Tannerite Sports, LLC et al v. Jerent Enterprises, LLC
Filing
41
OPINION AND ORDER: Plaintiffs' motion to dismiss defendant's counterclaims 32 is GRANTED in part and DENIED in part. Leave to amend defendant's counterclaims should be filed within 20 days of the date of this Opinion and Order and include the amendments defendant proposes. See formal OPINION AND ORDER. Signed on 10/6/2015 by Chief Judge Ann L. Aiken. (rh)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
TANNERITE SPORTS, LLC and
DANIEL TANNER,
Plaintiffs,
vs.
JERENT ENTERPRISES, LLC, dba
SONIC BOOM EXPLODING TARGETS,
Defendant.
Andrea D. Coit
Harrang Long Gary Rudnick, PC
360 East lOth Avenue, Suite 300
Eugene, OR 97401
Kevin M. Drucker (pro hac vice)
David L. Cargille (pro hac vice)
Mendelsohn, Drucker, & Dunleavy, PC
1500 John F. Kennedy Blvd., Suite 312
Philadelphia, PA 19102
Attorneys for plaintiffs
Joshua M. Wolf
Wolf Legal, LLC
17390 SW Rose Petal Lane #206
Beaverton, OR 97003
Page 1 - OPINION AND ORDER
Case No. 6:15-cv-180-AA
OPINION AND ORDER
Michael T. Hilgers (pro hac vice)
Gober Hilgers, PLLC
14301 FNB Parkway, Suite 100
Omaha, NE 68154
Attorneys for defendant
AIKEN, Chief Judge:
Plaintiffs Tannerite Sports,
LLC and Daniel Tanner move to
dismiss defendant Jerent Enterprises, LLC, dba Sonic Boom Exploding
Targets'
counterclaims under Fed.
R.
Civ.
P.
12 (b) (6).
For the
reasons set forth below, plaintiffs' motion to dismiss defendant's
counterclaims is GRANTED in part and DENIED in part.
BACKGROUND
On February 2,
2015,
plaintiffs filed a
complaint alleging
patent infringement of its Tannerite® brand binary targets under the
Patent Act, 35 U.S.C.
holder
of
binary
§
271. Plaintiff Daniel Tanner is the patent
exploding
shooting practice.
rifle
targets
used
for
long-range
These targets are safe and legal to ship and
store because they are packaged to keep the oxidizer separate from
the catalyst, thus preventing the target from exploding until mixed.
See Pls.' Mot. to Dismiss at 8.
On March
Plaintiffs
31,
2015,
realleged
plaintiffs
that
defendant
deliberately
commit
direct
infringement
by
customers
its
filed
continues
infringement,
and
an
end
amended complaint.
to
willfully
inducement
users,
and
of
and
direct
contributory
infringement of at least claim 25 of U.S. Patent No. RE44,386 ("the
'386 patent") through its manufacture, use, sale, and offering for
sale of nearly identical binary exploding rifle targets marketed
under the "Sonic Boom" brand name.
Page 2 - OPINION AND ORDER
Plaintiff also added a second
claim that defendant infringed U.S. Patent No. RE44,440 ("the '440
patent") in the same manner as summarized above.
On April
14,
2015,
defendant
answered
plaintiffs'
complaint with affirmative defenses and counterclaims,
filed
an
amended
counterclaims:
( 1)
answer.
Defendant
defendant
has
not
alleges
or
and then
the
directly
amended
following
indirectly
infringed, and is not continuing to directly or indirectly infringe,
the '386 or '440 patent;
(2) some or all of the claims of the '386
and '440 patents are invalid; and
inequitable
conduct
rendering
(3)
the
plaintiffs have engaged in
claims
of
the
'386
and
'440
patents invalid and unenforceable.
Plaintiffs move to dismiss defendant's counterclaims.
STANDARD OF REVIEW
"Where a counterclaim
'fail[s]
to state a claim upon which
relief can be granted,' it must be dismissed." Unum Life Ins. Co.
of Am. v. Martin, 2013 WL 3995005, *2 (D. Or. Aug. 1, 2013)
Fed.
R.
Civ.
P.
12 (b) (6)).
To
survive
a
motion
to
(quoting
dismiss,
a
counterclaim must allege "enough facts to state a claim to relief
that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 129 (2009).
The complaint is liberally construed in favor of the counterclaimant
and its allegations are taken as true. Rosen v. Walters, 719 F.2d
1422, 1424
(9th Cir. 1983). Bare assertions, however, that amount
to nothing more than a "formulaic recitation of the elements" of a
claim "are conclusory and not entitled to be assumed true." Ashcroft
v.
Iqbal, 556 U.S. at 681. Rather, to state a plausible claim for
Page 3 - OPINION AND ORDER
relief,
the
complaint
"must
contain
sufficient
allegations
of
underlying facts" to support its legal conclusions. Starr v. Baca,
652 F.3d 1202, 1216 (9th Cir. 2011), cert. denied, 132 S. Ct. 2101
(2012) .
DISCUSSION
Plaintiffs contend defendant's counterclaims fail to state a
claim for relief because they are unsupported by sufficient facts,
vague, and are conclusory recitations of the elements of a claim.
Defendant maintains
its
counterclaims
are
pled with
sufficient
factual support and afford plaintiff fair notice of its claims.
I.
Non-Infringement Claim
First, defendant brings a non-infringement counterclaim seeking
a declaration that it has not infringed the
'386 or
("patents-in-suit").
it
Defendant
indirectly infringed the
"denies
that
Patents- In-Suit
has
and denies
'440 patent
directly
that
it
or
is
continuing to directly or indirectly infringe the Patents-In-Suit."
Def. 's
Am.
Answer
'II
106.
Defendant
otherwise makes
no
factual
allegations to support its non-infringement counterclaim. Defendant
does however "incorporate by reference" paragraphs 80 through 104
of the "FACTS" section preceding its counterclaims, but fails to
direct the Court to any particular facts within the twenty-four
paragraphs in support of the non-infringement counterclaim.
Plaintiffs
argue
the
vague
and
conclusory
language
of
defendant's non-infringement counterclaim fails to state which of
defendant's products do not infringe the patents-in-suit, or provide
any reasons to support the alleged non-infringement.
Page 4 - OPINION AND ORDER
A motion to dismiss for failure to state a claim upon which
relief
can
be
granted
is
a
purely
procedural
question;
thus,
regional circuit law is applied. McZeal v. Sprint Nextel Corp., 501
F.3d 1354, 1355-56 (Fed. Cir. 2007) (citing
C
&
F Packing Co., Inc.
v. IBP, Inc., 224 F.3d 1296, 1306 (Fed. Cir. 2000)). Typically, the
pleading sufficiency of a counterclaim is adjudged in light of the
Supreme Court's pleading standard set forth in Iqbal and Twombly.
However,
a
exception,
"direct"
infringement
claim in a
patent
case
is
an
as district courts are split on whether to apply the
minimal pleading requirements of Fed. R.
Civ.
P.
Form 18 1 or the
significantly more demanding requirements of Iqbal and Twombly.
Furthermore,
the Ninth Circuit has not addressed which pleading
standard to apply to direct infringement claims. Aubin Indus., Inc.
v.
Caster
Concepts,
Inc.,
No.
2:14-CV-02082-MCE-CKD,
2015
WL
3914000, at *3 (E.D. Cal. June 25, 2015) (quoting Microsoft Corp. v.
Phx. Solutions, 741 F. Supp. 2d 1156, 1158
(C. D. Cal. 2010)).
This Court is persuaded by a recent patent opinion from the
Chief Judge of the Eastern District of California where a similarly
situated
plaintiff
moved
1
to
dismiss
counterclaims
of
non-
Form 18, found in the Appendix of Forms accompanying the
Federal Rules of Civil Procedure, is an approved model complaint
for asserting a claim of direct patent infringement, which
requires identifying a general "category" of infringing products
and an allegation of infringement in general terms, but does not
require the plaintiff to identify any specific patent claim
("claim" refers to a patent claim, not a legal claim). See Fed.
R. Civ. P. Form 18; Infineon Tech. AG v. Volterra Semiconductor
Corp., No. C-11-6239-MMC, 2012 WL 3939353, at *2 (N.D. Cal. Sept.
10, 2012).
Page 5 - OPINION AND ORDER
infringement and invalidity. See Aubin Indus., Inc., 2015 WL 3914000
at *3-5. The district court there determined that "Form 18, which
is appended to the Federal Rules of Civil Procedure, provides an
example for alleging direct patent infringement that requires little
more than a conclusory statement that the defendant infringed the
plaintiff's patent.
Supp.
2d at
11
Id.
at * 4
(quoting Microsoft Corp.,
7 41 F.
omitted) . 2 Similarly,
1158) (internal quotations
the
Northern District of California determined that "[t]he direct noninfringement portion of [defendant's] counterclaim must be evaluated
under Form 18,
whereas the indirect non-infringement portion is
subjected to the heightened pleading standard of Iqbal and Twombly.
PageMeldinq,
Inc.
3877686, at *2
Therefore,
v.
ESPN,
Inc.,
No.
C 11-06263
WHA,
2012
11
WL
(N.D. Cal. Sept. 6, 2012).
after
applying
the
Form
18
requirements
to
defendant's direct non-infringement counterclaim, this Court finds
the counterclaim sufficiently plead. Defendant asserted the detail
required by Form 18, including the patents at issue, i.e., the '386
and '440 patents, and the allegedly infringing product, i.e., the
Sonic Boom Exploding Targets. 3 Def.'s Am.
Answer~~
29, 96, 108.
2
Nonetheless, plaintiffs often challenge, and courts
continue to debate, whether Form 18 pleading standards apply to a
plaintiff's direct infringement claim only, and do not apply to a
counterclaim alleging direct non-infringement. This debate is
unsettled; this Court applies Form 18 pleading standards to
defendant's direct non-infringement counterclaim. Aubin Indus.,
Inc., 2015 WL 3914000 at *3-4.
3
However, the Court notes that defendant's pleading barely
satisfied Form 18 standards given that the Court infers the
allegedly infringing product from defendant's admission in~ 2930 of its Amended Answer. The Court encourages defendant, should
it seek to amend, to plead clear and particularized facts within
Page 6 - OPINION AND ORDER
Next,
regarding defendant's indirect non-infringement claim,
the heightened pleading standard of Twombly and Iqbal is applied.
R+L Carriers,
Inc. v.
Driver Tech LLC,
681 F.3d 1323, 1336
(Fed.
Cir. 2012) ("Form 18 should be strictly construed as measuring only
the
sufficiency of
allegations
of
direct
infringement,
and not
indirect infringement."); PageMeldinq, Inc., 2012 WL 3877686 at *3.
Defendant here has failed to allege sufficient facts,
when
taken as true, that lead to a reasonable inference that defendant
did not intend another party to infringe the patents-in-suit. Aside
from pleading that it did not indirectly infringe the patents-insuit, notably in the same sentence it denied direct infringement,
defendant states no facts
to support its claim that it sold or
offered to sell a product that had no substantial non-infringing
use.
Although
the
facts
incorporated by reference
provide
some
support for the indirect non-infringement claim, defendant leaves
the Court to guess which facts support a claim for relief. The Court
finds defendant's indirect non-infringement counterclaim fails at
the pleading level. Thus, plaintiffs' motion to dismiss defendant's
direct non-infringement counterclaim is denied, but the motion to
dismiss the indirect non-infringement counterclaim is granted.
II.
Invalidity Claim
Second, defendant brings an invalidity counterclaim seeking a
declaration that the '386 and '440 patents are invalid. Plaintiff
maintains that defendant's invalidity claim is vague and should be
dismissed for failure to allege anything more than a conclusory
the individual counterclaim sections.
Page 7 - OPINION AND ORDER
recitation of the statute. Plaintiffs' motion to dismiss defendant's
invalidity counterclaim is granted.
Counterclaims seeking declaratory relief for invalidity are
adjudged under the Iqbal and Twombly standard. PageMelding,
Inc.,
2012 WL 3877686 at *3. The elements of an invalidity claim depend
on the section of the Patent Act violated. Defendant alleges: "The
claims of the Patents-In-Suit are invalid for failure to satisfy one
or
more
of
the
requirements
of
Title
35,
including
without
limitations, Sections 102, 103 and/ or 112." De f. 's Am. Answer
Defendant
argues:
"Mr.
Tanner,
either
directly
or
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