Giantceutical, Inc. v. Ken Mable, Inc., No. 04 Civ. 8601(VM).

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Writing for the CourtMarrero
Citation356 F.Supp.2d 374
Decision Date16 February 2005
Docket NumberNo. 04 Civ. 8601(VM).
PartiesGIANTCEUTICAL, INC., Plaintiff, v. KEN MABLE, INC., Various John Does, Jane Does and XYZ Companies, Defendants.
356 F.Supp.2d 374
GIANTCEUTICAL, INC., Plaintiff,
v.
KEN MABLE, INC., Various John Does, Jane Does and XYZ Companies, Defendants.
No. 04 Civ. 8601(VM).
United States District Court, S.D. New York.
February 16, 2005.

Page 375

Po W. Yuen, New York City, Steven Verveniotis, Miranda & Sokoloff, LLP, Mineola, NY, for Plaintiff.

Terrence Michael Randell, Law Offices of Michael Randell, Law Offices of Michael G. Dowd, New York City, for Defendants.

DECISION AND ORDER

MARRERO, District Judge.


This matter is before the Court pursuant to an order to show cause filed by Giantceutical, Inc. ("Giantceutical") against Ken Mable, Inc. ("Mable"), seeking a preliminary injunction, temporary restraining order, and ex parte seizure and impoundment of goods based on an alleged patent infringement. On November 4, 2004, the Court denied Giantceutical's request for a temporary restraining order and ex parte seizure and impoundment and set a date for a hearing regarding a preliminary injunction. The hearing was held on November

Page 376

24, 2004 (the "November 24 Hearing"). The Court denies Giantceutical's motion for a preliminary injunction.

I. BACKGROUND

Giantceutical's motion concerns U.S. Patent No. 6,077,872 (the "872 Patent").1 The 872 Patent relates to the use of calcium L-threonate in preventing, inhibiting and curing osteoporosis and rickets. According to Giantceutical, the 872 Patent was issued on June 20, 2000 to Beijing Juneng Asia Pacific Life Scientific Research Center ("Beijing"). Giantceutical claims that Beijing assigned the patent to Juneng Industry Co., Ltd. ("Juneng") on or about June 26, 2002.2 This assignment was recorded by the U.S. Patent and Trademark Office on August 14, 2002. Giantceutical further claims that on October 2, 2003, Juneng executed a License Agreement granting Giantceutical an "exclusive right and license in the [United States], ... to use the Technology3 to make or manufacture or have made or manufactured the Products,4 and to carry out the invention as claimed in the Patent by marketing, distributing and selling the Products," (License Agreement, Art. 2.1, Ex. A to Yuen Decl.), for a period of two years. In exchange for this alleged exclusive right, Giantceutical states that it issued ten percent of its shares, worth approximately $3,000,000, to the licensor. (Pl.'s Mem. at 2.5) Giantceutical also claims that it has incurred more than $1,500,000 in expenses for advertising and promoting its products in the licensed territory.

In or about April 2004, Giantceutical allegedly learned that Bonepharm, Inc. ("Bonepharm"), a corporation organized and existing under the laws of California, had been purchasing, producing, distributing, offering for sale, selling, storing, vending and/or marketing a calcium dietary supplement called "Bonelux," which allegedly contains calcium L-threonate as its primary ingredient. According to Giantceutical, one of the principals of Bonepharm is a former employee of Juneng and a co-inventor of the invention claimed in the 872 Patent. In or about July 2004, Giantceutical allegedly learned that Mable had been purchasing, producing, distributing, offering for sale, selling, storing, vending and/or marketing Bonelux in and around the New York area.

Giantceutical commenced an action for patent infringement against Bonepharm in the Central District of California in October 2004. That action was dismissed without prejudice based on improper venue on September 15, 2004. On October 4, 2004, Giantceutical re-filed the action in the Northern District of California.

Page 377

Giantceutical seeks injunctive relief against Mable on the ground that Mable is allegedly infringing the 872 Patent by distributing a product containing calcium L-threonate in violation of the License Agreement. Mable argues that Giantceutical does not have standing to bring this action because Beijing did not assign all substantial rights in the 872 Patent to Juneng and because Juneng, in turn, did not grant Giantceutical the right to commence legal proceedings with respect to infringement of the patent. Mable further argues that, even assuming that Giantceutical does have standing to commence an action for patent infringement, it does not meet the standard necessary to obtain preliminary relief. In particular, Mable argues that Giantceutical cannot make a clear showing of a reasonable likelihood of success on the merits because Mable has raised a substantial question regarding the infringement or validity of the 872 Patent.

II. DISCUSSION

A. STANDING

Before addressing the merits of the instant motion, it is necessary to determine whether Giantceutical has standing to sue on the patent. See Fieldturf, Inc. v. Southwest Recreational Industries, Inc., 357 F.3d 1266, 1268 (Fed.Cir.2004) (citations omitted). A party has standing to bring an action for patent infringement only if it is the patentee, a successor in title to the patentee, or an exclusive licensee of the patent at issue. Id. (citations omitted). Giantceutical argues that it has standing to bring this action as an exclusive licensee of the 872 Patent.

A party is an exclusive licensee to a patent if it "possesses all substantial rights in the patent." Id. (citations and quotation marks omitted). As noted above, Giantceutical claims that Juneng granted it such rights in the patent and that Juneng was entitled to do so because Beijing had assigned the patent to Juneng. Therefore, in order to determine whether Giantceutical possesses all substantial rights in the patent it is first necessary to determine whether those rights were assigned to Juneng, such that Juneng could validly convey them to Giantceutical.

Mable argues that Giantceutical has failed to establish that Beijing assigned the patent to Juneng. He argues that the document cited by Giantceutical in support of the claim that Beijing assigned the patent to Juneng, the Notice of Recordation of Assignment Document ("Recordation Notice") (attached to the Declaration of Jackson Wen, dated Oct. 20th, 2004, ("Wen Decl.") as Ex. 2 (the Declaration of Jackson Wen is itself attached to the Declaration of Steven Verveniotis, dated October 22, 2004, as Ex. A)), "shows only that Beijing assigned some interest in the 872 patent to Juneng and nothing more." (Defendant Ken Mable, Inc.'s Memorandum of Law in Opposition to Plaintiff's Motion for a Preliminary Injunction, Temporary Restraining Order, Seizure and Impoundment ("Def.'s Mem.") at 2.) The Recordation Notice states that it concerns the "assignment of assignor's interest" and, in parentheses, instructs the reader to "see document for details." (Recordation Notice, attached to Wen Decl. as Ex. 2.) Giantceutical has not, however, provided the document referred to here to the Court, nor does Giantceutical address this issue in its pleadings. As a result, it is impossible for the Court to determine the extent of the assignment referred to in the Recordation Notice.

Even assuming that the assignment from Beijing entitled Juneng to grant Giantceutical the right to exclusive use of the patent in the United States, Giantceutical has not adequately demonstrated that Juneng conveyed to it all substantial rights in the patent. One of the substantial rights

Page 378

that must be conveyed to a party in order to make that party an exclusive licensee is the right to enforce the patent. See Fieldturf, Inc., 357 F.3d at 1269 (citations omitted). If an agreement does not grant "the right to enforce the patent, either explicitly or impliedly, the document conveys no more than a bare license," id. (citations omitted), i.e., a non-exclusive license. See Moore U.S.A. Inc. v. Standard Register Co., 60 F.Supp.2d 104, 107 (W.D.N.Y.1999). The grant of the right to enforce the patent is "particularly dispositive" of standing issues because of the underlying policy to prevent "two suits on the same patent against a single infringer." Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 875-876 (Fed.Cir.1991).

Giantceutical claims that Article 7.2 of the License Agreement executed by Juneng "grants Giantceutical the right to commence legal proceedings for infringement." (Pl.'s Mem. at 3.) In fact, Article 7.2 only specifies the conditions under which the right to enforce the patent may be transferred to Giantceutical with respect to specific infringement proceedings: "If Licensor elects not to exercise control of any infringement proceedings in the Territory [i.e., the United States and Taiwan] and advises Licensee in writing of such election, Licensee may commence proceedings in respect of the infringement or suspected or threatened infringement on its own behalf and at its own expense." (License Agreement Art. 7.2, Ex. A to Yuen Decl.)

In its initial submission to the Court, Giantceutical argued that a Letter of Authorization from Juneng to Giantceutical, dated September 21, 2004 (the "First Authorization Letter"), constituted such a written advisory. After the November 24 Hearing, at which deficiencies in the First Authorization Letter were raised, Giantceutical submitted a second, undated, Letter of Authorization from Juneng to Giantceutical (the "Second Authorization Letter"), allegedly compensating for any deficiencies in the First Authorization Letter. Neither of these letters is sufficient to demonstrate that Juneng has provided Giantceutical with a written advisory that it has elected not to exercise control of the instant infringement proceedings.

The First Authorization Letter explicitly authorizes Giantceutical only "to seek legal action independently against BonePharm, Inc. for manufacturing and selling Bonelux in the U.S. [sic]...," not against Mable. In its initial...

To continue reading

Request your trial
1 practice notes
  • Pass & Seymour, Inc. v. Hubbell Inc., No. 5:07-CV-0272.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Northern District of New York
    • July 23, 2007
    ...market before trial can be devastating." Illinois Tool Works, 906 F.2d at 683; see also Gianiceutical, Inc. v. Ken Mable, Inc., 356 F.Supp.2d 374, 381-82 (S.D.N.Y.2005) (quoting Illinois Tool 12. Following a conference with the parties the court did excuse the discovery prohibition of ......
1 cases
  • Pass & Seymour, Inc. v. Hubbell Inc., No. 5:07-CV-0272.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Northern District of New York
    • July 23, 2007
    ...market before trial can be devastating." Illinois Tool Works, 906 F.2d at 683; see also Gianiceutical, Inc. v. Ken Mable, Inc., 356 F.Supp.2d 374, 381-82 (S.D.N.Y.2005) (quoting Illinois Tool 12. Following a conference with the parties the court did excuse the discovery prohibition of ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT