United States District Court, D. Arizona
P. LOGAN UNITED STATE DISTRICT JUDGE.
the Court is Defendants' partial Motion for Summary
Judgment (Docs. 79; 80). The motion is fully briefed (Docs.
84-89), and no party has requested oral argument. For the
reasons that follow, the motion will be granted.
summer of 2006, Christopher Martin, owner of Martin
Manufacturing, Inc., built a prototype of a small,
gas-powered, two-wheeled minibike. Later that fall, Martin
approached the president of Baja, Inc., then Richard Godfrey,
to reproduce and sell the minibike. Martin claims that the
parties entered into an oral agreement to license the
minibike. Qunsheng Group Co. Ltd., a Chinese manufacturer,
was selected to fabricate the minibike. Using the proposed
prototype, the minibike was manufactured and marketed under
variations of “Doodlebug” or “DB-30.”
August and September of 2006, retail distributor Pep Boys
Manny Mo & Jack of California placed orders for the
minibikes with Baja. In turn, Baja placed purchase orders for
the minibikes with Qunsheng, one for 50 units and one for
196. The minibikes were manufactured, invoiced, and shipped
to the United States, and were delivered to freight carriers
in October 2006. On or before November 10, 2006, the
minibikes were delivered to Pep Boys distribution centers.
They were then distributed to Pep Boys retailors where they
were offered for sale and sold to customers in the United
States. The minibike bearing VIN L4GSDGL056S00021 was among
those manufactured and delivered to the United States in
2006. (Doc. 80 ¶¶ 6-8, 19-25, 27-32; Doc. 80-1 at
87; Doc. 84 ¶¶ 19, 43-46.)
December 2006 and January 2007, feedback regarding the
distributed minibikes was received, and improvements were
discussed with Martin. Martin then made a prototype
incorporating the modifications. (Doc. 84 ¶¶
March 30 2007, Martin entered into a licensing agreement with
Baja to manufacture and distribute the “Doodlebug 30
minibike (the ‘MiniBike').” (Doc. 85 at 13;
Doc. 87 at 75.) The licensing agreement incorporated by
reference blue prints, CAD drawings, specifications, and
design parameters of the minibike, as well as a sample
prototype of the minibike. A “depiction of the
Minibike, ” shown below, was also attached to the
87 at 83, Exh. J.) A second production of the minibikes ran
in the spring of 2007. (Doc. 84 ¶¶ 53, 65.)
November of 2007, a dispute arose between Martin and Baja
regarding the ownership of the “Baja Doodle Bug”
design. Martin sent a letter to purchasers informing them
that Martin Manufacturing had terminated all licensing of all
products with Baja, and had selected a new distributor and/or
manufacturer. Baja ceased paying Martin royalties for sales
of the minibike.
November 15, 2007, Martin filed a patent application for his
minibike design with the United States Patent Office.
Following resubmission of an amended application, on April
28, 2009, the patent office issued United States Design
Patent No. D591, 203S (“‘203 Patent”),
entitled “Asymmetrical Mini Bike, ” the rights of
which Martin assigned to MMI.
subsequently filed a complaint in federal court on March 3,
2010, MMI, Inc. v. Baja, Inc., et al,
CV-10-00496-PHX-RCJ (D. Ariz.), bringing one claim of patent
infringement against Baja and alleged distributors. (Doc. 80
at 69-75.) The case concluded by settlement and was dismissed
without prejudice on August 5, 2011.
between 2011 and 2012, MMI claims that Martin again entered
into discussions with Godfrey, now owner of Rich Godfrey
& Associates, Inc. (dba Coleman Powersports), to license
and sell Martin's minibike. MMI claims that during those
discussions, Godfrey made false representations which induced
Martin to provide him with his minibike prototype. (Doc. 52.)
Godfrey took possession of the prototype and refused to
return it. Godfrey then shipped the prototype to China
“to be copied into an almost identical mini bike model
that directly incorporated the design elements of the
‘203 Patent ( referred to as the ‘Infringing
Products').” (Doc. 52 ¶ 24.) He marketed,
imported, distributed and sold the “Infringing
Products, ” which he made available to retail
distributors for consumer purchase.
March 12, 2015, MMI filed a second lawsuit in federal court
commencing the instant action. A First Amended Complaint was
filed on November 25, 2015. (Doc. 52.) MMI sues Richard
Godfrey (and spouse Susan Godfrey), Rich Godfrey &
Associates, Inc., Cabela's, Inc., BJ's Wholesale
Club, Inc., and Recon Enterprise, LLC, bringing claims
against them for direct, induced, and contributory patent
infringement, as well as breach of contract, fraud,
fraudulent inducement and negligent misrepresentation. MMI
seeks injunctive relief and damages.
each filed an answer and counterclaim against MMI bringing
two counts for declaratory judgment, seeking a declaration of
invalidity and a declaration of non-infringement. Defendants
presently move for partial summary judgment on their
counterclaim of invalidity. (Doc. 79.)
judgment is appropriate if “the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). Summary judgment may also be entered
“against a party who fails to make a showing sufficient
to establish the existence of an element essential to that
party's case, and on which that party will bear the
burden of proof at trial.” Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986).
moving party “bears the initial responsibility of
informing the district court of the basis for its motion, and
identifying those portions of [the record] which it believes
demonstrate the absence of a genuine issue of material
fact.” Celotex, 477 U.S. at 323. If the movant
carries its initial burden of production, in response, the
non-movant “must do more than simply show that there is
some metaphysical doubt as to the material facts, ” and
instead must “come forward with ‘specific facts
showing that there is a genuine issue for trial.'”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586-87 (1986) (quoting Fed.R.Civ.P. 56(e)).
court views the evidence and draws reasonable inferences
“in the light most favorable to the party opposing the
motion.” United States v. Diebold, Inc., 369
U.S. 654, 655 (1962). However, only disputes over facts that
could affect the outcome of the suit will preclude the entry
of summary judgment, and the disputed evidence must be
“such that a reasonable jury could return a verdict for
the nonmoving party.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). See also Scott v.
Harris, 550 U.S. 372, 380 (2007).
are presumed to be valid. 35 U.S.C. § 282; Microsoft
Corp. v. i4i Limited Partnerhsip, 131 S.Ct. 2238 (2011).
To obtain summary judgment on invalidity, the moving party
must therefore overcome the presumption of validity by
presenting clear and convincing evidence of invalidity under
35 U.S.C. §§ 101, 102, 103, 112, or
251.Honeywell Int'l. Inc. v. Universal
Avionics Systems Corp., 488 F.3d 982, 996 (Fed. Cir.
2007); Apple Computer Inc. v. Articulate Sys. Inc.,
234 F.3d 14, 26 (Fed. Cir. 2000).
Court finds that Defendants have met their burden, and have
overcome the presumption of ...