McDowell v. USA et al
Filing
14
REPORT AND RECOMMENDATIONS- GRANTING 12 MOTION to Dismiss for Lack of Jurisdiction Over the Subject Matter, GRANTING 8 MOTION to Dismiss for Failure to State a Claim. Please note that when filing Objections pursuant to Federal Rule of Civi l Procedure 72(b)(2), briefing consists solely of the Objections (no longer than ten (10) pages) and the Response to the Objections (no longer than ten (10) pages). No further briefing shall be permitted with respect to objections without leave of the Court. Objections to R&R due by 5/28/2013. Signed by Judge Sherry R. Fallon on 5/10/2013. (lih)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
JOHN W. MCDOWELL, JR.,
)
)
Plaintiff,
)
)
v.
)
)
UNITED STATES OF AMERICA Through)
ERIC HOLDER, ATTORNEY GENERAL )
)
(USA), CHARLES OBERLY, UNITED
STATES ATTORNEY, and KATHLEEN )
)
SEBELIUS, SECRETARY HHS;
AND
)
KANNALIFE SCIENCES INC.,
)
)
Defendants.
)
Civil Action No. 12-1302-SLR-SRF
REPORT AND RECOMMENDATION
I.
INTRODUCTION
Presently before the court in this patent infringement action are the following motions:
(1) a motion to dismiss plaintiff John W. McDowell, Jr.'s ("McDowell") complaint for lack of
subject matter jurisdiction and failure to state a claim of patent infringement, filed by defendant
Kannalife Sciences Inc. ("Kannalife") (D.I. 8); and (2) a motion to dismiss for lack of subject
matter jurisdiction, filed by the United States (D.I. 12). For the following reasons, I recommend
that the court grant the motions to dismiss without prejudice.
II.
BACKGROUND
United States Patent 7,597,910 ("the '910 patent") issued on October 6, 2009 to
McDowell, the named inventor. The '910 patent is directed to compositions and methods for
treating prostate disorders using a mixture of cannabis, shiitake mushrooms, and maitake
mushrooms. (D.I. 1 at~ 2) The '910 patent was subsequently assigned and remains assigned to
1
SLGM Medical Research Institute (Rehoboth, DE) ("SLGM"). (D.I. 9, Ex. 2) On October 9,
2012, McDowell filed a prose complaint against Kannalife and the United States, alleging that
he is the owner of the '91 0 patent and that the defendants infringed the patent. (D .I. 1)
III.
LEGALSTANDARDS
A.
Rule 12(b )(1)
Federal Rule of Civil Procedure 12(b)( 1) authorizes dismissal of a complaint for lack of
jurisdiction over the subject matter, or if the plaintiff lacks standing to bring its claim. Motions
brought under Rule 12(b)(1) may present either a facial or factual challenge to the court's subject
matter jurisdiction. In reviewing a facial challenge under Rule 12(b)( 1), the standards relevant to
Rule 12(b)(6) apply. In this regard, the court must accept all factual allegations in the complaint
as true, and the court may only consider the complaint and documents referenced in or attached
to the complaint. See Gould Elec., Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000). In
reviewing a factual challenge to the court's subject matter jurisdiction, the court is not confined
to the allegations in the complaint. See Mortensen v. First Fed. Sav. & Loan Ass 'n, 549 F.2d
884, 891 (3d Cir. 1977). Instead, the court may consider evidence outside the pleadings,
including affidavits, depositions and testimony, to resolve any factual issues bearing on
jurisdiction. See Gotha v. United States, 115 F.3d 176, 179 (3d Cir. 1997). Once the court's
1
Kannalife attaches to its brief a copy of the '91 0 patent and an exhibit entitled "Patent Assignment Abstract of
Title" from the United States Patent and Trademark Office's ("PTO") website. (D.I. 9, Exs. 1 & 2) Generally,
when materials outside the pleadings are presented on a motion to dismiss under Rule 12(b)(6), the motion is treated
as one for summary judgment. Fed. R. Civ. P. 12(d); see also Adkins v. Rumsfeld, 450 F. Supp. 2d 440, 444 (D. Del.
2006). However, some materials may be considered without converting the motion to dismiss into a motion for
summary judgment. The court is not limited to the four comers of the complaint and may consider "matters
incorporated by reference or integral to the claim, items subject to judicial notice, matters of public record, orders
[and] items appearing in the record of the case." Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256,260 (3d Cir. 2006)
(citing 5B Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure§ 1357 (2004)). The '910 patent
and the patent assignment information are public records. Therefore, the court may consider the exhibit without
converting Kannalife's motion to dismiss to a motion for summary judgment. The court may consider matters
outside the pleadings when ruling on a Rule 12(b)(l) motion. See Watson v. Dep 't ofServs. for Children, Youths &
Their Families Del., C.A. No., 2012 WL 1134512, at *1 n.2 (D. Del. Mar. 30, 2012).
2
subject matter jurisdiction over a complaint is challenged, the plaintiff bears the burden of
proving that jurisdiction exists. See Mortensen, 549 F .2d at 891.
B.
Rule 12(b)(6)
To state a claim upon which relief can be granted pursuant to Rule 12(b)( 6), a complaint
must contain a "short and plain statement of the claim showing that the pleader is entitled to
relief." Fed. R. Civ. P. 8(a)(2). Although detailed factual allegations are not required, the
complaint must set forth sufficient factual matter, accepted as true, to "state a claim for relief that
is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); see also
Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). A claim is facially plausible when the factual
allegations allow the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged. Twombly, 550 U.S. at 555-56; Iqbal, 556 U.S. at 663. The court "need not
accept as true threadbare recitals of a cause of action's elements, supported by mere conclusory
statements." !d.
Following the Supreme Court's decision in Iqbal, district courts have conducted a twopart analysis in determining the sufficiency of the claims. First, the court must separate the
factual and legal elements of the claim, accepting the complaint's well-pleaded facts as true and
disregarding the legal conclusions. Iqbal, 556 U.S. at 663. "While legal conclusions can provide
the complaint's framework, they must be supported by factual allegations." !d. at 664. Second,
the court must determine whether the facts alleged in the complaint state a plausible claim by
conducting a context-specific inquiry that "draw[s] on [the court's] experience and common
sense." !d. at 663-64; Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). As the
Supreme Court instructed in Iqbal, "[w]here the well-pleaded facts do not permit the court to
infer more than the mere possibility of misconduct, the complaint has alleged - but it has not
3
'show[n]'- 'that the pleader is entitled to relief."' Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. P.
8(a)(2)).
IV.
DISCUSSION
A.
Lack of Subject Matter Jurisdiction
1.
Kannalife's motion to dismiss
In support of its motion to dismiss, Kannalife alleges that the plain face of the '910
patent, as well as the current PTO assignment records, demonstrate that the owner of the '910
patent is SLGM, not McDowell. (D.I. 9 at 2) According to Kannalife, the law is wellestablished that a plaintiff has no right to sue for patent infringement unless it can demonstrate
that it owns the rights to the patent. (!d.)
In response, McDowell concedes that the facts submitted by Kannalife are "on point."
(D.I. 11 at 1) Despite the concession, McDowell alleges that Kannalife's arguments fail because
McDowell and SLGM are "one and the same." (Id.)
Determining whether a party has standing to sue is a question of law. MHL TEK, LLC v.
Nissan Motor Co., 655 F.3d 1266, 1273-74 (Fed. Cir. 2011) (internal citations omitted). To have
standing, the plaintiff must demonstrate: (1) injury in fact, (2) a causal connection between the
injury and the conduct complained of, and (3) redressability. !d. "Courts also recognize three
prudential principles that must be considered in the standing analysis: (1) a party generally must
litigate its own rights and not the rights of a third party; (2) the question must not be an abstract,
generalized grievance; and (3) the harm must be in the zone of interests protected by the statute
or constitutional provision at issue." In re Rosuvastatin Calcium Patent Litig., 719 F. Supp. 2d
388, 398 (D. Del. 2010) (citing Valley Forge Christian College v. Americans United for
Separation ofChurch & State, 454 U.S. 464,474-75 (1982)).
4
In patent infringement actions, only the owner of the patent has standing to sue. MHL
TEK, LLC, 655 F.3d at 1274 ("[t]he party holding the exclusionary rights to the patent suffers
legal injury in fact under the statute."); see also Abbott Point of Care, Inc. v. Epocal, Inc., 666
F.3d 1299, 1302 (Fed. Cir. 2012) ("Only a patentee may bring an action for patent
infringement."); 35 U.S. C. § 281 ("A patentee shall have remedy by civil action for infringement
of his patent."). "[I]f a patentee transfers 'all substantial rights' to the patent, this amounts to an
assignment or a transfer of title, which confers constitutional standing on the assignee to sue for
infringement in its own name alone." Morrow v. Microsoft Corp., 499 F.3d 1332, 1340 (Fed.
Cir. 2007). The plaintiff bears the burden to show its ownership rights to support standing.
Abbott Point of Care, 666 F.3d at 1302.
In the present matter, the face ofthe '910 patent and the assignment records maintained
by the PTO indicate that McDowell assigned his patent rights to SLGM. (D.I. 9, Exs. 1 & 2)
McDowell has not met his burden to show that the ownership rights were transferred from
SLGM to him, and that he is currently the owner ofthe '910 patent. To the extent that
McDowell alleges that he represents SLGM in the present action, his arguments fail because
SLGM is not a named plaintiff in this action. Moreover, as a non-attorney, McDowell is not
permitted to represent SLGM. See Rowland v. California Men's Colony, Unit II Men's Advisory
Council, 506 U.S. 194, 201-02 (1993) ("It has been the law for the better part of two centuries ..
. that a corporation may appear in the federal courts only through licensed counsel."); see also DBeam v. Roller Derby Skate Corp., 316 F. App'x 966,967 (Fed. Cir. 2008) (holding that inventor
who assigned his patent rights to holding company he formed could not represent holding
company in litigation). In view of the foregoing authority, I recommend that the court grant
Kannalife's motion to dismiss for lack of standing.
5
2.
The United States' motion to dismiss
The United States contends that McDowell lacks standing to bring claims against the
United States for patent infringement because 28 U.S.C. § 1498 grants the United States Court of
Federal Claims exclusive jurisdiction to hear all claims of patent infringement against the United
States? (D.I. 12 at~ 4)
Section 1498 of Title 28 grants the United States Court of Federal Claims exclusive
jurisdiction to hear all claims of patent infringement against the United States:
Whenever an invention described in and covered by a patent of the United States
is used or manufactured by or for the United States without license of the owner
thereof or lawful right to use or manufacture the same, the owner's remedy shall
be by action against the United States in the United States Court of Federal
Claims for the recovery of his reasonable and entire compensation for such use
and manufacture.
28 U.S.C. § 1498; see also Crater Corp. v. Lucent Techs., Inc., 255 F.3d 1361, 1364 (Fed. Cir.
2001 ). Pursuant to the statute, McDowell lacks standing to seek relief for patent infringement
against the United States in this court. Therefore, I recommend that the court grant the United
States' motion to dismiss without prejudice. McDowell's claims against the United States, as
alleged in the pending complaint, can only be litigated in the United States Court of Federal
Claims.
2
The United States alleges that McDowell's use of the word "through" in the caption suggests that he did not intend
to name Attorney General Eric Holder, Health and Human Services Secretary Kathleen Sebelius, and United States
Attorney Charles Oberly as individual defendants. (0.1. 12 at 3 n.3) The United States further notes that the body
of the complaint lists only the United States and Kannalife as defendants, and alleges that even if the individuals
listed were to be sued in their individual capacity, they should also be dismissed pursuant to 28 U.S.C. § 1498. (/d.)
The court agrees that the complaint alleges causes of action only against the United States, Kannabis, and
"defendants" collectively. Other than their identification in the case caption, the individual defendants are not
mentioned by name, nor are specific allegations made against any of them in the three paragraph complaint. (D.l. 1)
6
B.
Failure to State a Claim
For the reasons set forth above, McDowell lacks standing to bring his claims for patent
infringement, and there is no need to reach the Rule 12(b)(6) bases for dismissal ofthese claims.
However, McDowell's complaint also alleges that "[t]his action also arises under the United
States Constitution, specifically, the 5th and 14yh [sic] amendments rightto [sic] due process and
equal protection of the law. The 'Commerce Clause' also is relevant to this action." (D.I. 1 at,;
l.(b)) This paragraph does not contain any factual allegations regarding how the defendants'
conduct meets the elements of the asserted causes of action as required by Twombly and Iqbal.
To the extent that the complaint alleges causes of action for violations of his Due Process, Equal
Protection, or Commerce Clause rights, I recommend that the court dismiss those claims for
failure to state a claim upon which relief can be granted.
V.
CONCLUSION
For the reasons discussed above, I recommend that the court grant without prejudice: (1)
Kannalife's motion to dismiss (D.I. 8), and (2) the United States' motion to dismiss (D.I. 12).
This Report and Recommendation is filed pursuant to 28 U.S.C. § 636(b)(l)(B), Fed. R.
Civ. P. 72(b)(l), and D. Del. LR 72.1. The parties may serve and file specific written objections
within fourteen (14) days after being served with a copy of this Report and Recommendation.
Fed. R. Civ. P. 72(b). The failure of a party to object to legal conclusions may result in the loss
ofthe right to de novo review in the district court. See Henderson v. Carlson, 812 F.2d 874,
878-79 (3d Cir. 1987); Sincavage v. Barnhart, 171 F. App'x 924,925 n.1 (3d Cir. 2006).
7
The parties are directed to the court's Standing Order In ProSe Matters For Objections
Filed Under Fed. R. Civ. P. 72, dated November 16, 2009, a copy of which is available at
http://www.ded.uscourts.gov/court-info/local-rules-and-orders/general-orders .
.
Dated: May 10, 2013
\
~
MAGISTRATE JUDGE
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?