Rain Gutter Pros, LLC v. MGP Mfg., LLC

• Decision Date: 28 October 2014
• Docket Number: Case No. C14–0458 RSM.
• Citation: 55 F.Supp.3d 1330
• Court: U.S. District Court — Western District of Washington
• Parties: RAIN GUTTER PROS, LLC, a Washington Limited Liability Corporation, Plaintiff, v. MGP MANUFACTURING, LLC, a Delaware Limited Liability Company, Defendant.

55 F.Supp.3d 1330

RAIN GUTTER PROS, LLC, a Washington Limited Liability Corporation, Plaintiff

v.MGP MANUFACTURING, LLC, a Delaware Limited Liability Company, Defendant.

Case No. C14–0458 RSM.

United States District Court, W.D. Washington, at Seattle.

Signed Oct. 28, 2014.

Brian G. Bodine, Priya Sinha Cloutier, Lane Powell PC, Seattle, WA, for Plaintiff.

James A. Gale, Rafael A. Perez–Pineiro, Feldman Gale, P.A., Miami, FL, Regina Vogel Culbert, Merchant & Gould, Seattle, WA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS

RICARDO S. MARTINEZ, District Judge.

I. INTRODUCTION

This matter comes before the Court on Defendant's Motion for Judgment on the Pleadings under Federal Rule of Civil Procedure 12(c). Dkt. # 19. Defendant, MGP Manufacturing, LLC (“MGP”), argues that Plaintiff's claims should be dismissed for lack of standing because there was no actual case or controversy at the time the action was initiated. Id. Alternatively, Defendant argues that the action should be dismissed because it fails to meet proper pleading standards. Id. Plaintiff, Rain Gutter Pros, LLC (“RGP”), opposes the motion, arguing that the totality of the circumstances demonstrates an actual case or controversy sufficient to allow this matter to move forward on all claims, and that the pleading standards have been sufficiently met. Dkt. # 21. For the reasons set forth below, the Court agrees in part with Plaintiff, and GRANTS IN PART and DENIES IN PART Defendant's motion.

II. BACKGROUND

This case involves allegations of patent infringement and invalidity. On March 28, 2014, RGP filed a Declaratory Judgment action seeking a declaratory judgment that it does not infringe any valid claim of United States patent numbers 8,397,436 and RE43,555. Dkt. # 1. RGP filed an Amended Complaint on April 15, 2014, requesting the same relief. Dkt. # 5. The Complaint apparently arises from a letter sent to RGP by MGP's patent insurance company (“Intellectual Property Insurance Services Corporation” or “IPISC”) on May 18, 2014, wherein IPISC alerted RGP to certain patents owned by MGP, invited RGP to review the patents and then invited RGP to call MGP to discuss the patents, but did not explicitly accuse RGP of infringement. Dkt. # 5, Ex. A.

III. DISCUSSION

A. Standard of Review

Rule 12(c) of the Federal Rules of Civil Procedure permits a party to move to dismiss a suit “[a]fter the pleadings are closed ... but early enough not to delay trial.” Fed.R.Civ.P. 12(c). “Judgment on the pleadings is proper when, taking all allegations in the pleading as true, the moving party is entitled to judgment as a matter of law.” Stanley v. Trustees of Cal. State Univ., 433 F.3d 1129, 1133 (9th Cir.2006) ; see also Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir.2009). Because a motion for judgment on the pleadings is “functionally identical” to a motion to dismiss, the standard for a Rule 12(c) motion is the same as for a Rule 12(b)(6) motion. See Platt Elec. Supply, Inc. v. EOFF Elec., Inc., 522 F.3d 1049, 1052 n. 1 (9th Cir.2008).

In deciding a 12(b)(6) or 12(c) motion, this Court is limited to the allegations on the face of the complaint (including documents attached thereto), matters which are properly judicially noticeable and other extrinsic documents when “the plaintiff's claim depends on the contents of a document, the defendant attaches the document to its motion to dismiss, and the parties do not dispute the authenticity of the document, even though the plaintiff does not explicitly allege the contents of that document in the complaint.” Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir.2005). The Court must construe the complaint in the light most favorable to the Plaintiff and must accept all factual allegations as true. Cahill v. Liberty Mutual Ins. Co., 80 F.3d 336, 337–38 (9th Cir.1996). The Court must also accept as true all reasonable inferences to be drawn from the material allegations in the Complaint. See Brown v. Elec. Arts, Inc., 724 F.3d 1235, 1247–48 (9th Cir.2013) ; Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir.1998). However, the Court is not required to accept as true a “legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). The Complaint “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Id. at 678, 129 S.Ct. 1937. This requirement is met when Plaintiff “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Absent facial plausibility, Plaintiff's claims must be dismissed. Twombly, 550 U.S. at 570, 127 S.Ct. 1955.

B. Article III Standing

The Court first addresses Defendant's standing arguments. The doctrine of standing is an essential part of the case-or-controversy requirement of Article III and is a constitutional prerequisite for a federal court to have subject matter jurisdiction. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). Article III's prerequisites apply to actions requesting declaratory relief. See MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126–28, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007). In the patent context, there is an actual controversy if “the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Id. at 127, 127 S.Ct. 764 (quoting Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 85 L.Ed. 826 (1941) ). In order to establish standing, the U.S. Supreme Court has “required that the dispute be ‘definite and concrete, touching the legal relations of parties having adverse legal interests'; and that it be ‘real and substantial’ and ‘admi[t] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.’ ” Id. at 127, 127 S.Ct. 764 (quoting Aetna Life Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 240–41, 57 S.Ct. 461, 81 L.Ed. 617 (1937) ). The Court has recognized that this is not a bright line inquiry, but is, rather, dependant upon the facts in each case. Id.

Since MedImmune, supra, a number of Federal Circuit cases have applied this fact-based, “all the circumstances” test to determine when standing exists to seek declaratory judgment of non-infringement or the invalidity of a patent. In so doing, courts have looked at a number of factors, including: the depth and extent of infringement analysis conducted by the patent holder, SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1374–76 (Fed.Cir.2007) ; the strength of any threatening language in communications between the parties, ABB Inc. v. Cooper Indus., LLC, 635 F.3d 1345, 1346–47 (Fed.Cir.2011) ; whether the patent holder imposed a deadline to respond, Hewlett–Packard Co. v. Acceleron LLC, 587 F.3d 1358, 1362–63 (Fed.Cir.2009) ; any prior litigation between the parties, id.; the patent holder's history of enforcing the patent-in-suit, Micron Tech., Inc. v. Mosaid Technologies, Inc., 518 F.3d 897, 899 (Fed.Cir.2008) ; whether the patent holder's threats have induced the alleged infringer to change its behavior; Ass'n for Molecular Pathology v. U.S. Patent & Trademark Office, 689 F.3d 1303, 1318 (Fed.Cir.2012)cert. granted on other grounds, ––– U.S. ––––, 133 S.Ct. 694, 184 L.Ed.2d 496 (2012) ( “Myriad ”); the number of times the patent holder has contacted the alleged infringer, Hewlett–Packard Co., supra, 587 F.3d at 1364 ; Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1334 (Fed.Cir.2008) ; whether the patent holder is simply a holding company with no sources of income other than enforcing patent rights, id.; whether the patentee refused to give assurance it will not enforce its patent, Prasco, supra, 537 F.3d at 1341 ; whether the patent holder has identified a specific patent and specific infringing products, id.; Applera Corp. v. Michigan Diagnostics, LLC, 594 F.Supp.2d 150, 158–60 (D.Mass.2009), the extent of the patent holder's familiarity with the product prior to the suit, Prasco, 537 F.3d at 1334 ; Innovative Therapies, Inc. v. Kinetic Concepts, Inc., 599 F.3d 1377, 1380 (Fed.Cir.2010)cert. denied, ––– U.S. ––––, 131 S.Ct. 424, 178 L.Ed.2d 324 (2010) ; the length of time transpired after the patent holder assert infringement, Ass'n for Molecular Pathology v. U.S. Patent & Trademark Office, 689 F.3d 1303, 1321 (Fed.Cir.2012) ; and whether communications initiated by the declaratory judgment plaintiff have the appearance of an attempt to create a controversy in anticipation of filing suit, Innovative Therapies, 599 F.3d. at 1381.

In the instant matter, the Court finds several of the above cases to be instructive. For example, in Hewlett–Packard Co. v. Acceleron LLC, the court found standing to seek a declaratory judgment against a defendant patent holding company that had, as in this case, sent a letter to “call [the plaintiff's] attention to” one of the defendant's patents that “relates to” a specified line of the plaintiff's products, and then later sent a follow up letter. 587 F.3d 1358, 1360 (Fed.Cir.2009).

The court noted that “a communication from a patent owner to another party, merely identifying its patent and the other party's product line, without more, cannot establish adverse legal interests between the parties, let alone the existence of a ‘definite and concrete’ dispute, ‘nor could standing’ be defeated simply by the stratagem of a correspondence that avoids the magic words such as ‘litigation’ or ‘infringement.’ ” Id. at 1362 (citations omitted). However, the court ultimately found the dispute to be justiciable, pointing to the fact...