Leitner-Wise v. LWRC International, LLC et al
MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 2/28/2017. (aos, Deputy Clerk)
IN TIlE UNITED STATES I)ISTRICT COURT
FOR Tin: I)ISTRICT OF MARYLAND
PAUL ANDREW LEITNER-WISE,
Case No,: G.IH-16-2.BO
LWRC INTERNATIONAL, LLC, l'f :11.,
Plainti IT Paul Andrcw
and unjust cnrichmcnt
Systcm I()r a Fircarm."
Motion to Dismiss,
I.I.C ("I. WRC!"') and Sig Saucr, Inc. ("Sig Saucr") allcging patcnt infi'ingcmcnl.
Lcitncr- Wisc brings this casc against Dcfcndants
hcaring is unnccessary.
in rclation to his 200-1 invcntion
ECF NO.1. Pcnding bcl()rc the Court arc Dcfendant
ECF No. 1-1.and Dcfcndant
Motion to Dismiss. or in thc
ECF No. 15. Thcse issucs have bccn fully bricfed and a
Loc. R. 105.0 (D. Md. 2016). For thc rcasons statcd belo\\', thc Court "ill
Sig Saucr. Inc.'s Motion to Dismiss in full and Delendant
I.WRC.Ts Motion to
Dismiss as it rclatcs to thc patcnt inli'ingcmcn!
thc Court will convcr!
".ith rcspcct to thc brcach of
Motion to Dismiss into a Motionl()f'
contract and unjust cnrichmcnt
as to thosc claims.
claims. and will grant LWRCI's
Motion I()f' Summary
In 2004. PlaintilTcrcatcd
Systcm It)r a Fircarm:'
regulating short-stroKc piston operating systcm ItH AR-15 typc sell~Ioading rilles. and was
awarded a patent It)r his inyelJlion by the U.S. Patcnt Oflicc (..thc .581 patcnt").
ECF NO.1 '119: ECF NO.1-I.
Inc. ("L WRC).
Plaintiff founded a company named Leitncr-Wise
which he then sold in 2005. ECF NO.1
On April 11.2005.
was rctaincd by LWRC as an exccutivc and cntcrcd into an cmploymcnt
terms of thcir relationship.
ECF NO.1 at
agreemcnt delining thc
22: see a/so ECF No. 1-2. The cmploymcnt
containcd a proyision aCKnowledging that Plaintiff had
dcvclopcd ccrtain Intelicctual Propcrty prior to thc execution of this Agrcement
which Employer dcsires to cxcrcisc owncrship rights .... Employcr will separatcly
pay a royalty of onc half of one pcrcent (.05%.) on thc nct salc pricc of cach
product containing a previously patcntcd or patentable or othc!wise protccted
deyice deycloped by the Executivc .... Paymcnt of royalties under this scction shall
not be withheld or terminated regardless of any Termination of the Executiye It)r
lOCI' NO.1 '123: .Iee a/so ECF No. 1-2 at 8.2PlaintilTieli
with LWRC on
October 3 J. 2006. and on the same date. assigned tbc pending' 581 patenl to his ItJrlllCr
ECF No. I ~ 24: see a/so ECF No. 1-3. Thc Assignmcnt
[i In considcration of thc sum of Onc Dollar ($1.00) or cquivalent and other good
and valuable consideration paid to ... Paul Leitncr- Wisc. thc undcrsigned. hcrcby
scII(s) and assign(s) to Leitncr-Wisc Rillc Company. Inc ... their cntirc right. titlc
and interest ... in thc invcntion Known as "Sci I' Cleaning Gas Opcrating Systcm for
lOCI' No. 1-3.
I Unless stated otherwise. all facts arc taken from Plaintiffs Complaint or documents allached 10 and relied
upon in the Complaint. and . I>efendants'
of the Court.
Thus. Plaintiff has tai led
lhat he conferred
Motion tor Summary
Fees and Custs
fees and costs associated
to either 35 U,S,c. ~ 285, authorizing
strength ofa party's
Wise ] may ha\'e
also request that the Court award attorneys'
party in "exceptional"
claim of unjust enrichment.
this case. pursuant
eases. or under the "inherent
case is one that "stands out from others with respect to the
litigating position (considering
tilcts of the case) or the unreasonable
both the governing
manner ,in which the case was litigated:'
law and the
L1.C \', ICON 11('(//111 Fill1('ss, Il1e, , 134 S, Ct. 1749, 1756 (2014), "A movant must establish
ease by a preponderance
2016 WI. 4141006.
to any sanctions
of the evidence:'
T('"l1s" Ille. \', BAt: '<':I's .. 111",.
at *3 (D, Md, 2(16) (citini.: 0"'(///('.134
by statute. the Court's
of a court order'"
S. Ct, at 1758), In
inherent powers allow fee-shining
or "when the losing party has 'acted in bad tilith.
or for oppressi ve reasons ..... "
134 S, Cl. at 1758 (citing ,I~\'('sk(/
S('ITiec Co, \', Wild('/"11('ss SOc/('ly. 421 LJ ,S. 240. 258-259 (1975)).
is defined in the contract
the "581 patent. Sec ECF No. 15-8
II Dclcndant Sig. Sauer's rcfcrcIH.:c 10 35 U.S.c. ~ 1<)27 appears to be a cOlll1ation 01'28 U.S.c. ~ 1927
(counsel's liability for excessive costs) and 35 U.S,c. ~ 285 (award ofattorncy's fees to prevailing party in patent
cases). As Defendant goes Oil to cite (}clane Filness. I./.(, ", leO,\' f1f!olll, & rirl1e.\'s, Il1c.. 134 S. Ct. 1749. 1756
(2014). which addressed the later statute. the Court will interpret its request as onc for attorncy's fees pursuant to 35
U.S.c. ~ 2&5.
llerc. whilc both Dcfcndants
ultimately prevailed. the CourCs decision on the patent
claim turned on an unpublished
decision by thc Fcderal Circuit. finding that thc
retention of royalty rights does not provide a former patent holder with standing to bring a claim.
failure to specify whcther Plaintiff was alleging direct or indirect inti'ingemcnt.
such as a
Sauer itself points out that the pleading standard on which Plaintiff incorrectly relied was
abrogated only six months prior to the liling of the case. Thcrefi.)re. although the Court filily
the time and expense required to produce the Delcndants'
linds that they have failed to make a sufficicnt showing that this is an "cxccptional
linancial rccovery for thcir labors.
Thc Court ncxt turns to Dcfcndants'
rcqucst liJr sanctions undcr thc court's inhcrcnt
authority. Although this authority "cxtcnds to a full rangc of litigation abuses" including bad
I[lith. S!!!! Thollll/s \'. Ford ,Ilolor Co .. 244 F. App'x 535. 53X (4th Cir. 2(07). it "must be
exercised with rcstraint and discretion."
F.3d 1143 (4th
Cir. 2(00) (quoting Chl/lIlh!!rs \'. ,vASCO. I/lc .. 501 U.S. 32. 44 (1991)) (unpublished).
Court declines to cxereise its discrction to award attorneys'
time and expense of discovery
Ices whcre thcre is no evidence of
to the court and the casc is bcing resolved promptly. prior to thc
request for attorncys'
For the foregoing reasons, Defendant Sig Sauer's Motion to Dismiss, ECF No. 14, is
granted and Defendant LWRCl's Motion to Dismiss or in the Alternative. for Summary
Judgment, ECF No. 15, is granted. A separate Order follows.
GEORGE J. HAZEL
United States District Judge
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