Tai v. Minka Lighting Incorporated

First MOTION to Dismiss for Failure to State a Claim

D. Ariz.January 11, 2017

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i Herbert J. Hammond THOMPSON & KNIGHT LLP One Arts Plaza 1722 Routh Street, Suite 1500 Dallas, Texas 75201 Texas Bar No. 08858500 (214) 969-1700 (214) 969-1751 (Fax) Herbert.Hammond@tklaw.com Brad A. Denton Denton Peterson, PC 1930 N. Arboleda, Suite 200 Mesa, Arizona 85213 Arizona Bar No. 016454 (480) 655-7440 (480) 655-7099 (Fax) Brad@dentonpeterson.com ATTORNEYS FOR DEFENDANT MINKA LIGHTING, INC. IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA JEN-LUNG DAVID TAI, an individual; Plaintiff, v. MINKA LIGHTING, INC., A CALIFORNIA CORPORATION; Defendant. CASE NO. CV-16-02810-PHX-ESW DEFENDANT MINKA LIGHTING, INC.’S MEMORANDUM OF LAW IN SUPPORT OF 12(B)(6) MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 1 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii TABLE OF CONTENTS I. INTRODUCTION ............................................................................................................1 II. ARGUMENTS AND AUTHORITIES.............................................................................1 A. Patent Infringement ...............................................................................................2 1. The Complaint fails to “allege that [any particular] accused product practices each of the limitations found in at least one asserted claim.” .........................................................................................2 2. The Complaint identifies no products with specificity. ............................4 3. The Complaint fails to identify any facts related to inducement or contributory infringement. ........................................................................5 4. The existence of a valid licensing agreement necessarily defeats Plaintiff’s patent-infringement claim. .......................................................7 B. Breach of Licensing Agreement ...........................................................................9 C. Breach of Duty of Good Faith and Fair Dealing.................................................10 III. CONCLUSION ...............................................................................................................11 Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 2 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii TABLE OF AUTHORITIES Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009) ..................................................................................................... 1, 3, 7, 11 Beer Barrel, LLC v. Deep Wood Brew Prods. LLC, No. 2:16-cv-00440-DN-BCW, 2016 WL 5936874 (D. Utah Oct. 12, 2016) ............................ 3 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................................................................... 1, 3 Bender v. L.G. Elecs. U.S.A., Inc., No. C 09-02114 JF, 2010 WL 889541 (N.D. Cal. Mar. 11, 2010) ........................................... 5 In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323 (Fed. Cir. 2012) ............................................................................................. 2, 6 Cephalon, Inc. v. Watson Pharms., Inc., 707 F.3d 1330 (Fed. Cir. 2013) ................................................................................................. 3 e.Digital Corp. v. iBaby Labs, Inc., No. 15-cv-05790-JST, 2016 WL 4427209 (N.D. Cal. Aug. 22, 2016) ................................. 4, 9 Footbalance Sys. Inc. v. Zero Gravity Inside, Inc., No. 15-CV-1058 JLS(DHB), 2016 WL 5786936 (S.D. Cal. Oct. 4, 2016) ........................... 3, 9 Footbalance Sys. Inc. v. Zero Gravity Inside, Inc., No. 15-CV-1058 JLS(DHB), 2016 WL 903681 (S.D. Cal. Feb. 8, 2016) ................................ 4 Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321 (Fed. Cir. 2010) ................................................................................................. 6 Grecia v. VUDU, Inc., No. C-14-1220-EMC consolidated with Lead Case No. C-14-0775-EMC, 2015 WL 538486 (N.D. Cal. Feb. 9, 2015) ......................................................................................... 6 Havoco of Am., Ltd. v. Shell Oil Co., 626 F.2d 549 (7th Cir. 1980) ..................................................................................................... 2 Ir. Miller, Inc. v. Shee Atika Holdings Phoenix, LLC, No. CV-10-00354-PHX-ROS, 2010 WL 2743653 (D. Ariz. July 12, 2010) .................... 10, 11 Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533 (Fed. Cir. 1991) ................................................................................................. 3 MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369 (Fed. Cir. 2005) ................................................................................................. 6 Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 3 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv Murphey v. TPS Enters., 296 F. A’ppx 24 (Fed. Cir. 2008) .............................................................................................. 8 Rembrandt Patent Innovations LLC v. Apple Inc., Nos. C 14-05094 WHA (lead), C 14-05093 WHA (consolidated), 2015 WL 8607390 (N.D. Cal. Dec. 13, 2015) ........................................................................................................... 3 Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729 (9th Cir. 1987) ..................................................................................................... 2 Spindelfabrik Suessen-Schurr Stahlecker & Grill GmbH v. Schubert & Salzer Maschinenfabrik Atiengesellschaft, 829 F.2d 1075 (Fed. Cir. 1987) ................................................................................................. 7 TeleSign Corp. v. Twilio, Inc., No. CV 16-2106 PSG(SSx), 2016 WL 4703873 (C.D. Cal. Aug. 3, 2016) .......................... 5, 9 United States v. I.C.C., 337 U.S. 426 (1949) ................................................................................................................... 9 Wells Fargo Bank v. Az. Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 490 (2002) ........................................................................................................ 10 Statutory Authorities 35 U.S.C. § 271 ....................................................................................................................... 3, 5, 7 Rules and Regulations Fed. R. Civ. P. 8 ................................................................................................................ 1, 2, 9, 11 Fed. R. Civ. P. 11 ............................................................................................................................ 4 Fed. R. Civ. P. 12 ........................................................................................................................ 1, 2 Fed. R. Civ. P. 84 .................................................................................................................... 2, 3, 5 Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 4 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 I. INTRODUCTION Plaintiff Jen-Lung David Tai has sued Defendant Minka Lighting, Inc. (Minka) for patent infringement, breach of a licensing agreement, and breach of the duty of good faith and fair dealing under that agreement. But instead of a well-pleaded complaint, Plaintiff has presented Minka with the unanswerable accusation that one or more of Minka’s hundreds of products infringes upon one or more of the asserted patent’s twenty claims under one or more of the statutory torts that constitute infringement. The allegations fail to inform Minka which of its many products or which of the patent’s claims are at issue. And even if Minka could successfully guess at the nature of its alleged wrongdoing, the Complaint goes on to claim that Minka has a valid license. Because such vague and contradictory allegations plainly fail to “state a claim to relief that its plausible on its face,” Minka asks the Court to dismiss the Complaint with prejudice under Rule 12(b)(6). II. ARGUMENTS AND AUTHORITIES Federal Rule of Civil Procedure 8 requires plaintiffs to articulate “a short and plain statement of [each] claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To satisfy this requirement and “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 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). This requirement means advancing “more than . . . unadorned, the-defendant- unlawfully-harmed-me accusation[s].” Id. (citing Twombly, 550 U.S. at 555). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice” to meet Rule 8’s pleading standard. Id. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 5 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 has not ‘show[n]’-‘that the pleader is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). Importantly, where a complaint does not “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face,’” see id. at 678, Rule 12(b)(6) “enable[s] defendants to challenge [the complaint’s] legal sufficiency . . . without subjecting themselves to discovery.” See Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729, 738 (9th Cir. 1987). Indeed, “‘if the allegations of the complaint fail to establish the requisite elements of the cause of action, [to] requir[e] costly and time consuming discovery and trial work would represent an abdication of [the court’s] judicial responsibility.’” Id. (quoting Havoco of Am., Ltd. v. Shell Oil Co., 626 F.2d 549, 553 (7th Cir. 1980)). Here, Plaintiff’s Complaint warrants dismissal because it fails Rule 8’s pleading standard with regard to each one of its three pleaded causes of action, and because the claim that Minka holds a valid license provides an absolute defense to Plaintiff’s patent-infringement claims. A. Patent Infringement 1. The Complaint fails to “allege that [any particular] accused product practices each of the limitations found in at least one asserted claim.” First, the facts pleaded in Plaintiff’s patent-infringement cause of action fall far short of the requirements to state a plausible claim for relief. Until recently, patent plaintiffs could successfully articulate “a short and plain statement of the claim showing that [they were] entitled to relief” under Rule 8 by adhering to the low bar set by Form 18, the form for a patent- infringement complaint. See Fed. R. Civ. P. 84 (repealed December 1, 2015) (“The forms in the Appendix suffice under these rules . . .”). As a result, courts evaluated patent complaints in light of Form 18’s requirements rather than holding them to the higher pleading standard articulated in Twombly and Iqbal. See In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1334 (Fed. Cir. 2012) (“[T]o the extent the parties argue that Twombly and its Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 6 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 progeny conflict with the Forms and create differing pleading requirements, the Forms control.”). But Rule 84-and consequently Form 18-were abrogated by the December 1, 2015 Amendments to the Federal Rules of Civil Procedure. Since that time, the vast majority of district courts to have addressed the issue have concluded that “[t]he abrogation of Rule 84 means that the Rule 8 pleading standards as construed by the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) govern in patent cases.” See Footbalance Sys. Inc. v. Zero Gravity Inside, Inc., No. 15-CV-1058 JLS (DHB), 2016 WL 5786936, at *2 (S.D. Cal. Oct. 4, 2016). See also Beer Barrel, LLC v. Deep Wood Brew Prods. LLC, No. 2:16-cv-00440-DN-BCW, 2016 WL 5936874, at *3 (D. Utah Oct. 12, 2016) (adopting Footbalance rule); Rembrandt Patent Innovations LLC v. Apple Inc., Nos. C 14-05094 WHA (lead), C 14-05093 WHA (consolidated), 2015 WL 8607390 at *2 (N.D. Cal. Dec. 13, 2015) (“Rule 84 has been abrogated, so In re Bill of Lading no longer applies.”). Accordingly, rather than simply complying with a basic form, a patent complaint now “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). Plaintiff’s Complaint fails this pleading standard. Patent infringement occurs when a person, “without authority makes, uses, offers to sell, or sells any patented invention.” 35 U.S.C. § 271(a) (2012). “To prove infringement, the patentee must show that an accused product embodies all limitations of the claim either literally or by the doctrine of equivalents.” Cephalon, Inc. v. Watson Pharms., Inc., 707 F.3d 1330, 1340 (Fed. Cir. 2013). Because “the failure to meet a single limitation is sufficient to negate infringement of [a] claim,” Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1535 (Fed. Cir. 1991), courts applying Twombly to this cause of action “have required plaintiffs to plausibly allege that the accused Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 7 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 product practices each of the limitations found in at least one asserted claim,” e.Digital Corp. v. iBaby Labs, Inc., No. 15-cv-05790-JST, 2016 WL 4427209, at *3 (N.D. Cal. Aug. 22, 2016) (collecting cases). This requirement imposes no undue burden on patentee-plaintiffs, as this information is, of course, part of a plaintiff’s proper Rule 11 pre-filing investigation. See id. at *4 n.2. The Complaint’s allegations fail the infringement pleading standard because the Complaint does not allege that any identifiable “product practices each of the limitations found in at least one asserted claim.” See id. at *3. Indeed, it fails to identify which of the patent’s twenty claims are allegedly infringed at all. In fact, the Complaint’s only use of the word “claim” is contained in the factual allegations where the Complaint simply reproduces all of the claims listed in the patent-in-suit. See Complaint (Compl.), ECF No. 1, ¶ 12. Otherwise, Plaintiff alleges merely that Minka makes or sells ceiling fans “that embody or use the invention claimed in The 531 Patent,” see Compl., ECF No. 1, ¶ 17, and that Minka has induced and contributed to infringement by unidentified acts by unknown parties, see id. ¶¶ 21-22. With no facts alleging how the accused products practice each of the limitations in at least one claim, the infringement cause of action is insufficient to state a claim. See e.Digital, 2016 WL 4427209, at *4-5 (granting motion to dismiss for failure to state a claim where plaintiff failed to map one limitation to any allegations in the complaint). 2. The Complaint identifies no products with specificity. Further, the Complaint does not put Minka on notice of which of its numerous products allegedly infringes any particular claims of the ’531 patent. Even the low bar set by Form 18 required patent plaintiffs to identify allegedly infringing products with specificity. See, e.g., FootBalance Sys. Inc. v. Zero Gravity Inside, Inc., No. 15-CV-1058 JLS (DHB), 2016 WL 903681, at *4 (S.D. Cal. Feb. 8, 2016) (explaining that allegations encompassing essentially Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 8 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 Defendant’s “entire business” could not meet even the “minimal hurdle” posed by Form 18); Bender v. L.G. Elecs. U.S.A., Inc., No. C 09-02114 JF, 2010 WL 889541, at *3 (N.D. Cal. Mar. 11, 2010) (“[W]ithout identifying specific products or product parts, [Plaintiff] has not put Defendants on notice as to what products or parts are subject to the infringement claim.”). But “especially in light of the abrogation of Rule 84 and Form 18, a plaintiff must offer sufficient specificity to put the defendant on notice of which products are at issue.” TeleSign Corp. v. Twilio, Inc., No. CV 16-2106 PSG (SSx), 2016 WL 4703873, at *3 (C.D. Cal. Aug. 3, 2016). Here, the complained-of products are, broadly, “ceiling fans, including those sold under the name Minka Aire Fans.” Compl., ECF No. 1, ¶ 20; see also id. ¶¶ 17, 21-22. But the Minka Aire product line includes more than 100 ceiling fans. So without information about which of these scores of fans allegedly infringes the patent-in-suit and how, Minka has no notice of the infringement claim. This omission is a fatal defect.1 3. The Complaint fails to identify any facts related to inducement or contributory infringement. While the Complaint contains a few suggestions of inducement and contributory infringement, see, e.g., Compl., ECF No. 1, ¶ 22 (“Minka has been and is infringing and/or contributing to the infringement of and/or inducing the infringement of The 531 Patent by making, using, selling, offering for sale in the United States, including within this judicial district, ceiling fans, including those sold under the name Minka Aire Fans.”), the absence of facts to support these statements of legal theories renders them insufficient to state a claim. “Actively induc[ing] infringement of a patent” gives rise to infringement liability. See 35 U.S.C. § 271(b). “In order to succeed on a claim of inducement, the patentee must show, first 1 On December 13, following the Court’s December 8, 2016 Order concerning motions to dismiss, Minka contacted Plaintiff’s counsel, pointed out the deficiencies in the Complaint, and offered Plaintiff the opportunity to amend. In discussions leading up to the filing of this motion, Plaintiff identified seven allegedly infringing products. But he refused to amend the Complaint to identify those products or the claims asserted against those products or to allege how any accused product practiced each of the limitations of the asserted claims. Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 9 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 that there has been direct infringement, and second, that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another’s infringement.” MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1378 (Fed. Cir. 2005) (quotation marks omitted). “At the motion to dismiss stage, this means that a claim of inducement ‘must contain facts plausibly showing that [the defendant] specifically intended [the direct infringer] to infringe [the patent-in-suit] and knew that the [direct infringer’s] acts constituted infringement.’” Grecia v. VUDU, Inc., No. C-14-1220-EMC consolidated with Lead Case No. C-14-0775-EMC, 2015 WL 538486, at *7 (N.D. Cal. Feb. 9, 2015) (alterations in original) (quoting In re Bill of Lading, 681 F.3d at 1339). Liability for contributory infringement arises where a person offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use . . . 35 U.S.C. § 271(c). Thus, “[t]o establish contributory infringement, the patent owner must show . . . : 1) that there is direct infringement, 2) that the accused infringer had knowledge of the patent, 3) that the component has no substantial noninfringing uses, and 4) that the component is a material part of the invention.” Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321, 1326 (Fed. Cir. 2010). The Complaint contains no information about either inducement or contributory infringement apart from simply employing the words “contributing” and “inducing.” Plaintiff identifies no direct infringer that Minka “specifically intended” to infringe the patent-in-suit, much less any allegedly infringing acts of the absent direct infringer. See Grecia, 2015 WL 538486, at *7. And the Complaint contains no information about any allegedly infringing component, much less a component that “has no substantial noninfringing uses.” See Fujitsu, 620 Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 10 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 F.3d at 1326. The Complaint’s mentions of inducement and contributory infringement are, thus, nothing more than the type of “mere conclusory statements” that fail to satisfy the pleading standard. See Ashcroft, 556 U.S. at 678. 4. The existence of a valid licensing agreement necessarily defeats Plaintiff’s patent-infringement claim. Finally, the facts alleged in the breach-of-licensing-agreement cause of action, taken as true, necessarily defeat the infringement contentions. By definition, patent infringement occurs only when a person “without authority makes, uses, offers to sell, or sells any patented invention.” 35 U.S.C. § 271 (emphasis added). Because a valid license is “in essence nothing more than a promise by the licensor not to sue the licensee,” it negates the statute’s “without authority” element, thereby providing a complete defense to a claim for patent infringement. See Spindelfabrik Suessen-Schurr Stahlecker & Grill GmbH v. Schubert & Salzer Maschinenfabrik Atiengesellschaft, 829 F.2d 1075, 1081 (Fed. Cir. 1987). The Licensing Agreement (Agreement) at issue-attached to the Complaint as Exhibit No. 2-grants to Minka (a) a limited nonexclusive right and license to offer for sale and sell products using the invention patented under the ’531 patent to lighting and ceiling fan specialty stores and (b) a limited nonexclusive right and license to offer for sale and sell products using the invention patented under the ’531 patent to home improvement center accounts. Compl., ECF No. 1, Exh. 2, ¶ 1. By its own terms, the duration of the Agreement “shall be for two (2) years from the [March 1, 2003] effective date.” Id., Exh. 2, ¶ VIII.a. Termination of the Agreement is accomplished through either party’s written notice “no later than six (6) months before the end of any two (2) year period.” Id. Otherwise, “it shall automatically be renewed for an additional two (2) year period at the expiration of each period.” Id. (emphasis added). The Licensor also may terminate the Agreement upon the Licensee’s nonpayment or failure of its other obligations “by giving fifteen (15) days written notice specifying default complained Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 11 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 hereof, provided however, that if LICENSEE shall, within such fifteen (15) days cure the default complained of, then the notice shall cease to be operative and th[e] Agreement shall continue in full force and effect as though such default had not occurred.” Id., Exh. 2, ¶ VIII.b. And even upon termination of the license, the Agreement provides that “LICENSEE can continue operating under th[e] AGREEMENT for three (3) years on existing models with the same royalty fee terms as specified herein.” Id., Exh. 2, ¶ VIII.c. The facts alleged in the Complaint establish that the Licensing Agreement is still in full effect. The Complaint specifically states that Minka “was and is contractually obligated under the Licensing Agreement to have all products incorporating the invention patented under The 531 Patent manufactured by Air Cool Company, Ltd.,” Compl., ECF No. 1, ¶ 29 (emphasis added), and that “Minka has and continues to breach the Licensing Agreement by” various acts set forth in paragraph 31, see id., ¶ 31 (emphasis added). Further, the Complaint fails to allege that either of the prerequisites to the Agreement’s termination-a written default notice from Licensor to Licensee followed by a fifteen-day curative period, or a written termination notice from either side to the other-has been satisfied. And because the allegations do not identify any terminating event, it is impossible to discern whether and when the three-year post-termination provision is in effect. Plaintiff has, therefore, appended an apparently valid instrument promising not to sue Minka for infringement to the very Complaint in which Plaintiff sues Minka for infringement. And as a result, the facts pleaded in the breach-of-licensing-agreement cause of action defeat the infringement claim. See Murphey v. TPS Enters., 296 F. A’ppx 24, 26 (Fed. Cir. 2008) (“[Patentee’s] grant of authority to [Defendants] in the license agreement to ‘make, have made, use, sell, and offer to sell’ devices made pursuant to the [patent-in-suit], as well as to sublicense those rights, immunizes [Defendants] from [patentee’s] charges of infringement based on those acts committed while the agreement was in force.”). In other words, by seeking to Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 12 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 recover for both infringement and breach of license, Plaintiff has pleaded himself out of Court, at least as to the infringement claim. B. Breach of Licensing Agreement The allegations in the breach-of-licensing-agreement cause of action likewise fail Rule 8’s pleading requirements. As with the infringement contentions, the Complaint broadly alleges that Minka breaches the Licensing Agreement through “[t]he manufacture, distribution and/or sale of ceiling fans or their component parts which incorporate the invention patented under The 531 Patent, and without compensation to Plaintiff David Tai.” See Compl., ECF No. 1, ¶ 31B. Essentially, this is a statement that Minka infringes without permission. But again, district courts in the Ninth Circuit have concluded that the Iqbal/Twombly pleading standards now “govern in patent cases.” See Footbalance, 2016 WL 5786936, at *2; see also discussion supra Section II.A.1. Accordingly, where the allegations underlying a breach-of-licensing-agreement claim depend on patent infringement, those allegations must allege that the “product practices each of the limitations found in at least one asserted claim,” see e.Digital, 2016 WL 4427209, at *3, and “offer sufficient specificity to and put the defendant on notice of which products are at issue,” TeleSign, 2016 WL 4703873, at *3. Plaintiff’s Complaint does neither. Further, the Complaint alleges that Minka “refus[es] to cooperate in the prosecution of infringers of The 531 Patent.” Compl., ECF No. 1, ¶ 31C. But the Complaint identifies no third- party infringers with sufficient specificity to inform Minka in whose prosecution it has refused to cooperate; indeed, Minka is the only alleged infringer named in the Complaint. But “the long- recognized general principle that no person may sue himself” of course prohibits the contract from being interpreted in a way that requires Minka to participate in its own prosecution. See United States v. I.C.C., 337 U.S. 426, 430 (1949). Accordingly, the breach-of-licensing- Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 13 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 agreement cause of action, as with the infringement cause of action, fails to put Minka on notice of Plaintiff’s allegations against it. C. Breach of Duty of Good Faith and Fair Dealing Finally, the Complaint’s allegations fail to state a claim for breach of the implied covenant of good faith and fair dealing because they merely re-allege breaches of express contract terms. “Arizona law implies a covenant of good faith and fair dealing in every contract,” with implied terms that “are as much a part of the covenant as are the express terms.” Wells Fargo Bank v. Az. Laborers, Teamsters & Cement Masons Local No. 395 Pension Trust Fund, 201 Ariz. 474, 490 (2002). “A claim for breach of the covenant is not proper, however, when a plaintiff merely alleges [b]reach of an express term in a contract.” Ir. Miller, Inc. v. Shee Atika Holdings Phoenix, LLC, No. CV-10-00354-PHX-ROS, 2010 WL 2743653, at *2 (D. Ariz. July 12, 2010) (alteration in original) (quotation marks and citation omitted) (dismissing claim for breach of duty of good faith and fair dealing as “duplicative of Plaintiff’s breach of contract claim.”). Here, Plaintiff’s claim for breach of the implied covenant of good faith and fair dealing “is duplicative of Plaintiff’s breach of contract claim.” See id. The first and last allegations of the claim explicitly allege breaches of the Licensing Agreement. See Compl., ECF No. 1, ¶ 36A (alleging infringement “to avoid paying Plaintiff David Tai the benefits under the Licensing Agreement” (emphasis added)); id. ¶ 36E (Defendant “breached its duty of good faith and fair dealing . . . [b]y continuing to breach the terms of the Licensing Agreement” (emphasis added)). The second allegation asserts an “attempt to assign benefits and rights,” which is a restated allegation of the Agreement’s non-assignment provision. See Compl., ECF No. 1, Exh. 2, ¶ VII.a. (“Neither this AGREEMENT nor any of its benefits nor any rights hereunder shall be directly or indirectly assigned by any party hereto without the prior written consent of all parties Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 14 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 hereto.”). Similarly, the third and fourth contentions are merely a repackaged breach-of- licensing-agreement claim and the assertion that Minka attempted to defend itself. See Compl., ECF No. 1, ¶¶ 36C-36D. Thus, the bases for the alleged breach of the covenant of good faith and fair dealing are nothing more than a claim that Minka breached the licensing agreement. Because this cause of action is improperly duplicative of the second cause of action, it too must be dismissed. See Ir. Miller, 2010 WL 2743653, at *3. III. CONCLUSION Plaintiff has presented Minka and the Court with a document that requires a best guess as to which of Minka’s hundreds of products might infringe which of the patent’s twenty claims. The Complaint then alleges the existence of an Agreement that legally permits the very behavior on the part of Minka that Plaintiff purports to condemn. Because these vapid, conflicting allegations are simply “unadorned, the-defendant-unlawfully-harmed-me accusation[s]” that fail to satisfy Rule 8’s pleading standard, see Ashcroft, 556 U.S. at 678, Minka asks the Court to dismiss Plaintiff’s Complaint with prejudice. Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 15 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 Dated: January 11, 2017 Respectfully submitted, /s/ Herbert J. Hammond Herbert J. Hammond Texas Bar No. 08858500 herbert.hammond@tklaw.com Natalie M. Cooley Texas Bar No. 24079912 natalie.cooley@tklaw.com THOMPSON & KNIGHT LLP 1722 Routh Street, Suite 1500 Dallas, Texas 75201 214.969.1700 214.969.1751 (facsimile) Brad A. Denton Denton Peterson, PC 1930 N. Arboleda, Suite 200 Mesa, Arizona 85213 Arizona Bar No. 016454 (480) 655-7440 (480) 655-7099 (Fax) Brad@dentonpeterson.com ATTORNEYS FOR DEFENDANT MINKA LIGHTING, INC. Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 16 of 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 CERTIFICATE OF SERVICE I certify that on January 11, 2017, I served a true and correct copy of the foregoing on Plaintiff’s counsel, Douglas M. Schumacher through the Court’s electronic filing system. /s/ Herbert J. Hammond Herbert J. Hammond CERTIFICATION PURSUANT TO COURT’S DECEMBER 8, 2016 ORDER I certify that, pursuant to the Court’ December 8, 2016 Order requiring parties to meet and confer prior to filing 12(b) motions, the parties met and conferred on the basis of the motion and Defendant’s counsel provided Plaintiff’s counsel written notice of Defendant’s objections to Plaintiff’s Complaint. Defendant afforded Plaintiff the opportunity to amend the Complaint in advance of filing this motion. Plaintiff declined to amend, thereby requiring Defendant to file this motion. /s/ Herbert J. Hammond Herbert J. Hammond Case 2:16-cv-02810-DLR Document 22 Filed 01/11/17 Page 17 of 17