John Mezzalingua Associates, Inc v. Corning Gilbert Inc.

Filing 211

MEMORANDUM-DECISION and ORDER - That PPC's 125 Motion for Summary Judgment on Gilbert's state law counterclaims is GRANTED. That Gilbert's state law tort counterclaims (Dkt. No. 6 132-42) are DISMISSED. That the case is trial ready and the Clerk shall issue a trial scheduling order in due course. Signed by Chief Judge Gary L. Sharpe on 2/13/2014. (jel, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
________________________________
PPC BROADBAND, INC.,
d/b/a PPC,
Plaintiff,

5:11-cv-761
(GLS/DEP)

v.
CORNING GILBERT INC.,
Defendant.
________________________________
APPEARANCES:
OF COUNSEL:
FOR THE PLAINTIFF:
Hiscock, Barclay Law Firm
One Park Place
300 South State Street
Syracuse, NY 13202-2078

DOUGLAS J. NASH, ESQ.
GABRIEL M. NUGENT, ESQ.
JASON C. HALPIN, ESQ.
JOHN D. COOK, ESQ.
KATHRYN DALEY CORNISH,
ESQ.

FOR THE DEFENDANT:
DLA Piper LLP
500 Eighth Avenue NW
Washington, DC 22004

KATHRYN R. GRASSO, ESQ.
JOSEPH P. LAVELLE, ESQ.
ANDREW N. STEIN, ESQ.

Harter, Secrest Law Firm
1600 Bausch and Lomb Place
Rochester, NY 14604-2711

DAVID M. LASCELL, ESQ.
ERIKA N.D. STANAT, ESQ.
JERAULD E. BRYDGES, ESQ.

Gary L. Sharpe
Chief Judge
MEMORANDUM-DECISION AND ORDER

I. Introduction
On July 5, 2011, plaintiff PPC Broadband, Inc. commenced this
patent infringement action against defendant Corning Gilbert Inc. (Compl.,
Dkt. No. 1.) In its answer, Gilbert asserted several counterclaims,
including state law claims for “Intentional Interference with Business
Relationships,” “Abuse of Process,” and Commercial Disparagement.”
(Dkt. No. 6 ¶¶ 132-42.) Pending is PPC’s motion for summary judgment
seeking dismissal of Gilbert’s state law counterclaims. (Dkt. No. 125.) For
the reasons that follow, PPC’s motion is granted.
II. Background1
Both PPC and Gilbert are engaged in the business of designing and
manufacturing coaxial cable connectors. (See generally Compl., Dkt. No.
1.) On July 21, 2000, PPC filed a patent application for a coaxial cable
connector, which was approved and a patent issued to PPC on May 6,
2003 as U.S. Patent No. 6,558,194 (“194 patent”). (Id. ¶¶ 1, 23, 24; Dkt.
No. 1, Attach. 2.) On January 21, 2003, PPC filed another patent

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Unless otherwise noted, the facts are not in dispute. Further, for
additional background facts, the parties are directed to the court’s prior
decisions in this case. Familiarity therewith is presumed.
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application for a coaxial cable connector, which was approved and a patent
issued to PPC on February 1, 2005 as U.S. Patent No. 6,848,940 (“940
patent”). (Compl. ¶¶ 1, 26, 27; Dkt. No. 1, Attach. 3.)
PPC alleges that Gilbert has infringed the 194 and 940 patents by
making, using, selling, offering for sale, selling, and/or importing coaxial
cable connectors, specifically Gilbert’s UltraRange and UltraShield series
connectors, that infringe on PPC’s patents. (Compl. ¶¶ 45-58.)
As relevant here, Gilbert had established business relationships with
Cox Communications and Comcast Corporation to supply them with
Gilbert’s coaxial cable connectors. (Pl.’s Statement of Material Facts
(SMF) ¶¶ 1-2, Dkt. No. 125, Attach. 13; Def.’s SMF ¶¶ 20, 27, Dkt. No.
176, Attach. 1.) Specifically, on May 27, 2011, Gilbert was selected by Cox
Communications to be its exclusive supplier of coaxial cable connectors, a
fact of which PPC was aware. (Def.’s SMF ¶¶ 16-17.) Beginning some
time in July 2011, PPC communicated to Cox and Comcast its belief that
Gilbert’s connectors infringed PPC’s patents, that a lawsuit was potentially
forthcoming, and that as a result, Gilbert may be unable to continue
providing products to Cox and Comcast on an ongoing basis. (Id. ¶ 20;
Dkt. No. 177, Attach. 9 at 5-7, 32; Dkt. No. 177, Attach. 13 at 6-7, 9-11;
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Dkt. No. 177, Attach. 10 at 2, 5, 7-8.)
III. Standard of Review
The standard of review pursuant to Fed. R. Civ. P. 56 is well
established and will not be repeated here. For a full discussion of the
standard, the court refers the parties to its decision in Wagner v. Swarts,
827 F. Supp. 2d 85, 92 (N.D.N.Y. 2011), aff’d sub nom. Wagner v.
Sprague, 489 F. App’x 500 (2d Cir. 2012).
IV. Discussion
PPC contends, as an initial matter, that Gilbert’s state law
counterclaims are preempted by federal patent law and should therefore be
dismissed. (Dkt. No. 125, Attach. 12 at 3-8.) Further, PPC argues that as
to the merits of the claims, Gilbert has either failed to allege, or is unable to
establish, all required elements of the causes of action. (Id. at 8-25.) In
response, Gilbert asserts that its claims are not preempted by federal law,
and that PPC has not established that it is entitled to judgment as a matter
of law on the state law counterclaims. (Dkt. No. 176 at 9-25.) Because
PPC’s state tort law liability for its conduct in communications asserting
infringement of its patents and warning of potential litigation is preempted
by federal patent law, PPC’s motion is granted.
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“[F]ederal patent law preempts state-law tort liability for a
patentholder’s good faith conduct in communications asserting
infringement of its patent and warning about potential litigation.”
Globetrotter Software, Inc. v. Elan Computer Grp., Inc., 362 F.3d 1367,
1374 (Fed. Cir. 2004); see Hunter Douglas, Inc. v. Harmonic Design, Inc.,
153 F.3d 1318, 1336 (Fed. Cir. 1998) (“federal patent law bars the
imposition of liability for publicizing a patent in the marketplace unless the
plaintiff can show that the patentholder acted in bad faith.”). Thus, in order
for Gilbert to avoid preemption and maintain its state law tort claims arising
from PPC’s protection of its patent and communications with Gilbert’s
current or potential customers, Gilbert would have to allege and prove that
PPC acted in “bad faith,” 800 Adept, Inc. v. Murex Sec., Ltd., 539 F.3d
1354, 1369 (Fed. Cir. 2008), “even if bad faith is not otherwise an element
of the tort claim,” Zenith Elecs. Corp. v. Exzec, Inc., 182 F.3d 1340, 1355
(Fed. Cir. 1999) (“[B]ad faith is a prerequisite to [an alleged infringer]’s
state-law tortious interference claim; without it, the claim is preempted by
patent law.”).
This “bad faith” standard has objective and subjective components.
See Dominant Semiconductors SDN. BHD. v. Osram GMBH, 524 F.3d
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1254, 1260 (Fed. Cir. 2008). The objective component requires a showing
that the infringement allegations are “objectively baseless.” Globetrotter
Software, Inc., 362 F.3d at 1376; see Golan v. Pingel Enter., Inc., 310 F.3d
1360, 1371 (Fed. Cir. 2002). The subjective component relates to a
showing that the patentee in enforcing the patent demonstrated subjective
bad faith. See id. Absent a showing that the infringement allegations are
objectively baseless, it is unnecessary to reach the question of the
patentee’s intent. See id.; 800 Adept, 539 F.3d at 1370.
The standard for finding infringement allegations to be “objectively
baseless” is that “no reasonable litigant could realistically expect success
on the merits.” GP Indus., Inc. v. Eran Indus., Inc., 500 F.3d 1369, 1374
(Fed. Cir. 2007); see Zenith Elecs., 182 F.3d at 1354 (“[I]f the patentee
knows that the patent is invalid, unenforceable, or not infringed, yet
represents to the marketplace that a competitor is infringing the patent, a
clear case of bad faith representations is made out.”) Further, a
heightened standard of proof—namely, clear and convincing
evidence—applies to this issue, and therefore, “[t]o survive summary
judgment, the party challenging such [allegations] must present affirmative
evidence sufficient for a reasonable jury to conclude that the patentee
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acted in bad faith, in light of the burden of clear and convincing evidence
that will adhere at trial.” Golan, 310 F.3d at 1371. In other words, to
satisfy the bad faith requirement, Gilbert “must offer clear and convincing
evidence that [PPC] had no reasonable basis to believe that [Gilbert’s
connectors] infringed [PPC]’s patents or that [PPC] knew it was enforcing
an . . . unforceable[] patent.” Id. Gilbert has not satisfied its burden in this
case.
In opposition to PPC’s motion for summary judgment, Gilbert argues
that its counterclaims are not preempted because the infringement
allegations PPC made to Gilbert’s customers were “objectively baseless,”
and therefore constitute bad faith conduct. (Dkt. No. 176 at 11-16.) Gilbert
relies on its assertions that “no reasonable litigant could have expected to
prevail with his claim of infringement in this case,” and that “[t]he record
evidence also shows that even PPC would not expect such an infringement
claim to succeed.” (Id. at 12.) However, a review of the record does not
reveal clear and convincing evidence that PPC lacked a reasonable basis
to believe that Gilbert’s connectors infringe the patents in suit when it
communicated as much to Gilbert’s customers. In fact, in arguing that
PPC’s infringement allegations are objectively baseless, Gilbert relies on
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many of the same arguments it has put forth in the numerous other
motions filed in this case, including Gilbert’s motions for summary
judgment on non-infringement, (Dkt. No. 132), collateral estoppel, (Dkt. No.
135), and laches, (Dkt. No. 136), which this court has since addressed and
denied, (Dkt. Nos. 206, 207, 209).
The deposition testimony and record evidence cited by Gilbert which
deals with the communications made by PPC to Gilbert’s customers simply
shows that PPC notified Gilbert’s customers that Gilbert’s connectors
infringed PPC’s patents, that a lawsuit was potentially forthcoming, and
that, as a result, Gilbert may be unable to continue providing products to
Cox and Comcast on an ongoing basis. (See, e.g., Dkt. No. 177, Attach. 9
at 5-7, 32; Dkt. No. 177, Attach. 13 at 6-7, 9-11; Dkt. No. 177, Attach. 10 at
2, 5, 7-8.) In light of the record and the court’s prior decisions in this case
with respect to the merits of PPC’s infringement claims, Gilbert cannot
establish by clear and convincing evidence that PPC’s infringement
allegations were objectively baseless, such that “no reasonable litigant
could realistically expect success on the merits,” and therefore that PPC’s
conduct was taken in bad faith. GP Indus., 500 F.3d at 1374.
Consequently, Gilbert’s state law tort claims are preempted by federal
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patent law and thus dismissed.
V. Conclusion
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that PPC’s motion for summary judgment on Gilbert’s
state law counterclaims (Dkt. No. 125) is GRANTED; and it is further
ORDERED that Gilbert’s state law tort counterclaims (Dkt. No. 6, ¶¶
132-42) are DISMISSED; and it is further
ORDERED that the case is trial ready and the Clerk shall issue a trial
scheduling order in due course; and it is further
ORDERED that the Clerk provide a copy of this MemorandumDecision and Order to the parties.
IT IS SO ORDERED.
February 13, 2014
Albany, New York

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