Coda Dev. S.R.O. v. Goodyear Tire & Rubber Co.

• Decision Date: 29 September 2016
• Docket Number: CASE NO. 5:15-cv-1572
• Parties: CODA DEVELOPMENT s.r.o., CODA INNOVATIONS s.r.o., et al., PLAINTIFFS, v. THE GOODYEAR TIRE & RUBBER COMPANY, et al., DEFENDANTS.
• Court: U.S. District Court — Northern District of Ohio

CODA DEVELOPMENT s.r.o., CODA
INNOVATIONS s.r.o., et al., PLAINTIFFS,
v.
THE GOODYEAR TIRE & RUBBER
COMPANY, et al., DEFENDANTS.

CASE NO. 5:15-cv-1572

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

September 29, 2016

JUDGE SARA LIOI

MEMORANDUM OPINION

Before the Court is the motion to dismiss filed by defendants under Fed. R. Civ. P. 12(b)(6). (Doc. No. 16 ["Mot."].)¹ Plaintiffs filed an opposition brief (Doc. No. 23 ["Opp'n"]) and defendants filed a reply (Doc. No. 25 ["Reply"]). Plaintiffs also filed a motion to strike portions of defendants' reply brief or, in the alternative, to be granted leave to file a surreply. (Doc. No. 26.) Defendants have opposed this motion (Doc. No. 27) and plaintiffs have replied (Doc. No. 28). For the reasons discussed herein, plaintiffs' motion to strike or to file a surreply is denied and defendants' motion to dismiss is granted.

I. BACKGROUND

On August 9, 2015, plaintiffs Coda Development s.r.o., Coda Innovations s.r.o. (collectively, "Coda"), and Frantisek Hrabal ("Hrabal") (collectively, "plaintiffs") filed their complaint alleging various claims relating to the purported misappropriation by defendants of

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plaintiffs' confidential and proprietary Self-Inflating Tire ("SIT") technology, allegedly invented by Hrabal, Coda's CEO. (Doc. No. 1 ["Compl."] ¶ 1.)

In their complaint, plaintiffs set forth thirteen (13) causes of action for correction of inventorship under 35 U.S.C. § 256 and one cause of action under the Lanham Act, 15 U.S.C. § 1125(a)(1)(A). In addition, they assert several state law claims: two for fraudulent non-disclosure, one for misappropriation of trade secrets, two for tortious interference with business relations/prospective economic advantage, one for negligent misrepresentation, and one for unjust enrichment.

All of the claims are based on the same underlying factual allegation that defendant Goodyear Tire & Rubber Company ("Goodyear") misappropriated plaintiffs' SIT technology. (Compl. ¶ 3.) At the urging of General Motors ("GM"), who wanted to incorporate SIT technology in the Chevy Volt™, Goodyear contacted Coda in December 2008² to initiate discussions.³ Defendant Robert Benedict ("Benedict"), a senior member of the Goodyear team charged with development, soon emerged as the leader of Goodyear interactions with Coda regarding SIT. (Id. ¶ 5.) Plaintiffs allege that, in the course of discussions between Goodyear and Coda, Goodyear misled plaintiffs into revealing confidential and proprietary information about Coda's SIT technology, and fraudulently induced Coda to enter into a non-disclosure agreement under the pretense of potentially engaging in a "development project" with Coda relating to this technology. (Id. ¶ 6.) Goodyear allegedly ignored its obligations under the non-disclosure

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agreement and, after deriving as much knowledge as it could from a series of meetings with Coda and Hrabal, proceeded to patent plaintiffs' SIT technology (as well as additional related technologies founded on the misappropriated SIT technology) without plaintiffs' knowledge or consent, and without informing the Patent Office of the true inventor of the SIT technology. (Id.) Plaintiffs allegedly learned of Goodyear's deception in September 2012, from a former Goodyear employee. (Id. ¶ 7.)

The challenged Goodyear patents are U.S. Patent Numbers 8,042,586;⁴ 8,235,081; 8,322,036; 8,381,784; 8,550,137; 8,573,270; 8,695,661; 8,381,785; 8,113,254; 8,746,306; 8,857,484; and 8,944,126 (collectively, "the Goodyear Patents-In-Suit"). (Id. ¶ 8.) Plaintiffs seek the removal of the inventors currently named on the '586 Patent (Benedict and defendant Robert Losey ["Losey"], another Goodyear employee) and the addition of Hrabal's name as the true and sole inventor under 35 U.S.C. § 256. Plaintiffs further seek to add Hrabal as an additional co-inventor of the other Goodyear Patents-in-Suit (the "Jointly Invented Patents") under § 256 because Hrabal allegedly made inventive contributions to those patents. (Id.) Finally, plaintiffs seek damages, including exemplary and punitive damages.

II. DISCUSSION

A. Plaintiffs' Motion to Strike

Plaintiffs filed a motion to strike portions of defendants' reply (in particular, Exhibit 19 and any discussion thereof) or, in the alternative, to be granted leave to sur-reply. (Doc. No. 26.) Plaintiffs argue that Exhibit 19, an article entitled "Self-Inflating Tire Technology," which was authored by Hrabal and published in 2008 in a quarterly publication called "Tire Technology

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International," is matter outside the complaint that would convert the motion to one for summary judgment. They further argue that a surreply is required because defendants have misinterpreted the article. Defendants opposed this motion (Doc. No. 27), arguing that the Court can take judicial notice of the article, since it was authored by Hrabel and is publicly available. They also argue that the article was presented only in response to plaintiffs' first-time assertion, made in their opposition brief, that the June 2009 meeting with Goodyear was the first ever display of Coda's functional prototype of its SIT technology, a fact defendants argue is belied by Exhibit 19. Plaintiffs filed a reply (Doc. No. 28), arguing that taking judicial notice of this "extrinsic evidence" is not only impermissible under judicial notice standards, but is beyond the scope of a motion to dismiss. Plaintiffs state that Goodyear's purpose in submitting this 2008 article is to show that "Coda's allegations that it had trade secrets in 2009 are false." (Doc. No. 28 at 1048.)⁵

Plaintiffs argue that the Court may not engage in "[a]n evidence-based inquiry into the merits[.]" (Id.) But the Court need not do so in order to take judicial notice of the fact that Exhibit 19 was authored by Hrabal and was published in 2008. The Court also need not determine whether any portion of the article is actually true or factually correct in order to determine whether it was a 2008 public disclosure of something Coda now claims was secret when disclosed to Goodyear in 2009. See e.g., United States ex rel Dingle v. BioPort Corp., 270 F. Supp. 2d 968, 977 n. 2 (W.D. Mich. 2003) (where plaintiffs claimed that statements in a journal article were incorrect and thus unreliable as public disclosures, the court concluded that "such an inaccuracy does not preclude the article from serving as a public disclosure[]").

Plaintiffs' motion to strike is denied.

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B. Standard on a Motion to Dismiss

A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief[.]" Fed. R. Civ. P. 8(a)(2). Although this pleading standard does not require great detail, the factual allegations in the complaint "must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (citing authorities). In other words, "Rule 8(a)(2) still requires a 'showing,' rather than a blanket assertion, of entitlement to relief." Id. at 556 n. 3 (criticizing the Twombly dissent's assertion that the pleading standard of Rule 8 "does not require, or even invite, the pleading of facts").

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Twombly, 550 U.S. at 570). Rule 8 does not "unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Id. at 678-79. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at 679. "The court need not, however, accept unwarranted factual inferences." Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 434 (6th Cir. 2008) (citing Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987)).

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C. Analysis of the Motion to Dismiss

1. Federal Claims under 35 U.S.C. § 256 (1st - 13th Causes of Action)

The first thirteen (13) of plaintiffs' causes of action seek to correct patent inventorship under 35 U.S.C. § 256 with respect to the twelve (12) Goodyear Patents-in-Suit. The first and second causes of action both relate to the '586 Patent, whereas the third through thirteenth causes of action each address one of the other eleven (11) patents.⁶

Title 35, Section 256 provides:

(a) Correction. - Whenever through error a person is named in an issued patent as the inventor, or through error an inventor is not named in an issued patent, the Director [of the Patent and Trademark Office] may, on application of all the parties and assignees, with proof of the facts and such other requirements as may be imposed, issue a certificate correcting such error.

(b) Patent valid if error corrected. -- The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.

"Because issued patents are presumed to correctly name their inventors, the burden of proving nonjoinder of inventors is a heavy one, which must be demonstrated by clear and convincing evidence." Meng v. Chu, Nos. 2014-1746, 2015-1390, 2016 WL 1321127, at *4 (Fed.

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Cir. Apr. 5, 2016) (quotation marks and citation omitted); see also Hess v. Adv. Cardiovascular Sys., Inc., 106 F.3d 976, 980 (Fed. Cir. 1997) ("one claiming that the inventor listed in the patent derived the invention from the claimant's work...