Leitner-Wise v. LWRC International, LLC et al

Filing 21

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 2/28/2017. (aos, Deputy Clerk)

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r I IN TIlE UNITED STATES I)ISTRICT COURT FOR Tin: I)ISTRICT OF MARYLAND Southern Di,.ision ,- :: IT b * PAUL ANDREW LEITNER-WISE, * Plaintiff, Case No,: G.IH-16-2.BO * y, * LWRC INTERNATIONAL, LLC, l'f :11., * Defendants, * * * * * * * * * * * * * * MEMORANDUM OPINION Plainti IT Paul Andrcw Intcrnational. Gas Opcrating and unjust cnrichmcnt Systcm I()r a Fircarm." Motion to Dismiss, Altcrnativc, L WRC I.I.C ("I. WRC!"') and Sig Saucr, Inc. ("Sig Saucr") allcging patcnt infi'ingcmcnl. brcach o(contract Saucr's Lcitncr- Wisc brings this casc against Dcfcndants lor Summary hcaring is unnccessary. gran! Dcfendant in rclation to his 200-1 invcntion ECF NO.1. Pcnding bcl()rc the Court arc Dcfendant ECF No. 1-1.and Dcfcndant Judgmcnl. ofa "Sell~Clcaning LWRCl's Sig 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! claim. Furthcrmorc. thc Court will convcr! I.WRCI's Summary ".ith rcspcct to thc brcach of Motion to Dismiss into a Motionl()f' contract and unjust cnrichmcnt as to thosc claims. Judgment claims. and will grant LWRCI's Motion I()f' Summary Judgmcnt I. BACKGROUND! In 2004. PlaintilTcrcatcd a "Sell~Cleaning Gas Opcrating Systcm It)r a Fircarm:' a sell~ regulating short-stroKc piston operating systcm ItH AR-15 typc sell~Ioading rilles. and was subscquently 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 'I,j 21-22. On April 11.2005. was rctaincd by LWRC as an exccutivc and cntcrcd into an cmploymcnt terms of thcir relationship. ECF NO.1 at 'i Rille Company. Plaintiff agreemcnt delining thc 22: see a/so ECF No. 1-2. The cmploymcnt agrecmcnt 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 any reason. lOCI' NO.1 '123: .Iee a/so ECF No. 1-2 at 8.2PlaintilTieli his cmployment with LWRC on October 3 J. 2006. and on the same date. assigned tbc pending' 581 patenl to his ItJrlllCr employcr. ECF No. I ~ 24: see a/so ECF No. 1-3. Thc Assignmcnt stated that [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 a Fircann:" 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 <Irc accepted as true. ~ Pin ciles to documents filed on the Coun's electronic filing system (Ct\'1/ECF) refer to the page numbers gcncr<Itcd by that system. 2 Contemporaneously with his departure. Plainti If executed additional contracts with LWRC:' On October 31. 2006. Plainli If signed a document entitled "Termination Employment". of which included a provision releasing LWRC "from any and all c1aims .... including. but not limited to. all claims arising out oflPlaintiffsj claims arising out oCthe Employment Agreemelll (hereinafier. "Intellectual all Agreement. ... [andl all hreaeh oCeontraet and other common law claims." ECF No. 15-6 at 1-2. An additional Assignment employment. contract entitled "Intellectual By And Between Paul Leitner-Wise Property Agreement".) and Leitner-Wise Property Rille Co. Inc." included a provision slating that "I Leitner- Wise] herehy translCrs and assigns to ILWRCI all of[Leitner-Wise's] right. titlc and intercst to any and all Intellectual have throughout Property ownership to the Assigned separately Intellectual interest [Leitner-Wisejmay Properties'" ECF No. 15-8 at 2. "Assigned the world in and Intellectual Properties" is defined in the contract to inelude the' 581 patent. See ECF No. 15-8 at 1.7. Furthermore. a section in the same contract entitled "Payment ..the consideration 1<11" the assignment and Communication'" and other rights granted to [L WRC lundeI' this Agreement consists of good and valuahle consideration. the suflieiency of which is herehy acknowledged [Leitner- Wise I pursuant to a separate Equities Purchase Agreement. the transactions respect thereof." contemplated stated that and the consunllnation therehy. there heing no further consideration ECF No. 15-8 at 3 (emphasis hy of or royally I'ayahle in added). ~ This contract was also signed hy Plaintiff on Octoher 31. 2006. the same day that the' 581 patent was assigned to LWRe. ECF No. 15-8 at 6: see also ECF No. 1-3. 'Defendant these additional contracts to its Motion to Dismiss. or in the Alternative. for h~/i'a.the COlui will convert Ihe Motion to Dismiss into a Motion for Summary Judgment with respect to the breach of coni rae I and unjust enrichment claims. Therefore. it is appropriate to consider these documents with respect to those claims. viewed in the light most favorable 10 the Plaintiff. The Court SUlllmary Judgment. L\VRCI attached As explained will not cOllsider the facts in this paragraph as they relate to Sig Saller's claims or LWRCl's patell! infringement claim. I The Equities Purchase Agreement \I.:as also attached to Defendant's rely on it to reach its decisioll .. \'(!e EeF No. 15.9. 3 motion. though the COlll1nced not On April 18.2008. LWRC assigncd thc '581 patcntto 5 29: ECF NO.1 _4. Plaintif1' claims that this assignmcnt thc royaltics entitlcd to him pursuant to his employment survivcd his tcrmination fi'om LWRC. It/. . ~'i 34-35. Dcfcndant LWRCI. lOCI' No. I ~ was madc without duc considcration agrcement with LWRC. which he claims Plaintil1' statcs that ncithcr LWRClnor Sauer cver paid him f(1I'thc value rcceivcd Ii'om thcir ongoing usc ofthc intcllectual containcd of Sig property within thc '581 patcnt. It/. ~ 48. Plaintiff initiated this casc on Junc 29. 2016. asscrting claims of patcnt infringcment unjust cnrichmcnt and against both LWRCI and Sig Saucr. as wcll as a claim of breach of contract against LWRCI alonc. lOCI' No. I. On Scptcmber arguing that thc casc should bc dismisscd becausc Plaintil1' had relinquished 6. 2016. Sig Saucr filed a Motion to Dismiss. pursuant to cither Rule 12(b)( I) f()r laCK of standing. his rights to the '581 patcnt. or pursuant to 12(b)(6) f(l)' fililurc to statc a claim. ECF No. 14. Thc samc day. LWRCI filed a Motion to Dismiss. or in the Altcrnativc. dismisscd f(lr Summary Judgmcnt. echoing Sig Sauer's argumcnts cithcr for laCK of standing or fl)r failure to state a claim. ECF also rcqucsted that the Court award thcm attorneys' rcspcctive that the easc could be o. 15. Both Dcfcndants ICcs and costs associatcd with drafting thcir motions. ECF No. 15-1 at 17-20: lOCI' No. 14-1 at 21-22. On Septcmber 22. 20 J 6. Plainti 1'1' iled a Consolidated f Motions to Dismiss. arguing that Plaintiffs to assert a patent infringcmcnt Opposition to Defcndants' right to rcccivc royaltics providcd him with standing claim. lOCI' No. 18. Plaintif1'also Motion into a Motion I()r Summary Judgmcnt is inappropriatc argucs that converting because thc doeumcnts LWRCl's on \dlieh ~ Plaintiffs Complaint includes additional allegations about the ::W08 assignlllent of the patent. claiming that the assignment was defective and then fraudulently concealed. referencing a prior patent infringement cas(.' between I.\VRCI and Sig Sauer ill support of his claim. lIowever. these allegations do not affect the Court's reasoning because. having already assigned his right to LWRe in 1006. any defects ill a subsequent assignmellt of the patent do not support any claim Plaintiff might have to the patent 4 L WRCI relics are not authcntieatcd. ECF No. I R at 5. On October their Rcplies in support oCtheir respective II. STANDAIWS "[C1ourts gencrally Crcdil oCsubjcct Ullion. lOCI' Nos. 19 (Sig Sauer) & 20 (LWRCI). Motions. Pursuanl to Rule 12(b)(l) analyze issues oCstanding pursuant to Rulc 12(b)( I ):. /Jorlo 458 B.R. 228. 231 (D. Md. 201\). matter jurisdiction. Fed. R. Civ.l'ro. Milia 1'. BrO\I'II. 462 F.3d 312.316 made to subject matter jurisdiction. subject matter jurisdiction. 642.647 12(b)(I). "It is well established (4th Cir. 2(06) (citation omittcd). that be Core a oC the Once a challenge Scc E1'£I11.1' H.F. I'akill.l' ". .I'CC Co .. II Dil'. o(SllIlIdc.': lIl.I'o Fadilllllld-D(/\'clIl)()rl 1111'1 Corp .. 166 F.3d \'. ChildrclI's 742 F. Supp. 2d 772. 777 (I). Md. 2010). The court should grant a Rule 12(b)(I) Guild motion "only iC l~lctS are not in dispute and the moving party is cntitled to prevail as a matter oC law:' 10'1'£111.1'. FJd at 647. 166 B. Molion to Dismiss Pursuant to Rule l2(b)(6) To survivc a motion to dismiss invoking Cactualmatter. accepted 12(b)(6). "a complaint must contain sufficient as true. to 'statc a claim to relief that is plausible on its I~lce.'" ;/.I'hcroji \'. l'lhlll. 556 U.S. 662. 678 (2009) (citing Bell ;/lllIl11ic Corp. \'. Tll'Ol11h1y. 550 U.S. 544. 570 (2007». "1\ claim has 1~lCialplausibility court to draw the reasonable l'1hlll. inference 556 U.S. aI67R. "Thrcadbare mcre conclusory is the plainti 11'bears the burden oC proving that the Court has (4th Cir. 1999) (citation omitted): thc material jurisdictional 1'. N(/\~l' which gO\'Crns motions to dismiss I(lI"lack fedcral court can decide the merits oC a claim. the claim must invoke the jurisdiction court:' liled OF REVIEW A. iVlotion 10 Dismiss Fcd II. 20 I 6. Dclendants statements. when the plaintil1'pleads that the dclendant is liable IClI"hc misconduct t recitals oCthe clements do not suffice:' Id. (citing 5 lactual content that allows the allcged." oCa cause oCaction. supported by l"l'Ol11h~l'. 550 U.S. at 555) ("a plaintiCfs obligation to provide the 'grounds' conclusions, and a rormulaic or his 'entitlelment] recitation to rclief ora cause or action's requires more than labels and elcments r Fed. R. Ci v. 1', 12( b)( 6 s purpose "is to test the sufliciency resolve contests surrounding /'res/ey marks omitted). inlcrences When deciding a motion to dismiss under Rule 12(b)(6), a court "must ('Ollll!y allegations in the complaint:' £.1. <III /'oll! <Ie ,vell/ollrs (4th Cir. 2(11) (citations accept unsupported and must "draw all and internal quotation legal allegations, A//aill. devoid or any reference & Co. marks see RevL'/1e v. COII/II/ 'rs. 882 F.2d 870, 873 (4th Cir. 1989), legal conclusions factual allegations,/'a/ws(//I\'. I/irst. 435,440 The Court need nol. however. Charles contained Ilrom those lilets 1 in lilVor or the plaintirr:' v. Ko!lJIIIII<lIlS .. IlIc .. 637 FJd omitted), and not to 464 F.3d 480, 483 (4th Cir. 2(06) (citation and internal accept as true all or the li1ctual allegations reasonable of a complaint the facts, the merits of a claim, or the appl icability or defcnses:' \'. ('ity o(Char/Of(esvi//e. quotation will not do:'). couched as 478 U,S, 265, 286 (1986), or conclusory to actual events. Ullite<l Black Firefighters factual o('\/orfh/k \', 604 F.2d 844, 847 (4th Cir. 1979). C. Connrtinl: Motion to ()ismiss to Motion for Summa,!' .Judl:ment L WRCt's Judgment motion is styled as a Motion to Dismiss or, in the Alternative, under Fed. R. Civ. 1',56. Irthe Court considers matcrials Itll' Summary outside the pleadings, Court does here, the Court must treat a motion to dismiss as one ItH summary judgmenl. as the Fed. R. Civ. 1', 12(d). When the Coul1 treats a motion to dismiss as a motion ltJr summary judgmenl. "la]1I parties must be given a reasonable opportunity to present all the material that is pertinent the motion:' Iii. When the moving party styles its motion as a "Motion to Dismiss or. in the Alternativ'e, ft)r Summary to motion, the nonmoving Judgment:' as is thc case here, and attaches additional party is, or course, aware that materials (, materials outside the pleadings to its are belt)re the Court. and the Court can treat thc motion as one for summary judgment. ,He/mpolilan Wash. Airl'orls not prohibited discovery. See Lall~h/in \'. Alllh.. 149 F.3d 253. 260-61 (4th Cir. 1(98). Further. the Court is Ii'om granting a motion for summary judgment before the commenccmcnt of See Fed. R. Civ. P. 56(a) (stating that the court "shall grant summary judgment movant shows that thcre is no genuine dispute as to any material if the lilCC without distinguishing pre-or post-discovery). llowever. the opportunity summary judgment to discover should not be granted iI' the nonmoving information that is essential to his opposition to the motion. Anderson \'. Liherly Lohhy. Inc" 477 U.S. 242. 250 n.5. (1987). If the nonmoving motion is premature. party has not had party feels that the that party can il1\'okc Fed. R. Civ. 1'1'0. 56(d). See Celo/ex Corp. ,'. ClI/rell. 477 U.S, 317. 326 (I (86). Undcr Rule 56(d). the Court may deny a motion fiJI' summary judgment if the non-movant cannot properly opposition, shows through an affidavit present facts. currently unavailable Fed, R. Civ. Pro. 56(d). "'[TJhe that. f()r specilied to him or her. that are essential lililure to Ii Ie an affidavit, grounds to reject a claim that the opportunity reasons. he or she lor discovery to justilY an , . is itsclfsufficient was inadequate, ... Ilarmds LId \'. ,<;ix/yInlel'l7el DOII/ain N({/lles. 302 F.3d 214. 244 (4th Cir. 2(02) (citations omitted). But a lililurc to lile an affidm'it inlimned the district may be excused "ifthe court that the motion is premature party's objections at 244-45 (citations party has adequately and that more discovery is necessary" betill'e thc district court served as the functional and internal quotation Ilcre. PlaintilThas is that the contracts Plaintiffs and thc "nonmoving equivalent of an affidavit:' Jd marks omitted). not liled an affidavit of the need li)r more discovery. inappropriate nonmoving under Rule 56(d) or made an equivalcnt main argument that summary judgment on which LWRCI relics are not authenticated. 7 showing is ECF No. 18 at 5. However. declaration this allegation Irom R, Kevin Bernstein. the documents contracts. in question company by declaring 1.1.c. a company in the ordinary receiving that the attached were true and correct copies of the further states thai the documents which owns a controlling course of busincss, a document III. "I M jultiple integratcs records. relics on it in its day to day opcrations .... Sheel ,lIelllIWorkers' were found in the interest in I. WRCI. and were courts have concluded from another business can lay a sunicient acting in the regular course of its busincss. trustworthiness foundation Melloll ". A<IlIIIlS. NO.5: 13.CV .245.BO. own Complaint 29. Therefore. and surrounding where it. circumstances indicate I.oeal Ullioll No. 11111 WlIshillglOIl. D.C. Arell i'ellsioll 2014 WI. 38 I063 I. at statcs that I.WRC assigned it is reasonable that 'a the received record into its own busincss FIIII<I,'. IV. Sill'. Co .. 187 F. Supp. 3d 569, 586 n.14 (D. Md, 2016) (quoting Plaintilrs by a the Vice President of Strategy of I.WRCI. authenticating ECr No. 15.2. The declaration records of RifTech. maintained is belied by the fact that I. WRCl"s filing was accompanied that business *I (E.D. HlIllko{Xnl' .c. Aug. I. 2014)). thc '581 patent to I.WRCI. IOcr No. 1'1 records relating to the assignmcnt I.WRC would have passed to I.WRCI in conjunction !'ork fromPlaintilTto with thc sccond assignment. As Plaintiff has not liled an aflidavit under Rule 56(d) or proffered judgment at this timc. the Court will convert I. WRCl"s Motion to Dismiss into is unwarranted aMmotion li)r Summary Judgmcnt any othcr grounds that summary with rcspcct to thc claims of breach of contract and unjust enrichmcnt. D. Motion for SUnllnal}' .JUl1l:ment Summary judgmcnt is appropriate if"materials documcnts. clectronically storcd inlill"lllation. affidavits admissions. interrogatory answers. or othcr matcrials," 8 in thc rccord. ineluding or declarations. depositions. stipulations, .,. Fcd. R. Civ. 1', 56(c). show that there is "no genuine dispute as to any material law:' fact and the movant is entitled to judgment as a malleI' of Fed. R. Civ. 1'. 56(a): see also Celo/ex Corv. 477 U.S. at 322. The party moving for summary judgment bcars the hurdcn of demonstrating that no genuine disputc cxists as to materiall~lcts.l'lIlliall/ll1\'. CO. I'. Call/eo I'rops .. 810 F.2d 1282. 1286 (4th Cir. 1(87). If the moving party demonstrates that there is no evidcnce burden shilis to the nonmoving to support the nonmoving party to identify specific I~lcts showing that there is a genuine issue Itlr trial. See Celli/ex. 477 U.S. at 322-23. A materiall~lCt outeome ofthc party's case. the suit under the governing is one that "might affect the law:' Spriggs \'. Dial//llnd A 11/0 Glass. 242 F.3d 179. 183 (4th Cir. 200 I) (quoting Amler.\oll \'. Liher/)' LoMy. IlIc.. 477 U.S. 242. 248 (1986»). A dispute of material fact is only "genuine" ifsuflicient evidence 1[IVOringthe nonm()\'ing party exists Itlr the tricr of fact to return a verdict for that party. Allderslln. 477 U.S. at 248. Ilowever. the nonmoving party "cannot create a gcnuine issue of material the building of one infcrcnce upon anothcr:' 255. Ilowewr. and alljustiliable if the non-movant's so that no rcasonable the purposes inferences or Beale \'. f/ardl'. 769 F.2d 213. 214 (4th Cir. 198(,). When ruling on a motion ttlI' summary judgment. be believed. I~lct through mere speculation "ltJhe cvidcncc of the non-movant is to are to be drawn in his favor:' Anderson. 477 U.S. at statement of the facts is "blatantly contradicted by the record. jury could believe it. thc court should not adopt that version of the l~lCts Itlr of ruling on a motion for summary judgment:' '<;coll '. I!arris. 550 U.S. 372. 380 I (2007). III. DISCUSSION A. Patent Infringemcnt I'laintilTciaims selling and offering Claim both Del'cndants !tlr sale sell~loading have infringed upon his '581 patent by making. using. rifles that incorporate 9 the "Leitner-Wise sell~regulating short-stroke piston system" without his conscnt. license or authorization. ECF No. I Ilc claims that as the inventor 01" the' 58 J patent and as an assignor who maintains 56-57. a royalty lei. 11 54. to bring a claim 01" patent infringement. intercst in the patent. he has standing 'I'i Iklcndants argue that Plaintil"I" lacks standing to bring this claim based on his 2006 writtcn assignment ol"his "entire right. title and interest". in the '581 patent to L\VRC. lOCI' No. 14-1 at 9-11: ECF No. J 5-1 at 8- J 0: see a/so ECF No. 1-3. Only a patentee may bring a civil action 1(11' patent infi'ingement. See 35 U.S.c. ~ 28 J. "Patentee" is delined as "not only the patentee to whom the patent was issued but also the sueccssors in title to the patentee:' "patentee" and thus. who has standing controls the analysis. 6996738. 1eI.. ~ IOO(d). Because the patent laws themseh'es to bring a case. Federal Circuit case law on standing II7170\"(/liOlIS. f.LC. No. 14-CV -3884-M.JG. See III re eTr deline at *2 (D. Md. 2(16) (citing Paradise Cr('{fliolls. 2016 \VL /IIC. ". VI! So/es. Il7c .. 315 F.3d J 304. 1308 (Fed. Cir. 20(3))." As long as the agreement is in writing. interests in patents are assignable. See 35 U.S.c. ~ 261, Thus. a patent holder may grant a portion ol"their interests in a patent to another party. example through a non-exclusive license to sell the patented interests. such as the right to sue 1(1)' inli'ingement. 427 F.3d 971. 976 (Fed. Cir. 2(05)( commence an action holds 'all substantial standing 1(11' product. while retaining other ,\".1' .. !.til. 1'. Agi/el71 Techs,. 111(". ..'tlhe owner ol"a patent or the owner's assignee ean patent infringement. rights' See Sicolll 1(1)' but a liccnsee alone cannot. .. unless the licensee in the patent. A nonexclusive license con tel'S no constitutional on the licensec to bring suit or e\'en to join a suit \\'ith the patentee because a nonexclusive I, licensee suflcrs no legal injury Irom inli'ingement.")(internal citations omitted)). The Federal Circuit has exclusive jurisdiction over appeals in patent cases. ,\"1.'1.' 2& U.S.C ~ 1295. 10 Yet. when the assignment is IlJr all rights or all substantial rights ... the transferee-and transferor-is not the the effective owner Illr purposes of standing:' A::llre Ne/lrorks. LLC \'. CSN 1'1.('. 771 F.3d 1336. 1342 (Fed. Cir. 2(14) (judgment vacated on other grounds). When a party holds this core bundle of rights. "it alone has standing to sue Illr inli'ingement:' Morrml' \'. Microso/i Corp .. 499 F.3d 1332. 1J40 (Fed. Cir. 20(7). TherellJre. when there has been a \Hillen assignment of a patent. the Court examines whether the assignment transferred "all substantial rights" or if eel1ain rights were retained by the assignor. See ill. at 1339-40. "In construing the substance of the assignment. a court must earellilly consider the intention of the parties and the language of the grant:' IsraellJio-Eng:~ Pro;ec/ \'. Amgl.'l1.Inc.. 475 F.3d 1256. 1265 (Fed. Cir. 2(07) (citing VailI'l.'l Texlilmaschinen KC; \'.. \/('c('(/ni('(/ h'lIro Ilalia Sr.A .. 944 F.2d 870. 874 (red. Cir. 1991»). Ilere. the assignment in question states that Plaintil1"'sell(s) and assign(s) to LeitnerWisc Rille Company.lne .... their entire right. title and interest" in the '581 patent. ECI' No. 1.3. The unambiguous language in this grant demonstrates an intent to transfer. without reservation. all rights in the '581 patent li'OI11 laintiff to LWRC.7 There is no relerenee to a license P agreement as the Plaintiff no\\' alludes to in his Opposition motion. or to any reservation of substantial rights. Furthermore. the Federal Circuit has implied that this exact languagc signilies a transfer of all substantial rights in the patent to the assignee. See SC;S-Thomson Microl.'!ec/ronics. Inc. \'. Inl'l Nec/i/ia Corp .. 31 F.3d 1177 at *5 (Fed. Cir. 19(4)(unpublished). Even if the Court were to construe the language in the assignment stating that Plaintiff was relinquishing his rights to the patent ,,' i In consideration of the Sllll1of One Dollar ($I.()(j) equivalent an" o/h<'l'goo" all" millahle cOlISi"aa/ion." ECF No. 1-3 (alteration and emphasis 7 Th~ Court observes that Merriam-Webster lists "air" as the first S:'IHlIlym for "entire:' See Mcrrialll\Vebster. "Entire:' U!.t.ps: \\\\\\.I1H:rrial1l-\\'l.'bstcLl:Olll/lhcsaurus'Clltirc (last visited February 16.2017). 11 or added). to refer to the royalties that Plaintiff was ow'ed pursuant to the employment agreement exeeuted the prior year. that would not save his claim. The retention of a right to royalties does not limit the assignment unless the retention of royalty rights was a reservation of a substantial right. such as the right to exclude others from making the patcnted product. See SGS.71WIIISOII Microeleclrollics. IlIc .. 31 F.3d at *5. Here. the plain language of the assignment transferring "entire right. title and interest" shows that there was no reservation of a substantial the Court finds that the unambiguous language of the assignment demonstrates the right. Thus. that Plaintiff transtCrred all rights to LWRC in 2006. depriving him of standing to bring this claim. Defendants' motions are thercltll'C granted as to Plaintiffs patent inlringement claim. B. Breach of Contract Next. Plaintilf alleges that by accepting the assignment LWRCI assumed the underlying employment obligation of the' 58 I patent from LWRC. to pay royalties to Plaintiff: as laid out in his 2005 contract with LWRC. ECF No. I ~ 69. By Illiling to pay those royalties. Plaintiff claims that LWRCI breached their eontract with him. Id 'i'170. 72. LWRCI denies this allegation. submitting evidence that Plaintiff waived all of his rights to the royalty payments when he leli LWRC in 2006. two years before LWRCI gained the rights to the '581 patent. lOCI' Nos. 15.6 (Termination Plaintilfhas Leller): 15.8 (lntcllectual Property Assignment Agreement). not specilied whether he is bringing his breach of contract claim under Maryland or Virginia state law. "When choosing the applicable state substantive exercising di,'ersity or supplemental jurisdiction. law w'hile a federal district court applies the choice of law rulcs ofthc l'll'llll1 state." Dallller \'.1111'1 Freighl.\)'.\. oj'Wa.\hillglol1. 447 (D. Md. 2(12) (quoting Gro/illd Zero M/ise/llll Works/wl'l'. LLC'. 855 F. Supp. 2d 433. Wi/SOli. 813 F. Supp. 2d 678. 696 (D. Md. 2(11)). Maryland is the lorum state It)r this Court and thus. Maryland's 12 choice of law rules apply. Under Maryland law. "contract claims are ordinarily governed hy the law of the state where the contract was made ("I"x loci COlllraclll.\'''). unless the parties to thc contract agreed to he hound hy the law of another jurisdiction:' Id (citing ARrRA Ural/p, Inc .. 338 Md. 560, 573 (1995))(alteration agreement .1111, Motorists 1m, Co, ]'. in the original), Here. the employment was executed in Virginia and states that Virginia law governs its interpretation, No, 1-2 at 10, I'laintiffhas offered no argument Eel' for why this provision is unenl())'ceahle or why application of Virginia law would be inappropriate. interpreting Thus, the Court will apply Virginia law in the contract. Under Virginia law ... r t jhe clements of a breach of contract action are ( 1) a legally enl()rceahle obligation: obligation of a defendant to a plaintiff: (2) thc detCndant's violation or breach ofthal and (3) injury or damage to the plainti ITcaused by the breach of obi igation:' \', W"I/s Fargo Bank. iVA. 289 Va, 321. 323 (2015) (citation omitted). When interpreting RmllOs a contract. the Virginia Supreme Court has instructed courts to ..to construe a document according to its plain terms if it is clear and unambiguous "bcyond the instrument outside the documcnt ambiguous parties:' on its face:' without looking for meaning itself." Oil ]'. I. & .Il1oMings, itself. known as parol evidence. and review of additional inf(mnation Ue. 275 Va, 182. 187 (2008). Ev'idence is only appropriate ifthc document is needed to "determine is the intent ofthc Id In the present case, I'laintiffhas legally enforccable employment obligation agrecment t~]iled to put f(1I'\vard any evidence of the existence ofa between him and DetCndant LWRC!. lie states that his 2005 with LWRe. which included a provision cntitling him to royalty paymcnts on thc nct sale of certain products. should imposc a continuing LWRCI to make royalty payments, Ilowever. legal obligation upon hc f~lils to address the evidcnce that LWRCI has 13 submitted. showing that he signed away his rights to royalty payments in 2006 when he len his employment with 1.WRe. A basie eoneept of eontraet law is that eontraets are not set in stone and can be modi lied by the assent of the parties. See .lIedlin & Son Cons/,.. CO. I'. Mal/hews (;"1'" Inc.. No. 160050. 2016 WI. 7031843. at * 5 (Va. 2016 ) (citation omittcd) ("[13]y thc rules of the common law .... it is .competent liJr the partics to a simple contract in writing. belil)'(: any breach of its provisions. either altogether to waivc. dissolvc. or abandon it. or add to. changc. or modily it. or vary or quality its tcrms. and thus makc a ncw onc."'). Ilere. Dcfendant LWRCI submitted a document titled "Termination 6. Thc document of Employment."' signed by Plaintiff on Octobcr 3 J. 2006. See ECF No. 15- notcs that it relates to the "jtlcrJnination that certain cmployment agrcemcnt. of [Plaintifrs] cmploymcnt pursuant to datcd April II. 2005. by and bctwcen 1 LWRC and PlaintiITj."' Id at I. LWRCI states. and it secms logical. that this is a rcfcrencc to the employment agreement. betwccn the samc parties cxccutcd on April 11. 2005. which PlaintilTattachcd initial pleadings. See lOCI' No. 1-2. Thc lirst provision of the October 31 termination releasc. stating that in exchange against him. the exccution considcration" of an Equitics Purchase Agrecmcnt. and "other good and valuable rcleasel s I and dischargel s] [1.WRC all claims .... including. but not limited to. all elaims arising out offPlaintifrs] claims arising out of the Employment According 2005 cmployment Iettcr is a li)r LWRC releasing Plaintiff li'om any claims they might have Plainti ff "unconditionally common law claims:' to his I.... li'om any and cmployment. all Agreement .... 1 and] all breach of contract and othcr lOCI' No. 15-6 at 1-2. to his Complaint. agrccmcnt. Plaintifrs lOCI' No. I right to rcccivc a royalty payment arises out of his 'I'i 23-26. Like thc terms of any contract. thc seopc and meaning of a release agrcement ordinarily is govcrned by the intcntion of the parties as exprcssed in thc documcnt 14 they have executed. When the contract is lawful and the language ambiguity. the agreement furnishes the law that governs the partics. IJerc=ek 1'. Erie 111.1'. (jrl' .. 259 Va. 795. 799 (2000) (internal citations prlwision is unambiguous provision in his :1005 employmcnt PlaintifI Defendant's an aflidavit contraet. asserting than the interpretation is incorrect. letter. he has a differcnt interpretation LWRCI has put I(llward. Nor has Plaintiffmadc and unchallenged of a showing languagc of this contract alonc would sevcr Defendant Property Agreement. to royalties LWRCI submits an additional in the' 581 patent. The Intellectual hereby transfers PlaintifT has tailed to put forward even to these documcnts. Intellectual separately of a royalty hc would need to address any alleged flaws in these eontraets. royalty rights. Howcvcr. to the Assigned Here. the release is elearly I()reelosed by the 20()G termination of these contracts that. as a signatory The unambiguous all Intellectual free from dcspite having ample timc. has not put f(lr\vard any f[lcts to show that the of what discovery Plaintin's omitted). and the relief that Plaintilf seeks now. enfiJrcement intcrprctation their mcaning IS which PlaintilTalso signed. specilieally Property Agreement and assigns to fLWRCJ all of[Leitner-Wise'sl Property ownership Intellectual interest [Leitner-Wise Properties'" I may contract. relinquishing the his right stated that "f I.eitner- Wise I right. title and interest to any and have throughout ECF No. 15-8 at 2. "Assigned the world in and Intellectual Properties" defined in the contract to inelude the '581 patent. Sec ECF No. 15-8 at 1.7. In a scction cntitlcd "Payment the assignmcnt the contract stated that "thc consideration and othcr rights granted to fLWRC valuablc consideration. pursuant to a separate royall)' I'ayahle and Communication'" thc sufliciency Equities J undcr thc agreement of which is hercby acknowledged Purchase Agreement. language of this contract a!!ain demonstrates •... consists of good and by fLeitner- Wise J .. therc being no furthcr considcration in rcspect thcrcof."' ECF No. 15-8 at 3 (emphasis or addcd). Thc unambiguous that Plaintiff contracted 15 fill' - awav his rovaltv ri!!lllS in -.' ... is the '58 I patent over a decade ago. As with the termination any evidence contradicting interpretation ofmatcriallilet letter. Plaintirr rails to put rorward the plain language orthe contract and Defendant's reasonable or it." Bascd on the rccord berorc it. the Court linds that there is no genuine dispute rcgarding the existencc ofa legal obligation betwcen PlaintifTand LWRC to make royalty payments in relation to thc '581 patcnt. Thus. Defendant LWRCl's Summary Judgment Motion for is grantcd as to the breach of contract claim. C. Unjust Enrichment Finally. the Court turns to PlaintiJrs unjust enrichmcnt claims against both Sig Sauer and LWRCI. As with the breach of contract claim. PlaintifT fails to specify whether he is bringing his unjust enrichment claims under Maryland or Virginia law. Ilowever. the Court need not resolve this issue because. regardless of which law he invokes, Plainti ff has Iililed to stale a claim ftlr unjust enrichment. To state a claim lor unjust enrichment under Virginia statc law, Plaintiff would need to establish thai .,( I) IPlaintilTI conferred a bcnefit on IdelCndantJ (2) I Defendant] benefit and should reasonably have expected to repay Iplaintifll and (3) [Dcfendant! rctained the benefit without paying f(lr its valuc'" Schlllid, ". I!ollsehold 108.116 (2008). Maryland requires Plaintirrto PlaintilTmust defendant the benefit under thc circumstances MOllO ". MOllO Elec. Grollfl. K irrelevant Il1c.. Fill. Corfl., acceptcd or 11.276 Va. makc an almost identical showing. stating that a allege that "( I) the plaintitTconlerlredl knlcw] or appreciate[dl knew orthe a bencfit on thc dcfendant: the bene lit: and (3) thc defendant's would bc inequitablc acceptancc (2) the or rctcntion or without the paying of value in rcturn'" 176 Md. App. 672, 712-13 (Md. Ct. Spec. App, 2(07), Plaintiffs allegation that Defendant failed to allnch a portion of the Equities Purchase Agrl'cmcnt is to the Court's decision. as the Court need not rely on the Equities 16 Purch3se Agrccl11enllo decide this cn~c. Addressing lirst the allegations as they apply to Defendant Sig Sauer. PlaintitThas put f,mvard no filcts to show that he conferred a hcnefit on Sig Sauer. While Plaintiff alleges generally that Sig Sauer benefited fi'OI11 the intellectual he provides no Iilcts to support the conclusion property contained within the '581 patent. that Sig Sauer knew of or appreciatcd those bcnefits prior to Octohcr 31. 2006. As discusscd s/ll'ra, on that date. Plaintiff assigncd his "entire right. title and intcrest" in the '581 patcnt to LWRC. Eel' No. 1-3, Thus, as Sig Sauer correctly points out. Plaintiff could not eonfcr any hcnefit to them aner Oetobcr 31, 2006, beeausc hc had no benclit to providc to thcm ancr his assignment of the patent. See Sell.Hll'llwlie Sec. COl]'. \'. Sellsorl11alie Elees. Corl' .. 249 F. Supp. 2d 703, 709 (D, Md. 20(3) (dismissing cnrichmcnt claim, holding that "[plaintiITlmust plead that it provided a bcnefit to Idefendant] and it has not done so, nor does it appear that it could:') Thus. Dcfendant Similarly. Sig Sauer's Agrcemcnt 2 (alteration and cmphasis Motion to Dismiss is grantcd as to Plaintitrs Plaintiff filils to cstahlish a claim of unjust cnrichment LWRCI. As discusscd ahovc in relation to Plaintiffs submitted hy Dcfcndant unamhiguously unjust in thc original), unjust enriehmcnt against Defendant hreaeh of contract claim, the contracts indieatc that upon cxeeution of thc Intellectual Property in 2006. PlaintifT was len without any rights in thc '581 patent. See Eel' No. 15-8 at ("I Lcitncr-Wiscl herehy transfers and assigns to ILWRCI all ofILcitncr-Wisc'sl right. title and 9 In addition to I~liling state a claim. Plaintiffs unjust enrichment cause ofactioll is also likt.'ly preto empted by redtTal patent law. especially where. as is the case with his claim against Sig Sauer. it is plead alone and not in the :Jlternativc to a breach of contract claim. 5;l!1.' IIUnler Doug/as. /11('. \', lIamuJllic Design. 111(". 153 r-.Jd 131R. 1335 (Fed. eir. 19(8) (overruled on other grounds) ("Ira plaintilTbases its lorl action on conduct that is protected or governed by federal patcnt law. thcn the plaintirrmay not invoke the stale law remcdy, whieh must be preempted for conlliet with federal patent law."): see a/,w' Gil', I./,L' ,'. /111 'I Bus, .\Iachines ('01''',. No. eIY.A. 3:07CV06 7-11EI L 2007 WI. 1231443. at *4 n.6 (E.D. Va. 20(7)("lhe proper claim for the misappropriation of patented lcchnolog,y is patent infringement. not unjust enrichment. Unjust enrichment claims based on statc law are gencrall.y precmptcd by federal patent law alter the patent issues, unless the patentec can show the infringer obtained an incremental bellelit from the information it received bcfore the patent issued over and above \\ hal the public received from the published paten!."). 17 interest to any and all Intellectual throughout Property ownership the world in and to the Assigned to demonstrate a genuine dispute of material benetlt upon LWRCt. Therefore, Defendant granted with respect to Plaintilrs 1>. I>efendants' Defendants detending of the Court. substantive Properties:"). tact regarding LWRCI's fur Atturneys' 10 Thus. Plaintiff has tai led lhat he conferred Motion tor Summary Judgment a will be Fees and Custs fees and costs associated to either 35 U,S,c. ~ 285, authorizing An "exceptional" strength ofa party's Wise ] may ha\'e his contention also request that the Court award attorneys' party in "exceptional" II Intcllectual I Leitner- claim of unjust enrichment. Request this case. pursuant the prevailing interest patent inti'ingement reasonable attorney's eases. or under the "inherent with ICes to powers" 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 Oel(///(' FiII1('SS, L1.C \', ICON 11('(//111 Fill1('ss, Il1e, , 134 S, Ct. 1749, 1756 (2014), "A movant must establish & exceptional ease by a preponderance No, 14-CY-0245. 2016 WI. 4141006. addition to any sanctions '''willful disobedience vexatiously. l'il'('/il1(' of the evidence:' wantonly, provided 11.1"/11/"11('1 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'" an S. Ct, at 1758), In inherent powers allow fee-shining lill' or "when the losing party has 'acted in bad tilith. or for oppressi ve reasons ..... " ()"!aI1(', 134 S, Cl. at 1758 (citing ,I~\'('sk(/ S('ITiec Co, \', Wild('/"11('ss SOc/('ly. 421 LJ ,S. 240. 258-259 (1975)). l() "Assigned Intellectual PropcI1ics" is defined in the contract 10 include the "581 patent. Sec ECF No. 15-8 at 2. 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. IS llerc. whilc both Dcfcndants infringement 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. While Delcndants highlight additional pleading deficiencies in Plaintiffs complaint. failure to specify whcther Plaintiff was alleging direct or indirect inti'ingemcnt. such as a Defcndant Sig 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 acknowledges the time and expense required to produce the Delcndants' well-written linds that they have failed to make a sufficicnt showing that this is an "cxccptional allowing briefs. it easc" 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." Kreischer \'. Kerriso/l /),)' (jood,'. n9 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' aftinnative falsehoods submitted time and expense of discovery Ilere. the Ices whcre thcre is no evidence of to the court and the casc is bcing resolved promptly. prior to thc proceedings. Thus. Defendants' denied. \9 request for attorncys' ICcs is IV. CONCLUSION 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. Dated: FebruaryZl;"2017 • &/~• GEORGE J. HAZEL United States District Judge 20

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