Hebert v. Allied Rubber & Gasket Co., Inc. ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 |} LELAND J. HEBERT, Case No.: 20-cv-1350-JO-MDD 12 Plaintitt, | ORDER DENYING PLAINTIFF'S 13 || Vv. MOTION FOR PARTIAL 15 MOTION FOR SUMMARY 16 Defendant.| JUDGMENT 17 18 19 20 Plaintiff Leland J. Hebert (“Plaintiff”) brought an action against his former busines: 21 |}partner and employer, Defendant Allied Rubber & Gasket Company (“Defendant”) 22 jjalleging patent infringement, false marking, and unfair competition surrounding 23 ||Defendant’s sale of adjustable wrenches. Plaintiff and Defendant filed cross-motions □□□ 24 ||summary judgment on the patent infringement claim. Dkts. 44, 45. Defendant also filed and attached to the smooth collar, and a threaded shaft extending from _an opposing second side of the wheel and attached to the threaded collar” 3 Furthermore, the Accused Wrenches must also contain an actuator wheel with a 4 || smooth bar extending from one side of the wheel and a bar with helical-shaped grooves 5 extending from the opposite side in order for the Court to find infringement. As described 6 above, claims 1 and 8 require an “adjustment mechanism” that is “an actuator wheel, a 7 || smooth shaft extending from a first side of the wheel and attached to the smooth collar, and 8 || a threaded shaft extending from an opposing second side of the wheel and attached to the 9 || threaded collar.” Claim Construction Order at 6. The Court has construed the “shaft” 10 || jimitation in these claims to have its plain and ordinary meaning. Jd. I] The Court first examines the plain and ordinary meaning of the term “shaft,” and 12 || then turns to whether the Accused Wrenches contain an actuator wheel with a smooth shaft 13 extending from one side and a threaded shaft extending from the opposite side. The 14 ordinary meaning of a claim may be determined by reviewing “the claims themselves, the 15 specification, the prosecution history, dictionaries, and any other relevant evidence.” 16 || Ruckus Wireless, Inc. v. Innovative Wireless Sols., LLC, 824 F.3d 999, 1002-03 (Fed. Cir. 17 2016). Ultimately, the “only meaning that matters in claim construction is the meaning in 18 context of the patent.” Jd. (citing Trs. of Columbia Univ. in City of New York v. 19 Symantec Corp., 811 F.3d 1359, 1363 (Fed. Cir. 2016)). An inventor may not change the 20 meaning of his words to fit the particular circumstances of a trial. Chicago Steel Foundry 21 |! Co. v. Burnside Steel Foundry Co., 132 F.2d 812, 814-15 (7th Cir. 1943). Here, □□□□□□□□□□□ 22 patent claim describes a smooth shaft “extending from a first side of said wheel and 23 insertably attached within said smooth collar” and a threaded shaft “extending from an 24 opposing second side of said wheel and threadingly mated with said threaded collar.” ‘931 25 || Pat. at 7:42-51 (emphasis added). Additionally, both parties agreed that the meaning of a 26 ||“shaft” as a “Jong cylindrical bar or pole” is consistent with how Plaintiff intended to use 27 || the word “shaft” in his patent. Dkt. 33-1, Ex. C at 66:7-16; Dkt. 45-1 at 19. The claim 28 language and relevant evidence—particularly, the patentee’s intention of “shaft” to mean 1 “long cylindrical bar or pole” in the context of the patent—indicate that a shaft is ar 2 || object such as a bar or pole. 3 Having determined that a shaft is a bar or pole, the Court now examines whether the 4 Accused Wrenches contain an actuator wheel with a smooth bar or pole extending from 5 || one side, and a threaded bar or pole extending from the opposite side. Here, Plaintiff fails 6 ||to submit evidence of an actuator wheel component that has a threaded bar or pole 7 ||}extending from one side, and a smooth bar or pole extending from the opposite side 8 || Plaintiff points to a photograph of an actuator wheel component of the Concealer Wrench. 9 an examination of that component shows a bar with helical grooves extending fror 10 || both sides. Hebert Decl., Ex. F. The actuator wheel component does not contain a □□□□□ 11 ||/shaft extending from one of the sides as required by the claim limitations. Plaintifi 12 || argues that the smooth shaft of the Concealer Wrench is the two parallel bars on the handl« 13 the wrench. The Court rejects this argument because an examination of the two paralle 14 on the handle of the wrench shows that they do not interact with the actuator wheel as 15 ||/required by the claim limitations. 16 With regard to the Recessed Wrench, the Offset Wrench, and the Socket Wrench. 17 || Plaintiff points to a photograph of an actuator wheel with a hole through the middle tha 18 || does not have a bar or pole extending from either side. Hebert Decl., Ex. F. Plaintiff argues 19 the smooth shaft is the hole at the center of the actuator wheel. Plaintiff's Exper 20 ||Report, Ex. 7. The Court rejects this argument because a “shaft” is not construed to □□ 21 ||hole. See Claim Construction Order at 6; TechSearch, L.L.C., 286 F.3d at 1372. The Cour 22 || therefore concludes that the Accused Wrenches do not have a smooth shaft extending fror 23 side of the actuator wheel and a threaded shaft extending from the opposite side 24 || Accordingly, the Court finds that Plaintiff fails to raise a triable issue as to whether the 25 |; Accused Wrenches meet this limitation of claims 1 and 8. 26 | // 27 // 28 1 2. Patent marking does not per se warrant or preclude summary judgment on this > record. 3 The Court next addresses Plaintiff's argument that the patent marking on the 4 ||Recessed Wrench per se warrants summary judgment of infringement in his favor. 5 || Evidence of marking can function as an extrajudicial admission by the marking party “that 6 || the marked product falls within the scope of the patent claims.” Frolow v. Wilson Sporting 7 Goods Co., 710 F.3d 1303, 1310 (Fed. Cir. 2013). Like with other admissions, however, g ||a defendant may “introduce counter evidence or explanation” that rebuts such relevant g ||evidence supporting infringement. Jd. In Frolow, the court found that the plaintiffs 10 |;evidence of patent marking precluded summary judgment of non-infringement because 11 evidence, in combination with the defendant’s expert evidence that the accused 12 || product did not infringe, created a triable issue of material fact. 710 F.3d at 1310-11. The 13 |}court emphasized, however, that patent marking does not defeat summary judgment in 14 ||every instance and the outcome depends on the facts in the record. Id. at 1310; cf Hewlett- 15 || Packard Co. v. Repeat-O-Type Stencil Mfg. Corp., Inc., 123 F.3d 1445, 1454 (Fed. Cir. 16 1997) (granting summary judgment of non-infringement where defendant’s expert 17 ||explained that his “admissions” of infringement on the record were due to a 18 || misunderstanding). 19 Here, the history of the relationship between Plaintiff and Defendant explains how 40 Defendant’s Recessed Wrenches came to be marked with Plaintiff's patent number. 41 Initially, per their exclusive distribution agreement, Plaintiff manufactured the wrenches 49 ||and Defendant distributed them, paying Plaintiff $25 per wrench in return for exclusive 43 ||sale rights. Plaintiffs Opp, Ex. B. During this period, Defendant had no role in 74 ||manufacturing the wrenches or placing Plaintiffs patent number on these wrenches. 75 ||Stoddard Decl. § 13. Then, when Plaintiff and Defendant agreed to change the 46 ||manufacturer of the wrenches, Plaintiff instructed the new manufacturer to mark the 47 wrenches with the ’931 patent number. Jd. {| 16-17, Ex. 7. Defendant permitted this 4g ||arrangement, which continued even after Plaintiff started working for Defendant as an 1 |}employee. Jd. □□ 18-19. Defendant agreed to the marking of these wrenches based on the 2 assumption that Plaintiff's patent governed the Recessed Wrench. Plaintiff’s Opp., Ex. A 3 || However, after Plaintiff and Defendant terminated their working relationship, Defendan 4 expressed doubt over whether Plaintiff's patent even covered the Recessed Wrench. Id. 5 || Ex. D. 6 The above evidence indicates that Defendant’s agreement to the marking was borr 7 of its business relationship with Plaintiff rather than a reasoned conclusion of patent 8 coverage. Defendant simply assumed that Plaintiff's patent covered the wrenches he wa: 9 ||manufacturing, and then later discovered it did not. In the context of their business 10 relationship, the fact that Defendant acquiesced to Plaintiff marking the wrenches based or 11 |/an untested assumption does not create a triable issue of fact that infringement occurred 12 || Neonatal Product Group, Inc. v. Shields, 312 F. Supp. 3d 1010, 1023 (D. Kan. 2018 13 ||(finding patent marking on accused product was not an admission defeating summary 14 ||judgment of non-infringement where defendant company merely “assumed” the □□□□□□ 15 || covered the product but later realized it did not). Given the clear evidence that the Accusec 16 || Wrenches do not meet the claim limitations, the Court concludes that such an “admission’ 17 ||does not create an issue of fact any more than an expert’s unsupported conclusion or 18 ||infringement would. See Dynacore Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263 19 1278 (Fed. Cir. 2004) (holding that an expert’s unsupported and conclusory assertions are 20 || insufficient to raise a genuine issue of material fact). 21 ||B. False Marking 22 The Court now turns to Plaintiffs false marking claim, in which he alleges tha 23 Defendant injured him by selling Recessed Wrenches’ that were marked with Plaintiff’: 24 2aoio00—sSCSCisS 26 ||> After Plaintiff was terminated, the only Recessed Wrenches sold by Defendant were the remaining inventory that had been previously marked with Plaintiff’s patent number while he was still employed by 27 Defendant. Stoddard Decl. § 20. The Concealer Wrenches and the Offset Wrenches were never sold. Id 3g || 11 19.22. 14 1 || patent number without his consent. Defendant argues, and the Court agrees, that summary 2 judgment should be granted in favor of Defendant because Plaintiff fails to raise a triable 3 issue as to whether he suffered competitive injury from the sales of the Recessed Wrenches. 4 While the law prohibits false marking of devices, only a plaintiff who has suffered 5 ||a competitive injury from the false marking may bring suit. The false marking statute 6 || prohibits a party from marking a product with a patent number without the consent of the 7 patentee. 35 U.S.C. § 292(a). Only a person “who has suffered a competitive injury as a 8 ||result of a violation of this section” may bring an action to enforce Section 292(a). 35 9 ||U.S.C. § 292(b); Hall v. Bed Bath & Beyond, Inc., 705 F.3d 1357, 1373 (Fed. Cir. 2013) 10 || (plaintiff must prove that it “suffered a competitive injury as a result of the false marking” 11 ||to have statutory standing for false marking claim). Competitive injury is a “wrongful 12 ||economic loss caused by a commercial rival, such as the loss of sales due to unfair 13 ||competition [or] a disadvantage in a plaintiff's ability to compete with a defendant.” 14 || Sukumar v. Nautilus, Inc., 785 F.3d 1396, 1400 (Fed. Cir. 2015). In the false-marking 15 ||context, the injury must be one inflicted on a party’s competitive activity and caused by 16 ||the false marking. Jd. at 1402; Gravelle v. Kaba Ilco Corp., 684 Fed. Appx. 974, 979 (Fed. 17 || Cir. 2017) (affirming summary judgment for defendant on false marking claim due to “lack 18 || of concrete, non-speculative evidence of causation of an actual injury”). 19 Here, Plaintiff fails to submit evidence that he suffered competitive injury caused by 20 ||the patent marking on Defendant’s wrenches. Plaintiff does not point to any evidence that 21 suffered a loss of sales, reputation, or the ability to compete as a result of the Recessed 22 || Wrenches that were marked with the ‘931 patent number. To the contrary, Plaintiff did not 23 ||sell the Recessed Wrench as a competitor upon entering into an initial exclusive 24 |! distribution agreement with Defendant. Plaintiff's Opp., Ex. B. Moreover, the record 25 || shows that Plaintiff did not sell or attempt to sell his own Recessed Wrench as a competitor 26 being hired, and subsequently fired, by Defendant. Nor has Plaintiff submitted any 27 ||evidence in the record that Defendant failed to pay him royalties. By entering into an 28 exclusive distribution agreement, Plaintiff and Defendant agreed to not act as competitors; 1 financial injury he suffered working with Defendant under that agreement would be 2 ||damages for breach of contract rather than “competitive” injury that he suffered as a □□□□□□ 3 ||of Defendant’s failure to pay “royalties on the falsely marked sales.” Stewart Decl., Ex 4 at 60. Therefore, Plaintiff neither suffered a loss of sales nor a competitive disadvantage 5 another company as a result of the patent marking. Sukumar, 785 F.3d at 1400. 6 Plaintiff's false marking claim fails on additional grounds because Plaintif 7 {consented to the patent marking on Defendant’s wrenches. Plaintiff argues that he seeks 8 ||\damages “confined to the sales [Defendant] wrongfully made under the exclusive 9 distribution agreement.” Plaintiff's Opp. at 22. While under the exclusive distributior 10 ||agreement, however, Plaintiff gave consent for Defendant to mark the Recessed Wrenches 11 exchange for a payment of $25 per wrench. Jd., Ex. B; Wang Decl. { 8 (“In accordance 12 || with the instructions provided by Mr. Hebert in the engineering drawing, the file in Exhibi 13 ||2, and the authorization letter, I manufactured the Recessed Wrench bearing the □□□□□ 14 || patent number]. No one other [sic] Mr. Hebert ever discussed with me the placement o: 15 |/this patent number on the Recessed Wrench.”). Accordingly, the Court concludes tha 16 || Plaintiff fails to create a triable issue as to whether he suffered competitive injury as a resul 17 ||of the marked Recessed Wrenches and whether the Recessed Wrenches were markec 18 || without the consent of the patentee. 19 ||C. Unfair Competition 20 The Court finally turns to Plaintiff's claim that Defendant engaged in unfai 21 |} competition in violation of California’s Unfair Competition Law, Cal. Bus. & Prof. Code 22 || § 17200 (“Section 17200”). Plaintiff alleges that Defendant engaged in unfair competitior 23 |lin the following five ways: (1) falsely marking its Recessed Wrenches with Plaintiff’: 24 patent number, (2) seeking to invalidate Plaintiff's patent through litigation, (3) making 25 || discouraging statements to potential counsel for Plaintiff to deter them from representing 26 || Plaintiff, (4) making “bullying statements” to Plaintiff, and (5) “disparaging” Plaintiff tc 27 || third parties. FAC §§ 58-63; Stewart Decl., Ex. 13. The Court examines each allegatior 28 turn. Section 17200 prohibits “unfair competition” which is broadly defined as “any 2 ||}unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof. Code § 17200. 3 ||Each prong of the statute is a separate and distinct theory of liability. Kearns v. Fora 4 || Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009) (citing South Bay Chevrolet v. General 5 || Motors Acceptance Corp., 72 Cal. App. 4th 861 (1999)). The “unlawful” prong “borrows 6 || violations of other laws and treats these violations, when committed pursuant to business 7 ||activity, as unlawful practices independently actionable under Section 17200.” Farmers 8 || Ins. Exch. v. Superior Court, 2 Cal. 4th 377, 383 (1992). A “defendant cannot be liable 9 || under § 17200 for committing unlawful business practices without having violated another 10 ||law.” Ingels v. Westwood One Broadcasting Servs., Inc., 129 Cal. App. 4th 1050, 1060 11 ||(2005) (internal quotations omitted). Conduct under the “fraudulent” prong is conduct that 12 |Jis “likely to deceive.” Morgan v. AT&T Wireless Servs., Inc., 177 Cal. App. 4th 1235, 13 ||1254 (2009). A claim under the fraudulent prong is governed by the “reasonable 14 ||consumer” standard, which requires the plaintiff to “show that members of the public are 15 likely to be deceived.” Williams vy. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). 16 ||Section 17200 requires a party to have suffered an “injury in fact” and “lost money ot 17 || property as a result of the unfair competition.” Lozano v. AT&T Wireless Servs., Inc., 504 18 || F.3d 718, 731 (9th Cir. 2007). 19 I. False marking 20 First, Plaintiff argues that Defendant’s false marking constitutes unlawful and 21 || deceptive conduct. A claim under the “unlawful” prong hinges upon whether a □□□□□□□□□ 22 ||has a viable claim under the predicate law. Farmers Ins. Exch., 2 Cal. 4th at 383; Martinez 23 Welk Group, Inc., 907 F. Supp. 2d 1123, 1139 (S.D. Cal. 2012) (granting summary 24 || judgment for defendant under Section 17200’s unlawful prong where plaintiff no viable 25 || predicate claim). Because Plaintiff fails to raise a triable issue on his false marking claim, 26 27 ng ||* Plaintiff does not argue liability or present any evidence under the “unfair” prong, and so the Cour focuses its analysis on the “unlawful” and “fraudulent” prongs. 1 described above, the Court grants summary judgment in favor of Defendant or 2 Plaintiff's unfair competition claim to the extent it relies on the alleged false marking a: 3 predicate act. 4 Plaintiff has also failed to submit any evidence to support this claim under the 5 “fraudulent” prong, and so the Court grants summary judgment on the “fraudulent” prong 6 || based on Plaintiff's failure to point to triable facts in the record. Celotex, 477 U.S. at 314 7 2. Litigation conduct seeking to invalidate the patent 8 Second, Plaintiff argues that Defendant’s actions in this litigation to challenge the 9 || validity of the ‘931 patent constitute unlawful and deceptive conduct. It is well-establishec 10 || that free competition favors challenging the validity of patents. Lear, Inc. v. Adkins, 395 11 ||U.S. 653, 670 (1969) (challenging patent validity supports public interest in full and free 12 ||competition). Moreover, the Noerr-Pennington doctrine protects those who petition the 13 || courts—including in the form of filing a counterclaim or other pleadings—from liability 14 || for statutory violations. Freeman v. Lasky, Haas & Cohler, 410 F.3d 1180, 1184 (9th Cir 15 |}2005); Manistee Town Ctr. v. City of Glendale, 227 F.3d 1090, 1092 (9th Cir. 2000). Here 16 alleged conduct is Defendant’s counterclaim for a declaratory judgment of invalidity 17 || This conduct challenging the validity of the ‘931 patent falls squarely within the scope o: 18 petition to the court that is protected by the Noerr-Pennington doctrine. Therefore, the 19 Court grants summary judgment in favor of Defendant on Plaintiff's unfair competitior 20 ||claim to the extent it relies on Defendant’s actions to challenge the validity of the ‘931 21 || patent. 22 3. Statements to potential counsel for Plaintiff 23 Third, Plaintiff argues that Defendant’s statements “discourag[ing] counsel anc 24 potential counsel for [Plaintiff] from representing [Plaintiff]” in the litigation constitute 25 unfair and deceptive conduct. FAC § 63. Plaintiff points to several communications ir 26 ||which Mr. Stoddard communicates settlement offers and Defendant’s position or 27 Plaintiff's patent. Dkt. 47-4 at 2-3; Dkt. 47-5. However, Plaintiff does not point to any 28 |} communications that contain the “discouragement” that he alleges. Therefore, even if suct 1 |\allegations about discouragement could state a claim for relief under Section 17200, the 2 Court finds that Plaintiff has not raise a triable issue of fact that such discouragement has 3 |joccurred. The Court grants summary judgment in favor of Defendant on Plaintiffs □□□□□□ 4 || competition claim to the extent it relies on Defendant’s statements “discouraging” counsel. 5 4. “Bullying” statements to Plaintiff 6 Fourth, Plaintiff argues that Defendant’s “bullying” statements to Plaintiff constitute 7 |lunlawful and deceptive conduct. Plaintiff's amended complaint alleged “bullying” 8 || statements from Mr. Stoddard to Plaintiff that he “no longer owned the patent” and that he 9 || would “blow holes in [his] patent.” FAC 9 63. However, Plaintiff does not point to any of 10 |Ithese purported “bullying” statements in the record. Plaintiff cannot merely rely on his 11 |} pleadings and thus fails to meet his burden of pointing to triable facts in the record. Fed. 12 Civ. P. 56(c)(1)(A). Therefore, the Court grants summary judgment in favor of 13 || Defendant on Plaintiff's unfair competition claim to the extent it relies on Defendant’s 14 alleged bullying statements to Plaintiff. 15 5. “Disparaging” statements about Plaintiff to third parties 16 Finally, Plaintiff argues that Defendant’s “disparaging” statements made to third 17 parties constitute unlawful and deceptive conduct. Plaintiff not pointed to any evidence 18 in the record regarding disparaging statements made to third parties by Defendant. Because 19 |! Plaintiff fails to meet his burden of pointing to specific facts to raise a triable issue, Celotex, 20 U.S. at 314, the Court grants summary judgment in favor of Defendant on □□□□□□□□□□□ 21 unfair competition claim to the extent it relies on these allegedly disparaging statements. 22 Therefore, the Court finds that Plaintiff has failed to raise triable issues of material 23 || fact on each of the grounds for the unfair competition claim. 24 IV. CONCLUSION 25 For the reasons discussed above, Plaintiff’s motion for partial summary judgment of 26 infringement [Dkt. 44] is DENIED. Defendant’s cross-motion for summary judgment of 27 non-infringement and summary judgment on false marking and unfair competition [Dkt. 28 || 45] is GRANTED. 1 Pursuant to Federal Rule of Civil Procedure 58, the Court enters judgment in favor 2 ||of Defendant and ORDERS the Clerk to close the case. 3 4 IT IS SO ORDERED AND ADJUDGED. 5 6 || Dated: | g d | LL, 7 9 United States District Judge 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10