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Filter Plus, Inc. v. The O R Co.

United States District Court, E.D. Michigan, Southern Division

February 27, 2017

FILTER PLUS, INC., Plaintiff,
v.
THE O R COMPANY & SURGICAL PRINCIPALS INC., Defendants.

          OPINION AND ORDER DENYING MOTION TO DISMISS

          ROBERT H. CLELAND UNITED STATES DISTRICT JUDGE

         This is a patent infringement case. Plaintiff Filter Plus, Inc. alleges that Defendants The O R Company and Surgical Principles, Inc. manufacture and distribute a knock-off of one of Plaintiff's products, protected by U.S. Patent No. 7, 537, 563 (“the ‘563 Patent”). After Defendants filed a motion to dismiss, (Dkt. # 11), Plaintiff submitted an amended complaint, (Dkt. # 14). Defendants withdrew their first motion and filed the motion to dismiss presently before the court, arguing that Plaintiff's amended complaint fails to state a claim upon which relief can be granted and that this court lacks personal jurisdiction over either Defendant. (Dkt. # 19.) The motion is fully briefed and a hearing is unnecessary. See E.D. Mich. LR 7.1(f)(2). For the reasons that follow, the court will deny Defendants' motion.

         I. BACKGROUND

         For the purposes of this motion, the court accepts Plaintiff's well-pleaded factual allegations as true. Plaintiff is a Michigan corporation that designs, manufactures, imports, and markets a variety of surgical tools and supplies. Defendant The O R Company is an Australian corporation that also develops and supplies medical devices, and uses Defendant Surgical Principles, a Washington state corporation based in Tacoma, Washington, as its United States distributer. (Dkt. # 14, Pg. ID 66-67.)

         Plaintiff owns the ‘563 Patent, entitled “Heater for Surgical Viewing Instruments.” (Dkt. # 14-2.) Plaintiff markets and sells a product covered by the ‘563 Patent that warms surgical scopes to body temperature before use to prevent the scopes' lenses from clouding. Defendant Surgical Principles purchased these scope warmers from Plaintiff from 2002 to 2015. As part of these sales, Plaintiffs regularly communicated with Timothy Wynne, who holds an ownership interest in both Defendants and exerts control over at least Surgical Principles. (Dkt. # 14, Pg. ID 67.)

         In 2016, Defendants contacted Ten-Comfort, the Taiwan-based manufacturer of Plaintiff's scope warmer, to source a “knock-off.” Defendants stopped purchasing Plaintiff's product and began marketing their own scope warmer, the “Liquid Scope WarmOR.” Plaintiff then initiated this litigation, claiming that Defendants infringed the ‘563 Patent by importing and selling the accused product. (Dkt. # 14, Pg. ID 71.)

         II. STANDARD

         A. Failure to state a claim

         A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Under Federal Rule of Civil Procedure 12(b)(6), a party may move for dismissal for the “failure to state a claim upon which relief can be granted.” In patent cases, the standards applicable to Rule 12(b)(6) motions are those articulated by the regional court of appeals rather than by the Federal Circuit. See R Carriers, Inc. v. DriverTech LLC (In re Bill of Lading Transmission & Processing Sys. Patent Litig.), 681 F.3d 1323, 1331 (Fed. Cir. 2013)).

         To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the complaint's “[f]actual allegations must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). Bare allegations are not enough. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not show[n] - that the pleader is entitled to relief.” Id. at 679 (internal quotation marks omitted). The court “primarily considers the allegations in the complaint, although matters of public record, orders, items appearing in the record of the case, and exhibits attached to the complaint, also may be taken into account.” Amini v. Oberlin Coll., 259 F.3d 493, 502 (6th Cir. 2001) (quoting Nieman v. NLO, Inc., 108 F.3d 1546, 1554 (6th Cir.1997)).

         B. Personal jurisdiction

          If a district court lacks jurisdiction over the defendants, dismissal is appropriate under Federal Rule of Civil Procedure 12(b)(2). To determine whether personal jurisdiction exists in a patent infringement action, the court applies the law of the Federal Circuit. See Elecs. For Imaging, Inc. v. Coyle, 340 F.3d 1344, 1348 (Fed. Cir. 2003). For the court to exercise personal jurisdiction over a non-consenting defendant outside the boundaries of the forum state, two requirements must be satisfied. See Red Wing Shoe Co., Inc. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1358 (Fed. Cir. 1998). First, the defendant must be subject to personal jurisdiction under the laws of the forum state, in this case the state of Michigan. Id. Second, the exercise of personal jurisdiction over the defendant must comport with the due process clause. Id. In addition, the plaintiff must follow the general guidelines for pleadings standards-the plaintiff must allege specific facts to show the standard has been met for personal jurisdiction. Palnik v. Westlake Entm't, Inc., 344 Fed.Appx. 249, 251 (6th Cir. 2009) (stating that complaints must follow federal pleading standards for personal jurisdiction issues as well).

         III. DISCUSSION

         Defendants provide two grounds for their motion to dismiss. First, that Plaintiff's complaint fails to state a claim upon which relief can be granted because it does not allege facts showing that the accused product meets each limitation of the claim. Second, that the complaint does not allege sufficient facts to show that the court has personal jurisdiction over Defendants. The court will address each in turn.

         A. Failure to state a claim

         Prior to December 1, 2015, plaintiffs alleging patent infringement only needed to meet the lower pleading standard set by Federal Rule of Civil Procedure 84 and Form 18. However, Rule 84 has since been abrogated, and the parties agree that the standard elucidated under Twombley ...


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