Sophos Inc v. RPost Holdings, Inc. et al
Filing
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Judge Denise J. Casper: ORDER entered. MEMORANDUM AND ORDER - RPost's motion to dismiss, D. 62, is DENIED. (Hourihan, Lisa)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
__________________________________________
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SOPHOS, INC.,
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Plaintiff,
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v.
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Civil Action No. 13-12856-DJC
RPOST HOLDINGS, INC. and
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RPOST COMMUNICATIONS LTD.,
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Defendants.
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__________________________________________)
MEMORANDUM AND ORDER
CASPER, J.
December 30, 2014
Introduction
Defendants RPost Communications, Ltd. and RPost Holdings, Inc. (collectively,
“RPost”) move to dismiss this case for lack of subject matter jurisdiction pursuant to Fed. R. Civ.
P. 12(b)(1), or, in the alternative, asks this Court to decline, in its discretion, to adjudicate this
claim, under the Declaratory Judgment Act. D. 62. For the reasons discussed below, the Court
DENIES the motion.
Relevant Background
On November 12, 2013, Plaintiff Sophos, Inc. (“Sophos”) filed this action seeking a
declaratory judgment that it does not infringe the patents at issue on the heels of receiving notice
from RPost that its products and services “infringe certain patents owned by RPost.” D. 1; D. 11 at 2. In the wake of the filing of this lawsuit by Sophos, RPost filed a patent infringement suit
against Sophos in the Eastern District of Texas. The Court subsequently denied RPost’s motion
to transfer the instant case to the Eastern District of Texas, D. 53, and the Texas action was
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transferred to this Court according to the first-to-file rule. RPost Holdings, Inc. v. Sophos, Inc.,
14-cv-13628-DJC, D. 42, 46. In July 2014, Sophos moved to stay this action pending the
resolution of litigation in California concerning ownership of the patents at issue. D. 56. RPost
subsequently filed the instant motion to dismiss. D. 62. The Court has denied the motion to
stay, D. 69, and now turns to RPost’s motion to dismiss.
Discussion
1. Addressing Ripeness
Here, Sophos seeks a declaratory judgment about the patents at issue. RPost contends
first that there is no ripe controversy and, therefore, the Court lacks subject matter jurisdiction to
hear this case. “Ripeness is an Article III jurisdictional requirement” and a court may not grant a
declaratory judgment unless the plaintiff’s request “arise[s] in a context of a controversy ripe for
judicial resolution.” Verizon New England, Inc. v. Int'l Bhd. of Elec. Workers, Local No. 2322,
651 F.3d 176, 188 (1st Cir. 2011). An issue of ripeness is “gauged by means of a two-part test.”
Ernst & Young v. Depositors Econ. Protection Corp., 45 F.3d 530, 535 (1st Cir. 1995). “First, the
court must consider whether the issue presented is fit for review . . . .[which] typically involves
subsidiary queries concerning finality, definiteness, and the extent to which resolution of the
challenge depends upon facts that may not yet be sufficiently developed.” Id. The second
inquiry considers “the extent to which hardship loom—an inquiry that typically ‘turns upon
whether the challenged action creates a ‘direct and immediate’ dilemma for the parties.’” Id.
(citation omitted).
RPost contends that this matter is not ripe for review because: (1) Sophos has failed to
allege affirmatively that RPost owns the patents-in suit; and (2) Sophos’s recent request for a
stay pending the outcome of the ongoing patent ownership dispute in California indicates the
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plaintiff’s acknowledgement that this matter is not ripe for review. D. 74 at 2-3. As to the first
contention, Sophos has alleged plausibly that the Defendants own the patents at issue, even as
such ownership is a matter of dispute and the subject of ongoing litigation in California. See D.
1 ¶¶ 11-16; D. 1-2 at 2; D. 1-3 at 2; D. 1-4 at 2; D. 1-5 at 2. It remains the case that the
Defendants claim ownership of the patents and put Sophos on notice of its alleged infringement
and Sophos, in turn, filed this suit for declaratory judgment that it has not so infringed.
That is, there exists a case or controversy and a declaratory judgment would finally and
conclusively resolve the question of whether Sophos infringes the patents in question, patents
over which RPost has continuously asserted ownership. See Vink v. Hendrikus Johannes Schijf
Rolkan N.V., 839 F.2d 676, 679 (Fed. Cir. 1988) (reversing a Fed. R. Civ. P. 12(b)(1) dismissal
of a declaratory judgment action because “[t]he ownership issue raised by [the movant] must, in
the procedural posture of this case, be considered merely as a defense not affecting the district
court's jurisdiction” where the plaintiff had alleged that he owned the patent and that the
defendant had infringed that patent).
As to fitness, for the reasons discussed above, a judicial determination will be final and
definitive as to whether Sophos infringed on the patents. As to hardship, that Sophos’s alleged
infringement creates a “direct and immediate dilemma” is apparent from the claim infringement
notice sent by RPost. RPost is incorrect that Sophos’s claims “squarely involve ‘uncertain and
contingent events that may not occur as anticipated, or indeed may not occur at all,’” as the
events giving rise to the suit occurred as a result of Sophos’s alleged infringement. D. 74 at 3
(quoting Ernst & Young, 45 F.3d at 536).
Second, Sophos’s motion to stay this action, during the pendency of the California
litigation regarding patent ownership, does not amount to an admission that this matter is not
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ripe. The motion to stay (denied by this Court) was, as posited by Sophos, an attempt to
conserve resources while that litigation continued. It does not alter the fact that this matter is
ripe because of RPost’s alleged actions (i.e., putting Sophos on notice of its infringement of its
patents) and continuing to assert an ownership in those patents, including the initiation and
litigation of the infringement case against Sophos originally filed in the Eastern District of
Texas.
2. Addressing Discretionary Authority to Dismiss
Should the Court not dismiss based on lack of subject matter jurisdiction, RPost
alternatively requests dismissal pursuant to the Court’s discretionary authority under the
Declaratory Judgment Act. D. 63 at 7-8. The Declaratory Judgment Act provides, “[i]n a case
of actual controversy within its jurisdiction . . . any court of the United States, upon the filing of
an appropriate pleading, may declare the rights and other legal relations of any interested party
seeking such declaration, whether or not further relief is or could be sought.” 28 U.S.C. §
2201(a). The Supreme Court has “characterized the Declaratory Judgment Act as an enabling
Act, which confers a discretion on the courts rather than an absolute right upon the litigant.”
Wilton v. Seven Falls Co., 515 U.S. 277, 287 (1995) (citations and quotation omitted). Thus,
“the normal principle that federal courts should adjudicate claims within their jurisdiction yields
to considerations of practicality and wise judicial administration.”
Id. at 288.
Here, a
declaratory judgment would relieve Sophos of uncertainty as to any infringement of the
Defendants’ patents and the Court declines RPost’s invitation to decline to adjudicate this matter
under the Declaratory Judgment Act.
Conclusion
For the aforementioned reasons, RPost’s motion to dismiss, D. 62, is DENIED.
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So Ordered.
/s/ Denise J. Casper
United States District Judge
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