Certainteed Corp. v. Knauf Insulation
| Decision Date | 29 March 2012 |
| Docket Number | Civil Action No. 11–623 (BAH). |
| Citation | 849 F.Supp.2d 67 |
| Parties | CERTAINTEED CORPORATION, Plaintiff, v. KNAUF INSULATION, SPRL, Defendant. |
| Court | U.S. District Court — District of Columbia |
OPINION TEXT STARTS HERE
Barry J. Herman, Lindsay J. Kile, Thomas J. Fisher, Oblon, Spivak, McClelland, Maier & Neustadt, PC, Alexandria, VA, for Plaintiff.
Joseph D. Lewis, James Rupert Burdett, Barnes & Thornburg LLP, Washington, DC, for Defendant.
In this case, plaintiff Certainteed Corporation seeks declaratory judgment that it is not infringing a patent allegedly owned by defendant Knauf Insulation, SPRL (“Knauf–BE”). The defendant has moved to dismiss the Complaint on grounds that the Court lacks subject matter jurisdiction because the defendant does not own the patent at issue.1 As explained below, the Court agrees that it lacks subject matter jurisdiction because the defendant is not the owner of the patent. The plaintiff's Complaint is therefore dismissed.
I. BACKGROUNDA. Patent Application and Assignment
On January 25, 2007, three employees of Knauf Insulation Limited, a United Kingdom company, (“Knauf–UK”) filed a patent application with the United States Patent and Trademark Office (“USPTO”) seeking to patent a certain type of formaldehyde-free mineral fibre insulation product (“the '980 patent”). Compl., Ex. A, at 1. Before the USPTO issued the patent, on October 1, 2009, Knauf–UK entered into an agreement assigning the '980 patent application to Knauf–BE, a Belgian corporation and one of Knauf–UK's sister companies. Pl.'s Opp'n Mot. Dismiss, ECF No. 15, Decl. Barry J. Herman, Ex. 2.
A few weeks following Knauf–UK's assignment of the '980 patent application to Knauf–BE, between October 14 and 29, 2009, the three Knauf–UK employees who initiated the patent application assigned their rights in the '980 patent application to their employer, Knauf–UK. Pl.'s Opp'n Mot. Dismiss, ECF No. 15, Decl. Barry J. Herman, Ex. 3. Knauf–UK then recorded the assignment executed by its employees with the USPTO. Id. Accordingly, despite the earlier transfer of interest in the '980 patent application from Knauf–UK to Knauf–BE, on December 21, 2010, the USPTO issued the '980 patent and named Knauf–UK the patent's sole assignee. Compl., Ex. A.
B. Litigation Involving the '980 Patent
Approximately two months after being issued the '980 patent, on February 28, 2011, Knauf–UK filed a case against plaintiff Certainteed Corporation in the U.S. District Court for the Southern District of Indiana alleging that the plaintiff was infringing the '980 patent. See Knauf Insulation Ltd. v. Certainteed Corp., No. 11–300 (S.D.Ind. filed Feb. 28, 2011). After the filing of that case, the plaintiff and Knauf–UK allegedly entered into settlement negotiations, and Knauf–UK therefore delayed service of the Complaint while these discussions proceeded. Def.'s Mot. Dismiss, ECF No. 13, Decl. Felicia Boyd (“Boyd Decl.”), ¶¶ 2–3.
In the midst of settlement negotiations, on March 25, 2011, Certainteed filed a Complaint against defendant Knauf–BE in this Court, asserting that the defendant was the true owner of the later assignment of their patent rights to Knauf–UK. Id.
In response to the plaintiff's filings in this Court and in the Southern District of Indiana, Knauf–BE sent Certainteed a letter disclaiming ownership of the '980 patent and any intention to take action against the plaintiff for infringement on the '980 patent. Boyd Decl., Ex. 1. Shortly thereafter, on April 20, 2011, the defendant executed a “Quitclaim and Assignment,” which stated:
... for avoidance of doubt, KI–BE desires to quitclaim and release to KI–UK all residual and/or equitable rights KI–BE may have nevertheless maintained in the U.S. Application and '980 patent by virtue of KI–UK's previous assignment of KI–UK's rights in the PCT application to KI–BE.
Boyd Decl., Ex. 2. The quitclaim, however, contained a typographical error. Instead of assigning the patent's rights from Knauf–BE to Knauf–UK, the quitclaim stated: “ KI–BE hereby releases and quitclaims and assigns to KI–BE any right, title, interest, claim, or demand whatsoever that KI–BE may have acquired and/or retained in the U.S. Application and the '980 patent.” (emphasis added). Id.
Following the April 20, 2011 quitclaim and assignment, Certainteed continued to maintain that the case in the Southern District of Indiana should be dismissed. See Certainteed's Reply, Knauf Insulation Ltd. v. Certainteed Corp., No. 11–300 , ECF No. 33. It argued that in a patent infringement action the party seeking to enforce its rights is required to have those rights at the time the lawsuit is filed. Id. at 6 (citing Paradise Creations, Inc. v. UV Sales, Inc., 315 F.3d 1304 (Fed.Cir.2003)). Thus, if it was effective at all, the plaintiff argued that the April 20, 2011 quitclaim and assignment was executed too late to allow for Knauf–UK to have standing to sue for infringement. In an attempt to obviate this argument, Knauf–UK voluntarily dismissed its Complaint in the Southern District of Indiana and filed a new case,2 on May 19, 2011, again asserting infringement of the ' 980 patent against the plaintiff.3See Knauf Insulation Ltd. v. Certainteed Corp., No. 11–680 (S.D. Ind. filed May 19, 2011).
As a consequence of this procedural history, two actions are currently pending regarding the plaintiff's alleged infringement of the '980 patent: the plaintiff's declaratory judgment action against the defendant in this Court, and Knauf–UK's action against the plaintiff in the Southern District of Indiana.
C. Motions Seeking Dismissal of the Pending Actions
In June 2011, the defendant moved to dismiss the case proceeding in this Court and the plaintiff moved to dismiss the proceedings in the Southern District of Indiana. At issue in these motions is the dispute over the ownership of the ' 980 patent.
Specifically, on June 10, 2011, the defendant moved to dismiss the Complaint in this Court for lack of subject matter jurisdiction, arguing that the '980 patent was owned by Knauf–UK, not by the defendant, and thus there is no “actual and justiciable controversy” for the Court to resolve. Mem. Supp. Def.'s Mot. Dismiss, ECF No. 13 (“Def.'s Mem.”), at 2. On June 16, 2011, the plaintiff here moved to dismiss the action pending against it in the Southern District of Indiana on grounds that the April 20, 2011 quitclaim and assignment was not effective because of the drafting error and therefore Knauf–UK did not have standing to sue for infringement because the defendant here, Knauf–BE, still owned the '980 patent. Plaintiff's Notice, ECF No. 17, Ex. 1, Certainteed's Mot. Dismiss in Southern District of Indiana. Although Knauf–UK maintained that the April 20, 2011 quitclaim was effective despite the drafting error, on June 24, 2011, Knauf–UK and Knauf–BE responded to the plaintiff's motion in Indiana by executing a “Quitclaim and Assignment Confirmation” to confirm that the '980 patent was assigned from the defendant to Knauf–UK. Def.'s Reply, ECF No. 16, Ex. 3.
On March 1, 2012, the Southern District of Indiana denied the plaintiff's motion to dismiss the infringement action filed by Knauf–UK, holding that Knauf–UK owned the '980 patent because “it is beyond dispute that [Knauf–BE] intended to quitclaim and/or transfer any remaining rights in the 980 patent to [Knauf–UK] through the Quitclaim and Assignment executed on April 20, 2011.” See Knauf Insulation Ltd. v. Certainteed Corp., No. 11–680, slip-op, at 5 (S.D.Ind. Mar. 1, 2012). The court further rejected the plaintiff's argument that its action in the District of Columbia was the proper forum to adjudicate infringement claims regarding the '980 patent because it was the “first-filed” case. Id. at 6–7. The court stated that “regardless of which Knauf entity owned the 980 patent rights at the time the declaratory judgment action was filed, it is clear that KI–Limited owned them when [the Complaint in the Southern District of Indiana] was filed.” Id. at 8. Accordingly, Knauf–UK's claims that the plaintiff infringed the ' 980 patent are proceeding in the Southern District of Indiana.
Currently pending before this Court is the defendant's motion to dismiss. As explained below, the Southern District of Indiana concluded that Knauf–UK owns the '980 patent and the plaintiff is therefore precluded by the doctrine of collateral estoppel from re-litigating that issue here. Given that the defendant does not own the patent at issue, and that litigation involving the real owner of the patent is proceeding in the Southern District of Indiana, there is no “case or controversy” involving the plaintiff and the defendant before this Court. Consequently, the defendant's motion to dismiss is granted.
II. STANDARD OF REVIEW
On a motion to dismiss for lack of subject matter jurisdiction, under Rule 12(b)(1) of the Federal Rules of Civil Procedure, the plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence. Mostofi v. Napolitano, 841 F.Supp.2d 208, 209–11, No. 11–cv–727, 2012 WL 251922, at *1–2, 2012 U.S. Dist. LEXIS 9563, at *4 (D.D.C. Jan. 27, 2012) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)); Ki Sun Kim v. United...
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