Cobra North America, LLC v. Cold Cut Systems Svenska AB
ORDER granting 82 Cobra North America (Pyrolance)s motion to join American Cobra AB as a party-plaintiff; granting 83 American Cobra ABs motion to confirm the award entered in the Swedish arbitration occurring between CCS and American ; denying 95 CCSs motion to dismiss. By Judge David M. Ebel on 11/30/2009.(sah, )
I N THE UNITED STATES DISTRICT COURT F O R THE DISTRICT OF COLORADO C i v i l Action No. 08-cv-00873-DME-CBS C O B R A NORTH AMERICA, LLC, a Colorado Limited Liability Company, d o i n g business as Pyrolance North America, P l a i n t i f f - Counter Defendant, v. C O L D CUT SYSTEMS SVENSKA AB, a Swedish company, D e f e n d a n t - Counter Claimant.
A M E R I C A N COBRA AB, a Swedish company, I n t e r e s t e d Party. ORDER T h i s matter is before the Court on three motions: 1) the motion of Plaintiff C o b r a North America, LLC, doing business as Pyrolance North America ("Cobra N o r t h America (Pyrolance)"), to join American Cobra AB as a party-plaintiff p u r s u a n t to Fed. R. Civ. P. 19 or 20 (Doc. 82); 2) American Cobra AB's motion t o confirm its Swedish arbitration award against Defendant Cold Cut Systems S v e n s k a AB ("CCS") (Doc. 83); and 3) CCS's motion, made pursuant to Fed. R. C i v . P. 12(b)(6), to dismiss all of Cobra North America (Pyrolance)'s claims a g a i n s t it (Doc. 95). After considering the parties' pleadings and conducting a
h e a r i n g , 1 the Court GRANTS the motions to join American Cobra AB as a p a r t y - p l a i n t i f f (Doc. 82) and to confirm American Cobra AB's arbitration award ( D o c . 83). The Court DENIES in full CCS's motion to dismiss (Doc. 95). I. BACKGROUND B r i e f l y stated, Cobra North America (Pyrolance) alleges the following: C C S designed and developed the Cobra, a rifle-like device used by firefighters t o cut through burning structures using a combination of water and aggregate. CCS then patented this device in several countries, including the United States. I n September 2006, CCS granted American Cobra AB an exclusive license to u s e CCS's U.S. patent, as well as its trademarks, copyrighted materials and " k n o w - h o w , " in the United States and Canada ("Licensing Agreement"). American Cobra AB is a Swedish company formed by American Kevin Spencer. American Cobra AB, in turn, sublicensed its rights under the Licensing A g r e e m e n t to Plaintiff Cobra North America (Pyrolance) ("Sublicensing A g r e e m e n t " ) , a Colorado company also formed by Spencer. Cobra North A m e r i c a (Pyrolance) entered into a contract with Fluid Power Products ("FPP") t o manufacture a Cobra-like device, the Pyrolance®. The controversy u n d e r l y i n g this litigation stems, in part, from CCS's decision to terminate the L i c e n s i n g Agreement in April 2008 because, among other reasons, Cobra North
D u r i n g the hearing on these motions, the Court permitted the parties to a r g u e at length regarding a number of matters pertinent to this case, but not n e c e s s a r i l y relevant to the disposition of the specific issues presented by the t h r e e motions at issue here. Counsel's argument, however, will serve to inform t h e Court if and when the parties raise the other matters in subsequent motions. 2
A m e r i c a (Pyrolance) was marketing and selling the Pyrolance® outside the U n i t e d States and Canada. Previously, the Court stayed this litigation pending arbitration proceedings o c c u r r i n g in Sweden between CCS and American Cobra AB regarding CCS's t e r m i n a t i o n of the Licensing Agreement. In May 2009, the Swedish arbitration p a n e l entered a decision generally favorable to American Cobra AB. Following t h a t arbitration award, the parties filed with this Court the three motions at issue here. II. PENDING MOTIONS A. M o t i o n to join American Cobra AB as a party-plaintiff C o b r a North America (Pyrolance) moves to join American Cobra AB as a p a r t y - p l a i n t i f f under either Fed. R. Civ. P. 19 or 20. (Doc. 82.) American Cobra A B joins this motion. The Court concludes that, under Rule 19(a)(1)(B)(i), American Cobra AB i s a party required to be joined, if feasible. That rule provides that [a] person who is subject to service of process and whose joinder will n o t deprive the court of subject-matter jurisdiction must be joined as a party if: .... (B) that person claims an interest relating to the subject o f the action and is so situated that disposing of the a c t i o n in the person's absence may: (i) as a practical matter impair or impede the p e r s o n ' s ability to protect the interest . . . . F e d . R. Civ. P. 19(a)(1)(B)(i). 3
C l e a r l y American Cobra AB, as the licensee and sublicensor of CCS's U n i t e d States patent, has an interest in the subject of this litigation between C o b r a North America (Pyrolance) and CCS--the licensing and sublicensing a r r a n g e m e n t involving that patent. Further, the parties used almost identical l a n g u a g e in drafting both the Licensing and Sublicensing Agreements; thus, the i n t e r p r e t a t i o n of one of these agreements may well affect the interpretation to be g i v e n the other. Moreover, American Cobra AB has obtained an arbitration a w a r d against CCS which directly addresses, interprets and applies the L i c e n s i n g Agreement between those two parties. American Cobra AB has an i n t e r e s t in seeing that award enforced, and in preventing an inconsistent j u d g m e n t being entered in this litigation. For these reasons, disposing of Cobra N o r t h America (Pyrolance)'s claims asserted against CCS in this litigation w i t h o u t American Cobra AB's participation might impair or impede American C o b r a AB's ability to protect its interest in this licensing arrangement. See E n t e r . Mgmt. Consultants, Inc. v. United States ex rel. Hodel, 883 F.2d 890, 8 9 1 , 893 (10th Cir. 1989) (holding, in action involving plaintiff and the Citizen B a n d Potawatomi Tribe, that Tribe was a party required under Rule 19(a) to be j o i n e d if feasible, where plaintiff was seeking to validate its contract with the T r i b e , while the Tribe, in a separate action, was seeking instead to have the a g r e e m e n t declared void; noting that "[t]he Tribe's interest in the validity of this c o n t r a c t , to which it is a party, would be directly affected by the relief" plaintiff s e e k s ) ; cf. Rainville Co. v. Consupak, Inc., 407 F. Supp. 221, 223-25 (D. N.J. 1 9 7 6 ) (holding licensee who transferred license to the plaintiff, but who still 4
c l a i m e d an interest in the license, was a party who needed to be joined, if feasible).2 A m e r i c a n Cobra AB, therefore, is a party required to be joined, if feasible. The Court further concludes that it is feasible to join American Cobra AB as a p a r t y to this litigation. American Cobra AB concedes it is subject to service of p r o c e s s . And joinder of American Cobra AB will not defeat this court's federal q u e s t i o n subject-matter jurisdiction, see 9 U.S.C. §203, 28 U.S.C. §§ 1331, 1 3 3 8 , 1367. The Court, therefore, GRANTS Cobra North America (Pyrolance)'s m o t i o n to join American Cobra AB as a party-plaintiff. 3 B. M o t i o n to confirm Swedish arbitration award N o w a party-plaintiff, American Cobra AB moves this court, pursuant to t h e Convention on the Recognition and Enforcement of Foreign Arbitral Awards o f 1958, codified at 9 U.S.C. §§ 201-08, to confirm the now-final award entered b y the Swedish arbitration panel in the proceedings between CCS and American C o b r a AB. 4 (Doc. 83.) Cobra North America (Pyrolance) joins this motion.
A l t h o u g h Rule 19 was revised effective in December 2007, those r e v i s i o n s were "stylistic only." See Republic of Philippines v. Pimentel, 128 S . Ct. 2180, 2184-85 (2008). Therefore, the Court continues to rely upon case l a w decided under the earlier version of the rule. See id. A l t h o u g h Rule 19(a)(1)(B)(i) provides the most straightforward j u s t i f i c a t i o n for joinder, the Court concludes that joinder would also be a p p r o p r i a t e under both Rule 19(a)(1)(A) and Rule 20(a)(1)(A). D u r i n g the hearing, the parties represented to the Court that the time for e i t h e r party to the Swedish arbitration, CCS and American Cobra AB, to c h a l l e n g e the award in the courts of Sweden has now expired. 5
9 U.S.C. § 207 specifically provides that, [w]ithin three years after an arbitral award falling under the Convention i s made, any party to the arbitration may apply to any court having j u r i s d i c t i o n under this chapter for an order confirming the award a g a i n s t any other party to the arbitration. The court shall confirm the a w a r d unless it finds one of the grounds for refusal or deferral of r e c o g n i t i o n or enforcement of the award specified in the said Convention. ( E m p h a s i s added.) T h e award entered in the Swedish arbitration between CCS and American C o b r a AB falls under the Convention--"[a]n arbitration agreement or arbitral a w a r d arising out of a legal relationship, whether contractual or not, which is c o n s i d e r e d commercial . . . ," but that is not "[a]n agreement or award arising o u t of such a relationship which is entirely between citizens of the United S t a t e s . . . ," 9 U.S.C. § 202. And this court has subject-matter jurisdiction over A m e r i c a n Cobra AB's confirmation request: "An action or proceeding falling u n d e r the Convention shall be deemed to arise under the laws and treaties of t h e United States. The district courts of the United States . . . shall have o r i g i n a l jurisdiction over such an action or proceedings, regardless of the a m o u n t in controversy." Id. § 203. Furthermore, CCS challenges neither venue i n this court, nor this court's personal jurisdiction over it. Finally, "`[t]he party opposing enforcement of an arbitral award has the b u r d e n to prove that one of the seven defenses under the New York Convention a p p l i e s . Art. V(1). The burden is a heavy one, as the showing required to avoid s u m m a r y confirmance is high.'" Zeiler v. Deitsch, 500 F.3d 157, 164 (2d Cir. 2 0 0 7 ) (quotation omitted). But here, CCS fails to invoke any of the seven 6
d e f e n s e s the Convention makes available to prevent the confirmation of the a r b i t r a t i o n award. In fact, CCS "does not contest that the Award was properly i s s u e d " and acknowledges that American Cobra AB "could likely confirm the A w a r d in a separate action." (Doc. 96 at 11.) CCS argues, instead, only that by c o n f i r m i n g that award as part of this litigation, Cobra North America (Pyrolance) i s seeking to "expand" American Cobra AB's award to resolve Cobra North A m e r i c a (Pyrolance)'s claims asserted against CCS in this action. But the p r e c l u s i v e effect of American Cobra AB's arbitration award on Cobra North A m e r i c a (Pyrolance)'s claims at issue in this litigation is a separate issue that h a s not yet been squarely presented to the Court by motion. Under these circumstances, this Court must confirm the Swedish a r b i t r a t i o n award. See 9 U.S.C. §207 ("The court shall confirm the award unless i t finds one of the grounds for refusal or deferral of recognition or enforcement o f the award specified in the said Convention.") (emphasis added); see also E n c y c l o p a e d i a Universalis S.A. v. Encyclopaedia Britannica, Inc., 403 F.3d 85, 9 0 (2d Cir. 2005); China Nat'l Metal Prods. Import/Export Co. v. Apex Digital, I n c . , 379 F.3d 796, 799 (9th Cir. 2004); Karaha Bodas Co. v. Perusahaan P e r t a m b a n g a n Minyak Dan Gas Bumi Negara, 364 F.3d 274, 287-88 (5th Cir. 2 0 0 4 ) . Therefore, the Court GRANTS American Cobra AB's motion to confirm t h e arbitration award entered in the Swedish arbitration proceedings between C C S and American Cobra AB. The Court does not express any view as to the p r e c l u s i v e effect that arbitration award might have in these proceedings.
M o t i o n to dismiss Cobra North America (Pyrolance)'s claims CCS has filed a motion, made pursuant to Fed. R. Civ. P. 12(b)(6), to
d i s m i s s with prejudice all five claims Cobra North America (Pyrolance) has a s s e r t e d against CCS. (Doc. 95.) Notwithstanding that this is a Rule 12(b)(6) m o t i o n , to be resolved on the allegations Cobra North America (Pyrolance) m a d e in its amended complaint, see Alvarado v. KOB-TV, L.L.C., 493 F.3d 1 2 1 0 , 1215 (10th Cir. 2007), the parties have included additional materials a d d r e s s i n g CCS's motion to dismiss. The parties have also relied, in their p l e a d i n g s , on evidence presented to the Court during the earlier hearing on the p a r t i e s ' motions for preliminary injunctions. The Court, however, declines to c o n v e r t CCS's motion to dismiss into one for summary judgment at this stage in t h e proceedings. See Fed. R. Civ. P. 12(d). Therefore, the Court will resolve t h e motion to dismiss without resort to these additional materials. In doing so, h o w e v e r , the Court can still rely on the Licensing and Sublicensing Agreements s u b m i t t e d to the Court because the amended complaint refers to those d o c u m e n t s , the parties do not challenge the authenticity of the agreements s u b m i t t e d to the Court, and these documents are central to Cobra North A m e r i c a (Pyrolance)'s claims. See Alvarado, 493 F.3d at 1215 (noting district c o u r t , in resolving Rule 12(b)(6) motion, may consider documents referred to in t h e complaint if the documents "are central to the plaintiff's claim and the parties d o not dispute the documents' authenticity") (quotation omitted); see also Utah G o s p e l Mission v. Salt Lake City Corp., 425 F.3d 1249, 1253-54 (10th Cir. 2005). 8
I n reviewing CCS's motion to dismiss, then, the Court will accept as true a l l of Cobra North America (Pyrolance)'s well-pled factual allegations included in t h e amended complaint, construing those allegations in the light most favorable t o the plaintiff, Cobra North America (Pyrolance). See Ashcroft v. Iqbal, 129 S . Ct. 1937, 1949-50 (2009); Pace v. Swerdlow, 519 F.3d 1067, 1073 (10th Cir. 2 0 0 8 ) . "To survive a motion to dismiss, a complaint must contain sufficient f a c t u a l matter, accepted as true, to `state a claim to relief that is plausible on its f a c e . ' " Iqbal, 129 S. Ct. at 1949 (quoting Bell Atlantic Corp. v. Twombly, 550 U . S . 544, 570 (2007)). In its motion to dismiss, CCS asserts three reasons why this court should d i s m i s s Cobra North America (Pyrolance)'s claims against it. 5 1. C o b r a North America is obligated to arbitrate its claims against CCS
CCS first argues that "[a]ll counts" Cobra North America (Pyrolance) a l l e g e d against it "must be dismissed because they are subject to the arbitration p r o v i s i o n set out in the operative agreements." 6 (Doc. 95 at 1.) D u r i n g argument to the Court, CCS asserted several other reasons why it b e l i e v e s Cobra North America (Pyrolance)'s claims are legally deficient and s h o u l d be dismissed. In this order, however, the Court addresses only the s p e c i f i c grounds for dismissal CCS asserted in its written motion to dismiss. T h e question of "[w]hether a party is bound by an arbitration agreement i s generally considered an issue for the courts, not the arbitrator, `[u]nless the p a r t i e s clearly and unmistakably provide otherwise.'" Bridas S.A.P.I.C. v. Gov't o f Turkmenistan, 345 F.3d 347, 354 (5th Cir. 2003) (quoting AT&T Techs., Inc. v . Commc'ns Workers, 475 U.S. 643, 649 (1986)); see also Dwayne E. Williams, B i n d i n g Nonsignatories to Arbitration Agreements, 25 Franchise L. J. 175, 182 ( S p r i n g 2006) (citing Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84
" [ A ] r b i t r a t i o n is a creature of contract law." E.I. Dupont de Nemours & Co. v . Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187, 194 (3d C i r . 2001); see also E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 294 (2002); V o l t Info. Sciences, Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U . S . 468, 478 (1989); Hardin v. First Cash Fin. Servs., Inc., 465 F.3d 470, 4747 5 (10th Cir. 2006). The duty to arbitrate, therefore, generally arises from a w r i t t e n agreement between the two parties involved in a dispute that they will a r b i t r a t e that controversy. See 9 U.S.C. § 206 (providing for orders to compel f o r e i g n arbitration "in accordance with the agreement" to do so); see also A n s w e r s in Genesis of Ky., Inc. v. Creation Ministries Int'l, Ltd., 556 F.3d 459, 4 6 8 (6th Cir. 2009) (discussing Convention's requirement for such a written a g r e e m e n t ) ; Smith/Enron Cogeneration Ltd. P'ship, Inc. v. Smith Cogeneration I n t ' l , Inc., 198 F.3d 88, 92 (2d Cir. 1999) (same). Here, there is no such written a g r e e m e n t between CCS and Cobra North America (Pyrolance). Nevertheless, CCS, citing generally to "United States and Swedish law," a r g u e s that Cobra North America (Pyrolance) is still bound to arbitrate its claims a g a i n s t CCS, pursuant to the arbitration clause in the Licensing Agreement e n t e r e d into between CCS and American Cobra AB. But Cobra North America
( 2 0 0 2 ) , and First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943-46 ( 1 9 9 5 ) ) ; cf. Sheet Metal Workers' Int'l Ass'n, Local Union No. 2 v. McElroy's, I n c . , 500 F.3d 1093, 1096 (10th Cir. 2007) (whether the parties submitted a p a r t i c u l a r dispute to arbitration is for the court to decide). Here, the parties do n o t argue, and the Court has not found any indication, that the Licensing A g r e e m e n t "clearly and unmistakably" provided that this issue should be r e s o l v e d by a Swedish arbitration panel. 10
( P y r o l a n c e ) did not sign and is not a party to that Licensing Agreement. Ordinarily, a party is not bound by an agreement to which it did not assent, see W o r l d Rentals and Sales, LLC v. Volvo Constr. Equip. Rents, Inc., 517 F.3d 1 2 4 0 , 1 2 4 4 (11th Cir. 2008); Bridas, 345 F.3d at 353, "unless [that party] is b o u n d under traditional principles of contract and agency law to be akin to a s i g n a t o r y to the underlying agreement," E.I. Dupont, 269 F.3d at 194 (quotation o m i t t e d ) ; see also Comer v. Micor, Inc., 436 F.3d 1098, 1101 (9th Cir. 2006); B r i d a s , 345 F.3d at 356. Courts have recognized several such contract or a g e n c y theories that might support enforcing an arbitration agreement against a n o n - s i g n a t o r y such as Cobra North America (Pyrolance). See World Rentals, 5 1 7 F.3d at 1244; Comer, 436 F.3d at 1101; Bridas, 345 F.3d at 356; E.I. D u p o n t , 269 F.3d at 196; see also Arthur Andersen LLP v. Carlisle, 129 S. Ct. 1 8 9 6 , 1902 (2009). The only such theory CCS invokes here is its contention t h a t Cobra North America (Pyrolance) is a third-party beneficiary to the L i c e n s i n g Agreement. There is, however, a strong presumption against t h i r d - p a r t y beneficiary status. See Williams, supra, at 179; see also InterGen N . V . v. Grina, 344 F.3d 134, 146 (1st Cir. 2003) (noting "the law requires special c l a r i t y to support a finding that the contracting parties intended to confer a b e n e f i t on a third party"). To succeed on that theory, CCS bears the burden of e s t a b l i s h i n g , among other things, that the parties to the Licensing A g r e e m e n t -- C C S and American Cobra AB--intended, at the time they made t h e i r agreement, that Cobra North America (Pyrolance) be a third-party b e n e f i c i a r y of their Licensing Agreement. See E.I. Dupont, 269 F.3d at 196; see 11
a l s o Saudi Am. Bank v. Shaw Group, Inc. (In re Stone & Webster, Inc.), 558 F . 3 d 234, 241 (3d Cir. 2009); Comer, 436 F.3d at 1102; Bridas, 345 F.3d at 355, 3 6 2 ; 1 Domke on Comm'l Arb. § 13:9; Williams, supra, at 178. CCS never a t t e m p t s to make such a showing here. And Cobra North America (Pyrolance) e x p r e s s l y eschews that its claims are premised on its being a third-party b e n e f i c i a r y of the Licensing Agreement. Further, the Court's own review of the terms of that agreement does not s u g g e s t that the parties to the Licensing Agreement had such an intent. See B r i d a s , 345 F.3d at 355 (considering agreement); InterGen, 344 F.3d at 146 ( s a m e ) . It is not enough for CCS to show that Cobra North America (Pyrolance) w i l l be "directly affected by the parties' conduct" in relation to the Licensing A g r e e m e n t , or that it has a "substantial interest in the contract's enforcement." Bridas, 345 F.3d at 362; see also InterGen, 344 F.3d at 147. Therefore, b e c a u s e CCS has not established that the parties to the Licensing Agreement, C C S and American Cobra AB, intended at the time they entered that agreement t h a t Cobra North America (Pyrolance) be a third-party beneficiary to the L i c e n s i n g Agreement, the Court denies CCS's motion to dismiss premised on t h e argument that Cobra North America (Pyrolance) is a third-party beneficiary t o the Licensing Agreement and is thus required to arbitrate all of its claims a g a i n s t CCS in Sweden. 7 B e c a u s e the Court concludes that CCS has failed to establish that Cobra N o r t h America (Pyrolance) must arbitrate its claims against CCS, we need not a d d r e s s Cobra North America (Pyrolance)'s argument that CCS waived any right
C C S next asserts that Cobra North America (Pyrolance)'s "requests for d e c l a r a t o r y relief . . . must be dismissed because those requests are now moot a s there is no existing case or controversy" (Doc. 95 at 1), as required by the D e c l a r a t o r y Judgment Act, see 28 U.S.C. § 2201(a). To be actionable, a d e c l a r a t o r y judgment claim must involve a dispute that is "definite and concrete, t o u c h i n g the legal relations of parties having adverse legal interests; and that [ i s ] real and substantial and admit[s] of specific relief through a decree of a c o n c l u s i v e character, as distinguished from an opinion advising what the law w o u l d be upon a hypothetical state of facts. MedImmune, Inc. v. Genentech, I n c . , 549 U.S. 118, 127 (2007) (quotations, alterations omitted); see also S u r e f o o t LC v. Sure Foot Corp., 531 F.3d 1236, 1244 (10th Cir. 2008) (applying M e d I m m u n e ) . "Basically, the question in each case is whether the facts alleged, u n d e r all the circumstances, show that there is a substantial controversy, b e t w e e n parties having adverse legal interests, of sufficient immediacy and r e a l i t y to warrant the issuance of a declaratory judgment." MedImmune, 549 U . S . at 127 (quotation omitted); see also Surefoot, 531 F.3d at 1244. In this case, Cobra North America (Pyrolance) asserts two claims for d e c l a r a t o r y relief. First, Cobra North America (Pyrolance) seeks a declaration that (a) Pyrolance is not infringing CCS's [U.S.] Patent by manufacturing,
i t had to compel Cobra North America (Pyrolance) to arbitrate.
m a r k e t i n g , selling or offering to sell its Pyrolance® device in foreign c o u n t r i e s where CCS holds no patent; and (b) Pyrolance is not i n f r i n g i n g CCS's Patent by manufacturing, marketing, selling or o f f e r i n g to sell its Pyrolance® device in the U.S. and Canada; and ( c ) Pyrolance's and FPP's continued performance under the P y r o l a n c e / F P P contract does not infringe the Patent. ( D o c . 41 at 11-12.) In its motion to dismiss, CCS contends this claim is moot b e c a u s e , "[s]ince the [Swedish arbitration] Award was issued, . . . Cold Cut has n o t challenged Pyrolance's or FPP's actions as an infringement of Cold Cut's p a t e n t . " (Doc. 96 at 13.) T h e Court rejects the argument that this claim for declaratory relief is m o o t . A party generally cannot voluntarily cease its challenged conduct in order t o moot the claims against it. See New Mexico ex rel. Richardson v. BLM, 565 F . 3 d 683, 701 (10th Cir. 2009) (noting that "[w]hen a party moots a case by v o l u n t a r i l y changing its own conduct, the Supreme Court instructs us to view m o o t n e s s arguments with suspicion because the offending party might otherwise r e s u m e that conduct as soon as the case is dismissed") (citing Friends of the E a r t h , Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 189 (2000)). "This voluntary cessation exception" to mootness "derives from `the principle t h a t a party should not be able to evade judicial review . . . by temporarily a l t e r i n g questionable behavior.'" Id. at 701-02 (quoting City News & Novelty, I n c . v. City of Waukesha, 531 U.S. 278, 284 n.1 (2001)). Cobra North America (Pyrolance)'s second claim seeks a declaration that " ( a ) CCS is not entitled to terminate the Sublicense Agreement based upon the g r o u n d s it has asserted; and (b) the Sublicense Agreement remains in full force 14
a n d effect." (Doc. 41 at 12.) CCS contends that this claim, too, is moot, b e c a u s e , "since the [arbitration] Award, Cold Cut has not contested the validity o f the Sublicense Agreement." (Doc. 96 at 13.) The Court also declines to dismiss this claim as moot. As stated above, g e n e r a l l y a party cannot voluntarily cease its challenged conduct in order to m a k e moot the claims asserted against it. See New Mexico ex rel. Richardson, 5 6 5 F.3d at 701-02. While the Swedish arbitration panel concluded CCS i m p r o p e r l y terminated the Licensing Agreement, it did so after only addressing t h e substance of four of the five justifications CCS proffered to justify t e r m i n a t i n g the Licensing Agreement. The arbitration panel declined to address t h e fifth justification only because CCS failed to give Cobra North America ( P y r o l a n c e ) sufficient notice of that reason. It is possible that CCS could, at a l a t e r date, seek to reassert its fifth justification for termination. More i m p o r t a n t l y , the parties clearly disagree as to the preclusive effective the S w e d i s h arbitration award should have on the claims Cobra North America ( P y r o l a n c e ) asserts against CCS in this litigation. For these reasons, therefore, the Court concludes there remains an actual c o n t r o v e r s y between the parties. The Court, thus, concludes Cobra North A m e r i c a (Pyrolance)'s two declaratory judgment claims are not moot. Rather, a s alleged, there remains a "substantial controversy" here between two parties w i t h "adverse legal interests, of sufficient immediacy and reality to warrant the i s s u a n c e of a declaratory judgment." MedImmune, 549 U.S. at 127 (quotation omitted). 15
T h i s court has already ruled in CCS's favor on Cobra North A m e r i c a (Pyrolance)'s claim that CCS intentionally interfered w i t h Cobra North America (Pyrolance)'s contract with FPP
In its amended complaint, Cobra North America (Pyrolance) alleged that C C S intentionally interfered with FPP's performance of its contract with Cobra N o r t h America (Pyrolance). In support of that claim for damages and injunctive r e l i e f asserted under Colorado law, Cobra North America (Pyrolance) further a l l e g e d that it "retained FPP as its exclusive United States manufacturer of the p a t e n t e d device," "FPP was able . . . to overcome the manufacturing and defect i s s u e s in the original Cobra Device," and develop "[a] new device, the P y r o l a n c e ® . " (Doc. 41 at 8.) Regarding CCS's interference with that contract, C o b r a North America (Pyrolance) alleged that, [o]n April 14, 2008, CCS delivered to [American Cobra AB] a purported t e r m i n a t i o n notice, wherein CCS declared the License Agreement t e r m i n a t e d . CCS then, on April 18, 2008, immediately and directly c o n t a c t e d FPP by letter. CCS informed FPP that it considered the L i c e n s e Agreement and the Sublicense Agreement terminated and that C C S would not honor either license agreement. CCS further directly t h r e a t e n e d FPP, and Pyrolance, with immediate legal action for " i n f r i n g e m e n t " unless both companies immediately "suspended" any w o r k whatsoever relating to the patented technology. ( I d . at 8-9.) In the order denying either party a preliminary injunction, the Court p r e v i o u s l y held that CCS's conduct in notifying FPP that Cobra North America ( P y r o l a n c e ) ' s sublicense to use CCS's U.S. patent had been terminated did "not a p p e a r to be wrongful interference, but instead was an apparent good faith n o t i c e to FPP, based upon CCS's terminating the Licensing Agreement." (Doc. 7 5 at 24.) On that basis, CCS now contends the Court should dismiss Cobra 16
N o r t h America (Pyrolance)'s intentional interference claim against CCS under R u l e 12(b)(6). But the Court clearly prefaced its earlier decision addressing the p r e l i m i n a r y injunction motions by stating that, because "the Federal Rules of E v i d e n c e did not apply" to that proceeding, the Court's "factual findings are, of c o u r s e , preliminary and do not bind the Court in the ultimate resolution of P l a i n t i f f ' s claims." (Doc. 75 at 2 n.1.) See Heideman v. S. Salt Lake City, 348 F . 3 d 1182, 1188 (10th Cir. 2003). Therefore, the Court's order on the p r e l i m i n a r y injunction motions does not provide a basis on which to grant CCS's m o t i o n to dismiss Cobra North America (Pyrolance)'s claim alleging CCS i n t e n t i o n a l l y interfered with the Cobra North America (Pyrolance)/FPP c o n t r a c t u a l relationship. I I I . CONCLUSION T o summarize, the Court GRANTS Cobra North America (Pyrolance)'s m o t i o n to join American Cobra AB as a party-plaintiff (Doc. 82), and GRANTS A m e r i c a n Cobra AB's motion to confirm the award entered in the Swedish a r b i t r a t i o n occurring between CCS and American Cobra AB (Doc. 83). The C o u r t DENIES, in all respects, CCS's motion to dismiss (Doc. 95). D a t e d this 30th day of November, 2009. B Y THE COURT: s / David M. Ebel David M. Ebel U . S. Circuit Court Judge
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