Selex ES Inc. v. NDI Techs.

• Decision Date: 30 December 2021
• Docket Number: Civil Action 3:20-CV-637-RJC-DCK
• Court: U.S. District Court — Western District of North Carolina
• Parties: SELEX ES INC., Plaintiff, v. NDI TECHNOLOGIES, INC., d/b/a NDA RECOGNITION SYSTEMS, Defendant.

SELEX ES INC., Plaintiff,
v.
NDI TECHNOLOGIES, INC., d/b/a NDA RECOGNITION SYSTEMS, Defendant.

Civil Action No. 3:20-CV-637-RJC-DCK

United States District Court, W.D. North Carolina, Charlotte Division

December 30, 2021

MEMORANDUM AND RECOMMENDATION

David C. Keesler, United States Magistrate Judge

THIS MATTER IS BEFORE THE COURT on “Defendant NDI Technologies, Inc.'s Motion To Dismiss The First Amended Complaint For Improper Venue, Or Alternatively, To Transfer Under 28 U.S.C. § 1406(a), And Motion To Dismiss The Claims Of Infringement For Failure To Plead A Claim Upon Which Relief May Be Granted” (Document No. 10). This motion has been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(b) and is now ripe for disposition. Having carefully considered the arguments, the record, and the applicable authority, the undersigned will respectfully recommend that the motion be granted in part and denied in part, as discussed below.

I. BACKGROUND

Plaintiff Selex ES Inc. (“Plaintiff” or “Selex”) initiated this action with the filing of a “Complaint” on November 17, 2020 against Defendant NDI Technologies, Inc. (“Defendant” or “NDI”). (Document No. 1). On March 16, 2021, Defendant filed a “…Motion To Dismiss For Improper Venue, Or Alternatively, To Transfer Pursuant To 28 U.S.C. § 1406(a).” (Document No. 7). Plaintiff filed its “First Amended Complaint” on March 30, 2021. (Document No. 9). On

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account of the filing of the Amended Complaint, the undersigned denied Defendant's Motion to Dismiss (Document No. 7) as moot on October 12, 2021. (Document No. 14).

Plaintiff's claims arise out of its allegations that NDI is infringing its rights in U.S. Patent No. 7, 504, 965 (“the '965 Patent”) through NDI's sale of two automated license plate reader (“ALPR”) products - the “Road Warrior^TM Radar” and the “Road Warrior^TM VMS” systems. (Document No. 9, p. 2). Plaintiff contends that one of its own products is a “license plate reader [] and system[], ” called the ELSAG Plate Hunter ALPR System. Id. Plaintiff suggests that it “is a leader in air traffic management, critical communications technologies, and law enforcement systems for military and civil markets.” Id. Plaintiff further contends that it “is the owner of all right, title, and interest in and to U.S. Patent No. 7, 504, 965 (‘the '965 Patent') entitled ‘Portable Covert License Plate Reader.'” Id. Plaintiff alleges that through Defendant's “manufacturing, using, offering for sale and selling” of the aforementioned “portable covert license plate reader products and systems, ” Defendant is infringing Plaintiff's rights in the '965 Patent. Id.

The Amended Complaint alleges three claims against Defendant: (1) infringement of the '965 Patent in violation of 35 U.S.C. § 271; (2) induced infringement of the '965 Patent; and (3) contributory infringement of the '965 Patent. Id. at pp. 3-6. The Amended Complaint also seeks enhanced damages for willful infringement pursuant to 35 U.S.C. § 284.

On April 13, 2021, Defendant filed its “…Motion To Dismiss The First Amended Complaint For Improper Venue, Or Alternatively, To Transfer Under 28 U.S.C. § 1406(a), And Motion To Dismiss The Claims Of Infringement For Failure To Plead A Claim Upon Which Relief May Be Granted” (Document No. 10) and “…Memorandum Of Law In Support Of Its Motion To Dismiss…” (Document No. 11). On April 27, 2021, Plaintiff filed its “…Response In Opposition To Defendant NDI Technologies, Inc.'s Motion To Dismiss The First Amended Complaint For

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Improper Venue, Or Alternatively, To Transfer Under 28 U.S.C. § 1406(a), And Motion To Dismiss The Claims Of Infringement For Failure To Plead A Claim Upon Which Relief May Be Granted” (Document No. 12). Finally, on May 3, 2021, Defendant filed its “…Reply Brief In Support Of Its Motion To Dismiss The First Amended Complaint For Improper Venue, Or Alternatively, To Transfer Under 28 U.S.C. § 1406(a), And Motion To Dismiss The Claims Of Infringement For Failure To Plead A Claim Upon Which Relief May Be Granted” (Document No. 13). The pending motion is now ripe for review and a recommendation to the presiding district judge.

II. STANDARD OF REVIEW

Motion To Dismiss Pursuant To Fed.R.Civ.P. 12(b)(3)

When an objection to venue has been raised under Rule 12(b)(3), the burden lies with the plaintiff to establish that venue is proper in the judicial district in which the plaintiff has brought the action. Static Control Components, Inc. v. Intersolution Ventures, Ltd., 2006 WL 2042900, at *10 (M.D. N.C. July 17, 2006) (citing Plant Genetic Systems, N.V. v. Ciba Seeds, 933 F.Supp. 519, 526 (M.D. N.C. 1996)). “To survive a motion to dismiss for improper venue when no evidentiary hearing is held, the plaintiff need only make a prima facie showing of venue.” Eyetalk365, LLC v. Zmodo Tech. Corp. Ltd., 2017 WL 4684189, at *1 (W.D. N.C. Oct. 18, 2017) (quoting Mitrano v. Hawes, 377 F.3d 402, 405 (4th Cir. 2004)). And, “[i]n assessing whether there has been a prima facie venue showing, [the court] view[s] the facts in the light most favorable to the plaintiff.” Eyetalk365, LLC, 2017 WL 4684189, at *1 (quoting Aggarao v. MOL Ship Mgmt. Co., Ltd., 675 F.3d 355, 366 (4th Cir. 2012)). Ordinarily, venue in civil cases is proper in:

(1) a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located

(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of

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property that is the subject of the action is situated; or (3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action.

28 U.S.C. § 1391(b). However, in patent infringement cases, a special venue statute applies. Pursuant to that statute, venue in patent infringement cases is proper “in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” 28 U.S.C. § 1400(b).

Moreover, when venue is improper in the district in which a case has been filed, the district court “shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.” 28 U.S.C. § 1406(a). “The decision to transfer or dismiss is a matter within the sound discretion of the district court.” Simpson Performance Prods., Inc. v. NecksGen, Inc., 2017 WL 3616764, at *8 (W.D. N.C. Aug. 23, 2017) (internal quotations and citations omitted).

Motion To Dismiss Pursuant To Fed.R.Civ.P. 12(b)(6)

A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) tests the “legal sufficiency of the complaint” but “does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992); Eastern Shore Markets, Inc. v. J.D. Assoc. Ltd. Partnership, 213 F.3d 175, 180 (4th Cir. 2000). A complaint attacked by a Rule 12(b)(6) motion to dismiss will survive if it contains “enough facts to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also, Robinson v. American Honda Motor Co., Inc., 551 F.3d 218, 222 (4th Cir. 2009). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678.

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“Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id.

The Supreme Court has also opined that

Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Specific facts are not necessary; the statement need only “‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'” In addition, when ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.

Erickson v. Pardus, 551 U.S. 89, 93-94 (2007) (quoting Twombly, 550 U.S. at 555-56).

“Although for the purposes of this motion to dismiss we must take all the factual allegations in the complaint as true, we are not bound to accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986). The court “should view the complaint in the light most favorable to the plaintiff.” Mylan Labs, Inc. v. Matkar, 7 F.3d 1130, 1134 (4th Cir...