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Ei Du Pont De Nemours and Co. v. Heraeus Precious M S North America Conshohocken LLC

United States District Court, Ninth Circuit

June 7, 2013

E.I. DU PONT DE NEMOURS AND COMPANY, a Delaware corporation Plaintiff,

Peter E. Heuser, Devon Zastrow Newman, SCHWABE, WILLIAMSON & WYATT, P.C. Portland, OR, Matthew W. Brewer, Sean G. Gallagher, Adam K. Mortara, Asha L.I. Spencer BARTLIT BECK HERMAN PALENCHAR & SCOTT LLP, Chicago, IL, Attorneys for Plaintiff.

Steven K. Blackhurst ATER WYNNE LLP Portland, OR, Maximillian A. Grant, Matthew J. Moore, Lisa Limor Rabie, Elizabeth M. Roesel, Gregory K. Sobolski LATHAM & WATKINS LLP Washington, D.C., Alexander C. Johnson, Jr., MARGER JOHNSON & McCOLLOM P.C., Portland, OR, Attorneys for Defendants.


DENNIS JAMES HUBEL, Magistrate Judge.

The plaintiff E.I. Du Pont de NeMours and Company ("DuPont") sues the defendants Heraeus Precious M s North America Conshohocken LLC ("Heraeus") and SolarWorld Industries America, Inc. ("SolarWorld"), alleging infringement of DuPont's patent for a conductive m lization paste used in the production of photovoltaic solar cells, U.S. Patent No. 8, 158, 504 ("the 504 Patent"). In Heraeus's original Answer, it asserted three counterclaims, the third of which alleged DuPont had violated Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), in connection with statements made by DuPont in a press release it issued on July 19, 2012. See Dkt. #25, Counterclaims, ¶¶ 22-26. The court granted DuPont's motion to dismiss that counterclaim because Heraeus had failed to allege a required element; i.e., that DuPont acted in bad faith. See Dkt. # 64, p. 10 (citing, inter alia CollegeNET, Inc. v. Xap Corp., 2004 WL 2303506, at *10 (D. Or. Oct. 12, 2004)). The dismissal was without prejudice to Heraeus's amendment of the counterclaim to allege bad faith.

On March 1, 2013, Heraeus filed its Amended Answer, Affirmative Defenses and Counterclaims. Dkt. #70. Heraeus now asserts two counterclaims for unfair competition under the Lanham Act, one entitled "Bad Faith Marketplace Statements Regarding Intellectual Property Theft" (Count III, the "IP Theft Counterclaim"), and the other entitled "Bad Faith Marketplace Statements Regarding Patent Infringement" (Count IV, the "Patent Infringement Counterclaim"). Id., Counterclaims, ¶¶ 21-43. The matter before the court is DuPont's motion to dismiss these two counterclaims for failure to state a claim for which relief may be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6). Dkt. #82. DuPont claims Heraeus's amendment suffers from the same defect as before; i.e., failure to plead bad faith properly. In addition, DuPont claims Heraeus's new allegations relating to DuPont's alleged communications to Heraeus's Taiwanese customers fail to state an actionable claim. See id.


General Standards

Chief Judge Aiken of this court set forth the standard for the court's consideration of a motion to dismiss in Gambee v. Cornelius, No. 10-CV-6265-AA, 2011 WL 1311782 (D. Or. Apr. 1, 2011) (Aiken, C.J.). Judge Aiken observed:

Under Fed.R.Civ.P. 12(b)(6), a complaint is construed in favor of the plaintiff, and its factual allegations are taken as true. Daniels-Hall Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). "[F]or a complaint to survive a motion to dismiss, the non-conclusory factual content, ' and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief." Moss v. United States Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 563 [, 127 S.Ct. 1955, 1969, 167 L.Ed.2d 929] (2007). "[G]enerally the scope of review on a motion to dismiss for failure to state a claim is limited to the Complaint." Daniels-Hall, 629 F.3d at 998.

Id. at *2.

Consideration of Matters Outside the Pleadings

"As a general matter, a district court may not consider any material outside of the pleadings when ruling on a Rule 12(b)(6) motion." O'Connell-Babcock v. Multnomah County, Oregon, No. 08-cv-459-AC, slip op., 2009 WL 1139441 at *4 (D. Or. Apr. 24, 2009) (King, J.) (citing Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001)). However, the Ninth Circuit recognizes two exceptions to this rule. First, the court may consider documents "whose contents are alleged in a [pleading] and whose authenticity no party questions, but which are not physically attached to the... pleading.'" Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998) (quoting Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994)), superseded by statute on other grounds as recognized in Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 681 (9th Cir. 2006); accord Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001) (citing Parrino ); Vanguard Prods. Group v. Merchandising Technologies, Inc., slip op., 2008 WL 939041, at *3 (D. Or. Apr. 3, 2008) (Brown, J.) (same; quoting Lee ).

In the current case, Heraeus's Lanham Act counterclaims arise, in part, from statements made by DuPont in a press release issued on July 19, 2012. A copy of the press release is attached as Exhibit 1 to the Declaration of Matthew W. Brewer in support of DuPont's Motion to Dismiss. Dkt. #84-1. Because Heraeus makes allegations regarding the press release and the language of the press release is integral to Heraeus's Lanham Act counterclaims, and further because its authenticity is not at issue, the court may consider the press release in ruling on DuPont's motion to dismiss. See Parrino, supra .

"Second, under Fed.R.Evid. 201, a court may take judicial notice of matters of public record'" in considering a motion to dismiss. Lee, 250 F.3d at 688-89 (quoting Mack v. South Bay Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986)). A district court's decision regarding whether to take judicial notice of documents is reviewed for abuse of discretion. Id.

In connection with the present motions, DuPont asks the court to take judicial notice of two types of documents it asserts are "matters of public record." These include (1) a criminal indictment of Tung Pham, Heraeus's former head of R&D, charging him with theft of trade secrets, see Dkt. #84-3; and (2) public documents relating to prosecution of the 254 Patent, see Dkt. #84-2. The court will take judicial notice of these documents for purposes of the current motions.

DuPont further asks the court to take judicial notice of some of Heraeus's discovery responses. DuPont has not cited any authorities from this court or the Ninth Circuit Court of Appeals in support of its request, although it has cited two cases from federal district courts in Connecticut and California, in which those courts indicated discovery responses may be considered on a Rule 12(b)(6) motion. See Dkt. #83, p. 10 (citing Harris v. Stonecrest Care Auto Ctr., LLC, 559 F.Supp.2d 1088, 1089 (S.D. Cal. 2008); Steiner v. Shawmut Nat'l Corp., 766 F.Supp. 1236, 1241 n.13 (D. Conn. 1991)). The court finds discovery responses are a type of materials "outside the pleadings" that would require the court to treat DuPont's motion to dismiss as one for summary judgment under Rule 56. See Fed.R.Civ.P. 12(d). The court declines to embark on that course of action at this juncture. Therefore, these discovery responses are not considered on this motion to dismiss.


Heraeus's Lanham Act counterclaims are based on representations it alleges DuPont made concerning Heraeus and its products. Both of the counterclaims allege DuPont misrepresented the legitimacy of Heraeus's products in the press release. The press release is titled, "DuPont Addresses Patent Protection at Solarbuzz China Conference; Intellectual Property Theft Growing in Competitive Climate of Photovoltaics." Id. According to Heraeus, the release was issued and published on the internet, and also distributed by DuPont directly to DuPont's and Heraeus's customers via email. Among other things, the press release discusses the growth of intellectual property theft in the photovoltaic industry, and mentions that DuPont filed the present case for patent infringement against Heraeus. In pertinent part, the release states as follows:

Shanghai, July 19, 2012 - DuPont Electronics & Communications Managing Director for Greater China, Walt Cheng, was a featured speaker today at the Solarbuzz China Photovoltaics (PV) Conference in Shanghai. In addressing the importance of materials supply in PV manufacturing, Cheng emphasized the critical role innovation plays in advancing the solar energy industry, and the ...

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