Filter Plus, Inc. v. The O R Company et al
OPINION AND ORDER Denying 19 MOTION to Dismiss. (Supplemental Brief due by 4/13/2017) Signed by District Judge Robert H. Cleland. (SBur)
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
FILTER PLUS, INC.,
Case No. 16-12974
THE O R COMPANY & SURGICAL
OPINION AND ORDER DENYING MOTION TO DISMISS
This is a patent infringement case. Plaintiff Filter Plus, Inc. alleges that
Defendants The O R Company and Surgical Principles, Inc. manufacture and distribute
a knock-off of one of Plaintiff’s products, protected by U.S. Patent No. 7,537,563 (“the
‘563 Patent”). After Defendants filed a motion to dismiss, (Dkt. # 11), Plaintiff submitted
an amended complaint, (Dkt. # 14). Defendants withdrew their first motion and filed the
motion to dismiss presently before the court, arguing that Plaintiff’s amended complaint
fails to state a claim upon which relief can be granted and that this court lacks personal
jurisdiction over either Defendant. (Dkt. # 19.) The motion is fully briefed and a hearing
is unnecessary. See E.D. Mich. LR 7.1(f)(2). For the reasons that follow, the court will
deny Defendants’ motion.
For the purposes of this motion, the court accepts Plaintiff’s well-pleaded factual
allegations as true. Plaintiff is a Michigan corporation that designs, manufactures,
imports, and markets a variety of surgical tools and supplies. Defendant The O R
Company is an Australian corporation that also develops and supplies medical devices,
and uses Defendant Surgical Principles, a Washington state corporation based in
Tacoma, Washington, as its United States distributer. (Dkt. # 14, Pg. ID 66-67.)
Plaintiff owns the ‘563 Patent, entitled “Heater for Surgical Viewing Instruments.”
(Dkt. # 14-2.) Plaintiff markets and sells a product covered by the ‘563 Patent that
warms surgical scopes to body temperature before use to prevent the scopes’ lenses
from clouding. Defendant Surgical Principles purchased these scope warmers from
Plaintiff from 2002 to 2015. As part of these sales, Plaintiffs regularly communicated
with Timothy Wynne, who holds an ownership interest in both Defendants and exerts
control over at least Surgical Principles. (Dkt. # 14, Pg. ID 67.)
In 2016, Defendants contacted Ten-Comfort, the Taiwan-based manufacturer of
Plaintiff’s scope warmer, to source a “knock-off.” Defendants stopped purchasing
Plaintiff’s product and began marketing their own scope warmer, the “Liquid Scope
WarmOR.” Plaintiff then initiated this litigation, claiming that Defendants infringed the
‘563 Patent by importing and selling the accused product. (Dkt. # 14, Pg. ID 71.)
A. Failure to state a claim
A complaint must contain “a short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Under Federal Rule of Civil
Procedure 12(b)(6), a party may move for dismissal for the “failure to state a claim upon
which relief can be granted.” In patent cases, the standards applicable to Rule 12(b)(6)
motions are those articulated by the regional court of appeals rather than by the Federal
Circuit. See R+L Carriers, Inc. v. DriverTech LLC (In re Bill of Lading Transmission &
Processing Sys. Patent Litig.), 681 F.3d 1323, 1331 (Fed. Cir. 2013)).
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6),
the complaint’s “[f]actual allegations must be enough to raise a right to relief above the
speculative level . . . on the assumption that all the allegations in the complaint are
true.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). 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). Bare allegations are not enough. “[W]here the well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct, the complaint has alleged —
but it has not show[n] — that the pleader is entitled to relief.” Id. at 679 (internal
quotation marks omitted). The court “primarily considers the allegations in the
complaint, although matters of public record, orders, items appearing in the record of
the case, and exhibits attached to the complaint, also may be taken into account.” Amini
v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001) (quoting Nieman v. NLO, Inc., 108
F.3d 1546, 1554 (6th Cir.1997)).
B. Personal jurisdiction
If a district court lacks jurisdiction over the defendants, dismissal is appropriate
under Federal Rule of Civil Procedure 12(b)(2). To determine whether personal
jurisdiction exists in a patent infringement action, the court applies the law of the
Federal Circuit. See Elecs. For Imaging, Inc. v. Coyle, 340 F.3d 1344, 1348 (Fed. Cir.
2003). For the court to exercise personal jurisdiction over a non-consenting defendant
outside the boundaries of the forum state, two requirements must be satisfied. See Red
Wing Shoe Co., Inc. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1358 (Fed. Cir.
1998). First, the defendant must be subject to personal jurisdiction under the laws of the
forum state, in this case the state of Michigan. Id. Second, the exercise of personal
jurisdiction over the defendant must comport with the due process clause. Id. In
addition, the plaintiff must follow the general guidelines for pleadings standards—the
plaintiff must allege specific facts to show the standard has been met for personal
jurisdiction. Palnik v. Westlake Entm’t, Inc., 344 Fed. Appx. 249, 251 (6th Cir. 2009)
(stating that complaints must follow federal pleading standards for personal jurisdiction
issues as well).
Defendants provide two grounds for their motion to dismiss. First, that Plaintiff’s
complaint fails to state a claim upon which relief can be granted because it does not
allege facts showing that the accused product meets each limitation of the claim.
Second, that the complaint does not allege sufficient facts to show that the court has
personal jurisdiction over Defendants. The court will address each in turn.
A. Failure to state a claim
Prior to December 1, 2015, plaintiffs alleging patent infringement only needed to
meet the lower pleading standard set by Federal Rule of Civil Procedure 84 and Form
18. However, Rule 84 has since been abrogated, and the parties agree that the
standard elucidated under Twombley and Iqbal applies here. (See Dkt. # 19, Pg. ID
107; Dkt. # 23, Pg. ID 330.)
The Sixth Circuit has not yet set out the pleading requirements for a direct
infringement claim under the Twombley and Iqbal standard. Most other district courts
that have considered the question have concluded that plaintiffs must “plausibly allege
that the accused product practices each of the limitations found in at least one asserted
claim.” e.Digital Corp. v. iBaby Labs, Inc., 2016 U.S. Dist. LEXIS 111689, *8 (N.D. Cal.
August 22, 2016) (collecting cases).
Plaintiff asserts only the first claim to the ‘563 Patent, which has the following
A system for warming an endoscope, laparoscope, or other such
instrument to minimize fogging, comprising:
o A flexible pad having a length, a width and a periphery for
wrapping around the instrument, the pad including a mixture of
water and sodium acetate to generate heat through an
o An activation disc located around the periphery of the pad; and
o One or more elongate partitions running lengthwise along the
pad to establish fold lines, each partition including a gap to
facilitate fluid transfer of the mixture.
(Dkt. # 14-2, Pg. ID 82.) Defendants argue that Plaintiff fails to allege facts to support a
plausible inference that the accused product meets either the second or third limitation.
Plaintiff attaches a claim chart to the complaint. (Dkt. # 14-3.) The chart matches
each claim limitation to one or more images of the accused product, along with a
description. Defendants take issue with two sections of the chart. First, dealing with the
second limitation, as displayed in Defendants motion:
(Dkt. # 19, Pg. ID 104 (emphasis Defendants’.) Defendants argue that “[P]laintiff has no
explanation or allegation as to how or why the ‘a mixture of water and sodium acetate’
limitation is met in the accused device. Plaintiff simply asserts ‘[t]he pad includes a
mixture of water and sodium acetate[.]’” (Id.) This, Defendants urge, is insufficient under
the Twombly and Iqbal standard. The court disagrees.
A limitation describing the chemical content of a container is not one that easily
lends itself to being shown with a picture of the product. Defendants complain that that
this is “nothing but a repetition of the claim language,” (Id.), but do not indicate how,
other than providing a statement of the (alleged) content and (alleged) potential for
chemical reaction Plaintiff could allege more specific facts showing that the accused
product “includes a mixture of water and sodium acetate to generate heat through an
exothermic reaction.” Plaintiff’s factual allegation in this way does not assert a mere
legal conclusion. The court finds it a straightforward statement of fact sufficient, in these
circumstances, under Twombley and Iqbal.
Second, Defendants criticize the following section:
(Dkt. # 19, Pg. ID 105.) Defendants argue that the bottom-right picture does not
demonstrate a “. . . partition including a gap to facilitate fluid transfer of the mixture” as
stated in the limitation. (Id.) Rather, the picture shows that “the partition is integral and
whole for all its length.” (Id.) As a result, Defendants argue, Plaintiff has not pleaded
sufficient specific facts to meet this limitation.
Defendants argue that “Plaintiff opted not to state that its infringement theory is
that the space around (not included in) the partition that meets the ‘each partition
including a gap’ limitation of Claim 1. Plaintiff chose not to articulate that theory because
it is indefensible[.]” (Id.) However, by including the arrows, Plaintiff implies that the “gap”
Plaintiff points to are the gaps between the partition and the seam (or end) of the pad.
The court declines to engage in a lengthy analysis of the merits of Plaintiff’s implicit
construction at this time—such an issue is more appropriately reserved for a full hearing
on the meaning of claim language. Markman v. Westview Instr., Inc., 517 U.S. 370
The standard for a motion to dismiss is forgiving. “[A] well-pleaded complaint may
proceed even if it strikes a savvy judge that actual proof of those facts is improbable,
and that a recovery is very remote and unlikely.” Twombley, 550 U.S. at 556. Plaintiff
has pointed to an accused infringing product, identified the claim at issue, provided a
claim chart that maps the limitations of its claim to features of the accused product, and
alleges facts to suggest Defendants had notice of the patent. Plaintiff’s implicit
interpretation of “each partition including a gap,” based on the complaint and the
exhibits attached thereto, is at least “plausible” within the meaning of Twombley, 550
U.S. 570. As a result, Rule 12(b)(6) dismissal is not available. Id.
B. Personal jurisdiction
Defendants argue that for this court to exercise personal jurisdiction over
Defendants would violate due process. (Dkt. # 19, Pg. ID 114.) Defendants have not
attached an affidavit in support of their motion. Rather, they argue that Plaintiff’s
allegations do not meet the pleading standard—that Plaintiff has not plead sufficiently
specific facts to show that Defendants have adequate minimum contacts with the state
of Michigan. (Id.)
The courts have determined that Michigan’s long-arm statute gives the
“maximum scope of personal jurisdiction permitted by the due process clause of the
Fourteenth Amendment.” Chrysler Corp. v. Fedders Corp., 643 F.2d 1229, 1236 (6th
Cir. 1981). Due process is satisfied if the defendant has “sufficient minimum contacts”
with the forum state “such that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.” Internat’l Shoe Co. v. Washington, 326 U.S.
310, 316 91945) (citation omitted). The contact with Michigan must purposeful and
sufficient, such that Defendants should “reasonably anticipate being haled into court
there.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
Importantly, “the plaintiff cannot be the only link between the defendant and the forum.
Rather, it is the defendant’s conduct that must form the necessary connection with the
forum state that is the basis for its jurisdiction over him.” Walden v. Fiore, 134 S.Ct.
1115, 1122 (2014) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985)).
To determine whether personal jurisdiction exists in a patent infringement case,
courts apply the law of the Federal Circuit, not the regional circuit. See Akro Corp. v.
Luker, 45 F.3d 1541, 1543 (Fed. Cir. 1995). The court may exercise either limited
personal jurisdiction (also called “specific” personal jurisdiction) or general personal
jurisdiction. See Red Wing, 148 F.3d at 1359. Limited jurisdiction exists when the cause
of action at issue arises out of or relates to a defendant’s contacts with the forum state,
even if those contacts are isolated and sporadic. See id.; Mich. Comp. Laws § 600.715.
General jurisdiction exists when a defendant has continuous and systematic contacts
with the forum state justifying the court’s exercise of judicial authority with respect to any
and all claims against the defendant; in other words, the defendant may be subject to
jurisdiction even when the cause of action has no relation to the defendant’s contacts
within the forum state. See Red Wing, 148 F.3d at 1359; Mich. Comp. Laws §
Plaintiff’s allegations relating to personal jurisdiction are as follows:
5. This Court has personal jurisdiction over Defendants because they,
based on information and belief, import, manufacture and supply infringing
products in and into the United States, including within this Judicial
District. Further, upon information and belief, Defendants regularly and
continuously engage in substantial sales and other business transactions
in Michigan, and have sold infringing products and/or committed infringing
acts in this Judicial District.
6. For example, in violation of 35 U.S.C. § 271, Defendants place
infringing products into the stream of commerce, with the knowledge or
understanding that such products will be sold and used in this Judicial
District. On information and belief, SP is a USA distributor of the infringing
products for OR, which also sells infringing product via the internet. Also
on information and belief, SP maintains regional sales representatives
throughout the United States, including one or more representatives with
responsibility for sales within Michigan and this Judicial District. Therefore,
because SP, on behalf of Defendants, has assigned responsibility for
sales in the State of Michigan to a sales representative, Defendants intend
for product accused of infringing the patent-in-suit to be sold in Michigan
and within this Judicial District. Based on information and belief, product
accused of infringing the patent-in-suit has been sold or has been offered
for sale in Michigan.
7. Personal jurisdiction over Defendants is also proper in the Court
because OR and SP, until 2016, purchased product directly related to the
willfulness claims asserted in this Amended Complaint from Plaintiff, a
Michigan resident. Defendants have, therefore, engaged in financial
transactions within the State of Michigan that are directly relevant to these
8. Further, prior to 2016, and in connection with the purchase of product
relevant to the claims asserted in this Amended Complaint from Plaintiff,
Timothy Wynne, an owner of Defendants, engaged in direct
communication and negotiations with the principal of the Michigan-based
Plaintiff, including multiple phone calls and emails with Plaintiff concerning
sales of Plaintiff’s patented product knocked-off by Defendants.
(Dkt. # 14, Pg. ID 65-66.)
Plaintiff does not explicitly state whether its view is that the court has limited
personal jurisdiction, general personal jurisdiction, or both. However, Plaintiff’s brief
points only to the limited personal jurisdiction section of Michigan’s long-arm statute,
(see Dkt. # 23, Pg. ID 340 (citing Mich. Comp. Laws 600.715(1))), and address only the
due process standard for limited personal jurisdiction, (see id. (discussing Neogen Corp.
v. Neo Gen Screening, Inc., 282 F.3d 883, 888 (6th Cir. 2002))). Accordingly, the court
will examine whether Plaintiff has alleged specific facts to meet the requirements for
limited personal jurisdiction.
To determine whether Defendant may constitutionally be subject to limited
personal jurisdiction in Michigan, the court applies a three-prong test. See Hi-Tex, 87 F.
Supp.2d at 743-44 (citing HollyAnne Corp. v. TFT, Inc., 199 F.3d 1304, 1306 (Fed. Cir.
1999). First, the court must determine whether Defendant “purposefully directed its
activities at the residents of the forum.” Id. Second, whether the cause of action “arises
out of or is related to those activities.” Id. Finally, whether the court’s assertion of
personal jurisdiction would be “reasonable and fair.” Id.
Plaintiff’s allegations relating to infringing activity within the confines of this
district are largely conclusory. As Defendants correctly observe in their reply brief:
Plaintiff pleads no facts alleging the who, what, when[,] and where of any
alleged infringing act. . . . Plaintiff never suggests that a specific vendor
made a sale in this jurisdiction, or that a specific customer made a
purchase here, or even that Plaintiff was able to purchase an accused
product from a website. Plaintiff has not identified any marketing materials
found in this jurisdiction, any accused products in use in this jurisdiction, or
even any specific hearsay that would substantiate its conclusory
(Dkt. # 26, Pg. ID 354.) Plaintiff’s specific factual allegations primarily relate to Plaintiff’s
prior sales of its scope warmer to Defendants, and communications concerning those
transactions, which do not give rise to Plaintiff’s claim.
Defendants urge the court to disregard factual allegations made “on information
and belief” and dismiss the complaint. (Dkt. # 19, Pg. ID 114.) However, the allegations
made “on information and belief,” if true, would render Defendants subject to an
exercise of personal jurisdiction by this court—and it is not clear to the court that it may
so casually disregard them.1 Further, Defendants have declined to submit an affidavit
detailing the actual extent of their contacts to the state of Michigan, so the court is
unable to conclusively determine that Defendants are not subject to the court’s personal
To resolve this issue, the court will order limited discovery. A district court,
reviewing a motion to dismiss for lack of personal jurisdiction, in its discretion “may
decide the motion upon the affidavits alone; it may permit discovery in aid of deciding
the motion; or it may conduct an evidentiary hearing to resolve any apparent factual
questions.” Carrier Corp. v. Outokump Oyj, 673 F.3d 430, 449 (6th Cir. 2012) (quoting
Theunissen v. Matthews, 935 F.3d 1454, 1458 (6th Cir. 1991)). Defendants are in a
better position than Plaintiff to know whether the accused product has been imported to
or sold in the Eastern District of Michigan. Thirty days of limited discovery should be
more than sufficient to determine that question.
To support their contention that “a court need not accept as true allegations that
are made purely on information and belief[,] (Dkt. # 19, Pg. ID 114), Defendants point to
Twombley, 550 U.S. 551, 564-70. But the Supreme Court disregarded the pleadings in
Twombley because they were conclusory and insufficiently specific, not because they
were made “on information and belief.” Id. at 564 (describing the allegations as “merely
IT IS ORDERED that Defendants’ Motion to Dismiss (Dkt. # 19) is DENIED.
IT IS FURTHER ORDERED that Plaintiff is AUTHORIZED to conduct thirty days
of limited discovery from the date of entry of this order to ascertain whether this court
may exercise personal jurisdiction over Defendants. This discovery may include
discovery pursuant to Federal Rule of Civil Procedure 30(b)(6).
IT IS FURTHER ORDERED that Plaintiff is DIRECTED to file a supplemental
brief addressing whether this court may permissibly exercise personal jurisdiction over
Defendants within 45 days of the date of entry of this order. This brief shall include
specific factual allegations regarding the importation, sale, or marketing of the accused
product within the Eastern District of Michigan.
s/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE
Dated: February 27, 2017
I hereby certify that a copy of the foregoing document was mailed to counsel of record
on this date, February 27, 2017, by electronic and/or ordinary mail.
s/Shawna C. Burns
Case Manager Generalist
S:\Cleland\JUDGE'S DESK\C1 ORDERS\16-12013.FILTERPLUS.motion.to.dismiss.TLH2.docx
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?