Pressure Specialist, Inc. v. Next Gen Manufacturing Inc.

Filing 33

MEMORANDUM Opinion and Order Signed by the Honorable Amy J. St. Eve on 1/24/2018:Mailed notice(kef, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
PRESSURE SPECIALIST, INC.,
Plaintiff,
v.
NEXT GEN MANUFACTURING, INC.,

Defendant.

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Case No. 17-CV-6582
Hon. Amy J. St. Eve

MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Court Judge:
On September 12, 2017, Plaintiff Pressure Specialist, Inc. (“PSI”) brought the present
Complaint against Defendant Next Gen Manufacturing (“Next Gen”) alleging patent
infringement. Before the Court is Next Gen’s motion to dismiss Count I brought pursuant to
Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the Court denies
Defendant’s motion to dismiss.
BACKGROUND
In this Complaint, Plaintiff asserts a patent infringement claim alleging that Defendant
has infringed on Plaintiff’s United State Patent No. 6,851,447, entitled “Direct Acting Gas
Regulator” (hereinafter the “’447 Patent”), and United State Patent No. 7,059,343 (hereinafter
the “’343 Patent”).1 (R. 1, Compl.) Plaintiff is an Illinois corporation with its principal place of
business in Crystal Lake, Illinois, and it is in the business of designing, developing,
manufacturing, and selling hoses, fittings, regulators, fill stations, and accessories for paintball,

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Both patents are attached to Plaintiff’s Complaint as Exhibit A and Exhibit B.

air-gun, and related industries. (Id. ¶¶ 1, 5.) Plaintiff has designed and holds 12 patents covering
paintball products. (Id. ¶ 5.) Defendant is an Illinois corporation with its principal place of
business in Elgin, Illinois. (Id. ¶ 2.)
Plaintiff alleges that Defendant infringed on Plaintiff’s patent by manufacturing and
selling a paintball regulator called the PowerHouse Competition Regulator (the “Regulator”).
(Id. ¶ 6.) A paintball regulator is a device that regulates the pressure of the air entering a
paintball gun by cutting off the air source when the pressure in the regulator chamber reaches a
certain pressure. (Id. ¶ 7.) ASTM is an international standards organization that publishes
technical standards for a wide range of materials and products, and Plaintiff’s regulators are
ASTM-compliant. (Id.) Plaintiff alleges that Jeff Schreiber, Plaintiff’s former employee, who
worked on Plaintiff’s research and development teams and had access to confidential information
regarding Plaintiff’s products, began working with Defendant to promote and sell the Regulator
at issue after Plaintiff terminated him. (Id. ¶¶ 8-9.) Plaintiff brought a pending state court
lawsuit against Schreiber for breach of non-competition and confidentiality agreements. (Id. ¶
9.)
In Count I, Plaintiff alleges that it is the owner of all rights, titles, and interests in the
‘447 Patent, a valid, enforceable patent, including the right to exclude others and to enforce, sue,
and recover damages for past and future infringement. (Id. ¶¶ 12-13.) Plaintiff alleges that
Defendant directly infringed and continues to infringe on the ‘447 Patent through its production
and sale of the Regulator. (Id. ¶ 14.) Claim 1 of the ‘447 Patent recites: a direct acting pressure
regulator comprised of the following: (1) a body with a high pressure inlet and defining a seat,
with a guide sleeve therein; (2) an bonnet with a regulated gas outlet and a body guide sleeve
extending into the piston chamber; (3) a piston disposed within the piston chamber and in the

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guide sleeve that is movable between open and closed regulator conditions and that has a sealing
element formed of resilient materials; (4) a spring disposed in the piston chamber for urging the
piston to the open regulator condition; (5) a first seal disposed between the sealing element and
the piston chamber at about the guide sleeve; (6) a second seal disposed between the
impingement surface and the piston chamber; and (7) a pin valve disposed in the central
longitudinal bore of the piston. (Id. ¶ 15.)
Plaintiff alleges that the Regulator, Defendant’s product, has a body with a high pressure
inlet and a guide sleeve. (Id. ¶¶ 16-18.) It also has a bonnet with a low pressure side outlet that
is threaded onto the body to define a piston chamber. (Id. ¶¶ 19-20.) The Regulator also has a
piston disposed within the piston chamber and in part in the guide sleeve. (Id. ¶ 21.) Plaintiff
alleges that the bonnet of the Regulator has a stop surface that stops movement out of the piston.
(Id. ¶ 22.) The Regulator includes a gap between the piston and the piston chamber wall and the
piston moves between open position and closed position. (Id. ¶¶ 23-24.) Plaintiff alleges that
the Regulator’s piston includes a support in which the resilient ball is positioned and this support
has openings that open into a bore in the piston. (Id. ¶¶ 25-26.) The piston also includes a
shoulder that engages the bonnet stop surface. (Id. ¶ 27.) A spring is positioned on the piston
within the chamber that urges the resilient ball of the seat. (Id. ¶ 28.) The Regulator also has an
O-ring seal on the piston and a pin valve on the piston bore. (Id. ¶¶ 29-30.) Plaintiff alleges that
the Regulator infringes on Patent 447 causing damages to Plaintiff. (Id. ¶¶ 31-35.)
In Count II, Plaintiff alleges that it is the owner of all right, title, and interest in the ‘343
Patent, a valid, enforceable patent, including the right to exclude others and to enforce, sue, and
recover damages for past and future infringement. (Id. ¶¶ 38-39.) Plaintiff alleges that
Defendant directly infringed and continues to infringe on the ‘343 Patent through its production

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and sale of the Regulator. (Id. ¶ 40.) Claim 1 of the ‘343 Patent recites: a direct acting pressure
regulator comprised of the following: (1) a body with a high pressure inlet and defining a seat;
(2) a bonnet that engages with the body to define a piston chamber within the body and the
bonnet and with a regulated gas outlet; (3) a piston disposed within the piston chamber and
defining a gap between the piston and the wall defining the chamber and capable of moving
between open and closed regulator conditions and that has a plug with a sealing element that
engages with the seat; (4) a spring for urging the piston to the open regulator condition; and (5) a
pin valve disposed in the central longitudinal bore of the piston. (Id. ¶ 41.) The Regulator piston
has a plug in which a sealing element is positioned with radial opening that open into a bore in
the piston. (Id. ¶¶ 42-43.) Plaintiff alleges that the Regulator infringes on the ‘343 Patent
causing damages to Plaintiff. (Id. ¶¶ 44-47.)

LEGAL STANDARD
Even in patent cases, the Court looks to Seventh Circuit law for the standard governing
motions to dismiss under Rule 12(b)(6). See Lyda v. CBS Corp., 838 F.3d 1331, 1337 (Fed. Cir.
2016); see also Alfred E. Mann Found. for Sci. Res. v. Cochlear Corp., 841 F.3d 1334, 1346
(Fed. Cir. 2016). “A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6)
challenges the viability of a complaint by arguing that it fails to state a claim upon which relief
may be granted.” Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736 (7th Cir. 2014).
Under Rule 8(a)(2), a complaint must include “a short and plain statement of the claim showing
that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). The short and plain statement under
Rule 8(a)(2) must “give the defendant fair notice of what the claim is and the grounds upon
which it rests.” Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007) (citation omitted). Under
the federal notice pleading standards, a plaintiff’s “factual allegations must be enough to raise a
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right to relief above the speculative level.” Twombly, 550 U.S. at 555. Put differently, 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, 556 U.S. 662, 678 (2009) (quoting Twombly, 550
U.S. at 570).
In determining the sufficiency of a complaint under the plausibility standard, courts must
“accept all well-pleaded facts as true and draw reasonable inferences in the plaintiffs’ favor.”
Roberts v. City of Chicago, 817 F.3d 561, 564 (7th Cir. 2016). Some of the facts the Court
references come from exhibits attached to the complaint. The Court may properly consider such
attachments in ruling on a Rule 12(b)(6) motion to dismiss. See Phillips v. Prudential Ins. Co. of
Am., 714 F.3d 1017, 1019–20 (7th Cir. 2013); McWorthey v. Tech. Ins. Co., No. 15-cv-5021,
2016 WL 4398063, at *3 n.3 (N.D. Ill. Aug. 18, 2016). When the exhibits contradict the
allegations, “the exhibits trump the allegations.” See Abcarian v. McDonald, 617 F.3d 931, 933
(7th Cir. 2010); McWorthey, 2016 WL 4398063, at *3 n.3.
ANALYSIS
U.S. Code Title 35, Section 271(a) governs direct patent infringement and provides that
“whoever without authority makes, uses, offers to sell, or sells any patented invention, within the
United States . . . during the term of the patent therefor, infringes the patent.” 35 U.S.C. §
271(a). “To prove infringement, the patentee must show that an accused product embodies all
limitations of the claim [that the patentee alleges the defendant infringed] either literally or by
the doctrine of equivalents.” Cephalon, Inc. v. Watson Pharm., Inc., 707 F.3d 1330, 1340 (Fed.
Cir. 2013); see also Profectus Tech. LLC v. Huawei Techs. Co., 823 F.3d 1375, 1382 (Fed. Cir.
2016) (“The infringement inquiry asks if an accused device contains every claim limitation or its
equivalent.”). “To establish literal infringement, every limitation set forth in a claim must be

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found in an accused product, exactly.” Advanced Steel Recovery, LLC v. X-Body Equip., Inc.,
808 F.3d 1313, 1319 (Fed. Cir. 2015) (quoting Southwall Techs., Inc. v. Cardinal IG Co., 54
F.3d 1570, 1575 (Fed. Cir. 1995)).
Courts applying the Twombly-Iqbal standard to patent infringement claims have required
plaintiffs to set forth sufficient facts to plausibly allege that the accused product embodies every
limitation in a particular asserted claim. See, e.g., Scripps Res. Inst. v. Illumina, Inc., No. 16-cv661 JLS (BGS), 2016 WL 6834024, at *4 (S.D. Cal. Nov. 21, 2016); Atlas IP, LLC v. Exelon
Corp., 189 F. Supp. 3d 768, 775 (N.D. Ill. 2016). This requirement flows naturally from the
Twombly/Iqbal standard and the burden of proof in a patent infringement case “because ‘the
failure to meet a single limitation is sufficient to negate infringement of [a] claim.’” e.Digital
Corp. v. iBaby Labs, Inc., No. 15-CV-05790-JST, 2016 WL 4427209, at *3 (N.D. Cal. Aug. 22,
2016) (alteration in original) (quoting Laitram Corp v. Rexnord, Inc., 939 F.2d 1533, 1535 (Fed.
Cir. 1991)).
Here, to prevail on its infringement claim, Plaintiff will have to show that the Regulator
meets the guide sleeve limitation of the claim because, as noted above, “[d]irect infringement . .
. requires that each and every limitation set forth in a claim appear in an accused product.”
LifeNet Health v. LifeCell Corp., 837 F.3d 1316, 1325 (Fed. Cir. 2016) (citation and quotation
marks omitted)). Plaintiff, however, does not need to prove its case at the pleading stage. In re
Bill of Lading Transmission & Processing Sys. Patent Litig. (“Bill of Lading”), 681 F.3d 1323,
1339-40 (Fed. Cir. 2012) (observing that the Twombly/Iqbal pleading standard “does not mean . .
. [plaintiff] must prove its case at the pleading stage” and reversing Rule 12(b)(6) dismissal of
induced infringement claim).

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Indeed, the U.S. Court of Appeals for the Federal Circuit has cautioned against
construing claim language to resolve, at the pleading stage, what are effectively noninfringement arguments. In Bill of Lading, 681 F.3d at 1343 n.13, for example, the Federal
Circuit reversed a court’s dismissal of a patent infringement claim and stated that in deciding
motions to dismiss, a court should not “base[ ] its assessment of the ‘reasonableness’ of a given
inference of infringement on a narrow construction of the patent’s claims,” in part because
“claim construction at the pleading stage—with no claim construction processes undertaken”—is
“inappropriate.” See also Novartis Pharm. Corp. v. Actavis, Inc., No. 12-366-RGA, 2012 WL
6212619, at *7-8 (D. Del. Dec. 5, 2012) (discussing rationale for not resolving claim
construction and non-infringement arguments at pleading stage).
In line with this principle, district courts have “repeatedly held that if a court is required
to construe the meaning of claim terms and perform an infringement analysis in order to resolve
a motion to dismiss . . . the motion should be denied, because this type of analysis is
inappropriate at the pleading stage.” Id. at *7 (collecting cases). “These courts have reasoned
that it is unsuitable to engage in such an inquiry at the pleading stage, because claim construction
can be illuminated by the consideration of extrinsic evidence-evidence that is often not before the
court at that stage.” Id. These courts have also “note[d] that a claim construction analysis at the
pleading stage does not benefit from the procedures (including . . . the exchange of proposed
constructions and extensive briefing) that typically precede a Markman hearing.” Id. See also
Midwest Innovative Prod., LLC v. Kinamor, Inc., No. 16 CV 11005, 2017 WL 2362571, at *4
(N.D. Ill. May 31, 2017) (refusing to dismiss infringement claim because “claims are afforded
‘their broadest possible construction’ at the pleading stage” and the parties had not yet developed
claim construction issues) (internal quotation omitted); Lecat’s Ventriloscope v. MT Tool &

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Mfg., No. 16 C 5298, 2017 WL 1362036, at *4 (N.D. Ill. Jan. 6, 2017) (refusing to dismiss
infringement claim because it “would be inappropriate to . . . engage in infringement analysis at
the pleading stage” and plaintiff plausibly alleged that accused product included all elements of
patent); Fujitsu Ltd. v. Belkin Int’l, Inc., 782 F. Supp. 2d 868, 890 (N.D. Cal. 2011) (same).
Here, the ‘447 Patent includes the following elements: (1) a body; (2) a bonnet; (3) a
piston; (4) a spring; (5) a first seal; (6) a second seal; and (7) a pin valve. (Compl., Ex. A, ‘447
Patent 7.) The Patent states, in relevant part, that the bonnet contains a “body guide sleeve
extending into the piston chamber” and that the piston is “disposed within the piston chamber
and in part in the guide sleeve.” (Id.) The Patent also contains three figures, pictured below, and
labelled Figures 1, 2, and 3:

FIGURE 1

FIGURE 2
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FIGURE 3

(Id. 3-4.) In its Complaint, Plaintiff alleges that the body of Defendant’s product, the Regulator,
“has a guide sleeve.” (Compl. ¶ 18.)
Despite the language in the ‘447 Patent and Plaintiff’s allegations, Defendant argues that
the Court should dismiss Count I because Plaintiff has failed to sufficiently allege that the
Regulator contains a guide sleeve and that in fact, the Regulator does not contain a guide sleeve.
Defendant’s primary argument is that Figure 1 and Figure 2 are the actual representations of the
product the ‘447 Patent protects, and Figure 3 is “an unclaimed embodiment of a regulator
without a guide sleeve.” (Def.’s Mot. to Dismiss 3.) Defendant argues that Figures 1 and 2
show a U-shaped guide sleeve (at part 57 in Figure 1) that is not present in the Regulator,2 and
thus Plaintiff has not stated an infringement claim.3

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Defendant provides photographs in its Motion to Dismiss that it purports show that the Regulator does
not infringe on the ‘447 Patent. The Court, however, will not consider new allegations, documents, or
photographs presented along with its Motion to Dismiss because in a 12(b)(6) challenge, “[t]he attack is
on the sufficiency of the complaint, and the defendant cannot set or alter the terms of the dispute, but
must demonstrate that the plaintiff's claim, as set forth by the complaint, is without legal consequence.”
Smith v. Burge, 222 F. Supp. 3d 669, 691 (N.D. Ill. 2016) (quoting Gomez v. Ill. State Bd. of Educ., 811
F.2d 1030, 1039 (7th Cir. 1987)).
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Defendant also argues, without any citation, that the “differentiating feature of the two patents, and thus,
of the two claims, is whether the presence of a guide sleeve is required for infringement.” (Def.’s Mot. to
Dismiss 2.) As Plaintiff notes, this claim is incorrect—the ‘447 Patent and the ‘343 Patent have several

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Defendant’s arguments are unavailing. First, as Plaintiff notes in response, the ‘447
Patent provides that Figure 3 is “an alternate embodiment of the direct acting gas regulator” that
is “similar to the embodiment” in Figures 1 and 2 and that, outside of a difference between the
coil spring and ball in the figures, the remaining portions “are identical or similar” in Figures 1,
2, and 3. (‘447 Patent 4.) Based on this language, even if the Regulator at issue is more similar
to the regulator in Figure 3—which Plaintiff claims does not have a guide sleeve and Defendant
claims has a L-shaped guide sleeve as opposed to a U-shaped guide sleeve—at this stage, the
Court cannot find that it is not covered by the ‘447 Patent because the ‘447 Patent explicitly
states that the regulator in Figure 3 is an alternate embodiment of the covered regulator.
Second, and more importantly, it is premature for the Court to make an infringement
determination at this stage. As the court stated in Kinamor, 2017 WL 2362571, at *4, “claims
are afforded ‘their broadest possible construction’ at the pleading stage.” Here, Plaintiff has
provided the ‘447 Patent, and Plaintiff has alleged that Defendant’s product, the Regulator,
contains the elements discussed in the ‘447 Patent, including the guide sleeve. (Compl. ¶ 18.)
Plaintiff need not “prove its case at the pleading stage,” and as such, viewing the allegations in
Plaintiff’s favor, Plaintiff has sufficiently alleged an infringement claim. Bill of Lading, 681 F.3d
at 1339-40. In line with the cases discussed above, the Court will not “engage in an infringement
analysis at the pleading stage” or attempt to analyze—before any claim construction—the scope
of the patent or the differences between the Regulator and Plaintiff’s regulator. Lecat’s
Ventriloscope, 2017 WL 1362036, at *4; see also Novartis, 2012 WL 6212619, at *7-8 (refusing

differences, including the first seal and second seal elements required in the ‘447 Patent. Regardless,
those differences are irrelevant, as Defendant has only moved to dismiss Count I, regarding the ‘447
Patent, and thus, the Court only considers the ‘447 Patent.

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to dismiss because it would be inappropriate to “construe the meaning of claim terms and
perform an infringement analysis” at the pleading stage).
CONCLUSION
For these reasons, the Court denies Defendant’s motion to dismiss Count I.
Dated: January 24, 2018
ENTERED

______________________________
AMY J. ST. EVE
United States District Court Judge

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