Link Treasure Ltd. v. Baby Trend, Inc., Case No. EDCV 07-828-VAP (OPx)

• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
• Decision Date: 15 August 2011
• Docket Number: Case No. EDCV 07-828-VAP (OPx)
• Parties: LINK TREASURE LIMITED, a company organized and existing under the laws of the British Virgin Islands, Islands, Plaintiff, v. BABY TREND, INC., a corporation organized and existing under the laws of the state of California, Defendants.

LINK TREASURE LIMITED, a company organized
and existing under the laws of the British Virgin Islands, Islands, Plaintiff,
v.
BABY TREND, INC., a corporation organized and existing under the laws of the state of California, Defendants.

Case No. EDCV 07-828-VAP (OPx)

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Dated: August 15, 2011

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

[Motion filed on April 25, 2011]

Plaintiff Link Treasure Limited ("Plaintiff") filed this action for patent infringement, alleging that Defendant Baby Trend, Inc. ("Defendant") infringed two patents owned by Plaintiff relating to folding baby strollers. Defendant brought a counterclaim against Plaintiff for a declaratory judgment of non-infringement,

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invalidity, and unenforceability of the asserted patents. Before the Court is Defendant's motion for summary judgment or partial summary judgment on Plaintiff's claims and Defendant's counterclaim and affirmative defenses ("Motion"). The parties came before the Court for a hearing on July 18, 2011. After considering the arguments in support of and in opposition to the Motion, the Court GRANTS the Motion.

I. BACKGROUND

A. Procedural History

On August 18, 2006, Plaintiff and former co-plaintiff Discovery International Co., Ltd. ("Discovery") filed a complaint against Defendant in the Northern District of Georgia. (Link Treasure Ltd. v. Baby Trend, Inc., No. 06-1930 (N.D. Ga. filed Aug. 18, 2006), Doc. No. 1 (Compl.).¹ ) In the Complaint, Plaintiff accused Defendant of infringing two patents it owns by assignment: (1) U.S. Patent No. 5,876,057, issued on March 2, 1999, a utility patent entitled "Folding Device for a Stroller" (the "'057 patent"); and (2) U.S. Patent

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No. D430,826, issued on September 12, 2000, a design patent entitled "Frame of Three-Wheeled Stroller" (the "'826 patent"). (Compl. ¶¶ 1, 8-25.) On December 15, 2006, Plaintiff filed a First Amended Complaint ("FAC") against Defendant, asserting the same claims but removing Discovery as a party. (Doc. No. 27.)

On October 11, 2006, Defendant filed its answer and a counterclaim against Plaintiff seeking a declaratory judgment of non-infringement, invalidity, and unenforceability of the '057 patent and the '826 patent. (Doc. No. 6.) On June 18, 2007, the District Court in Georgia granted Defendant's Motion to Transfer Venue, transferring the case to this Court. (Doc. No. 57.)

On October 23, 2008, the Court held a Markman hearing regarding claim construction for certain terms in the '057 patent, and on November 13, 2008, the Court issued a Claim Construction Order. (Doc. No. 85 (Claim Constr. Order).) On October 22, 2009, Defendant filed a Notice of Stay and Filing of Bankruptcy Petition. (Doc. No. 104.) On January 27, 2010, the Court stayed the action pending resolution of Defendant's bankruptcy petition. (Doc. No. 105.) On February 8, 2011, the Court withdrew the reference to the Bankruptcy Court in part. (Doc. No. 106.)

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On April 25, 2011, Defendant filed the Motion (Doc. No. 112), along with: (1) a statement of uncontroverted facts and conclusions of law ("SUF") (Doc. No. 112-1); (2) a declaration of Danny Tsai ("Tsai Declaration"), attaching exhibits A through M, X, and Z (Doc. No. 112-2); (3) a declaration of Edward Lin ("Lin Declaration"), attaching exhibits N through W (Doc. No. 112-3); (4) a declaration of Deborah S. Mallgrave ("Mallgrave Declaration"), attaching exhibit Y (Doc. No. 112-4); and (5) a request for judicial notice ("RJN")² (Doc. No. 113).

On May 23, 2011, Plaintiff filed its opposition to the Motion ("Opposition") (Doc. No. 114), along with: (1) a statement of genuine issues ("SGI") and statement of uncontroverted material facts ("UMF") (Doc. No. 114-1); (2) a declaration of Harold J. Fassnacht ("Fassnacht Declaration"), attaching exhibits A through E (Doc. No. 114-2); and (3) a declaration from Ruby Wu ("Wu Declaration"), attaching Exhibit A (Doc. No. 114-3).

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On May 27, 2011, Defendant filed its reply in support of the Motion ("Reply") (Doc. No. 115), along with evidentiary objections to the Fassnacht and Wu Declarations ("Defendant's Evidentiary Objections") (Doc. No. 116).

B. Evidentiary Objections

First, Defendant objects to both the Fassnacht and Wu Declarations because they do not satisfy the statutory requirement of 28 U.S.C. § 1746 that the statements within be sworn under penalty of perjury. (Def.'s Evidentiary Objections at 2.) Defendant also objects to the statements in the Wu Declaration as lacking foundation as to personal knowledge, and containing only conclusory statements, speculation, and hearsay. (Id. at 2-9.)

The Court sustains Defendant's objections to the Fassnacht and Wu Declarations on both grounds. First, compliance with the requirement of 28 U.S.C. § 1746 is mandatory, and neither Fassnacht nor Wu comply with its requirements by stating that their declarations are made under penalty of perjury. See, e.g., Schroeder v. McDonald, 55 F.3d 454, 460 n.10 (9th Cir. 1995) (accepting as valid a declaration that did not follow § 1746 with precision, but asserted that statement was made under penalty of perjury that the contents were true and

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correct). Defendant filed its objections on May 27, 2011, and therefore Plaintiff had ample notice of this deficiency, and could have remedied it by submitting sworn declarations. Plaintiff failed to do so.

Additionally, Defendant's objections to the Wu Declaration are well-taken. In her declaration, Wu does not state her job title, her job responsibilities, or why or how she has knowledge of the facts she asserts. Accordingly, the Wu Declaration is inadmissible under Federal Rule of Civil Procedure 56(c)(4) as lacking an adequate foundation. Accordingly, the Court does not rely upon the statements in either the Fassnacht or Wu Declarations to resolve the Motion.

C. Uncontroverted Facts

The Court finds the following material facts are supported adequately by admissible evidence and are uncontroverted. They are "admitted to exist without controversy" for the purposes of these Motions. L.R. 56-3; see generally Fed. R. Civ. P. 56.

1. The '826 Patent

The '826 patent was filed on December 27, 1999, and assigned to Plaintiff. (SUF ¶ 1; UMF ¶ 1.) The "critical date," or "bar date," for purposes of an on-sale bar is thus December 27, 1998. (SUF ¶ 2; UMF ¶ 2.)

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Lerado Group, Ltd. ("Lerado") is Plaintiff's parent company, and is responsible for manufacturing strollers for Plaintiff.³ (SUF ¶ 3; UMF ¶ 3.) Defendant is a California company, located in Ontario, California. (SUF ¶ 4; UMF ¶ 4.) Before the critical date of December 27, 1998, Defendant and Lerado were negotiating the sale of Lerado Model T-415 strollers ("T-415 Strollers") to Defendant.⁴ (SUF ¶ 5; UMF ¶ 5.) These negotiations took place in person and through correspondence. (SUF ¶ 6; UMF ¶ 6.)

In mid-1998, Defendant's director Denny Tsai ("Tsai") visited the Lerado factory in China. (SUF ¶ 7; Tsai Decl. ¶ 3; UMF ¶ 7.) During that visit, Tsai was shown a sample of what he believes was the T-415 Stroller. (SUF ¶ 7; Tsai Decl. ¶ 3.) During the fall of 1998, employees at Lerado sent Tsai photographs and a sample of a T-415 Stroller, and he negotiated with managers at Lerado over

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the price of the strollers. (SUF ¶¶ 8, 10; Tsai Decl. ¶¶ 4-6; id., Ex. A, B, X; UMF ¶¶ 8, 10.)

In October and November 1998, Defendant and Lerado exchanged purchase order documents regarding Defendant's order of T-415 Strollers from Lerado ("Purchase Order Documents").⁵ (SUF ¶ 9; Tsai Decl. ¶¶ 7-9.) On December 11, 1998, Defendant issued a letter of credit (the "Letter of Credit") in favor of Plaintiff for the purchase of T-415 Strollers. (SUF ¶ 11; UMF ¶ 11.)

On December 28, 1998, an independent safety testing company issued a "Certificate of Compliance" for the T-415 Stroller (identified in the Certificate as Defendant's 9210 Stroller). (SUF ¶ 12; UMF ¶ 12.⁶ ) On January 25, 1999, Lerado issued a commercial invoice to Defendant (the "January 25, 1999, Invoice") stating a shipping vessel containing 4,500 T-415 Strollers would be

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sailing to Los Angeles on or about January 27, 1999. (Tsai Decl., Ex. I.)

II. LEGAL STANDARD

A motion for summary judgment shall be granted when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); see also Hodosh v. Block Drug Co., Inc., 786 F.2d 1136, 1141 (Fed. Cir. 1986) (holding summary judgment to be appropriate "in patent as in other cases"). The moving party must show that "under the governing law, there can be but one reasonable conclusion as to the verdict." Anderson, 477 U.S. at 250.

The initial burden is on the moving party to demonstrate that it is entitled to summary judgment. Margolis v. Ryan, 140 F.3d 850, 852 (9th Cir. 1998); In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010). The moving party bears the burden of identifying the elements of the claim or defense and evidence that it believes demonstrates the absence of an issue of material fact. ...