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Ellison Educational Equipment v. Heartfelt Creations, Inc.

United States District Court, N.D. Indiana, South Bend Division

September 20, 2019

ELLISON EDUCATIONAL EQUIPMENT, Plaintiff,
v.
HEARTFELT CREATIONS, INC. and DOES 1-10, Defendants.

          OPINION AND ORDER

          PHILIP P. SIMON, UNITED STATES DISTRICT JUDGE.

         Plaintiff Ellison Educational Equipment has brought this action alleging that defendant Heartfelt Creations, Inc., and unidentified defendants Does 1 through 10, are guilty of patent infringement. Ellison holds U.S. Patent No. 9, 079, 325, entitled “Chemical-Etched Die Having Improved Registration Means.” [DE 1 at ¶24; DE 1-1.] The patented method involves the use of a die in a machine with a roller press to cut shapes from a sheet of material that is fed through the machine. Ellison’s complaint explains that chemical-etching is a process that can be used to create a die with an intricate design. [DE 1 at ¶22.] Machines for die-cutting can be used to cut shapes out of materials including paper, fabric and leather, for applications in scrapbooking and other crafts as well as for use in schools for decorations, teaching materials, and other projects. The complaint alleges that “Ellison recently discovered that Heartfelt is making or having their patterns made into chemically-etched dies that are used to perform the method taught by the ‘325 Patent.” [DE 1 at ¶26.]

         Count I of Ellison’s complaint is a claim of direct infringement of the ‘325 Patent by “importing, making, using, selling, and/or offering to sell, patterns made into chemically-etched dies that are used to perform the method taught by the ‘325 Patent.” [DE 1 at ¶38.] Count II makes a claim of inducing infringement, alleging that “Defendants indirectly infringe on the ‘325 Patent by instructing, directing and/or requiring others, including but not limited to, customers, purchasers, users and developers, to perform the steps of claim 1, either literally or under the doctrine of equivalents, of the ‘325 Patent[.]” [DE 1 at ¶47.] Finally Count III is a claim of contributory infringement of the patent by “selling or offering to sell material or apparatus for use in practicing the ‘325 Patent that is a material part of the invention.” [DE 1 at ¶53.]

         Now before me is Heartfelt’s motion to dismiss the complaint under Fed.R.Civ.P. 12(b)(6), arguing that Ellison has failed to allege adequate facts to plausibly state its claims. [DE 17.] Federal pleading standards require a complaint to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A plaintiff meets this requirement if it ‘pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.’” Lifetime Industries, Inc. v. Trim-Lok, Inc., 869 F.3d 1372, 1376 (Fed. Cir. 2017) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). In considering a motion to dismiss under Rule 12(b)(6), I “assume all well-pleaded allegations are true and draw all reasonable inferences in the light most favorable to the plaintiff.” Manistee Apartments, LLC v. City of Chicago, 844 F.3d 630, 633 (7th Cir. 2016). Fed.R.Civ.P. 8(a)(2) “generally requires only a plausible ‘short and plain’ statement of the plaintiff’s claim, not an exposition of his legal argument.” Skinner v. Switzer, 562 U.S. 521, 530 (2011). See also Nalco Company v. Chem-Mod, LLC, 883 F.3d 1337, 1346 (Fed.Cir. 2018).

         Direct Infringement Claim – Count I

         The first of Heartfelt’s arguments is that, in support of its claim of direct infringement, Ellison has not specifically identified an infringing product or alleged that Heartfelt practices the method claimed in the patent. [DE 18 at 7.] Heartfelt asserts that without such specificity, Ellison has not satisfied the pleading requirement of putting the defendant on notice as to what products or practices are allegedly infringing.

         Under the now-abrogated Form 18 in the Appendix to the Federal Rules of Civil Procedure, the required elements of a claim of direct patent infringement were minimal:

(1) an allegation of jurisdiction, (2) a statement that the plaintiff owns the patent, (3) a statement that the defendant has been infringing the patent “by making, selling, and using [the device] embodying the patent”; (4) a statement that the plaintiff has given the defendant notice of its infringement; and (5) a demand for an injunction and damages.

In re Bill of Lading, 681 F.3d at 1334. The Federal Circuit has never recognized a distinction between the requirements of Form 18 and Iqbal/Twombly. Disc Disease Solutions Inc. v. VGH Solutions, Inc., 888 F.3d 1256, 1259 n.3. (Fed.Cir. 2018). The third element of this formulation requires some identification of the allegedly infringing device. A plaintiff is not required to “prove its case at the pleading stage.” In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1339 (Fed. Cir. 2012), citing Skinner v. Switzer, 562 U.S. 521, 529 (2011). But the precedent of the Federal Circuit “requires that a complaint place the alleged infringer ‘on notice of what activity...is being accused of infringement.’” Lifetime Ind., 869 F.3d at 1379 (quoting K-Tech Telecomms., Inc. v. Time Warner Cable, Inc., 714 F.3d 1277, 1284 (Fed.Cir. 2013)). “To survive a motion to dismiss under RCFC 12(b)(6), ‘[t]here must be some allegation of specific services or products of the defendants which are being accused.’” Golden v. United States, 137 Fed.Cl. 155, 187 (Ct. Cl. 2018) (quoting Addiction and Detoxification Inst. L.L.C. v. Carpenter, 620 F.App'x 934, 937 (Fed. Cir. 2015)).

         Ellison’s response identifies the portions of its complaint that meet these pleading standards. Count I alleges that Heartfelt has infringed “at least claim one (1) of the ‘325 patent....by using the methods covered by the ‘325 Patent.” [DE 1 at ¶36.] The complaint identifies Heartfelt products allegedly used to infringe the patented method in ¶¶27 and 28 by providing the addresses for webpages displaying the “Tropical Hibiscus” die and the “Under the Sea” die sold by Heartfelt, and the address of Heartfelt’s webpage listing “over seventy (70) ‘Dies that Match Stamps’.” Later in ¶30, the complaint provides “[a]dditional examples” of dies allegedly used to infringe Ellison’s patent by including photographs of the packages of Heartfelt’s “Backyard Blossoms” and “Fluttering Butterfly” dies. Finally, to plead a specific occurrence of Heartfelt’s infringing practice of the patented method, the complaint identifies a particular video on Heartfelt’s YouTube channel depicting Heartfelt’s Creative Director “demonstrating products that are used to perform the methods taught by the ‘325 Patent” and “teach[ing] members of the public how to infringe at least one claim of the ‘325 Patent.” [DE 1 at ¶29.][1]

         This pleading is more than adequate to meet the standards applicable to a claim of direct infringement. Ellison’s opposition to the motion points to these paragraphs of the complaint, and embellishes them with additional webpage screenshot images and other illustrations. But in my view the pleading speaks for itself and the additional images are unnecessary. I reject Heartfelt’s characterization of Ellison’s argument as an attempt to “shoe-horn[] in addition facts” or somehow improperly “pose[] a hypothetical regarding the use of a roller press in the YouTube video.” [DE 24 at 6, 7.] I also find Heartfelt’s forays into what reads like claim construction arguments to be both misplaced and unavailing.[2] Arguments that “boil down to objections to [a plaintiff’s] proposed claim construction “ are “dispute[s] not suitable for resolution on a motion to dismiss.” Nalco Company, 883 F.3d at 1349.

         A second argument against the direct infringement count is that Ellison fails to plead that Heartfelt practices the method claimed in the ‘325 Patent. [DE 18 at 10.] This is a stingy and unrealistic reading of the complaint, and one at odds with the requirement that its allegations be read in the light most favorable to the plaintiff. The allegation in ¶26 that “Ellison recently discovered that Heartfelt is making or having their patterns made into chemically-etched dies that are used to perform the method taught by the ‘325 Patent” encompasses the notion that Heartfelt is using the dies to perform the patented method. [DE 1 at 5.] Then there’s the video addressed above, showing Heartfelt’s Creative Director demonstrating the use of Heartfelt’s dies and die-cutting machine to perform a method that allegedly violates the ‘325 Patent. [DE 1 at ¶29.] Finally, both sentences of ¶33 of the complaint allege infringement by Heartfelt’s use of the patented method, among other possible manners of infringement. Count I for direct infringement is not shown to be subject to dismissal for failure to state a claim.

         Induced Infringement Claim – Count II

         Next, Heartfelt argues that Ellison has not adequately pled the scienter required for an induced infringement claim. [DE 18 at 13.] Federal statute provides that “Whoever actively induces infringement of a patent shall be liable as an infringer.” 35 U.S.C. §271(b). “For an allegation of induced infringement to survive a motion to dismiss, a complaint must plead facts plausibly showing that the accused infringer ‘specifically intended [another party] to infringe [the patent] and knew that the [other party]’s acts constituted infringement.” Lifetime Ind., 869 F.3d at 1379 (quoting Bill of Lading, 681 F.3d at 1339) (emphasis added). But the intent requirement of induced infringement is adequately pleaded where a complaint ÔÇťalleged ...


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