Deniece Design, LLC v. Braun

• Decision Date: 19 June 2013
• Docket Number: Civil Action No. H–12–2814.
• Citation: 953 F.Supp.2d 765
• Parties: DENIECE DESIGN, LLC, Plaintiff, v. Elaine BRAUN, Defendant.
• Court: U.S. District Court — Southern District of Texas

953 F.Supp.2d 765

DENIECE DESIGN, LLC, Plaintiff,

v.Elaine BRAUN, Defendant.

Civil Action No. H–12–2814.

United States District Court,

S.D. Texas,

Houston Division.

June 19, 2013.

Edward W. Goldstein, Goldstein Law, PLLC, Houston, TX, for Plaintiff.

Kevin F. Risley, Thompson Coe et al., Houston, TX, Evan B. Berger, Gary Charles Rosen, Becker & Poliakoff PA, Fort Lauderdale, FL, for Defendant.

OPINION AND ORDER

MELINDA HARMON, District Judge.

The above referenced action seeks injunctive relief and a declaratory judgment that Plaintiff DeNiece Design LLC's (“DeNiece's”) products have not infringed and do not infringe United States Patent 7,255,299 (the “'299 patent”) for a fabric storage panel, purportedly owned by Defendant Elaine Braun (“Braun”), or that the patent is invalid, or that Braun is barred from enforcing the '299 Patent on the grounds of waiver, laches, and estoppel because of Braun's action or inaction. Braun counterclaims for patent infringement, false marking under 35 U.S.C. § 292,¹ and false designation of origin under 15 U.S.C. § 1125(a).²

Pending before the Court are (1) Braun's motion to dismiss (instrument # 8) Counts II (invalidity of patent) and III (waiver, estoppel, and laches) of Plaintiff's Complaint and (2) Counter Defendant DeNiece Herrod's motion to dismiss (# 24).

I. Factual Allegations of DeNiece's Complaint (# 1)

DeNiece's complaint states that Braun claims to own the '299 patent for a “Fabric Storage Panel” (copy attached as Exhibit A). Ms. Herrod (“Herrod”) by and through her company, DeNiece, makes, manufactures and sells fabric organizers to store scraps and yardage of fabrics. She claims that she originated the concept of the fabric organizer on January 30, 2004, that she filed for a provisional patent No. 60/676.215,³ entitled “Fabric Organizer,” on April 29, 2005, and that she filed application No. 11/381,086, which claimed the benefit of 60/676.215, on May 1, 2006. That application went abandoned on June 14, 2010.

U.S. Patent '299 was filed on August 13, 2004 and issued on August 14, 2007. On August 15, 2007 Braun's lawyers sent a cease and desist letter to DeNiece asserting encroachment of the '299 patent. On August 29, 2007 Herrod's attorneys sent a response detailing differences between her products and the claims of the '299 patent. Neither Herrod nor DeNiece received any more correspondence from Braun or her lawyers for nearly five years. Then on June 13, 2012, Herrod received another cease and desist letter from Braun and her lawyers. Moreover Herrod's retailers have received such letters and have caused Herrod to lose customers and/or business.

DeNiece and Herrod's assert three claims for relief: a declaratory judgment of non-infringement of the '299 patent; a declaratory judgment that the ' 299 patent is invalid; and nonenforcement of the '299 patent based on waiver, laches, and estoppel.

II. Braun's Motion to Dismiss Counts II and III (# 8)

A. Standard of Review Generally

Federal Rule of Civil Procedure 8(a)(2) provides, “A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief.” The Fifth Circuit has held that the same Rule 8(a) pleading standards apply to counterclaims and affirmative defenses. Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir.1999) (“[A] defendant must plead an affirmative defense with enough specificity or factual particularity to give the plaintiff ‘fair notice’ of the defense that is being advanced ... and in some cases merely pleading the name of the affirmative defense ... may be sufficient”; “[t]he ‘fair notice’ pleading requirement is met if the defendant ‘sufficiently articulated the defense so that the plaintiff was not a victim of unfair surprise.’ ”).

When a district court reviews a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), it must construe the complaint in favor of the plaintiff and take all well-pleaded facts as true. Randall D. Wolcott, MD, PA v. Sebelius, 635 F.3d 757, 763 (5th Cir.2011), citing Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir.2009).

“While a complaint attacked by a Rule 12(b)(6) motion to plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do ....” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964–65, 167 L.Ed.2d 929 (2007) (citations omitted). “Factual allegations must be enough to raise a right to relief above the speculative level.” Id. at 1965,citing5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235–236 (3d ed. 2004) (“[T]he pleading must contain something more ... than ... a statement of facts that merely creates a suspicion [of] a legally cognizable right of action”). “Twombly jettisoned the minimum notice pleading requirement of Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 ... (1957) [“a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief”], and instead required that a complaint allege enough facts to state a claim that is plausible on its face.” St. Germain v. Howard, 556 F.3d 261, 263 n. 2 (5th Cir.2009), citing In re Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th Cir.2007) (“To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead ‘enough facts to state a claim to relief that is plausible on its face.’ ”), citing Twombly, 127 S.Ct. at 1974). “ ‘A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’ ” Montoya v. FedEx Ground Package System, Inc., 614 F.3d 145, 148 (5th Cir.2010), quoting Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1940, 173 L.Ed.2d 868 (2009). The plausibility standard is not akin to a “probability requirement,” but asks for more than a “possibility that a defendant has acted unlawfully.” Twombly, 550 U.S. at 556, 127 S.Ct. 1955. Dismissal is appropriate when the plaintiff fails to allege “ ‘enough facts to state a claim to relief that is plausible on its face’ ” and therefore fails to “ ‘raise a right to relief above the speculative level.’ ” Montoya, 614 F.3d at 148,quoting Twombly, 550 U.S. at 555, 570, 127 S.Ct. 1955.

In Ashcroft v. Iqbal, 129 S.Ct. at 1940, the Supreme Court, applying the Twombly plausibility standard to a Bivens claim of unconstitutional discrimination and a defense of qualified immunity for a government official, observed that two principles inform the Twombly opinion: (1) “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” ... Rule 8 “does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.”; and (2) “only a complaint that states a plausible claim for relief survives a motion to dismiss,” a determination involving “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” “[T]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements do not suffice” under Rule 12(b). Iqbal, 129 S.Ct. at 1949. The plaintiff must plead specific facts, not merely conclusory allegations, to avoid dismissal. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498 (5th Cir.2000). “Dismissal is proper if the complaint lacks an allegation regarding a required element necessary to obtain relief ....” Rios v. City of Del Rio, Texas, 444 F.3d 417, 421 (5th Cir.2006), cert. denied,549 U.S. 825, 127 S.Ct. 181, 166 L.Ed.2d 43 (2006).

“Rule 12(b) is not a procedure for resolving contests about the facts or the merits of a case.” Gallentine v. Housing Authority of City of Port Arthur, Tex., 919 F.Supp.2d 787, 794 (E.D.Tex.2012), citing5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure: Civil 2d § 1356, at 294 (1990).

B. Federal Circuit's Standard of Review for Patent Infringement

A few months after Twombly was issued and almost two years before Iqbal was released, in McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1356–57 (Fed.Cir.2007), the Federal Circuit, addressing a pro se patent and trademark infringement complaint, held that a patentee at minimum needs only to plead facts sufficient to provide the alleged infringer with notice under Rule 8(a) of the plaintiff's claims against him in order to survive a motion to dismiss. The Federal Circuit noted that the Supreme Court has recognized a “less demanding standard” for pro se litigants on procedural matter such as pleading requirements. 501 F.3d at 1356. It further observed that the Supreme Court has concluded that Rule 8(a)(2) requires only “ ‘a short plain statement of the claim showing that the pleader is entitled to relief’ in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.’ ” Id., citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955. It held that an acceptable way to put a defendant on notice of the nature of a plaintiff's allegations is the sample patent infringement complaint in Form 16 (now Form 18) of the Appendix of Forms to the Federal Rules of Civil Procedure. McZeal, 501 F.3d at 1356–57 (listing the elements of Form 16 and explaining how plaintiff's complaint included those elements). Specifically McZeal identifies the following as the only required elements needed to plead patent infringement: “1) an allegation of jurisdiction; 2) a statement that the plaintiff owns the patent; 3) a statement that the defendant has been infringing the patent by ‘making, selling, and using [the device] embodying the patent’; 4) a statement that the plaintiff has given the defendant notice of its infringement; and 5) a demand for an injunction and damages.” 501 F.3d at 1357. The Federal...