Kowalski v. Hawaii International Seafood, Inc. et al

Filing 334

ORDER Finding Defendants Anova Food, Inc. and Anova Food, LLC Are Not Precluded From Asserting A Patent Invalidity Defense. Signed by JUDGE HELEN GILLMOR on 5/14/14. (gab, )CERTIFICATE OF SERVICEParticipants registe red to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
WILLIAM R. KOWALSKI; HAWAII
INTERNATIONAL SEAFOOD, INC.,

)
)
)
Plaintiffs,
)
)
)
vs.
)
)
ANOVA FOOD, LLC; ANOVA FOOD,
INC.; CLEARSMOKE TECHNOLOGIES, )
)
LTD; and DOES 1-10,
)
)
)
Defendants.
_______________________________ )

Civil NO. 11-00795HG-RLP

ORDER FINDING DEFENDANTS ANOVA FOOD, INC. AND ANOVA FOOD, LLC ARE
NOT PRECLUDED FROM ASSERTING A PATENT INVALIDITY DEFENSE
On October 26, 1999, Plaintiff William R. Kowalski was
issued United States Patent No. 5,972,401, entitled “Process For
Manufacturing Tasteless Super-Purified Smoke For Treating Seafood
To Be Frozen And Thawed.”
On December 29, 2011, Plaintiffs Kowalski and Hawaii
International Seafood, Inc. filed the current suit for patent
infringement, false advertising and promotion pursuant to the
Lanham Act, and violation of state statutes.
In their Answers filed on May 8, 2013, Defendants Anova Food
Inc. and Anova Food, LLC pled the affirmative defense that
Plaintiffs’ patent is invalid.

There is no counterclaim in this

matter.

1

The Court requested briefing from the Parties concerning the
affirmative defense of patent invalidity.
The Court finds that Defendants Anova Food, Inc. and Anova
Food, LLC are not precluded from asserting the affirmative
defense of patent invalidity.

PROCEDURAL HISTORY
On January 2, 2012, Plaintiffs William R. Kowalski and
Hawaii International Seafood, Inc. filed the First Amended
Complaint.

(ECF No. 6).

On May 8, 2013, Defendant Anova Food, LLC filed its ANSWER
TO PLAINTIFFS’ FIRST AMENDED COMPLAINT.

(ECF No. 161).

On the same date, Defendant Anova Food, Inc. filed its
ANSWER.

(ECF No. 162).

On January 28, 2014, Defendant Anova Food, LLC filed a
Motion to Amend the Scheduling Order to permit it to file a
counterclaim for patent invalidity.

(ECF No. 269).

On February 3, 2014, the Court held a Claim Construction
Hearing.

(ECF No. 277).

At the hearing, the Court ordered the

Parties to file briefs to address the issue of whether patent
invalidity may be asserted.

(Id.)

On February 19, 2014, Defendant Anova Food, Inc. filed its
BRIEF REGARDING AFFIRMATIVE DEFENSE OF PATENT INVALIDITY.
No. 291).

2

(ECF

On the same date, Defendant Anova Food, LLC filed its BRIEF
REGARDING WHETHER PATENT INVALIDITY MAY BE ASSERTED BY
DEFENDANTS.

(ECF No. 292).

On March 6, 2014, the Magistrate Judge issued an ORDER
GRANTING IN PART AND DENYING IN PART DEFENDANT ANOVA FOOD, LLC’S
MOTION TO AMEND SCHEDULING ORDER.

(ECF No. 303).

Defendant

Anova Food, LLC’s request to extend the deadline to file a
counterclaim was denied.

(Id.)

On March 12, 2014, Plaintiffs William R. Kowalski and Hawaii
International Seafood, Inc. filed their RESPONSE.

(ECF No. 304).

On March 26, 2014, Defendant Anova Food, Inc. filed a
SUBMISSION OF RELEVANT AUTHORITY.

(ECF No. 309).

On March 28, 2014, Defendant Anova Food, LLC filed a JOINDER
IN DEFENDANT ANOVA FOOD, INC.’S SUBMISSION OF RELEVANT AUTHORITY.
(ECF No. 310).
LEGAL STANDARD
The answer must state in short and plain terms the
defendant’s defenses to each claim asserted against it.

Fed. R.

Civ. P. 8(b)(1)(A).
An affirmative defense must be pled with enough specificity
or factual particularity to give plaintiff fair notice of the
defense being advanced.

Simmons v. Navajo County, Arizona, 609

F.3d 1011, 1023 (9th Cir. 2010).
An answer cannot be used to obtain affirmative relief

3

against the plaintiff.

Ralston-Purina Co. v. Bertie, 541 F.2d

1363, 1367 (9th Cir. 1976); Schwarzer, Tashima & Wagstaffe, Fed.
Civ. Pro. Before Trial ¶ 8:1065 (2014).
must be pled for affirmative relief.

A separate counterclaim

Fed. R. Civ. P. 13.

ANALYSIS
On October 26, 1999, Plaintiff William R. Kowalski was
issued United States Patent No. 5,972,401 (“ ’401 Patent”).
’401 Patent is presumed valid.

The

35 U.S.C. § 282.

Patent invalidity may be pled as an affirmative defense.
U.S.C. § 282(b).

35

The burden of establishing invalidity of a

patent rests on the party asserting such invalidity.

Id.

A district court may, but is not required to, resolve the
issue of validity when invalidity is raised only as an
affirmative defense.

Multiform Desiccants, Inc. v. Medzam Ltd.,

133 F.3d 1473, 1481 (Fed. Cir. 1998); Hill-Rom Co., Inc. v.
Kinetic Concepts, Inc., 209 F.3d 1337, 1344 (Fed. Cir. 2000).

A

court’s invalidity ruling that is not necessary to the outcome of
the first action does not have collateral estoppel effect in any
possible future dispute between the same parties involving the
same patent.

In re Freeman, 30 F.3d 1459, 1465-67 (Fed. Cir.

1994).

4

I.

Defendants Pled Invalidity as an Affirmative Defense
Defendants Anova Food, Inc. (“Anova Inc”) and Anova Food,

LLC (“Anova LLC”) have raised invalidity as an affirmative
defense.
In its Answer, Defendant Anova Inc asserted that Plaintiffs’
patent is invalid because of indefiniteness.
Inc’s Answer at pp. 6-7, ECF No. 162).

(Defendant Anova

Defendant Anova Inc also

pled patent invalidity for obviousness in light of prior art.
(Id.)

Defendant Anova Inc also stated that its invalidity

defense was based on “the reasons set forth in Anova Inc.’s Inter
Partes Review of the ’401 Patent filed January 17, 2013 in the
U.S. Patent and Trademark Office.”

(Id.)

Defendant Anova LLC’s Answer contained the same invalidity
defense pleadings as Defendant Anova Inc’s Answer.

(Defendant

Anova LLC’s Answer at p. 6, ECF No. 161).
Defendants concede that their Answers do not contain
counterclaims.

(Defendant Anova Inc’s Brief at p. 2, ECF No.

291; Defendant Anova LLC’s Brief at p. 5).

Defendants did not

bring a timely counterclaim for invalidity and are not permitted
to bring one at this late stage in the proceedings.

(Order

Granting In Part And Denying In Part Defendant Anova Food, LLC’s
Motion To Amend Scheduling Order at p. 3-4, ECF No. 303).
The United States Court of Appeals for the Federal Circuit
has recognized that a district court may consider patent

5

invalidity when it is raised as a defense to infringement without
an accompanying counterclaim.

Boss Control, Inc. v. Bombardier

Inc., 410 F.3d 1372, 1375 (Fed. Cir. 2005).

The Federal Circuit

Court of Appeals has explained that when a district court finds a
patent was not infringed, it need not enter a judgment as to the
issue of invalidity when invalidity was only pled as an
affirmative defense.

Lighting World, Inc. v. Birchwood Lighting,

Inc., 382 F.3d 1354, 1366 (Fed. Cir. 2004); Prima Tek II, LLC v.
Polypap, S.A.R.L., 318 F.3d 1143, 1152-53 (Fed. Cir. 2003); Watts
v. XL Sys. Inc., 232 F.3d 877, 879n.1 (Fed. Cir. 2000); Multiform
Desiccants, Inc., 133 F.3d at 1481.

II.

Defendants Are Not Precluded From Raising Patent Invalidity
As A Defense
The United States Supreme Court has recognized the federal

courts’ traditional adherence to the preclusion doctrines of res
judicata and collateral estoppel.
94 (1980).

Allen v. McCurry, 449 U.S. 90,

“Under res judicata, a final judgment on the merits

of an action precludes the parties or their privies from
relitigating issues that were or could have been raised in that
action.”

Id.

“Under collateral estoppel, once a court has

decided an issue of fact or law necessary to its judgment, that
decision may preclude relitigation of the issue in a suit on a
different cause of action involving a party to the first case.”

6

Id.

These common law doctrines relieve parties of the cost and

vexation of multiple lawsuits, conserve judicial resources, and
encourage reliance on adjudication by preventing inconsistent
decisions.

Id.

Plaintiffs argue that Defendants are precluded from
asserting a patent invalidity defense because of a previous
judgment issued by another federal district court.
Defendant Anova Inc filed lawsuits against Plaintiffs in
2003 and 2004 in the U.S. District Court for the Northern
District of Georgia, Atlanta Division.

(Civ. No. 03-815BBM, Civ.

No. 03-2325WBH, Civ. No. 04-775JTC, Plaintiffs’ Exs. 1, 2, 3, ECF
No. 304).
On March 25, 2003, Defendant Anova Inc filed a complaint
against Plaintiffs in the U.S. District Court for the Northern
District of Georgia, Atlanta Division in Civ. No. 03-0815BBM.
(Plaintiffs’ Ex. 1, ECF No. 304).

On August 21, 2003, Judgment

was issued in Civ. No. 03-0815BBM.

The case was dismissed for

Anova Inc’s “failure to execute service of process pursuant to
Local Rule 41.2(B).”

(Id.)

On August 1, 2003, Defendant Anova Inc filed a second
complaint against Plaintiffs in the U.S. District Court for the
Northern District of Georgia, Atlanta Division in Civ. No. 032325WBH.

(Plaintiffs’ Ex. 2, ECF No. 304).

On December 30,

2003, Judgment was issued in Civ. No. 03-2325WBH.

7

Once again the

same court ruled the case was “dismissed without prejudice for
failure to effectuate service of process pursuant to LR 41.2(B)
and Fed. R. Civ. P. 4.”

(Id.)

On March 18, 2004, Defendant Anova Inc filed a third
complaint against Plaintiffs in the same U.S. District Court for
the Northern District of Georgia, Atlanta Division in Civ. No.
04-0775JTC.

(Plaintiffs’ Ex. 3, ECF No. 304).

Plaintiffs rely

on the Judgment issued by the federal court in the third lawsuit,
Civ. No. 04-775, to argue that Defendants are precluded from
bringing an invalidity defense.
The Judgment in Civ. No. 04-775 dismissed Anova Inc’s action
“for failure to prosecute” pursuant to Federal Rule of Civil
Procedure 41(b) and Local Rule 41.3(A)(3).

(Id.)

Federal Rule

of Civil Procedure 41(b) provides for involuntary dismissals when
the plaintiff fails to prosecute.

Local Rule 41.3(A)(3) for the

District Court for the Northern District of Georgia, Atlanta
Division permits dismissal when the case has been pending for
more than six months without substantial proceedings on the
record.

Plaintiffs assert that the dismissal in Civ. No. 04-775

has claim preclusive effect because the dismissal, pursuant to
Federal Rule of Civil Procedure 41(b), was an “adjudication on
the merits.”
In Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497,
501-02 (2001), the United States Supreme Court considered the

8

effect of a dismissal pursuant to Rule 41(b).

The United States

Supreme Court held that an “adjudication on the merits” pursuant
to Rule 41(b) does not necessarily have preclusive effect in
other courts.

Id. at 503.

Only a judgment that “actually passes

directly on the substance of a particular claim before the court
... triggers the doctrine of res judicata or claim preclusion.”
Id. at 501-02; see Headwaters Inc. v. U.S. Forest Service, 399
F.3d 1047, 1053n.4 (9th Cir. 2005) (recognizing that a dismissal
with prejudice pursuant to Rule 41 may not have claim preclusive
effect in another court).
The Judgment in Civ. No. 04-775 did not rule directly on the
substance of Defendants’ claim that the ’401 Patent is invalid.
The dismissal pursuant to the Atlanta federal district court’s
Local Rule demonstrates that dismissal was not based on the
substance of the claim but was entered because the case was
pending for more than six months without any substantial
proceedings of record.

U.S. District Court for the Northern

District of Georgia, Atlanta Division L.R. 41.3(A)(3).

The

Judgment itself states that dismissal was issued due to Anova
Inc’s “failure to prosecute.”

(Plaintiffs’ Ex. 3, ECF No. 304).

The federal district court did not consider the substance of
Anova Inc’s invalidity claim.
Defendants are not precluded from asserting the affirmative
defense of invalidity.

The Judgment issued by the District Court

9

for the Northern District of Georgia, Atlanta Division in Civ.
No. 04-775 does not bar Defendants from asserting a patent
invalidity defense in this Court.

Semtek Int’l Inc., 531 U.S. at

501-03.

CONCLUSION
Defendants pled patent invalidity as an affirmative defense.
Defendants are not precluded from raising the defense that the
’401 Patent is invalid.

IT IS SO ORDERED.
Dated:

May 14, 2014, Honolulu, Hawaii.

/s/ Helen Gillmor
Helen Gillmor
United States District Judge

William R. Kowalski; Hawaii International Seafood, Inc., v. Anova
Food, LLC; Anova Food, Inc.; Clearsmoke Technologies, LTD; Does
1-10, Civil No. 11-00795HG-RLP; ORDER FINDING DEFENDANTS ANOVA
FOOD, INC. AND ANOVA FOOD, LLC ARE NOT PRECLUDED FROM ASSERTING A
PATENT INVALIDITY DEFENSE
10

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
WILLIAM R. KOWALSKI; HAWAII
INTERNATIONAL SEAFOOD, INC.,

)
)
)
Plaintiffs,
)
)
)
vs.
)
)
ANOVA FOOD, LLC; ANOVA FOOD,
INC.; CLEARSMOKE TECHNOLOGIES, )
)
LTD; and DOES 1-10,
)
)
)
Defendants.
_______________________________ )

Civil NO. 11-00795HG-RLP

ORDER FINDING DEFENDANTS ANOVA FOOD, INC. AND ANOVA FOOD, LLC ARE
NOT PRECLUDED FROM ASSERTING A PATENT INVALIDITY DEFENSE
On October 26, 1999, Plaintiff William R. Kowalski was
issued United States Patent No. 5,972,401, entitled “Process For
Manufacturing Tasteless Super-Purified Smoke For Treating Seafood
To Be Frozen And Thawed.”
On December 29, 2011, Plaintiffs Kowalski and Hawaii
International Seafood, Inc. filed the current suit for patent
infringement, false advertising and promotion pursuant to the
Lanham Act, and violation of state statutes.
In their Answers filed on May 8, 2013, Defendants Anova Food
Inc. and Anova Food, LLC pled the affirmative defense that
Plaintiffs’ patent is invalid.

There is no counterclaim in this

matter.

1

The Court requested briefing from the Parties concerning the
affirmative defense of patent invalidity.
The Court finds that Defendants Anova Food, Inc. and Anova
Food, LLC are not precluded from asserting the affirmative
defense of patent invalidity.

PROCEDURAL HISTORY
On January 2, 2012, Plaintiffs William R. Kowalski and
Hawaii International Seafood, Inc. filed the First Amended
Complaint.

(ECF No. 6).

On May 8, 2013, Defendant Anova Food, LLC filed its ANSWER
TO PLAINTIFFS’ FIRST AMENDED COMPLAINT.

(ECF No. 161).

On the same date, Defendant Anova Food, Inc. filed its
ANSWER.

(ECF No. 162).

On January 28, 2014, Defendant Anova Food, LLC filed a
Motion to Amend the Scheduling Order to permit it to file a
counterclaim for patent invalidity.

(ECF No. 269).

On February 3, 2014, the Court held a Claim Construction
Hearing.

(ECF No. 277).

At the hearing, the Court ordered the

Parties to file briefs to address the issue of whether patent
invalidity may be asserted.

(Id.)

On February 19, 2014, Defendant Anova Food, Inc. filed its
BRIEF REGARDING AFFIRMATIVE DEFENSE OF PATENT INVALIDITY.
No. 291).

2

(ECF

On the same date, Defendant Anova Food, LLC filed its BRIEF
REGARDING WHETHER PATENT INVALIDITY MAY BE ASSERTED BY
DEFENDANTS.

(ECF No. 292).

On March 6, 2014, the Magistrate Judge issued an ORDER
GRANTING IN PART AND DENYING IN PART DEFENDANT ANOVA FOOD, LLC’S
MOTION TO AMEND SCHEDULING ORDER.

(ECF No. 303).

Defendant

Anova Food, LLC’s request to extend the deadline to file a
counterclaim was denied.

(Id.)

On March 12, 2014, Plaintiffs William R. Kowalski and Hawaii
International Seafood, Inc. filed their RESPONSE.

(ECF No. 304).

On March 26, 2014, Defendant Anova Food, Inc. filed a
SUBMISSION OF RELEVANT AUTHORITY.

(ECF No. 309).

On March 28, 2014, Defendant Anova Food, LLC filed a JOINDER
IN DEFENDANT ANOVA FOOD, INC.’S SUBMISSION OF RELEVANT AUTHORITY.
(ECF No. 310).
LEGAL STANDARD
The answer must state in short and plain terms the
defendant’s defenses to each claim asserted against it.

Fed. R.

Civ. P. 8(b)(1)(A).
An affirmative defense must be pled with enough specificity
or factual particularity to give plaintiff fair notice of the
defense being advanced.

Simmons v. Navajo County, Arizona, 609

F.3d 1011, 1023 (9th Cir. 2010).
An answer cannot be used to obtain affirmative relief

3

against the plaintiff.

Ralston-Purina Co. v. Bertie, 541 F.2d

1363, 1367 (9th Cir. 1976); Schwarzer, Tashima & Wagstaffe, Fed.
Civ. Pro. Before Trial ¶ 8:1065 (2014).
must be pled for affirmative relief.

A separate counterclaim

Fed. R. Civ. P. 13.

ANALYSIS
On October 26, 1999, Plaintiff William R. Kowalski was
issued United States Patent No. 5,972,401 (“ ’401 Patent”).
’401 Patent is presumed valid.

The

35 U.S.C. § 282.

Patent invalidity may be pled as an affirmative defense.
U.S.C. § 282(b).

35

The burden of establishing invalidity of a

patent rests on the party asserting such invalidity.

Id.

A district court may, but is not required to, resolve the
issue of validity when invalidity is raised only as an
affirmative defense.

Multiform Desiccants, Inc. v. Medzam Ltd.,

133 F.3d 1473, 1481 (Fed. Cir. 1998); Hill-Rom Co., Inc. v.
Kinetic Concepts, Inc., 209 F.3d 1337, 1344 (Fed. Cir. 2000).

A

court’s invalidity ruling that is not necessary to the outcome of
the first action does not have collateral estoppel effect in any
possible future dispute between the same parties involving the
same patent.

In re Freeman, 30 F.3d 1459, 1465-67 (Fed. Cir.

1994).

4

I.

Defendants Pled Invalidity as an Affirmative Defense
Defendants Anova Food, Inc. (“Anova Inc”) and Anova Food,

LLC (“Anova LLC”) have raised invalidity as an affirmative
defense.
In its Answer, Defendant Anova Inc asserted that Plaintiffs’
patent is invalid because of indefiniteness.
Inc’s Answer at pp. 6-7, ECF No. 162).

(Defendant Anova

Defendant Anova Inc also

pled patent invalidity for obviousness in light of prior art.
(Id.)

Defendant Anova Inc also stated that its invalidity

defense was based on “the reasons set forth in Anova Inc.’s Inter
Partes Review of the ’401 Patent filed January 17, 2013 in the
U.S. Patent and Trademark Office.”

(Id.)

Defendant Anova LLC’s Answer contained the same invalidity
defense pleadings as Defendant Anova Inc’s Answer.

(Defendant

Anova LLC’s Answer at p. 6, ECF No. 161).
Defendants concede that their Answers do not contain
counterclaims.

(Defendant Anova Inc’s Brief at p. 2, ECF No.

291; Defendant Anova LLC’s Brief at p. 5).

Defendants did not

bring a timely counterclaim for invalidity and are not permitted
to bring one at this late stage in the proceedings.

(Order

Granting In Part And Denying In Part Defendant Anova Food, LLC’s
Motion To Amend Scheduling Order at p. 3-4, ECF No. 303).
The United States Court of Appeals for the Federal Circuit
has recognized that a district court may consider patent

5

invalidity when it is raised as a defense to infringement without
an accompanying counterclaim.

Boss Control, Inc. v. Bombardier

Inc., 410 F.3d 1372, 1375 (Fed. Cir. 2005).

The Federal Circuit

Court of Appeals has explained that when a district court finds a
patent was not infringed, it need not enter a judgment as to the
issue of invalidity when invalidity was only pled as an
affirmative defense.

Lighting World, Inc. v. Birchwood Lighting,

Inc., 382 F.3d 1354, 1366 (Fed. Cir. 2004); Prima Tek II, LLC v.
Polypap, S.A.R.L., 318 F.3d 1143, 1152-53 (Fed. Cir. 2003); Watts
v. XL Sys. Inc., 232 F.3d 877, 879n.1 (Fed. Cir. 2000); Multiform
Desiccants, Inc., 133 F.3d at 1481.

II.

Defendants Are Not Precluded From Raising Patent Invalidity
As A Defense
The United States Supreme Court has recognized the federal

courts’ traditional adherence to the preclusion doctrines of res
judicata and collateral estoppel.
94 (1980).

Allen v. McCurry, 449 U.S. 90,

“Under res judicata, a final judgment on the merits

of an action precludes the parties or their privies from
relitigating issues that were or could have been raised in that
action.”

Id.

“Under collateral estoppel, once a court has

decided an issue of fact or law necessary to its judgment, that
decision may preclude relitigation of the issue in a suit on a
different cause of action involving a party to the first case.”

6

Id.

These common law doctrines relieve parties of the cost and

vexation of multiple lawsuits, conserve judicial resources, and
encourage reliance on adjudication by preventing inconsistent
decisions.

Id.

Plaintiffs argue that Defendants are precluded from
asserting a patent invalidity defense because of a previous
judgment issued by another federal district court.
Defendant Anova Inc filed lawsuits against Plaintiffs in
2003 and 2004 in the U.S. District Court for the Northern
District of Georgia, Atlanta Division.

(Civ. No. 03-815BBM, Civ.

No. 03-2325WBH, Civ. No. 04-775JTC, Plaintiffs’ Exs. 1, 2, 3, ECF
No. 304).
On March 25, 2003, Defendant Anova Inc filed a complaint
against Plaintiffs in the U.S. District Court for the Northern
District of Georgia, Atlanta Division in Civ. No. 03-0815BBM.
(Plaintiffs’ Ex. 1, ECF No. 304).

On August 21, 2003, Judgment

was issued in Civ. No. 03-0815BBM.

The case was dismissed for

Anova Inc’s “failure to execute service of process pursuant to
Local Rule 41.2(B).”

(Id.)

On August 1, 2003, Defendant Anova Inc filed a second
complaint against Plaintiffs in the U.S. District Court for the
Northern District of Georgia, Atlanta Division in Civ. No. 032325WBH.

(Plaintiffs’ Ex. 2, ECF No. 304).

On December 30,

2003, Judgment was issued in Civ. No. 03-2325WBH.

7

Once again the

same court ruled the case was “dismissed without prejudice for
failure to effectuate service of process pursuant to LR 41.2(B)
and Fed. R. Civ. P. 4.”

(Id.)

On March 18, 2004, Defendant Anova Inc filed a third
complaint against Plaintiffs in the same U.S. District Court for
the Northern District of Georgia, Atlanta Division in Civ. No.
04-0775JTC.

(Plaintiffs’ Ex. 3, ECF No. 304).

Plaintiffs rely

on the Judgment issued by the federal court in the third lawsuit,
Civ. No. 04-775, to argue that Defendants are precluded from
bringing an invalidity defense.
The Judgment in Civ. No. 04-775 dismissed Anova Inc’s action
“for failure to prosecute” pursuant to Federal Rule of Civil
Procedure 41(b) and Local Rule 41.3(A)(3).

(Id.)

Federal Rule

of Civil Procedure 41(b) provides for involuntary dismissals when
the plaintiff fails to prosecute.

Local Rule 41.3(A)(3) for the

District Court for the Northern District of Georgia, Atlanta
Division permits dismissal when the case has been pending for
more than six months without substantial proceedings on the
record.

Plaintiffs assert that the dismissal in Civ. No. 04-775

has claim preclusive effect because the dismissal, pursuant to
Federal Rule of Civil Procedure 41(b), was an “adjudication on
the merits.”
In Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497,
501-02 (2001), the United States Supreme Court considered the

8

effect of a dismissal pursuant to Rule 41(b).

The United States

Supreme Court held that an “adjudication on the merits” pursuant
to Rule 41(b) does not necessarily have preclusive effect in
other courts.

Id. at 503.

Only a judgment that “actually passes

directly on the substance of a particular claim before the court
... triggers the doctrine of res judicata or claim preclusion.”
Id. at 501-02; see Headwaters Inc. v. U.S. Forest Service, 399
F.3d 1047, 1053n.4 (9th Cir. 2005) (recognizing that a dismissal
with prejudice pursuant to Rule 41 may not have claim preclusive
effect in another court).
The Judgment in Civ. No. 04-775 did not rule directly on the
substance of Defendants’ claim that the ’401 Patent is invalid.
The dismissal pursuant to the Atlanta federal district court’s
Local Rule demonstrates that dismissal was not based on the
substance of the claim but was entered because the case was
pending for more than six months without any substantial
proceedings of record.

U.S. District Court for the Northern

District of Georgia, Atlanta Division L.R. 41.3(A)(3).

The

Judgment itself states that dismissal was issued due to Anova
Inc’s “failure to prosecute.”

(Plaintiffs’ Ex. 3, ECF No. 304).

The federal district court did not consider the substance of
Anova Inc’s invalidity claim.
Defendants are not precluded from asserting the affirmative
defense of invalidity.

The Judgment issued by the District Court

9

for the Northern District of Georgia, Atlanta Division in Civ.
No. 04-775 does not bar Defendants from asserting a patent
invalidity defense in this Court.

Semtek Int’l Inc., 531 U.S. at

501-03.

CONCLUSION
Defendants pled patent invalidity as an affirmative defense.
Defendants are not precluded from raising the defense that the
’401 Patent is invalid.

IT IS SO ORDERED.
Dated:

May 14, 2014, Honolulu, Hawaii.

/s/ Helen Gillmor
Helen Gillmor
United States District Judge

William R. Kowalski; Hawaii International Seafood, Inc., v. Anova
Food, LLC; Anova Food, Inc.; Clearsmoke Technologies, LTD; Does
1-10, Civil No. 11-00795HG-RLP; ORDER FINDING DEFENDANTS ANOVA
FOOD, INC. AND ANOVA FOOD, LLC ARE NOT PRECLUDED FROM ASSERTING A
PATENT INVALIDITY DEFENSE
10