HONEYWELL INTERNATIONAL INC. v. CREE, INC.

Filing 36

OPINION. Signed by Judge Jose L. Linares on 1/12/15. (DD, )

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

HONEYWELL INTERNATIONAL INC.,

Civil Action No.: 14-2004 (JLL)

Plaintiff,

OPINION

v.
CREE, INC.,
Defendant.

LINARES, District Judge.
This matter comes before the Court by way of Defendant Cree, Inc., (“Defendant”)’s
partial motion to dismiss Plaintiff Honeywell International Inc., (“Plaintiff’)’s Complaint (ECF
No. 1) pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 11). The Court has
considered the parties’ submissions in support of and in opposition to the instant motion and
decides this matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For
the reasons set forth below, the Court denies Defendants’ motion.
I. BACKGROUND’

Plaintiff is a corporation organized under the laws of the state of Delaware, with its
principal place of business in New Jersey. (Comp. at ¶ 1). Defendant is a corporation, with its
principal place of business in North Carolina. (Id. at 3). Plaintiff is the owner of U.S. Patent
¶

1

The following facts are taken as true solely for the purposes of this motion.

No. 6,373,188 Bi (the “188 Patent”) and U.S. reissued Patent No. RE41,685 (the “685
Reissue”, a reissue of U.S. Patent No. 6,666,567). (Id. at ¶ 2).
On April 16, 2002, the United States Patent and Trademark Office (“USPTO”) issued the
‘188 patent, which Plaintiff owns all substantial rights in. (Id. at 8-9). The Patent was entitled
¶
“Efficient Solid-State Light Emitting Device With Excited Phosphors For Producing a Visible
Light Output.” (Id. at ¶ 8). Moreover, on January 11, 2011, the USPTO issued an exparte
reexamination certificate for the ‘188 patent. (Id. at ¶ 10). Similarly, on December 23, 2003 the
USPTO issued the ‘567 patent, which was later reissued as the ‘685 reissue on September 14,
2010. (Id. at ¶ 11). This patent and subsequent reissue was entitled “Light Source With Non
White and Phosphor-Based White LED Devices, and LCD Assembly.” (Id.). Plaintiff owns all
substantial rights in the ‘567 reissue, as well. (Id. at ¶ 12).
Plaintiff alleges that Defendant has infringed and continues to infringe the ‘188
Patent by making, using, offering to sell, and/or selling in the United States phosphor-based
LEDs and/or products incorporating the same, that are covered by claim 28 of the ‘188 Patent.
(Id. at ¶ 14). Moreover, Plaintiff asserts that Defendant has indirectly infringed and continues to
indirectly infringe the ‘188 Patent; Defendant’s customers also directly infringe the ‘188 Patent
by their use of Defendant’s phosphor-based LED products in the United States; Defendant has
knowingly induced infringement and has had specific intent to induce infringement of the ‘188
Patent by its activities relating to the marketing, sales, support, and distribution of its phosphor
based LED products; Defendant has committed and intended to commit contributory
infringement of the ‘188 Patent; and Defendant knew of the alleged contributory infringement.
(Id. at ¶ 15). Plaintiff contends that Defendant has had actual knowledge of the ‘188 patent since
no later than October 19, 2007, when Plaintiff filed an original Complaint against Defendant
in

the United States District Court for the Eastern District of Texas, alleging infringement of the
‘188 Patent. (Id. at ¶ 16). Regardless of Defendant’s knowledge of the ‘188 Patent, as well as
Plaintiff’s allegations of infringement and the confirmation of the ‘188 Patent claims in
reexamination, Defendant has allegedly continued to infringe, directly and indirectly, the ‘188
Patent, sufficient to entitle Plaintiff to treble damages. (Id. atJ 16-17).
Similarly, Plaintiff alleges that Defendant has infringed and continues to infringe the ‘188
Patent by making, using, offering to sell, and/or selling in the United States, LED systems and
arrays of LEDs and/or products incorporating the same, that are covered by claim 10 of the ‘685
Reissue. (Id. at ¶ 20). Plaintiff asserts that Defendant has indirectly infringed and continues to
indirectly infringe the ‘685 Reissue as well. (Id. at ¶ 21). What is more, Plaintiff alleges that
Defendant’s customers also directly infringe the ‘685 Reissue by their use of Defendant’s LED
system products; Defendant has knowingly induced infringement and has had specific intent to
induce infringement of the ‘685 Reissue by its activities relating to the marketing, support, and
distribution of its LED system products; Defendant had committed and intended to commit
contributory infringement of the ‘685 Reissue; and Defendant knew that its LED system
products, and/or any components thereof, were especially made or adapted for use in infringing
the ‘685 Reissue. (Id.) Finally, Defendant has contributed to the infringement of the ‘685 Reissue
by marketing, supporting, distribution, offering for sale and/or selling the phosphor-based LED
products, and/or components thereof, to its customers. (Id.) Plaintiff contends that Defendant has
had actual knowledge of the ‘685 Reissue since no later than the date of the filing of the
Complaint. (Id. at ¶ 22).
II. LEGAL STANDARD

Federal Rule of Civil Procedure 8(a)(2) requires that a complaint set forth “a short and
plain statement of the claim showing that the pleader is entitled to relief.” For a complaint to
survive dismissal, it “must contain sufficient factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.” Ashcrofl v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Ati,
Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The plaintiffs
short and plain statement of the claim must “give the defendants fair notice of what the.

.

.

claim

is and the grounds upon which it rests.” Twombly, 550 U.S. at 545 (quoting Conley v. Gibson, 355
U.S. 41, 47, 78 S.Ct. 99,2 L.Ed.2d 80(1957)).
In evaluating the sufficiency of a complaint, a court must accept all well-pleaded factual
allegations as true and draw all reasonable inferences in favor of the non-moving party. See Phillips
v. County ofAllegheny, 515 F.3d 224, 234 (3d Cir. 2008). “Factual allegations must be enough
to

raise a right to relief above the speculative level.” Bell All. Corp. v. Twombly, 550 U.S. at 555
(2007). Further, “[a] pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the
elements of a cause of action will not do. Nor does a complaint suffice if it tenders ‘naked
assertion[s]’ devoid of ‘further factual enhancement.” Jqbal, 556 U.S. at 678 (citing Bell Atl.
Corp. v. Twombly, 550 U.S. at 555, 557 (2007)). However, this “does not impose a probability
requirement at the pleading stage,’ but instead sirnply calls for enough facts to raise a reasonable
expectation that discovery will reveal evidence of the necessary element.” West Penn Allegheny
Health Svs. Inc.

i.

UPAIC, 627 F.3d 85,98 (3d Cir. 2010) (quoting Phillips v. county ofAllegheny,

515 R3d 224, 234 (3d Cir.2008)).
III. DISCUSSION
A. Motions before the Court

1. Defendant’s Motion
Defendant argues that dismissal of Count II of Plaintiffs Complaint is warranted upon
the following grounds: (1) The ‘685 reissue patent enlarged the scope of the claims of ‘567
patent; and (2) the application for the ‘685 reissue patent was filed over two years after the ‘567
patent issued.
2. Plaintiff’s Opposition
In opposition to the instant motion, Plaintiff argues: (1) Plaintiff timely filed its reissue
application within the two-year window, and then properly used a divisional reissue application
to continue its examination; (2) Plaintiff fulfilled any requirement to reference the parent
application in the divisional; and (3) Defendant’s motion is particularly meritless in the
procedural context of a motion to dismiss.
B. ‘685 Reissue
Defendant argues that Claim 10 of the ‘685 reissue is facially invalid and therefore,
Defendant cannot be liable for any alleged infringement. As a result of this, Defendant contents
that Count II of Plaintiffs Complaint fails to state a plausible claim for relief and must be
dismissed. Defendant asserts that claim 10 of the ‘685 reissue is facially invalid because while
the ‘567 patent was issued on December 23, 2003, the reissue application was not filed until
April 19, 2007, over three years after the ‘567 patent issued. Defendant points to the language
of
35 U.S.C.

§ 251(d), for the proposition that “no reissue patent shall be granted enlarging the

scope of the claims of the original patent unless appliedfor within two years from the grant of
the original patent.” 35 U.S.C. §251 (d) (Emphasis added). Moreover, Defendant notes that
under 35 U.S.C. §120, for a later-filed application to claim priority to an earlier application,
the

application must contain or be amended to contain a specific reference to the earlier filed
application, which Defendant argues, Plaintiff has failed to satisfy. Encyclopedia Britannica, Inc.
v. Alpine Elecs. OfAm., Inc., 609 F.3d 1345, 1349-1350 (Fed. Cir. 2010).
Plaintiff responds to Defendant’s arguments by stating that Plaintiff filed an application
for a reissue of ‘567 patent on December 22, 2005, within two years of the issuance of the ‘567
patent. Plaintiff sought to correct an error originally issued in the ‘567 parent by adding twenty
one (21) new claims in the patent reissue application. Plaintiff contends that the USPTO
reviewed the ‘597 parent reissue application and determined that the new claims were
sufficiently distinct from the original nine claims and that they should be included in separate,
but related applications, called “divisional” applications. Plaintiff states that pursuant to the
USPTO’s instructions, on April 19, 2007, Plaintiff amended the ‘597 patent by cancelling claims
10-30, without prejudice, and concurrently filed two divisional applications. The USPTO then
suspended the examination of ‘597 parent reissue application and commenced examination of the
‘399 divisional application, where it eventually determined that the claims were allowable and
could issue into a patent. Plaintiff, following the USPTO’s instructions, merged the ‘399
divisional reissue application with the ‘597 parent reissue application. Plaintiff cites to In re
Staats, for the proposition that a second related reissue application may be filed after the two
year window when that application relates back to a parent application that is still being
examined. 671 F.3d 1350, 1355-56 (Fed. Cir. 2012).
Furthermore, Plaintiff argues that the ‘399 divisional reissue application does contain a
specific reference to the earlier filed application, despite Defendant’s contentions. Plaintiff points
to language in the ‘399 divisional reissue application which states:

Notice: More than one reissue application has been filed for the
reissue of US. Pat. No. 6,666, 567. The reissue applications are application
Ser. No. 11/788,399 (the present application), Ser. No. 11/788,398 (filed
concurrently herewith), and Ser. No. 11/316,567, all of which are
divisional reissues of US. Pat. No. 6,666,567.

(ECF No. 30-12 at 2) (Emphases added). Plaintiff maintains that although Defendant states that
this is inadequate to establish specific reference, the USPTO found no issues with this notice and
granted the claims. Plaintiff then points to other statements in the file history which provide other
reference to the ‘597 parent reissue application. Plaintiff asserts that the above cited provision in
the body of ‘685 reissue patent combined with Plaintiff’s and the USPTO’s statements in the file
history provide sufficient notice of the relationship between the ‘399 divisional reissue
application and the ‘597 parent reissue application.
Finally, Plaintiff argues, notwithstanding the above arguments, Defendant’s motion is
meritless in the procedural context of a motion to dismiss. Plaintiff states that the Court should
reject Defendant’s argument that the ‘399 divisional reissue application cannot claim priority to
the ‘597 parent application due to the alleged lack of a specific reference in the divisional
application for several reasons. Plaintiff contends that whether written description exists in a
question of fact, often determined by expert testimony and not appropriate on a motion to
dismiss; expert testimony is needed to determine how one of ordinary skill in the art would
understand the scope of written description in the ‘597 reissue parent application; the Court has
not engaged in claim construction and it would be inappropriate to invalidate claim 10 without
claim construction discovery; and Defendant’s motion does not meet the high burden of
establishing a failure to state a claim upon which relief could be granted.
Defendant responds to Plaintiff by stating that Plaintiff’s arguments are based upon a
“fundamental misunderstanding” of the specific reference requirement under 120. Defendant
§

states that the text that Plaintiff relies upon as a specific reference was actually inserte
d to
comply with the requirement that there must be notification if more than one reissue applica
tion
is filed for a single patent as prescribed in Patent Office Rule 177. 37 C.F.R. §1.177(a).
Defendant asserts that the language Plaintiff asserted into its specification exactly tracks
the
suggested language in the Manual of Patent examining Procedure (“MPEP”). Defendant further
s
its argument by pointing out that in In re Staats there was no dispute whether the applica
tion was
a proper “continuing reissue application” because the patent application is that case contain
ed the
“specific reference” required by

§ 120. Defendant then points to two separate paragraphs in the

Staats patent application; one which stands for the purpose of denoting specific referen
ce, and
the other which denotes the multiple-issue-notice requirement of Rule 177.
What is more, Defendant argues that Plaintiff’s contention that based upon statem
ents in
the prosecution history the Court should infer that the public was sufficiently given
notice is
misguided. Plaintiff cites Federal Circuit law for the proposition that 120 cannot be
satisfied
§
based on contextual clues in prosecution history from which the public would have discern
to
the
intended claim for priority. Medtronic Core Valve, LLC v. Edwards Lfesciences Corp.,
741 F.3d
1359, 1366 (Fed. Cir. 2014). Therefore, Defendant argues, because Plainti
ff did not make the

specific reference in the application itself, Plaintiff has not met its 120 burden
. Finally,
§
Defendant asserts that even though, by statute, Plaintiff had four months from the
date of its
application to make specific reference, Plaintiff still failed to submit the referen
ce and thus
waived any benefit under 35 U.S.C.

§ 120 and 121.37 C.F.R. §l.78(a)(2)(ii).

Claim construction is often a preliminary proceeding in the district
court, before trial of infringement, validity, damages, etc. At the threshold,
the court establishes the metes and bounds of the claims that define the
patent right. The questions of claim construction are not questions of weight
of evidence or credibility of witnesses, but of the claim scope as set forth
in
the patent documents.

Lighting Ballast Control LLC v. Philips Electronics iV Am. Corp., 744 F.3d 1272, 1285 (Fed.
Cir. 2014).
The Court finds it inappropriate, at this stage of the litigation, to dismiss Count II of
Plaintiff’s Complaint. Although, Defendant maybe able to invalidate Claim 10 of the ‘685
reissue at a later stage, the Court declines to undertake that enquiry without both parties being
afforded proper claim construction discovery. For the Court to render the ‘685 reissue invalid at
this stage of the proceedings would be premature. Rule 12(b)(6), “does not impose a probability
requirement at the pleading stage,’ but instead ‘simply calls for enough facts to raise a reasonable
expectation that discovery will reveal evidence of’ the necessary element.” West Penn Allegheny
l-Iealth Svs. Inc. v. UPMC, 627 F.3d 85, 98 (3d Cir. 2010) (quoting Phillips v. County of

Allegheny, 515 F.3d 224, 234 (3d Cir.2008)). Based upon this standard and the pleadings at
hand. Plaintiff has alleged direct and indirect infringement in Count II in a manner sufficient to
defeat Defendant’s partial motion to dismiss. Therefore, Defendant’s motion is denied.
IV. CONCLUSION

For the reasons herein expressed, Defendant’s motion to dismiss Count II of Plaintiff’s
Complaint is denied.
An appropriate Order accompanies this Opinion.

DATE: January

/., 2015
States District Judge