Open Innovation LLC v. Char-Broil et al

Filing 43

ORDER granting 39 Motion to Dismiss Complaint. Ordered by Judge Clay D. Land on 08/19/2011. (CGC)

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IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF GEORGIA COLUMBUS DIVISION OPEN INNOVATION LLC, * Plaintiff, * vs. * CASE NO. 4:11-CV-16 (CDL) CHAR-BROIL, BRADLEY CO., LLC, and W.C. * * Defendants. * O R D E R Plaintiff brought this qui tam 35 U.S.C. § 292, alleging that patent marking. Defendants assert that Plaintiff‟s Complaint Defendants action engaged under in false fails to state a claim on which relief can be granted. Court agrees with Defendants and grants Defendants‟ The renewed Motion to Dismiss (ECF No. 39). MOTION TO DISMISS STANDARD When considering a 12(b)(6) motion to dismiss, the Court must accept complaint as and true limit all facts its consideration exhibits attached thereto. set forth to in the the plaintiff=s pleadings and Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007); Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 959 (11th Cir. 2009). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to „state a claim to relief that is plausible on its face.‟” Ashcroft v. Iqbal, 129 S. (quoting Twombly, 550 U.S. at 570). Ct. 1937, 1949 (2009) The complaint must include sufficient factual allegations “to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. “[A] formulaic recitation of the elements of a cause of action will not do[.]” Id. Although the complaint must contain factual allegations that “raise a reasonable expectation that discovery will reveal evidence of” the plaintiff=s claims, id. at 556, “Rule 12(b)(6) does not permit dismissal of a well-pleaded complaint simply because „it strikes a savvy judge that actual proof of those facts is improbable,‟” Watts v. Fla. Int’l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007) (quoting Twombly, 550 U.S. at 556). FACTUAL ALLEGATIONS Defendants sell “outdoor produce, cooking manufacture, products and market, distribute, accessories,” “consumer barbeque grills and grill accessories.” 9, 15, ECF No. 1. and including Compl. ¶¶ 7, Defendants “include within the packaging of each cooking product” a product guide, which “identifies the associated product model and lists a number of patents.” ¶ 16. Id. Each product guide is also available in digital form on Char-Broil‟s website. Id. ¶ 17. Each product guide states that the associated grill product is protected under “one or more” of approximately 100 U.S. patents. 2 Plaintiff alleges that nearly half of those patents are either expired or inapplicable to the grill products. Id. ¶¶ 18-19, 123-24. For example, Plaintiff alleges that the product guide for the grill with product number 463250510 lists U.S. Patent Nos. 6,640,803, D456,222, and D456,223—as well as a host of other patents—in the patent notice. Id. ¶ 18. alleges 6,640,803 that U.S. Patent No. Plaintiff further claims an “outdoor fireplace” and not a grill (id. ¶¶ 26-27) and that U.S. Patent Nos. D456,222 and D456,223 claim ornamental designs of a “Fork with Ergonomic Handle” and a “Spatula with Ergonomic Handle,” respectively. (id. ¶¶ 69-72, 126). Plaintiff also alleges that Defendants lacked a reasonable basis to believe that all of the listed patents applied to the grill products and that “[t]here can be no innocent explanation of Defendants[‟] mismarking given the numerous instances of mismarking . irrelevance of the patents so-mismarked.” . . and the obvious Id. ¶¶ 125-27. Plaintiff contends that Defendants engaged in mismarking under 35 U.S.C. § 292 by “(1) causing a digital copy of the periodically updated product guides to be publicly accessible via the Char-Broil website at since at least January 2001, and (2) causing a physical copy of the periodically updated product guides to be included within the packaging of each September 2008.” of the Char-Broil Id. ¶ 137. Grills since at least Plaintiff does not allege that 3 Defendants fixed an inapplicable or expired patent number directly on any of the grill models listed in the Complaint. Finally, Plaintiff alleges: “On information and belief, Defendants are large and sophisticated companies that regularly employ and retain multiple individuals familiar with of U.S.C. § 292.” ¶ Plaintiff requirements alleges, “on Defendants‟ “either 35 information employees aware of, and were, created, by Id. belief,” 128. that several virtue of their participated in the the of positions, creation of, approved, and/or ratified Char-Broil‟s practice of marking its Char-Broil Grills with numerous expired and/or inapplicable patent numbers” and “knew that the inapplicable patents do not cover and could not be read to cover the Char-Broil Grills.” Id. ¶¶ 133-34. DISCUSSION Defendants three reasons. contend First, that Plaintiff‟s Defendants Complaint assert that fails for Plaintiff‟s Complaint does not satisfy the heightened pleading requirement of Federal Rule of Civil Procedure 9(b). argue that Plaintiff cannot state a claim Second, Defendants for false marking based on the marking in the product guides. patent Third, Defendants maitain that even if marking in the product guides can constitute false patent marking, Plaintiff‟s claims fail because Plaintiff did not sufficiently allege that Defendants 4 had intent to deceive. Court finds that As discussed in more detail below, the Plaintiff intent to deceive. failed to allege sufficiently an Accordingly, the Court need not address Defendants‟ other bases for dismissal. Under 25 U.S.C. § 292(a), “[w]hoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word “patent” or any word or number importing that the same is patented for the purpose of deceiving the public . . . [s]hall be fined not more offense.” 35 U.S.C. § 292(a). than $500 for every such “The two elements of a § 292 false marking claim are (1) marking an unpatented article and (2) intent to deceive the public.” Forest Grp., Inc. v. Bon Tool Co., 590 F.3d 1295, 1300 (Fed. Cir. 2009). Even if the Court were to assume that the Complaint adequately alleges “marking an unpatented article,” the Complaint does not adequately allege “intent to deceive the public.” In the false marking context, “the combination of a false statement and knowledge that the statement was false creates a rebuttable presumption of intent to deceive the public.” Pequignot v. Solo Cup Co., 608 F.3d 1356, 1362-63 (Fed. Cir. 2010); accord Clontech Labs., Inc. v. Invitrogen Corp., 406 F.3d 1347, 1352 (Fed. Cir. 2005). Knowledge of the falsity can be proved by showing “that the party accused of false marking did not have a reasonable belief that the articles were properly 5 marked.” Clontech, 406 F.3d at 1353. Although “knowledge” and “intent” “may be averred generally and . . . a plaintiff may plead upon information and belief under Rule 9(b),” the pleadings must “allege sufficient underlying facts from which a court may reasonably infer that a party acted with the requisite state of mind.” In re BP Lubricants USA Inc., 637 F.3d 1307, 1311 (Fed. Cir. 2011) (internal quotation marks omitted). Here, Plaintiff attempts to travel under the rebuttable presumption approved in Pequignot and Clontech, but Plaintiff has not alleged a false statement. The Complaint alleges that the patent notice in the product guides states that the grill is covered under “one or more” of the listed patents. more than Plaintiff 100 U.S. alleges patents that listed in approximately each There are patent forty-seven of notice. them are inapplicable but makes no allegation that the other patents do not actually or potentially apply to the grills. So, the Complaint does not allege that it is a false statement to say that “one or more” of the listed patents protects the grill in question. The Court finds Pequignot to be instructive here. In Pequignot, the defendant‟s patent notice stated: “This product may be covered by one or more U.S. or foreign pending or issued patents. For details, contact Pequignot, 608 F.3d at 1359. [the defendant‟s website].” Some of the products so marked 6 were not covered by any patent, but others were. The court noted that “it is highly questionable whether such a statement could be made „for the purpose of deceiving the public,‟ when the public would not reasonably be deceived into believing that the products were definitely covered by a patent.” Id. at 1365. Likewise, here, the public would not reasonably be deceived into believing that the grills were definitely covered by all of the listed patents.1 For these reasons, the Court concludes that the Complaint does not sufficiently allege intent to deceive. CONCLUSION For the reasons set forth above, Defendants‟ renewed Motion to Dismiss (ECF No. 39) is granted. IT IS SO ORDERED, this 19th day of August, 2011. S/Clay D. Land CLAY D. LAND UNITED STATES DISTRICT JUDGE 1 The intent to deceive allegations would prove to be even more dubious at the summary judgment stage if Defendants‟ contention that they physically mark their grills with applicable patent numbers, in accordance with 35 U.S.C. § 287(a), proved to be true. However, the Court acknowledges that consideration of this argument at the motion to dismiss stage is not appropriate. 7

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