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Smart Options, LLC v. Jump Rope

November 13, 2012


The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge:


On April 4, 2012, Plaintiff Smart Options, LLC ("Smart Options") filed a complaint against Defendant Jump Rope, Inc. ("Jump Rope") alleging infringement of Smart Options' United States Patent No. 7,313,539 ("'539 patent"). (R. 1, Compl.) On August 20, 2012, Jump Rope moved for summary judgment of non-infringement pursuant to Federal Rule of Civil Procedure 56. (R. 24, Mot.) For the following reasons, the Court grants Jump Rope's motion. The Court also grants Jump Rope's motion to strike. (R. 51, Mot. to Strike.)


I. Northern District of Illinois Local Rule 56.1

"For litigants appearing in the Northern District of Illinois, the Rule 56.1 statement is a critical, and required, component of a litigant's response to a motion for summary judgment. The purpose of the local rule is to make the summary judgment process less burdensome on district courts, by requiring the parties to nail down the relevant facts and the way they propose to support them." Sojka v. Bovis Lend Lease, Inc., 686 F.3d 394, 398 (7th Cir. 2012). Local Rule 56.1 assists the Court by "organizing the evidence, identifying undisputed facts, and demonstrating precisely how each side propose[s] to prove a disputed fact with admissible evidence." Bordelon v. Chi. Sch. Reform Bd. of Trs., 233 F.3d 524, 527 (7th Cir. 2000). "The Rule is designed, in part, to aid the district court, 'which does not have the advantage of the parties' familiarity with the record and often cannot afford to spend the time combing the record to locate the relevant information,' in determining whether a trial is necessary." Delapaz v. Richardson, 634 F.3d 895, 899 (7th Cir. 2011) (citation omitted).

Local Rule 56.1(a)(3) requires the moving party to provide "a statement of material facts as to which the moving party contends there is no genuine issue." Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009). "The opposing party is required to file 'a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon.'" Id. (citing N.D. Ill. R. 56.1(b)(3)(B)). Pursuant to the Local Rules, the Court will not consider any additional facts proposed in the nonmoving party's Local Rule 56.1(b)(3)(B) response, but must rely on the non-movant's Local Rule 56.1(b)(3)(C) statement of additional facts. See Ciomber v. Coop. Plus, Inc., 527 F.3d 635, 643 (7th Cir. 2008). The Court disregards Rule 56.1 statements and responses that do not cite to specific portions of the record, as well as those that contain factual or legal argument. See Cracco, 559 F.3d at 632 ("When a responding party's statement fails to dispute the facts set forth in the moving party's statement in the manner dictated by the rule, those facts are deemed admitted for purposes of the motion."); Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir. 2006) ("statement of material facts did [] not comply with Rule 56.1 as it failed to adequately cite the record and was filled with irrelevant information, legal arguments, and conjecture"); Bordelon, 233 F.3d at 528 (the requirements for responses under Local Rule 56.1 are "not satisfied by evasive denials that do not fairly meet the substance of the material facts asserted"); Cichon v. Exelon Generation Co., L.L.C., 401 F.3d 803, 809-10 (7th Cir. 2005) ("A district court does not abuse its discretion when, in imposing a penalty for a litigant's non-compliance with Local Rule 56.1, the court chooses to ignore and not consider the additional facts that a litigant has proposed.").

II. Smart Options Failed to Comply with Local Rule 56.1

As detailed in Jump Rope's Reply, Smart Options' Local Rule 56.1 statements and responses contain significant problems. (R. 44, Reply at 5-6.) Almost every one of Smart Options' responses to Jump Rope's Local Rule 56.1 Statement of Undisputed Material Facts is either unsupported by citations to evidence, or does not constitute a statement of fact at all, but rather legal argument or legal conclusions. (See e.g., R. 41, Pl's. 56.1 Resp. ¶¶ 11, 12, 22-37.) Indeed, rather than providing specific references to affidavits or parts of the record as required by Local Rule 56.1, Smart Options repeatedly cites the same 16 paragraphs of the Gartner Declaration. (See id.) Smart Options' repeated response that "SmartOptions further states that JumpRope's accused smartphone applications allow users to buy an option by paying an 'option fee' to gain access to the front of a line at a club, at which time the JumpRope user may pay the 'reservation price' or 'cover charge' to gain access to the club" is improper argument and not tailored to respond to the specific factual assertions. (Id.) As explained above, the purpose of Local Rule 56.1 statements is to identify the relevant admissible evidence supporting the material facts, not to make factual or legal arguments. See Cady, 467 F.3d at 1060; see also Judson Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec, 529 F.3d 371, 382 n. 2 (7th Cir. 2008) ("It is inappropriate to make legal arguments in a Rule 56.1 statement of facts."). As such, for the particular statements of fact that contain such a response from Smart Options without any additional citation, the Court deems Jump Rope's statements of fact as admitted for the purposes of its motion. See Cracco, 559 F.3d at 632; see also Sojka,686 F.3d at 398 ("The obligation set forth in Local Rule 56.1 'is not a mere formality.' Rather, '[i]t follows from the obligation imposed by Fed. R. Civ. P. 56(e) on the party opposing summary judgment to identify specific facts that establish a genuine issue for trial.'") (quoting Delapaz v. Richardson, 634 F.3d 895, 899 (7th Cir. 2011) (internal citations omitted))

Smart Options Additional Facts That Require Denial of Defendant's Summary Judgment Motion are similarly deficient ("Additional Facts"). (Pl.'s 56.1 Resp., Add'l Facts.) Several of Smart Options' additional facts amount to no more than conclusions by a non-expert about the meaning of words in the '539 patent. (Id. ¶¶ 5, 6, 8, 9, 12, 15, 16.) As explained above, the Court disregards such improper argument.*fn1

Smart Options also filed supplemental additional facts and a supporting declaration on October 10, 2012, even though briefing closed on September 28, 2012. (R. 49, Pl.'s Sup. Add'l Facts; R. 48, Sup. Decl. G. Baker.) On October 17, 2012, Jump Rope filed a motion to strike these supplemental filings. (R. 51, Mot. to Strike.) Smart Options' supplemental filing were untimely and improper as this Court set a briefing schedule which included an opportunity for Smart Options to make factual assertions under Local Rule 56.1. Though the Court appreciates that Smart Options "didn't wait" and "acted rapidly to supplement the record" after it obtained new information, Smart Options did not seek leave of the Court to make these additional filings even though Local Rule 56.1 does not allow for such supplemental filings. (R. 56, Resp. to Mot. to Strike at 2); see also N.D. Ill. R. 56.1.Additionally, the supplemental factual statements relate to an alleged Jump Rope competitor, Zoomline, not Jump Rope. (Pl.'s Sup. Add'l Facts; Sup. Decl. G. Baker.; see also Resp. to Mot. to Strike.) Factual allegations regarding Zoomline's choice to seek a license from Smart Options are irrelevant and immaterial to whether Jump Rope's product infringes the '539 patent. See Fed. R. Civ. P. 12(f). The Court, therefore, grants Jump Rope's motion to strike Smart Options' supplemental filings.


Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A genuine dispute as to any material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). In determining summary judgment motions, "facts must be viewed in the light most favorable to the nonmoving party only if there is a 'genuine' dispute as to those facts." Scott v. Harris, 550 U.S. 372, 380, 127 S. Ct. 1769, 167 L. Ed. 2d 686 (2007). The party seeking summary judgment has the burden of establishing that there is no genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). After "a properly supported motion for summary judgment is made, the adverse party 'must set forth specific facts showing that there is a genuine issue for trial.'" Anderson, 477 U.S. at 255 (quotation omitted). "[D]istrict courts presiding over summary judgment proceedings may not weigh conflicting evidence or make credibility determinations, both of which are the province of the jury." Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 697, 704-05 (7th Cir. 2011) (internal citations omitted).


Smart Options owns the '539 patent entitled "Method and System for Reserving Future Purchases of Goods and Services." (Uncontested Facts ¶¶ 4-5.)*fn2 Smart Options uses the technology described in the '539 patent to operate the website (Comp. ¶7.) It assists consumers who "may be interested in goods or services but [are not] able or willing to purchase the goods or services at the present time." (Uncontested Facts ¶ 6.) Smart Options, for example, may allow a user to purchase an "option" to purchase a DVD player during a 60 day time period at a $170 "reservation price," though the product normally sells for $200. (Id. ¶8.) The purchaser would pay an "option fee" to reserve the right to purchase the DVD player at the reservation price for the duration of that 60 day period. (Id.) The purchaser then may pay the $170 reservation price at any time during that 60 day period to purchase the DVD player. (Id.) The option does not obligate the purchaser to actually purchase the desired good. (Id. ¶ 9.) Rather, "[a] purchaser is ...

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