Beer Barrel, The v. Deep Wood Brew Products et al

Filing 36

MEMORANDUM DECISION AND ORDER granting in part and denying in part 24 Second Motion to Dismiss: plaintiff's allegations of non-infringement are dismissed; plaintiff is granted leave to amend those non-infringement allegations - any amended complaint must be filed no later than 10/31/16. Signed by Judge David Nuffer on 10/12/16 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
THE BEER BARREL, LLC, a Utah limited
liability company,
Plaintiff,
v.
DEEP WOOD BREW PRODUCTS, LLC, a
Michigan limited liability company;
MANCAN UNIVERSE, LLC, a Michigan
limited liability company; MANCAN
UNIVERSE, INC., a Colorado corporation,

MEMORANDUM DECISION AND
ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANTS’
SECOND MOTION TO DISMISS

Case No. 2:16-cv-00440-DN-BCW
District Judge David Nuffer
Magistrate Judge Brooke C. Wells

Defendants.

Defendants Deep Wood Brew Products, LLC, ManCan Universe, LLC, and ManCan
Universe, Inc. (collectively “ManCan” or “Defendants”), move to dismiss with prejudice the
Amended Complaint 1 filed by The Beer Barrel, LLC (“Beer Barrel”) (“Motion”). 2 Beer Barrel
opposes the Motion (“Opposition”). 3 No reply was filed by Defendants. 4 For the reasons set
forth below, the Motion is GRANTED IN PART and DENIED IN PART.

1

Amended Complaint, docket no. 16, filed July 21, 2016.

2

Second Motion to Dismiss in Response to Plaintiff’s Amended Complaint (“Motion”), docket no. 24, filed Aug. 2,
2016.
3

Opposition to Defendants’ Second Motion to Dismiss (“Opposition”), docket no. 29, filed Aug. 26, 2016.

4

Request to Submit for Decision ¶¶ 4-7, docket no. 33, filed Sep. 15, 2016.

BACKGROUND 5
Beer Barrel makes and sells beer products. 6 Its primary products are beer growlers and
nozzle attachments. 7 The growlers are sold in 64 oz. and 128 oz. sizes. 8 Beer Barrel’s products
are manufactured in China by a company called Sino Dragon. 9 Defendants are competitors of
Beer Barrel and sell similar products. 10 Defendants originally sold their products under the
product name “Deep Wood Brew Products,” but now sell their products under the name
“ManCan.” 11
On January 21, 2015, before commencement of this lawsuit, ManCan sent a letter to Beer
Barrel stating that ManCan held a “common law copyright in the works of art of a minigrowler,” two utility patent applications, and two design patent applications, one of which was
granted and assigned U.S. Patent No. D735,436 (the “’436 Patent”). 12 ManCan’s letter to Beer
Barrel suggested that Beer Barrel was infringing ManCan’s intellectual property rights and
requested that Beer Barrel cease selling its products. 13 Beer Barrel did not immediately respond
to this letter.

5

The allegations provided in this Background section derive from the Amended Complaint, the parties’ briefing on
the Motion, and the exhibits attached to the original Complaint and Motion. For purposes of this memorandum
decision and order, the plaintiff’s allegations are assumed to be true. See Cory v. Allstate Ins., 583 F.3d 1240, 1244
(10th Cir. 2009) (instructing that when considering a motion to dismiss for failure to state a claim, the thrust of all
well-pleaded facts in the complaint is presumed, but conclusory allegations need not be accepted).

6

Amended Complaint ¶ 8.

7

Id.

8

Id.

9

Id. ¶ 9.

10

Id. ¶ 10.

11

Id. ¶ 11.

12

Id. ¶ 12; Letter from Chris Mueller, CEO of ManCan, to Zach Frantz, Beer Barrel (Jan. 21, 2015), Ex. 1 to
Complaint, docket no. 2-2, filed May 25, 2016.
13

Amended Complaint ¶ 12; Letter from Chris Mueller, CEO of ManCan, to Zach Frantz, Beer Barrel (Jan. 21,
2015), Ex. 1 to Complaint, docket no. 2-2, filed May 25, 2016.

2

On July 24, 2015 ManCan’s counsel sent a follow-up letter to Beer Barrel notifying Beer
Barrel of ManCan’s intellectual property rights. It stated that ManCan held the following
applications, in addition to the ‘436 Patent:
•

14/075,563 "Mini-Keg Growler"

•

14/705,204 "Portable Kegerator Cooler"

•

14/465,965 "Mini-Keg Growler Cap, Components, Accessories, and Designs for the
Same”

•

29/471,710 "Mini-Keg Growler Neck and Cap"

ManCan’s counsel stated that ManCan also had a “pending U.S. Trademark SN 86-555,740
‘MANCAN’ and pending copyright Application for ‘Mini-Keg Growler.’” 14
Beer Barrel responded to ManCan’s correspondence on February 1, 2016 by stating that
ManCan held only one approved patent “for your ManCan 64, a product that [Beer Barrel] does
not sell[;]” and ManCan could not claim patent infringement for patent applications. 15
ManCan replied to Beer Barrel’s letter on February 12, 2016 by stating that Beer Barrel
infringed ManCan’s ‘436 Patent and infringed ManCan’s “recently Issued U.S. Design Patent
Application number 29/471710” (which was granted approximately six weeks later on March 29,
2016 and assigned U.S. Patent No. D752,839 (“’839 Patent”)); 16 and Beer Barrel was correct that
there could be no infringement on a pending patent application. 17 ManCan’s February 12 letter
stated that Beer Barrel could either cease selling the mini-keg growler in question or enter into a

14

Letter from BrooksGroup, attorneys for ManCan, to Beer Barrel (July 24, 2015), Ex. 2 to Complaint, docket no.
2-3, filed May 25, 2016.
15

Amended Complaint ¶ 15; Letter from Justin James, attorney for Beer Barrel, to Chris Mueller, CEO of ManCan
(Feb. 1, 2016), Ex. H to Motion, docket no. 24-8, filed Aug. 2, 2016.
16

Amended Complaint ¶ 20.

17

Id. ¶ 17; Letter from BrooksGroup, attorneys for ManCan, to Justin James, attorney for Beer Barrel (Feb. 12,
2016), Ex. I to Motion, docket no. 24-9, filed Aug. 2, 2016.

3

licensing agreement with ManCan. 18 ManCan stated that if no licensing agreement was reached,
Beer Barrel would face statutory damages for infringement. 19
Beer Barrel did not cease selling the beer growler in question and did not enter into a
licensing agreement with ManCan. 20
In May 2016, ManCan contacted Amazon.com (“Amazon”), the primary vendor for Beer
Barrel’s products, and told Amazon that Beer Barrel’s products infringed ManCan’s patents. 21
Pursuant to Amazon policy, Amazon immediately ceased selling Beer Barrel’s products without
further investigation, pending a resolution between Beer Barrel and ManCan. 22 After Amazon
stopped selling Beer Barrel’s products, Beer Barrel’s sales slowed significantly. 23
Shortly after ManCan contacted Amazon, Beer Barrel filed this lawsuit seeking a
declaratory judgment of non-infringement of ManCan’s ‘436 and ‘839 Patents. Beer Barrel
originally sought relief for tortious interference with economic relations as well, but that claim
was later dropped. 24 ManCan now moves to dismiss Beer Barrel’s Amended Complaint on the
grounds that it does not state a claim for which relief may be granted.
STANDARD
Under Rule 12(b)(6), a complaint that does not “state a claim upon which relief can be
granted” will be dismissed. 25 Whether a complaint states a claim for relief is determined under
Rule 8(a), which requires a “short and plaint statement of the claim showing that the pleader is
18

Letter from BrooksGroup, attorneys for ManCan, to Justin James, attorney for Beer Barrel (Feb. 12, 2016), Ex. I
to Motion, docket no. 24-9, filed Aug. 2, 2016.
19

Amended Complaint ¶ 18.

20

Id. ¶ 19.

21

Id. ¶ 21.

22

Id.

23

Id. ¶ 22.

24

See generally Amended Complaint.

25

Fed. R. Civ. P. 12(b)(6).

4

entitled to relief.” 26 “In patent cases, courts previously looked to Federal Rule of Civil Procedure
84, which in turn referred to . . . Form 18 . . . .” 27 Form 18 provided an “example complaint for
patent infringement that merely included an allegation that the defendant infringed the asserted
patent” without specific factual allegations. 28 As of December 1, 2015, Rule 84 and Form 18
were abrogated and are no longer in effect. 29
“The abrogation of Rule 84 means that the Rule 8 pleading standards as construed by the
Supreme Court in . . . Iqbal . . . and . . . Twombly . . . govern in patent cases.” 30 This means that a
claim for patent infringement must contain “more than an unadorned, the defendant-unlawfullyharmed-me accusation.” 31 “A pleading that offers ‘labels and conclusions’ or ‘a formulaic
recitation of the elements of a cause of action will not do.’” 32 Instead, “[t]he allegations must be
enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for
relief.” 33 “This requirement of plausibility serves not only to weed out claims that do not (in the
absence of additional allegations) have a reasonable prospect of success, but also to inform the
defendants of the actual grounds of the claim against them.” 34
“[T]he tenet that a court must accept as true all of the allegations contained in a complaint
is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action,

26

Fed. R. Civ. P. 8(a).

27

Footbalance Systems, Inc. v. Zero Gravity Inside, Inc., Case No. 15-cv-1058-JHS (DHB), 2016 WL 5786936, at
*2 (S.D. Cal. Oct. 4, 2016) (unpublished).
28

Id.

29

Id.

30

Id.

31

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

32

Id. (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007)).

33

Robbins v. Oklahoma, 519 F.3d 1242, 1247-48 (10th Cir. 2008).

34

Id. at 1248.

5

supported by mere conclusory statements, do not suffice.” 35 “[N]aked assertions devoid of
further factual enhancement,” 36 do not state a claim sufficiently to survive a motion to dismiss.
“[T]he mere metaphysical possibility that some plaintiff could prove some set of facts in
support of the pleaded claims is insufficient; the complaint must give the court reason to believe
that this plaintiff has a reasonable likelihood of mustering factual support for these claims.” 37
“In evaluating a Rule 12(b)(6) motion to dismiss, courts may consider not only the
complaint itself, but also attached exhibits, and documents incorporated into the complaint by
reference.” 38
DISCUSSION
Beer Barrel has brought a single cause of action against ManCan for “declaratory
judgment of non-infringement and invalidity.” 39 The single cause of action alleges as follows:
24. The Beer Barrel’s Products do not and have not infringed on any valid and
enforceable claim of Defendants’ Patents, directly or indirectly, by inducement or
contributory infringement, literally or under the doctrine of equivalents.
25. One or more claims of Defendants Patents are invalid for failure to comply
with one or more requirements for patentability under the patent laws of the
United States, including, but not limited to, 35 U.S.C. § 102 and 103.
26. Upon information and belief, the design shown in Defendants’ Patents were
described and shown in printed publications and/or was otherwise available to the
public before November 4, 2012—one year before the effective filing date--by
several foreign manufacturers, including Sino Dragon.
27. Defendants’ patents are obvious to a designer of ordinary skill who designs
articles of the type involved by combining the teachings of prior art to create the
same overall visual appearance as the Defendants’ claimed design. Such prior art
35

Id.

36

Id.

37

The Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007).

38

Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009) (citations omitted). See also Tellabs, Inc. v. Makor
Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) (citing 5B WRIGHT & MILLER § 1357 (3d ed. 2004 & Supp.
2007)).
39
Amended Complaint at 5.

6

includes, but is not limited to the following patents D486,347; US 5,792,391;
D497,283; US365513A, US20130032564 A1, US4032047, US4690299,
US5129534, US5165569, US5203181, US20130264350, USD205750,
USD228976, USD244850, USD305601, USD306639, USD336714, USD362990,
USD374959, USD497283, USD558950, USD574574, USD623464, USD623887,
USD721281, EP2512974 B1, US4005813 A, US8646660, and EP1026089 A2.
28. In addition, Defendants’ ’839 Patent is invalid as a design patent because its
design is primarily functional rather than ornamental.
29. As a result of the Defendants’ allegations that all of Beer Barrel’s Products
infringe on Defendants’ patents, threats of litigation, and representations to
Amazon.com that the Beer Barrel’s 128 oz. Products infringe Defendants’
Patents, an actual controversy exists as to infringement on Defendants’ Patents
and their validity.
30. The Beer Barrel is entitled to a declaratory judgment that the Beer Barrel is
not directly, indirectly, contributorily infringe [sic] the Defendants’ Patents; that
the Beer Barrel has not actively induced others to infringe any claim of the
Defendants’ Patents; and that one or more claims of Defendants Patents are
invalid for failure to comply with one or more requirements for patentability
under that patent laws of the United States. 40
ManCan believes these allegations fail to state a claim with sufficient factual specificity
under Twombly and Iqbal, and moves to dismiss Beer Barrel’s claims with prejudice. 41 Beer
Barrel disagrees, arguing that “the Amended Complaint meets the requirements of Rule 8 . . . and
the standards set by Iqbal and Twombly in interpreting Rule 8.” 42 Beer Barrel argues that “the
plausibility standard was ‘not akin to a probability requirement, but it asks for more than a sheer
possibility’ of plaintiff’s claims.” 43
Beer Barrel Has Not Sufficiently Pled Non-Infringement
Beer Barrel’s claim of non-infringement consists of the following allegations:
•

ManCan is a competitor of Beer Barrel and sells similar products. 44

40

Id. ¶¶ 24-30.

41

Motion at 9, 11, and 14.

42

Opposition at 2.

43

Id. (quoting Iqbal, 556 U.S. at 678).

44

Amended Complaint ¶ 10.

7

•
•

ManCan sent Beer Barrel correspondence accusing Beer Barrel of
infringement, but Beer Barrel denied that it infringed ManCan’s patents. 45
“Beer Barrel’s Products do not and have not infringed on any valid and
enforceable claim of Defendants’ Patents, directly or indirectly, by
inducement or contributory infringement, literally or under the doctrine of
equivalents.” 46

This is the full extent of Beer Barrel’s allegations of non-infringement. No specific
factual allegations are provided.
Beer Barrel argues that it is not required to provide factual specificity, and that as the
“declaratory judgment plaintiff,” it “must only allege sufficient facts to establish jurisdiction
under the Federal Declaratory Judgment Act.” 47 The case Beer Barrel cites in support of this
argument is Arris Group, Inc. v. British Telecommunications, PLC. 48 But this case does not
support the proposition for which Beer Barrel has cited it. First, Arris was decided before the
abrogation of Rule 84 and Form 18 in December 2015. After that date, heightened pleading
standards apply to patent cases—even to a party seeking a declaratory judgment of noninfringement. 49 Second, Arris discusses the question of standing; not the question of sufficiency
of pleading under Rule 8. Thus, Arris does not support the proposition that Beer Barrel is
excused from the pleading requirements of Iqbal and Twombly.
Beer Barrel also argues that it is not required to provide factual specificity for its noninfringement claims because it is the patentee’s burden to prove infringement. 50 Beer Barrel cites

45

Id. ¶ 15.

46

Id. ¶ 24.

47

Opposition at 3.

48

Id. at 3 (citing Arris Group, Inc. v. British Telecommunications, PLC, 639 F.3d 1368, 1380 (Fed. Cir. 2011)).

49

See RAH Color Tech., LLC v. Ricoh USA, Inc., Case No. 2:15-cv-05203-JCJ, 2016 WL 3632720, at *5 (E.D.
Penn. July 7, 2016) (unpublished) (citing cases).
50

Opposition at 3.

8

Medtronic, Inc. v. Mirowski Family Ventures, LLC in support of this proposition. 51 Beer Barrel is
correct that Medtronic states the burden of proving infringement remains with the patentee. But
Medtronic, like Arris, was decided before December 2015 when Rule 84 and Form 18 were
abrogated. A complaint filed in a patent case must comply with the pleading requirements of
Iqbal and Twombly. Beer Barrel cites no authority that excuses it from making specific factual
allegations establishing a plausible claim of non-infringement, and thorough research into this
issue has not revealed any authority that would relieve Beer Barrel of this obligation. 52 As the
plaintiff asserting claims of non-infringement, Beer Barrel has an obligation to support those
claims under current pleading standards. Those standards require specific factual allegations.
The only factual allegations Beer Barrel identifies in its Amended Complaint are the
description of “two ‘primary products’; ‘a 128 oz. growler and a 64 oz. growler,’” and a
statement that those products “do not and have not infringed on any valid and enforceable claim
of ManCan’s Patents.” 53 But this is a conclusory allegation. The statement that “our products do
not infringe our competitor’s products” does not identify any facts upon which non-infringement
may be based. It is simply a conclusion. And although Beer Barrel identifies the “ordinary
observer test” as the proper test for determining whether a design patent is infringed, Beer Barrel
does not (and cannot) point to any allegations contained in the Amended Complaint that show
how the ordinary observer test would apply to this case. Thus, Beer Barrel’s claim for noninfringment lacks the plausibility and particularized facts required under Iqbal and Twombly to
sufficiently state a claim for relief. Thus, the Motion is GRANTED with respect to the non-

51

Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S.Ct. 843, 849 (2014).

52

RAH Color Tech., 2016 WL 3632720, at *5 (dismissing noninfringement counterclaim because it failed to
plausibly allege noninfringement); Tannerite Sports, LLC v. Jerent Enters., LLC, Case No. 6:15-cv-00180-AA, 2016
WL 1737740, at *5 (D.Or. May 2, 2016) (unpublished) (same).
53

Opposition at 5 (quoting Amended Complaint ¶ 24).

9

infringement claim. The claim is not dismissed with prejudice, however. Instead, Beer Barrel is
granted LEAVE TO AMEND the non-infringement claim pursuant to Rule 15(a). 54 Any
amended claim for non-infringement must include more than “‘labels and conclusions’ or ‘a
formulaic recitation of the elements of a cause of action . . . .’” 55 Instead, “[t]he allegations must
be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim
for relief.” 56 Any amended complaint should include specific factual allegations about how Beer
Barrel’s products do not infringe ManCan’s patents rather than a single conclusory statement that
“Beer Barrel’s Products do not and have not infringed on any valid and enforceable claim of
Defendants’ Patents . . . .” 57
Beer Barrel Has Sufficiently Pled Invalidity
The pleading standards of Iqbal and Twombly apply to invalidity claims. 58 Thus, Beer
Barrel must plausibly allege a claim of invalidity in order to survive ManCan’s Motion.
Unlike Beer Barrel’s claim for non-infringement, Beer Barrel’s claim for invalidity
consists of factual allegations. For example, Beer Barrel alleges that “the design shown in
Defendants’ Patents were [sic] described and shown in printed publications and/or was otherwise
available to the public before November 4, 2012 . . . .” 59 If this factual allegation is true—and its
truth must be assumed for purposes of a motion to dismiss—ManCan’s patents would be invalid.

54

See RAH Color Tech., 2016 WL 3632720, at *6.

55

Iqbal, 556 U.S. at 678 (quoting Twombly , 550 U.S. at 555).

56

Robbins, 519 F.3d at 1247-48.

57

Amended Complaint ¶ 24.

58

Neonatal Prod. Grp., Inc. v. Shields, Case No. 13-cv-2601-DDC-KGS, 2014 WL 6685477, *11 (D.Kan. Nov. 26,
2014) (unpublished) (“Our court has previously held Form 18 does not apply to invalidity declarations, so a Court
must scrutinize such claims under Iqbal and Twombly.”); RAH Color Tech., 2016 WL 3632720, at *4 (“[T]the
abrogation of Rule 84 and Form 18 eliminated any reason to deviate from Twombly/Iqbal in pleading patent claims.
We will follow the federal district courts in our circuit that have applied Twombly/Iqbal’s pleading standard to
counterclaims of invalidity.”).
59

Amended Complaint ¶ 26.

10

A patent is invalid if it was “patented, described in a printed publication, or in public use, on
sale, or otherwise available to the public” 60 more than one year before the effective filing date of
the patent. 61 Here, both the ‘436 and the ‘839 Patents were filed on November 4, 2013. If the
information in those patents was previously patented or was published before November 4, 2012,
one year before the filing date of the ‘436 and ‘839 Patents, they are invalid.
Beer Barrel also alleges that patents D486,347; US 5,792,391; D497,283; US365513A,
US20130032564 A1, US4032047, US4690299, US5129534, US5165569, US5203181,
US20130264350, USD205750, USD228976, USD244850, USD305601, USD306639,
USD336714, USD362990, USD374959, USD497283, USD558950, USD574574, USD623464,
USD623887, USD721281, EP2512974 B1, US4005813 A, US8646660, and EP1026089 A2
constitute prior art which invalidate ManCan’s patents. 62 If this is true—and its truth must be
assumed for purposes of a motion to dismiss—ManCan’s patents would be invalid. A patent is
invalid if its claims were previously covered by prior art. 63 Here, Beer Barrel lists specific prior
art that could potentially invalidate ManCan’s patents.
Thus, Beer Barrel has made specific factual allegations of invalidity. And, while the
Amended Complaint includes some conclusory statements that ManCan’s patents are invalid
because they do not meet the requirements of patentability, 64 it also includes enough factual
allegations to plausibly state a claim for invalidity. Unlike other cases that have dismissed
invalidity claims for failure to satisfy Iqbal and Twombly pleading standards, here the Amended
Complaint does not simply include a “laundry list of United States Code sections” on which the
60

35 U.S.C. § 102(a)(1).

61

Id. § 102(b)(1).

62

Amended Complaint ¶ 27 (listing patents).

63

35 U.S.C. §§ 102, 103.

64

See Amended Complaint ¶¶ 25, 28.

11

invalidity claim is based. 65 Thus, Beer Barrel has sufficiently pled its claim for invalidity and the
Motion is DENIED with respect to invalidity.
CONCLUSION AND ORDER
Beer Barrel has not sufficiently pled a claim for non-infringement, but has sufficiently
pled a claim for invalidity. Accordingly,
IT IS HEREBY ORDERED that the Motion 66 is GRANTED IN PART AND DENIED
IN PART. Beer Barrel’s allegations of non-infringement are dismissed, and Beer Barrel is
granted LEAVE TO AMEND those non-infringement allegations under Rule 15(a). Any
amended complaint must be filed no later than October 31, 2016. Beer Barrel’s allegations of
invalidity are not required to be amended.

Dated October 12, 2016.
BY THE COURT:
____________________________
David Nuffer
United States District Judge

65

Info. Planning and Mgmt. Serv., Inc. v. Dollar Gen. Corp., Case No. 2:15cv206, 2016 WL 69902, at *3 (E.D. Va.
Jan. 5, 2016) (unpublished).

66

Second Motion to Dismiss in Response to Plaintiff’s Amended Complaint, docket no. 24, filed Aug. 2, 2016.

12