Opinion
01 CV 3501 (AGS)
March 11, 2002
OPINION AND ORDER
Plaintiffs Orion Electric Co., Ltd. ("Orion") and Orion America, Inc. ("Orion America") bring this action seeking a declaratory judgment that certain patents held by defendant Funai Electric Co., Ltd. ("Funai") are not infringed, or not valid, or both, and that Funai and defendant Funai Corporation ("Funai Corp.") may not enforce the patents as a result of their inequitable conduct or patent misuse. Plaintiffs also seek damages for alleged antitrust violations by defendants. Defendants move to dismiss certain claims for lack of subject matter jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(1), and to dismiss certain claims for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6). In the alternative, defendants move to separate and stay the antitrust claims until after resolution of the patent claims, pursuant to Fed.R.Civ.P. 42(b). Plaintiffs cross-move to amend and supplement the Amended Complaint, pursuant to Fed.R.Civ.P. 15(a), (d). For the reasons set forth below, defendants' Rule 12(b)(1) motion is denied, defendants' Rule 12(b)(6) motion is granted, and the remaining motions arc denied, without prejudice, as moot.
I. BACKGROUND
The following facts are derived from the Amended Complaint. Orion is a Japanese corporation with its principal place of business in Fukui, Japan. Orion is engaged in the business of manufacturing and/or selling electronic devices, including video cassette recorders ("VCRs"), combination television/video cassette recorders ("TV/VCRs"), and tuners and technology for VCRs and TV/VCRs. (Am. Compl. ¶ 3.) Orion America, an affiliate of Orion, is an Illinois corporation with its principal place of business in Paramus, New Jersey. Orion America is engaged in the business of selling and marketing electronic devices, including VCRs, TV/VCRs, and tuners and technology for VCRs and TV/VCRs, in the United States. ( Id. ¶ 3.) Funai is a Japanese corporation with its principal place of business in Osaka, Japan. Funai is engaged in the business of manufacturing and/or selling electronic devices, including VCRs, TV/VCRs, and tuners and technology for VCRs and TV/VCRs. ( Id. ¶ 4.) Funai Corp., a subsidiary of Funai, has a regular place of business in Teterboro, New Jersey. ( Id. ¶ 5.) Allegedly, Funai, directly or indirectly through Funai Corp., markets, sells, and services electronic devices, including VCRs, in this District. ( Id.)
Funai asserts that it possesses the exclusive right to make, use, sell, or offer to sell within the United States the inventions claimed in each of the following patents (collectively the "Asserted Patents"): United States Patent No. 5, 594, 510; United States Patent No. 5, 621, 475; United States Patent No. 5, 815, 218; United States Patent No. 5, 877, 912; United States Patent No. 5, 987, 209; United States Patent No. 6, 021, 018; and United States Patent No. 6,084,751. (Am. Compl. ¶ 9.) Funai is identified as the assignee on each of the Asserted Patents. ( Id. ¶ 10.) Funai has asserted that the VCRs sold in the United States by Orion practice the inventions claimed in the Asserted Patents. ( Id. ¶ 11.) Accordingly, Funai has asserted that it is entitled to a remedy for patent infringement, threatened litigation, and demanded that Orion pay Funai a royalty for each VCR sold by Orion. ( Id. ¶¶ 12, 28.) Plaintiffs deny that any of the VCRs they manufacture, use, import, sell, or offer for sale, or have manufactured, used, imported, sold, or offered for sale, in the United States infringe any valid or enforceable claim of any of the Asserted Patents. ( Id. ¶ 13.)
Plaintiffs filed the instant action in April 2001. In July 2001, no answer having yet been filed, plaintiffs filed the Amended Complaint. The Amended Complaint contains two counts. Count I seeks a declaration that certain of the Asserted Patents are invalid, that certain of the Asserted Patents are not infringed, and that certain of the Asserted Patents are unenforceable as a result of inequitable conduct or patent misuse by defendants. Count II seeks damages for monopolization or attempted monopolization in violation of 15 U.S.C. § 2. Defendants filed their motions to dismiss, or in the alternative to separate and stay the antitrust claims, in August 2001. Because the Rule 12(b)(1) motion relied upon matter outside the pleading, plaintiffs were given several months to conduct discovery relating to the issue of subject matter jurisdiction. Defendants' motions, and plaintiffs' cross-motion, are now fully submitted.
II. SUBJECT MATTER JURISDICTION
A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it. In resolving a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), a district court . . . may refer to evidence outside the pleadings. A plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists.Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000) (internal citations omitted). Section 2201 of Title 28 of the United States Code provides a district court with jurisdiction to hear a declaratory judgment action when there is an "actual controversy" between the parties. The exercise of jurisdiction under § 2201 is within the court's discretion, and may be declined in appropriate circumstances. 28 U.S.C. § 2201 ("any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party . . ." (emphasis added)); EMC Corp. v. Norand Corp., 89 F.3d 807, 813 (Fed. Cir. 1996). Defendants contend that there existed no actual controversy between the parties at the time plaintiffs commenced this action. In the alternative, defendants contend that, even if an actual controversy did exist, the Court should decline to exercise jurisdiction over Count I of the Amended Complaint. Plaintiffs respond that an actual controversy existed and that the Court should take jurisdiction over their declaratory judgment claims.
A. Actual Controversy
The Court of Appeals for the Federal Circuit has established a two-prong inquiry for determining whether an actual controversy exists in a declaratory judgment action involving allegations of patent noninfringement, invalidity, or unenforceability. See, e.g., Fina Research, S.A. v. Baroid Ltd., 141 F.3d 1479, 1481 (Fed. Cir. 1998); EMC, 89 F.3d at 811. The first prong requires "an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit . . . ." Fina Research, 141 F.3d at 1481. The second prong requires "present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity." Id. Both prongs must be satisfied for an actual controversy to exist. See id. Here there is no dispute regarding the second prong. Plaintiffs allege that, among other things, they sell electronic devices, including VCRs, in the United States. (Am. Compl. ¶¶ 3, 13.) Defendants do not dispute this allegation. If the electronic devices sold by plaintiffs practice the inventions claimed in any of the Asserted Patents, that could constitute infringement. 35 U.S.C. § 271(a). Accordingly, the second prong is satisfied.
Defendants assert, however, that at the time plaintiffs commenced this action there existed no facts which could create a reasonable apprehension on the part of plaintiffs that plaintiffs would face an infringement suit by defendants. Defendants rely principally upon Phillips Plastics Corp. v. Kato Hatsujou Kabushiki Kaisha, 57 F.3d 1051 (Fed. Cir. 1995). In Phillips, the patentee, Kato, had not threatened litigation, Instead, Kato had informed Phillips that certain products made by Phillips were "covered by" Kato's patent and had offered Phillips a license. The parties conducted certain negotiations towards a license, but before any agreement was reached Phillips filed a declaratory judgment action against Kato. Id. at 1052. The Federal Circuit affirmed the district court's finding that there was no actual controversy. There had been no threat of litigation and "the offer of a patent license does not create an actual controversy." Id. at 1053. The court further stated that, "[w]hen there are proposed or ongoing license negotiations, a litigation controversy normally does not arise until the negotiations have broken down." Id. Defendants offer declarations of counsel stating that discussions between counsel for the parties here began in June 2000; that Funai first presented a written discussion of its position in December 2000; that Funai's counsel proposed licensing terms to plaintiffs' counsel on March 23, 2001; and that plaintiffs had not responded to the March 23 proposal by the time they filed suit on April 25, 2001, even though plaintiffs had until April 30 to give Funai an answer. (Decl. of Michael A. Doherty ("Doherty Decl."); Supplemental Decl. of Michael A. Doherty Filed in Supp. of Defs.' Mot. to Dismiss the Am. Compl. Pursuant to Rules 12(b)(1) and 12(b)(6) ("Supplemental Doherty Decl.").) Relying upon Phillips, defendants contend that no actual controversy existed because license negotiations were ongoing.
This action is distinguishable from Phillips in one crucial respect, however. Plaintiffs plead that Funai had threatened them with "imminent infringement litigation." (Am. Compl. ¶ 28.) The Court accepts this allegation as true because none of the evidence offered by defendants controverts it. In Phillips there had been no threat of litigation, only business discussions concerning a license. Here, there was an express threat of litigation by the patentee. That is sufficient to satisfy the first prong of the Federal Circuit's actual controversy analysis. See, e.g., Genentech, Inc. v. Eli Lilly Co., 998 F.2d 931, 936-37 (Fed. Cir. 1993), abrogated on other grounds by, Wilton v. Seven Falls, Co., 515 U.S. 277 (1995); Arrowhead Indus. Water, Inc. v. Ecolochem, Inc., 846 F.2d 731, 736 (Fed. Cir. 1988). Because the preponderance of the evidence offered in connection with this motion demonstrates that both prongs of the Federal Circuit's inquiry were satisfied as of April 25, 2001, there existed an actual controversy at the time plaintiffs commenced this action. Neither party has offered any evidence indicating that such controversy has been resolved since that time. Accordingly, the Court may exercise subject matter jurisdiction over plaintiffs' declaratory judgment claims.
B. Discretionary Exercise of Jurisdiction
"Simply because there is an actual controversy between the parties does not mean that the district court is required to exercise that jurisdiction." EMC, 89 F.3d at 813. A court has discretion in determining whether to exercise jurisdiction over a declaratory judgment action, but that discretion is not unfettered. Id. A court may not, for example, dismiss a declaratory judgment action by an alleged infringer simply because the patentee subsequently filed a parallel patent infringement action in another district. Genentech, 998 F.2d at 937. Thus, the Court may not dismiss Count I of the Amended Complaint on the grounds that Funai filed a patent infringement action against Orion and Orion America in the District of New Jersey in December 2001. (Decl. of Frank Laudadio in Supp. of Pls.' Opp. to Defs.' Mot. to Dismiss the Am. Compl. Pursuant to Rules 12(b)(1) and 12(b)(6) ("Laudadio Decl.") Ex. A.)
Defendants rely principally upon EMC in contending that taking jurisdiction here would undermine the purpose of § 2201. In EMC, the Federal Circuit affirmed a district court's decision not to exercise jurisdiction even though an actual controversy existed between the parties. The district court had concluded, or at least expressed concern, that the alleged infringer, EMC, had abused the declaratory judgment mechanism in order to obtain a more favorable bargaining position in its ongoing licensing negotiations with the patentee, Norand. 89 F.3d at 814. The district court had also noted that exercising jurisdiction over a declaratory judgment action that had been filed while negotiations were ongoing would conflict with the policies of promoting extrajudicial resolution of disputes and of conserving judicial resources. Id. In affirming, the Federal Circuit ruled that a district court "may take into account the pendency of serious negotiations to sell or license a patent in determining to exercise jurisdiction over a declaratory judgment action." Id. In considering when a declaratory judgment action is appropriate, the EMC Court quoted from Arrowhead. The Arrowhead Court had stated that the Declaratory Judgment Act was intended to address situations where a "patent owner engages in a danse macabre, brandishing a Damoclean threat with a sheathed sword." 846 F.2d at 734-35. The EMC Court stated that, "[o]f course, there may be situations in which the patentee has entered negotiations with an alleged infringer but nonetheless is engaging in the " danse macabre" referred to in Arrowhead . . . ." 89 F.3d at 815. On the facts of the case before it, the EMC Court found no reason to disagree with the district court's assessment that Norand was not engaged in the danse macabre. Among other things, the Federal Circuit noted that the filing of EMC's complaint occurred shortly after Norand disclosed that it was to begin license negotiations with EMC's competitors, and that the day after filing the complaint, EMC's counsel informed Norand's counsel that the declaratory judgment action was a defensive measure, notwithstanding which EMC desired to continue the ongoing negotiations. Id. "Under these circumstances, the district court could properly view the declaratory judgment complaint as a tactical measure filed in order to improve EMC's posture in the ongoing negotiations — not a purpose that the Declaratory Judgment Act was designed to serve." Id.
This action is factually distinguishable from EMC. First, defendants' own submissions suggest that defendants were more likely than not engaged in the "danse macabre." According to defendants' counsel, counsel for the parties here began to discuss the Asserted Patents and their relation, if any, to plaintiffs' products in June 2000. (Supplemental Doherty Decl. ¶ 4.) However, it was not until December 2000, six months later, that counsel for defendants "first presented a written discussion of [defendants'] technical position . . . ." ( Id.) It was not until approximately three months after that, until March 23, 2001, that defendants' counsel first proposed terms for a license agreement under the Asserted Patents. (Doherty Decl. ¶ 3.) More than a week later, defendants' counsel requested that plaintiffs' counsel respond to the March 23 proposal by April 30, 2001. ( Id. ¶ 7.) On April 25, 2001, plaintiffs responded with this action. These facts, together with the undisputed allegation that defendants had (at some unspecified time) threatened infringement litigation, indicate that defendants sought to hold the Damoclean sword of an infringement action over plaintiffs' head for a significant period of time without actually proceeding to litigate. No evidence offered in connection with this motion demonstrates that plaintiffs engaged in the type of conduct described in EMC. Defendants cite no evidence that plaintiffs brought this action to block defendants' interaction with any of plaintiffs' competitors. Defendants cite no evidence that plaintiffs immediately sought to return to the negotiating table after filing this action. In sum, the preponderance of the evidence indicates that plaintiffs have not used the declaratory judgment mechanism simply to obtain a tactical advantage in negotiations. Under the circumstances presented in the record, it is appropriate for the Court to exercise jurisdiction over plaintiffs' declaratory judgment claims. See Arrowhead, 846 F.2d at 734-35. Accordingly, defendants' motion to dismiss Count I of the Amended Complaint for lack of subject matter jurisdiction is denied.
To the extent defendants believe that venue in this District is inconvenient or improper, they may seek recourse pursuant to 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406.
III. FAILURE TO STATE A CLAIM
A. Standard
A court may not dismiss a complaint pursuant to Rule 12(b)(6) unless, even when the complaint is construed liberally, it appears beyond doubt that the plaintiff can prove no set of facts which would entitle it to relief. Jaghory v. New York State Dep't of Educ., 131 F.3d 326, 329 (2d Cir. 1997). On a motion to dismiss for failure to state a claim, a court must accept as true all of the facts alleged in the complaint. Id. A court must also draw all reasonable inferences in the light most favorable to the plaintiff. Id. In antitrust cases, as in other types of cases, all that is required is a "short plain statement of a claim for relief which gives notice to the opposing party." Global Disc. Travel Sews. v. Trans World Airlines, 960 F. Supp. 701, 704 (S.D.N.Y. 1997). "This does not mean that `conclusory allegations which merely recite the litany of antitrust . . . will suffice.'" Id. (quoting John's Insulation, Inc. v. Siska Constr. Co., 774 F. Supp. 156, 163 (S.D.N.Y. 1991)). Although both parties have submitted material outside the pleadings in relation to defendants' Rule 12(b)(1) motion, the Court excludes such material from consideration on the Rule 12(b)(6) motion and does not treat this motion as one for summary judgment. See Fed.R.Civ.P. 12(b).
B. Count I — Patent Misuse
Defendants seek to dismiss the allegations of patent misuse, contending that plaintiffs have not alleged the necessary elements of patent misuse. Plaintiffs allege that Funai committed patent misuse by demanding that Orion agree to a "package license," that is, a license under all of the Asserted Patents for any product that practices an invention claimed in any of the Asserted Patents. (Am. Compl. ¶¶ 28-41.) Section 271(d) of the Patent Act provides, in pertinent part, that:
[n]o patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following: . . . (5) conditioned the license of any rights to the patent or the sale of the patented product on the acquisition of a license to rights in another patent or purchase of a separate product, unless, in view of the circumstances, the patent owner has market power in the relevant market for the patent or patented product on which the license or sale is conditioned.35 U.S.C. § 271(d). Accordingly, plaintiffs' claims of patent misuse require plaintiffs to allege market power in the relevant market. Plaintiffs allege three relevant markets in Count I: VCRs, TV/VCRs, and tuners for VCRs. (Am. Compl. ¶¶ 32, 35.) Plaintiffs allege that Funai has market power in the market for VCRS because Funai manufactures 33.33% of all VCRs sold in the United States and because Funai's proffered construction of the Asserted Patents is sufficiently broad to exclude anyone who does not accept a package license from competing in the United States VCR market. ( Id. ¶ 32.) Plaintiffs allege that Funai has market power in the market for TV/VCRs because Funai manufactures 50% of all TV/VCRs sold in the United States and because Funai's proffered construction of the Asserted Patents is sufficiently broad to exclude anyone who does not accept a package license from competing in the United States TV/VCR market. ( Id.) Plaintiffs allege that Funai has market power in the market for VCR tuners because Funai's proffered construction of the Asserted Patents is sufficiently broad to exclude anyone who does not accept a package license from competing in the United States market for VCR tuners. ( Id. ¶ 35.)
These allegations are insufficient. Given the absence of other facts regarding the VCR or TV/VCR markets, neither a market share of 33% nor a market share of 50% establishes market power in the relevant markets. See Broadway Delivery Corp. v. United Parcel Serv. of Am., Inc., 651 F.2d 122, 128 (2d Cir. 1981) (meaning of market share depends on context and "the true significance of market share data can be determined only after careful analysis of the particular market"). Plaintiffs do not even allege Funai's share of the VCR tuner market. Plaintiffs contend that they need not prove market power through market share, but may directly prove the ability to exclude competitors from the relevant market. While plaintiffs are correct that it is permissible for a plaintiff to show market power through direct evidence of anti-competitive effects of the defendant's conduct, Todd v. Exxon Corp., 275 F.3d 191, 206-07 (2d Cir. 2001), plaintiffs have not done so here. A patent does not, by itself, create any presumption of market power. In re Independent Serv. Orgs. Antitrust Litig., 203 F.3d 1322, 1325 (Fed. Cir. 2000) (citing Abbot Labs. v. Brennan, 952 F.2d 1346, 1355 (Fed. Cir. 1991)), cert. denied, 531 U.S. 1143 (2001). To demonstrate market power flowing from a patent, a plaintiff must show that, within the relevant market, there are no acceptable substitutes for the patented product and that the patent, therefore, enables the patentee to exclude competition. See Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 37 n. 7 (1984) (O'Connor, J., concurring). Plaintiffs position is that "it is the manner in which Funai construes their patents that gives them the power to exclude their competitors from legally relevant antitrust markets . . . ." (Pls.' Mem. of Law in Opp. to Defs.' Mot. to Dismiss the Am. Compl. Pursuant to Rules 12(b)(1) and 12(b)(6) at 22; see also id. at 20.) Funai's claims about the scope of the patents, however, are not legally relevant. Funai's assertions do not have any legal effect and cannot block anyone from entering the relevant markets. It is only the legal force of the Asserted Patents themselves that can exclude competitors, and patent claim interpretation is a question of law to be decided by the courts. Markman v. Wesiview Instruments, Inc., 517 U.S. 370 (1996). This is not merely a semantic difference. To withstand a motion to dismiss, the facts alleged in a complaint must be sufficient, if subsequently proven, to satisfy each element of the relevant cause of action. If proven, plaintiffs' allegations would demonstrate that Funai has stated that its patents are very broad. If the Court were to hold now that that is sufficient to demonstrate market power, plaintiffs could prevail on their antitrust claims even if this Court (or the court hearing defendants' infringement action) issued a very narrow claim construction that allowed parties other than Funai to manufacture and sell VCRs, TV/VCRs, and VCR tuners without practicing the inventions claimed in the Asserted Patents. Such a result cannot be correct; if the patents, as construed by a court, do not allow Funai to exclude competitors from the relevant markets, then Funai does not have market power, whatever Funai may claim its patents mean. While plaintiffs may make an allegation of market power conditional upon a court's interpretation of the Asserted Patents, any claim of market power must depend upon the patents themselves, not upon the statements of the patentee. Because plaintiffs have pled only Funai's alleged representations, they have not adequately alleged market power. Accordingly, plaintiffs have not alleged all of the elements of patent misuse; defendants' motion to dismiss that claim pursuant to Rule 12(b)(6) is, therefore, granted.
C. Count II- Antitrust
Defendants also seek to dismiss plaintiffs' claims under 15 U.S.C. § 2 for, among other things, failure to allege market power or a dangerous probability that Funai will acquire market power. Plaintiffs allege in Count II that Funai monopolizes, or has attempted to monopolize, six markets: VCRs, TV/VCRs, VCR tuners, VCR technology, TV/VCR technology, and VCR tuner technology. Plaintiffs also allege that Funai has violated § 2 through tying arrangements. (Am. Compl. ¶¶ 42-53.)
One of the elements of a claim of monopolization under § 2 is market power in the relevant market. See Irvin Indus. v. Goodyear Aerospace Corp., 974 F.2d 241, 244 (2d Cir. 1992). One of the elements of a tying claim is market power in the market for the tying product. See Hack v. President Fellows of Yale Coll., 237 F.3d 81, 86 (2d Cir. 2000), cert. denied, 122 S.Ct. 201 (2001). Thus, to state a claim for monopolization or tying, plaintiffs must allege that defendants possess market power in the relevant market. Plaintiffs' allegations of market power with respect to the three "product markets" (that is VCRs, TV/VCRs, and VCR tuners, as distinct from the corresponding technology) are the same as plaintiffs' allegations of market power with respect to patent misuse. (Am. Compl. ¶¶ 42, 48.) For the reasons set forth above, those allegations are deficient. Plaintiffs make no separate allegations of market power for the three "technology markets;" of course, to the extent that plaintiffs rely upon the allegations regarding the product markets, those allegations are deficient as to the technology markets as well. Accordingly, plaintiffs have not adequately alleged market power and fail to state a claim for either monopolization or tying.
One of the elements of a claim of attempted monopolization is a dangerous probability of obtaining market power in the relevant market. See Kelco Disposal, Inc. v. Browning-Ferris Indus., 845 F.2d 404, 407 (2d Cir. 1988), aff'd on other grounds, 492 U.S. 257 (1989). In only one paragraph of the Amended Complaint do plaintiffs make any allegation of a dangerous probability of market power. Plaintiffs allege that:
Under the coercive package license, Funai has conditioned a license to the `218 and `209 Patents on Orion's agreement to pay royalties on separate non-patented goods; goods ostensibly covered by other Asserted Patents; and goods that are not subject to the patent laws of the United States. Unless the conduct alleged herein is stopped, there is a dangerous probability that Funai will succeed in monopolizing these separate and distinct markets.
(Am. Compl. ¶ 49.) The logical construction of "these separate and distinct markets" is as a reference to "separate non-patented goods," "goods ostensibly covered by other Asserted Patents," and "goods that are not subject to the patent laws of the United States." However, plaintiffs do not define any such markets, nor do they allege that there are not reasonably available substitutes for such goods. Nor do these three sets of goods correspond to the three "product markets" or the three "technology markets." Plaintiffs have, therefore, failed to allege that defendants have a dangerous probability of obtaining market power in any of the six relevant markets. Accordingly, for the reasons set forth above, defendants' motion to dismiss Count II of the Amended Complaint for failure to state a claim is granted. The Court having dismissed Count II, defendants' motion in the alternative for separation and a stay of the antitrust claims is denied, without prejudice, as moot.
D. Funai Corp.
Defendants also move to dismiss all claims as against Funai Corp. for failure to state a claim. The Court having dismissed the patent misuse and antitrust claims, only Count I's claims that the patents are neither infringed, nor valid, nor enforceable need be considered in this section. In order to be a defendant in an action seeking a declaratory judgment of noninfringement, invalidity, and unenforceability of patents, a party must be capable of bringing a parallel suit for infringement of said patents. There can be no reasonable apprehension that a party who lacks standing to sue for infringement will do so. A patentee has standing to bring an infringement action, as does an exclusive licensee. Intellectual Prop. Dev., Inc. v. TCI Cablevision of California, Inc., 248 F.3d 1333, 1345 (Fed. Cir.), cert. denied, 122 S.Ct. 216 (2001). A holder of a nonexclusive license to practice the patent, however, lacks standing to sue for infringement. Id. The Amended Complaint does not allege that Funai Corp. is a patentee or the holder of an exclusive license under any of the Asserted Patents. At most, the Amended Complaint alleges that Funai Corp. holds a non-exclusive license under the Asserted Patents. (Am. Compl. ¶ 5.) Count I is, therefore, not properly asserted against Funai Corp. Accordingly, defendants' motion to dismiss the noninfringement, invalidity, and unenforceability claims against Funai Corp. for failure to state a claim is granted.
E. Leave to Replead
"It is the usual practice upon granting a motion to dismiss to allow leave to replead. . . . Although leave to replead is within the discretion of the district court, refusal to grant it without any justifying reason is an abuse of discretion." Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991). The Court is unaware of a reason that would justify denying leave to replead. The dismissed claims are not futile. Plaintiffs may or may not be able to plead the facts necessary to state a claim; they simply have not done so in the Amended Complaint. Although plaintiffs have already amended their pleading once, they did so without any ruling from the Court; this is not a situation where a plaintiff was informed as to what it was required to plead but then failed to do so. Nor is there any evidence of bad faith, undue delay, or undue prejudice to defendants. Accordingly, plaintiffs are granted leave to replead. Because leave to replead is granted, plaintiffs' cross-motion to amend and supplement the Amended Complaint is denied without prejudice.
IV. CONCLUSION
For the reasons set forth above, defendants' motion, pursuant to Rule 12(b)(1), to dismiss the declaratory judgment claims for lack of subject matter jurisdiction is denied; defendants' motion, pursuant to Rule 12(b)(6), to dismiss the patent misuse claims, the antitrust claims, and all claims against Funai Corp. are granted; defendants' motion, pursuant to Rule 42(b), to separate and stay the antitrust claims is denied, without prejudice, as moot; and plaintiffs' cross-motion, pursuant to Rule 15(a), (d), to amend and supplement the Amended Complaint is denied, without prejudice, as moot. If plaintiffs propose to serve and file a Second Amended Complaint, they shall do so not later than 30 days from the date of this Opinion and Order.
SO ORDERED.