Laughing Rabbit, Inc. v. Nat'l Auto. Parts Ass'n

• Decision Date: 11 February 2014
• Docket Number: CASE NO. C12-0402JLR
• Court: U.S. District Court — Western District of Washington
• Parties: LAUGHING RABBIT, INC., Plaintiff, v. NATIONAL AUTOMOTIVE PARTS ASSOCIATION, Defendant.

LAUGHING RABBIT, INC., Plaintiff, v. NATIONAL AUTOMOTIVE PARTS ASSOCIATION, Defendant.

CASE NO. C12-0402JLR

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

Dated: February 11, 2014

ORDER ON PLAINTIFF'S

MOTION FOR PARTIAL

SUMMARY JUDGMENT

I. INTRODUCTION

Plaintiff Laughing Rabbit, Inc. ("LRI") alleges that Defendant National Automotive Parts Association ("NAPA") infringed its design patent for a pocket-sized LED flashlight ("the '372 patent"). (Am. Compl. (Dkt. # 3) ¶¶ 1, 25.) As an affirmative defense, NAPA asserts that the '372 patent is invalid. (Ans. (Dkt. # 12) ¶¶ 5-6.) Before the court is LRI's motion for partial summary judgment on NAPA's patent invalidity defense. (Mot. (Dkt. # 16).) After considering the motion, all submissions filed insupport of and opposition to the motion, the balance of the record, and the applicable law, the court GRANTS in part and DENIES in part LRI's summary judgment motion.

II. BACKGROUND

LRI is an Oregon corporation. (Am. Compl. ¶ 1.) It manufactures and distributes specialty lighting products, including LED flashlights. (Id. ¶ 7.) LRI has sold its products through national retailers and online since 1994. (Id. ¶ 8.) LRI is the exclusive licensee of the '372 patent titled "Pocket Flashlight" at issue in this case. (Id. ¶ 9.) LRI filed its amended complaint against NAPA on March 8, 2012, alleging patent and trademark infringement, unfair competition, and violation of the Washington State Consumer Protection Act, RCW 19.86. (See generally id.) With respect to the patent infringement claim, LRI alleges that NAPA has "since at least as early as November 17, 2011[,] offered to sell LED flashlights substantially identical in appearance to [those for which LRI is the exclusive patent licensee] to the public at 'www.napaonline.com' and retail locations . . . ." (Id. ¶ 11.) LRI also asserts that NAPA "was placed on notice of LRI's [patent] rights, by letter dated November 30, 2011," and "continued to sell the accused product thereafter." (Id. ¶ 13.)

NAPA is a trade association (Resp. (Dkt. # 19) at 2), and its "jurisdiction of formation" is Michigan (Ans. ¶ 2).¹ In NAPA's January 11, 2013, answer, NAPA asserted numerous affirmative defenses, including patent invalidity, which is the basis ofLRI's instant motion for partial summary judgment. (Ans. ¶¶ 5-6; see generally Mot.) Patent invalidity is a defense to patent infringement. See, e.g., Agrizap, Inc. v. Woodstream Corp., 520 F.3d 1337, 1341 (Fed. Cir. 2008). NAPA claims that the '372 patent does not meet the conditions for patentability required by the Patent Act in 35 U.S.C. §§ 102, 103, and/or 171. (Ans. ¶ 6.) NAPA claims that the '372 patent design is not "new, original and ornamental" as required by 35 U.S.C. § 171, but rather "primarily functional and dictated by its function," and therefore invalid. (Id.) NAPA also alleges that flashlights with this same design were "publicly offered" "as early as 1993 which constitute[s] invalidating prior art with respect to the design claimed in the '372 patent." (Id.) With this assertion, NAPA appears to argue that the patent is invalid because it is anticipated and obvious under 35 U.S.C. §§ 102 and 103, although NAPA does not explicitly say so. (See generally Ans.)

LRI filed this motion for partial summary judgment on November 12, 2013, pursuant to Federal Rule of Civil Procedure 56. (See generally Mot.) LRI argues that summary judgment should be granted on NAPA's patent invalidity defense because NAPA has not pleaded "sufficient facts" to demonstrate patent invalidity. (Mot. at 8.) LRI further argues that NAPA does not have sufficient evidence about "the alleged prior art product" (id. at 9), to show that the '372 patent was anticipated or obvious. LRI finally contends that NAPA's functionality defense "fails as a matter of law as utility is a requirement of all inventions submitted for Letters Patent . . ." under 35 U.S.C. § 101. (Id.)

NAPA responded on January 2, 2014. (See generally Resp.) In its response, NAPA characterizes LRI's motion as "a late-filed motion to strike" NAPA's patent invalidity defense under Federal Rule of Civil Procedure 12(f) because LRI's motion "focuses on the sufficiency of NAPA's pleading rather than the absence of material factual disputes . . . ." (Resp. at 1); see Fed. R. Civ. P. 12(f). NAPA argues that the court cannot grant this motion because LRI did not file its motion within the 21-day period required by Rule 12(f). See Fed. R. Civ. P. 12(f)(2). NAPA finally asserts that LRI has not met its summary judgment burden because LRI focused on utility patents rather than on design patents and on the requirement that design patents be ornamental and not just functional. (Resp. at 1.) NAPA's response does not address at all its defenses that the '372 patent is invalid because it is anticipated or obvious. (See generally Resp.)

LRI filed a reply on January 8, 2014. (See generally Reply.) In its reply, LRI addresses functionality under 35 U.S.C. § 171, which NAPA cited as a basis for invalidity. (Id.; see generally Mot.) Along with its reply memorandum, LRI submits the declaration of David Allen, the '372 patent inventor, and several exhibits showing different designs for pocket flashlights to demonstrate that the design is ornamental rather than functional. (Allen Decl. (Dkt. # 20-1); Reply at 3.) This information was not included in LRI's original motion for summary judgment. (See generally Mot.) LRI's sole argument in its original moving papers for disputing NAPA's affirmative defense based on functionality was that the "NAPA's averment fails as a matter of law as ultiity is a requirement of all inventions submitted for Letter Patent . . . ." (Mot. at 5-6 (citing 35 U.S.C. § 101).)

III. ANALYSIS

A. Applicable Summary Judgment Standards

Summary judgment is appropriate if the evidence, when viewed in the light most favorable to the nonmoving party, demonstrates "that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Galen v. Cnty. of L.A., 477 F.3d 652, 658 (9th Cir. 2007). A fact is "material" if it might affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is "genuine" if the evidence is such that reasonable people could disagree about whether the facts claimed by the moving party are true. Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983). The moving party bears the initial burden of showing there is no genuine issue of material fact and that it is entitled to prevail as a matter of law. Celotex, 477 U.S. at 323. In moving for summary judgment against a party who will bear the ultimate burden of proof at trial, the movant's burden will be satisfied if it points to an absence of evidence to support an essential element of the nonmoving party's claim. Id. at 322-23.

If the moving party meets its burden, the nonmoving party "must make a showing sufficient to establish a genuine dispute of material fact regarding the existence of the essential elements" of its case in order to withstand summary judgment. Galen, 477 F.3d at 658. The court is "required to view the facts and draw reasonable inferences in the light most favorable to the [nonmoving] party." Scott v. Harris, 550 U.S. 372, 378 (2007). Facts asserted by the party opposing the motion, if supported by affidavits orother evidentiary material, are regarded as true. See, e.g., Hunt v. Cromartie, 526 U.S. 541, 551 (1999).

On a summary judgment motion, the court must "view the evidence presented through the prism of the substantive evidentiary burden" that applies at trial. Anderson, 477 U.S. at 254. A party asserting patent invalidity must prove a patent is invalid by clear and convincing evidence. See, e.g., Taurus IP, LLC v. DaimlerChrysler Corp., 726 F.3d 1306, 1322 (Fed. Cir. 2013); see also 35 U.S.C. § 282 (establishing a presumption of patent validity giving rise to the clear and convincing evidence standard). "[A] moving party seeking to have a patent held not invalid at summary judgment must show that the nonmoving party, who bears the burden of proof at trial, failed to produce clear and convincing evidence on an essential element of a defense upon which a reasonable jury could invalidate the patent." Delano Farms Co. v. Cal. Table Grape Comm'n, 940 F. Supp. 2d 1229, 1251 (E.D. Cal. 2013) (quoting Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 962 (Fed. Cir. 2001)). A patentee has no burden to present factual evidence affirmatively establishing the validity of its patent, even in support of its own motion for summary judgment on the validity issue. Massey v. Del Labs., Inc., 118 F.3d 1568, 1573 (Fed. Cir. 1997). Rather, a patentee moving for summary judgment can meet its burden simply by pointing to the nonmoving party's lack of evidence to support its patent invalidity defense. See, e .g., Celotex, 477 U.S. at 323.

However, courts abuse their discretion when they grant summary judgment based on new evidence introduced in the moving party's reply brief. See, e.g., Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007). Because all inferences must be made in thenonmoving party's favor, courts should either disregard new information presented in a reply brief, or allow a nonmoving party to address the new evidence presented. See, e.g., id.

B. NAPA's Asserted Grounds for Patent Invalidity

NAPA styles its affirmative defense as a single defense of patent invalidity. (See Ans. ¶¶ 5-6.) However, NAPA's defense is based on three sections of the Patent Act, 35 U.S.C. § 102, 103, 171, any one of which could independently support patent invalidity. The court therefore considers each asserted ground of patent invalidity—functionality, anticipation, and obviousness—as a separate defense, and addresses whether summary judgment is appropriate as to each ground.

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