Blue Spike, LLC v. Caterpillar, Inc. et al
ORDER ADOPTING REPORT AND RECOMMENDATIONS re #43 Report and Recommendations. It is ORDERED that #17 Motion to Dismiss filed by Caterpillar, Inc. is converted to a motion for summary judgment pursuant to Federal Rule of Civil Procedure 12(d) and ORDERED that summary judgment of non-infringement is GRANTED in favor of Caterpillar. It is ORDERED that #48 Blue Spike's Motion to Dismiss and for Entry of Final Judgment with Respect to Defendant Caterpillar is DENIED. It is ORDERED that this matter is referred to Magistrate Judge Love for determination of whether and in what amount fees should be awarded under Rule 11(b)(3). Signed by Judge Robert W. Schroeder, III on 5/8/2017. (rlf)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
BLUE SPIKE LLC,
CATERPILLAR INC., et al.,
Case No. 6:16-cv-1361 RWS-JDL
ORDER ADOPTING REPORT AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
Before the Court is Magistrate Judge John D. Love’s Report and Recommendation (the
“Report”) (Docket No. 43), which recommends that Defendant Caterpillar Inc.’s (“Caterpillar”)
Motion to Dismiss (Docket No. 17) be converted to a motion for summary judgment and granted,
and that Plaintiff Blue Spike LLC’s (“Blue Spike”) claims against Caterpillar be dismissed with
prejudice. Report at 1. The Report also finds that an award of fees may be appropriate under
Federal Rule of Civil Procedure 11(b)(3). Also before the Court are Blue Spike’s Unopposed
Motion to Dismiss Just Defendant Caterpillar and Entry of Final Judgment (Docket No. 48) and
its Response to the Report and Recommendation (Docket No. 49).
The above-styled matter was referred to United States Magistrate Judge John D. Love
pursuant to 28 U.S.C. § 636(b). The Court reviews de novo objected-to portions of the Report and
otherwise reviews the Report for plain error. 28 U.S.C. § 636 (b)(1). Having reviewed the Report,
the Court concludes that the findings and conclusions of the Magistrate Judge are correct.
Accordingly, and for the reasons that follow, the Court ADOPTS the Report, DENIES Blue
Spike’s Motion to Dismiss, and GRANTS summary judgment in favor of Caterpillar.
Blue Spike’s Response to the Report
In its Response to the Report, Blue Spike argues that in light of its Unopposed Motion to
Dismiss Caterpillar (Docket No. 48), Caterpillar’s Motion to Dismiss (Docket No. 17) and
therefore the Report are moot. Docket No. 49 at 1–2. Blue Spike states that it “followed the advice
of the Court’s ruling and dismissed defendant Caterpillar with prejudice via stipulation pursuant
to Rule 41(a)(1)(A)(ii).” Id. at 1.
However, Blue Spike has failed to fulfill the requirements of Rule 41(a)(1)(A)(ii) for
voluntarily dismissing Caterpillar without a court order. This rule states in relevant part:
Subject to Rules 23(e), 23.1(c), 23.2, and 66 and any applicable
federal statute, the plaintiff may dismiss an action without a court
order by filing:
(ii) a stipulation of dismissal signed by all parties who have
FED. R. CIV. P. 41(a)(1)(A)(ii). Blue Spike’s Motion to Dismiss Caterpillar, while unopposed, is
not signed by Caterpillar. See Docket No. 48. The dismissal is therefore ineffective, and neither
the Report nor the underlying Motion to Dismiss is moot. Accordingly, to the extent that Blue
Spike’s Response (Docket No. 49) represents an objection to the Report, it is OVERRULED.
Recommendation to Convert Motion to Dismiss Under Rule 12(d)
In his Report, the Magistrate Judge first recommends converting Caterpillar’s Motion to
Dismiss to a motion for summary judgment pursuant to Rule 12(d) of the Federal Rules of Civil
Procedure. Docket No. 43 at 4–5. The Magistrate Judge finds that the parties had ample notice of
conversion and that both parties relied heavily on matters outside the pleadings, including a
number of exhibits and sworn declarations. Neither party objected to the Magistrate Judge’s
recommendation in this regard. Converting Caterpillar’s Motion to Dismiss to a Motion for
Summary Judgment is proper.
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Recommendation to Grant Summary Judgment
The Magistrate Judge next recommends that summary judgment be granted in favor of
Caterpillar because Caterpillar has demonstrated an absence of a genuine issue of material fact as
to whether it performed any act that could constitute patent infringement (i.e. making, using or
selling the accused products, etc.).
The Magistrate Judge relies on two unrebutted declarations from Caterpillar Senior
Corporate Counsel Jamie Skinner and Bullitt Group Chief Operating Officer Lawrence Corbett.
Both declarations indicate that Caterpillar’s involvement in selling the accused Cat Phones is
limited to being a trademark licensor and that Bullitt Group designs and markets Cat Phones,
including by operating the catphones.com website. In light of the unrebutted evidence that Bullitt
Group operates catphones.com, the Magistrate Judge finds irrelevant Blue Spike’s evidence that
Caterpillar owns the website. Report at 9. He further finds that Caterpillar’s trademark license to
Bullitt does not support a “partnership” that might subject Caterpillar to patent-infringement
liability arising out of the sale of Cat Phones. Id. Finally, the Magistrate Judge finds that no
evidence supports Blue Spike’s allegation that Caterpillar is liable for joint infringement because
Blue Spike offers no evidence that Bullitt acted as an agent of Caterpillar or that Caterpillar
contracted with Bullitt to perform one or more steps of the patents-in-suit. Id. at 10.
The Magistrate Judge concludes that the record lacks evidence that could create a genuine
issue of material fact that Caterpillar made, used, sold, offered to sell or imported the accused
products, or that Caterpillar created, wrote or supplied any software used in the accused phones
that would infringe the patents-in-suit. Id. Accordingly, the Magistrate Judge recommends
granting summary judgment in favor of Caterpillar or, alternatively, granting dismissal on the basis
pursuant to Rule 12(b)(6). Id. at 10–11.
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Neither party objected to the findings, conclusions or recommendations of the Magistrate
Judge. The Court finds no error in the Magistrate Judge’s findings or conclusions and therefore
ADOPTS the Magistrate Judge’s Report and Recommendation as the findings and conclusions of
Blue Spike’s Motion to Dismiss
In its Motion to Dismiss (Docket No. 48), Blue Spike requests that the Court dismiss with
prejudice its claims against Caterpillar and enter final judgment. In light of the Court’s adoption
of the Report, Blue Spike’s request for dismissal is moot. Further, although the Court has in other
cases considered motions for attorney’s fees after the entry of final judgment, it is more appropriate
in this case to reserve final judgment until after the fees issue is resolved. Accordingly, the Court
finds that Blue Spike’s motion should be DENIED.
Fees to Be Resolved Separately
As a final matter, the Magistrate Judge found that Rule 11(b)(3) sanctions may be
appropriate in this case and, accordingly, ordered Blue Spike to show cause as to why it should
not be sanctioned for filing and maintaining a frivolous lawsuit against Caterpillar. Docket No.
43 at 11. The parties submitted briefs pursuant to the Magistrate Judge’s order. The undersigned
requests that the Magistrate Judge prepare a supplemental Report and Recommendation as to
whether and in what amount sanctions should be imposed.
For the foregoing reasons, it is
ORDERED that Caterpillar’s Motion to Dismiss (Docket No. 17) is converted to a motion
for summary judgment pursuant to Federal Rule of Civil Procedure 12(d);
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ORDERED that summary judgment of non-infringement is GRANTED in favor of
Caterpillar (Docket No. 17); and
ORDERED that Blue Spike’s claims against Caterpillar are DISMISSED WITH
PREJUDICE. It is also
ORDERED that Blue Spike’s Motion to Dismiss and for Entry of Final Judgment with
Respect to Defendant Caterpillar (Docket No. 48) is DENIED. It is also
ORDERED that this matter is referred to Magistrate Judge Love for determination of
whether and in what amount fees should be awarded under Rule 11(b)(3).
SIGNED this 8th day of May, 2017.
ROBERT W. SCHROEDER III
UNITED STATES DISTRICT JUDGE
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