Gerawan Farming, Inc. v. Rehrig Pacific Co.
| Decision Date | 02 March 2012 |
| Docket Number | CASE NO. 1:11-cv-01273 LJO BAM |
| Court | U.S. District Court — Eastern District of California |
| Parties | GERAWAN FARMING, INC., Plaintiff, v. REHRIG PACIFIC COMPANY, Defendant. |
ORDER ON DEFENDANT'S MOTION TO
DISMISS
(Doc. 11)
Now pending before the Court is Defendant Rehrig Pacific Company's ("Rehrig's") motion to dismiss. Plaintiff Gerawan Farming, Inc. ("Gerawan") has filed an opposition, and Rehrig has filed a reply. Upon consideration of the parties' submissions and the record in this case, the Court GRANTS IN PART and DENIES IN PART the motion to dismiss.
Gerawan is in the business of producing and distributing fresh produce. In 1993, Gerawan and Rehrig, a manufacturer of plastic-molded containers for industrial use, reached an agreement to patent, manufacture, and sell the "Harvest Tote," a container for holding stone fruits such as peaches during harvesting. The agreement ("the Harvest Tote Agreement") provided that (1) Gerawan's founder, Ray Gerawan,1 would provide the initial design for the Harvest Tote; (2) Gerawan would share in the cost of patenting the Harvest Tote; (3) the patent claims related to the Harvest Tote would be jointly owned;(4) Rehrig would be granted an exclusive license to sell the Harvest Tote; and (5) Rehrig would pay royalties to Gerawan from sales of the Harvest Tote.
During the parties' collaboration on the Harvest Tote in 1993, Rehrig filed a patent application for U.S. Patent No. 5,415,293, entitled "Grape Lug" ("the '293 Patent"). The '293 Patent relates to a container used for harvesting, storing, and transporting grapes. Among other characteristics, the '293 Patent includes patent claims for "the configuration of eight side columns and an upper portion, which is recessed, in contrast with a lower portion, which has a doubling of material[,] which is characteristic of the Harvest Tote." (Doc. 1, Compl., ¶ 12.) The '293 Patent, however, does not name Ray Gerawan as a co-inventor of the Grape Lug.
Some time in 2001, Rehrig discontinued making royalty payments to Gerawan for sales of the Harvest Tote. At that time, Gerawan was under the impression that the payments were discontinued because sales of the Harvest Tote had fallen to the point where no royalty payments were warranted. However, in 2008 Gerawan discovered that Rehrig had made significant sales of the Harvest Tote for several years without paying Gerawan royalties. Gerawan also discovered that Rehrig developed and claimed exclusive ownership of a new container for produce ("the Second Generation Harvest Tote"), which appears to have been derived from the design of the Harvest Tote.
Gerawan initiated this action on July 29, 2011. In its complaint, Gerawan asserts eight causes of action: (1) correction of inventorship under 35 U.S.C. § 256; (2) conversion; (3) unfair competition in violation of California Business and Professional Code Section 17200 et seq.; (4) unjust enrichment; (5) concealment; (6) false promise; (7) unfair competition in violation of 15 U.S.C. § 1125(a); and (8) accounting. On December 9, 2011, Rehrig filed the instant motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). In response, Gerawan filed an opposition on January 3, 2012, and Rehrig filed a reply on January 17, 2012. This matter was deemed suitable for decision without oral argument pursuant to Local Rule 230(g).
A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) is a challenge to the legal sufficiency of a claim presented in the complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). Where there is a "lack of a cognizable legal theory" or an "absence of sufficient facts alleged under a cognizable legal theory," dismissal under Rule 12(b)(6) is proper. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). "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." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009). While "[t]he plausibility standard is not akin to a 'probability requirement,' . . . it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (quoting Twombly, 550 U.S. at 556). Naked assertions, "labels and conclusions," or "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555. See Iqbal, 129 S. Ct. at 1949 ().
In deciding a motion to dismiss under Rule 12(b)(6), the court accepts the factual allegations of the complaint as true and construes the pleadings in the light most favorable to the party opposing the motion. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). However, the court may disregard allegations that are contradicted by matters properly subject to judicial notice or by exhibit. Id. The court may also disregard allegations that are "conclusory" or are the product of unreasonable deductions and inferences. Id. Finally, if the court concludes that dismissal under Rule 12(b)(6) is warranted, the court should not dismiss the complaint "unless it determines that the pleading could not possibly be cured by the allegation of other facts." Cook, Perkiss & Liehe, Inc. v. Northern California Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990).
Gerawan claims that its founder, Ray Gerawan, was omitted as a co-inventor of the '293 Patent and therefore seeks a court order correcting the issued patent. Rehrig argues that this claim should be dismissed because Gerawan has failed to allege facts sufficient to show that Ray Gerawan contributedin a significant manner to the conception of the '293 Patent such that he should be named a co-inventor in the issued patent.
The issuance of a patent "creates a presumption that the named inventors are the true and only inventors." Ethicon, Inc. v. United States Surgical Corp., 135 F.3d 1456, 1460 (Fed. Cir. 1998) (citing Hess v. Advanced Cardiovascular Sys., 106 F.3d 976, 980 (Fed. Cir. 1997)). However, if an inventor is not named in an issued patent through error and without any deceptive intention on his part, a court may order correction of the patent. See 35 U.S.C. § 256; Fina Oil & Chem. Co. v. Ewen, 123 F.3d 1466, 1471 (Fed. Cir. 1997). A court may correct either a misjoinder (the patent names a person who is not an inventor) or a nonjoinder (the patent omits the name of a person who is an inventor). See Stark v. Advanced Magnetics, 119 F.3d 1551, 1553 (Fed. Cir. 1997).
"Conception is the touchstone" in determining inventorship. Burroughs Wellcome Co. v. Barr Laboratories, Inc., 40 F.3d 1223, 1227 (Fed. Cir. 1994). Conception is the "formation in the mind of the inventor[] of a definite and permanent idea of the complete and operative invention[.]" Id. (citation and internal quotation marks omitted). To be a joint inventor, an individual must "contribute in some significant manner to the conception of the invention." Fina Oil & Chem., 123 F.3d at 1473. "[M]erely assisting the actual inventor after conception of the claimed invention;" providing the actual inventor well-known principles or state of the art without having a definite idea of the claimed combination as a whole; or "reducing the [actual] inventor's idea to practice" through ordinary skill in the art does not give rise to a claim for joint inventorship. Ethicon, 135 F.3d at 1460.
A joint inventor need not make a contribution to the conception of every claim of a patent, nor even the same amount of contribution as another inventor. See 35 U.S.C. § 116. Rather, each inventor need only "perform . . . a part of the task which produces the invention." Ethicon, 135 F.3d at 1460. "A contribution to one claim is enough." Id. at 1461 (citation omitted). Thus, in the end, "the critical question for joint conception is who conceived, as that term is used in the patent law, the subject matter of the claims at issue." Id.
The patent claims at issue in this case pertain to the walls of the Grape Lug, specifically "the configuration of eight side columns and an upper portion, which is recessed, in contrast with a lower portion, which has a doubling of material[.]" (Doc. 1, Compl., ¶ 12.) Gerawan alleges that these claimsare "characteristic" of the Harvest Tote, which Ray Gerawan provided the "initial design" for as part of the Harvest Tote Agreement. (Id. ¶¶ 9, 12.) Gerawan notes that only after Rehrig received the design for the Harvest Tote did it file its patent application for the '293 Patent. When viewed in the light most favorable to Gerawan, these facts suggest that Ray Gerawan conceived the distinct wall construction as part of his work on the Harvest Tote and this distinct construction was incorporated in the claims of the '293 Patent. This gives rise to a facially plausible claim for correction of inventorship under 35 U.S.C. § 256. Accordingly, Rehrig's motion to dismiss is DENIED with respect to this claim.
Gerawan claims that Rehrig's conduct constitutes a false designation of origin, affiliation, or sponsorship in violation of the Lanham Act, 15 U.S.C. § 1125(a). Specifically, Gerawan claims that Rehrig falsely and wrongfully suggested that it is the sole inventor or source of the Harvest Tote and the Second Generation Harvest Tote. Rehrig counters that Gerawan's allegations fail to state a cognizable claim under the Lanham Act.
Section 1125(a) provides, in relevant part:
To continue reading
Request your trial