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Godaddy.Com, LLC v. Rpost Communications Ltd.

United States District Court, D. Arizona

December 9, 2014, LLC, Plaintiff,
RPost Communications Limited, et al., Defendants.


JAMES A. TEILBORG, Senior District Judge.

Pending before the Court is Defendants RPost International Limited's and RMail Limited's Motion to Dismiss Counts III-XII of the First Amended Complaint under Fed.R.Civ.P. 12(b)(1). (Doc. 56). The Court now rules on the motion.

I. Background, LLC ("GoDaddy") has brought this Declaratory Judgment Action against Defendants RPost Holdings, Inc. ("RPost Holdings"), RPost International Limited ("RPI"), RMail Limited ("RMail"), and RPost Communications Limited ("RComm") (collectively, "RPost") seeking, among other things, declarations of invalidity and noninfringement of U.S. Patent Nos. 8, 209, 389 ("the 389 patent"), 8, 224, 913 ("the 913 patent"), 8, 161, 104 ("the 104 patent"), 8, 468, 198 ("the 198 patent"), and 8, 468, 199 ("the 199 patent") (collectively "the Tomkow Patents") in Counts III-XII of the First Amended Complaint. (Doc 46 at 18-32). RPI and RMail seek dismissal of Counts III-XII claiming that they have no right, title, or interest in the Tomkow Patents, and therefore, GoDaddy has no standing to seek declaratory relief against them. (Doc. 56 at 1).

A. Ownership History of the Tomkow Patents

Starting in 1999, Dr. Terrance Tomkow applied for the Tomkow Patents, which describe a way of tracking and confirming delivery of email. (Doc. 46 at 6). Kenneth Barton and Zafar Khan joined Tomkow in creating a corporate structure to protect this intellectual property and founded RPI, in which Tomkow, Barton, and Khan were all principal shareholders. ( Id. ) On May 20, 2001, Dr. Tomkow assigned the applications for the Tomkow Patents to RPI. (Doc 35-2 at 2). An assignment agreement dated March 21, 2011 shows that RPI then assigned the Tomkow Patents to RComm. (Doc. 46-2 at 1, 9-13; Doc. 59 at 1-2). Barton did not sign the agreement assigning the Tomkow Patents from RPI to RComm. (Doc. 46-2 at 4).

B. Related Prior and Pending Litigation

Barton's relationship with Tomkow and Khan fell apart over time, and Barton eventually brought two actions against Tomkow and Khan (the "Barton Cases"). (Doc. 46 at 6). In the First Barton Case, a California court found that Tomkow, Khan, and RPI had committed fraud and breach of fiduciary duty against Barton, and Tomkow, Khan, and RPI were ordered to pay him general and punitive damages. RMail Limited v., Inc., 2:10-cv-258-JRG, 2014 U.S. Dist. LEXIS 25597, at *15-16 (E.D. Tex. Jan. 30, 2014) (providing an overview of the facts of the Barton Cases). In the Second Barton Case, Barton brought another state action against RPI, RMail, and RComm alleging that RPI, Tomkow, and Khan fraudulently transferred corporate assets, including intellectual property assets, of RPI to RComm and RMail. Id. Barton seeks in the Second Barton Case to void the transfer of those assets, id. at *16, which included the Tomkow Patents. (Doc. 46-2 at 1, 9-13).

Khan and Tomkow have each filed for bankruptcy under Chapter 13 (the "Bankruptcy Cases"). Amazon, 2014 U.S. Dist. LEXIS 25597, at *16. Barton has objected to the bankruptcy filings, and the bankruptcy court granted his motions to convert Khan and Tomkow's Chapter 13 Bankruptcy Cases to Chapter 7. Id. at *17.

There have been various lawsuits in which the Tomkow Patents are at issue. In Amazon, RPost Holdings, RMail, and RComm asserted various patents against the defendants. Id. at *12. The Amazon court learned of the pending Barton Cases and Bankruptcy Cases, id. at *15, which RPost had never mentioned, and therefore stayed the Amazon case until the Barton Cases and Bankruptcy Cases are resolved. Id. at *31. The court said, "If the fraudulent transfer claims are ultimately resolved in Barton's favor and the March 2011 transaction declared null and void, then that result would have a considerable impact on Plaintiffs' standing to sue" for patent infringement. Id. at *27.

In Trend Micro Inc. v. RPost Holdings, Inc., 13-CV-05227-WHO, 2014 WL 1365491 (N.D. Cal. Apr. 7, 2014), Trend Micro sued defendants, including RPI and RMail, in a declaratory judgment action seeking, among other things, a declaration of patent noninfringement and invalidity of some of the Tomkow Patents. Id. at *1. The court granted RPI's motion to dismiss for lack of subject-matter jurisdiction, finding that RPI had no legal interest in the Tomkow Patents, and therefore, Trend Micro did not have standing to sue RPI. Id. at *6-8.

C. RPost's Assertions of the Tomkow Patents Against GoDaddy

RPost, referring to itself as simply "RPost" in its communications, contacted GoDaddy and advised of its belief that GoDaddy was infringing the Tomkow Patents. (Docs. 46-3, 46-4). In an email on July 17, 2013 (Docs. 46-4) and a letter on October 4, 2013 (Doc. 46-5), RPost represented that it had clear, unclouded rights to license the Tomkow Patents. ( See Docs. 46-4 at 2-4, 46-5 at 4). GoDaddy seeks in Counts III-XII of its First Amended Complaint a declaration of invalidity and/or noninfringement of the Tomkow Patents. (Doc. 46 at 18-32). RPI and RMail move to dismiss these counts by making a factual subject-matter ...

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