Speedfit LLC et al v. Woodway USA, Inc. et al
MEMORANDUM AND ORDER re 126 motion to dismiss. For the reasons set forth in the attached Memorandum and Order, defendant's motion to dismiss plaintiffs' Third Amended Complaint is granted in part and denied in part. The parties shall confer and jointly advise the court by letter via ECF how they intend to proceed consistent with this opinion no later than January 9, 2017. Ordered by Judge Kiyo A. Matsumoto on 12/28/2016. (Newman, Alanna)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
SPEEDFIT LLC and AUREL A. ASTILEAN,
MEMORANDUM & ORDER
-againstWOODWAY USA, INC.,
MATSUMOTO, United States District Judge:
Plaintiffs Speedfit LLC (“Speedfit”) and Aurel A.
Astilean (“Astilean”) (collectively, “plaintiffs”) commenced
this action against Woodway USA, Inc. (“Woodway” or
“defendant”), alleging that Woodway wrongfully infringed upon
United States Patent No. 8,308,619 (“the ‘619 Patent”) and
United States Patent No. 8,343,016 (“the ‘016 Patent”), both of
which relate to a manually-powered treadmill design.1
allege that Woodway has infringed upon the ‘619 and ‘016 Patents
through the following patents owned by Woodway, which also
relate to manually-powered treadmills:
United States Patent No.
8,864,627 (“the ‘627 Patent”), United States Patent No.
8,986,169 (“the ‘169 Patent”), United States Patent No.
Plaintiffs’ Third Amended Complaint also alleges that Woodway has infringed
upon United States Provisional Application Serial No. 61/280,265.
infringement occurs “during the term of the patent,” which begins “on the date
on which the patent issues.”
See 35 U.S.C. §§ 271(a), 154(a)(2).
provisional application is not an issued patent, the court will only consider
plaintiffs’ claims regarding the ‘619 and ‘016 Patents.
9,039,580 (“the ‘580 Patent”), and United States Patent No.
9,114,276 (“the ‘276 Patent”) (collectively, the “Woodway
Plaintiffs seek a finding that Woodway wrongfully
infringed on the ‘619 and ‘016 Patents, a correction of
inventorship on the Woodway Patents, damages for alleged
conversion, and a declaratory judgment that Astilean and his coinventor Daniel Bostan (“Bostan”) are the sole or joint
inventors of the Woodway Patents.
(ECF No. 125, Plaintiffs’
Third Amended Complaint (“Am. Compl.”).)
Presently before the court is Woodway’s motion to
dismiss plaintiffs’ Third Amended Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(1) (“Rule 12(b)(1)”) for lack of
subject matter jurisdiction, and Federal Rule of Civil Procedure
12(b)(6) (“Rule 12(b)(6)”) for failure to state a claim upon
which relief can be granted.
For the reasons set forth below,
defendant’s motion is granted in part and denied in part.
Familiarity with the factual and procedural history is
assumed, as set forth comprehensively in this court’s prior
orders concerning this litigation.
See Speedfit LLC, et. al. v.
Woodway USA, Inc., No. 13-cv-1276, 2015 WL 6143697 (E.D.N.Y.
October 19, 2015) (granting leave to file a Third Amended
Complaint); Speedfit LLC, et. al. v. Woodway USA, Inc., 53 F.
Supp. 3d 561 (E.D.N.Y. 2014) (denying Woodway’s motion to
dismiss and motion to transfer).
Thereafter, plaintiffs filed
their Third Amended Complaint on October 23, 2015, adding claims
for correction of inventorship, conversion, and declaratory
On October 30, 2015, defendant filed a motion to
dismiss the Third Amended Complaint, and plaintiffs filed an
opposition on November 6, 2015.
(See ECF No. 126, Motion for
Pre-Motion Conference to Dismiss by Woodway USA, Inc. (“Def.
Mot.”); ECF No. 129, Reply in Opposition to Woodway USA, Inc.’s
Letter Motion Requesting a Pre-Motion Conference (“Pl. Opp.”).)2
Plaintiffs filed a supplemental opposition on November 19, 2015,
(ECF No. 133, Response in Opposition re Motion to Dismiss (“Pl.
Supp. Opp.”).) and defendant filed a reply on November 25, 2015.
(ECF No. 137, Reply in Support re Status Conference (“Def.
In its motion to dismiss, defendant argues that the
court lacks subject matter jurisdiction over plaintiffs’
infringement claims because Bostan, who is a co-inventor of the
‘619 and ‘016 Patents is not named as a plaintiff in this suit
and plaintiffs Speedfit and Astilean therefore lack standing to
bring claims for infringement.
Defendant further asserts that
During a telephonic conference held on November 12, 2015, the court granted
defendant’s request to treat its October 30, 2015 letter motion requesting leave
to file a motion to dismiss as defendant’s motion to dismiss the Third Amended
Complaint, and to treat plaintiff’s response letter as its opposition.
Plaintiffs were also granted permission to file a supplemental opposition. (See
ECF Minute Entry, dated 11/12/15.)
plaintiffs’ claims for correction of inventorship should be
dismissed because Speedfit and Astilean lack standing to bring
these claims on Bostan’s behalf.
Finally, defendant asserts
that plaintiffs’ claim for conversion is preempted by federal
patent law and should therefore be dismissed.
“A case is properly dismissed for lack of subject
matter jurisdiction under Rule 12(b)(1) when the district court
lacks the statutory or constitutional power to adjudicate it.”
Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000).
is well-settled that the “plaintiff bears the burden of proving
subject matter jurisdiction by a preponderance of the
Aurecchione v. Schoolman Transp. Sys., Inc., 426
F.3d 635, 638 (2d Cir. 2005) (citing Luckett v. Bure, 290 F.3d
493, 497 (2d Cir. 2002)).
In reviewing a Rule 12(b)(1) motion to dismiss, the
court “must accept as true all material factual allegations in
the complaint, but [the court is] not to draw inferences from
the complaint favorable to plaintiff.”
J.S. ex rel. N.S. v.
Attica Cent. Sch., 386 F.3d 107, 110 (2d Cir. 2004).
may exercise jurisdiction “only if a plaintiff has standing to
sue on the date that it files suit.”
Abraxis Bioscience, Inc.
v. Navinta LLC, 625 F.3d 1359, 1364 (Fed. Cir. 2010) (citing
Keane Corp. v. United States, 508 U.S. 200, 207 (1993)).
Furthermore, courts “‘have an independent obligation to
determine whether subject-matter jurisdiction exists, even in
the absence of a challenge from any party.’”
Medicare Contractor, No. 12-cv-6339, 2013 WL 1694870, at *2
(E.D.N.Y. Apr. 16, 2013) (quoting Arbaugh v. Y & H Corp., 546
U.S. 500, 514 (2006)).
Where subject matter jurisdiction is
lacking, “dismissal is mandatory.”
Id.; see also Fed. R. Civ.
P. 12(h)(3) (“If the court determines at any time that it lacks
subject-matter jurisdiction, the court must dismiss the
To survive a motion to dismiss pursuant to Rule
12(b)(6), 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 Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
“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
A complaint providing only “labels and
conclusions” or “a formulaic recitation of the elements of a
cause of action will not do.”
Twombly, 550 U.S. at 555.
deciding a motion to dismiss pursuant to Rule 12(b)(6), the
court may refer to “documents attached to the complaint as an
exhibit or incorporated in it by reference, to matters of which
judicial notice may be taken, or to documents either in
plaintiffs’ possession or of which plaintiffs had knowledge and
relied on in bringing suit.”
Brass v. Am. Film Tech., Inc., 987
F.2d 142, 150 (2d Cir. 1993) (internal citations omitted); see
also Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.
1993) (clarifying that “reliance on the terms and effect of a
document in drafting the complaint is a necessary prerequisite
to the court’s consideration of a document on a dismissal
motion; mere notice of possession is not enough.”) (emphasis in
Plaintiffs’ Patent Infringement Claims
Plaintiffs allege that Woodway wrongfully infringed
upon the ‘016 and ‘619 Patents through its manufacture and sale
of the Curve treadmill, which is also manually-powered.
issue is whether plaintiffs’ infringement claims should be
dismissed for lack of subject matter jurisdiction, as asserted
Defendant argues that because the Third Amended
Complaint does not name co-inventor Bostan as a plaintiff and
because Bostan was not named as a plaintiff when this action was
initially filed on March 11, 2013, plaintiffs Astilean and
Speedfit lack standing to bring an infringement claim relating
to the ‘016 and ‘619 Patents, and their claims should therefore
a. Standing to Bring an Infringement Claim
A patent serves to protect an inventor’s right to
exclude others from making, using, offering to sell, or selling
his or her invention during the term of the patent.
35 U.S.C. §
271(a) (“Except as otherwise provided in this title, whoever
without authority makes, uses, offers to sell, or sells any
patented invention, within the United States or imports into the
United States any patented invention during the term of the
patent therefor, infringes the patent.”).
In general, an
individual owns the patent rights to the subject matter of which
he or she is an inventor.
1359 (Fed. Cir. 2000).
Banks v. Unisys Corp., 228 F.3d 1357,
In cases of co-inventors, each
individual “owns a pro rata undivided interest in the entire
patent, no matter what their respective contributions.”
Ethicon, Inc. v. Surgical Corp., 135 F.3d 1456, 1465 (Fed. Cir.
As such, each co-inventor individually retains the right
to exclude others from infringing upon his or her patent, and
the Federal Circuit has consistently required that all coinventors be joined as plaintiffs at the time that an
infringement suit is filed in order for there to be proper
standing to proceed with an infringement claim.
Int’l Nutrition Corp. v. Horphag Research Ltd., 257 F.3d 1324,
1331 (Fed. Cir. 2001) (“[T]he right to bring suit on the United
States patent in the district court is governed by United States
patent law, which requires that all co-owners normally must join
as plaintiffs in an infringement suit.”); Ethicon, 135 F.3d at
1467-68 (“An action for infringement must join as plaintiffs all
co-owners.”) (citing Waterman v. Mackenzie, 138 U.S. 252, 255
In the present suit, the initial complaint, filed on
March 11, 2013, named Speedfit LLC and Astilean as plaintiffs
(See ECF No. 1, Complaint.), but did not include Bostan, whom
plaintiffs have since established as a co-inventor of the
patents at issue.
(See ECF No. 110, Motion to
Amend/Correct/Supplement the Inventorship of the Patents-In-Suit
pursuant to 35 U.S.C. 256.)
Recognizing the general rule
requiring all co-owners of a patent to join as plaintiffs,
plaintiffs assert two exceptions to this rule as the basis for
their argument that their claims should proceed against Woodway
despite the fact that Bostan has not been joined as a plaintiff.
First, plaintiffs assert that Astilean and Bostan assigned their
right to sue to Speedfit through an assignment agreement dated
June 1, 2015 (the “Assignment Agreement”), thereby granting
Speedfit the full ownership interest required for standing to
bring an infringement suit.
(See Pl. Opp. at 2.)
plaintiffs argue that Bostan waived his right not to be joined
involuntarily if he refuses to join a lawsuit voluntarily, and
that this suit can therefore proceed without him.
Supp. Op. at 9.)
The court considers each of plaintiffs’
assertions in turn.
1. The June 1, 2015 Assignment
Plaintiffs refer to the Assignment Agreement in
support of their assertion that Bostan need not be joined in
order for plaintiffs to have standing, since he assigned his
complete ownership in the patents at issue, and all accompanying
rights, to Speedfit.
(See Def. Mot. Exhibit B.)
Agreement provided that Bostan and Astilean “irrevocably assign
and transfer [their] entire and exclusive right, title, and
interest in the [‘016 Patent and ‘619 Patent] to Speedfit, LLC,
[...] its successors, assigns, and legal representatives,
including any nominees.”
Plaintiffs argue that because
Bostan assigned his “entire and exclusive right, title, and
interest” to Speedfit, Speedfit has standing to bring the
present claims without naming Bostan as a plaintiff.
Plaintiffs further assert that the Assignment Agreement,
though dated June 1, 2015, should be understood to apply
retroactively, based on the intention of the parties, which
plaintiff asserts can be gleaned from context surrounding the
execution of the Assignment Agreement.
The court respectfully rejects plaintiffs’ assertion
that the Assignment Agreement conveys the requisite standing to
Speedfit and Astilean to bring this suit without naming Bostan
as a plaintiff.
First, the court finds no support in the
Assignment Agreement for plaintiffs’ assertion that it was
intended to apply retroactively to the date that this suit was
initially filed in March of 2013.
In addition, even if the
Assignment Agreement did apply retroactively – though this is
not specified anywhere in the agreement - a deficiency in
standing cannot be cured through a retroactive assignment
See Abraxis, 625 F.3d at 1366-67 (“Even if the
[assignment] agreement is considered to be a nunc pro
tunc assignment, for purposes of standing, [plaintiff] was
required to have legal title to the patents on the day it filed
the complaint and that requirement cannot be met
Although there is one recognized exception to
this rule, where an owner expressly grants an assignee the right
to sue for past infringement transpiring before the assignee
acquired legal title, the Assignment Agreement makes no such
specification and therefore, this exception does not apply here.
Id. at 1367.
Furthermore, the Assignment Agreement was entered
over two years after the initial complaint was filed naming
Speedfit as a plaintiff.
Even if the Assignment Agreement was
retroactively applicable, Speedfit did not have an ownership
interest in the patents at issue on March 11, 2013, and
therefore lacked standing to bring suit at the time that the
original complaint was filed.
Consequently, the court finds that plaintiffs lack
standing to bring the present claims for infringement of the
‘016 and ‘619 Patents.
As a co-owner of the patents at issue,
Astilean was required to join Bostan as a plaintiff when the
suit was filed in March of 2013.
Furthermore, Speedfit, which
had no ownership interest in the patent until June 1, 2015, did
not have standing at the time the suit was filed.
deficiency in standing was cured through the June 1, 2015
assignment to Speedfit.
2. Bostan’s Right Not to be Involuntarily
Joined in a Lawsuit
Plaintiffs argue in the alternative, that even if
Bostan would ordinarily be required to join as a plaintiff under
the general rule for standing, an exception applies in the
present case because Bostan waived his right not to be
involuntarily joined in this lawsuit.
(See Pl. Supp. Op. at 1.)
The Federal Circuit has recognized this exception to the general
requirement that all co-owners must be joined as plaintiffs in
an infringement suit.
See, e.g., Ethicon, 135 F.3d at 1468 n.9
(“If, by agreement, a co-owner waives his right to refuse to
join suit, his co-owners may subsequently force him to join in a
suit against infringers.”); see also STC.UNM v. Intel Corp., 754
F.3d 940, 946 (Fed. Cir. 2014) (same).
In asserting this
exception, plaintiffs rely on a May 2009 agreement (the “2009
Agreement”) between Bostan and Astilean, by which they agreed to
work together to develop the “New Design,” i.e., the manuallypowered treadmill, that would become the subject of the ‘016 and
(See Def. Mot. Exhibit F.)
In particular, plaintiffs point to the following
provision as an implied waiver by Bostan of his right to resist
being involuntarily joined in a lawsuit:
“[Astilean and Bostan]
will promote and market the New Design in such a way to obtain
the most beneficial rewards, both financial and honorary, for
their role as innovators and catalysts for the implementation of
the new generation of green treadmills.”
(2009 Agreement at 2.)
Plaintiffs argue that by agreeing to this term, Bostan
“acknowledged an express duty to take all steps required for
Astilean to promote and monetize the invention,” and that this
includes a waiver of his ability to prevent an infringement suit
by refusing to join as plaintiff.
(Pl. Supp. Op. at 9.)
The court finds that the 2009 Agreement did not
constitute a waiver by Bostan of his right to refuse to join an
First, there is no mention in the 2009
Agreement of participation in future lawsuits and Bostan’s
willingness to do so.
Second, years after the 2009 Agreement
was executed, Bostan expressed his desire not to participate in
this suit in the emails and deposition testimony cited by the
parties – thereby asserting his right to refuse to join the
lawsuit - without any mention of the 2009 Agreement.
e.g., Pl. Opp. Exhibits A-B; Def. Mot. Exhibit D.)
point to Bostan’s deposition testimony, in which he stated that
he “was giving all the rights to Speedfit over the applications,
patents and so on” and that his “understanding was that Speedfit
now will continue their lawsuit against Woodway [...] and I will
not have to be party of that.”
(Pl. Opp. Exhibit A, at 181.)
The court finds this statement to be ambiguous at best with
respect to Bostan’s intention to waive his right to refuse to
join the lawsuit.
Based on the foregoing, and because a waiver must be
clear and unambiguous, the testimony cited by plaintiffs cannot
be viewed as a waiver of Bostan’s right, particularly to the
extent that it can be construed as an expression of Bostan’s
desire not to be a party to the lawsuit against Woodway.
Mooney v. City of New York, 219 F.3d 123, 131 (2d Cir. 2000)
(“The conduct said to constitute a waiver must be clear and
unequivocal, as waivers are never to be lightly inferred.”)
(internal citation and quotation marks omitted).
plaintiffs have made no attempt to join Bostan as a plaintiff in
their Third Amended Complaint, despite their assertion that they
are entitled to do so as a result of his alleged waiver.
Rather, plaintiffs have continued in their attempt to proceed
with their infringement claims in Bostan’s absence.
therefore finds that Bostan did not waive his right to refuse to
be joined in the law suit, and that his joinder was required in
order for plaintiffs to have standing.
b. Required Joinder Under Federal Rule of Civil Procedure
In light of the court’s determination that Bostan is a
necessary party for plaintiffs’ infringement claims to proceed,
the court has considered whether Bostan can be involuntarily
joined as a plaintiff to remedy the standing issues presented by
Federal Rule of Civil Procedure 19 (“Rule 19”),
which delineates the circumstances in which a party can be
involuntarily joined, provides that “[a] person who is subject
to service of process and whose joinder will not deprive the
court of subject-matter jurisdiction must be joined as a party
if [...] in that person’s absence, the court cannot accord
complete relief among existing parties.”
Fed. R. Civ. P.
The court must further consider the application of
Rule 19 in the patent law context.
The Federal Circuit has addressed the question of
whether there is a rule of patent law that precludes application
of Rule 19, in light of the rule that “an action for
infringement must join as plaintiffs all co-owners.”
135 F.3d at 1467 (citing Waterman, 138 U.S. at 255).
considering this question, the Federal Circuit has held that
“[r]ules of procedure, such as Rule 19(a), must give way to
substantive patent rights.”
U.S.C. § 2072 (2012)).
STC.UNM, 754 F.3d at 946 (citing 28
The Federal Circuit has defined such
“substantive patent rights” to include “the right of a patent
co-owner to impede an infringement suit brought by another coowner,” noting that this substantive right “trumps the
procedural rule for involuntary joinder under Rule 19(a).”
STC.UNM, 754 F.3d at 946 (finding that one co-owner’s consistent
expression of a desire not to join a lawsuit left the other coowner without standing to bring the suit); see also DDB
Technologies, L.L.C. v. MLB Advanced Media L.P., 517 F.3d 1284,
1289 n.2 (Fed. Cir. 2008) (“[W]e have explicitly held that Rule
19 does not permit the involuntary joinder of a patent co-owner
in an infringement suit brought by another co-owner.”).
controlling precedent is clear that a co-owner must voluntarily
join an infringement suit, and absent the specific exceptions
discussed above – which do not apply here – a court cannot rely
on Rule 19 to join an unwilling co-inventor involuntarily as a
The court therefore finds that plaintiffs’ failure to
join Bostan in the present suit renders them unable to bring
claims of patent infringement with respect to the ‘619 and ‘016
Patents, and defendant’s motion to dismiss these claims pursuant
to Rule 12(b)(1) is granted.
Plaintiffs’ Correction of Inventorship Claims
In addition to the claims for infringement of the ‘016
and ‘619 Patents, plaintiffs’ Third Amended Complaint includes
claims for correction of inventorship, asserting that the
Woodway Patents should be corrected to include Astilean and
Bostan as inventors or as joint inventors with inventor Nicholas
(See Am. Compl. ¶¶ 64-103.)
Defendant asserts that
plaintiffs’ correction of inventorship claims should also be
dismissed pursuant to Rule 12(b)(1) because Astilean and
Speedfit have not established that they have standing to bring
these claims on Bostan’s behalf.
(See Def. Mot. at 4; Def.
Repl. at 11.)
Correction of inventorship is governed by 35 U.S.C. §
See 35 U.S.C. § 256(a) (“Whenever through error a person
is named in an issued patent as the inventor, or through error
an inventor is not named in an issued patent, the Director may,
on application of all the parties and assignees, with proof of
the facts and such other requirements as may be imposed, issue a
certificate correcting such error.”).
The Federal Circuit has
recognized the right of a person alleging that he or she is a
“co-inventor of the invention claimed in an issued patent who
was not listed as an inventor on the patent” to “bring a cause
of action to correct inventorship in a district court under 35
U.S.C. § 256.”
Vapor Point LLC v. Moorhead, 832 F.3d 1343, 1348
(Fed. Cir. 2016) (quoting Eli Lilly & Co. v. Aradigm Corp., 376
F.3d 1352, 1357 n.1 (Fed. Cir. 2004)).
The court finds that
this right clearly applies to Astilean’s claim on his own behalf
that the Woodway Patents should be corrected to include himself
as an inventor or joint inventor.
The court next considers
whether Astilean and Speedfit can assert this right on behalf of
Bostan, who is not a plaintiff in this action.
In support of its motion to dismiss, defendant argues
that plaintiffs have not established that they have standing to
bring a claim for correction of inventorship on Bostan’s behalf,
and that Bostan would have to join as a plaintiff in order to
bring a claim seeking to add him as an inventor or joint
inventor to the Woodway Patents pursuant to 35 U.S.C. § 256.
Although this court finds that Bostan must be joined as a
plaintiff in order for plaintiffs to have standing to bring a
patent infringement claim, the court finds that Bostan need not
be joined for plaintiffs’ correction of inventorship claims to
Though not a basis for its decision, the court notes that defendant did not
raise the present standing concerns when plaintiffs filed their motion for
correction of inventorship adding Bostan as a co-inventor of the ‘619 and ‘016
Patents, which similarly involved plaintiffs Astilean and Speedfit bringing the
claim on behalf of Bostan, who was not a party.
Defendant’s argument with
The Federal Circuit has advised that 35 U.S.C. § 256
should be “interpreted broadly as a ‘savings provision’ to
prevent patent rights from being extinguished simply because the
inventors are not correctly listed.”
Chou v. Univ. of Chicago,
254 F.3d 1347, 1358 (Fed. Cir. 2001) (citations omitted).
as discussed above, Bostan assigned his interests in the ‘016
and ‘619 Patents to Speedfit as of June 1, 2015, through the
The Assignment Agreement assigned
Bostan’s “entire and exclusive right, title, and interest” in
the ‘619 and ‘016 Patents to Speedfit, including the right to
protect its own interests in these patents as of June 1, 2015.
The court disagrees with defendant’s reliance on the fact that
the Assignment Agreement “say[s] nothing about Mr. Bostan
assigning any alleged inventorship rights in the Woodway
Patents” to Speedfit, (See Def. Repl. at 11 n.7.), and finds
that Speedfit’s ability to assert such claims derives from its
assigned interest in the ‘619 and ‘016 Patents, which concern
the same underlying subject matter as the Woodway Patents.
The court finds that as an assignee of Bostan,
Speedfit may assert a clear ownership interest in the subject
matter at issue in the Woodway Patents and therefore has
respect to standing related to plaintiffs’ claims of patent infringement alone.
(See ECF No. 111, Response in Opposition re Motion to Amend/Correct/Supplement
the Inventorship of the Patents-In-Suit pursuant to 35 U.S.C. 256, at 11-14.)
standing to bring claims for correction of inventorship seeking
to add Bostan as an inventor.
See, e.g., Trireme Medical, LLC
v. Angioscore, Inc., 812 F.3d 1050, 1052-53 (Fed. Cir. 2015)
(finding that plaintiff lacked standing, not because of his
status as assignee, but because the original patent owner had
already assigned his rights to a prior assignee, and therefore
had no ownership interest to assign to plaintiff); Ferring B.V.
v. Allergan, Inc., 166 F. Supp. 3d 415, 418 (S.D.N.Y. 2016)
(deciding counterclaim by an assignee seeking to correct
inventorship to substitute inventor, who assigned his interests
in patents at issue).
Moreover, the court notes that in light
of the Assignment Agreement, Bostan no longer has an ownership
interest in the ‘016 and ‘619 Patents, and would likely be found
to lack standing if he sought to bring a correction of
inventorship claim on his own behalf at this time.
v. Correct Craft, Inc., 569 F.3d 1319, 1327 (Fed. Cir. 2009)
(finding that inventor lacked standing because he assigned his
patent rights and no longer had an ownership interest or
“concrete financial interest” necessary for standing to bring a
correction of inventorship claim).
The court notes, however,
that standing alone is not sufficient to bring a claim pursuant
to 35 U.S.C. § 256, and that notice and a hearing must be given
to all interested parties before the court can reach a
determination on the merits.
See 35 U.S.C. § 256(b) (“A
district court may order correction of the patent on notice and
hearing of all parties concerned.”) (emphasis added).
the foregoing, defendant’s motion to dismiss plaintiffs’ claims
for correction of inventorship pursuant to Rule 12(b)(6) is
III. Conversion Claim
Finally, plaintiffs bring a claim of conversion based
on the allegation that “Woodway has wrongfully exercised
dominion over the property of Plaintiffs by refusing to name
Astilean and Bostan as either inventors or joint inventors [...]
of the [Woodway Patents].”
(Am. Compl. ¶ 110.)
As asserted in
the Third Amended Complaint, the “property” at issue and subject
to the alleged conversion claim is plaintiffs’ ownership
interest in “subject matter relating to motorless treadmills
with a curved running surface [...] including the [Woodway
Defendant argues that plaintiffs’ conversion
claim should be dismissed under Rule 12(b)(6) because it is
preempted by federal patent law.
Whether a state law claim is preempted by federal
patent law is governed by the law of the Federal Circuit.
Univ. of Colorado Found., Inc. v. Am. Cyanamid Co., 196 F.3d
1366, 1371 (Fed. Cir. 1999) (“This court applies its own law to
determine whether federal patent law preempts state law.”)
In addressing matters of preemption, the
Federal Circuit has explained that “although federal patent law
plainly does not provide for explicit preemption [...] a state
may not offer patent-like protection to intellectual creations
that would otherwise remain unprotected as a matter of federal
Univ. of Colorado Found., Inc. v. Am. Cyanamid Co., 342
F.3d 1298, 1305 (Fed. Cir. 2003) (citations omitted).
the Federal Circuit has held that “the field of federal patent
law preempts any state law that purports to define rights based
HIF Bio, Inc. v. Yung Shin Pharm. Indus. Co.,
Ltd., 600 F.3d 1347, 1353 (Fed. Cir. 2010) (quoting Am.
Cyanamid, 196 F.3d at 1372).
Thus, according to controlling
precedent, a state law claim that either seeks “patent-like”
protections not provided by federal patent law, or turns on a
determination of inventorship, is preempted by federal patent
Here, plaintiffs’ conversion claim is both “patentlike” in nature, and also turns on a determination of
inventorship regarding the manually-powered treadmill design at
First, plaintiffs’ assertion of ownership over the
subject matter of the Woodway Patents, which underlies their
claim of conversion, clearly turns on a determination of
Second, the damages that plaintiffs assert, in
particular the “loss of value of the Patents-in-Suit and the
revenues derived from licenses to that property,” essentially
restate the infringement claim for which patent law would
provide a remedy if warranted.
(Am. Compl. ¶ 111.)
therefore finds that plaintiffs’ conversion claim is preempted
by federal patent law and must be dismissed.
For the reasons set forth above, defendant’s motion to
dismiss plaintiffs’ Third Amended Complaint is granted in part
and denied in part.
Plaintiffs’ claims for infringement of the
‘016 and ‘619 Patents and conversion are dismissed pursuant to
Rule 12(b)(1) and Rule 12(b)(6), respectively.
motion to dismiss is denied with respect to plaintiffs’ claims
for correction of inventorship.
The parties shall confer and
jointly advise the court by letter on ECF how they intend to
proceed consistent with this opinion no later than January 9,
December 28, 2016
Brooklyn, New York
Kiyo A. Matsumoto
United States District Judge
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