Webasto Thermo & Comfort North America, Inc. et al v. BesTop, Inc.

Filing 36

OPINION AND ORDER Granting 27 Motion to Dismiss and Granting Defendant Leave to File an Amended Complaint. Signed by District Judge Paul D. Borman. (DTof)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
WEBASTO THERMO & COMFORT
NORTH AMERICA, INC. and
WEBASTO-EDSCHA CABRIO USA, INC.,
Plaintiffs,

Case No. 16-cv-13456
Paul D. Borman
United States District Judge

v.
BESTOP, INC.,
Defendant.
_______________________________/

OPINION AND ORDER GRANTING PLAINTIFF’S MOTION TO DISMISS
DEFENDANT’S COUNTERCLAIM (ECF NO. 27) AND GRANTING
DEFENDANT LEAVE TO FILE AN AMENDED COUNTERCLAIM
This action involves Plaintiffs Webasto Thermo & Comfort North America, Inc.
and Webasto-Edscha Cabrio USA, Inc.’s (collectively “Webasto”) claim that
Defendant Bestop, Inc. (“BesTop”) infringes Webasto’s U.S. Patent No. 9,346,342
(“the ‘342 Patent”), entitled “Vehicle Roof and Roof Opening Mechanism.” BesTop
has filed an Answer to the Complaint and a Four-Count Counterclaim. (ECF No. 23.)
Webasto now moves to dismiss the Counterclaim for failure to satisfy Fed. R.
Civ. P. 12(b)(6) pleading standards. (ECF No. 27.) BesTop filed a Response (ECF
No. 31), and Webasto filed a Reply (ECF No. 33). The Court has determined that oral
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argument will not assist in resolving this motion and the Court will therefore decide
the matter on the briefs. See E.D. Mich. L. R. 7.1(f)(2). For the reasons that follow,
the Court GRANTS the motion to dismiss and GRANTS BesTop’s request for leave
to file an amended counterclaim.
I.

BACKGROUND
The Court has summarized these background facts in a previous Opinion and

Order denying BesTop’s motion to dismiss. Webasto Thermo & Comfort North
America, Inc. v. Bestop, Inc., No. 16-cv-13456, 2017 WL 2276988 (E.D. Mich. May
25, 2017). Webasto alleges that on May 24, 2016, the United States Patent and
Trademark Office (“USPTO”) issued the ‘342 Patent and that Webasto holds all right,
title and interest in the ‘342 Patent with rights to enforce the ‘342 Patent and to sue
for infringement. (ECF No. 1, Complaint ¶ 8; Ex. A, U.S. Patent No. 9,346,342.) The
‘342 Patent claims technology related to a vehicle roof and roof opening mechanism
that Webasto claims to have introduced to the public on March 27, 2015, at the Easter
Jeep Safari event in Moab, Utah. (Compl. ¶ 10-11.) Webasto alleges that the
Webasto roof opening mechanism provides an innovative and effective way to cover
and selectively uncover a roof opening. (Compl. ¶ 12.)
Webasto alleges that BesTop manufactures a roof opening mechanism under
the name “Sunrider For Hardtop” (“Sunrider”) that incorporates Webasto’s patented
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roof opening mechanism and infringes one or more claims of the ‘342 Patent, either
literally or under the doctrine of equivalents. Webasto alleges that representatives of
BesTop were present at the 2015 Moab, Utah Jeep event and that, at that time, BesTop
did not offer a roof opening mechanism similar to or in-line with its current Sunrider.
(Compl. ¶¶ 13-18.)
Webasto alleges that BesTop’s Sunrider infringes at least claims 1 and 6 of the
‘342 Patent. (Compl. ¶ 25.) Claim 6 of the ‘342 Patent recites:
A roof opening mechanism, being designed as an interchangeable insert,
for unlockable fixation at a roof structure of a vehicle roof, and
comprising:
a base frame, which can be placed upon an edge region of
the roof structure, said edge region for limiting a roof
opening, further comprising a fabric covering element,
which, by at least one tensioning bow fixedly pivotable
with respect to the base frame, is displaceable between a
closed position for covering the roof opening and an
uncovering position for uncovering the roof opening,
wherein the tensioning bow is coupled to an auxiliary
tensioning bow fixedly pivotal to the base frame, and
wherein the tensioning bow, in relation to a vertical
longitudinal center plane of the roof, is on each of its two
sides connected to the auxiliary tensioning bow via a
coupling rod,
the coupling rod being articulated to the auxiliary
tensioning bow and to the main tensioning bow via
intermediately positioned hinge points.
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(Compl. ¶ 26, Ex. A, United States Patent No. 9,346,342, claim 6, PgID 38.) Webasto
alleges that BesTop’s Sunrider mechanism satisfies all of the limitations of claim 6 of
the ‘342 Patent. (Compl. ¶¶ 27-33.)
Claim 1 of the ‘342 Patent recites “A vehicle roof having a roof structure with
a roof opening, which, by a roof opening mechanism, can be closed or at least
partially uncovered as desired, said roof opening mechanism being designed as an
interchangeable insert. . . .” (Compl. ¶ 34. Ex. A, ‘342 Patent, claim 1, PgID 37.)
Claim 1 then recites the structural elements of the interchangeable insert which are
similar to those set forth connection with claim 6. (Id.) Webasto alleges that each of
the limitations of claim 1 of the ‘342 Patent are found in BesTop’s Sunrider
mechanism. (Compl. ¶ 35.)
Webasto alleges that BesTop adopted the Webasto patented design after having
seen Webasto’s design in at least March 2015 and was or should have been aware that
Webasto’s design incorporated patentable subject matter. Webasto alleges that
BesTop’s infringement has caused and continues to cause damage to Webasto and that
Webasto is entitled to recover damages at trial, including treble damages, pursuant to
35 U.S.C. § 284 and attorneys’ fees pursuant to 35 U.S.C. § 285. (Compl. ¶¶ 42-43.)
On June 8, 2017, BesTop filed its Answer and a Counterclaim, alleging two
counts of non-infringement of the ‘342 patent and two counts of invalidity of the ‘342
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patent. (ECF No. 23, Answer and Counterclaim.) Webasto now moves to dismiss
BesTop’s Counterclaim under Fed. R. Civ. P. 12(b)(6) for failure to state a claim,
alleging that the Counterclaim contains nothing but a formulaic recitation of the
elements of the claims of non-infringement and invalidity and therefore fails to
plausibly allege either non-infringement or invalidity.
II.

STANDARD OF REVIEW
When reviewing a motion to dismiss under Rule 12(b)(6), a court must

“‘construe the complaint in the light most favorable to the plaintiff, accept its
allegations as true, and draw all reasonable inferences in favor of the plaintiff.’”
Handy-Clay v. City of Memphis, 695 F.3d 531, 538 (6th Cir. 2012) (quoting Directv
Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007)). The court “need not accept as true
a legal conclusion couched as a factual allegation, or an unwarranted factual
inference.” Handy-Clay, 695 F.3d at 539 (internal quotation marks and citations
omitted). See also Eidson v. State of Tenn. Dep’t of Children’s Servs., 510 F.3d 631,
634 (6th Cir. 2007) (“Conclusory allegations or legal conclusions masquerading as
factual allegations will not suffice.”).
In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court
explained that “a plaintiff’s obligation to provide the grounds of his entitle[ment] to
relief requires more than labels and conclusions, and a formulaic recitation of the
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elements of a cause of action will not do. Factual allegations must be enough to raise
a right to relief above the speculative level . . . .” Id. at 555 (internal quotation marks
and citations omitted) (alteration in original). “To state a valid claim, a complaint must
contain either direct or inferential allegations respecting all the material elements to
sustain recovery under some viable legal theory.” LULAC v. Bredesen, 500 F.3d 523,
527 (6th Cir. 2007).
The Supreme Court clarified the concept of “plausibilty” in Ashcroft v. Iqbal,
556 U.S. 662 (2009), explaining that “[a] claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged. Id. at 678.” Thus, “[t]o survive
a motion to dismiss, a litigant must allege enough facts to make it plausible that the
defendant bears legal liability. The facts cannot make it merely possible that the
defendant is liable; they must make it plausible. Bare assertions of legal liability
absent some corresponding facts are insufficient to state a claim.” Agema v. City of
Allegan, 826 F.3d 326, 331 (6th Cir. 2016) (citing Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009)).
In ruling on a motion to dismiss, the Court may consider the complaint as well
as (1) documents that are referenced in the plaintiff’s complaint and that are central
to plaintiff’s claims, (2) matters of which a court may take judicial notice (3)
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documents that are a matter of public record, and (4) letters that constitute decisions
of a governmental agency. Thomas v. Noder-Love, 621 F. App’x 825, 829 (6th Cir.
2015) (“Documents outside of the pleadings that may typically be incorporated
without converting the motion to dismiss into a motion for summary judgment are
public records, matters of which a court may take judicial notice, and letter decisions
of governmental agencies.”) (Internal quotation marks and citations omitted);
Armengau v. Cline, 7 F. App’x 336, 344 (6th Cir. 2001) (“We have taken a liberal
view of what matters fall within the pleadings for purposes of Rule 12(b)(6). If
referred to in a complaint and central to the claim, documents attached to a motion to
dismiss form part of the pleadings. . . . [C]ourts may also consider public records,
matters of which a court may take judicial notice, and letter decisions of governmental
agencies.”); Greenberg v. Life Ins. Co. Of Virginia, 177 F.3d 507, 514 (6th Cir. 1999)
(finding that documents attached to a motion to dismiss that are referred to in the
complaint and central to the claim are deemed to form a part of the pleadings). Where
the claims rely on the existence of a written agreement, and plaintiff fails to attach the
written instrument, “the defendant may introduce the pertinent exhibit,” which is then
considered part of the pleadings. QQC, Inc. v. Hewlett-Packard Co., 258 F. Supp. 2d
718, 721 (E.D. Mich. 2003). “Otherwise, a plaintiff with a legally deficient claims
could survive a motion to dismiss simply by failing to attach a dispositive document.”
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Weiner v. Klais and Co., Inc., 108 F.3d 86, 89 (6th Cir. 1997).
III.

ANALYSIS
BesTop does not deny, nor can it, that its Counterclaim alleges non-

infringement and invalidity in the most formulaic of terms, setting forth barebones
legal conclusions and alleging no facts whatsoever that would satisfy the
Twombly/Iqbal pleading standard.1 But BesTop argues that special (more lax) rules
of pleading apply to its patent non-infringement and invalidity Counterclaims, and that

1

For example, Count I, “Non-Infringement of the ‘342 Patent,” begins by
“incorporat[ing] by reference the averments of the preceding paragraphs in these
counterclaims as though fully set forth herein.” (Counterclaim ¶ 5.) The preceding
4 paragraphs allege that jurisdiction is appropriate and assert that Webasto has filed
its claims in this action. (Counterclaim ¶¶ 1-4.) BesTop further alleges in Count I that
Webasto “cannot identify any products of [BesTop] that infringe any properly
construed valid or unenforceable claims of the ‘342 Patent after the date of the
patent.” (Counterclaim ¶ 6.) This Count continues, alleging that BesTop “does not
infringe and has not infringed any properly construed claim of the ‘342 Patent
literally, equivalently, directly, or indirectly, including inducement of infringement
or contributory infringement.” (Counterclaim ¶ 7.) The final paragraph of this Count
alleges that “[b]y virtue of the Complaint filed by Webasto in this Court, there is an
actual controversy between Webasto on the one hand and BesTop on the other hand
concerning non-infringement of the ‘342 Patent. A judicial determination of the noninfringement of the ‘342 Patent is necessary and appropriate in order to resolve this
controversy.” (Counterclaim ¶ 8.) Count I contains bare legal conclusions and no
factual content that, taken as true, would plausibly suggest a valid non-infringement
claim against Webasto. BesTop’s additional non-infringement Count and its two
invalidity Counterclaims are similarly deficient. See, e.g.,RAH Color Technologies
LLC v. Ricoh USA, Inc., 194 F. Supp. 3d 346, 351 (E.D. Pa. 2016) (finding identically
worded non-infringement and invalidity counterclaims insufficient under Twombly
and Iqbal).
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the formulaic recitation of the elements set forth in its four-Count Counterclaim
satisfies that special pleading rule. Webasto argues that the “special patent pleading
rules” that BesTop invokes were abrogated by 2015 amendments to the Federal Rules
of Civil Procedure and argues that patent non-infringement and invalidity claims now
must meet the same Twombly/Iqbal pleading standards that apply to all other types of
claims. This Court agrees with Webasto.
Prior to 2015, Fed. R. Civ. P. 84 incorporated into the Federal Rules a number
of “official forms [to] serve as guides in pleading.” See Fed. R. Civ. P. 84
[Abrogated], 1937 Advisory Committee Notes. Over time, the Rules attached some36
Forms that included model complaints for claims ranging from conversion of property
to patent infringement and many topics in between. See Fed. R. Civ. P. Appendix of
Forms [Abrogated]. A pleading that conformed to one of the Forms was deemed
sufficient to withstand any motion to dismiss based on factual insufficiency. Form 18,
a model “Complaint for Patent Infringement,” required only “(1) an allegation of
jurisdiction; (2) a statement that the plaintiff owns the patent; (3) a statement that
defendant has been infringing the patent ‘by making, selling, and using [the device]
embodying the patent’; (4) a statement that the plaintiff has given the defendant notice
of its infringement; and (5) a demand for an injunction and damages.” In re Bill of
Lading Transmission and Processing System Patent Litig., 681 F.3d 1323, 1334 (Fed.
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Cir. 2012).

The pleading Forms applied to claims and counterclaims alike.

“[W]hether asserted as complaints or counterclaims, [all] allegations are judged under
the same standards.” Id. at 1328 n. 1. In Bill of Lading, the Federal Circuit confirmed
that patent infringement claims that met the minimal pleading demands of Form 18
were unassailable for factual insufficiency. “The language of Rule 84 and the
Advisory Committee Notes make clear that a pleading, motion, or other paper that
follows one of the Official Forms cannot be successfully attacked.” Id. (citation
omitted).
Thus, Form 18, which was appended to the Rules, “provided a sample pleading
for direct patent infringement that permitted threadbare infringement allegations.”
RAH Color Technologies LLC v. Ricoh USA, Inc., 194 F. Supp. 3d 346, 348 (E.D. Pa.
2016). But Rule 84 was abrogated, as were the Forms it endorsed, effective December
1, 2015:
Rule 84 was adopted when the Civil Rules were established in 1938 “to
indicate, subject to the provisions of these rules, the simplicity and
brevity of statement which the rules contemplate.” The purpose of
providing illustrations for the rules, although useful when the rules were
adopted, has been fulfilled. Accordingly, recognizing that there are
many excellent alternative sources for forms . . . Rule 84 and the
Appendix of Forms are no longer necessary and have been abrogated.
The abrogation of Rule 84 does not alter existing pleading standards or
otherwise change the requirements of Civil Rule 8.
Advisory Committee Notes, 2015 Amendment (ellipsis added).
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Although the Sixth Circuit has not directly addressed the issue, and few courts
in this district have had occasion to directly address the issue either, it is
overwhelmingly accepted by courts that have examined the question that the “existing
pleading standards” referred to in the Advisory Committee Notes are those defined in
Twombly and further refined in Iqbal:
The Advisory Committee’s reference to “existing pleading standards”
and “requirements of Civil Rule 8” indicate that all complaints must now
meet the Twombly and Iqbal pleading standards that federal courts have
previously applied to all complaints not covered by the Forms. Pleading
in compliance with the prior Forms no longer will suffice under Rule 8,
since they generally do not suggest pleading enough facts to constitute
a plausible claim for relief.
5 Fed. Prac. & Proc. § 1251 (3d ed) (April 2017 Update). See also, e.g., RAH Color,
194 F. Supp. 3d at 350-53 (noting that “the abrogation of Rule 84 and Form 18
eliminated any reason to deviate from Twombly/Iqbal in pleading patent claims,” and
“follow[ing] the federal district courts in our circuit that have applied
Twombly/Iqbal’s pleading standard to counterclaims of invalidity [and noninfringement],” and dismissing threadbare counterclaims but granting leave to
amend); Hi-Tech Pharmaceuticals, Inc. v. Hodges Consulting, Inc., 230 F. Supp. 3d
1323, 1335-36 (N.D. Ga. 2016) (noting that “after the forms were abrogated, courts
have almost unanimously held that all patent claims and counterclaims are subject to
the pleading requirements of Iqbal and Twombly,” and granting motion to dismiss
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defendant’s conclusory counterclaims of non-infringement and invalidity under
Twombly and Iqbal, which pleaded no factual content, but granting leave to amend);
Tannerite Sports, LLC v. Jerent Enterprises, LLC, No. 15-cv-00180, 2016 WL
1737740, at *3 (D. Or. May 2, 2016) (“With the abrogation of Form 18, so too went
the patent infringement exception to the civil pleading requirements set forth in
Twombly and Iqbal.”); Filter Plus, Inc. v. O R Co., No. 16-cv-12974, 2017 WL
747598, at *2 (E.D. Mich. Feb. 27, 2017) (“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 Twombly and Iqbal
applies here.”). The only case appearing to suggest otherwise, Hologram USA, Inc.
v. Pulse Evolution Corp., No. 14-cv-0772, 2016 WL 199417 (D. Nev. Jan. 15, 2016),
has been disregarded by multiple courts as having been “short on legal analysis” and
also distinguished in some instances by the fact that the complaint in Hologram was
filed before the effective date of the December 1, 2015 Amendments abrogating Form
18. See, e.g., RAH Color, 194 F. Supp. 3d at 352 (recognizing Hologram as “an
outlier” and applying Twombly and Iqbal pleading standards); Tannerite, 2016 WL
1737740, at *3 (rejecting Hologram’s “abbreviated legal analysis,” and finding that
the Hologram court “overlooked the import of a critical point,” i.e. “a form that no
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longer exists can no longer control”).
In response to Webasto’s motion, BesTop does not cite one case discussing the
appropriate pleading standard for a patent case that post-dates the abrogation of Rule
84 and Form 18. Indeed BesTop does not even acknowledge or try to distinguish the
many cases cited by Webasto and discussed supra, that reject continued adherence to
the abbreviated pleading standards of now-abrogated Form 18 following the
December, 2015 Amendments to the Federal Rules of Civil Procedure.
BesTop suggests that Webasto (and apparently the Court) need only look to its
recently-served invalidity contentions to understand the factual predicate for its
counterclaims. But of course the Court is limited to an examination of the pleadings
in resolving a motion under Fed. R. Civ. P. 12(b)(6). BesTop’s invalidity contentions,
which were to be served on Webasto on September 22, 2017, are irrelevant to the
Court’s analysis. In any event, Webasto states in its Reply that it has received those
contentions and they are equally void of factual content.
BesTop’s counterclaims as pled merely recite bare legal conclusions and fail
to allege sufficient factual content to support a plausible inference of liability. “Bare
assertions of legal liability absent some corresponding facts are insufficient to state
a claim.” Agema, 826 F.3d at 331. BesTop seemingly accepts this but invokes an
abrogated exception to the prevailing pleading standards in defense of the brevity of
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its pleading. The Court rejects BesTop’s argument and GRANTS Plaintiff’s motion
to dismiss the counterclaims.
In the alternative to a denial of Webasto’s motion to dismiss its Counterclaim,
BesTop seeks leave to file an amended counterclaim. Rule 15 requires that leave to
amend be freely given when justice so requires. Given the relatively early stages of
this case, and the absence of any significant prejudice to the Plaintiff, the Court
concludes that leave to amend should be granted here.
IV.

CONCLUSION
The Court GRANTS the motion to dismiss BesTop’s counterclaims as

insufficient under Twombly and Iqbal, and GRANTS BesTop’s request for leave to
amend its counterclaims. BesTop shall file its amended counterclaim, if it so elects,
within fourteen (14) days of the date of its Opinion and Order.
IT IS SO ORDERED.
s/Paul D. Borman
Paul D. Borman
United States District Judge
Dated: October 11, 2017
CERTIFICATE OF SERVICE
The undersigned certifies that a copy of the foregoing order was served upon each
attorney or party of record herein by electronic means or first class U.S. mail on October 11,
2017.
s/Deborah Tofil
Case Manager
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