PPC Broadband, Inc. v. Corning Gilbert Inc.

Filing 49

MEMORANDUM-DECISION and ORDER - That PPC's 11 Motion for Preliminary Injunction is DENIED. That Corning's 14 Motion to Dismiss is DENIED. That the partes notify Magistrate Judge Peebles in order to schedule further proceedings in accordance with this Memorandum-Decision and Order. Signed by Chief Judge Gary L. Sharpe on 6/5/2014. (jel, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
________________________________
PPC BROADBAND, INC.,
Plaintiff,

5:13-cv-1310
(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.
JASON C. HALPIN, ESQ.
JOHN D. COOK, ESQ.
DENIS J. SULLIVAN, ESQ.

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

JOSEPH P. LAVELLE, ESQ.
SUSAN N. ACQUISTA, ESQ.
ANDREW N. STEIN, ESQ.

Harter, Secrest Law Firm
1600 Bausch and Lomb Plaza
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
Plaintiff PPC Broadband, Inc. commenced this action asserting

patent infringement claims against Corning Gilbert Inc. (Am. Compl., Dkt.
No. 9.) Pending are PPC’s motion for a preliminary injunction, (Dkt. No.
11), and Corning Gilbert’s motion to dismiss the complaint pursuant to Fed.
R. Civ. P. 12(b)(6), (Dkt. No. 14). For the reasons that follow, both motions
are denied.
II. Background
A.

Facts1
Both PPC and Corning Gilbert are engaged in the business of

designing and manufacturing coaxial cable connectors. (Am. Compl. ¶¶ 78, 21, 26.) On October 15, 2012, PPC filed two patent applications for a
coaxial cable connector, (id. ¶¶ 12, 16), which were approved and issued
to PPC on October 22, 2013 and December 3, 2013, as U.S. Patent No.
8,562,366 (“366 patent”) and U.S. Patent No. 8,597,041 (“041 patent”),
respectively, (id. ¶¶ 13, 17; Dkt. No. 1, Attach. 1; Dkt. No. 1, Attach. 2).
PPC has not licensed the use of these patents to Corning. (Am. Compl. ¶¶
14, 18.)
PPC alleges that Corning has infringed the patents in suit by “making,

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The facts are drawn from PPC’s amended complaint and presented
in the light most favorable to it.
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using, selling, offering for sale, and/or importing coaxial cable connectors,”
specifically Corning’s UltraShield series connectors. (Id. ¶¶ 21, 26.) PPC
alleges that “[Corning]’s acts of infringement cause PPC irreparable harm
and damages in an amount to be proven at trial, including lost sales, lost
profits, lost sales opportunities, and loss of goodwill.” (Id. ¶¶ 22, 27.)
B.

Procedural History
The instant case, involving the alleged infringement of the 366 and

041 patents, was commenced on December 3, 2013. (Am. Compl.) At the
time this action was commenced, PPC had already commenced another
patent infringement action against Corning, which remains pending. (Dkt.
No. 15, 5:12-cv-911.) In that earlier-filed case, PPC alleges that Corning’s
manufacture, sale, and importation of its UltraShield coaxial cable
connectors infringes on different PPC patents from the ones involved in this
lawsuit, namely U.S. Patent Nos. 8,192,237 (“237 patent”) and 8,287,320
(“320 patent”). (Id. ¶¶ 1, 22, 27.)
III. Standards of Review
A.

Motion to Dismiss
The standard of review under Fed. R. Civ. P. 12(b)(6) is well settled

and will not be repeated here. For a full discussion of the standard, the
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court refers the parties to its prior decision in Ellis v. Cohen & Slamowitz,
LLP, 701 F. Supp. 2d 215, 218 (N.D.N.Y. 2010).
B.

Preliminary Injunction
“[P]reliminary injunctive relief is an extraordinary remedy and should

not be routinely granted.” Patton v. Dole, 806 F.2d 24, 28 (2d Cir. 1986).
To obtain a preliminary injunction, the moving party must show: “(1) a
reasonable likelihood of success on the merits of its claims; (2) irreparable
harm if an injunction is not granted; (3) a balance of hardships tipping in its
favor; and (4) the injunction’s favorable impact on the public interest.”
Gillette Co. v. Energizer Holdings, Inc., 405 F.3d 1367, 1370 (Fed. Cir.
2005); see Reebok Int’l Ltd. v. J. Baker, Inc., 32 F.3d 1552, 1555 (Fed. Cir.
1994); see also Polymer Techs., Inc. v. Bridwell, 103 F.3d 970, 973-74
(Fed. Cir. 1996) (“[A] trial court need not make findings concerning the third
and fourth factors if the moving party fails to establish either of the first two
factors.”).
IV. Discussion
A.

Motion to Dismiss
Corning contends that the instant action filed by PPC regarding the

366 and 041 patents should be dismissed pursuant to the “claim splitting”
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doctrine, and/or pursuant to the court’s inherent authority to dismiss
duplicative actions. (Dkt. No. 14, Attach. 2 at 7-15.) In opposition, PPC
contends that the two actions are not duplicative, and that each patent
represents a different cause of action, such that the instant action should
not be dismissed. (Dkt. No. 38 at 5-19.)
At the outset, the court notes that it has already ruled on this same
legal issue in yet another action between these two parties. Specifically,
this court, following Federal Circuit precedent, held, under analogous
factual circumstances, that “each patent represents a distinct cause of
action, and, therefore, a second patent infringement action is not precluded
where it deals with different patents from those raised in an earlier action.”
See PPC Broadband, Inc. v. Corning Gilbert Inc., No. 5:13-cv-538, 2013
WL 6145799, at *2 (N.D.N.Y. Nov. 21, 2013) (citing Kearns v. Gen. Motors
Corp., 94 F.3d 1553, 1555 (Fed. Cir. 1996)). For the same reasons, the
court also finds that this action is not duplicative of the earlier-filed action
involving the 237 and 320 patents, and the court declines to exercise its
discretion to dismiss the current action. Corning’s motion to dismiss is
therefore denied.
B.

Motion for Preliminary Injunction
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PPC has also moved, pursuant to Fed. R. Civ. P. 65 and 35 U.S.C.
§§ 271(a) and 283, for a preliminary injunction barring Corning “from
making, using, importing, offering to sell, and/or selling coaxial cable
connectors that infringe [the patents in suit], including [Corning]’s
UltraShield line of coaxial cable connectors.” (Dkt. No. 11 at 2.)
Specifically, PPC argues that it would suffer irreparable harm if Corning
were not enjoined from selling its allegedly infringing products, namely its
UltraShield line of cable connectors, and that a preliminary injunction
should issue because PPC is likely to succeed on the merits of its
infringement claims. (Dkt. No. 11, Attach. 1 at 6-25.) Corning, on the other
hand, argues that PPC is not likely to succeed on the merits because there
is a substantial question going to the validity of the patents in suit, and
because PPC has not suffered, and will not suffer, irreparable harm. (Dkt.
No. 39 at 10-29.) For the reasons that follow, PPC’s motion is denied.
As mentioned above, to obtain a preliminary injunction, PPC must
show: “(1) a reasonable likelihood of success on the merits of its claims; (2)
irreparable harm if an injunction is not granted; (3) a balance of hardships
tipping in its favor; and (4) the injunction’s favorable impact on the public
interest.” Gillette, 405 F.3d at 1370. In order to demonstrate a likelihood of
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success on the merits, PPC would have to show, in light of the
presumptions and burdens that will apply at trial, that Corning likely
infringes the patents in suit, and that the claims of the patents will likely
withstand Corning’s challenges to validity. See id.; Amazon.com, Inc. v.
Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001).
Further, a party seeking a preliminary injunction must establish that it
“is likely to suffer irreparable harm in the absence of preliminary relief.”
Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). “Issuing a
preliminary injunction based only on a possibility of irreparable harm is
inconsistent with [the Supreme Court’s] characterization of injunctive relief
as an extraordinary remedy that may only be awarded upon a clear
showing that the plaintiff is entitled to such relief.” Id. at 22 (citing Mazurek
v. Armstrong, 520 U.S. 968, 972 (1997)). “‘A clear showing’” of a risk of
irreparable harm requires that a party show “‘a likelihood of substantial and
immediate irreparable injury.’” Apple, Inc. v. Samsung Elecs. Co., 678 F.3d
1314, 1325 (Fed. Cir. 2012) (quoting O’Shea v. Littleton, 414 U.S. 488, 502
(1974)). The burden of proving a likelihood of irreparable harm absent a
court’s issuance of a preliminary injunction rests with the moving party.
See id.; Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1155 (Fed.
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Cir. 2011) (“[T]he burden of proving irreparable harm was of course [the
moving party’s].).
With these requirements in mind, assuming, without deciding, that
PPC can establish a likelihood of success on the merits and defeat
Corning’s challenges to the validity of the patents in suit, the motion for
preliminary injunction is denied because PPC has not demonstrated a
likelihood of substantial and immediate irreparable harm if an injunction
were not issued. See Apple, 678 F.3d at 1325. Here, PPC claims that it
will suffer irreparable harm in the form of price erosion, damage to its
goodwill and reputation, and layoffs of employees. (Dkt. No. 11, Attach. 1
at 12-24.) With respect to price erosion, PPC argues that it has no choice
but to sell its connectors for lower prices in order to compete with Corning
in the relevant market, and that, even if it reduces its prices in the
meantime, and ultimately prevails at trial, asking its customers to later pay
higher prices is “not an option,” as its customers will “staunchly refuse to
accept any increase[d] prices.” (Id. at 17-18.) However, the record
indicates that PPC’s competitors, in addition to Corning, are selling
connectors at prices lower than PPC, such that PPC has “received pricing
pressures from . . . [e]verybody” else in the market. (Dkt. No. 39, Attach.
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14 at 3.) Additionally, as Corning notes, (Dkt. No. 39 at 23-24), PPC’s own
expert could not express an opinion with a reasonable degree of certainty
that the alleged price erosion is caused by Corning, (Dkt. No. 39, Attach.
15 at 4).
With respect to the other claimed forms of irreparable harm, at this
juncture they are too speculative to merit a preliminary injunction. See
Automated Merch. Sys., Inc. v. Crane Co., 357 F. App’x 297, 301 (Fed. Cir.
2009) (“[G]ranting preliminary injunctions on the basis of speculative loss of
market share would result in granting preliminary injunctions ‘in every
patent case where the patentee practices the invention.’” (quoting Nutrition
21 v. United States, 930 F.2d 867, 871 (Fed. Cir. 1991)). In sum, PPC has
not shown that it would be likely to suffer harm, beyond lost sales or lost
profits, that could not be adequately compensated by money damages by a
jury, if PPC were to prevail at trial. See Canon, Inc. v. GCC Int’l, Ltd., 263
F. App’x 57, 62 (Fed. Cir. 2008) (“[I]rreparable harm consists of harm that
could not be sufficiently compensated by money damages or avoided by a
later decision on the merits.”); Nutrition 21, 930 F.2d at 871 (“[N]either the
difficulty of calculating losses in market share, nor speculation that such
losses might occur, amount to proof of special circumstances justifying the
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extraordinary relief of an injunction prior to trial.”); Altana Pharma AG v.
Teva Pharms. USA, Inc., 532 F. Supp. 2d 666, 683-84 (D.N.J. 2007)
(denying motion for preliminary injunction where plaintiff failed to prove that
the alleged harm, including price erosion, lost sales, and lost market
opportunities, was incalculable in terms of money damages). Further,
denial of the motion for preliminary injunction would better maintain the
status quo between these two parties until this dispute is ultimately
resolved. See Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981) (“The
purpose of a preliminary injunction is merely to preserve the relative
positions of the parties until a trial on the merits can be held.”).
Accordingly, the motion for a preliminary injunction is denied.
V. Conclusion
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that PPC’s motion for a preliminary injunction (Dkt. No.
11) is DENIED; and it is further
ORDERED that Corning’s motion to dismiss (Dkt. No. 14) is DENIED;
and it is further
ORDERED that the parties notify Magistrate Judge Peebles in order
to schedule further proceedings in accordance with this Memorandum10

Decision and Order; and it is further
ORDERED that the Clerk provide a copy of this MemorandumDecision and Order to the parties.
IT IS SO ORDERED.
June 5, 2014
Albany, New York

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