Superior Indus., LLC v. Thor Global Enters. Ltd.

• Decision Date: 01 February 2013
• Docket Number: No. 2011–1549.,2011–1549.
• Parties: SUPERIOR INDUSTRIES, LLC, Plaintiff–Appellant, v. THOR GLOBAL ENTERPRISES LTD, Defendant–Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

700 F.3d 1287

105 U.S.P.Q.2d 1221

SUPERIOR INDUSTRIES, LLC, Plaintiff–Appellant,

v.THOR GLOBAL ENTERPRISES LTD, Defendant–Appellee.

No. 2011–1549.

United States Court of Appeals, Federal Circuit.

Nov. 27, 2012.

Rehearing En Banc Denied Feb. 1, 2013.

John M. Weyrauch, Dicke, Billig & Czaja, PLLC, of Minneapolis, MN, argued for plaintiff-appellant. With him on the brief were Patrick G. Billig and Paul P. Kempf.

Christopher T. Holland, Krieg Keller Sloan Reilley & Roman LLP, of San Francisco, CA, argued for defendant-appellee. With him on the brief was Matthew T. Peters.

Before RADER, Chief Judge, MAYER and SCHALL, Circuit Judges.

Dissenting opinion filed by Circuit Judge MAYER.

RADER, Chief Judge.

The United States District Court for the District of Minnesota dismissed with prejudice a patent infringement complaint filed by Superior Industries, LLC (“Superior”) against Thor Global Enterprises Ltd. (“Thor”) in part based on claim preclusion and in part for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Superior Indus., LLC v. Thor Global Enters. Ltd., No. 10–CV–2524, 2011 WL 3100335, at *3 (D.Minn. July 22, 2011). Because Superior's prior trademark infringement action did not arise from the same operative facts, and because Superior's patent infringement complaint meets the pleading requirements of Form 18 of the Federal Rules of Civil Procedure, this Court reverses and remands for further proceedings. This court affirms the dismissal of Superior's claims of indirect infringement of U.S. Patent No. 7,618,231.

I

Superior is the exclusive owner by assignment of U.S. Patent Nos. 7,284,947 (the “'947 Patent”), 7,470,101 (the “'101 Patent”), and 7,618,231 (the “'231 Patent”) (collectively, the “Superior Patents”). The Superior Patents claim priority to an October 26, 2006 application and cover a “Braced Telescoping Support Strut and System.” This claimed system supports a portable conveyor assembly. Portable conveyors transport and stockpile rock, sand, grain, and other aggregate material. Superior alleges its patents claim an improved undercarriage system that enables portable conveyors to safely and stably extend to, and operate at, heights above previous conveyors. The invention improves the prior art with cross bracing between the upper and lower support beams that does not interfere with the extension or retraction of the upper support beams. Superior claims to have coined the term “fully braced” to refer to the new undercarriage. Based on an intent-to-use trademark application filed on October 3, 2007, Superior owns the registered trademark “FB” for height-adjustable bulk material belt conveyors and undercarriage assemblies (U.S. Trademark Registration No. 3,502,855).

Thor is a Canadian company that competes with Superior in the portable conveyor market. On July 12, 2007, Thor filed a U.S. patent application for an “Undercarriage for a Telescopic Frame” (the “Thor Patent Application”), which discloses a telescoping frame similar to that claimed in the Superior Patents.

On October 1, 2007, Thor issued a press release on its website describing a conveyor system with a new “PATENT–PENDING FB Undercarriage” (the “Thor Undercarriage Technology”). The press release states that the “FB (Fully Braced) Undercarriage technology ... is currently being applied to all new T150–20, T150–12/15, T135–12/15 and T170–5/8/10 ThorStack2^TM series telescopic stackers as well as other lifting devices.” J.A. 148. The release provides no details about the selling price or other terms of sale for Thor's telescopic stackers. Also in October 2007, Thor distributed point-of-sale displays, identical to the press release, to numerous dealers throughout the United States.

On August 4, 2009, Superior initiated a trademark infringement action in the District of Minnesota (the “2009 Trademark Action”). Superior asserted Thor infringed its registered “FB” trademark through Thor's use of the mark in its press releases and point-of-sale displays. The 2009 Trademark Action ended in a Consent Judgment dated April 7, 2010, which permanently enjoined Thor from further use of the “FB” trademark in connection with Thor's undercarriage assemblies or portable conveyors.

On June 21, 2010, Superior filed suit against Thor for infringement of Superior's '101 and '231 Patents. Superior's First Amended Complaint alleges that Thor “has been and is directly infringing, actively inducing others to infringe and/or contributing to the infringement of one or more claims of the '101 [and '231] Patent[s] by its unauthorized making, using, offering to sell, selling and/or importing a telescoping conveyor having the Thor Undercarriage Technology in and/or to the United States.” J.A. 112–13. The complaint alleges that Thor admitted during the 2009 Trademark Action that it had used “the mark ‘FB’ in connection with ‘multiple sales offerings to customers, dealers and distributors in the United States [for conveyor systems and/or related undercarriage systems], and sold such goods into commerce in the United States' ” before Superior's October 3, 2007 intent-to-use application for the “FB” mark. J.A. 112 (quoting Thor's Answer, Affirmative Defenses and Counterclaims in the 2009 Trademark Action) (alterations in original). In April and May 2010, Superior purports to have questioned Thor about its current selling, offering for sale, and/or importing the Thor Undercarriage Technology into the United States. Superior alleges that, in response, it received only “evasive responses and conclusory opinions from Thor that the Thor Undercarriage Technology did not infringe Superior's patents.” Id.

The district court dismissed Superior's claims for infringement of the '101 Patent on the basis of claim preclusion. The district court noted that Superior “referenced the '947 Patent” in its complaint filed in the 2009 Trademark Action, and found “[t]he only reason the earlier suit did not contain patent allegations is because Superior chose not to make them.” Superior, 2011 WL 3100335, at *5. The court found “both lawsuits arise from the same nucleus of operative facts—Thor's offering for sale its FB undercarriage technology in the United States. Both the trademark claims and the patent claims arise from and are based on the October 2007 press releases issued by Thor describing its ‘Patent–Pending FB Undercarriage Technology’ and the point of sale displays allegedly distributed by Thor to dealers throughout the United States.” Id.

As to the '231 Patent, the district court determined that claim preclusion did not apply because the '231 Patent did not issue until more than three months after Superior filed its complaint in the 2009 Trademark Action. Id. The district court dismissed Superior's claim based on Rule 12(b)(6) of the Federal Rules of Civil Procedure, however, finding Superior did not state a claim for relief that is plausible on its face. Id. at *6. The court found Superior did not plead sufficient factual matter to support its claim that Thor sold or offered for sale infringing products in the United States after the ' 231 Patent issued. Id. The district court held Superior could not rely on Thor's admission in the 2009 Trademark Action that it had sold and offered for sale the Thor Undercarriage Technology, because the admitted activities predated issuance of the '231 Patent.Id.

II

Claim preclusion is an issue of law reviewed without deference. In re Bose Corp., 476 F.3d 1331, 1334 (Fed.Cir.2007). The law of the regional circuit—in this case the United States Court of Appeals for the Eighth Circuit—applies to the general principles of claim preclusion. See Mars, Inc. v. Nippon Conlux Kabushiki–Kaisha, 58 F.3d 616, 618 (Fed.Cir.1995). Federal Circuit law, however, applies to “issues of substantive patent law and certain procedural issues pertaining to patent law.” Research Corp. Techs., Inc. v. Microsoft Corp., 536 F.3d 1247, 1255 (Fed.Cir.2008). Thus, this court looks to Federal Circuit precedent to resolve underlying issues of substantive patent law, such as the operative facts involved in a claim for patent infringement. See, e.g., Acumed LLC v. Stryker Corp., 525 F.3d 1319, 1323 (Fed.Cir.2008) (applying FederalCircuit law to determine whether two claims for patent infringement are identical for claim preclusion purposes).

This court reviews without deference a district court's Rule 12(b)(6) dismissal for failure to state a claim. Cambridge v. United States, 558 F.3d 1331, 1335 (Fed.Cir.2009). “The question whether a Rule 12(b)(6) motion was properly granted is a purely procedural question not pertaining to patent law, to which this court applies the rule of the regional circuit.” CoreBrace LLC v. Star Seismic LLC, 566 F.3d 1069, 1072 (Fed.Cir.2009) (quoting Gen. Mills, Inc. v. Kraft Foods Global, Inc., 487 F.3d 1368, 1373 (Fed.Cir.2007)) (alterations omitted).

III

The doctrine of res judicata, more specifically referred to as claim preclusion, bars a party from bringing “repetitive suits involving the same cause of action.” Lundquist v. Rice Mem'l Hosp., 238 F.3d 975, 977 (8th Cir.2001) (citation omitted). Under Eighth Circuit law, claim preclusion “bars relitigation of a claim if: (1) the prior judgment was rendered by a court of competent jurisdiction; (2) the prior judgment was a final judgment on the merits; and (3) the same cause of action and the same parties or their privies were involved in both cases.” Lane v. Peterson, 899 F.2d 737, 742 (8th Cir.1990).

Superior and Thor do not dispute that the 2009 Trademark Action involved the same parties and resulted in a final judgment on the merits entered by a court of competent jurisdiction. See Superior Indus., LLC v. Thor Global Enters. Ltd., No. 09–cv–02035 (D.Minn. Apr. 7, 2010) (Consent Judgment in the 2009 Trademark Action). Superior's claim for patent infringement is thus barred by claim preclusion if the 2009 Trademark Action constitutes the “same cause of...