Ultimate Home Protector Pans, Inc. v. Camco Mfg., Inc.

ULTIMATE HOME PROTECTOR PANS, INC., d/b/a DRIPTITE, Plaintiff, v. CAMCO MANUFACTURING, INC., HAIER US APPLIANCE OPERATION,LLC, and HAIER US APPLIANCE SOLUTIONS, INC., Defendants.

ULTIMATE HOME PROTECTOR PANS, INC., d/b/a DRIPTITE, Plaintiff, v. HAIER US APPLIANCE OPERATION, LLC, andHAIER US APPLIANCE SOLUTIONS, INC., Defendants.

1:19CV280

1:19CV675

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

August 24, 2020

MEMORANDUM OPINION AND ORDER

OSTEEN, JR., District Judge

This matter is before the court on Defendants Haier US Appliance Operation, LLC, and Haier US Appliance Solutions, Inc. (together, "GE Appliances") and Camco Manufacturing, Inc.'s ("Camco") (together, "Defendants") motion to dismiss and for default judgment under Federal Rules of Civil Procedure 41(b) and 55(b). (Doc. 35.) This case concerns washing machine drain pans. Defendants all sell washing machine drain pans, as does Plaintiff. (Doc. 23 at 1.)

I. PROCEDURAL HISTORY

Plaintiff filed complaints against Defendants for patent infringement, seeking damages and declaratory relief that Defendants had infringed its patent, U.S. Patent No. 8,393,351 (the "'351 Patent").¹ (1:19CV280 (Doc. 1); 1:19CV675 (Doc. 1).) Defendants filed counterclaims against Plaintiff, (Camco's Answer (Doc. 22); GE Appliances' Answer (Doc. 23)), and when Plaintiff failed to respond to those counterclaims, Defendants moved for an entry of default against Plaintiff for failing to respond to their counterclaims, (Doc. 31). The clerk of court filed an entry of default against Plaintiff. (Doc. 33.)

Now Defendants ask the court to dismiss Plaintiff's claims with prejudice and for a declaratory judgment that the '351 Patent is invalid and unenforceable and that Defendants' accused devices do not infringe the '351 Patent, as requested in theircounterclaims. (Doc. 35 at 4; see also Camco's Answer (Doc. 22) at 26-27; GE Appliances' Answer (Doc. 23) at 23-27.)

II. ANALYSIS

A. Declaratory Judgment Legal Background

Under the Declaratory Judgment Act, a district court, in "a case of actual controversy within its jurisdiction . . . may declare the rights and other legal relations of any interested party seeking such declaration." 28 U.S.C. § 2201(a) (emphasis added). This Act gives federal courts discretion to decide whether to declare the rights of litigants. Rather than grant litigants a right to judgment in their case, it merely permits the courts to hear those cases.

Trustgard Ins. Co. v. Collins, 942 F.3d 195, 201 (4th Cir. 2019) (citing Wilton v. Seven Falls Co., 515 U.S. 277, 286-87 (1995)).

B. Default Judgment Background

Generally, if a defendant fails to plead or otherwise defend an action, this court has the discretion to enter default judgment as to that defendant. Fed. R. Civ. P. 55; see Music City Music v. Alfa Foods, Ltd., 616 F. Supp. 1001, 1002 (E.D. Va. 1985). "Upon the entry of default, the defaulted party is deemed to have admitted all well-pleaded allegations of fact contained in the complaint." J & J Sports Prods., Inc. v. Romenski, 845 F. Supp. 2d 703, 705 (W.D.N.C. 2012). "However, the defendant is not deemed to have admitted conclusions of law . . . ." Id. The party moving for default judgment must still show that the defaulted party was properly served, Md. StateFiremen's Ass'n v. Chaves, 166 F.R.D. 353, 354 (D. Md. 1996), and that the "unchallenged factual allegations constitute a legitimate cause of action," Agora Fin., LLC v. Samler, 725 F. Supp. 2d 491, 494 (D. Md. 2010); see Romenski, 845 F. Supp. 2d at 705 (default judgment is proper when "the well-pleaded allegations in the complaint support the relief sought"). Defendants do not seek damages. (See Camco's Answer (Doc. 22) at 26-27; GE Appliances' Answer (Doc. 23) at 27-28.)

The court finds that the requirements for entering a default judgment have been met and default judgment is appropriate.

First, the court finds Plaintiff has been properly served. Federal Rule of Civil Procedure 4(h)(1)(A) allows service on a corporation consistent with Rule 4(e)(1), which permits service that "follow[s] state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made." The relevant North Carolina statute allows service on a corporation by, among other ways, "mailing a copy of the summons and of the complaint, registered or certified mail, return receipt requested, addressed to the officer, director or agent to be served." N.C. Gen. Stat. § 1A-1, Rule 4(j)(6)(c).

Defendants properly served Plaintiff with their counterclaims. (See Camco's Answer (Doc. 22); GE Appliances' Answer (Doc. 23).) Further, Plaintiff's counsel at the time acknowledged by email that Plaintiff had received the counterclaims. (Doc. 32-2 at 2.) The court is therefore satisfied that Plaintiff has been properly served.

Second, the court finds that the "unchallenged factual allegations constitute a legitimate cause of action." Defendants brought substantively identical counterclaims, seeking declaratory relief for noninfringement with regard to their accused devices and invalidity and enforceability regarding the '351 Patent. (Camco's Answer (Doc. 22) at 22-26; GE Appliances' Answer (Doc. 23) at 23-27.) Because the court finds that Defendants' accused devices do not infringe the '351 Patent, and the court declines to exercise jurisdiction under the Declaratory Judgment Act, the court will dismiss Defendants' remaining counterclaims without prejudice.

C. Counterclaim for Noninfringement

Defendants' second counterclaims are for a declaration of noninfringement as to the '351 Patent. (Camco's Answer (Doc. 22) at 24-25; GE Appliances' Answer (Doc. 23) at 24-25.) Defendants argue their accused devices do not infringe the '351 Patenteither literally or under the doctrine of equivalents. (Doc. 36 at 15.)

Claim 1, the first of three the independent claims of the '351 Patent, states:

A system for collecting leakages from at least one washing machine and at least one dryer the system comprising:

a plurality of opposing side walls engaging with a front wall, a rear wall and a substantially flat bottom panel to define a basin structure having a void interior, said basin structure being sized to contain at least one washing machine and at least one dryer and being capable of containing liquid;

and at least one detachable slide wedge which engages with the front wall to provide strength to the at least one front wall;

whereby the at least one detachable slide wedge is adapted to enhance the transition, location and installation of the at least one dryer and at least one washing machine.

(Complaint, Ex. A (Doc. 1-1) '351 Patent col. 8 lines 1-16.) Claim 6 reiterates the majority of Claim 1 but substitutes the following language in place of the clause concerning a "detachable slide wedge":

and at least one safety edge and/or safety corner adapted to engage with one or more top edges of the plurality of opposing side walls, the front wall and the rear wall;

whereby the at least one safety edge and/or safety corner provides thicker material and is formed to not be sharp-edged, both to provide greater strength to the wall top edges and to pose less danger to users.

(Id. col. 8 lines 41-47.) And Claim 11 substitutes in "and at least one damping means secured to the substantially flat bottom panel to damp and attenuate wave motion characteristics associated to the at least one dryer and/or the at least one washing machine." (Id. col. 9 lines 4-7.) Thus, the material limitations of the '351 Patent are as follows: (1) a basin sized to contain at least one washing machine and at least one dryer and capable of containing liquid; (2) "at least one detachable slide wedge which engages with the front wall to provide strength to the at least one front wall"; (3) "at least one safety edge and/or safety corner adapted to engage with one or more top edges of the plurality of opposing side walls, the front wall and the rear wall"; and (4) "at least one damping means secured to the substantially flat bottom panel to damp and attenuate wave motion characteristics associated to the at least one dryer and/or the at least one washing machine."

Determining patent infringement involves a two-step analysis. Carroll Touch, Inc. v. Electro Mech. Sys., Inc., 15 F.3d 1573, 1576 (Fed. Cir. 1993). First, a court must construe the claim at issue in order to determine its scope and meaning, as a matter of law. Id. Second, the court must compare the claim to the alleged infringer's products. Id.; see also ZMICorp. v. Cardiac Resuscitator Corp., 844 F.2d 1576, 1578 (Fed. Cir. 1988).

Direct infringement occurs where "all steps of a claimed method are performed by or attributable to a single entity." Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020, 1022 (Fed. Cir. 2015). A plaintiff may prove direct infringement by proving literal infringement or infringement under the doctrine of equivalents. Cross Med. Prods., Inc. v. Medtronic Sofamor Danek, Inc., 424 F.3d 1293, 1310 (Fed. Cir. 2005).

Literal infringement is found if the accused products embody every limitation of the claim. Carroll Touch, 15 F.3d at 1576. By contrast, under the doctrine of equivalents, "a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is 'equivalence' between the elements of the accused product or process and the claimed elements of the patented invention." Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 21 (1997).

1. Literal Infringement

"To prove literal infringement, the patentee must show that the accused device contains every limitation in the asserted claims." Leggett & Platt, Inc. v. Hickory Springs Mfg. Co., 285F.3d 1353, 1358 (Fed. Cir. 2002) (quoting Mas-Hamilton Grp. v. LaGard, Inc., 156 F.3d 1206, 1211 (Fed. Cir. 1998)).

Claims 1, 6, and 11, the independent claims of the '351 Patent, all state: "A...