TimesLines, Inc v. Facebook, Inc.

Filing 169

SUPPLEMENT to Sealed motion 140 In Limine No. 7 (Van Baren, Bruce)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TIMELINES, INC.
Plaintiff/Counter-Defendant,
v.
FACEBOOK, INC.
Defendant/Counter-Plaintiff

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Civil Action No.: 11 CV 6867
HONORABLE JOHN W. DARRAH
Jury Trial Demanded

SUPPLEMENTAL AUTHORITY IN SUPPORT OF
TIMELINES’ MOTION IN LIMINE NO. 7
The undersigned believe this detailed and carefully reasoned decision is highly relevant
to the Court’s consideration of Timelines’ Motion In Limine No. 7 (the “Motion”).

In its

Motion, Timelines moves this Court to exclude Facebook from introducing evidence that its
revenue in connection with using Timelines’ trademark is $ 0. This is a clear misstatement and
improper application of U.S. trademark law because Timelines’ trademark does appear on, and is
used in “connection with” a Facebook product or service that generates revenue. Timelines,
moreover, has proved this revenue. Facebook, therefore, now has the burden of establishing how
much of that revenue is not derived from its use of Timelines’ trademark. Timelines cannot
make this determination, nor is it required to under established Supreme Court and Seventh
Circuit precedent discussed in its Motion.
The attached supplement authority is a relevant trademark case in which this Court (J. J.
Darrah) denied a defendant’s post-trial motion for a new trial on damages where the jury
awarded $1,000,000 in profits. Aero Products Int'l, Inc. v. Intex Recreation Corp., 2004 WL
5129997, at *3 (N.D. Ill. Dec. 15, 2004) (attached hereto). Specifically, defendants argued—
similar to Facebook here—that the evidence at trial did not establish profits derived from
infringing activities. See id. After explaining that under the Lanham Act, a trademark must be

used “in connection with the sale, offering for sale, distribution, or advertising of any goods or
services,” the Court denied defendant’s motion and held that there was evidence that “the
trademark was used on . . . a publicly accessible website,” which was a source to “advertise and
offer to sell [defendant’s] services.” Id. (citing 15 U.S.C. § 1114(1)(a) (emphasis added). Here
too, Facebook used Timelines’ trademark on both its website and in its advertising material, such
as its road show video, to promote the Timeline feature on its website. And the Timeline feature,
under the name “Timeline” is used and offered on its website, which Timeline has proved,
generates positive revenue. Therefore, Facebook cannot argue that its profits are $0 because the
fact is that Facebook has used Timeline’s trademark “in connection with” a product or service
that is revenue positive.
April 18, 2013

Respectfully submitted,
TIMELINES, INC.,
Plaintiff/Counter-Defendant

By: /s/ Douglas A. Albritton
James T. Hultquist (SBN 6204320)
Douglas A. Albritton (SBN 6228734)
Michael L. DeMarino (SBN 6298337)
Bruce R. Van Baren (SBN 6310375)
REED SMITH LLP
10 South Wacker Drive
Chicago, IL 60606-7507
Telephone: [phone]
Facsimile: [phone]
Counsel for TIMELINES, INC.

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CERTIFICATE OF SERVICE
I, the undersigned attorney, certify that I electronically filed the attached document.
Pursuant to Rule 5(b)(3) of the Federal Rules of Civil Procedure and Local Rule 5.9, I have
thereby electronically served all Filing Users.
April 18, 2013

Respectfully submitted,
TIMELINES, INC.,
Plaintiff/Counter-Defendant

By: /s/ Douglas A. Albritton
James T. Hultquist (SBN 6204320)
Douglas A. Albritton (SBN 6228734)
Michael L. DeMarino (SBN 6298337)
Bruce R. Van Baren (SBN 6310375)
REED SMITH LLP
10 South Wacker Drive
Chicago, IL 60606-7507
Telephone: [phone]
Facsimile: [phone]
Counsel for TIMELINES, INC.

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Aero Products Intern., Inc. v. Intex Recreation Corp., Not Reported in F.Supp.2d (2004)

2004 WL 5129997
Only the Westlaw citation is currently available.
United States District Court,
N.D. Illinois, Eastern Division.
AERO PRODUCTS INTERNATIONAL, INC., a
Florida corporation, and Robert B. Chaffee, an
individual, Plaintiffs,
v.
INTEX RECREATION CORPORATION., a
California corporation; Quality Trading, Inc., a
California corporation; and Wal–Mart Stores, Inc.,
a Delaware corporation, Defendants.

ANALYSIS
Intex argues that: (1) the record demonstrates Plaintiffs
failed to consistently mark their products with the ‘726
patent number prior to the filing of this action; (2) the jury
award with respect to the trademark damages was against
the great weight of the evidence presented at trial and
constituted a double recovery. All legal issues are
governed by Seventh Circuit law, except for substantive
patent law and matters related thereto that bear an
essential relationship to patent law; these issues are
governed by Federal Circuit law. Fiskars, Inc. v. Hunt
Mfg. Co., 279 F.3d 1378, 1381 (Fed.Cir.2002).

No. 02 C 2590. | Dec. 15, 2004.
Attorneys and Law Firms
Michael Paul Chu, Christopher Michael Dolan, David
Howard Bluestone, Mark Herbert Remus, William H.
Frankel, Brinks, Hofer, Gilson & Lione, Chicago, IL,
Plaintiffs.
Mark E. Phelps, Leydig, Voit & Mayer, Ltd., Chicago, IL,
Scott Russell Maynard, Lewis Brisbois Bisgaard & Smith
LLP, Los Angeles, CA, Defendants.
Opinion

Patent Damages
Intex contends that Aero failed to consistently mark their
products with the ‘726 patent number prior to filing this
action. Specifically, Intex asserts that: (1) Aero admitted
to distributing products that lacked the ‘726 patent
number; (2) the marking of Aero’s products’ packaging
and inserts is insufficient to comply with the marking
statute; and (3) Plaintiffs offered no evidence that its
licensees marked the products they sold with the ‘726
patent number. A new trial on the issue of damages is
required if a jury’s damage award is against the great
weight of the evidence. Oiness v. Walgreen Co., 88 F.3d
1025, 1028 (Fed.Cir.1996) (Oiness ).

MEMORANDUM OPINION AND ORDER
DARRAH, J.
*1 The Plaintiffs, Aero Products International, Inc.
(“Aero”) and Robert B. Chaffee, filed suit against the
Defendants, Intex Recreation Corporation (“Intex”);
Quality Trading, Inc.; and Wal–Mart Stores, Inc. After
trial by jury, Defendants were found liable for willfully
infringing Plaintiffs’ patent regarding an inflatable
mattress valve, United States Patent No. 5,367,726 (“the
‘726 patent”) and for violating Plaintiffs’ trademark. The
jury awarded Plaintiffs $2,950,000.00 in damages for
patent infringement. The jury also awarded Plaintiffs
$1,000,000.00 in damages for the trademark infringement
arising from Intex’s profits from using the mark.
Presently before the Court is Intex’s Motion for a
Judgment as a Matter of Law and for New Trial on
Damages or, in the Alternative, for Remittitur.

Initially, Plaintiffs argue that Intex waived its marking
argument by not presenting a motion for a judgment as a
matter of law in any of its pre-verdict motions. However,
motions for a new trial are not required to be submitted
prior to the verdict. See, e.g., Umpleby v. Potter &
Brimfield, Inc., 69 F.3d 209, 212–213 (7th Cir.1995).
Under 35 U.S.C. § 287(a),
Patentees, and persons making or
selling any patented article for or
under them, may give notice to the
public that the same is patented,
either by fixing thereon the word
“patent” or the abbreviation “pat.”,
together with the number of the
patent, or when, from the character
of the article this can not be done,
by fixing to it, or to the package
wherein one or more of them is

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Aero Products Intern., Inc. v. Intex Recreation Corp., Not Reported in F.Supp.2d (2004)

contained, a label containing a like
notice.
If a patentee fails to mark its product, “no damages shall
be recovered by the patentee in any action for
infringement, except on proof that the infringer was
notified of the infringement and continued to infringe
thereafter, in which event damages may be recovered only
for the infringement occurring after such notice.” 35
U.S.C. § 287(a).
*2 To satisfy the marking requirement, a patentee must
consistently mark substantially all of its products and no
longer distribute unmarked products. Nike, Inc. v.
Wal–Mart Stores, Inc., 138 F.3d 1437, 1446
(Fed.Cir.1998) (Nike ). The patentee must prove the
marking requirement has been met by the preponderance
of the evidence. Nike, 138 F.3d at 1446.
In this case, evidence was presented that Aero listed the
‘726 patent number on the product itself and was
generally in compliance with the statute throughout the
relevant period. Intex presented evidence that some times
during 1999 and 2002, Aero failed to place the ‘726
patent number on the product. However, Intex failed to
present any specific evidence as to the exact duration this
occurred or even, in general, the number of units which
were not properly marked in this regard. Therefore, it
cannot be said that the jury’s decision to find that Aero,
by a preponderance of the evidence, complied with the
marking requirement was against the great weight of the
evidence.
Furthermore, Aero presented evidence that the instruction
manuals, product packaging, and sell sheets were
constantly marked with the ‘726 patent number during all
relevant times. Intex argues that marking these items was
insufficient and cites Rutherford v. Trim–Tex, Inc., 803
F.Supp. 158, 163–64 (N.D.Ill.1992), in support of this
proposition. However, the jury instruction given by the
Court regarding the marking requirement never discussed
the proposition advanced by Intex; and Intex did not
object to the instruction as given nor offered an alternate
instruction consistent with the theory they are now
arguing. Accordingly, Intex waived any objections in this
regard; any error in giving the jury instruction was not so
obvious that it could be described as a plain error.
Fed.R.Civ.P. 51(d); Riverwood Int’l Corp. v. R.A. Jones
& Co., 324 F.3d 1346, 1353 (Fed.Cir.2003); Jabat, Inc. v.
Smith, 201 F.3d 852, 857 (7th Cir.2000).
Intex also seeks a new trial or a remittitur because Aero
offered no evidence that two licensees, the Coleman
Company and Cyrk, Inc., marked the products they sold

with the ‘726 patent number. However, Intex failed to
provide any evidence that Coleman and Cyrk did not
mark the products. Furthermore, “once marking has
begun in compliance with the statute, in rem notice is
provided and there is no reason to further limit damages”
under the marking statute. Am Med. Sys., Inc. v. Med.
Eng’g Corp., 6 F.3d 1523, 1537 (Fed.Cir.1993). Here,
there is no evidence that the licensees sold any products
after October 2000 onward, the period in which Intex sold
the infringing products and Plaintiffs sought to recover
patent damages. Thus, Aero and its licensees were in
compliance with the marking statute before Intex
infringed the patent. In its reply, Intex offers nothing to
the contrary.
Based on the above, the jury’s decision was not against
the great weight of the evidence, and Intex’s motion for a
new trial on this ground is denied. Similarly, Intex’s
motion for a remittitur on this ground is also denied.

Trademark Damages
*3 Intex also raises two issues with respect to the
trademark damages awarded to Plaintiffs. First, Intex
seeks a judgment as a matter of law or a new trial because
the jury’s award was not supported by the evidence.
Second, Intex seeks a remittitur because the jury’s
trademark award constituted an impermissible double
recovery. These issues are governed by Seventh Circuit
law.
In determining whether to grant a motion for a judgment
as a matter of law under Federal Rule of Civil Procedure
50(b), the inquiry is limited to “whether the evidence
presented, combined with all reasonable inferences
permissibly drawn therefrom, is sufficient to support the
verdict viewed in the light most favorable to the party
against whom the motion is directed.” Susan Wakeen Doll
Co. v. Ashton–Drake Galleries, 272 F.3d 441, 449 (7th
Cir.2001) (Susan Wakeen ). Thus, the jury’s decision is
reversed only if it is found “that no rational juror could
have found for the prevailing party.” Susan Wakeen, 272
F.3d at 449. To obtain a new trial under Federal Rule of
Civil Procedure 59, the jury’s verdict must be against the
clear weight of the evidence. Robinson v. Burlington N.
R.R. Co., 131 F.3d 648, 656 (7th Cir.1997).
An award of profits for trademark infringement may be
given under an unjust enrichment or compensation theory.
Sands, Taylor, and Woods v. Quaker Oats Co., 34 F.3d
1340, 1349 (7th Cir.1994) (Sands ). “[A]n award of the
wrongdoer’s profits must bear some relationship to the

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Aero Products Intern., Inc. v. Intex Recreation Corp., Not Reported in F.Supp.2d (2004)

unlawful conduct....” Alexander Binzel Corp. v.
Nu–Tecsys Corp., No. 91 C 2092, 2000 WL 310304, at
*13 (N.D.Ill.2000) (citing Sands, 34 F.3d at 1349).

Jury Award as Not Supported by the Evidence
Intex argues that the evidence at trial established that the
term trademark was not used on any of Intex’s packaging
or point of sale materials; but, rather, the term was only
used on a “passive” website and a secure website
available to Intex’s sale personnel and a few customers.
Intex also argues that Plaintiffs did not introduce any
evidence regarding actual confusion regarding the source
of Intex’s products.
However, Intex concedes that there is no requirement that
a package be marked to find a defendant liable for
trademark infringement. See, e.g., Intermatic, Inc. v.
Toeppen, 947 F.Supp. 1227, 1239 (N.D.Ill.1996). Rather,
the trademark must be used “in connection with the sale,
offering for sale, distribution, or advertising of any goods
or services.” 15 U.S.C. § 1114(1)(a).
In this case, Plaintiffs presented evidence that the
trademark was used on: (1) a publicly accessible website,
(2) a password protected website available to some Intex
customers, (3) a flip-book advertisement, and (4) a
Quality Trading website. These sources were used to
advertise and offer to sell Intex’s products. Plaintiffs also
presented evidence that customers were confused by
Intex’s advertising and use of Aero’s trademark. Plaintiff
further presented evidence of profits made by Intex
through its infringing activities. Therefore, evidence was
presented by Plaintiffs that would bear some relationship
to the wrongful conduct of Intex.
*4 Based on the above, a rational juror could have found
for Plaintiffs on this issue when viewing the evidence in
the light most favorable to Plaintiffs. Moreover, the jury’s
verdict was not against the clear weight of the evidence.
Accordingly, Intex’s motions for a judgment as a matter
of law and new trial are denied.

Intex seeks a remittitur because the jury’s trademark
award constituted an impermissible double recovery.
According to Intex, the jury awarded an amount of patent
damages in excess of any profit made by Intex in selling
the accused products. Therefore, the patent damages and
the trademark infringement overlapped and resulted in a
double recovery for Plaintiffs.
Intex cites Catalina Lighting, Inc. v. Lamps Plus, Inc.,
295 F.3d 1277, 1291 (Fed.Cir.2002) (Catalina Lighting ),
in support of its argument. There, though, the court relied
on 35 U.S.C. § 289, which prohibits the owner of a design
patent from twice recovering the profit made from an
infringement by obtaining a reasonable royalty. Section
289 is not applicable here because a design patent is not at
issue.
Intex also cites Bowers v. Baystate Techs., Inc., 320 F.3d
1317, 1327–28 (Fed.Cir.2003) (Bowers ), for the
proposition that the jury may award separate damages for
the patent and trademark claims; and the court, in its
discretion, may make appropriate adjustments to avoid a
double recovery. In Bowers, however, the claims at issue
involved copyright and contract claims.
The function of patent damages is not to disgorge the
profits of the infringer. King Instruments Corp. v. Perego,
65 F.3d 941, 948 (Fed.Cir.1995) (citation omitted) (King
Instruments ). Instead, the patentee is entitled to recover
the loss it suffered without regard to whether the infringer
profited. King Instruments, 65 F.3d at 948. In contrast, as
discussed above, trademark infringement damages are
premised on unjust enrichment and compensation
theories. Therefore, Plaintiffs were not awarded an
impermissible double recovery in receiving both patent
and trademark damages as awarded by the jury.

CONCLUSION
For the foregoing reasons, Intex’s Motion for a Judgment
as a Matter of Law and for New Trial on Damages or, in
the Alternative, for Remittitur is denied.

Double Recovery
End of Document

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© 2013 Thomson Reuters. No claim to original U.S. Government Works.

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