Cherdak v. Vock

• Decision Date: 23 April 2012
• Docket Number: Case No.: 1:11-cv-1311
• Court: U.S. District Court — Eastern District of Virginia
• Parties: ERIK B. CHERDAK, Plaintiff, v. VOCK, et al., Defendants.

ERIK B. CHERDAK, Plaintiff,

v.VOCK, et al., Defendants.

Case No.: 1:11-cv-1311

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Alexandria Division

April 23, 2012

MEMORANDUM OPINION

Before the Court are Defendants Curtis A. Vock and PhatRat Technology, LLC's ("Vock" and "PhatRat") Motion to Dismiss (Dkt. No. 39) and Motions for Judicial Notice (Dkt. Nos. 41, 87, and 89); the related Objection to the Cardenas-Navia declaration (Dkt. No. 104) and Objection and Motion to Strike the declaration of Jerry D. Voight (Dkt. Nos. 94 and 95, respectively); Defendant Nike, Inc.'s ("Nike") Motion to Dismiss Counts II, III, and IV of the Amended Complaint (Dkt. No. 54); Defendant Apple, Inc.'s ("Apple") Motion to Dismiss the Amended Complaint (Dkt. No. 59) and Plaintiff Cherdak's related request for Judicial Notice (Dkt. No. 100).

BACKGROUND

Plaintiff Erik B. Cherdak ("Cherdak") alleges a four-count Amended Complaint against Defendants Vock, PhatRat, Apple, and Nike. Count I for patent infringement is alleged only against Apple and Nike. The remaining counts are answerable by all Defendants. Count II alleges an interfering patents claim under 35 U.S.C. § 291, Count III is a claim for declaratory relief, and Count IV alleges antitrust violations. Defendants PhatRat, Vock, and Apple move to dismiss each of the counts pled against them. Defendant Nike only moves to dismiss Counts II, III, and IV.

ANALYSIS

I. Fraud: the Basis for the Amended Complaint

Much, if not all, of the bases for the Amended Complaint are grounded in the fraudulent and inequitable conduct in which Defendant Vock allegedly engaged while pursuing two patents—U.S. Patent Nos. 5,636,146 (the "146 patent") and 5,960,380 (the "380 patent"), (collectively the "PhatRat patents"). Cherdak alleges that during the prosecution of the PhatRat patents, Vock made misstatements and omissions regarding prior art, namely Cherdak's 5,343,445 patent ("445 patent"), and that "but for" this inequitable conduct, the infringing and interfering PhatRat patents would not have issued. The Court disagrees.

Cherdak's 445 patent was before the Patent and Trade Office ("PTO") examiner during the prosecution of both the 146 and 380 patents. Indeed, the statements Vock made during the prosecution were an attempt to distinguish the PhatRat patents from the Cherdak patents. Initially, the PTO examiner found Vock's arguments unconvincing and rejected the PhatRat patents. In response, Vock altered, amended, and clarified the 146 and 380 patents, which were ultimately issued.

The Federal Circuit has repeatedly commented that attorney argument, advocating the attorney's "interpretations of its claims and the teachings of prior art," does not amount to an omission or misrepresentation. See Innogenetics, N. V. v. Abbott Labs., 512 F.3d 1363, 1379 (Fed. Cir. 2008); see also Young v. Lumenis, Inc., 492 F.3d 1336, 1349 (Fed. Cir. 2007) ("The examiner had the Fossum Reference to refer to during the reexamination proceeding and initially rejected claim 1 based on that reference. Young argued against the rejection, and the examiner was free to reach his own conclusions and accept or reject Young's arguments. We therefore fail to see how the statements in the October 2005 Response, which consist of attorney argument andan interpretation of what the prior art discloses, constitute affirmative misrepresentations of material fact.").¹ Even presuming that each of the facts pled in the Amended Complaint is true, there are simply no indicia of fraud present.² The allegations in the Amended Complaint amount to nothing more than permissible attorney argument. Thus, any count within the Amended Complaint which is dependent on the presence of fraud, must also fail.

II. The Counts of the Complaint

a. Count I: Infringement

As discussed supra, Count I is pled only against Defendants Nike and Apple, and only Apple moves to dismiss this count. Cherdak claims that Apple infringes its 445 and 5,452,269 ("269") patents both independently and through its partnership with Nike. Patent infringement is prohibited under 35 U.S.C. § 271. Although the Court is not convinced that Cherdak sufficiently pled facts suggesting either direct infringement under § 271(a), or inducement under § 271(b), the Court finds that Cherdak's claim for contributory infringement under § 271(c) survives a motion to dismiss. Section 271(c) provides:

Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

(emphasis added). The Court was not persuaded as to the existence of a substantial noninfringing use for Apple's Nike Sports Pack pursuant to 35 U.S.C. § 271 (c) that would be sufficient to warrant dismissal of the Plaintiff's infringement count at this stage of the litigation. Defendant instead argued that its products do not infringe any of the Cherdak patents. While this might ultimately prove true, the Court finds that it would be inappropriate to dismiss Count I under Rule 12, considering that, at this stage, all inferences are to be made in Plaintiff's favor.

b. Count II: Interference

Count II of the Complaint alleges a claim for interference under 35 U.S.C. § 291 against all Defendants. Section 291 provides relief to "[t]he owner of an interfering patent . . . against the owner of another by civil action." "[T]he court may adjudge the question of the validity of any interfering patents, in whole or in part. . . ." 35 U.S.C. § 291 (emphasis added). The establishment of an interference-in-fact is a jurisdictional predicate to a § 291 claim. See Albert v. Kevex Corp., 729 F.2d 757, 761 (Fed. Cir. 1984).

Interference-in-fact is determined by conducting a two-way test, determining (1) that invention A [of the Cherdak patent] either anticipates or renders obvious invention B [of the PhatRat patents], where A's claimed invention is presumed to be prior art vis-a-vis B and (2) that invention B either anticipates or renders obvious invention A, where invention B's claimed invention is presumed to be prior art vis-a-vis invention A. Medichem, S.A. v. Rolabo, S.L., 353 F.3d 928, 934 (Fed. Cir. 2003) (citations omitted). Essentially, the patents must claim "the same or substantially the same subject matter." Slip Track Sys., Inc. v. Metal-Lite, Inc., 304 F.3d 1256, 1263 (Fed. Cir. 2002).

The Plaintiff carries a high burden when establishing interference-in-fact, and there is a presumption that patents are not interfering, particularly when the prior art before the court wasalso before the PTO examiner. See Microsoft Corp. v. i4i Ltd. P'ship, --- U.S. ----, 131 S.Ct. 2238, 2250 (2011) (discussing an invalidity defense raised in an infringement action and noting that "because the heightened standard of proof applie[s] where the evidence before the court [i]s 'different' from that considered by the PTO, it applie[s] even more clearly where the evidence [i]s identical"); Radio Corp. of Am. v. Radio Eng'g Lab., 293 U.S. 1, 2 (1934) ("[T]here is a presumption of validity, a presumption not to be overthrown except by clear and cogent evidence."); Dooley Improvements v. Cent. Hanover Bank & Trust Co. of N.Y., 28 F.Supp. 531, 534 (D.D.C. 1939) ("[T]here is a recognized prima facie presumption that patents are not interfering.").

Here, not only did the PTO examiner consider Cherdak's 445 patent during the prosecution of the 380 and 146 patents, but the examiner considered the precise claims with which Plaintiff now finds issue. Indeed, the examiner initially rejected a number of the claims in the 146 patent as anticipated or obvious due to Cherdak's 445 patent, causing Vock to rewrite the 146 patent and amend the 380 patent to limit it to a "vehicle of the type which is ridden along the surface by a user of the vehicle" and to cancel all claims rejected on the basis of the 445 patent. The PTO ultimately issued a Notice of Allowability, indicating that the PTO considered the 445 patent and concluded that it neither anticipated nor rendered obvious any claim in the 136 or 380 patents. The Court agrees with the PTO.

Thus, because Plaintiff fails to meet his burden in showing that even the first part of the two-way test has been satisfied, i.e. that his patent anticipates or renders obvious either of the PhatRat patents, Plaintiff's § 291 interference claim must fail as it relates to the PhatRat patents, or any of the patents alleged to be interfering based on their relationship to the PhatRat patents.

Cherdak also claims that Apple's 8,036,851 patent ("851" patent) interferes with the 445 patent. However, the PTO examiner considered the 445 patent when examining the 851 patent and ultimately approved the 851 patent. Thus, the examiner concluded that the 851 patent was neither anticipated nor rendered obvious by the 445 patent. Again, the Court agrees. Apple's 851 patent measures the transition between two regions using a spectrum of signals. Cherdak's 445 patent senses pressure imparted to a shoe at different intervals. The patents do not cover "the same or substantially the same subject matter." Slip Track Sys., 304 F.3d at 1263.

Finally, Cherdak claims that Nike's Blackadar patent, 6,298,314 ("Blackadar patent" or "314 patent") interferes with Cherdak's 445 patent. Again, the Court finds otherwise. Plaintiff's memorandum in response directs the Court to his attached exhibit where he outlines interference charts which he claims establish an interference-in-fact. Not so. Plaintiff has provided no reasoning that convinces the Court that the 445 patent anticipates or renders obvious the...