Ateliers De La Haute-Garonne v. Broetje Automation, USA Inc., et al

Filing 340

MEMORANDUM OPINION. Signed by Judge Leonard P. Stark on 10/13/11. (ntl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
ATELIERS DE LA HAUTE-GARONNE
(French Corporation) and F2C2 SYSTEMS
S.A.S. (French Corporation),
Plaintiffs,

v.

Civil Action No. 09-598-LPS

BROETJE AUTOMATION-USA INC.
(Delaware Corporation) and BROTJE­
AUTOMATION GMBH (German
Corporation),
Defendants.

Scott G. Lindvall, Esquire and Sarah Welbourne Saunders, Esquire ofKAYE SCHOLER LLP,

New York, New York.

Melanie K. Sharp, Esquire; Monte T. Squire, Esquire; and Erika R. Caesar, Esquire of YOUNG

CONAWAY STAR GATT & TAYLOR, LLP, Wilmington, Delaware.

Attorneys for Plaintiffs.

Patrick J. Kelleher, Esquire; Darren S. Cahr, Esquire; and Carrie A. Beyer, Esquire of

DRINKER BIDDLE & REATH LLP, Chicago, Illinois.

Todd C. Schiltz, Esquire and Karen V. Sullivan, Esquire of DRINKER BIDDLE & REATH

LLP, Wilmington, Delaware.

Attorneys for Defendants.

MEMORANDUM OPINION

October 13,2011
Wilmington, Delaware.

[~~.(b

STARK, U.S. District Judge:
I.

INTRODUCTION
Currently pending before the Court is Defendants' Rule 12(b)(I) Motion to Dismiss

Plaintiffs' First Claim for Relief for Lack of Subject Matter Jurisdiction. (D.1. 141) The Court
previously found that United States Patent Nos. 5,011,339 ("the '339 patent") and 5,143,216
("the '216 patent") violated the best mode requirement of 35 U.S.C. § 112 ,-r 1. (D.1. 335)
Defendants Broetje Automation-USA Inc. and Brotje-Automation GmbH ("Broetje") maintain,
however, that the Court lacks subject matter jurisdiction over the '339 patent and, therefore,
cannot enter judgment of invalidity with respect to that patent. For the reasons set forth below,
Defendants' motion to dismiss will be denied.

II.

LEGAL STANDARDS
A plaintiff bears the burden of establishing subject matter jurisdiction by a

preponderance of the evidence. See Pascack Valley Hasp. v. Local 464A UFCW Welfare

Reimbursement Plan, 388 F.3d 393, 402 (3d Cir. 2004). A party challenging subject matter
jurisdiction may raise either a facial attack directed to deficiencies apparent from the face of the
complaint, or a factual attack challenging the existence of facts necessary to establish federal
subject matter jurisdiction. See Us. ex reI. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506,514
(3d Cir. 2007). When reviewing a factual challenge, no presumption of truthfulness attaches to
the plaintiff s allegations, and the district court may make factual findings to decide the
jurisdictional issue. See CNA v. Us., 535 F.3d 132, 139 (3d Cir. 2008). In doing so, the Court
may consider materials outside the pleadings, including matters of public record. See Atkinson,
473 F.3d at 514; Ketterson v. Wolf, 2001 WL 940909, at *4 (D. Del. Aug. 4, 2001); Jones v.

Delaware, 2001 WL 652593, at *1 (D. Del. Feb. 15,2001).

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III.

DISCUSSION

It is undisputed that, during prosecution, the Applicants' original check to cover the issue

fee "bounced," prompting the Patent Office to notify the Applicants of the payment deficiency,
and to seek withdrawal of the '339 patent from issuance. (D.1. 141 at 4-5 & Ex. 3-6) The
parties' main dispute is whether, in light of these events, the '339 patent must be regarded as
abandoned under 35 U.S.C. § 151 for failure to timely pay the required issue fee. Broetje
maintains that the '339 patent was abandoned and, therefore, is legally non-existent, because
"[t]here is no evidence that the Applicants ever responded to the USPTO's letters about the
bounced issue fee check." (D.1. 141 at 5) Plaintiffs respond that the questions surrounding the
issue fee payment were properly resolved, citing a letter from the Applicants' prosecuting
attorney noting that the issue fee payment "was immediately rectified" upon receiving notice
from the Patent Office. (D.L 204 at 3 & Ex. C) Plaintiffs also note that the Patent Office never
officially withdrew the '339 patent from issuance; to the contrary, the Patent Office accepted
payment of all required maintenance fees. (D.L 204 at 13-14)
Having considered the parties' respective arguments and evidence raised in their briefing
and during oral argument at the pre-trial conference, as well as statements included in the most
recent teleconference (D.L 339) and joint letter submission (D.L 337), the Court concludes that
Plaintiffs have established, by a preponderance of the evidence, that the issue fee was paid, and,
hence, that the '339 patent was not abandoned. It is undisputed that the Patent Office was aware
of the bounced check, and, on that basis, initially sought to have the '339 patent withdrawn from
issuance. There is no evidence, however, that the Patent Office ever withdrew the '339 patent
from issuance. Instead, it is undisputed that the Patent Office accepted payment of all required
maintenance fees, holding the '339 patent in force for the entire duration of its term. This course
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of dealing is circumstantial evidence that any questions surrounding the issue fee payment were
satisfactorily resolved, at least as far as the Patent Office was concerned. Additionally, and
consistent with this conclusion, the '339 patent on its face states that it was issued on April 30,
1991 and it remained publicly available - and identified as an issued patent - from the Patent
Office throughout the entire duration of its term. There is no evidence that the '339 patent was
ever listed by the Patent Office as withdrawn. I
Plaintiffs' payment of the issue fee is corroborated by the letter from Applicants'
prosecuting patent attorney, acknowledging the bounced check but emphasizing that "the matter
was immediately rectified" upon receiving notice from the Patent Office. (D.1. 205 Ex. C)
Although Broetje challenges the attorney letter as unauthenticated hearsay (D.1. 254 at 2-3), the
letter appears to be both authentic and admissible. See Fed. R. Evid. 803(16) & 901 (b )(8); see

also

us. v. Stelmokas, 100 F.3d 302, 312 (3d Cir. 1996).2
The Court is unpersuaded by Broetje's arguments for dismissal, which consist primarily

of complaints regarding the lack of official Patent Office documentation of actual payment of the

'As Plaintiffs noted during the pre-trial conference, withdrawn patents are not publicly accessible
on the Patent Office website, in contrast with the '339 patent, which remains fully accessible.
(D.1. 335 at 65) Moreover, the '339 patent does not appear in the Patent Office's comprehensive
listing of all withdrawn patents. (See Withdrawn Patent Numbers, 1790 through 04 October
2011, available at http://www.uspto.gov/patents/process/search/withdrawn.jsp)

2See also Lexington Ins. Co. v. Western Pa. Hosp., 423 F.3d 318,328 (3d Cir. 2005) (noting that
standard for authentication under Federal Rule of Evidence 901(a) is "minimal" and "slight").
Moreover, even if the attorney letter were hearsay, the Federal Circuit has held that "hearsay
bearing circumstantial indicia of reliability may be admitted for purposes" of resolving
jurisdictional disputes. Akro Corp. v. Luker, 45 F.3d 1541, 1546-47 (Fed. Cir. 1995). Broetje
has not accused Plaintiffs' attorneys of falsifying the letter or its contents, and no reason to doubt
its authenticity emerges in the record. In any event, even were the attorney letter not to be
considered, the Court concludes that Plaintiffs have met their burden to establish subject matter
jurisdiction.
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issue fee. Although such written correspondence would likely constitute clear and convincing
direct evidence that such payment occurred, here only a preponderance of the evidence is
required to establish subject matter jurisdiction, and Plaintiffs may rely on circumstantial
evidence to meet that burden. See generally Spansion, Inc. v. lTC, 629 F.3d 1331, 1352 (Fed.
Cir. 2010) ("[P]reponderance of the evidence does not require physical validation of all indirect
evidence ...."); Alco Standard Corp. v. Tenn. Valley Auth., 808 F.2d 1490, 1503 (Fed. Cir.
1986) ("Although the evidence ... is circumstantial, that does not make it any less credible or
persuasive. ").
Similarly, the Court is unpersuaded by Broetje's suggestion that payment of the issue fee
could not have occurred, as a matter of law, simply because any undocumented payments would
violate the Patent Office regulation set forth at 37 C.F.R. § 1.2, requiring that all business be
transacted in writing. (D.1. 254 at 3) Even assuming, arguendo, that this regulation applies to
the present situation, non-compliance would not defeat subject matter jurisdiction, since
"absolute compliance with the internal rules of patent examination becomes irrelevant after the
patent has issued." Magnivision, Inc. v. Bonneau Co., 115 F.3d 956, 960 (Fed. Cir. 1997).
Broetje's attempt to dismiss a patent infringement lawsuit on the basis of non-compliance with
an internal Patent Office regulation is contrary to the Federal Circuit's view that a mere
"prosecution irregularity or procedural lapse" by the Patent Office is no defense to allegations of
patent infringement. See Aristocrat Techs. Australia PTY Ltd v. lnt'l Game Technology, 543
F.3d 657,663 (Fed. Cir. 2008) (expressing concern that contrary ruling would cause "accused
infringers ... [to] inundate the courts with arguments relating to every minor transgression they
could comb from the file wrapper," and such "deluge would only detract focus from the

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important legal issues to be resolved,,). 3

IV.

CONCLUSION
For the foregoing reasons, the Court will deny Broetje's motion to dismiss for lack of

subject matter jurisdiction over the '339 patent. An appropriate order entering judgment of
invalidity as to both patents-in-suit follows.

3The Court recognizes that the Federal Circuit's statement in Aristocrat arose in the invalidity
context.
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