Ideal Instruments v. Rivard Instruments

434 F.Supp.2d 598

IDEAL INSTRUMENTS, INC., a Michigan corporation, Plaintiff, v. RIVARD INSTRUMENTS, INC., a foreign corporation, and Meril Rivard, a foreign national, Defendants.

No. C 05-3079 MWB.

United States District Court, N.D. Iowa, Central Division.

May 8, 2006.

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Debra Lynne Hulett, Nyemaster Goode West Hansell & O'Brien, PC, Jay Eaton,

Nyemaster Goode Voigts West Hansell & O'Brien, PC, Des Moines, IA, Katherine A. Weed, Mark R. Fox, Toni L. Harris, Fraser Trebilcock Davis & Dunlap, P.C., Lansing, MI, for Plaintiff.

Angela Ellen Dralle, Dennis Wayne Johnson, Dorsey & Whitney, Des Moines, IA, James W. Hellwege, Quentin R. Corrie, Raymond C. Stewart, Birch, Stewart,

Kolasch & Birch LLP, Falls Church, VA, for Defendants.

MEMORANDUM OPINION AND ODER REGARDING DEFENDANTS' MOTION TO DISMISS AND PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

BENNETT, Chief Judge.

TABLE OF CONTENTS

I. INTRODUCTION ......................................................................604
   A. Background And Allegations Of The Complaint ....................................604
   B. Procedural Background ..........................................................605
II. THE DEFENDANTS' MOTION TO DISMISS ...........................................607
    A. Personal Jurisdiction .........................................................607
       1. Arguments of the parties ...................................................607
       2. Applicable standards .......................................................609
       3. Application of the standards ...............................................612
          a. The "purposefully directed" factor ......................................612
          b. The "claim arising from contacts" factor ................................615
          c. The "reasonable and fair" factor ........................................615
       4. Summary ....................................................................616
    B. Failure To State Claims Upon Which Relief Can Be Granted ......................616
       1. Arguments of the parties ...................................................616
       2. Applicable standards .......................................................617
       3. Application of the standards ...............................................619
          a. The infringement claim ..................................................619
          b. The defamation and disparagement claims .................................622
             i. The "corporate defamation" claim .....................................623
             ii. The "product disparagement/trade libel" claim .......................625
          c. The tortious interference claims ........................................626
    C. Jurisdiction Over The Foreign Patent Claim ....................................627
       1. Arguments of the parties ...................................................628
       2. Analysis ...................................................................629
          a. Application of existing precedent .......................................629
          b. Ideal's "wait and see" argument .........................................631
    D. Forum Non Conveniens ..........................................................633
       1. Arguments of the parties ...................................................633
       2. Applicable standards .......................................................634
       3. Weighing of the factors ....................................................635
          a. "Private interest" factors ..............................................635
          b. "Public interest" factors ...............................................636
III. THE PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT .....................................637
     A. Arguments Of The Parties .....................................................637
     B. Analysis .....................................................................637
        1. The language of Rule 12(a) ................................................637
        2. The interpretation on which Ideal relies ..................................638
        3. The interpretation by the majority of courts ..............................638
        4. This court's interpretation ...............................................639
IV. CONCLUSION .......................................................................640

The defendants in this action assert fairly comprehensive challenges to the plaintiffs claims of infringement by the defendants of the plaintiffs United States patent, non-infringement by the plaintiff of the defendants' Canadian patent, and various commercial torts. One theme running through the parties' arguments on the defendants' motion to dismiss is whether the claims presented-with the exception of the claim that the corporate defendant is infringing the plaintiffs United States patent-should be litigated in this forum or in a pre-existing lawsuit brought by the corporate defendant in the Federal Court of Canada.

I. INTRODUCTION

A. Background And Allegations Of The Complaint

Plaintiff Ideal Instruments, Inc., is a Michigan corporation with its principal place of business in Lansing, Michigan. In its Complaint, Ideal alleges that defendant Rivard Instruments, Inc., is a closely held for profit Canadian corporation and that defendant Meril Rivard, who is a citizen of Canada and resident of Winnipeg, Manitoba, is the president and majority, if not sole, shareholder of Rivard Instruments. Both Ideal and Rivard Instruments manufacture "detectable" hypodermic needles for use, for example, in hypodermic syringes for livestock. The needles are "detectable" in the sense that they are made to be easily detected in the carcasses of slaughtered animals, if they break off or are otherwise inadvertently left behind. Neither Ideal nor Rivard Instruments has any manufacturing or distribution facilities or corporate offices in Iowa. Ideal nevertheless argues that Iowa is a center of the dispute between the parties, because it is a center of the livestock industry in which both parties' products are used.

More specifically, Ideal is the assignee of United States Patent No. 6,488,668 (the '668 patent) for a "detectable heavy duty needle." The '668 patent issued on December 3, 2002, and was upheld on ex parte reexamination on December 23, 2004. However, the focus of this litigation is another, subsequent patent for a "detectable heavy duty needle," for which Ideal is also the assignee, United States Patent No. 6,960,196 (the '196 patent), which issued on November 1, 2005. The Abstract for the '196 patent describes the patented invention as follows:

The present invention provides a detectable heavy duty needle cannula for use in hypodermic syringes and the like. Needle cannula comprises a magnetizable or magnetized stainless steel alloy, which enables needle cannula to be detectable in metal detectors that are commonly used in the meat processing industry to detect broken needle cannulas in the flesh of slaughtered animals.

Complaint, Exhibit A (the '196 patent) (component numbers deleted). Ideal manufactures, sells, and distributes a product exploiting the inventions disclosed in the '668 and the '196 patents under the commercial name "D3 Detectable Needles."

Similarly, Rivard Instruments owns Canadian Patent No. 2,298,277 (the '277 patent), which submissions by the defendants reveal is a patent for "detectable stainless steel needles for meat packing," issued March 16, 2004. See Defendants' Motion to dismiss (docket no. 13), Exhibit 1, attachment to Affidavit Exhibit 1A (the '277 patent). The Abstract for the '277 patent describes the patented invention as follows:

Magnetic stainless steel needles are detectable in processed meat. The previous non magnetic versions, made of 304 stainless steel, are not. Disposable hypodermic needles made from martensitic and ferritic stainless steel are easily detectable at the smallest size. A method of detection is also disclosed.

The '277 patent. Rivard Instruments also makes products exploiting the '277 patent.

Ideal contends that Rivard Instruments has made, used, offered for sale, sold, and/or caused to be sold, and has shipped, and/or caused to be shipped, in or into this federal judicial district, and elsewhere in the United States, detectable, magnetic, stainless steel veterinary hypodermic needles that read on and infringe Ideal's '196 patent and the invention claimed therein. Ideal also contends that Meril Rivard has directed and/or caused the infringing detectable, magnetic, stainless steel veterinary hypodermic needles to be made, used, offered for sale, sold, and/or shipped into this federal judicial district and elsewhere in the United States. Ideal contends, further, that Meril Rivard and Rivard Instruments have themselves or through their agents published to third parties, including existing and prospective customers, distributors, and/or manufacturers, accusations that Ideal has infringed Rivard Instruments's '277 patent and that Ideal's D3 Detectable Needles are of inferior quality. Finally, Ideal alleges that, in December 2005, Meril Rivard made an unannounced and unwelcome visit to the facility where Ideal's D3 Detectable Needles are made¹ and, while there, attempted to obtain confidential and proprietary information, attempted to interfere with the business relationship between Ideal and its manufacturer, made false and disparaging statements of and concerning Ideal, and attempted to intimidate Ideal's manufacturer by threatening to return with lawyers.

B. Procedural Background

In its Complaint in this action, filed December 30, 2005, Ideal asserts several patent and commercial tort claims. More specifically, in Count 1, Ideal asserts a claim of "patent infringement,"...