Global Tech Led, LLC v. Hilumz International Corp. et al
Filing
109
OPINION AND ORDER granting in part and denying in part 71 Motion to Dismiss 63 Defendants' Second Amended Counterclaims and Third Party Claims. The Motion to Dismiss is denied as to Counterclaim Count I, however, False Ads 4, 5, and 7 a re dismissed as bases for the Lanham Act claim. The Motion to Dismiss is also denied as to Counterclaim Counts II, III, and IV. Counterclaim Count V is dismissed with leave to amend within fourteen (14) days of the date of this Order. Signed by Judge John E. Steele on 2/14/2017. (KP)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
GLOBAL TECH LED, LLC, a
Florida limited liability
company,
Plaintiff/Counter
Defendant,
v.
Case No: 2:15-cv-553-FtM-29CM
HILUMZ INTERNATIONAL CORP.,
a
Georgia
corporation,
HILUMZ,
LLC,
a
Georgia
limited liability company,
and HILUMZ USA, LLC, a
Georgia limited liability
company,
Defendants/Counter
Claimant/Third Party
Plaintiffs
JEFFREY J. NEWMAN, and GARY
K. MART,
Third Party Defendants.
OPINION AND ORDER
This matter comes before the Court on Plaintiffs' Motion to
Dismiss Defendants’ Second Amended Counterclaims and Third-Party
Claims (Doc. #71) filed on July 11, 2016.
Defendants filed a
Response in Opposition (Doc. #75) on July 28, 2016.
As set forth
below, Plaintiffs’ Motion is granted in part and denied in part.
I.
This case involves two business partners-turned-competitors
in the retrofit LED lighting industry. On September 15, 2015,
Plaintiff Global Tech LED, LLC (Global Tech) filed a one-count
Complaint (Doc. #1) against Defendants HiLumz International Corp.,
HiLumz,
LLC,
and
HiLumz
USA,
LLC
(collectively,
Defendants)
alleging direct and indirect patent infringement under 35 U.S.C.
§
271
and
seeking
Specifically,
injunctive
Plaintiffs
accuse
relief
and
Defendants
money
of
damages.
“making,
using,
selling, or offering for sale” one or more retrofit LED lighting
products that infringe United States Patent No. 9.091,424 (the
‘424
Patent),
equivalents. 1
either
literally
(Doc. #1, ¶ 36.)
or
under
the
doctrine
of
Defendants are also alleged to
have “induced infringement of claims of at least the ‘424 Patent
by having one or more of its [sic] distributors and other entities
use, sell or offer for sale the Accused Products and others
substantially identical to the Accused Products with knowledge of
the ‘424 Patent.”
(Id. ¶ 37.)
1
According to the official patent Abstract, the invention
encompassed by the ‘424 Patent is:
A retrofit light emitting diode (LED) bulb
[that] includes a screw connector, a bracket,
and a housing.
The screw connector is
configured to be screwed into a receiving
socket of an electric light fixture for
supporting the retrofit light emitting diode
(LED) bulb.
The bracket is physically
attached to the screw connector. The housing
is rotatably coupled to the bracket.
The
housing includes one or more LED units for
generating light and one or more electrically
powered cooling devices to remove heat from
the vicinity of the one or more LED units.
(Doc. #1-1, p. 2.) The Court held a “Markman” claims construction
hearing on January 19, 2017 but has not yet issued an Order
construing the meaning of the disputed patent claims.
- 2 -
On
June
Counterclaim
22,
and
2016,
Third
Defendants
Party
filed
Complaint
a
Second
Amended
(the
Second
Amended
Counterclaim Complaint) (Doc. #63) alleging five claims:
(1)
false advertising under Section 43(a) of the Lanham Act, 15 U.S.C.
§ 1125; (2) unfair competition; (3) violations of the Florida
Deceptive and Unfair Trade Practices Act (the FDUTPA), Fla. Stat.
§ 501.201 et seq.; (4) trade libel; and (5) declaratory judgment
as to patent (un)enforceability. 2
on
several
disseminated
statements
regarding
(the
The first four counts are based
False
Global
Ads)
Tech’s
that
patents,
were
the
allegedly
parties’
competing LED retrofit kits, and Defendants’ business longevity,
and which Defendants claim are false or misleading, specifically:
1.
An announcement posted to Global Tech’s website on or
about September 24, 2015 prematurely asserting that
Global Tech “has received a permanent injunction,
rendering account and damages based on its newly-granted
patent against HiLumz USA for infringement of its US
patent 8,989,304 B2” and accusing Defendants of
“stealing” and “copying” Plaintiffs’ product ideas (The
Press Release or False Ad 1) (Doc. #7-13).
2.
A sentence in the Press Release incorrectly claiming
that Global Tech “filed a lawsuit against HiLumz USA .
. . for infringement of one of its patents entitled ‘LED
Light Bulb’ (U.S. Patent No. 8,989,304 3)” (False Ad 2).
3.
The Press Release’s original URL (webpage browser
address) reading: “globaltechled.com/2015/09/24/global-
2
The third-party claims are pled against Gary K. Mart (Mart) and
Jeffrey J. Newman (Newman), who are managing members of Global
Tech and the inventors of the “screw base” retrofit LED lighting
product for which Global Tech obtained the ‘424 Patent.
3
U.S. Patent No. 8,989,304 (the ‘304 Patent) is the “parent” of
the ‘424 Patent that Defendants’ products allegedly infringe. The
Complaint does not accuse Defendants of infringing the ‘304 Patent.
- 3 -
tech-led-receives-permanent-injunction-against-HiLumzusa” (False Ad 3).
4.
The same URL linking to an article called “Global Tech
LED Announces Lawsuit for Patent Infringement” that was
generated when Defendants performed a Google search on
October 6, 2015 for the terms “global tech LED HiLumz”
(False Ad 4).
5.
Mart’s statements to HiLumz distributors attending the
2015 World Energy Engineering Congress warning them to
“be careful what products you sell” and asserting that
“HiLumz will be out of business soon” (False Ad 5).
6.
Statements made to “customers, sales representatives,
competitors, and others” since the fall of 2012 that:
a.
b.
“HiLumz USA is no
retrofit kits”; and
c.
7.
Hilumz’s products infringe Global Tech’s patents;
“Global Tech was preparing to file suit against
HiLumz, and would also file suit against anyone who
does business with HiLumz.” (Collectively, False Ad
6.)
longer
allowed
to
sell
LED
A statement on Newman’s LinkedIn page claiming that the
‘304 Patent “issued on June 8, 2009.” 4 (False Ad 7).
The declaratory judgment counterclaim is based on inequitable
conduct allegedly committed during the prosecution of the ‘304
Patent,
which
Defendants
contend
renders
the
‘424
Patent
unenforceable through a theory of “infectious unenforceability.”
Global Tech, Mart, and Newman (collectively referred to as
Plaintiffs for purposes of this Motion) seek dismissal of all five
counts.
Dismissal is appropriate, Plaintiffs argue, because: (1)
the statements at issue are not actionable under the Lanham Act;
4
The ‘304 Patent was filed on June 8, 2009 but did not actually
issue until March 17, 2015. (Doc. #71-2.)
- 4 -
(2) Defendants have not alleged a connection between dissemination
of the False Ads and resultant consumer confusion, as required to
state a claim for unfair competition; (3) Defendants do not have
standing to assert a FDUTPA claim for damages against Plaintiffs,
have
failed
to
plead
the
existence
of
a
“trade
or
commerce
relationship,” as the FDTUPA requires, and have not alleged “actual
damages”; and (4) an infectious theory of inequitable conduct and
the elements of a claim of inequitable conduct are insufficiently
plead. 5
The Court addresses each argument below.
II.
“Counterclaims
are
applied to complaints.”
held
to
the
same
pleading
standards
Hill v. Nagpal, No. 12-21495-CIV, 2013
WL 246746, at *1 (S.D. Fla. Jan. 22, 2013) (citing Manuel v.
Convergys Corp., 430 F.3d 1132, 1141 (11th Cir. 2005)).
Any
pleading stating a claim for relief must contain a “short and plain
statement of the claim showing that the pleader is entitled to
5
Plaintiffs also seek dismissal of Counterclaim Counts I-IV on
the basis that Defendants have grouped all of the False Ads “into
the same context for adjudication,” in violation of “the rule
discussed” in Johnson & Johnson Vision Care, Inc. v. 1-800
Contacts, Inc., 299 F.3d 1242 (11th Cir. 2002). (Doc. #71, p. 3.)
That case, however, neither imposes nor discusses a rule of
pleading; the Eleventh Circuit simply points out that when a Lanham
Act claim is based on multiple statements, the fact-finder must
consider the specific context in which each was made when
determining whether the Act was violated.
So where, as here,
separate advertisements form the basis for a Lanham Act claim, the
fact-finder cannot use both to piece together the elements of a
successful claim, unless it is clear that the same consumer was
concurrently exposed to each. Id. at 1248 & n.4.
- 5 -
relief.” 6
Fed. R. Civ. P. 8(a)(2).
In evaluating a Rule 12(b)(6)
motion to dismiss a counterclaim for failing to comply with Rule
8(a), the Court must accept as true all factual allegations in the
counterclaim
complaint
and
“construe
them
favorable to the [counterclaim-]plaintiff.”
in
the
light
most
Baloco ex rel. Tapia
v. Drummond Co., 640 F.3d 1338, 1345 (11th Cir. 2011).
However,
mere “[l]egal conclusions without adequate factual support are
entitled to no assumption of truth.”
Mamani v. Berzain, 654 F.3d
1148, 1153 (11th Cir. 2011) (citations omitted).
By extension, “[a] motion to dismiss a counterclaim pursuant
to Federal Rule of Civil Procedure 12(b)(6) is [also] evaluated in
the same manner as a motion to dismiss a complaint.”
Sticky
Holsters, Inc. v. Ace Case Mfg., LLC, No. 2:15-cv-648-FTM-29CM,
2016 WL 1436602, at *6 (M.D. Fla. Apr. 12, 2016) (quoting Geter v.
Galardi S. Enters., Inc., 43 F. Supp. 3d 1322, 1325 (S.D. Fla.
2014)).
Thus,
to
avoid
dismissal
under
Rule
12(b)(6),
each
counterclaim must contain sufficient factual allegations to “raise
a right to relief above the speculative level.”
v. Twombly, 550 U.S. 544, 555 (2007).
Bell Atl. Corp.
To do so requires “enough
facts to state a claim to relief that is plausible on its face.”
6
As the Court noted in its May 31, 2016 Opinion and Order (Doc.
#62) dismissing Defendants’ original Counterclaims and Third-Party
Claims (Doc. #8), some courts have applied Rule 9(b)’s heightened
pleading requirements to determine the sufficiency of a Lanham Act
claim “grounded in fraud.”
(Doc. #62, p. 4 n.1 (citations
omitted).) Plaintiffs did not then, nor do they now, argue that
Rule 9(b)’s heightened pleading standard applies however, so the
Court applies Rule 8(a)’s “short and plain statement” requirement.
- 6 -
Id. at 570.
This plausibility pleading obligation demands “more
than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.”
Id. at 555 (citation
omitted); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(“Threadbare
supported
recitals
by
mere
of
the
elements
conclusory
of
statements,
a
cause
do
not
of
action,
suffice.”);
Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir. 2012)
(“Factual
allegations
that
are
merely
consistent
with
a
defendant’s liability fall short of being facially plausible.”
(citation omitted)).
Instead, the counterclaim complaint must
contain enough factual allegations as to the material elements of
each claim to raise the plausible inference that those elements
are satisfied.
III.
A.
False Advertising Under the Lanham Act (Count I)
Defendants accuse Plaintiffs of violating the Lanham Act by
disseminating
false
or
misleading
injurious
statements
about
Plaintiffs’ products and patent rights and Defendants’ business
and products.
in
commerce
The Lanham Act serves to “protect persons engaged
within
the
control
of
Congress
against
unfair
competition” – that is, against “injuries to business reputation
and present and future sales.”
Lexmark Int'l, Inc. v. Static
Control Components, Inc., 134 S. Ct. 1377, 1389–90 (2014) (citation
and internal alterations omitted).
As relevant here, the Lanham
Act imposes liability on a person or entity that “in commercial
- 7 -
advertising
or
promotion,
misrepresents
the
nature,
characteristics, qualities, or geographic origin of his or another
person's goods.”
Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256,
1260 (11th Cir. 2004) (quoting 15 U.S.C. § 1125(a)).
A plaintiff
alleging a claim of false advertising in violation of Section 43(a)
the Lanham Act must adequately plead, and ultimately prove, that:
(1) the advertisements of the opposing party
were
false
or
misleading;
(2)
the
advertisements deceived, or had the capacity
to deceive, consumers; (3) the deception had
a material effect on purchasing decisions; (4)
the misrepresented product or service affects
interstate commerce; and (5) the movant has
been — or is likely to be — injured as a result
of the false advertising.
Id. (citations omitted).
Moreover, if the advertisements forming
the basis of the Lanham Act claim constitute “marketplace activity
in support of [a] patent” - such as “statements about potential
infringement of [a] patent” - the plaintiff must plead and prove
that the statements were made “in bad faith,” Zenith Elecs. Corp.
v. Exzec, Inc., 182 F.3d 1340, 1353 (Fed. Cir. 1999), which “may
encompass subjective as well as objective considerations.”
Mikohn
Gaming Corp. v. Acres Gaming, Inc., 165 F.3d 891, 897 (Fed. Cir.
1998).
As the statutory language indicates, Section 43(a) of the
Lanham Act provides redress only for false or misleading statements
that “occur in commercial advertising or promotion.”
1125(a)(1)(B).
15 U.S.C. §
A statement “occurs in commercial advertising or
promotion” if it: (1) is “commercial speech”; (2) was made (a) by
- 8 -
someone “in commercial competition with” the plaintiff and (b)
“for the purpose of influencing consumers to buy defendant's goods
or
services”;
and
(3)
was
“disseminated
relevant purchasing public.”
sufficiently
to
the
Suntree Techs., Inc. v. Ecosense
Int’l, Inc., 693 F.3d 1338, 1349 (11th Cir. 2012) (quoting Gordon
& Breach Sci. Publishers S.A. v. Am. Inst. of Physics, 859 F. Supp.
1521, 1535-36 (S.D.N.Y. 1994)).
“Commercial speech consists of
expression related largely or solely to the economic interests of
the speaker and the audience[] . . . [and] encompasses not merely
direct invitations to trade, but also communications designed to
advance
business
interests,
exclusive
of
beliefs
and
ideas.”
Kleiner v. First Nat’l Bank of Atlanta, 751 F.2d 1193, 1204 (11th
Cir. 1985) (citations omitted).
“[R]elevant considerations [for
determining if speech is commercial] include whether: (1) the
speech is an advertisement; (2) the speech refers to a specific
product; and (3) the speaker has an economic motivation for the
speech.”
Jordan v. Jewel Food Stores, Inc., 743 F.3d 509, 517
(7th Cir. 2014) (citation omitted).
Plaintiffs argue that Defendants’ Lanham Act claim fails
because the False Ads “do not amount to commercial advertising or
promotion.”
(Doc. #71, pp. 2-5.)
Plaintiffs contend further that
False Ads 5 and 6 cannot support a Lanham Act claim because neither
is “literally false” nor “affects interstate commerce.”
5-8.)
- 9 -
(Id. pp.
1.
Whether
the
False
Ads
Advertising or Promotion”
“Occurred
in
Commercial
In support of their argument that the False Ads did not occur
in commercial advertising or promotion, Plaintiffs first contend
that none of the False Ads are “commercial speech.”
Second,
Plaintiffs argue that, even if the False Ads are “commercial
speech,”
none
was
sufficiently
disseminated
to
the
relevant
purchasing public.
a.
Commercial Speech
According to Plaintiffs, the False Ads are not commercial
speech because they reference only Plaintiffs’ patents, not any
“products,”
and
because
the
statements
were
not
economically
motivated.
As to the first argument, reference to a particular
good or service is merely a “relevant consideration,” indicative
of “commercial speech”; it is neither required in all instances,
nor alone sufficient.
Bolger v. Youngs Drug Prods. Corp., 463
U.S. 60, 66-68 & n.14 (1983); see also Jordan, 743 F.3d at 517.
But even were it required, the Court finds that False Ads 1,
2, 3, 5, and 6 do adequately reference “products.”
The Press
Release (False Ad 1) (Doc. #7-13) specifically mentions Global
Tech’s “LED lighting products” and appears to twice hyperlink the
word “products,” presumably to permit the viewer to click on the
word and redirect to the product page on Global Tech’s website.
See Bolger, 463 U.S. at 66 n.13 (“That a product is referred to
generically does not[] . . . remove it from the realm of commercial
- 10 -
speech.”); see also Weiland Sliding Doors & Windows, Inc. v. Panda
Windows & Doors, LLC, 814 F. Supp. 2d 1033, 1038 (S.D. Cal. 2011)
(“Even if patent licenses do not constitute goods, the Press
Release nonetheless promotes Weiland's goods. . . . The Press
Release provides contact information and a website URL for viewers
to
‘learn
more’
products.”).
and
get
‘more
information’
about
Weiland
False Ad 2 is a statement within the Press Release
and False Ad 3 is the Press Release’s original browser URL.
Each
is, therefore, properly considered in conjunction with False Ad 1
and thus also adequately references Plaintiffs’ products.
& Johnson, 299 F.3d at 1248 n.4.
Johnson
False Ad 5 warns distributors
to take care when determining which products to sell, in light of
HiLumz’s impending demise, and False Ad 6 asserts that Defendants
have infringed Plaintiffs’ “LED Light Bulb” patent and thus may no
longer sell HiLumz retrofit products.
Defendants have also sufficiently alleged that False Ads 1,
2, 3, 5, and 6 were economically motivated, that is, were “designed
to advance [Plaintiffs’] business interests.”
at 1204.
Kleiner, 751 F.2d
The Press Release (False Ads 1-3) welcomes Hilumz
distributors “caught in the middle” with “open arms” to sell Global
Tech’s products instead.
The statements about Plaintiffs’ patent
rights and the effect of those rights on Hilumz’s business (False
Ads 5 and 6) similarly “‘amount to speech of a commercial bent,’
as opposed to social or political speech,” and appear “intended to
influence customers to buy [Global Tech’s] products rather than
- 11 -
[HiLumz’s] products.”
VG Innovations, Inc. v. Minsurg Corp., No.
8:10-CV-1726-T-33MAP, 2011 WL 1466181, at *5-6 (M.D. Fla. Apr. 18,
2011) (quoting Kleiner, 751 F.2d at 1204).
However, the Court does agree that False Ad 7 (a statement
posted on Newman’s personal LinkedIn profile page incorrectly
asserting that the parent ‘304 Patent “issued on June 8, 2009”) is
not “commercial speech.”
LinkedIn is an online social platform
allowing individuals to exhibit their professional experience,
interests, and skills, primarily for business networking purposes.
That Newman sought merely to showcase his contribution to the world
of patentable technology and temporarily confused the date the
‘304 Patent application was filed with the date it issued is a
reasonable inference to draw from the publication of False Ad 7;
that he sought to drive LED retrofit kit business to Global Tech
is not. 7
False Ad 7 is thus dismissed as a basis for Count I.
b.
Adequate Dissemination
Plaintiffs also seek to dismiss each of the False Ads for
insufficient
dissemination
(Doc. #71, p. 2.)
to
the
relevant
The Court mostly disagrees.
purchasing
public.
The Second Amended
Counterclaim Complaint alleges that Global Tech published the
Press Release (False Ads 1-3) “to the entire world via its internet
website.”
(Doc. #63, ¶ 15.)
That allegation is sufficient at
7
Because Defendants have not sufficiently pled that False Ad 7
was “economically motivated,” it is unnecessary to assess whether
Plaintiffs are correct that a patent number is not a “product”
reference for purposes of stating a Lanham Act claim.
- 12 -
this stage. 8
See, e.g., 1524948 Alberta Ltd. v. Lee, No. 1:10-CV-
02735-RWS, 2011 WL 2899385, at *5 (N.D. Ga. July 15, 2011); StarBrite Distrib., Inc. v. Kop-Coat, Inc., No. 09-60812-CIV, 2010 WL
750353, at *3 (S.D. Fla. Mar. 4, 2010).
So too do the allegations
that False Ad 5 was disseminated to distributors of HiLumz products
attending the World Energy Engineering Congress (Doc. #63, ¶ 37),
and that False Ad 6 was made to “customers, sales representatives,
competitors, and others” (id. ¶ 39), sufficiently plead adequate
dissemination of those statements “to the relevant purchasing
public.”
See Merck Eprova AG v. Gnosis S.p.A., 901 F. Supp. 2d
436, 451 (S.D.N.Y. 2012) (granting summary judgment for plaintiff
alleging harm caused by distribution of literally false product
specification sheets that were “widely distributed” to trade show
attendees, including potential customers), aff'd, 760 F.3d 247 (2d
Cir. 2014).
8
The Court is aware of the affidavit testimony of Karhrman
Ziegenbein (Doc. #29), filed in conjunction with Plaintiffs’
response opposing (Doc. #25) a different motion. Mr. Ziegenbein
is an “expert in the field of Social Media Discovery, Web
Collection, and Digital Evidence Preservation” whom Plaintiffs
hired to review the Google Analytics for the Press Release and to
“provide an independent unbiased assessment of the page activity.”
(Id. ¶¶ 3, 4.) According to Mr. Ziegenbein, the number of page
views was minimal, and the number of “unique” views (those by
first-time viewers) even lower. (Id. ¶¶ 15-20.) Even assuming Mr.
Ziegenbein’s testimony undermines a finding of sufficient
dissemination of the Press Release, the Court may not take as true
the allegations in that declaration without converting Plaintiffs’
Motion to Dismiss into one for summary judgment.
Cyril v.
Neighborhood P’ship II Hous. Dev. Fund, Inc., 124 F. App’x 26, 27
n.2 (2d Cir. 2005) (per curiam); In re Olympia Holding Corp., 68
F.3d 1304, 1306 (11th Cir. 1995). The Court declines to do so.
- 13 -
The Court does agree, however, that Defendants have failed to
plead sufficient dissemination of False Ad 4.
The Second Amended
Counterclaim Complaint alleges that “when internet users searched
on the internet for ‘global tech LED hilumz’” at least as late as
on October 6, 2015, a Google search result appeared containing the
same URL that is the subject of False Ad 3, which incorrectly
stated that Global Tech had already received a permanent injunction
against HiLumz.
(Doc. #63, ¶ 23.)
Unlike with False Ad 3, which
is directly linked to the Press Release that neither party disputes
had at least some page views, the Court cannot gratuitously infer
that any netizen beside Defendants ever actually googled “global
tech LED hilumz” during the relevant time period.
See Johnson &
Johnson, 299 F.3d 1248 & n.4 (court must consider the specific
context in which each statement was made in determining whether
Lanham Act was violated).
Consequently, False Ad 4 is also
dismissed as a basis for Defendants’ Lanham Act counterclaim.
2.
Whether False Ads 5 and 6 are “False or Misleading” and
“Affect Interstate Commerce”
Plaintiffs also contend that False Ads 5 and 6 should be
dismissed
because
neither
interstate
commerce.”
statements
that
are
is
“literally
“[L]iterally
“literally
true,
false”
false”
but
nor
“affects
statements
and
misleading”
are
actionable under the Lanham Act, id. at 1247, whereas “[s]tatements
of opinion are generally not actionable.”
Osmose, Inc. v. Viance,
LLC,
2010).
612
F.3d
1298,
1311
(11th
- 14 -
Cir.
According
to
Plaintiffs, any statements regarding HiLumz’s impending demise,
patent infringement, and inability to sell retrofit kits are “nonactionable opinion” (Doc. #71, p. 7), which “no reasonable consumer
would take as implying a factual basis.”
(Id. p. 8.)
The Court agrees that False Ad 5 - Mart’s alleged statement
warning HiLumz distributors to “be careful” about selling HiLumz
products because HiLumz was “going out of business” - constitutes
non-verifiable
[Hilumz],
“prediction
and
or
consequently,
is
opinion
not
about
the
actionable
as
future
misleading statement of fact under the Lanham Act.”
a
of
false
or
Medison Am.,
Inc. v. Preferred Med. Sys., LLC, 548 F. Supp. 2d 567, 579 (W.D.
Tenn. 2007), aff'd, 357 F. App'x 656 (6th Cir. 2009); see also
Duty Free Americas, Inc. v. Estee Lauder Companies, Inc., No. 1260741-CIV, 2014 WL 1329359, at *18 (S.D. Fla. Mar. 31, 2014),
aff'd, 797 F.3d 1248 (11th Cir. 2015) (business projections forming
the
basis
“predictions
for
the
that
plaintiff’s
d[id]
not
Lanham
lend
Act
claim
themselves
to
were
mere
empirical
verification and [were] thus opinions” not actionable under the
Act); cf. Next Century Commc'ns Corp. v. Ellis, 318 F.3d 1023,
1028 (11th Cir. 2003) (concluding that a statement lauding the
company’s “strong performance” was not actionable fraud because
such characterization was “not the sort of empirically verifiable
statement that [could] be affirmatively disproven”).
- 15 -
The same cannot be said for at least the first two statements
comprising False Ad 6. 9
asserting
that
Plaintiffs argue that the statements
Defendants’
LED
retrofit
kits
infringe
Global
Tech’s patents and that Defendants are therefore no longer allowed
to sell those products embody only a firm opinion.
each
statement
“fairly
implies
a
factual
basis”
Maybe so, but
and
is
thus
properly treated as a statement of fact, despite being “framed as
an opinion.”
Duty Free Americas, Inc. v. Estee Lauder Companies,
Inc., 797 F.3d 1248, 1277 (11th Cir. 2015) (quotation and internal
alteration
omitted).
Indeed,
the
outcome
of
Plaintiffs’
infringement claim will reveal whether the statements are true or
false,
and
thus
the
statements
verifiable” statements of fact. 10
are
considered
“empirically
Pizza Hut, Inc. v. Papa John's
Int'l, Inc., 227 F.3d 489, 496 (5th Cir. 2000) (observing that for
Lanham Act purposes, “[a] statement of fact is one that (1) admits
of being adjudged true or false in a way that (2) admits of
9
The statement that “Global Tech was preparing to file suit
against HiLumz, and would also file suit against anyone who does
business with HiLumz” has by all accounts, proved true and so is
likely not actionable under the Lanham Act. (See Doc. #63, p. 7
n.1.)
10
Moreover, the Second Amended Counterclaim Complaint alleges that
Plaintiffs have been making these statements since as early as
fall of 2012, years before Global Tech actually obtained the patent
whose infringement is alleged in this lawsuit. Given that “[a]
patent application cannot be infringed,” the falsity of these
statements may be readily ascertainable. Abbey v. Mercedes Benz
of N. Am., Inc., 138 F. App’x 304, 307 (Fed. Cir. 2005).
- 16 -
empirical verification” (quotation omitted)); cf. Ellis, 318 F.3d
at 1028.
Plaintiffs argue that False Ad 6 should be dismissed for the
additional reason that the statements “neither travelled in any
interstate channels, nor were they of the nature to have any effect
on interstate commerce.”
in
this
affected
Circuit,
(Doc. #71, p. 7.)
however,
interstate
The relevant question
is
not
whether
a
statement
commerce,
but
whether
“the
product or service affects interstate commerce.” 11
F.3d
at
1260;
see
also
Third
Party
itself
misrepresented
Hickson, 357
Verification,
Inc.
v.
Signaturelink, Inc., 492 F. Supp. 2d 1314, 1324 (M.D. Fla. 2007)
(“To state a claim for false advertising under the federal Lanham
Act, 15 U.S.C. § 1125(a), the party must allege[] . . . the
defendant's advertised products traveled in interstate commerce .
. . .” (citing Hickson, 357 F.3d at 1260-61; Warner, 204 F.3d at
91-92)).
The first paragraph of the Second Amended Counterclaim
Complaint alleges that “HiLumz provides energy efficient lighting
products and services to companies across the United States and
around the world.”
(Doc. #63, ¶ 1.)
Because HiLumz’s products
include LED retrofit kits, which are the product mentioned in False
11
Compare Warner-Lambert Co. v. Breathasure, Inc., 204 F.3d 87,
91–92 (3d Cir. 2000) (Lanham Act plaintiff must show “the
advertised goods traveled in interstate commerce” (emphasis
added)), with Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 819
(7th Cir. 1999) (Lanham Act plaintiff must prove “defendant caused
its false statement to enter interstate commerce” (emphasis
added)).
- 17 -
Ad
6,
the
Court
finds
that
the
“affect
interstate
commerce”
requirement has been adequately alleged. 12
In sum, although the Court agrees that False Ads 4, 5, and 7
cannot serve as bases for Defendants’ Lanham Act counterclaim,
none of the arguments Plaintiffs have raised support dismissal of
False
Ads
1,
2,
3,
and
6.
Defendants’
request
to
dismiss
Counterclaim Count I is, therefore, denied.
B.
Unfair Competition Under Florida Law (Count II)
Counterclaim Count II asserts a common-law claim of unfair
competition.
Unfair
competition
is
“fairness, decency and common honesty.”
68 So. 2d 577, 580 (Fla. 1953).
a
doctrine
grounded
in
Sentco, Inc. v. McCulloh,
“To state a claim for unfair
competition under Florida common law, [a] claimant must allege (1)
deceptive or fraudulent conduct of a competitor and (2) likelihood
of consumer confusion.”
Whitney Info. Network, Inc. v. Gagnon,
353 F. Supp. 2d 1208, 1212 (M.D. Fla. 2005) (citation omitted);
Donald Frederick Evans & Assocs., Inc. v. Cont'l Homes, Inc., 785
F.2d 897, 914 (11th Cir. 1986) (“Florida law requires that [a
12
Plaintiffs also contend in passing that consumer deception has
not been sufficiently alleged as to False Ad 6. (Doc. #71, p. 9.)
The Court again disagrees. Not only does Count I aver that the
“statements have deceived, and have a tendency to further deceive,
a substantial segment of potential customers” (Doc. #63, ¶ 59),
Paragraph 33 alleges that a HiLumz reseller requested reassurance
that Defendants would “continue to be in business,” after being
told by “Mart or one of his accomplices” that “HiLumz was no longer
allowed to sell LED retrofit kits.” Further, Paragraph 46 alleges
that “some of Hilumz’[s] customers have specifically informed
HiLumz that they will not continue to purchase Hilumz’[s] products
out of fear of being sued by Defendants.”
- 18 -
plaintiff
alleging
unfair
competition]
establish
deceptive
or
fraudulent conduct of a competitor and likelihood of customer
confusion.” (citing Stagg Shop of Miami, Inc. v. Moss, 120 So. 2d
39, 41 (Fla. 2d DCA 1960))).
In moving to dismiss Count II, Plaintiffs point primarily to
this
Court’s
previous
observation
that
“the
success
of
a
plaintiff’s state unfair competition and FDUTPA claims is tied to
the federal Lanham Act claim[] for . . . false advertising.”
(Doc.
#62, p. 8 (internal alterations and citations omitted).)
Since
the Court is not dismissing Defendants’ Lanham Act claim as to
False Ads 1, 2, 3, and 6, however, dismissal of the unfair
competition claim is not warranted on that basis.
Plaintiffs’
only
other
argument
for
dismissal
is
that
Defendants have not adequately pled a causal connection between
the False Ads and resultant consumer confusion or other harm.
(Doc. #71, p. 10.)
Even if Defendants are required to plead such
causation at this stage, the Court disagrees that they have failed
to do so.
Paragraph 43, which is incorporated into Count II via
Paragraph 66, alleges that the False Ads “proximately caused . .
. injury to HiLumz by diverting sales from HiLumz to [Global
Tech].”
Paragraph 47, also incorporated into Count II, avers that
customers “have not purchased products from HiLumz, or have not
purchased the same volume of products, because they were misled by
[Plaintiffs’] False Advertisements.”
Accordingly, Plaintiffs’
request for dismissal of Count II is denied.
- 19 -
C.
Florida Deceptive and Unfair Trade Practices Act (Count III)
Counterclaim Count III is based on Defendants’ contention
that dissemination of the False Ads violated the Florida Deceptive
and Unfair Trade Practices Act.
The FDUTPA prohibits “[u]nfair
methods of competition, unconscionable acts or practices, and
unfair or deceptive acts or practices in the conduct of any trade
or commerce.”
Molina v. Aurora Loan Servs., LLC, 635 F. App'x
618, 626 (11th Cir. 2015) (per curiam) (quoting Fla. Stat. §
501.204(1)).
Stating
a
claim
under
the
FDUTPA
requires
the
plaintiff to “allege (1) a deceptive act or unfair trade practice;
(2) causation; and (3) actual damages.”
Dolphin LLC v. WCI
Communities, Inc., 715 F.3d 1243, 1250 (11th Cir. 2013) (citing
Rollins, Inc. v. Butland, 951 So.2d 860, 869 (Fla. 2d DCA 2006));
Wright v. Emory, 41 So. 3d 290, 292 (Fla. 4th DCA 2010) (quoting
Rollins, 951 So.2d at 869).
Paragraph 67 of the Second Amended Counterclaim Complaint
accuses Plaintiffs of engaging in four specific “deceptive and
unfair trade practices,” and Paragraph 68 avers that such actions
“proximately
caused”
Defendants’
“actual
economic
damages.”
Plaintiffs argue that the FDUTPA counterclaim should nevertheless
be
dismissed
because
(1)
Defendants
are
“competitors,”
not
“consumers,” (2) the False Ads did not occur in the context of a
“trade or commerce relationship,” and (3) Defendants have not
sufficiently pled “actual damages.”
contention.
- 20 -
The Court disagrees with each
1.
Standing to Sue
According
to
Plaintiffs,
because
Defendants
are
“a
manufacturer, seller, and distributor of LED lighting and retrofit
lamps,” they are not “consumers” and thus “fall outside of the
purview of FDUTPA.”
(Doc. #71, p. 10.)
Essentially, Plaintiffs
are claiming Defendants lack standing to pursue a FDUTPA claim as
Plaintiffs’ “competitors” in the retrofit LED lighting industry.
It is true that the Eleventh Circuit, construing a prior
version of the FDUTPA, concluded that the statute “[did] not apply
to suits between competitors.”
M.G.B. Homes, Inc. v. Ameron
Homes, Inc., 903 F.2d 1486, 1494 (11th Cir. 1990).
But, in that
version
(Fla.
Stat.
damages,
which
of
501.211(2))
the
statute,
allowed
only
the
damages
“consumers”
provision
to
seek
Florida courts interpreted as preventing suits for money damages
by those currently or previously engaged in the same business as
the defendant.
U.S. Fin. Grp., Inc. v. Horizon Mgmt., Inc., 476
So. 2d 771, 772 (Fla. 3d DCA 1985) (per curiam); Darrell Swanson
Consol. Servs. v. Davis, 433 So. 2d 651, 652 (Fla. 1st DCA 1983).
In the 2001 version of the statute, the word “consumer” in
Section 501.211(2) was replaced with the word “person.”
See
Furmanite Am., Inc. v. T.D. Williamson, Inc., 506 F. Supp. 2d 1134,
1146 (M.D. Fla. 2007).
This change has led numerous courts –
including this Court and at least two different Florida appellate
courts –
to
conclude
that
the
legislature
competitors to seek damages under the FDUTPA.
- 21 -
intended
to
allow
E.g., e-ventures
Worldwide, LLC v. Google, Inc., 188 F. Supp. 3d 1265, 1276 (M.D.
Fla. 2016) (subsequent case history omitted); Bailey v. St. Louis,
196 So. 3d 375, 383 (Fla. 2d DCA 2016); Caribbean Cruise Line,
Inc. v. Better Bus. Bureau of Palm Beach Cty., Inc., 169 So. 3d
164, 169 (Fla. 4th DCA 2015).
Accordingly, the Court finds that
Defendants’ status as Plaintiffs’ “competitors” does not prevent
Defendants from maintaining a claim for damages under the FDUTPA. 13
2.
Trade or Commerce “Relationship”
Plaintiffs also argue that the Second Amended Counterclaim
Complaint fails to adequately allege that the deceptive or unfair
behavior of which Plaintiffs are accused occurred “in the conduct
of any trade or commerce,” as required under Fla. Stat. 501.204(1).
According
to
Plaintiffs,
because
no
“trade
or
commerce
relationship” existed between Plaintiffs and Defendants at the
time the statements comprising the False Ads were made, the FDUTPA
counterclaim should be dismissed. (Doc. #71, pp. 11-12 (citing
13
Even if Defendants could not recover damages under the current
version of the FDUTPA, they would still have standing to maintain
their counterclaim, since they also request injunctive relief (see
Doc. #63, p. 30).
The FDUTPA allows “anyone aggrieved by a
violation of [the Act to] bring an action to obtain a declaratory
judgment . . . and to enjoin [the accused],” Fla. Stat. §
501.211(1), and Defendants’ allegations of commercial and
reputational harm show that Defendants may be “aggrieved.” Five
for Entm’t S.A. v. Rodriguez, 877 F. Supp. 2d 1321, 1330 (S.D.
Fla. 2012); Ahearn v. Mayo Clinic, 180 So. 3d 165, 172 (Fla. 1st
DCA 2015). Claims for equitable relief are not, and have never
been, subject to the “competitor” exclusion.
Del Monte Fresh
Produce Co. v. Dole Food Co., 136 F. Supp. 2d 1271, 1295 (S.D.
Fla. 2001); Bailey, 196 So. 3d at 382 (collecting cases).
- 22 -
Williams v. Nationwide Credit, Inc. 890 F. Supp. 2d 1319 (S.D.
Fla. 2012)).)
The FDUTPA broadly defines “trade or commerce,” in relevant
part, as “the advertising, soliciting, providing, offering, or
distributing, whether by sale, rental, or otherwise, of any good
or service,” Fla. Stat. § 501.203(8).
“relationship” requirement.
There is no mention of a
As such, the Court declines to narrow
the statutory definition by requiring that a trade or commerce
relationship have existed between a plaintiff and a defendant
before the defendant may be held liable under the FDUTPA.
It is true that the Williams case Plaintiffs cite found that
the
defendant
“was
not
engaged
in
trade
or
commerce
as
to
Plaintiff” and, absent such “‘trade or commerce’ relationship,”
the district court dismissed the FDUTPA claim.
at 1322.
890 F. Supp. 2d
However, rather than suggest a stand-alone “trade or
commerce relationship” requirement under the FDUTPA, this holding
reflects the creditor-debtor context in which the FDUTPA claim
arose in that case.
Since the only conduct forming the basis of
the plaintiff’s FDUTPA claim was the defendant’s attempt to collect
on the plaintiff’s outstanding debt, and because, in turn, debtcollection attempts “are not trade or commerce,” the plaintiff was
unable to establish that the FDUTPA had been violated. 14
14
Id.
Other cases discussing a “trade or commerce relationship” also
involve attempts to collect on consumer debt. State v. Beach Blvd
Auto. Inc., 139 So. 3d 380, 392 (Fla. 1st DCA 2014); Baker v.
Baptist Hosp., Inc., 115 So. 3d 1123, 1125 (Fla. 1st DCA 2013).
- 23 -
Here, in contrast, the existence (or lack thereof) of a trade
or commerce “relationship” between Plaintiffs and Defendants is
immaterial.
As discussed previously, Defendants have adequately
alleged that False Ads 1, 2, 3, and 6 constitute commercial speech
and affect interstate commerce because the statements therein
promote Global Tech products and malign LED HiLumz retrofit kits.
That is sufficient to satisfy the “trade or commerce” requirement
of Defendants’ FDUTPA claim at this stage.
See Sovereign Military
Hospitaller Order of Saint John of Jerusalem of Rhodes & of Malta
v. Fla. Priory of Knights Hospitallers of Sovereign Order of Saint
John of Jerusalem, Knights of Malta, Ecumenical Order, 702 F.3d
1279,
1296
(11th
Cir.
2012)
(“The
success
of
state
unfair
competition and FDUTPA claims is tied to the federal Lanham Act
claims for infringement and false advertising.” (citing Natural
Answers, Inc. v. Smithkline Beecham Corp., 529 F.3d 1325, 1333
(11th Cir. 2008))).
3.
“Actual Damages”
One who “has suffered a loss” caused by conduct the FDTUPA
proscribes may recover “actual damages.”
Fla. Stat. § 501.211(2).
Plaintiffs argue that because Defendants seek to recover only for
lost
profits,
they
have
not
“sufficiently
plausible claim for actual damages.”
support[ed]
any
(Doc. #71, pp. 12-13.)
This Court previously observed that, “under FDUTPA, ‘actual
damages’ do not include consequential damages, precluding recovery
of future lost profits.”
(Doc. #62, p. 9 (emphasis added) (quoting
- 24 -
Siever v. BWGaskets, Inc., 669 F. Supp. 2d 1286, 1294 (M.D. Fla.
2009) and citing Rodriguez v. Recovery Performance & Marine, LLC,
38 So. 3d 178, 180 (Fla. 3d DCA 2010)).)
However, the Second
Amended Counterclaim Complaint avers that the False Ads have
already diverted sales from Defendants to Plaintiffs, (Doc. #63,
¶¶ 43, 47), a contention further supported by the allegation that
“some of Hilumz’[s] customers have specifically informed HiLumz
that they will not continue to purchase Hilumz’[s] products”
because of the information conveyed in the False Ads.
(Id. ¶ 46.)
In other words, Defendants’ claim for damages seems to be based,
at least in part, on past lost profits.
Past lost profits, in
turn, appear to be a proper form of “actual damages.” 15
Factory
Direct Tires Inc. v. Cooper Tire & Rubber Co., No. 3:11-cv-255RV/EMT,
2011
WL
13117118,
at
*7
(N.D.
Fla.
Oct.
24,
2011)
(“[Plaintiff] is not seeking future lost profits, but rather the
lost profits that it has already suffered. It would appear that
such damages constitute ‘actual damages’ under FDUTPA.”); see also
Sun Prot. Factory, Inc. v. Tender Corp., No. 6:04-cv-732-ORL19KRS, 2005 WL 2484710, at *14 (M.D. Fla. Oct. 7, 2005) (denying
a motion to dismiss a FDUTPA claim in a trademark infringement
15
Even if the Court is incorrect, dismissal is still
inappropriate, since Defendants also request injunctive relief.
Wyndham Vacation Resorts, Inc. v. Timeshares Direct, Inc., 123 So.
3d 1149, 1152 (Fla. 5th DCA 2012). Moreover, if Defendants succeed
in obtaining an injunction, they may also be entitled to recover
attorneys’ fees under Fla. Stat. § 501.2105, irrespective of
whether they have suffered “actual damages.”
Airflo A/C &
Heating, Inc. v. Pagan, 929 So. 2d 739, 742 (Fla. 2d DCA 2006).
- 25 -
case since “lost business and lost profits” can fall within the
Act’s requirement that the plaintiff have “suffered a loss”); cf.
Siever, 669 F. Supp. 2d at 1294 (“Where a product is rendered
valueless
by
[the
conduct
that
price
is
violated
an
the
FDUTPA],
appropriate
the
[product’s]
purchase
measure
of
damages.”).
For all of the reasons just discussed, Plaintiffs’
motion to dismiss Count III is denied.
D.
Trade Libel (Count IV)
To
state
a
claim
for
trade
libel
under
Florida
law,
a
plaintiff must allege (1) that one who published or communicated
a falsehood about the plaintiff (a) knew, or reasonably should
have known, that (b) the falsehood would induce others not to deal
with the plaintiff, and (2) that the falsehood did, in fact, “play
a material and substantial part in inducing others not to deal
with the plaintiff,” (3) thereby causing the plaintiff to suffer
“special damages.”
Supp.
2d
1330,
Border Collie Rescue, Inc. v. Ryan, 418 F.
1348
(M.D.
Fla.
2006)
(citation
omitted).
Plaintiffs have raised no substantive challenge to the trade libel
counterclaim, 16 but do argue that “Defendants should at least be
required
to
file
another
amended
counterclaim
to
separately
delineate how each False Advertisement constitutes trade libel.”
16
The Court has doubts about whether the Second Amended
Counterclaim Complaint adequately alleges “special damages.” See,
e.g., Salit v. Ruden, McClosky, Smith, Schuster & Russell, P.A.,
742 So. 2d 381, 388 (Fla. 4th DCA 1999).
- 26 -
(Doc. #71, p. 14.)
As previously discussed, the Court does not
believe such a filing is either necessary or required.
E.
Inequitable Conduct and Patent Unenforceability (Count V)
Finally,
Defendants
request
a
declaration
that
the
‘424
Patent they are accused of infringing is unenforceable due to
“inequitable conduct” allegedly committed during the prosecution
of the ’304 Patent - the “parent” of the ‘424 patent.
Defendants’
two theories of inequitable conduct are both based on the alleged
failure
of
Mart,
Newman,
and
their
various
patent
attorneys
(collectively, the Patent Prosecutors) to disclose to the United
States Patent and Trademark Office (PTO) several material prior
art references of which the Patent Prosecutors had been previously
made aware when prosecuting a different Global Tech patent (United
States Patent No. 8,246,202).
Although these omissions allegedly
occurred during the prosecution of the ‘304 Patent, which is not
a part of this lawsuit, 17 Defendants contend that a declaration of
unenforceability
nevertheless
of
the
appropriate
“infected” the ‘424 Patent.
related,
because
in-suit
such
‘424
Patent
inequitable
is
conduct
(Doc. #75, pp. 11-12.)
“[A]ny court of the United States, upon the filing of an
appropriate pleading, may declare the rights and other legal
relations of any interested party seeking such declaration . . .
.”
28 U.S.C. § 2201(a).
The word “may” is key.
17
It is well
Global Tech has not elsewhere sued Defendants for infringing the
‘304 Patent. (Doc. #63, ¶ 17.)
- 27 -
established that “the declaratory judgment statute is an enabling
Act, which confers a discretion on the courts rather than an
absolute right upon the litigant.”
Green v. Mansour, 474 U.S. 64,
71 (1985); see also Wilton v. Seven Falls Co., 515 U.S. 277, 289–
90 (1995) (“Since its inception, the Declaratory Judgment Act has
been understood to confer on federal courts unique and substantial
discretion
in
litigants.”).
deciding
whether
to
declare
the
rights
of
In other words, the Declaratory Judgment Act “gives
the federal courts competence to make a declaration of rights; it
does not impose a duty to do so.”
Ameritas Variable Life Ins. Co.
v. Roach, 411 F.3d 1328, 1330 (11th Cir. 2005) (citing Brillhart
v. Excess Ins. Co. of Am., 316 U.S. 491, 494 (1942)).
A
declaration
justiciability.”
as
to
patent
rights
requires
“declaratory
Capo, Inc. v. Dioptics Med. Prods., Inc., 387
F.3d 1352, 1355 (Fed. Cir. 2004).
Declaratory justiciability, in
turn, “requires both (1) a threat or other action by the patentee
whereby the declaratory plaintiff has a reasonable apprehension
that he will be sued for infringement, and (2) activity by the
declaratory plaintiff that constitutes the alleged infringement or
active preparation to conduct such activity.”
Id. (citing Jervis
B. Webb Co. v. S. Sys., Inc., 742 F.2d 1388, 1398-99 (Fed. Cir.
1984)).
The Court applies an objective standard, which “focuses
on whether the patentee manifested the intention to enforce the
patent, and would be reasonably expected to enforce the patent
against the declaratory plaintiff.”
- 28 -
Id (citing Indium Corp. v.
Semi-Alloys, Inc., 781 F.2d 879, 883 (Fed. Cir. 1985)).
“When
these criteria are met the declaratory action should proceed.”
Id. (citing Arrowhead Indus. Water Inc. v. Ecolochem, Inc., 846
F.2d
731,
736
(Fed.
Cir.
1988)
(quoted
language
omitted)).
Nonetheless, “[t]he district court retains appropriate discretion
to decline to accept a declaratory action,” id. (Wilton v. Seven
Falls Co., 515 U.S. 277, 290 (1995), as long as there exist “wellfounded reasons” for declining.
Id. (citing Pub. Affairs Assocs.,
Inc. v. Rickover, 369 U.S. 111, 112 (1962)).
In
essence,
Defendants
seek
to
obtain
an
unofficial
declaration of unenforceability as to a patent not otherwise before
the Court, and then use that declaration as the predicate for
having the in-suit ‘424 Patent Defendants are accused of infringing
declared legally unenforceable.
The Court’s research has revealed
no case in which an in-suit patent was declared unenforceable based
on inequitable conduct relating to the procurement of a different
patent
that
is
out-of-suit.
Accordingly,
and
because
the
declaratory justiciability as to the ‘304 Patent is unestablished,
the
Court
deems
it
appropriate
to
decline
to
exercise
its
discretionary jurisdiction over Counterclaim Count V at this time.
Additionally, the Court finds that the declaratory judgment
counterclaim,
as
currently
pled,
fails
to
comply
with
the
requirements set forth in Exergen Corp. v. Wal-Mart Stores, Inc.,
575 F.3d 1312 (Fed. Cir. 2009), and Therasense, Inc. v. Becton,
Dickinson & Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011) (en banc),
- 29 -
as well as Cordis Corp. v. Bos. Sci. Corp., 188 F. App'x 984, 988
(Fed.
Cir.
2006).
Among
other
deficiencies,
Defendants
i)
improperly rest their theory of “infectious unenforceability” on
nothing more than the parent-child relationship between the ‘304
Patent and the ‘424 Patent, ii) have not pled facts from which the
court may reasonably infer that non-disclosure of the prior art
references was “but-for material” to the PTO, and iii) failed to
allege facts adequately supporting the scienter requirement.
Counterclaim Count V must, therefore, be dismissed.
As this
is the first dismissal of that counterclaim, the Court will afford
Defendants leave to replead to state a proper cause of action.
Accordingly, it is hereby
ORDERED:
1.
Plaintiffs' Motion to Dismiss Counterclaims and Third-
Party Claims (Doc. #71) is GRANTED in part and DENIED in part.
2.
The Motion to Dismiss is denied as to Counterclaim Count
I, however, False Ads 4, 5, and 7 are dismissed as bases for the
claim.
3.
The Motion is also denied as to Counts II, III, and IV.
Counterclaim Count V is dismissed with leave to amend
within fourteen (14) days of the date of this Order.
DONE and ORDERED at Fort Myers, Florida, this 14th day of
February, 2017.
Copies: Counsel of Record
- 30 -
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