Certusview Techs., LLC v. S & N Locating Servs., LLC

• Decision Date: 22 May 2015
• Docket Number: No. 2:13cv346.,2:13cv346.
• Citation: 107 F.Supp.3d 500
• Court: U.S. District Court — Eastern District of Virginia
• Parties: CERTUSVIEW TECHNOLOGIES, LLC, Plaintiff, v. S & N LOCATING SERVICES, LLC, and S & N Communications, Inc., Defendants.

107 F.Supp.3d 500

CERTUSVIEW TECHNOLOGIES, LLC, Plaintiff,

v.S & N LOCATING SERVICES, LLC, and S & N Communications, Inc., Defendants.

No. 2:13cv346.

United States District Court, E.D. Virginia, Norfolk Division.

Signed May 22, 2015.

Matthew Burt Lowrie, Aaron William Moore, Ruben Jose Rodrigues Foley and Lardner LLP, Boston, MA, Michael J. Lockerby, Lori Allison Rubin, Foley & Lardner LLP, Washington, DC, Gregory N. Stillman, Wendy Cohen McGraw, Hunton & Williams, Norfolk, VA, for Plaintiff.

Brian L. Whisler, Baker & McKenzie LLP, Washington, DC, Daniel Joseph O'Connor, Michael Anthony Duffy, Baker & McKenzie LLP, Chicago, IL, John Giuseppe Flaim, MacKenzie Marie Dewerff, Weldon Barton Rankin, Baker & McKenzie, Dallas, TX, for Defendant.

OPINION AND ORDER

MARK S. DAVIS, District Judge.

This matter is before the Court on CertusView Technologies, LLC's ("Plaintiff") Rule 72 objections, ECF No. 256, to the magistrate judge's January 16, 2015 Order granting S & N Communications, Inc., and S & N Locating Services, LLC, (collectively "Defendants" or "S & N") leave to amend their answer and counterclaims, and on Plaintiff's Motion to Strike and in the Alternative to Dismiss S & N's First Amended Answer and Counterclaims ("Motion to Dismiss"), ECF No. 260. After examining the briefs and the record, the Court determines that oral argument is unnecessary because the facts and legal contentions are adequately presented and oral argument would not aid in the decisional process. Fed.R.Civ.P. 78(b) ; E.D. Va. Loc. R. 7(J).

I. FACTUAL AND PROCEDURAL BACKGROUND¹

This is a patent infringement action involving the following five patents:

U.S. Patent No. 8,290,204 ("the '204 patent"), U.S. Patent No. 8,407,001 ("the '001 patent"), U.S. Patent No. 8,340,359 ("the '359 patent"), U.S. Patent No. 8,265,344 ("the '344 patent"), and U.S. Patent No. 8,532,341 ("the '341 patent" and, collectively with the '204, '001, ' 359, and '344 patents, "the patents-in-suit"). On May 29, 2013, Plaintiff filed an action in this Court alleging that Defendants "have infringed, and continue to infringe, literally and/or under the doctrine of equivalents," four of the five patents-in-suit "by making, using, offering to sell, and/or selling devices and/or services covered by the claims of the [patents] and by actively and intentionally inducing others to infringe one or more claims of the [patents]." Compl. ¶¶ 14, 18, 22, 26, ECF No. 1. On December 6, 2013, Plaintiff filed an amended complaint, alleging infringement of all five patents-in-suit. See Am. Compl. ¶¶ 15, 19, 23, 27, 32, ECF No. 55. On December 23, 2013, Defendants filed an Answer denying Plaintiff's allegations of infringement. Answer at 6–10, ECF No. 61.

On October 28, 2014, Defendants moved for judgment on the pleadings, seeking to invalidate the asserted claims of the patents-in-suit because they did not claim patent-eligible subject matter under 35 U.S.C. § 101. Defs.' Mot. for J. on the Pleadings, ECF No. 197. On November 10, 2014, Defendants moved for leave to amend their answer to assert inequitable conduct declaratory judgment counterclaims. Defs.' Mot. for Leave to File First Am. Answer & Countercls., ECF No. 204. Defendants attached their proposed amended answer to their memorandum in support of the motion for leave to amend. Defs.' Mem. Supp. Mot. for Leave to File First Am. Answer & Countercls. Ex. A, ECF No. 204–1. In opposition to Defendants' motion for leave to amend, Plaintiff contended that the Court should deny leave to amend on the basis of futility because the inequitable conduct counterclaims in the proposed amended answer did not satisfy the heightened pleading standard of Federal Rule of Civil Procedure 9(b). See Pl.'s Mem. Opp'n Mot. for Leave to File First Am. Answer & Countercls. at 1, ECF No. 224.

On January 16, 2015, the Court-by Order of the magistrate judge co-assigned to this action-granted Defendants' motion for leave to amend. Order at 2–3, ECF No. 248. The Court held that Defendants had sufficiently pleaded inequitable conduct and, therefore, that granting Defendants leave to amend their answer and counterclaims would not be futile. Id. at 2. The Court directed Defendants "to file the Amended Answer no later than January 23, 2015." Id. at 3.

On January 21, 2015, the Court granted Defendants' motion for judgment on the pleadings and held that each of the asserted claims of the patents-in-suit were invalid because they did not claim patent-eligible subject matter. See Opinion and Order at 95, ECF No. 250. On that same date, the Court entered judgment in favor of Defendants on Plaintiff's infringement claims. ECF No. 251. On January 23, 2015, Defendants filed their First Amended Answer. ECF No. 253.

On February 2, 2015, Plaintiff objected to the magistrate judge's January 16, 2015 Order. Pl.'s Objections to the Magistrate Judge's Order ("Pl.'s Objections"), ECF No. 256. In its objections, Plaintiff contends that the magistrate judge erred by granting leave to amend because Defendants' proposed amendments did not sufficiently allege an inequitable conduct claim upon which relief can be granted and, therefore, amendment was futile. Id. at 1.

On February 9, 2015, Plaintiff moved to dismiss Defendants' inequitable conduct counterclaim. Pl.'s Mot. to Dismiss, ECF No. 260. As discussed further below, in its motion to dismiss, Plaintiff argues that Defendants improperly filed their First Amended Answer because they did so after the entry of judgment and Plaintiff challenges the sufficiency of Defendants' pleading. Defendants timely responded both to Plaintiff's objections to the magistrate judge's ruling and to Plaintiff's motion to dismiss. See Defs.' Resp. Opp'n Pl.'s Objections, ECF No. 268; Defs.' Resp. Opp'n Mot. to Dismiss, ECF No. 274. Accordingly, both matters are now ripe for disposition.

II. STANDARD OF REVIEW

A. Rule 72

Rule 72(a) of the Federal Rules of Civil Procedure provides that "[t]he district judge in the case must consider timely objections" to a magistrate judge's ruling on non-dispositive matters and must "modify or set aside any part of the order that is clearly erroneous or is contrary to law." Fed.R.Civ.P. 72(a) ; 28 U.S.C. § 636(b)(1)(A) ; see Fed. Election Comm'n v. Christian Coal., 178 F.R.D. 456, 459–60 (E.D.Va.1998) (citing Thomas E. Hoar, Inc. v. Sara Lee Corp., 900 F.2d 522, 525 (2d Cir.1990) ). A magistrate judge's "finding is ‘clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948). If a court is not firmly convinced that such an error has occurred, then "the magistrate judge's order must be affirmed." Giganti v. Gen–X Strategies, Inc., 222 F.R.D. 299, 304–05 (E.D.Va.2004). Indeed, "altering a magistrat[e] [judge's] non-dispositive orders [is] ‘extremely difficult to justify.’ " Carlucci v. Han, 292 F.R.D. 309, 312 (E.D.Va.2013) (quoting 12 Charles Alan Wright & Arthur R. Miller et al., Federal Practice & Procedure § 3069 (2d ed.1997)). However, "[f]or questions of law there is no practical difference between review under Rule 72(a)'s contrary to law standard and a de novo standard." Bruce v. Hartford, 21 F.Supp.3d 590, 594 (E.D.Va.2014) (Cacheris, J.) (alterations, citations, and internal quotation marks omitted).

B. Rule 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) permits dismissal of a complaint, or a claim within a complaint, based on the plaintiff's "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). A motion to dismiss pursuant to Rule 12(b)(6) must be read in conjunction with Rule 8(a)(2), which requires "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed.R.Civ.P. 8(a)(2), so as to " ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests,’ " Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ) (omission in original). The United States Supreme Court has interpreted the pleading standard set forth in Rule 8(a) as requiring that a complaint include enough facts for the claim to be "plausible on its face" and thereby "raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Id. at 555, 570, 127 S.Ct. 1955 (internal citations omitted). The plausibility requirement is "not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility" that a defendant is liable.

Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ). In other words, "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 663, 129 S.Ct. 1937.

In a patent infringement suit, the laws of the regional courts of appeals govern whether to grant a motion to dismiss under Rule 12(b)(6). K–Tech Telecomms., Inc. v. Time Warner Cable, Inc., 714 F.3d 1277, 1282 (Fed.Cir.2013) (citations omitted). Because a Rule 12(b)(6) motion tests the sufficiency of a complaint without resolving factual disputes, a district court " ‘must accept as true all of the factual allegations contained in the complaint’ and ‘draw all reasonable inferences in favor of the plaintiff.’ " Kensington Volunteer Fire Dep't v. Montgomery County, 684 F.3d 462, 467 (4th Cir.2012) (quoting E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir.2011) ). Accordingly, " ‘Rule 12(b)(6) does not countenance ... dismissals based on a judge's disbelief of a complaint's factual allegations.’ " Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (quoting ...