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Composite Resources Inc. v. Recon Medical LLC

United States District Court, D. Nevada

July 5, 2019

COMPOSITE RESOURCES INC., Plaintiff/Counter Defendant,
v.
RECON MEDICAL LLC, Defendant/Counter Claimant.

          ORDER

          MIRANDA M. DU UNITED STATES DISTRICT JUDGE

         I. SUMMARY

         This is a patent, trademark, and unfair competition case about tourniquets used to stop the flow of blood to a body part when that body part is severely injured. Before the Court are Defendant/Counter Claimant Recon Medical LLC's (“Recon”) motions for summary judgment as to the patents-in-suit's invalidity (ECF Nos. 111, 112), and noninfringement of the patents-in-suit (ECF No. 113), along with Plaintiff/Counter Defendant Composite Resources Inc.'s (“CRI”) motion for summary judgment on its patent, trademark, and unfair competition claims (ECF No. 114).[1] As further explained below, the Court will deny Recon's motions except as to all but one of CRI's indirect patent infringement allegations, for which the Court will grant summary judgment to Recon. The Court will also grant summary judgment to CRI as to its trademark and federal unfair competition claims, but deny CRI summary judgment on its patent and state unfair competition claims.

         II. BACKGROUND

         CRI initiated this suit on January 27, 2017. (ECF No. 1.) It was later transferred to this Court from the District of South Carolina. (ECF No. 28.) CRI's high-level allegation is that Recon sells counterfeit copies of CRI's tourniquets under the Recon brand name, while also using at least one of CRI's trademarks to advertise them. This allegation breaks into patent, trademark, and unfair competition claims.

         More specifically, Recon offers for sale certain tourniquets that CRI alleges infringe its patents, which are entitled “Tourniquet and Method of Use” (U.S. Patent Nos. 7, 842, 067 (“the '067 patent”), 7, 892, 253 (“the '253 patent”), and 8, 888, 807 (“the '807 patent”)). (ECF No. 106 at 6-10.) The patents cover a method and a tourniquet for restricting the flow of blood in a body part, along with a method of making such a tourniquet. (ECF No. 114 at 12-19.) CRI also alleges that Recon infringes its trademark, U.S. Trademark Registration No. 3, 863, 064, covering the phrase Combat Application Tourniquet (the “Combat Application Tourniquet Mark”). (Id. at 3, 20-22.) CRI further alleges Recon engages in unfair competition in violation of 15 U.S.C. § 1125(a). (Id. at 22-23.) In addition, CRI alleges Recon's trade practices violate South Carolina's Unfair Trade Practices Act, SC Code Ann. § 39-5-20, et seq. (“SCUTPA”). (Id. at 12-13.)

         As to CRI's patent infringement claims, CRI alleges that Recon infringes: claims 1 through 11 and 15 through 17 of the '067 patent (ECF No. 114 at 12); claims 1 through 5, and 8 through 12 of the '253 patent (Id. at 14); and claims 1 through 4, 6, 8 through 20, and 22 through 30 of the '807 patent (id. at 18).

         As to CRI's trademark infringement claims, CRI alleges that Recon advertises its tourniquets on both its website and Amazon's marketplace using the Combat Application Tourniquet Mark, and provided an insert with each tourniquet Recon sold for some time, which also used the Combat Application Tourniquet Mark. (ECF No. 106 at 4-5.) CRI further alleges that Defendant's tourniquets are virtually identical to CRI's tourniquets, and are sold to the same class of consumers, and through the same channels, as CRI's tourniquets. (Id. at 5.) CRI alleges that all of this causes consumer confusion. (Id.) CRI further alleges that this confusion harms CRI because consumers will associate CRI with any issues caused by Recon's tourniquets, which, given the nature of the products, could be severe, resulting in injury or death. (Id.)

         CRI's federal and state unfair competition claims rely in part on CRI's allegations of patent and trademark infringement. (Id. at 11-13.) CRI's SCUTPA claim also contains the allegation that Recon's allegedly counterfeit tourniquets harm the public because they are of lower quality, and have not undergone the same safety testing, as CRI's tourniquets. (Id. at 12.) Therefore, CRI alleges, the public is harmed when it buys Recon's tourniquets thinking they are CRI's, but ends up getting hurt because Recon's products are less effective. (Id.)

         The Court previously construed certain disputed terms in the patents-in-suits' claims. (ECF No. 103.) Following further briefing from the parties, the Court reconsidered its decision on the phrase “body part, ” finding that it is not a claim limitation, either in the preambles of the asserted patents (ECF No. 124), or as used throughout the asserted claims (ECF No. 140). The latter order issued as the parties were briefing their summary judgment motions now before the Court. Recon acknowledges that the Court's reconsideration of “body part” renders much of its summary judgment motion as to noninfringement moot. (ECF No. 137 at 2.) Therefore, the Court does not address herein Recon's argument that it does not infringe the asserted patents because it does not supply body parts to its customers. (ECF No. 113 at 5, 13-15.)

         The Court heard oral argument, where the parties were directed to focus on the patent and trademark infringement aspects of CRI's summary judgment motion, on June 26, 2019 (the “Hearing”). (ECF No. 150.) Finally, the Court notes that CRI submitted actual tourniquets as exhibits to its motion for summary judgment: two of CRI's, and two of Recon's. (ECF Nos. 115-6, 115-7, 115-8, 115-9.) The Court reviewed and considered these tourniquets in ruling on the pending motions.

         III. LEGAL STANDARD

         “The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the facts before the court.” Nw. Motorcycle Ass'n v. U.S. Dep't of Agric., 18 F.3d 1468, 1471 (9th Cir. 1994). Summary judgment is appropriate when the pleadings, the discovery and disclosure materials on file, and any affidavits “show there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). An issue is “genuine” if there is a sufficient evidentiary basis on which a reasonable fact-finder could find for the nonmoving party and a dispute is “material” if it could affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). Where reasonable minds could differ on the material facts at issue, however, summary judgment is not appropriate. See Id. at 250-51. “The amount of evidence necessary to raise a genuine issue of material fact is enough ‘to require a jury or judge to resolve the parties' differing versions of the truth at trial.'” Aydin Corp. v. Loral Corp., 718 F.2d 897, 902 (9th Cir. 1983) (quoting First Nat'l Bank v. Cities Service Co., 391 U.S. 253, 288-89 (1968)). In evaluating a summary judgment motion, a court views all facts and draws all inferences in the light most favorable to the nonmoving party. See Kaiser Cement Corp. v. Fishbach & Moore, Inc., 793 F.2d 1100, 1103 (9th Cir. 1986).

         The moving party bears the burden of showing that there are no genuine issues of material fact. See Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once the moving party satisfies Rule 56's requirements, the burden shifts to the party resisting the motion to “set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256. The nonmoving party “may not rely on denials in the pleadings but must produce specific evidence, through affidavits or admissible discovery material, to show that the dispute exists, ” Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991), and “must do more than simply show that there is some metaphysical doubt as to the material facts.” Orr v. Bank of Am., 285 F.3d 764, 783 (9th Cir. 2002) (internal citations omitted). “The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient.” Anderson, 477 U.S. at 252.

         Further, “when parties submit cross-motions for summary judgment, ‘[e]ach motion must be considered on its own merits.'” Fair Hous. Council of Riverside Cty., Inc. v. Riverside Two, 249 F.3d 1132, 1136 (9th Cir. 2001) (quoting William W. Schwarzer, et al., The Analysis and Decision of Summary Judgment Motions, 139 F.R.D. 441, 499 (Feb. 1992)) (citations omitted). “In fulfilling its duty to review each cross-motion separately, the court must review the evidence submitted in support of each cross-motion.” Id.

         IV. RECON'S INVALIDITY MOTION (ECF NOS. 111, 112)

         Recon's argument that the '067 and '807 patents are invalid because a version of CRI's tourniquet was on sale more than one year prior to the proper critical date of these patents has a few components. (ECF No. 112.)[2] First, Recon argues early versions of CRI's tourniquets practice the inventions set forth in the asserted claims of these patents because of CRI's statement in its initial contentions that “CRI's Combat Application tourniquet practices the claimed inventions set forth in” those claims. (Id. at 9.) While Recon concedes it is not sure what generations of the tourniquet practice the claimed inventions, it asserts the tourniquets did not change between generations. (Id. at 9-10.)

         Second, Recon argues that neither the '067 nor the '807 patent are entitled to the priority date of the provisional applications they claim priority to, because the applicable provisional application did not adequately disclose the inventions embodied in the corresponding patent. (Id. at 15-26.) Instead, Recon argues “the '067 and '807 Patents must each be limited in their priority claims to the dates on which the respective applications from which those patents issued were filed.” (Id. at 26.) Because those dates are later than the date when the patents' inventor Mark Esposito sold and otherwise made available early versions of his tourniquets, Recon insists the patents are invalid under 35 U.S.C. § 102(b). (Id. at 6, 8.) Alternatively, Recon seeks a declaration (phrased as partial summary judgment) that the '067 and '807 patents are limited in their priority claims to the dates on which the respective applications from which those patents issued were filed. (Id. at 29.)

         CRI counters in relevant part that genuine issues of material fact preclude summary judgment on invalidity because Recon fails to establish by clear and convincing evidence that a particular version of Mr. Esposito's early tourniquets practiced each limitation of any specific claim of the '067 and '807 patents. (ECF No. 126 at 2.)[3] For this reason, CRI argues, Recon's extensive analysis of the appropriate critical date of the two patents is irrelevant, and Recon's desired alternative relief of a declaration as to these patents' critical dates is merely an unnecessary advisory opinion. (Id.)

         The Court agrees with CRI. Recon's proffered evidence does not establish that a particular early version of CRI's tourniquets is invalidating prior art. Recon bears the burden of establishing the '067 and '807 patents' invalidity by clear and convincing evidence. See, e.g., PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 1305 (Fed. Cir. 2008) (“[T]he party asserting invalidity[] must still show by clear and convincing evidence that the asserted patent is invalid.”). Further, Recon, “having the ultimate burden of proving its defense of invalidity based on anticipating prior art, then has the burden of going forward with evidence that there is such anticipating prior art[.]” Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1327 (Fed. Cir. 2008). Where, as here, the party asserting invalidity offers insufficient evidence of anticipating prior art, the analysis ends. See, e.g., Orexigen Therapeutics, Inc. v. Actavis Labs. FL, Inc., 282 F.Supp.3d 793, 805-6 (D. Del. 2017).

         The issue with Recon's invalidity motion is it is unclear exactly which generation of Mr. Esposito's early tourniquets Recon contends constitutes anticipating prior art, and whether those generations of early tourniquets differ in any material way. Recon asserts they do not materially differ, but only points to evidence that either equivocates or tends to show the contrary. (Compare ECF No. 112 at 8 (citing ECF No. 112-9) with ECF No. 112-9 (containing many statements to the effect that the early generations of tourniquets differed from each other); see also ECF No. 126 at 6-8 (making this argument).) Thus, Recon has failed to show how any particular version of Mr. Esposito's early tourniquets meets all limitations of one of the '067 and '807 patents' asserted claims. (ECF No. 112 at 26-28.) Whether a particular early generation of Mr. Esposito's tourniquets constitutes anticipating prior art is a factual question-one that Recon has failed to meet its initial burden to answer with the evidence it presented to the Court. See Tech. Licensing Corp., 545 F.3d at 1327 (explaining Recon's burden). Unable to resolve this key factual question with the evidence Recon proffered in its invalidity motion, the Court need not address Recon's extensive argument as to the appropriate critical date of the '067 and '807 patents. See, e.g., PowerOasis, 522 F.3d at 1305 (explaining the patent office also takes this sensible approach). The Court will therefore deny Recon's motion for summary judgment as to invalidity.

         V. RECON'S NONINFRINGEMENT MOTION (ECF NO. 113)

         Much of Recon's noninfringement summary judgment motion is moot in light of the Court reconsideration of the proper construction of “body part, ” but three of Recon's arguments from the motion remain. (ECF No. 137 at 2-6.) The Court will address all three arguments, in turn, below. Because the Court is persuaded by one, but unpersuaded by Recon's two other remaining arguments, the Court will grant in part and deny in part Recon's noninfringement motion.

         First, Recon argues it is entitled to summary judgment on CRI's indirect infringement claims as to asserted claims 1-11 and 15-17 of the '067 patent, and claims 1-5, and 8-11, of the '253 patent because CRI only included a boilerplate assertion in its infringement contentions that “Defendant is contributing to or inducing infringement by such users” as these claims. (Id. at 2-4.) The Court agrees with Recon on this point. In fact, CRI's statement in its infringement contentions went further-only alleging indirect infringement as to these claims if the Court decided “body part” was a necessary element of these claims. (ECF No. 76-1 at 2-3, 19-20; see also ECF No. 114 at 10-11.) Because the Court ultimately agreed with CRI that “body part” is not a claim limitation (ECF Nos. 124, 140), CRI's indirect infringement allegations as to these claims are moot-as CRI effectively acknowledges in its infringement contentions. CRI's counsel also conceded ...


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