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McAirlaids, Inc. v. Kimberly-Clark Corporation

United States District Court, Fourth Circuit

December 31, 2013

McAIRLAIDS, INC., Plaintiff,
v.
KIMBERLY-CLARK CORPORATION, et al., Defendants.

MEMORANDUM OPINION

SAMUEL G. WILSON, District Judge.

This is an action for patent infringement under 35 U.S.C. § 271 by plaintiff McAirlaids lnc. (it McAirlaids") against Kimberly-clark Corporation, Kimberly-clark Worldwide, Inc., and Kimberly-clark Global Sales, LLC (collectively "K-C"), arising out of the manufacttlre, importation, and sale of absorbent pads.[1] McAirlaids asserts, among other claims for relief, direct infringement under § 271(a) of a product-by-process patent claim, indirect inducement under § 271(b), and willful infringement. K-C has moved to dismiss McAirlaids'§ 271(a) claim for relief because the process resulting in the allegedly offending product occurs in the People's Republic of China, and it has moved to dismiss the indirect inducement and willful infringement claim son the grounds that McAirlaids has not plausibly pled those claim s. The court finds that McAirlaids may assert a claim for relief under § 271(a) based on the product-by-process patent claim even though the manufacturing process occurs outside the United States, and it also finds that McAirlaids has plausibly pled indirect inducement and willful infringement. Accordingly, the court will deny K-C's partial motion to dismiss.

I.

McAirlaids alleges K-C's production of absorbent pads directly, indirectly, and willfully infringes U.S. Patent No. 6, 675, 702 ("the 702 Patent"), which McAirlaids owns by assignment. Primarily at issue now is Claim 18 of the 702 Patent, which the parties agree is a product-by-process claim.[2] K-C manufactures the allegedly offending products such as GoodNites Disposable Bed Mats, in China and then imports them to the United States where K-C offers to sell, sells, and uses them. McAirlaids alleges that K-C knew of the 702 Patent and oversaw, directed, instructed, and/or exercised control over its Chinese manufacturer to make products using the patented process described in the 702 Patent. According to McAirlaids, before all this occurred, the parties met pursuant to a signed confidential disclosure agreement. During that meeting McAirlaids disclosed to K-C its proprietary and patented manufacturing processes for making absorbent pads, and shortly after that meeting, K-C employees filed a patent application for a Disposable Absorbent Pad, " and K-C began producing the allegedly offending products.

lI.

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests the legal suftkiency of a complaint. ln order to survive a motion to dismiss under Rule 12(b)(6), a complaint need not contain detailed factual allegations, but must contain facts sufficient "to raise a right to relief above the speculative level" and distaste a claim to relief that's plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007).A claim is plausible if the complaint contains "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged, " and if there is "more than a sheer possibility that a defendant has acted unlawfully" Ashcroft v. lqbal , 556 U.S. 662, 678-79 (2009). W hen considering a Rule 12(b)(6) motion, the court must accept all factual allegations in the complaint as true, and must draw all reasonable inferences in favor of the plaintiff. See Erickson v. PardusM , 551 U.S. 89, 94 (2007).

III.

K-C seeks to superimpose process claim law and logic on McAirlaids' product-by-process claim, arguing that the cohort should dismiss McAirlaids' § 271(a) claim for relief because K-C manufactures the allegedly offending product in China. The court rejects K-C's argllments based on a plain reading oft he statute.

The statute governing infringement of U.S. patents, 35 U.S.C. § 271, specifies actions that constitute infringement. Under § 271(a), which defines direct patent infringement, "whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term oft he patent therefore, infringes the patent."[3] 35 U.S.C. § 271(a). Patent law recognizes that some inventions, because of language limitations, "may be defined by the process of making rheum" In re Biddeford , 357 F.2d 679, 682 (C.C.P.A.1966).Such "product-by-process" claims enable an applicant to claim an otherwise patentable product that resists definition by other than the process by which it is made." In re Thome , 777 F.2d 695, 697 (Fed. Cir. 1985). And though defined by its manufacturing process, "the invention so defined is a product and nota process." In re Bridge ford, 357 F.2d at 682; see also SmithKline Beechen Corp.v.Apotex Cop., 439 F.3d 1312 , 1317 (Fed. Cir. 2006) ("Regardless of how broadly or narrowly one construes a product-by-process claim, it is clear that such claims are always to a product, not a process.').

It follows that a product cannot escape an action for direct infringement under § 271(a) by virtue of its extra territorial manufacture'.

Critically, it is the infringing act - making, using, offering to sell, selling, or importing - that must be within (or into)the United States. Even fan infringing production manufactured outside of the United States person infringes if he imports the products uses, offers to seller sells tin the United States.

Gemtron Corp. v. Saint-Gobain Corp., 572F.3d 1371, 1380(Fed.Cir.2009)(citing In re N. Pigment Co. , 71 F.2d 447, 456 (C.C.P.A. 1934) ("lt has long been settled that articles patented in the United States connote manufactured abroad, imported, and sold in violation oft he rights of the patentee).

Herewith parties agree Claim 18 of the 702 Patents a product-by-process claim. As such, it protects the final product, which is the patented invention for purposes of analysis under § 271(a). Nothing in the clear language of § 271(a) requires the process steps of a product-by-process claim to occur in the United States as an elment of infringement. Nor has any case so held.[4] Accordingly, the location of K-C's product manufacturing does not defeat McAirlaids'§ 271(a) claim.

IV.

Under a plausibility analysis, K-C argues that McAirlaids' claim s of indirect infringement under j§ 271(b) and willful infringement are inadequate because they contain boilerplate assertions" without suftkient facts.[5] The courtfinds McAirlaids has plausibly pled both.

A claim of indirect inducement under § 271(b) requires the plaintiff to establish that the alleged inducer "knowingly induced infringing activity and possessed specific intent to encourage another's infringement" and that the induced conduct resulted in direct infringement. Aknmai Techs., Inc. v. Limelight Networks lnc. , 692 F.3d 1301, 1308 (Fed. Cir. 2012) (enbanc). To adequately plead willful infringement, a plaintiff need only allege the defendant's knowledge and continued willful infringement of the patent, both plausibly supported with facts. See Mitutoyo Corp. v. Central Purchasing, LLC, 499 F.3d 1284 , 1290 (Fed.Cir.2007).[6]

McAirlaids has pled suftkient facts that tend to support the knowledge requirement. (See, e.g., First Amended Complaint, ¶¶ 19& 21-25) Perhaps most plausibly among them, McAirlaids describes a pre-suit meeting among the parties governed by a signed confidential disclosure agreemen during which it disclosed to K-C its proprietary and patented manufacturing processes for making absorbent pads. (Id. at ¶ 25) According to McAirlaids, shortly after the meeting, K-C's employees filed a patent application for a "Disposable Absorbent Pad." (Id.) Similarly, McAirlaids has pled sufticient facts and circumstances to supportits allegations that K-C knowingly induced infringing activity and specitkally intended to encourage infringement by others. (See, e.g., id. at ¶¶ 26 & 33-34) A complete reading of the complaint makes the following allegations clear: K-C learned of the 702 Patent through a presuit meeting; sought a patent based on the information it lenrned; and then went to work encouraging and directing its Chinese manufacturer to infringe the 702 Patent by making products like GoodNites Disposable Bed Mats. These collective allegations, and the fair inferences drawn therefrom, are sufticient to satisfy the plausibility of McAirlaids' § 271(b) indirect infringement and willful infringement claims.

V.

For the foregoing reasons, the court denies the defendants' partiotion to Dismiss.


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