Indiana Trademark Litigation: Venue in Northern District Not Improper Under “Substantial Part of the Events” Test

By: Paul B. Overhauser  Publisher: Indiana Intellectual Property Law News

Fort Wayne, Indiana – The Northern District of Indiana has denied Defendant’s motion to dismiss for improper venue, citing the connection of the Northern District to the events underlying the litigation.

This Indiana trademark litigation, Family Express Corp. v. Square Donuts, Inc., was filed to resolve a dispute over the use of the words “Square Donuts” in connection with the sale of donuts by two different Indiana-based companies.

Defendant Square Donuts of Terre Haute, Indiana claims trademark rights to “Square Donuts” under federal and Indiana law. It currently sells its “Square Donuts” in bakeries located in southern and central Indiana, including locations in Terre Haute, Indianapolis, Bloomington, and Richmond.

Plaintiff Family Express of Valparaiso, Indiana operates convenience stores in northern Indiana and uses the term “Square Donuts” in conjunction with doughnut sales. Plaintiff states that both it and Defendant are expanding their respective businesses into new markets, with Defendant expanding to the north while Plaintiff expands to the south. Thus, territory in which both operate concurrently has become a possibility.

In 2006, Defendant sent a cease-and-desist letter to Plaintiff. Plaintiff and Defendant subsequently discussed the possibility of entering into a co-existence arrangement, but did reach an agreement.

This trademark lawsuit followed. Plaintiff asks the Indiana federal court to declare that its use of the term does not infringe on the trademark rights in “Square Donuts” asserted by Defendant. Plaintiff also asks the court to cancel Defendant’s existing Indiana and federal “Square Donuts” trademarks.

Trademark litigators for Defendant asked the court to dismiss the lawsuit, claiming that it had been filed in an improper venue. In evaluating whether venue in the Northern District was permissible, the court first noted that, while it “must resolve all factual disputes and draw all reasonable inferences in the plaintiff’s favor,” Plaintiff then bears the burden of establishing that venue is proper. It also noted that venue can be proper in more than one district.

The federal venue statute, 28 U.S.C. § 1391(b), provides that venue can exist in “(1) a judicial district in which any defendant resides, if all defendants reside [in the same state]” or “(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated.” 

Plaintiff relied on subsection (b)(2), claiming that a substantial part of the events giving rise to the lawsuit took place in the Northern District of Indiana. To establish venue, Plaintiff pointed to the fact that Defendant’s cease-and-desist letter and other communications had been relayed to Plaintiff in the Northern District. At least some rulings by districts courts located within the Seventh Circuit have held that the requirements for venue “may be satisfied by a communication transmitted to or from the district in which the cause of action was filed, given a sufficient relationship between the communication and the cause of action.”

The Northern District of Indiana concluded that such communications, which would be a typical element of litigation under the Declaratory Judgment Act, would defeat the purpose of protecting a defendant from having to litigate “in the plaintiff’s home forum, without regard to the inconvenience to the defendant at having to defend an action in that forum or whether the defendant has engaged in substantial activities in that forum.”

Instead, the Indiana court considered the underlying substance of the dispute: “whether the Defendant’s Square Donuts trademark is valid and, if it is, whether the Plaintiff nevertheless has refrained from infringing on the trademark in connection with the sale of its Square Donuts.” The court concluded that, given the extent to which the claims and events at issue in the litigation took place in both the Northern and the Southern District of Indiana, venue was not improper in the Northern District of Indiana.

Practice Tip #1: If neither subsection (b)(1) nor (b)(2) of 28 U.S.C. § 1391 applies, a third subsection may be utilized. That subsection, 28 U.S.C. § 1391(b)(3), permits venue in “any judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action.” 

Practice Tip #2: An inquiry into proper venue for a lawsuit is different from one into personal jurisdiction. Personal jurisdiction “goes to the court’s power to exercise control over a party,” while venue is “primarily a matter of choosing a convenient forum.”

The case is assigned to District Judge Theresa L. Springmann and Magistrate Judge John E. Martin in the Northern District of Indiana and assigned Case No. 2:16-cv-00103-TLS-JEM.


By: Paul B. Overhauser, Publisher, Indiana Intellectual Property Law News

Overhauser Law Offices, LLC provides intellectual property services including patents, trademarks, copyrights and infringement litigation. Whether you’re an entrepreneur launching your first invention or a corporation looking for a litigation specialist, we have the legal experience to meet your goals.

To learn more about how Overhauser Law Offices can help you, browse our website to meet our lawyers and peruse our practice areas.  Then contact us, and we’ll put our expert team to work for you.

© 2016

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Posted in Intellectual Property Blog0 Comments

Employee or Independent Contractor? Or Will You Pay Twice or More?

By Richard Mann, Richard A. Mann, P.C., Indianapolis

Many businesses are trying to avoid having employees due to the many regulations, penalties, governmental mandates and what they perceive as costly taxes and insurance. Is this a trap you are setting for yourself? Say you run a small law firm and you have a part time secretary, paralegal or assistant. (If not a law firm insert your business i.e. roofer, electrician, butcher, baker, or candle-stick maker) What if that person also works elsewhere? Is that person an employee or independent contractor? You should first look to the IRS for guidance.  When doing so you will find it is not a simple search. The IRS has 4 categories 1) independent contractor, 2) employee (they call a common law employee), 3) statutory employee, and 4) a statutory nonemployee.

  1. Independent contractor. (click on links to access reference material) People such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax.
  2. Employee (common law employee). Under common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done. The following 3 factors are also considered Behavioral Control, Financial Control and Relationship of the Parties. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed. Say you have a secretary, roofer, part-time baker etc. who you control their hours of work, where they work, and how they perform the job. This person is an employee.
  3. Statutory employee. If workers are independent contractors under the common law rules, such workers may nevertheless be treated as employees by statute (statutory employees) for certain employment tax purposes if they fall within any one of the following four categories and meet the three conditions described under Social Security and Medicare taxes:

i. A driver who distributes beverages (other than milk) or meat, vegetable, fruit, or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is your agent or is paid on commission.

ii. A full-time life insurance sales agent whose principal business activity is selling life insurance or annuity contracts, or both, primarily for one life insurance company.

iii. An individual who works at home on materials or goods that you supply and that must be returned to you or to a person you name, if you also furnish specifications for the work to be done.

iv. A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. The goods sold must be merchandise for resale or supplies for use in the buyer’s business operation. The work performed for you must be the salesperson’s principal business activity.

You should consider whether 3 (i) above includes a person who does your typing or research at home or elsewhere? Does it include a candle-stick maker who works from their garage for you or a baker who works from their kitchen for you

Withhold Social Security and Medicare taxes from the wages of statutory employees if all three of the following conditions apply:

  • The service contract states or implies that substantially all the services are to be performed personally by them.
  • They do not have a substantial investment in the equipment and property used to perform the services (other than an investment in transportation facilities).
  • The services are performed on a continuing basis for the same payer.


  1. Statutory nonemployee. There are three categories of statutory nonemployees: direct sellers, licensed real estate agents and certain companion sitters. Direct sellers and licensed real estate agents are treated as self-employed for all Federal tax purposes, including income and employment taxes, if:
  • Substantially all payments for their services as direct sellers or real estate agents are directly related to sales or other output, rather than to the number of hours worked; and
  • Their services are performed under a written contract providing that they will not be treated as employees for Federal tax purposes.

Now you may ask: Why should I care? You might think “my employee/independent contractor will not turn me in as they are not paying taxes anyway and we are in a friendly relationship.” Have you heard of whistle blower statutes? One of the biggest causes of IRS audits is from disgruntled associates, employees, and ex-spouses. The IRS Whistleblower –Informant Award program offers rewards of 15-30% of the amount collected. The first award in 2011 was four and one half million dollars ($4,500,000.00) to an anonymous accountant. What if you have been paying the person “under the table?” Unless you are not reporting income you receive, then you are claiming income but not deducting the valid tax deductions for earning that income. If you are not reporting the income then you are incurring additional liabilities including possible criminal penalties. What happens if the person gets injured and files for worker’s compensation and/or social security disability and you have not reported them as an employee? For social security disability, the person must have paid in for a certain period of time. If they were not paying the taxes and it was determined you should have been paying the taxes, then you are subject to tax penalties. Can you then be sued for the benefits they would have received? You can be liable for all the unpaid taxes, even if you are not the owner of the company. See Who Can Be Responsible for the TFRP. These taxes may not even be dischargeable in bankruptcy and may be withheld from your income, wages, and tax refunds in the future.

Next, if the person files a worker’s compensation claim and is determined to be an employee for who you have not carried worker’s compensation insurance, what can happen? Pursuant to I.C. 22-3-4-13(f), “In an action before the board against an employer who at the time of the injury to or occupational disease of an employee had failed to comply with IC 22-3-5-1, IC 22-3-7-34(b), or IC 22-3-7-34(c), the board may award to the employee or the dependents of a deceased employee:

     (1) compensation not to exceed double the compensation provided by this article;

     (2) medical expenses; and

     (3) reasonable attorney fees in addition to the compensation and medical expenses.”

So this means if your secretary gets in a car accident when delivering mail to the local post office and you do not have worker’s compensation insurance her health insurance (if she has it) may not cover her as she is working (see our previous blog on worker’s compensation), and you can be held liable for the entire medical expenses, attorney fees and up to double what the worker’s compensation awards would be.

Now you have a disgruntled employee who may have to file bankruptcy to discharge medical bills, has no income and does not qualify for social security disability. Do you think this person may sue you under Title 22 above? Do you think this person will turn you in to the IRS?

In my practice I regularly encounter people who think they are saving money by claiming everyone who works for them are independent contractors and as such do not pay withholding taxes, worker’s compensation insurance, and sometimes do not issue 1099’s. I have not even addressed the state tax penalties, overtime laws, or the additional IRS penalties for failure to file returns or pay taxes, interest on the taxes/penalties, implications of hiring a contractor who does not cover their employees for worker’s compensation and the interest on all of these. Suffice it to say, not treating an employee as an employee is a dangerous practice. It is even more dangerous if you pay them under the table and do not report income. You should consult a Certified Public Accountant or your business attorney to see what advice they will give you. You may not like the advice but in the long run you may be able to sleep at night without the worries of the possible repercussions.

This is third of a series we will be doing on the issues of sole proprietorships, partnerships and other small business and issues with not complying or handling insurance, tax and other issues that can be found on our blog


Richard A. Mann has been practicing Family Law for more than 36 years in the Indianapolis area and throughout the State of Indiana. He is a Certified Family Law Specialist as certified by the Family Law Certification Committee, a Registered Family Law and Civil Law Mediator and Guardian ad Litem and Parenting Coordinator. Mr. Mann and his firm, Richard A. Mann, P.C. Attorneys at Law, are proud to have been one of the firms who represented Same-Sex couples who were successful in overturning Indiana’s ban on Same-Sex marriage. He continues to fight discrimination in the law.

While a large portion of Mr. Mann’s practice is in the Family Law area he also represents several corporations on contract, personnel and other matters. He also has a varied General Practice in wills, estates, juvenile matters, collections, probate throughout the state of Indiana. Mr. Mann has tried murder cases as well as a death penalty case.

Mr. Mann has been selected for inclusion in Super Lawyers SuperLawyers Edition for 2009, 2010, 2011, 2012, 2013, 2014, 2015 & 2016.

Follow Richard Mann on FacebookTwitter, or read more blogs by him here.

This blog does not constitute legal advice nor does it establish an attorney client relationship. This is for general information purposes as in most legal situations the facts and terms of an agreement between the parties can affect the result.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Posted in Law Blogs0 Comments

Indiana also Recognizes Foreign Registered Domestic Partnerships on the Basis of Comity

Family Law Case Review

Case: In re: Kristy Gardenour v. Denise Bondelie
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD:  A foreign Registered Domestic Partnership (“RDP”) can confer upon unmarried parties, who relocate to Indiana, rights and obligations that spouses share, on the theory that the foreign RDP was a contract between the parties’ that incorporated the foreign jurisdiction’s statutory substantive rights and obligations.

HELD: Indiana also recognizes foreign RDPs on the basis of comity.

HELD: A couple with a foreign RDP who knowingly and voluntarily agrees to co-parent a child by artificial insemination will each be a “legal parent” of the child.

In 2003, California enacted its Domestic Partner Act, which afforded an opportunity for two same-sex parties to share in all the same rights and responsibilities as marriage, but by another name. To be declared domestic partners, the parties needed to submit a “Declaration of Domestic Partnership.” The Act included various recitations that the parties would be treated the same as spouses with respect to rights and obligations of property, children, etc.  The Act also afforded the parties an opportunity to enter into a separate contract that deviated from those statutory terms; in effect, a “premarital agreement,” but for a domestic partnership.

In 2006, Kristy and Denise, while living in California, entered into an RDP. They had no separate agreement modifying their statutory rights and obligations. The parties subsequently moved to Indiana.

In 2012, Kristy was artificially inseminated and gave birth to Child the following year. In 2015, the parties separated, Denise moved back to California, and Kristy filed, in Indiana, a petition to terminate the RDP.  As a result of those proceedings, the Indiana trial court terminated the RDP, awarded the parties joint legal custody of Child, provided Denise with a parenting time arrangement, and ordered Denise to pay child support to Kristy. Kristy appealed.

Kristy appealed the trial court’s finding and conclusion of the parties’ “spousal relationship.” The trial court had done so relying upon a contractual theory: Indiana recognizes cohabitation agreements and marital agreements as valid and enforceable. Though Indiana does not have RDPs, Indiana law can view Denise and Kristy’s declaration of RDP as a contract that incorporated the substantive provisions of California law with respect to the parties’ rights and obligations to be just like spouses. The Court of Appeals agreed: “[D]espite the Declaration not detailing statutory language pertaining to the rights and obligations of domestic partners, we conclude Kristy and Denise contractually entered into a RDP – thereby incorporating default terms of California law – and agreed to be treated as spouses.”

The Court of Appeals also noted that the RDP could be honored on an alternative theory of comity. The Court further observed that, as a matter of public policy, not recognizing the terms of the RDP would allow a parent in California to flee his or her obligations as a spouse or parent by crossing state lines.

Kristy also appealed the trial court’s finding that Denise was Child’s “legal parent.” However, the Court of Appeals concluded that Denise was a legal parent of Child both under the same RDP contractual and comity analysis set forth above, but also pursuant to existing Indiana case law that can establish a legal parent relationship for anyone who “knowingly and voluntarily agreed to co-parent a child by artificial insemination,” which was the case here.

The trial court’s legal custody and parenting time order was affirmed.

To view the text of this opinion in its entirety, click here: In re the Marriage of: Kristy Gardenour v. Denise Bondelie



James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Posted in Family Law Case Review, News0 Comments

Seventh Circuit Rules on Sanctions for Vexatious and Obstructive Conduct by Attorneys for Porno-Trolling Collective

By: Paul B. Overhauser  Publisher: Indiana Intellectual Property Law News

Chicago, Illinois – The Seventh Circuit ruled in the ongoing intellectual property litigation between Plaintiff Lightspeed Media Corp. and Defendants Anthony Smith et al.

Attorneys for Lightspeed Media Corp. have filed numerous lawsuits nationwide in an apparent attempt to extract quick settlements from individual users who would rather avoid litigating their pornography consumption in open court. After pushback from Defendants and their internet service providers, as well as the imposition of sanctions by the Central District of California in a similar case, the attorneys began to voluntarily dismiss some of the cases.

The litigation against Defendant Smith was one such dismissed lawsuit. After the dismissal, Smith filed a motion for attorney’s fees. The Southern District of Illinois found that the Lightspeed lawsuit had been frivolous, baseless, and “smacked of bullying pretense,” and imposed sanctions of $261,025.11, jointly and severally, against three lawyers for Lightspeed: Paul Hansmeier, John Steele, and Paul Duffy.

Much legal wrangling ensued. While pleading to the court an inability to pay the sanctions, Steele withdrew over $300,000 from an account that he shared with his wife. Hansmeier withdrew a similar amount from one of his accounts. Each of these transfers was apparently an attempt to conceal the funds from the court and Smith. Other actions, also apparent attempts to conceal the funds, were also taken by the attorneys. Following these actions, Hansmeier filed for bankruptcy and Duffy passed away.

The Seventh Circuit was asked to consider the appropriateness of the sanction against the three attorneys. It declined to hear the matter as to Duffy, stating that because he was deceased he was “beyond [their] jurisdiction.” The appeals court dismissed the appeal as to Hansmeier, noting that, in a liquidation proceeding under Chapter 7 of the bankruptcy code, “only the trustee [of the bankruptcy estate] has standing to prosecute or defend a claim belonging to the estate.”

After a review of multiple instances of discovery misconduct, the appellate court held that the district court had acted within its discretion in imposing a discovery sanction against Steele for what it called a “pattern of vexatious and obstructive conduct” and “obviously egregious behavior.”

The appellate court then turned to the matter of the contempt sanction against Steele. Steele argued that the sanction was in fact criminal in nature, not civil. Thus, he contended, the district court had failed to abide by the enhanced procedural safeguards required for such a sanction.

The Seventh Circuit agreed. It held that, while “civil contempt may be imposed if proven by clear and convincing evidence, and without the full criminal procedural process,” imposing criminal contempt required more. Specifically, it required that the contemnor be “afforded the protections that the Constitution requires of such criminal proceedings.”

The appellate court also held that the fine, as ordered by the district court, was not “designed either to compel the contemnor into compliance with an existing court order or to compensate the complainant for losses sustained as a result of the contumacy,” as was appropriate for a finding of civil contempt. Instead, the sanctions that had been levied against Steele were punitive in nature, and “meant to vindicate the authority of the court.” Thus, they were properly deemed criminal sanctions.

Concluding that the procedures required under the Constitution for criminal contempt had not been applied, the Seventh Circuit vacated the contempt sanction.

The litigation, Case No. 15-2440, was heard by Chief Judge Diane P. Wood, Michael S. Kanne and Diane S. Sykes.


By: Paul B. Overhauser, Publisher, Indiana Intellectual Property Law News

Overhauser Law Offices, LLC provides intellectual property services including patents, trademarks, copyrights and infringement litigation. Whether you’re an entrepreneur launching your first invention or a corporation looking for a litigation specialist, we have the legal experience to meet your goals.

To learn more about how Overhauser Law Offices can help you, browse our website to meet our lawyers and peruse our practice areas.  Then contact us, and we’ll put our expert team to work for you.

© 2016

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Posted in Intellectual Property Blog0 Comments

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