BLUE RHINO GLOBAL SOURCING, INC. v. WELL TRAVELED IMPORTS, INC.
Filing
19
MEMORANDUM OPINION AND ORDER re: 11 MOTION for Judgment on the Pleadings filed by BLUE RHINO GLOBAL SOURCING, INC. IT IS ORDERED that Blue Rhinos Motion for Judgment on the Pleadings (Doc. 11 ) with respect to counts III and IV of Well Traveleds amended counterclaim (Doc. 9 ) is DENIED. Signed by JUDGE THOMAS D. SCHROEDER on 8/22/2012. (Solomon, Dianne)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
BLUE RHINO GLOBAL SOURCING,
INC.,
)
)
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
WELL TRAVELED IMPORTS, INC.,
d/b/a WELL TRAVELED LIVING,
Defendant.
No. 1:10-cv-490
MEMORANDUM OPINION AND ORDER
THOMAS D. SCHROEDER, District Judge.
Plaintiff Blue Rhino Global Sourcing, Inc. (“Blue Rhino”)
alleges
that
Traveled”)
heater.
Defendant
is
infringing
(Doc. 1.)
counterclaims
Well
on
its
Traveled
patent
Imports,
for
an
Inc.
outdoor
(“Well
propane
Well Traveled denies any infringement and
several
grounds.
Before
the
court
is
Blue
Rhino’s motion for judgment on the pleadings as to two counts of
Well Traveled’s counterclaim that seek damages under federal and
state
law
patent.
for
alleged
(Doc. 11.)
bad
faith
enforcement
of
Blue
Rhino’s
Finding that Well Traveled’s counterclaims
plausibly state a claim for relief, the court will deny the
motion.
I.
BACKGROUND
The facts alleged in the parties’ pleadings, taken in a
light most favorable to Well Traveled as the non-movant, reveal
the following:
Blue
Rhino
and
Well
Traveled
outdoor heating appliances.
are
competitors
(Doc. 1 ¶¶ 7-8.)
selling
Blue Rhino owns
United States Patent Number 6,651,647 (“the ’647 Patent”), which
describes
an
invention
for
an
outdoor
heating
device
that
embodies a more efficient method of heating its surroundings and
has
the
advantage
of
being
convenient
to
package
and
store.
Well Traveled’s heaters are allegedly manufactured in China by
Changzhou Wellife Furnace Co. Ltd. and then imported into the
United States.
On
June
(Id. ¶ 13.)
25,
2010,
Blue
Rhino
commenced
this
action,
alleging (upon information and belief) that Well Traveled is
unlawfully offering and selling outdoor heaters nationwide that
infringe
Patent.
“one
(Id.
or
more”
of
¶¶ 9-13.)
the
fourteen
Blue
Rhino
claims
seeks
of
the
monetary
’647
and
injunctive relief as well as its attorneys’ fees and costs.
Well Traveled has filed an amended answer and counterclaim
that alleges four bases for recovery against Blue Rhino: count I
seeks a declaration that the ’647 Patent is invalid because its
claimed
invention
was,
among
other
things,
“patented
or
described in a printed publication” more than one year before
the patent was issued (Doc. 9 (counterclaim) ¶¶ 13-15); count II
seeks a declaration that Well Traveled has not infringed any
2
valid claim of the ’647 Patent (id. ¶ 17); count III alleges
that Blue Rhino “made statements” to Well Traveled’s existing
and potential customers that the latter’s products infringe the
’647
Patent
because
and
Blue
that
Rhino
the
“had
statements
actual
were
knowledge
made
of
in
bad
prior
art
faith
that
invalidates the claims of the ’647 Patent” and sought to “coerce
[Well Traveled] into taking a license” (id. ¶ 19-21); and count
IV alleges that Blue Rhino’s conduct constitutes an unfair and
deceptive trade practice under North Carolina law (id. ¶ 23-26).
Well
Traveled’s
product
amended
description
for
counterclaim
a
Sun-Glo
incorporates
patio
radiant
an
attached
heater
that
allegedly constitutes prior art that invalidates claims 1, 2,
and 3 of the ’647 Patent.
(Doc. 9-1; Doc. 9 (counterclaim)
¶¶ 7-9.)
Blue
Rhino
now
challenges
counts
III
and
IV
of
Well
Traveled’s counterclaim with the present motion for judgment on
the pleadings.
(Doc. 11.)
The motion is fully briefed and is
ripe for review.
II.
ANALYSIS
When
evaluating
a
motion
for
judgment
on
the
pleadings
pursuant to Federal Rule of Civil Procedure 12(c), courts apply
the same standards as they would when deciding whether a party
has sufficiently pleaded a claim to survive a motion to dismiss
under Rule 12(b)(6).
Mayfield v. Nat’l Ass’n for Stock Car Auto
3
Racing, Inc., 674 F.3d 369, 375 (4th Cir. 2012).
Federal Rule
of Civil Procedure 8(a)(2) requires that a pleading contain only
“a
short
and
plain
statement
of
the
pleader is entitled to relief.”
contain
detailed
factual
claim
showing
that
the
While a complaint need not
allegations,
it
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 Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)).
“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.
While
Iqbal
and
Twombly
involved the allegations of a complaint, courts have applied
their
pleading
standard
to
counterclaims.
E.I.
du
Pont
de
Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir.
2011).
Under Rule 12(c), the court, as it would when reviewing a
motion
pursuant
to
Rule
12(b)(6),
“take[s]
the
facts
in
the
light most favorable to the [non-moving party],” but “[it] need
not
accept
as
true
unwarranted
conclusions, or arguments.”
298, 302 (4th Cir. 2008).
inferences,
unreasonable
Giarratano v. Johnson, 521 F.3d
However, the answer and any documents
incorporated by reference in the pleadings may be considered.
Mendenhall v. Hanesbrands, Inc., --- F. Supp. 2d ---, ---, No.
4
1:11CV570, 2012 WL 1230743, at *5 (M.D.N.C. Apr. 12, 2012).
The
“factual allegations of the answer are taken as true, to the
extent ‘they have not been denied or do not conflict with the
complaint.’”
Farmer v. Wilson Hous. Auth., 393 F. Supp. 2d 384,
386 (E.D.N.C. 2004).
Moreover, Iqbal and Twombly apply as well
to motions under Rule 12(c).
Cafasso v. Gen. Dynamics C4 Sys.,
Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011); Mendenhall, 2012
WL 1230743, at *5.
Ultimately, then, the applicable test under
Rule 12(c) is whether, “when viewed in the light most favorable
to the party against whom the motion is made, genuine issues of
material fact remain or whether the case can be decided as a
matter
of
law.”
Smith
v.
McDonald,
562
F.
Supp.
829,
842
(M.D.N.C. 1983), aff’d, 737 F.2d 427 (4th Cir. 1984), aff’d, 472
U.S. 479 (1985); Mendenhall, 2012 WL 1230743, at *5.
A.
Lanham Act Claim
Blue Rhino first seeks judgment on the pleadings as to Well
Traveled’s
claim
Competition
Under
for
“Bad
Federal
Faith
and
State
Enforcement
Law”
(count
-III).
Unfair
The
parties characterize the claim as one for unfair competition
under section 43(a) of the Lanham Act, 15 U.S.C. § 1125, but
Blue Rhino contends that Well Traveled “has not even come close
to properly pleading a federal unfair competition claim.” 1
1
(Doc.
Count III of the counterclaim is styled as a claim under state law
and alludes to “commerce in North Carolina.”
(Doc. 9 (counterclaim)
5
12 at 5 n.1.)
According to Blue Rhino, the heart of a Lanham
Act claim is that the patent-holder act in “bad faith,” but the
company argues that no facts in the pleadings provide a basis
for such an allegation.
In support of its position, Blue Rhino
notes that the ’647 Patent has never been declared invalid and
that “‘a patentholder does not compete unfairly by taking steps
to enforce his patent until it is determined to be invalid.’”
(Id. at 8-9 (quoting GFI, Inc. v. Bean Station Furniture, 286 F.
Supp. 2d 663, 666 (M.D.N.C. 2003)).)
In addition, Blue Rhino
argues that Well Traveled’s sole factual allegation in support
of its bad faith claim -- i.e., that Blue Rhino knew that prior
art invalidated claims 1, 2, and 3 of the ’647 Patent -- is
insufficient to make the Lanham Act claim plausible, because the
’647 Patent contains eleven other claims.
Well
Traveled,
in
contrast,
contends
that
it
has
sufficiently pleaded a claim for relief under the Lanham Act.
According
to
Well
Traveled,
it
has
alleged
facts
that
make
plausible its allegation that prior art invalidates each claim
of the ’647 Patent.
And, as Well Traveled puts it, where a
¶ 22.)
To the extent this claim also seeks recovery for unfair
competition under North Carolina common law, “[t]he standard which a
plaintiff must meet to recover [for such a claim] . . . is not
appreciably different” from a claim under the North Carolina Unfair
and Deceptive Trade Practices Act, N.C. Gen. Stat. § 75-1.1.
BellSouth Corp. v. White Directory Publishers, Inc., 42 F. Supp. 2d
598, 615 (M.D.N.C. 1999).
Because that is what is alleged in count
IV, Well Traveled’s state law claims will be addressed in Part II.B.
6
patent-holder “‘knows that a 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
representation’” is alleged.
(Doc. 16 at 10 (quoting Zenith
Elecs. Corp. v. Exzec, Inc., 182 F.3d 1340, 1353-55 (Fed. Cir.
1999)).)
Well Traveled also contests Blue Rhino’s reliance on
the presumption of a patent’s validity; in Well Traveled’s view
the
presumption
simply
charges
it
with
the
burden
of
demonstrating that Blue Rhino knew of the prior art that would
invalidate the claims in the ’647 Patent.
Section 43(a) of the Lanham Act creates a civil cause of
action for “any false designation of origin, false or misleading
description of fact, or false or misleading representation of
fact,
which
misrepresents
geographic
. . .
in
the
origin
commercial
nature,
of
his
or
advertising
characteristics,
her
services, or commercial activities.”
or
another
or
promotion,
qualities,
person’s
or
goods,
15 U.S.C. § 1125(a)(1)(B).
To state a claim for relief under the Lanham Act, Well Traveled
must plead five elements:
(1) the defendant made a false or misleading description
of fact or representation of fact in a commercial
advertisement about his own or another’s product; (2)
the misrepresentation is material, in that it is likely
to
influence
the
purchasing
decision;
(3)
the
misrepresentation actually deceives or has the tendency
to deceive a substantial segment of its audience; (4)
the defendant placed the false or misleading statement
in interstate commerce; and (5) the plaintiff has been
7
or is likely to be injured as a result of the
misrepresentation, either by direct diversion of sales
or by a lessening of goodwill associated with its
products.
PBM Prods., LLC v. Mead Johnson & Co., 639 F.3d 111, 120 (4th
Cir. 2011); see also Zenith Elecs., 182 F.3d at 1348 (reciting
the elements of a Lanham Act claim).
To avoid a conflict with
patent law, which makes patent-holders responsible for notifying
infringers of their violations as a prerequisite to recovering
damages, 35 U.S.C. § 287, Well Traveled must also allege that
Blue Rhino’s statements about the potential infringement were
made in “bad faith.”
Zenith Elecs., 182 F.3d at 1353.
Blue Rhino contends that Well Traveled has failed to allege
sufficient facts to make any element of its section 43(a) claim
plausible.
According
to
Blue
Rhino,
the
counterclaim
lacks
facts alleging that Blue Rhino “used in commerce a false or
misleading description or representation of fact which is likely
to cause confusion, mistake or deceive.”
Beyond
address
this
with
general
any
statement,
specificity
however,
the
(Doc. 12 at 5 n.1.)
Blue
supposed
Rhino
failings
fails
of
to
Well
Traveled’s counterclaim.
The court finds that Blue Rhino’s challenge comes up short.
Well Traveled’s allegation that Blue Rhino made statements that
its
products
infringe
the
’647
Patent
when
Blue
Rhino
“had
actual knowledge of prior art that invalidate[d] the [patent’s]
8
claims” (Doc. 9 (counterclaim) ¶¶ 19-20) is sufficient to make
it
plausible
that
Blue
Rhino’s
statements
were
false.
And
although not every misrepresentation implicates the Lanham Act,
see Garland Co. v. Ecology Roof Sys. Corp., 895 F. Supp. 274,
279
(D.
Kan.
1995),
the
allegation
that
Blue
Rhino
“made
statements” to Well Traveled’s “potential or existing customers”
(Doc. 9 (counterclaim) ¶ 19) makes it plausible that Blue Rhino
sufficiently
disseminated
its
statements
to
a
wide
enough
audience that it could be said to have engaged in the type of
“informal . . . ‘promotion’” prohibited under the Lanham Act,
see Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379, 1384, 1386-87
(5th
Cir.
1996)
“promotion”
(applying
first
the
described
test
in
for
Gordon
“advertising”
&
Breach
or
Science
Publishers S.A. v. American Institute of Physics, 859 F. Supp.
1521,
1535-36
given
in
(S.D.N.Y.
“individual,
1994),
and
concluding
face-to-face
business
that
materials
meetings”
can
constitute sufficient dissemination under the Lanham Act).
The
court can also infer that such false statements were likely to
deceive
and
influence
Well
purchasing decisions.
Traveled’s
customers
as
to
their
See Spotless Enters., Inc. v. Carlisle
Plastics, Inc., 56 F. Supp. 2d 274, 278 (E.D.N.Y. 1999) (“It
seems
clear
that,
if
made,
Spotless’
false
claims
and
implications that Carlisle’s hangers infringe Spotless’ patent
and, thus, may subject purchasers to suit, or other problems,
9
are as harmful to fair competition and as material to a decision
to purchase as [similar and valid] claims [arising in the false
comparative advertising context].”).
Moreover, a statement made
by one competitor to another competitor’s customers about the
latter’s products being sold nationwide occurs within interstate
commerce.
(1952)
See Steele v. Bulova Watch Co., 344 U.S. 280, 283-84
(explaining
that
the
Lanham
Act’s
interstate
commerce
requirement means “all commerce which may lawfully be regulated
by Congress” (citation and internal quotation marks omitted)).
Finally,
statements
Well
Traveled’s
were
“made
allegations
with
the
that
intent
to
Blue
injure
Rhino’s
[Well
Traveled’s] business” and to “coerce” Well Traveled into taking
a license (Doc. 9 (counterclaim) ¶¶ 20-21) make plausible that
Well
Traveled
has
suffered
or
was
likely
to
suffer
injury
because of Blue Rhino’s actions.
As for “bad faith” -- the most hotly contested allegation
in the parties’ briefing -- the Federal Circuit has held that
“what constitutes bad faith [must] . . . be determined on a case
by case basis.”
Zenith Elecs., 182 F.3d at 1354.
Blue Rhino
raises two principal arguments as to why claims of bad faith
against it are precluded.
First, Blue Rhino contends that a patent-holder does not
engage in bad faith by attempting to enforce its patent unless
its claims of infringement were “objectively baseless,” that is
10
that “no reasonable litigant could reasonably expect success on
the merits.” 2
Dominant Semiconductors Sdn. Bhd. v. OSRAM GmbH,
524 F.3d 1254, 1260 (Fed. Cir. 2008); Doc. 12 at 8.
It contends
that, because patents are presumed to be valid, see 35 U.S.C.
§ 282, and because the ’647 Patent has never been found to be
invalid, it could not have been “objectively baseless” for the
company to inform others of its rights under the ’647 Patent.
(Doc. 12 at 8-9.)
Blue Rhino’s reliance on the presumption of patent validity
and the lack of a prior finding of invalidity is misplaced.
It
is true that a patent enjoys a presumption of validity.
35
2
Well Traveled argues in a footnote that “[t]here is conflicting
authority regarding the applicability of the objectively baseless
standard in situations of marketplace communications as at issue
here.”
(Doc. 16 at 10 n.3 (citing Soilworks, LLC v. Midwest Indus.
Supply, Inc., 575 F. Supp. 2d 1118, 1126 (D. Ariz. 2008)).)
The
parameters of any conflict are unclear.
Compare CollegeNet, Inc. v.
Xap Corp., No. CV-03-1229-HU, 2004 WL 2303506, at *13-14 (D. Or. Oct.
12, 2004) (explaining that proof of “objective baselessness” is
required only for “pre-litigation communications” and not “marketplace
conduct”), with Dominant, 524 F.3d at 1257, 1261-62 (applying the
“objectively baseless” standard to a letter that a patent-holder sent
to its “[s]ales and [d]istribution partners” informing them that a
named competitor was violating its patents and encouraging the
recipients to share the email with their customers), and, MPT, Inc. v.
Marathon Labels, Inc., No. 1:04 CV 2357, 2005 WL 2086069, at *5 (N.D.
Ohio Aug. 26, 2005) (“Globetrotter expressly discusses and applies
Zenith’s bad faith test.
Nowhere in Globetrotter does the Federal
Circuit overrule, vacate, or even question that test.
Rather,
Globetrotter elaborates on the showing necessary to satisfy Zenith’s
bad faith test in the context of state common law claims based on prelitigation communications alleging patent infringement.”).
However,
the court need not resolve whether Well Traveled must allege facts
showing “objective baselessness” or “bad faith” because, as is
explained below, the company’s factual allegations satisfy either
standard.
11
U.S.C. § 282.
As Blue Rhino recognizes (Doc. 12 at 8), however,
the presumption can be overcome by a showing that the patentholder acted in bad faith.
See Hunter Douglas, Inc. v. Harmonic
Design, Inc., 153 F.3d 1318, 1336 (Fed. Cir. 1998) (“[F]ederal
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.” (emphasis added)), overruled
on
other
grounds,
Midwest
Indus.,
Inc.
v.
Karavan
Inc., 175 F.3d 1356 (Fed. Cir. 1999) (en banc).
Trailers,
Consequently,
just because a court has not declared the ’647 Patent invalid
does not, as a matter of law, preclude a determination that Blue
Rhino acted in bad faith in seeking to enforce it.
See, e.g.,
D&R Commc’ns, LLC v. Garrett, Civ. A. No. 11-0413 (GEB), 2011 WL
3329957, at *4 (D.N.J. Aug. 2, 2011) (denying defendants’ motion
to dismiss plaintiff’s unfair competition claim even while the
patent’s validity remained unresolved); cf. Dow Chem. Co. v.
Exxon Corp., 139 F.3d 1470, 1477-79 (Fed. Cir. 1998) (reversing
district court and allowing state law unfair competition claim
to
proceed
where
there
was
an
allegation
of
bad
faith
enforcement of an allegedly invalid patent). 3
3
Indeed, in Zenith Electronics, the court drew a sharp distinction
between Concrete Unlimited, Inc. v. Cementcraft, Inc., 776 F.2d 1537
(Fed. Cir. 1985), which the court characterized as a “good faith
enforcement of a patent” because bad faith had not been shown to
overcome the presumption of validity, and Dow Chemical, which the
court characterized as a “bad faith patent enforcement” because the
12
GFI, supra, upon which Blue Rhino relies heavily, does not
require a contrary result.
There, the patentee, GFI, had won a
federal lawsuit over the validity of its patent in 1996 and
thereafter (1996-97) wrote letters to potential infringers and
their customers notifying them of the patent and threatening
suit to enforce it.
GFI then sued alleged infringers in federal
court in Mississippi as well as in this district.
The federal
court in Mississippi held that the patent was invalid because of
inequitable conduct based on undisclosed prior art but declined
to
award
attorneys’
infringement
faith.
claim
fees
was
because
neither
the
court
frivolous
found
nor
that
brought
GFI’s
in
bad
GFI then dismissed its infringement claims against the
defendants in this court, but those defendants moved for summary
judgment
on
their
counterclaims
of
unfair
competition
under
state law based on GFI’s 1996-97 communications to defendants
and their customers.
The GFI court observed that “a patent is presumed valid
until
found
unfairly
by
invalid,
taking
and
steps
determined to be invalid.”
added).
a
to
patentholder
enforce
his
does
patent
not
until
compete
it
is
286 F. Supp. 2d at 666 (emphasis
However, the court held that GFI could not demonstrate
by “clear and convincing evidence that in 1996-97 GFI ‘knew’
patentee allegedly knew that the patent was unenforceable
inequitable conduct. Zenith Elecs., 182 F.3d at 1351.
13
due
to
that
its
patent
actually
was
invalid”
in
the
face
of
the
Massachusetts court’s ruling of validity, the Patent Office’s
affirmation of its patent, and the Mississippi federal court’s
refusal to find bad faith despite finding inequitable conduct.
Id. at 667-68.
Thus, the GFI court concluded, no reasonable
jury could find that the patent-holder was acting in “bad faith”
in seeking to enforce its patent. 4
Id.
To the extent GFI relied
on the general presumption of patent validity, therefore, it was
surplusage to the earlier judicial determination that the patent
was valid.
In
this
case,
by
contrast,
there
is
no
admission
or
allegation in the amended answer and counterclaim that the ’647
Patent has been declared valid.
Rather, the only facts alleged
are that Blue Rhino sought to enforce the ’647 Patent knowing
that prior art invalidated its claims.
Such an allegation, if
true, would state a plausible claim of bad faith.
See Zenith
Elecs., 182 F.3d at 1354.
Blue
Rhino
argues
secondly
that
Well
Traveled
fails
to
allege sufficient facts to make its bad faith claim plausible
because the one instance of prior art specifically identified in
the counterclaim is the Sun-Glo patio radiant heater, which is
alleged to “meet[] all the limitations of Claims 1, 2[,] and 3
4
This conclusion makes GFI more like Concrete Unlimited than Dow
Chemical in that the patent-holder’s bad faith was not shown.
14
of the ’647 Patent” only.
(Doc. 9 (counterclaim) ¶ 9.)
Because
the ’647 Patent contains eleven other claims, Blue Rhino argues,
the company could not have acted in bad faith in seeking to
enforce its patent.
(Doc. 12 at 6-7.)
Thus, Blue Rhino takes
Well Traveled to task for not identifying specific examples of
prior art that allegedly invalidate each of the ’647 Patent’s
fourteen claims.
Yet, a complaint or counterclaim need not contain “detailed
factual allegations” to survive a motion to dismiss.
550 U.S. at 555.
Twombly,
This is true even if “it strikes a savvy judge
that actual proof of those facts is improbable, and ‘that a
recovery is very remote and unlikely.’”
Scheuer
v.
Traveled
Rhodes,
has
416
alleged
U.S.
that
232,
“all
236
of
Id. at 556 (quoting
(1974)).
the
Here,
purported
Well
inventions
claimed in the ’647 [P]atent were known and used by others”
prior
to
the
purported
invention
in
the
patent
(Doc.
9
(counterclaim) ¶ 10) and that Blue Rhino “had actual knowledge
of prior art that invalidates the claims of the ’647 Patent”
(id. ¶ 20).
In support of these allegations, the counterclaim
includes alleged factual evidence of the Sun-Glo patio radiant
heater which, when viewed in the light most favorable to Well
Traveled, is offered as an example of prior art.
That this
specific example of prior art allegedly invalidates some but not
all
of
the
claims
of
the
’647
15
Patent
does
not
doom
the
counterclaim but makes plausible its allegation that other such
prior art exists that invalidates each “purported invention” of
the
’647
Patent.
Accordingly,
Well
Traveled’s
counterclaim
plausibly alleges that Blue Rhino acted in bad faith by making
objectively baseless statements about Well Traveled’s products.
Zenith Elecs., 182 F.3d at 1354 (finding it “obvious[]” that
where
a
patent-holder
unenforceable,
or
“knows
not
that
[his]
infringed,
yet
patent
is
represents
invalid,
to
the
marketplace that a competitor is infringing the patent, a clear
case of bad faith representations is made out”). 5
Because
Well
Traveled’s
amended
counterclaim
alleges
sufficient facts to make each element of its Lanham Act unfair
competition claim plausible, therefore, Blue Rhino’s motion for
judgment on the pleadings as to count III of the counterclaim
will be denied.
B.
Blue
North Carolina
Act Claim
Rhino
also
Unfair
seeks
and
Deceptive
judgment
on
the
Trade
Practices
pleadings
with
respect to Well Traveled’s “Bad Faith Enforcement -- Unfair and
Deceptive
Trade
Practices
Under
5
N.C.
Gen.
Stat.
§ 75[-1].1”
It is also not lost on the court that while Blue Rhino argues that
the counterclaim fails to allege sufficient facts as to every claim of
the ’647 Patent, the complaint itself does not survive Blue Rhino’s
own test.
The complaint broadly alleges that Well Traveled is
infringing “one or more claims” of the ’647 Patent and then provides
examples of particular claims alleged to be infringed. (Doc. 1 ¶¶ 910.) Moreover, most key factual allegations against Well Traveled are
made “on information and belief.” (Id. ¶¶ 10-13.)
16
(count IV).
Unfair
and
To state a claim for relief under North Carolina’s
Deceptive
Trade
Practices
Act
(UDTPA),
N.C.
Gen.
Stat. § 75-1.1, Well Traveled must allege (1) Blue Rhino engaged
in an “unfair” or “deceptive” act or practice, (2) the act was
in
or
affecting
Traveled.
commerce,
and
(3)
that
injured
Well
N.C. Gen. Stat. § 75-1.1; Dalton v. Camp, 353 N.C.
647, 656, 548 S.E.2d 704, 711 (2001).
patent
act
law,
the
state
allegation of bad faith.
law
UDTPA
To avoid preemption under
claim
must
also
include
an
See Zenith Elecs., 182 F.3d at 1355.
Here, the parties simply adopt the same arguments raised
with respect to the Lanham Act claim.
need
say
little
more
than
that
It follows that the court
Well
Traveled’s
UDTPA
claim
survives judgment on the pleadings for the same reasons as the
Lanham
Act
unfair
competition
claim.
That
is,
the
factual
allegations in the counterclaim, including the facts alleging
that Blue Rhino acted in bad faith, are sufficient to make Well
Traveled’s
Rhino’s
claim
motion
for
for
relief
judgment
plausible.
on
the
Accordingly,
pleadings
as
to
Blue
Well
Traveled’s UDTPA claim contained in count IV of the counterclaim
will be denied.
17
III. CONCLUSION
For the reasons set forth herein, therefore,
IT IS ORDERED that Blue Rhino’s Motion for Judgment on the
Pleadings (Doc. 11) with respect to counts III and IV of Well
Traveled’s amended counterclaim (Doc. 9) is DENIED.
/s/
Thomas D. Schroeder
United States District Judge
August 22, 2012
18
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