dlhBOWLES, Inc. v. Jiangsu Riying Elecs. Co.

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dlhBOWLES, Inc. Plaintiff, v. JIANGSU RIYING ELECTRONICS, CO., LTD., Defendant.

No. 5:21-cv-170

United States District Court, N.D. Ohio, Eastern Division

March 7, 2023

MEMORANDUM OPINION AND ORDER

DAVID A. RUIZ, UNITED STATES DISTRICT JUDGE.

I. Background

Plaintiff dlhBOWLES, Inc. (Plaintiff) filed a Motion to amend the complaint against Defendant Jiangsu Riying Electronics, Co Ltd. (Defendant or Riying) on August 20, 2021, (R. 27) attaching its Proposed First Amended Complaint that sought to add a claim alleging infringement of U.S. Patent No. 7,014,131 (the '131 patent). (R. 27-1). On January 3, 2022, the Court permitted Plaintiff to amend the complaint. (R. 55). It specifically noted that it “will treat Doc. No. 27-1 as dlhBOWLES's first amended complaint.” (R. 55, PagelD# 1319). On January 5, 2022, Plaintiff separately filed its Proposed First Amended Complaint.^[1] (R. 58). Six days later, Plaintiff filed a “Notice of Correction to Amended Complaint,” explaining that it “filed its Amended Complaint (R. 58) to correct a typographical error from ‘General Motors, Inc.' to ‘General Motors Company' and clarify that ‘General Motors Company' included ... ‘its subsidiaries, affiliates, partners, joint ventures, owners, including SAIC General Motors Corporation Limited.'” (R. 59, citing R. 58 at ¶¶31 & 42).^[2]

Defendant filed an Answer to the Amended Complaint on January 14, 2022. (R. 60). Defendant also filed a Rule 12(c) motion for judgment on the pleadings of Plaintiff's Amended Complaint and count one of its Counterclaim. (R. 61). Plaintiff opposed the motion for judgment (R. 83) and Defendant filed a reply in support of its motion. (R. 94). This matter is ripe for the Court's consideration.

II. Summary of Factual Allegations in the Amended Complaint

Plaintiff is a Canton, Ohio company that designs, develops, manufactures, and sells automotive washer nozzles, spray nozzles, and fluidic nozzles. (R. 58, PageID# 1331-1332, ¶¶1, 3). Plaintiff has developed and owns a number of patents, including U.S. Patent No. 8,662,421 (the '421 patent), attached to the Amended Complaint as Exhibit A (R. 58-1), and U.S. Patent No. 7,014.131 (the '131 patent), attached as Exhibit C. (R. 58-3).^[3] It is alleged Defendant manufactures “direct knock-offs” of these devices in China and then imports and sells the infringing nozzle devices in the United States. (R. 58, PageID# 1332-1335, ¶¶4, 19-21). Plaintiff specially asserts that Defendant has sold the allegedly infringing products to “General Motors Company and/or its subsidiaries, affiliates, partners, joint-ventures, owners, including SAIC General Motors Corporation Limited with specific intent” to infringe upon the '421 and '131 patents by reselling the infringing products. (R. 58, PageID# 1337-1338, ¶¶31, 42).

III. Applicable Standard

A. Fed.R.Civ.P. 12(c)

In the Sixth Circuit, a judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure is reviewed under the “ same standard as applies to a review of a motion to dismiss under Rule 12(b)(6).” Jackson v. Prof'lRadiology Inc., 864 F.3d 463, 465-66 (6^th Cir. 2017); accordK&L Trailer Leasing, Inc. v. Fellhoelter, 630 B.R. 81, 83 (Bankr.E.D.Tenn. 2021) (“Courts apply the same standard for Fed.R.Civ.P. 12(c) motions as for Rule 12(b)(6) motions”). As explained by the Court of Appeals:

A motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) generally follows the same rules as a motion to dismiss the complaint under Rule 12(b)(6). See D'Ambrosio v. Marino, 747 F.3d 378, 383 (6^th Cir. 2014). A court evaluating that type of motion thus must follow the Supreme Court's changes to the pleading standards in Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). See Engler v. Arnold, 862 F.3d 571, 575 (6th Cir. 2017). Courts must accept as true all well-pleaded factual allegations, but they need not accept legal conclusions. Iqbal, 556 U.S. at 678. And the well-pleaded factual allegations must “plausibly give rise to an entitlement to relief.” Id. at 679. Pleaded facts will do so if they “allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678. Pleaded facts will not do so if they “are ‘merely consistent with' a defendant's liability.” Id. (quoting Twombly, 550 U.S. at 557).

Bates v. Green Farms Condo. Ass'n, 958 F.3d 470, 480 (6^th Cir. 2020). Federal courts must “construe the complaint in the light most favorable to the plaintiff, accept all well-pleaded factual allegations as true, and draw all reasonable inferences in [the plaintiffs] favor.” Watkins v. Healy, 986 F.3d 648, 660 (6^th Cir. 2021) (citations omitted).

B. Infringement Context

“Patentees need not prove their case at the pleading stage.” BotM8 LLC v. Sony Corporation of America, 4 F.4th 1342, 1346 (Fed. Cir. 2021). Explaining further, the Federal Circuit Court of Appeals stated:

A plaintiff is not required to plead infringement on an element-by-element basis. [Nalco Co. v. Chem-Mod, LLC, 883 F.3d 1337, 1350 (Fed. Cir. 2018)]. (“[T]he Federal Rules of Civil Procedure do not require a plaintiff to plead facts establishing that each element of an asserted claim is met.”); see Disc Disease Sols. Inc. v. VGHSols., Inc., 888 F.3d 1256, 1260 (Fed. Cir. 2018) (finding that a plaintiff need not plead every element, but must only give the alleged infringer fair notice of infringement). Instead, it is enough “that a complaint place the alleged infringer ‘on notice of what activity ... is being accused of infringement.'” Lifetime Indus., Inc. v. Trim-Lok, Inc., 869 F.3d 1372, 1379 (Fed. Cir. 2017) (quoting K-Tech Telecomms., Inc. v. Time Warner Cable, Inc., 714 F.3d 1277, 1284 (Fed. Cir. 2013)). To the extent this district court and others have adopted a blanket element-by-element pleading standard for patent infringement, that approach is unsupported and goes beyond the standard the Supreme Court articulated in Iqbal and Twombly. See Twombly, 550 U.S. at 556, 127 S.Ct. 1955 (“[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.”) (internal quotation marks and citation omitted).

Bot M8 LLC, 4 F.4th at 1352 (expressly rejecting the district court's assertion that counsel must “explain in [the] complaint every element of every claim that you say is infringed and/or explain why it can't be done.”). “It is not enough [for the Defendant] to show that an ordinary observer would likely find the accused parts materially dissimilar from the patented designs. Rather, at the pleading stage, it is Defendants' burden to show that the converse is not even plausible.” Gold Crest, LLC v. Project Light, LLC, 525 F.Supp.3d 826, 839 (N.D. Ohio 2021) (observing that while the plaintiff “must ultimately prove its case separately against each of the Corporate Defendants, collecting the three under a defined term then claiming all three are liable for the same misconduct is, at the pleading stage, sufficient to give each of them notice of the claims alleged against them.”)

III. Analysis

The Amended Complaint (R. 58) raises two counts: (1) a claim of infringement on its '421 patent; and (2) a claim of infringement on its '131 patent. (R. 58). Both counts allege that Defendant directly infringed, induced infringement, and contributed to infringement of the respective patents. Id. Defendant offers essentially five arguments in favor of its motion for judgment.

A. Plaintiff's Response to the Counterclaim

Defendant points out that it served its counterclaim on March 31, 2021, wherein it sought declaratory judgment action on the “invalidity and noninfringement” of the '421 Patent. (R. 10, PageID# 65). Plaintiff moved to dismiss Defendant's counterclaim (R. 15), which the Court granted in part and denied in part. (R. 55). Less than a month after the Court's order, Plaintiff filed its answer to the counterclaim. (R. 67).

Defendant argues that because the Court's Initial Standing Order required a party to file an answer even if a party moves for a Rule 12 dismissal, “the factual allegations supporting [Defendant] Riying's invalidity counterclaim are admitted, by operation of law.” (R. 61, PageID# 1569, citing Fed. Civ. Rule 8(b)(6) (allegation “is admitted if a responsive pleading is required and the allegation is not denied”). Defendant asserts Plaintiff's deadline for answering the counterclaim expired on April 28, 2021, before it filed the answer. Id.

The argument is unpersuasive, as explained when the Court denied a related defense motion. Previously, Defendant had filed a “Motion to strike Plaintiff's Tardy, Out-of-Rule Answer to Counterclaim” (“Motion to strike”). (R. 68). In an earlier Order, this Court denied the motion to strike the answer to the counterclaim and rejected the above argument as follows:

Defendant's Motion to strike attempts to circumvent litigation in this case, and is

tantamount to a motion for default judgment by having Plaintiff's Answer to the Counterclaim stricken and the allegations in the Counterclaim deemed admitted. The Counterclaim seeks to have the patent under which Plaintiff initiated the lawsuit declared invalid. Defendant moves for such outcome, despite Plaintiff's active litigation of this case.^[fn2]

[Footnote 2] Defendant denies it is seeking default judgment (R. 87, PageID# 2288), but it is in effect doing so. Defendant's pretext for resolving this case other than on the merits is Plaintiff's purported failure to comply with the Initial Order issued by the District Judge previously assigned to this matter, which states: “The

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