Illinois Tool Works Inc v. Elektromanufaktur Zangenstein Hanauer GmbH & Co KGaA
Filing
18
ORDER signed by Judge J P Stadtmueller on 11/30/11: granting in part and denying in part 7 defendant's Motion to Dismiss - defendant's motion to dismiss for failure to state a claim is DENIED, defendant's motion to dismiss for lack of personal jurisdiction is GRANTED; denying 7 defendant's alternative Motion for a More Definite Statement; and DISMISSING without prejudice 1 plaintiff's complaint for lack of personal jurisdiction over the defendant. See Order. (cc: all counsel) (nm)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
ILLINOIS TOOL WORKS INC.,
Plaintiff,
v.
Case No. 11-CV-262-JPS
ELEKTROMANUFAKTUR
ZANGENSTEIN HANAUER GmbH
& CO. KGaA,
ORDER
Defendant.
On March 15, 2011, plaintiff Illinois Tool Works Inc. (“ITW”) brought
suit against defendant Elektromanufaktur Zangenstein Hanauer GmbH &
Co. KGaA (“EMZ”) for patent infringement. (Docket #1). On September 6,
2011, EMZ filed a motion to dismiss ITW’s complaint for failure to state a
claim upon which relief can be granted and for failure to allege personal
jurisdiction, pursuant to Federal Rules of Civil Procedure 12(b)(6) and
12(b)(2). Alternatively, EMZ also moved for a more definite statement of
ITW’s claims against EMZ pursuant to Federal Rule of Civil Procedure 12(e).
After allowing the parties an extension of time to brief the motion – in the
hope that the parties would resolve the case without further court
involvement – the parties have now fully briefed the court on the relevant
issues related to the motion to dismiss and, as a result, the court is prepared
to rule on the motion.
1.
Failure to State a Claim
A motion to dismiss under Fed. R. Civ. P. 12(b)(6) challenges the
sufficiency of the plaintiff’s complaint by asserting that the claimant failed to
state a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6).
To survive a motion to dismiss under Rule 12(b)(6), claimant’s complaint
must allege facts sufficient to “state a claim for relief that is plausible on its
face.” Justice v. Town of Cicero, 557 F.3d 768, 771 (7th Cir. 2009) (quoting
Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)). Pleaders must “plead factual
content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Iqbal, 1129 S. Ct. at 1940.
However, the court construes the complaint in the light most favorable to the
claimant, accepts as true all well-pleaded facts alleged, and draws all possible
inferences in the claimant’s favor. Tamayo v. Blagojevich, 526 F.3d 1074, 1081
(7th Cir. 2008). Yet, the court need not accept as true “legal conclusions.”
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Indeed, “[a] ruling concerning
the legal sufficiency of the complaint is an appropriate determination to
make in response to a motion to dismiss.” Sanner v. Board of Trade of City of
Chicago, 62 F.3d 918, 924 (7th Cir. 1995) (citing Gomez v. Illinois State Board of
Education, 811 F.2d 1030, 1039 (7th Cir. 1987)). Moreover, “a defendant
should not be forced to undergo costly discovery unless the complaint
contains enough detail, factual or argumentative, to indicate that the plaintiff
has a substantial case.” Bissessur v. Indiana Univ. Bd. of Trustees, 581 F.3d 599,
602 (7th Cir. 2009) (quoting Iqbal, 129 S.Ct. at 1949). In addition, “threadbare
recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice.” Id.
Here, EMZ argues that ITW’s allegations of patent infringement are
ambiguous and conclusory because they fail to sufficiently and specifically
identify any accused products that allegedly infringe the patent in suit – U.S.
Page 2 of 11
Patent No. 5,520,424 (“424 patent”). EMZ contends that the complaint’s
reference to unspecified and generically-labeled “latching mechanisms” as
the allegedly infringing product is not sufficient to provide EMZ fair or
adequate notice as to what ITW’s claim of infringement is and the grounds
upon which it rests. On the other hand, ITW argues that the complaint is
sufficiently plausible as it alleges that the infringing products are latching
mechanisms for washing machines sold to manufacturers, such as Whirlpool,
that EMZ knew were bound for the United States. (Compl. ¶ 9).
The question before the court, then, is whether identifying the
infringing product as a latching mechanism for washing machines sold to
manufacturers such as Whirlpool, who will then sell the washing machine in
the United States, is sufficient to state a claim for relief. Several recent district
court decisions have held that the factual allegations in a patent infringement
complaint must identify the specific products accused. See Hewlett–Packard
Co. v. Intergraph Corp., 2003 WL 23884794 (N.D.Cal. Sept. 6, 2003) (dismissing
without prejudice plaintiff's complaint that defendant's “software and
hardware products” infringed the patent, because defendant implemented
“150 core technology platforms” in “over 4000 end-use application products”
and the allegations did not provide defendant with “fair notice” as to what
claims to defend); Elan Microelectronics Corp. v. Apple, Inc., 2009 WL 2972374
(N.D.Cal. Sept. 14, 2009) (dismissing with leave to amend Apple's
infringement counterclaims that identified “touch sensitive input devices or
touchpads, including but not limited to the Smart–Pad” for “failure to allege
sufficient facts” under Twombly and Iqbal); In re Papst Licensing GMBH & Co.
KG Litigation, 602 F.Supp.2d 17, 19-20 (D. D.C. 2009) (holding that allegation
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of “[u]pon information and belief, the [defendant] made, used, sold or
offered to sell…digital cameras which infringe the Patents in Suit” was
insufficient, because it “fail[ed] to include any facts in support of [the] bald
allegation” of infringement); see also Bender v. LG Electronics U.S.A., Inc., 2010
WL 889541, at *3 (N.D.Cal. Mar. 11, 2010) (finding “without identifying
specific products or product parts, [the plaintiff] has not put Defendants on
notice as to what products or parts are subject to the infringement claim.”).
This court finds the authority referenced above persuasive and will,
therefore, require a complaint to contain enough specificity to give the
defendant notice of what products or aspects of products allegedly infringe
the plaintiff’s patent. In the case at hand, ITW’s bare allegations of
infringement are much like Apple’s infringement allegations in the Elan
Microelectronics case in the Northern District of California. There, Apple
identified “touch sensitive input devices or touchpads, including but not
limited to the Smart-Pad” as the infringing product, a description that the
court found lacking in sufficient specificity. Elan Microelectronics, 2009 WL
2972374 at *2. Similarly, here, the plaintiff’s only allegation of infringement
consists of nothing more than a bare assertion that latching mechanisms, for
washing machines manufactured by Whirlpool and other unspecified
manufacturers, to be sold in the United States, constituted the infringing
product. This pleading plainly falls within the prohibition against
“[t]hreadbare recitals of the elements of a cause of action, supported by mere
conclusory statements.” Iqbal, 129 S.Ct. at 1949. Accordingly, on its own, the
complaint fails to state a claim for relief.
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ITW argues that because it followed the standard found in the Federal
Rules, as demonstrated by the appended Form 18, entitled “Complaint for
Infringement of Patent,” its allegations are sufficient. However, much like
other district courts considering this issue, this court finds it is difficult to
reconcile the guidelines set forth in Twombly and Iqbal with Form 18 as it does
not cover all manners of patent infringement. See Elan Microelectronics, 2009
WL 2972374 at *2; Bender v. LG Electronics U.S.A., Inc., 2010 WL 889541, at *3;
Hewlett–Packard Co. v. Intergraph Corp., 2003 WL 23884794, at * 1. Accordingly,
ITW’s argument in this respect is unavailing.
Lastly, in opposing the motion to dismiss, ITW now references facts
that support its allegation that EMZ infringed the 424 patent. Specifically,
ITW asserts that during a course of correspondence both before and after the
complaint was filed, ITW gave EMZ a claim chart detailing how a specific,
pictured EMZ latch infringed the 424 patent. (Fredrickson Decl., Ex. A)
(Docket #14). Because EMZ is on notice of ITW’s more detailed allegations
regarding EMZ’s alleged infringement, ITW asserts that its bare-bones
complaint is sufficient to state a claim. Though typically the court cannot
consider documents outside the pleadings unless the court converts the
defendant’s Rule 12(b)(6) motion to one for summary judgment and allows
both parties to submit additional evidentiary material of their own, Venture
Associates Corp. v. Zenith Data Systems Corp., 987 F.2d 429, 431 (7th Cir. 1993),
the Seventh Circuit has recently made clear that, even after Iqbal and
Twombly, plaintiffs may still suggest facts outside of the pleadings to show
that their complaints should not be dismissed, so long as those facts are
consistent with the complaint. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143,
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1146–47 (7th Cir. 2010). Accordingly, in light of the facts suggested to the
court by plaintiff in opposition to the motion to dismiss, the court finds that
ITW has pled sufficient factual material to state a plausible claim – that is,
sufficient to put the defendant on notice of a plausible claim against it – and,
therefore, the complaint should not be dismissed for failure to state a claim.
Therefore, the court will deny EMZ’s motion to dismiss pursuant to Rule
12(b)(6).
Moreover, the court will also deny EMZ’s motion for a more definite
statement. The additional facts presented by the plaintiff include evidence
that EMZ has sufficient detail to be able to answer ITW’s charge of
infringement – namely correspondence from EMZ’s counsel providing ITW
with three prior art references it believes are relevant to the validity of the
424 patent and a detailed rebuttal disputing ITW’s infringement analysis.
(Fredrickson Decl., Exs. B and C).
2.
Personal Jurisdiction
Having determined that the complaint need not be dismissed for its
failure to state a claim, the court now must determine whether it is obliged
to dismiss the complaint for lack of personal jurisdiction. Federal Rule of
Civil Procedure 12(b)(2) governs a motion to dismiss for lack of personal
jurisdiction. When a defendant brings a Rule 12(b)(2) motion, the plaintiff has
the burden of proving personal jurisdiction. Dorf v. Ron March Co., 99
F.Supp.2d 994, 996 (E.D.Wis. 2000). The burden, however, is not a heavy one.
Johnson Worldwide Assoc., Inc. v. Brunton Co., 12 F.Supp.2d 901, 906 (E.D.Wis.
1998). A plaintiff need only make a prima facie showing of the existence of
personal jurisdiction for discovery to be permitted. Id.; Cent. States, Se. and
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Sw. Areas Pension Fund v. Phencorp Reinsurance Co., Inc., 440 F.3d 870, 877–78
(7th Cir. 2006). In determining whether personal jurisdiction exists, the court
may rely on the complaint, affidavits, deposition testimony, exhibits, or other
evidence in the record. Schimpf v. Gerald, Inc., 2 F.Supp.2d 1150, 1160
(E.D.Wis.1998). The court must draw all inferences from the record in
plaintiff's favor. PKWare, Inc. v. Meade, 79 F.Supp.2d 1007, 1011 (E.D.Wis.
2000). Lastly, a conclusion that the plaintiff has established a prima facie case
of personal jurisdiction does not relieve the plaintiff from proving
jurisdictional facts at the summary judgment stage or at trial. See O'Hare Int'l
Bank v. Hampton et al., 437 F.2d 1173, 1176 (7th Cir.1971).
Here, plaintiff relies solely on Federal Rule of Civil Procedure 4(k)(2)
to support personal jurisdiction over the defendant. Rule 4(k)(2) provides:
“[f]or a claim that arises under federal law, serving a summons ... establishes
personal jurisdiction over a defendant if: (A) the defendant is not subject to
jurisdiction in any state's courts of general jurisdiction; and (B) exercising
jurisdiction is consistent with the United States Constitution and laws.”
Fed.R.Civ.P. 4(k)(2). Thus, Rule 4(k)(2) allows a court to exercise personal
jurisdiction over a defendant if: (1) the plaintiff's claim arises under federal
law; (2) the defendant is not subject to jurisdiction in any state's courts of
general jurisdiction; and (3) the exercise of jurisdiction comports with due
process. Cent. States, Se. and Sw. Areas Pension Fund v. Reimer Express World
Corp., 230 F.3d 934, 940-41 (7th Cir. 2000).
Here, ITW is suing for patent infringement under the Patent Laws of
the United States. Therefore, the first condition is met. EMZ does not argue
that jurisdiction is not proper in some state besides Wisconsin, so the court
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will assume that if jurisdiction is not proper in Wisconsin, it is not proper in
any other state. Accordingly, the only remaining question is whether
personal jurisdiction in these circumstances would be constitutional.
First, it is significant to note that Rule 4(k)(2) serves as a federal
long-arm statute, which allows a district court to exercise personal
jurisdiction over a foreign defendant whose contacts with the United States,
but not with the forum state, satisfy due process. Synthes (U.S.A.) v. G.M. Dos
Reis Jr. Ind. Com de Equip. Medico, 563 F.3d 1285, 1296 (Fed. Cir. 2009). Thus,
the forum, for purposes of this analysis, is the United States. In order for
personal jurisdiction to be proper, a defendant must have purposefully
established minimum contacts with the forum. See Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 474-76 (1985). The generalized foreseeability of the
defendant's action causing harm in the forum is not sufficient for the exercise
of jurisdiction. Id. at 474. Instead, whether the defendant's conduct and
connection with the forum are such that it should reasonably anticipate being
hailed into court there is the crucial inquiry. Id.; RAR, Inc. v. Turner Diesel,
Ltd., 107 F.3d 1272, 1277 (7th Cir. 1997). To establish as much, the defendant
must have purposefully availed itself of the privilege of conducting activities
in the forum, invoking the benefits and protections of its laws. Burger King,
471 U.S. at 474-75; RAR, 107 F.3d at 1277. Once minimum contacts have been
shown to exist, a court must examine other factors, such as the forum's
interest in adjudicating the dispute and the burden on the defendant, to
determine whether the exercise of personal jurisdiction satisfies traditional
notions of fair play and substantial justice. Burger King, 471 U.S. at 476-77. In
certain limited circumstances, these factors may show that a forum has such
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a strong interest in adjudicating a dispute that a lesser showing of minimum
contacts than is normally the case may suffice for jurisdiction. Id. at 477. To
exercise specific personal jurisdiction, the plaintiff's cause of action must arise
out of or be related to these minimum contacts that sufficiently comport with
fairness and justice. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.
408, 414 n. 8 (1984); RAR, 107 F.3d at 1277.
With respect to the issue of personal jurisdiction, the parties have
provided the court very little with which to work. Neither side, for instance,
has submitted affidavits or other evidence to support or oppose personal
jurisdiction over EMZ. Indeed, the only factual allegation set forth by the
plaintiff in support of the court’s jurisdiction over EMZ is the following:
EMZ has sold and continue[s] to sell latching mechanisms
covered by the ‘424 Patent to manufacturers of washing
machines, including, but not limited to Whirlpool, with the
knowledge that the latching mechanisms would be
incorporated into washing machines sold in the United States
and the State of Wisconsin.
(Compl. ¶ 9). Because the defendant has not submitted any evidence
disputing that it had knowledge that its allegedly infringing latching
mechanisms would be incorporated into washing machines sold in the
United States, the court must assume this fact to be true for purposes of the
personal jurisdiction analysis. Accordingly, the main issue for the court to
determine is whether a patentee’s knowledge that its product would be
incorporated into washing machines sold in the United States can be viewed
as purposefully directing its activities toward the United States.
The Supreme Court’s decision in Asahi Metal Industry Co., Ltd. v.
Superior Court of California, Solano County, 480 U.S. 102, 112-13 (1987), makes
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clear that such knowledge does not constitute an act of the defendant
purposefully directed toward the forum. The Asahi court specifically stated
that “a defendant's awareness that the stream of commerce may or will
sweep the product into the forum State does not convert the mere act of
placing the product into the stream into an act purposefully directed toward
the forum State.” Id. Instead, due process requires additional conduct of the
defendant to indicate an intent or purpose to serve the market of the forum,
such as “designing the product for the market in the forum State, advertising
in the forum State, establishing channels for providing regular advice to
customers in the forum State, or marketing the product through a distributor
who has agreed to serve as the sales agent in the forum State.” Id.
Accordingly, ITW’s bare assertion that EMZ had knowledge its latching
mechanisms would end up in the United States because it sold the product
to manufacturers who would inevitably sell their washing machines in the
United States is not enough to establish personal jurisdiction over EMZ.
Therefore, the court will grant EMZ’s motion to dismiss the complaint for
lack of personal jurisdiction.
Accordingly,
IT IS ORDERED that defendant’s motion to dismiss under Federal
Rule of Civil Procedure 12(b)(6) and/or 12(b)(2) (Docket #7) be and the same
is hereby GRANTED in part and DENIED in part; the defendant’s motion
to dismiss for failure to state a claim is DENIED; the defendant’s motion to
dismiss for lack of personal jurisdiction is GRANTED;
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IT IS FURTHER ORDERED that defendant’s alternative motion for
a more definite statement under Federal Rule of Civil Procedure 12(e)
(Docket #7) be and the same is hereby DENIED; and
IT IS FURTHER ORDERED that plaintiff’s complaint (Docket #1) be
and the same is hereby DISMISSED without prejudice for lack of personal
jurisdiction over the defendant.
The Clerk is directed to enter judgment accordingly.
Dated at Milwaukee, Wisconsin, this 30th day of November, 2011.
BY THE COURT:
J.P. Stadtmueller
U.S. District Judge
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