have prevailed. Nonetheless, Osler apparently made a strategic decision (that the Court likely picked up on) in an attempt to effectively extend the 36 month consent decree and prevent Miller from competing with it long after the consent decree expired.

NBA Properties files suit in the Northern District of Illinois against numerous alleged counterfeiters

NBA Properties, Inc. 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. NBA Properties 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 NBA Properties’ Trademarks, and violation of Illinois Uniform Deceptive Trade Practices Act against the partnerships and unincorporated associations.

The case is NBA Properties, Inc. v. The Partnerships and Unincorporated Associations Identified on Schedule A; N.D. Ill. Case No. 2015-CV-1198.

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.