Her Majesty the Queen in Right of Can. v. Van Well Nursery, Inc.
| Decision Date | 13 January 2021 |
| Docket Number | No. 2:20-CV-00181-SAB,2:20-CV-00181-SAB |
| Parties | HER MAJESTY THE QUEEN IN RIGHT OF CANADA AS REPRESENTED BY THE MINISTER OF AGRICULTURE AND AGRI-FOOD, a Canadian governmental authority, Plaintiff, v. VAN WELL NURSERY, INC., a Washington Corporation; MONSON FRUIT COMPANY, INC., a Washington Corporation; GORDON GOODWIN, an individual; and SALLY GOODWIN, an individual, Defendants. |
| Court | U.S. District Court — District of Washington |
The Court held a videoconference motion hearing in the above-captioned matter on January 8, 2021. During the hearing, the Court heard oral arguments in support of and against Defendants' Motion to Dismiss for Failure to Join a Necessary Party, ECF No. 40. Plaintiff was represented by Jennifer Bennett, Daniel Short, and Katherine McMorrow. Ms. Bennett presented Plaintiff's arguments. Defendants Van Well Nursery, Gordon Goodwin, and Sally Goodwin were represented by Quentin Batjer. Defendant Monson Fruit Company was represented by Kevin Regan and Mark Walters. Mr. Regan presented Defendants' arguments.
Defendants argue that Summerland Varieties Corporation, formerly known as PICO (hereinafter "SVC") is absent from this case and must be joined in order to satisfy Federal Rule of Civil Procedure 19 and principles of statutory standing unique to patent cases. They argue that SVC should either be joined as a party plaintiff in this case or, if joinder is impossible, the case should be dismissed. Plaintiff opposes the motion, arguing it has standing to sue on its own behalf without joinder of SVC but, if the Court does find joinder necessary, concedes that SVC will consent to being joined. The Court took the motion under advisement. Having reviewed the briefing and the relevant case law and having heard from the parties, the Court denies the motion.
On a Rule 12(b)(7) motion, the Court accepts as true the allegations in Plaintiff's complaint and draws all reasonable inferences in Plaintiff's favor. Dine Citizens Against Ruining Our Environment v. Bureau of Indian Affairs, 932 F.3d 843, 851 (9th Cir. 2019). Thus, the following facts are drawn from Plaintiff's Complaint, ECF No. 1, and are accepted as true.
Plaintiff is the owner of United States Patent No. PP 20,551 P3, a distinct variety of cherry tree known commercially as Staccato ("the '551 patent" or "Staccato"). The patent application was filed on March 6, 2003, and was issued on December 15, 2009. Plaintiff is also the owner of the registered trademark Staccato. Staccato was developed by W. David Lane on Plaintiff's behalf. Staccato's most distinguishing characteristic is that the fruit matures significantlylater than most other commercial cherry varieties. This extends the cherry harvest season and gives growers a distinct financial advantage.
In order to receive a royalty stream for its breeding program and to protect the interests of Canadian cherry growers, Plaintiff entered into a commercialization agreement with SVC to control the distribution of, among other plants, Staccato cherry trees. The first agreement was entered into in 1994 and has been renewed and amended since then. The most recent amendment was executed in March 2019.
Plaintiff alleges that Defendants have infringed its patent on Staccato cherry trees. In July 1998, Defendant Van Well entered into a contract with SVC to propagate, market, and sell a different cherry variety bred by Plaintiff known as Sonata. Van Well planted the Sonata cherry trees and, at some later point, Defendant Goodwin purchased them from Van Well. It is believed that SVC inadvertently gave Van Well—and Van Well then gave Goodwin—Staccato cherry trees in addition to the Sonata cherry trees. Unbeknownst to the Goodwins, they planted all the trees in their orchards. Later, Mr. Goodwin noticed that one of the trees—which he thought was a Sonata cherry tree—was different from the others and assumed that the different tree was a whole tree mutation of the Sonata tree. Mr. Goodwin propagated and planted the different trees in 2005, and the trees fruited in 2008 and 2010. On December 1, 2010, Mr. Goodwin applied for a U.S. patent on the different tree, and commercially named it Glory. Goodwin was granted the patent on May 1, 2012, which he subsequently assigned to Van Well. The first commercial picking of Glory cherries occurred in August 2010.
In 2008, Mr. Goodwin provided Glory budwood to Defendant Monson. Defendant Monson grafted the budwood and has since propagated hundreds of acres of Glory cherry trees. Monson continues to sell Glory cherries.
In May 2013, Van Well and Goodwin entered into an agreement relating to certain rights in Glory, including commercialization rights. That agreement was terminated in 2015. Van Well reassigned the patent back to Goodwin in 2015.
Sometime in 2012, Plaintiff and SVC learned that Mr. Goodwin had an allegedly new cherry variety called Glory, had filed for patent protection, and that Defendant Van Well was, at that point, the owner of the patent. Defendants provided samples of Glory to SVC, and in early 2014 genetic tests revealed the Glory variety was identical to the Staccato variety. Van Well soon thereafter agreed to sell to SVC whatever Glory trees it had in its possession or to destroy them. As far as Plaintiff was aware, by 2015, SVC and Van Well had settled the dispute, and Van Well had agreed not to sell Glory cherries or cherry trees any longer.
However, in spring 2018, Plaintiff believes Van Well sold 6,000 Glory trees to Defendant Monson, and sold it an additional 9,000 trees in 2019. Plaintiff believes Defendant Monson planted those trees and plans to sell the fruit once the trees mature.
Fundamental to the arguments here are commercialization agreements between SVC and Plaintiff, dated from 1994 through 2019, filed at ECF Nos. 42-1, 42-2, 42-3, and 42-4. Although neither party has filed a motion for judicial notice or argued that the agreements are incorporated into the Complaint by reference, neither party objected to the Court's consideration of the documents. Furthermore, neither party questions the authenticity of the documents. Accordingly, the Court will consider these documents. See UNILOC 2017, LLC v. Google, LLC, --- F. Supp. 3d ---, 2020 WL 7626430, at *5, *12 n.21 (N.D. Cal. Dec. 22, 2020). The parties agree that the 2013 Agreement, as amended by the 2019 Amendment controls here. ECF No. 42-3, 42-4. Relevant portions of the Agreement are discussed at length below.
Plaintiff filed its case in federal court on May 18, 2020. ECF No. 1. It alleges eight causes of action: (1) plant patent infringement in violation of 35 U.S.C. § 271; (2) correction of inventorship under 35 U.S.C. § 256 against the Goodwin Defendants; (3) declaratory judgment under 28 U.S.C. § 2201 against the Goodwin Defendants; (4) unfair competition and false designation of origin in violation of the Lanham Act; (6) conversion; (7) tortious interference with economic relations; and (8) unfair competition in violation of Wash. Rev. Code. 19.86.020. It also requests injunctive relief enjoining Defendants from growing, using, offering for sale, selling, reproducing, propagating, exchanging, transferring, or possessing the Glory/Staccato trees and its cuttings, budwood and fruit, and requiring Defendants to remove and destroy all Glory and unauthorized Staccato trees. It also seeks an order directing the Goodwin Defendants assign right, title, and ownership of the Glory patent to Plaintiff. Finally, Plaintiff seeks compensatory, consequential, and enhanced damages, as well as attorney's fees and costs.
Rule 12(b)(7) provides that a party may move to dismiss a complaint for failure to join a party under Rule 19. Fed. R. Civ. P. 12(b)(7). Rule 19, in turn, provides that a person must be joined in an action if, in that person's absence, the court cannot accord complete relief among the existing parties. Fed. R. Civ. P. 19(a)(1)(A). Rule 19 also provides that a person must be joined if the person claims an interest in the subject of the action and is so situated that disposing of the action in their absence may impair their ability to protect the interest or would leave an existing party subject to multiple or inconsistent obligations because of the interest. F. R. Civ. P. 19(a)(1)(B).
If the court finds that a person should be joined under Rule 19 and has not been joined, the court must order that the person be joined as a party. Fed. R. Civ. P. 19 (a)(2). If joinder is not feasible, the court must determine whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed. Fed. R. Civ. P. 19(b); Salt River Project Agr. Imp. & Power Dist. v. Lee, 672 F.3d 1176, 1179 (9th Cir. 2012). The factors a court should consider in determining whether to dismiss where joinder is not possible include: (1) the extent to which a judgment rendered in the person's absence might prejudice that person or the existing parties; (2) the extent to which any prejudice could be lessened or avoided by protective provisions in a judgment, shaping the relief, or other measures; (3) whether a judgment rendered in the person's absence would be adequate; and (4) whether the plaintiff would have an adequate remedy if the action were dismissed for nonjoinder. Fed. R. Civ. P. 19(b).
Patent statutes give rise to a right to sue others for patent infringement, defining the nature and source of the infringement claim and determining the party that is entitled to judicial relief. Morrow v. Microsoft Corp., 499 F.3d 1332, 1339 (Fed. Cir. 2007).1 A patentee is entitled to bring an infringement action. 35 U.S.C. § 281. This includes the party to whom the patent was originally issued, successors in title...
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