Courtesy Products LLC v. Hamilton Beach Brands Inc.
MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 11/5/2014. (nmfn)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
COURTESY PRODUCTS, L.L.C.
HAMILTON BEACH BRANDS, INC.
) Civ. No. 13-2012-SLR
Steven J. Balick, Esquire, Tiffany Geyer Lydon, Esquire, and Andrew C. Mayo, Esquire
of Ashby & Geddes, Wilmington, Delaware. Counsel for Plaintiff.
Richard L. Horwitz, Esquire, David E. Moore, Esquire, and Bindu A. Palapura, Esquire
of Potter Anderson & Corroon LLP, Wilmington, Delaware. Counsel for Defendant.
Dated: November 5 , 2014
On December 9, 2013, plaintiff Courtesy Products, L.L.C. ("Courtesy") filed a
complaint against defendant Hamilton Beach Brands, Inc. ("Hamilton") alleging direct
and indirect infringement of U.S. Patent Nos. 7,311,037 ("the '037 patent"), 7,258,884
("the '884 patent"), and 7,770,512 ("the '512 patent"). (D.I. 1) Presently before the
court are Hamilton's motions to dismiss the complaint for failure to state a claim (D.I. 8)
and for leave to file a motion for partial summary judgment of non-infringement (D.I.
10). The court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1331 and
Courtesy is a limited liability company organized under the laws of the State of
Missouri and has a principle place of business in St. Louis, Missouri. Courtesy sells
products including single-serving coffee makers, disposable brew baskets, and coffee
filter packs, as well as the CV1® One-Cup Coffee System, throughout the United
States. (D.I. 1 at 11112, 7) Hamilton is incorporated under the laws of the State of
Delaware and has a principle place of business in Glen Allen, Virginia. Hamilton Beach
distributes single-cup coffee makers, disposable brew baskets, and single-cup coffee
products throughout the United States. (Id. at 1111 3, 8)
Ill. STANDARD OF REVIEW
A motion filed under Federal Rule of Civil Procedure 12(b)(6) tests the
sufficiency of a complaint's factual allegations. Bell At!. Corp. v. Twombly, 550 U.S.
544, 555 (2007); Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). A complaint
must contain "a short and plain statement of the claim showing that the pleader is
entitled to relief, in order to give the defendant fair notice of what the ... claim is and
the grounds upon which it rests." Twombly, 550 U.S. at 545 (internal quotation marks
omitted) (interpreting Fed. R. Civ. P. 8(a)). Consistent with the Supreme Court's rulings
in Twombly and Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Third Circuit requires a twopart analysis when reviewing a Rule 12(b)(6) motion. Edwards v. A.H. Cornell & Son,
Inc., 610 F.3d 217, 219 (3d Cir. 201 O); Fowler v. UPMC Shadyside, 578 F.3d 203, 210
(3d Cir. 2009). First, a court should separate the factual and legal elements of a claim,
accepting the facts and disregarding the legal conclusions. Fowler, 578 F.3d. at 21011. Second, a court should determine whether the remaining well-pied facts sufficiently
show that the plaintiff "has a 'plausible claim for relief."' Id. at 211 (quoting Iqbal, 556
U.S. at 679). As part of the analysis, a court must accept all well-pleaded factual
allegations in the complaint as true, and view them in the light most favorable to the
plaintiff. See Erickson v. Pardus, 551 U.S. 89, 94 (2007); Christopher v. Harbury, 536
U.S. 403, 406 (2002); Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008).
In this regard, a court may consider the pleadings, public record, orders, exhibits
attached to the complaint, and documents incorporated into the complaint by reference.
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); Oshiver v. Levin,
Fishbein, Sedran & Berman, 38 F.3d 1380, 1384-85 n.2 (3d Cir. 1994).
The court's determination is not whether the non-moving party "will ultimately
prevail" but whether that party is "entitled to offer evidence to support the claims."
United States ex rel. Wilkins v. United Health Grp., Inc., 659 F.3d 295, 302 (3d Cir.
2011 ). This "does not impose a probability requirement at the pleading stage," but
instead "simply calls for enough facts to raise a reasonable expectation that discovery
will reveal evidence of [the necessary element]." Phillips, 515 F.3d at 234 (quoting
Twombly, 550 U.S. at 556). The court's analysis is a context-specific task requiring the
court "to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 66364.
A. Direct Infringement
A patent is infringed when a person "without authority makes, uses or sells any
patented invention, within the United States ... during the term of the patent." 35
U.S.C. § 271 (a). "Direct infringement requires a party to perform each and every step
or element of a claimed method or product." Exergen Corp. v. Wal-Mart Stores, Inc.,
575 F.3d 1312, 1320 (Fed. Cir. 2009) (internal quotation marks omitted). To state a
claim of direct infringement, "a patentee need only plead facts sufficient to place the
alleged infringer on notice as to what he must defend." McZeal v. Sprint Nextel Corp.,
501 F.3d 1354, 1357 (Fed. Cir. 2007) (citing Twombly, 550 U.S. at 565 n. 10).
Courtesy's complaint states that Hamilton "distributes single-cup coffee makers
(e.g., HDC200B and HDC200S), disposable brew baskets (e.g., Sysco SKU 0028358),
and single-cup coffee products .... " (D.I. 1 at~ 8) The '037 patent is directed to a
"beverage brewing system" using a "novel single-use, disposable brew basket for an
electric coffee maker." ('037 patent, abstract, 1:10-12) Each of the independent claims
describes a "brewing system" comprising a "beverage brewing machine," "filter packs,"
and "single serving disposable brew baskets." The '512 patent is directed to an
apparatus or system using a "novel disposable brew basket for a coffee maker." ('512
patent, abstract, 1:17-18) Independent claim 1 describes a brewing "apparatus"
comprising "single serving disposable brew baskets." Independent claim 28 describes
a "beverage brewing system" comprising a "beverage brewing machine,'' "filter packs,"
and "single serving disposable brew baskets." Independent claims 53, 63, and 64
describe a "beverage brewing system" 1 and require "a beverage brewing machine" and
"disposable brewing reservoirs." Hamilton argues that Courtesy's complaint fails to
identify any "systems" accused of direct infringement and does not allege the sale of
"filter packs." At the pleading stage, Courtesy's statement suffices to put Hamilton on
notice of what products Courtesy alleges comprise the infringing "system." See Xpoint
Techs., Inc. v. Microsoft Corp., 730 F. Supp. 2d 349, 353 (D. Del. 2010) (allegations in
complaint were sufficient when plaintiff "identified general categories of accused
products-processors, chipsets, and motherboards- ... [and] the means by which
[defendant]'s products allegedly infringe"); cf. Bender v. LG Elect's. U.S.A., Inc., Civ.
No. 09-02114, 2010 WL 889541, at *2, 5 (N.D. Cal. Mar. 11, 2010) (The court granted
the motion to dismiss as the complaint contained "lists of products [which] are
non-specific and fail to identify any single product by name or number.").
In order to adequately state a claim for direct infringement of method claims, the
complaint must allege that the accused infringer "perform[ed] all the steps of the
claimed method, either personally or through another acting under his direction or
0r "in-room beverage system."
control." Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301, 1307 (Fed.
Cir. 2012). The '884 patent is directed to a "method of supplying in-room beverage
service to a lodging establishment" using "a novel single-use, disposable brew basket
for an electric coffee maker." ('884 patent, abstract, 1: 10-13) For example,
independent claim 1 states:
A method of supplying in-room beverage service to a lodging
establishment that provides beverage dispensers in rooms of the lodging
establishment for use by a plurality of different lodging guests ...
(c) supplying the rooms with at least one of the plurality of disposable
(d) supplying the rooms with at least one of the plurality of filter packs ... ;
(e) after using the brew basket and filter pack in a single brewing
operation, discarding the brew basket and filter pack, and supplying a new
unused brew basket and new filter pack in the room.
('884 patent, 6:40-7:9) 2 In the case at bar, Courtesy has not alleged that Hamilton
supplies its "system" to lodging establishments or provided any factual information
regarding the performance of the last three steps of the claim. Hamilton's motion to
dismiss Courtesy's infringement claim as to the '844 patent is granted, with leave to
B. Indirect Infringement
To establish indirect infringement, a patent owner has available two theories:
1ndependent claims 16 and 29 also describe a "method of supplying in-room
beverage service to a lodging establishment."
ln order to establish a claim for indirect infringement, plaintiff's complaint must
plausibly allege that the patent was directly infringed. See In Re Bill of Lading Transm'n
and Processing Sys. Patent Litig., 681 F.3d 1323, 1331 (Fed. Cir. 2012) ("It is axiomatic
that 'there can be no inducement or contributory infringement without an underlying act
of direct infringement."').
active inducement of infringement and contributory infringement. See 35 U.S.C. §
271 (b) & (c). Liability for indirect infringement may arise "if, but only if, [there is] ...
direct infringement." Limelight Networks, Inc. v. Akamai Technologies, Inc., 134 S. Ct.
2111, 2117 (2014) (citing Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S.
336, 341 (1961) (emphasis omitted)).
Under 35 U.S.C. § 271 (b), "whoever actively induces infringement of a patent
shall be liable as an infringer." "To prove induced infringement, the patentee must
show direct infringement, and that the alleged infringer knowingly induced infringement
and possessed specific intent to encourage another's infringement." Toshiba Corp. v.
Imation Corp., 681 F.3d 1358, 1363 (Fed. Cir. 2012) (internal quotations omitted).
"[l]nduced infringement under§ 271 (b) requires knowledge that the induced acts
constitute patent infringement." Global-Tech Appliances, Inc. v. SEB S.A., -
- - , 131 S. Ct. 2060, 2068 (2011). The knowledge requirement can be met by a
showing of either actual knowledge or willful blindness. See id. "[A] willfully blind
defendant is one who takes deliberate actions to avoid confirming a high probability of
wrongdoing and who can almost be said to have actually known the critical facts." Id. at
2070-71. "[l]nducement requires evidence of culpable conduct, directed to encouraging
another's infringement, not merely that the inducer had knowledge of the direct
infringer's activities." DSU Medical Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1306 (Fed.
Cir. 2006) (en bane in relevant part) (citations omitted).
To establish contributory infringement, the patent owner must demonstrate the
following: (1) an offer to sell, sale, or import; (2) a component or material for use in a
patented process constituting a material part of the invention; (3) knowledge by the
defendant that the component is especially made or especially adapted for use in an
infringement of such patents; and (4) the component is not a staple or article suitable
for substantial non infringing use. See Fujitsu Ltd. v. Netgear Inc., 620 F .3d 1321, 1326
(Fed. Cir. 2010) (citing 35 U.S.C. § 271 (c)). Defendant "must know 'that the
combination for which his component was especially designed was both patented and
infringing."' Global-Tech, 131 S. Ct. at 2067 (citing Aro Mfg. Co. v. Convertible Top
Replacement Co., 377 U.S. 476, 488 (1964)).
As to the '037 patent, Courtesy asserts that Hamilton
contributes to the infringement of one or more claims of the '037 patent by
making, selling, or offering to sell components of systems, including
single-cup coffeemakers, single-cup coffee products, and disposable brew
baskets, which [Hamilton] knows constitute a material part of the invention
claimed in the '037 patent, and which [Hamilton] knows are not a staple
article or commodity of commerce suitable for substantial non-infringing
use; rather, the components are used for or in systems that infringe one
or more claims of the '037 patent.
... [Hamilton] induces the infringement of one or more claims of the '037
patent by intentionally advising and/or instructing third parties that
purchase its systems to operate the systems in a manner that infringes
one or more claims of the '037 patent.
... [Hamilton] knew or had reason to know that the use of its systems by
third parties would infringe the '037 patent, and with full knowledge of the
'037 patent, contributed to or induced the infringement of the '037 patent.
Hamilton has had knowledge of the patents-in-suit since at least the filing date of
the complaint. Courtesy's summary statements for induced and contributory
1dentical language is used for the '512 patent. (D.I. 1 at~~ 30-32)
infringement are facially plausible and provide Hamilton notice of the indirect
infringement claims. Specifically, the court concluded above that Courtesy adequately
alleged direct infringement and Courtesy has pied the elements of induced and
contributory infringement consistent with the court's analysis in Walker Digital LLC v.
Facebook, Inc., 852 F. Supp. 2d 559 (D. Del. 2012). As Courtesy's indirect
infringement claims are sustainable, Hamilton's motion to dismiss in this regard is
C. Willful Infringement
The Federal Circuit has set forth a two-pronged standard for establishing willful
infringement, an objective prong and a subjective prong. With respect to the former,
a patentee must show by clear and convincing evidence that the infringer
acted despite an objectively high likelihood that its actions constituted
infringement of a valid patent. The state of mind of the accused infringer is
not relevant to this objective inquiry.
In re Seagate Technology LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (internal citations
omitted). If the objective prong is satisfied, the patentee must next establish that "this
objectively-defined risk (determined by the record developed in the infringement
proceeding) was either known or so obvious that it should have been known to the
accused infringer." Id. This subjective prong hinges on the fact finder's assessments of
the credibility of witnesses. LG Elecs. U.S.A., Inc. v. Whirlpool Corp., 798 F. Supp. 2d
541, 557 (D. Del. 2011 ). "The drawing of inferences, particularly in respect of an
intent-implicating question such as willfulness, is peculiarly within the province of the
fact finder that observed the witnesses." Liquid Dynamics Corp. v. Vaughan Co., 449
F.3d 1209, 1225 (Fed. Cir. 2006) (citation omitted).
At the pleading stage, a plaintiff alleging a cause of action for willful infringement
must "plead facts giving rise to at least a showing of objective recklessness of the
infringement risk." St. Clair Intellectual Prop. Consultants, Inc. v. Hewlett-Packard Co.,
2012 WL 1134318, at *2-3 (D. Del. Mar. 28, 2012) (internal quotations omitted).
Although "actual knowledge of infringement or the infringement risk" need not be pied,
the complaint "must adequately allege 'factual circumstances in which the
patents-in-suit [are] called to the attention' of the defendants." MONEC Holding AG v.
Motorola Mobility, Inc., 897 F. Supp. 2d 225, 236 (D. Del. 2012).
Courtesy's complaint states that Hamilton "is aware of the '037 patent" and has
directly infringed it, as well as, "with full knowledge of the '037 patent, contributed to or
induced the infringement of the '037 patent." Courtesy alleges that "[h]aving notice of
the '037 patent, Hamilton Beach's continued activities demonstrate a willful disregard of
the '037 patent and thus constitute willful patent infringement."5 (D.I. 1 at 1f 11, 14, 15)
Courtesy has offered no factual information to establish "awareness" or "full knowledge"
of the patents-in-suit, sufficient to evidence pre-suit knowledge of the patents-in-suit.
Moreover, the complaint contains no facts establishing "objective recklessness of the
infringement risk." See e.g., Intellectual Ventures I LLC v. Toshiba Corp., Civ. No.
13-453-SLR, 2014 WL 4365235 (D. Del. Sept. 3, 2014). Therefore, Hamilton's motion
to dismiss is granted in this regard.
V. MOTION FOR LEAVE TO FILE A MOTION FOR PARTIAL SUMMARY
JUDGMENT OF NON-INFRINGEMENT
The same statement is made for the '512 patent. (D.I. 1 at 1f 29, 32, 33)
While the court disfavors early motions for summary judgment, such motions
may be helpful to the streamlining of cases in certain instances and will be discussed at
the Rule 16 scheduling conference. The court denies Hamilton's motion without
prejudice to renew at this juncture.
For the aforementioned reasons, Hamilton's motion to dismiss (D.I. 8) is granted
in part and denied in part. Courtesy is granted leave to amend the complaint to correct
the pleading deficiencies identified herein. Hamilton's motion for leave to file a motion
for partial summary judgment of non-infringement (D.I. 10) is denied without prejudice
to renew. An appropriate order shall issue.
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