Power Probe Grp., Inc. v. Innova Elecs. Corp.

670 F.Supp.3d 1143

POWER PROBE GROUP, INC., Plaintiff/Counter-Defendant, v. INNOVA ELECTRONICS CORPORATION, Defendant/Counterclaimant.

Case No.: 2:21-cv-00332-GMN-EJY

United States District Court, D. Nevada

Signed April 27, 2023

James D. Boyle, James Daniel Boyle, Holley Driggs, Ltd., Las Vegas, NV, Joanna Myers, Howard & Howard PLLC, Las Vegas, NV, Lucas D. Garber, Pro Hac Vice, Patrick Blane Horne, Pro Hac Vice, Samuel Alex Long, Pro Hac Vice, Tom BenGera, Pro Hac Vice, Shumaker, Loop & Kendrick, LLP, Charlotte, NC, for Plaintiff/Counter-Defendant.

Craig R. Anderson, Marquis & Aurbach, Las Vegas, NV, Jared M. Moser, Marquis Aurbach Chtd., Las Vegas, NV, Richard P. Beem, Pro Hac Vice, Lathrop GPM LLP, Chicago, IL, Alex Shtraym, Pro Hac Vice, Beem Patent Law Firm, Chicago, IL, Kenneth Robert Adamo, Pro Hac Vice, Law Office of KRAdamo, Chicago, IL, for Defendant/Counterclaimant.

ORDER

Gloria M. Navarro, District Judge

Pending before the Court is the Motion to Dismiss, (ECF No. 147), filed by Defendant Innova Electronics Corporation ("Defendant"). Plaintiff Power Probe Group, Inc. ("Plaintiff") filed a Response, (ECF No. 160), to which Defendant filed a Reply, (ECF No. 167). For the reasons discussed below, the Court DENIES the Motion to Dismiss.

I. BACKGROUND

Plaintiff is the owner of United States Patent No. 7,184,899 (the "'899 Patent"). According to Plaintiff's First Amended Complaint filed on December 8, 2021, the '899 Patent "generally relates to an electrical test device adapted to apply power to and perform a plurality of measurements upon an electrical system." (First Am. Compl. 4:14-15, ECF No. 139). Plaintiff alleges that Defendant "has previously and is presently making, using, selling, offering for sale, and/or importing into the United States . . . products that infringe the '899 Patent." (Id. 7:17-20). Specifically, Plaintiff argues that the Innova Power-Check #5420 (the "Accused Product"), infringes Plaintiff's '899 Patent. (Id.) Plaintiff additionally alleges that Defendant's infringement is willful, and that, among other things, "Defendant had knowledge of the '899 Patent at least as early as December 12, 2019," when Defendant explicitly referred to the '899 Patent in Defendant's U.S. Patent Application No. 16/712,893. (Id. 10:12-15).

On June 2, 2022, Defendant filed the pending Motion to Dismiss and noted, "considering all reasonable inferences in [Plaintiff's] favor, there are insufficient plausible allegations that [Defendant] is infringing or has infringed" Plaintiff's patent. (See Motion to Dismiss ("MTD") 1:5-8, ECF No. 147).

II. LEGAL STANDARD

Dismissal is appropriate under Rule 12(b)(6) where a pleader fails to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A pleading must give fair notice of a legally cognizable claim and the grounds on which it rests, and although a court must take all factual allegations as true, legal conclusions couched as factual allegations are insufficient. Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Accordingly, Rule 12(b)(6) requires "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. "To survive a motion to dismiss, 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). "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." Id. This standard "asks for more than a sheer possibility that a defendant has acted unlawfully." Id.

If a court grants a motion to dismiss for failure to state a claim, leave to amend should be granted unless it is clear that the deficiencies of the complaint cannot be cured by amendment. DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992). Pursuant to Rule 15(a), the court should "freely" give leave to amend "when justice so requires," and in the absence of a reason such as "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc." Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962).

III. DISCUSSION

As a preliminary matter, Plaintiff argues that the Court should deny the Motion to Dismiss because Defendant failed to assert a 12(b) defense against Plaintiff's original complaint, which is nearly identical to its First Amended Complaint. (See Resp. 4:11-26, ECF No. 160). In accordance with the Federal Rules of Civil Procedure ("FRCP"), a party may raise a 12(b) defense prior to filing a responsive pleading. See Fed. R. Civ. Pro. Rule 12(b).

Plaintiff cites two district court orders concluding that a defendant may assert a Rule 12(b) defense against an amended complaint only to the extent the defense challenges "new matter" in the amended complaint. See Brooks v. Caswell, No. 3:14-CV-01232-AC, 2016 WL 866303, at *3 (D. Or. Mar. 2, 2016); Pascal v. Concentra, Inc., No. 19-cv-02559-JCS, 2020 WL 4923974, at *2 (N.D. Cal. Aug. 21, 2020).¹ In response, Defendant contends that Plaintiff's original complaint was "wiped out" and thus its Motion to Dismiss was timely because it was made before any pleading in response to the First Amended Complaint.² (See Reply 11:25-12:4, ECF No. 167).

It appears the Ninth Circuit has not previously weighed in on this issue. However, several district courts in this circuit have followed the approach Plaintiff requests this Court to adopt. See Brooks, 2016 WL 866303, at *3 (D. Or. Mar 2, 2016) (denying defendant's motion to dismiss amended complaint alleging same causes of action as original complaint and concluding defendant waived its 12(b)(6) defense by failing to assert defense against original complaint); Pascal, 2020 WL 4923974, at *2 (N.D. Cal. Aug. 21, 2020) (same); Best Fresh LLC v. Vantaggio Farming Corporation, No. 3:21-cv-00131-BEN-WVG, 2022 WL 4112231, at *10 (S.D. Cal. Sept. 8, 2022) (holding that entertaining Defendant's "motion to dismiss claims asserted in the original complaint weighs against judicial economy"); Townsend Farms v. Goknur Gida Madderleri Enerji Imalat Ithalat Ihracat Ticaret Ve Sanayi A.S., et al., No. SA CV-15-0837-DOC (JCGx), 2016 WL 10570248, at *6 (C.D. Cal. Aug. 17, 2016) ("Holding that an amended complaint allows a defendant a fresh opportunity to bring a 12(b)(6) motion to dismiss as to claims raised by a prior—answered—complaint would undermine the requirements of the Federal Rule."); see also Sears Petroleum & Transport Corp. v. Ice Ban America, Inc., 217 F.R.D. 305, 307 (N.D.N.Y. 2003) ("While it is true that an amended complaint ordinarily supersedes a prior complaint, and renders it of no legal effect . . . [i]t is also true that if the amended complaint also contains new matter, the defendant may bring a second motion under Rule 12 to object to the new allegations only." (emphasis added)); Internet Products LLC v. LLJ Enterprises, Inc., No. 18-15421 (RBK/AMD), 2020 WL 6883430, at *2 (D. N.J. Nov. 24, 2020) (noting that a plaintiff's amended complaint "does not—and should not—automatically revive any defenses and objections" waived by defendant in response to the original complaint, including a 12(b)(6) defense).

Defendant acknowledges that Plaintiff's First Amended Complaint is "almost an exact replica" of the original complaint. (See MTD 10:1-2). Defendant had an opportunity to assert a 12(b) motion previously; however, Defendant instead filed its Answer and Counterclaim, (ECF No. 22). Interpreting FRCP Rule 12(b) to permit a defendant to submit a post-answer motion to dismiss an amended complaint attacking claims raised in the original complaint would render the 12(b) restriction on post-answer motions meaningless. Accordingly, the Court follows the approach adopted by other district courts in this circuit, and thus reviews the merits of Defendant's Motion to Dismiss only to the extent it challenges new claims raised in Plaintiff's First Amended Complaint.

Plaintiff amended its complaint to include a willful infringement cause of action and to expressly allege that Defendant's Accused Product infringes on the '899 patent "both literally and under the doctrine of equivalents." (First Am. Compl. 12:1-2). Because Plaintiff raised these arguments for the first time in its First Amended Complaint, the Court considers both in turn.

A. Plaintiff's Willful Infringement Claim

To state a claim for willful infringement, a plaintiff must plead sufficient facts to raise a reasonable inference that the defendant "was aware of the asserted patent, but nonetheless acted despite an objectively high likelihood that its actions constituted infringement of a valid patent." i4i Ltd. P'ship v. Microsoft Corp., 598 F.3d 831, 861 (Fed. Cir. 2010) (citation omitted). "To establish willfulness, the patentee must show the accused infringer had a specific intent to infringe at the time of the challenged conduct." Bayer Healthcare LLC v. Baxalta Inc., 989 F.3d 964, 987-88 (Fed. Cir. 2021). Both knowledge of the patent and knowledge of infringement must be pled with plausibility.

The Court previously addressed Defendant's argument that Plaintiff failed to adequately plead willful infringement in the Order granting Plaintiff's Motion for Leave to File a First Amended Complaint. (See generally Order, ECF No. 137).³ Upon reviewing Plaintiff's proposed First Amended Complaint, the Court concluded in its Order that Plaintiff "adequately pleads willful infringement." (Id. 9:4). The Court explained that Plaintiff "does not merely allege knowledge" but additionally pleads ...