Select Retrieval, LLC v. American Apparel, LLC et al

Filing 167

ORDER granting motions to substitute attorneys 125 , 136 ; granting 164 Joint Motion to Dismiss Skechers, all claims against Skechers, as well as counterclaims brought by Skechers, are dismissed with prejudice; denying without prejudice 54 ,[78 ], 128 Motions to Dismiss, the hearing on these motions currently on calendar for Monday, March 26, 2012 is vacated; denying as moot 163 Motion for Extension of Time Respond to the First Amended Complaint; Select Retrieval is ordered to file a se cond amended complaint no later than April 2, 2012, correcting the deficiencies this order has identified, and omitting all Defendants that are no longer part of this action; the second amended complaint must not add new Defendants or new claims; Signed by Judge Larry Alan Burns on 3/19/12. (All non-registered users served via U.S. Mail Service)(kaj)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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SELECT RETRIEVAL, LLC,

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CASE NO. 11cv2158-LAB (WMC)
Plaintiff,

ORDER GRANTING MOTIONS TO
SUBSTITUTE ATTORNEYS;

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ORDER DISMISSING
SKECHERS, U.S.A. WITH
PREJUDICE;

vs.

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ORDER DENYING WITHOUT
PREJUDICE MOTIONS TO
DISMISS; AND

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AMERICAN APPAREL, LLC,

ORDER DENYING AS MOOT
MOTION FOR EXTENSION OF
TIME TO ANSWER

Defendant.

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I.

Motions to Substitute Counsel

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On February 3, Plaintiff Select Retrieval, LLC moved to substitute X-Patents, APC

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(including John Hangartner, Esq.) in place of its current counsel San Diego IP Law Group

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LLP. On February 7, Defendant Build.com, Inc. moved to substitute William Baker, Esq.,

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Diana Chen, Esq., and Mitra Eskandari-Azari, Esq. of Alston & Bird LLP in place of Jason

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Choy and Kirkland & Ellis, LLP.

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For good cause shown, both motions are GRANTED and counsel are substituted
accordingly.
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II.

Motion to Dismiss Claims Against, and Counterclaims by, Skechers, U.S.A., Inc.

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On March 15, Select Retrieval and Defendant Skechers, U.S.A., Inc. jointly moved

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to dismiss all claims against Skechers, and all Skechers’ counterclaims against Select

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Retrieval. In accordance with Fed. R. Civ. P. 41(a), the joint motion is GRANTED and all

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claims against Skechers, as well as counterclaims brought by Skechers, are DISMISSED

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WITH PREJUDICE. The parties shall each bear their own costs and attorney’s fees.

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III.

Motions to Dismiss

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On November 30, 2011, Select Retrieval filed its first amended complaint (the

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FAC) for infringement of U.S. Patent number 6,128,617 (the “Patent” or the “‘617 Patent”),

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naming as Defendants thirty-three different businesses, of which six have since been

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dismissed. On December 12, 2011, Defendant Everything Furniture, Inc. filed a motion to

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dismiss. On January 10, 2012, eight Defendants (including Everything Furniture, Inc.) again

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moved to dismiss. Two other Defendants later joined in the motion. Both motions sought

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dismissal for failure to state a claim, but the second motion also sought dismissal on the

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basis of misjoinder. Specifically, the motion argued that Select Retrieval had improperly

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joined numerous claims arising from different transactions or occurrences, and that the

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claims’ only common link—the fact that all Defendants were alleged to have infringed the

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same patent—was insufficient to render the claims related. In the alternative, the motions

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seek a more definite statement.

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A.

Motions to Dismiss

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The complaint brings patent infringement claims against all Defendants. The Patent

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concerns a method of retrieving information from a database record with plural fields, or

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software instructions applying this method. Defendants argue the complaint does not meet

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the pleading standard articulated in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and

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Ashcroft v. Iqbal, 129 S.C.t 1937 (2009). In response, Select Retrieval cites McZeal v. Sprint

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Nextel Corp., 501 F.3d 1354 (Fed. Cir. 2007) for the principle that a complaint for patent

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infringement is adequate if it comports with the minimum standard of Fed. R. Civ. P. Form

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18.1 The FAC, all parties acknowledge, uses the same basic formulaic allegation against

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each Defendant:

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Without license or authorization [the Defendant] is and has been directly
infringing the ‘617 Patent in the United States at least by making, using,
owning, operating, and/or maintaining one or more websites, including but
not limited to [web address of Defendant’s website], that embody the
inventions claimed in the ‘617 Patent. Such acts constitute infringement
under at least 35 U.S.C. § 271(a).

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FAC, ¶¶ 40–72. A copy of the Patent was attached as an exhibit to the FAC. The FAC’s

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discussion of jurisdiction and venue provides other details about the nature of the alleged

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infringement:

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This Court has personal jurisdiction over Defendants at least because they
conduct business in this Judicial District and have committed acts of direct
patent infringement under 35 U.S.C. §271(a) in this Judicial District including,
inter alia, importing, making, using, offering for sale and/or selling infringing
products and/or selling products using an infringing method, system, medium
or instrumentality in this Judicial District.

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FAC, ¶ 36.

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At first blush, the FAC’s allegations seem clear enough: Select Retrieval is claiming

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that each Defendant owned or operated a website that used the patented data retrieval

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method. The jurisdictional and venue discussion muddies the water, however, both because

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of its unparallel grammatical structure, and because of its expensive allegations that don’t

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necessarily relate to the allegations against each individual Defendant. Apparently, Select

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Retrieval meant to allege that each Defendant imported, made, used, offered for sale, or

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sold products that infringed the Patent; or used an infringing method, system, medium, or

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instrumentality when selling products. It isn’t clear what, if anything, the difference would be

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between using a product that infringed the Patent, and using an infringing method, system,

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medium, or instrumentality. Paragraphs 40 through 72, moreover, don’t include any

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allegations that Defendants imported, sold, or made infringing products. This paragraph isn’t

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merely an aside: Select Retrieval’s opposition to the second motion to dismiss particularly

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cites it as substantively important. (Opp’n to Mot. to Dismiss (Docket no. 138), 7:14–16.)

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McZeal cited what was then Form 16, but which is now Form 18.
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Select Retrieval contends its allegations are in line with Form 18, and therefore, under

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McZeal, are sufficient. While the Court would agree that selected portions of the allegations

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mirror Form 18, the FAC expands on those by including confusing or contradictory

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allegations, principally in ¶ 36. Very likely the vagueness of this paragraph is due in part to

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the need to make allegations as broad and inclusive as possible to encompass the actions

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of the dozens of Defendants here. Nevertheless, McZeal doesn’t stand for the proposition

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that a plaintiff may use Form 18 as a model, but then obscure the nature of the claims with

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other vague and possibly contradictory allegations.

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The Court also agrees with Defendants’ contention that the FAC should have

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identified specific parts of the websites alleged to infringe on the Patent; or if the entire

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websites are alleged to be infringing, specific ways in which the infringement is taking place.

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Without greater specificity on this point, the FAC would fall short of the example embodied

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in Form 18.

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In other respects, however, the Court finds the FAC is similar to Form 18 and to that

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extent, dismissal is inappropriate. Select Retrieval is therefore ORDERED to file a second

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amended complaint no later than April 2, 2012, correcting the deficiencies this order has

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identified, and omitting all Defendants that are no longer part of this action. The second

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amended complaint must not add new Defendants or new claims.

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Turning to the issue of misjoinder, even if the Court were to sever the claims at this

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point, the severed cases would likely be assigned to the same judge under this District’s low-

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number rule. Civ. Local Rule 40.1(e)(3). All such related cases would likely be consolidated

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for purposes of claims construction. Therefore, the Court finds severance inappropriate at

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this time. The motions to dismiss are therefore DENIED WITHOUT PREJUDICE and the

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hearing on these motions currently on calendar on Monday, March 26, 2012 is VACATED.

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After Select Retrieval has filed its second amended complaint, all Defendants that

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have been served shall file an answer or otherwise respond no later than April 16, 2012. It

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is the Court’s intention that all Defendants will meet and confer and jointly submit claims

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construction briefing at the appropriate time. Because they can plead in the alternative,
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unanimity on all points is not required. That said, they will be expected to file one set of

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briefing in total. After the Markman hearing, they may if they wish again raise the issue of

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misjoinder.

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IV.

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Motion for Extension of Time to Answer
Defendant Frederick’s of Hollywood Stores, Inc.’s application for extension of time to

respond to the first amended complaint is DENIED AS MOOT.
IT IS SO ORDERED.
DATED: March 19, 2012

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HONORABLE LARRY ALAN BURNS
United States District Judge

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