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Road Science, L.L.C. v. Continental Western Transportation Co.

December 14, 2009

ROAD SCIENCE, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
CONTINENTAL WESTERN TRANSPORTATION COMPANY, INC., D/B/A WINDSOR FUEL COMPANY AND TELFER OIL COMPANY, A CALIFORNIA CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Frank C. Damrell, Jr. United States District Judge

MEMORANDUM AND ORDER

This matter is before the court on defendants Continental Western Company, Inc. and Telfer Oil Company d/b/a Windsor Fuel Company's ("defendants") motion to dismiss plaintiff Road Science, L.L.C.'s ("plaintiff") complaint on the grounds plaintiff lacks standing to bring this patent action, has failed to name a necessary party to the action and names improper defendants, and/or the complaint fails to state a cognizable claim of patent infringement against defendants.*fn1 Fed. Rs. Civ. P. 12(b)(6), 19. More specifically, as a threshold matter, defendants contend plaintiff, holder of only a hybrid licence in the subject patent, lacks standing to pursue this action on its own; rather, defendants assert plaintiff must bring this action with the patent owner. Alternatively, defendants allege the court should dismiss the case for failure to join a necessary party; namely, Screg, the company who filed the patent application since defendants allege the patent was procured through the inequitable conduct of Screg and its representatives. Defendants further allege that the complaint is procedurally defective because plaintiff names incorrect defendants. Finally, defendants allege the complaint fails to state a viable claim against them because (1) plaintiff has no cognizable damages since plaintiff licenses the patent for free and/or (2) plaintiff cannot state a claim of patent infringement against defendants because a proper claims construction of the "five seconds" element of the patent demonstrates that defendants' road paving process is not completed within the patent's requisite five seconds.

Plaintiff opposes the motion on all grounds. However, because the court finds that plaintiff lacks standing to bring this action without naming the patent owner as a co-plaintiff, it HEREBY DISMISSES the action without prejudice. As such, the court does not reach the remainder of the issues raised by defendants' motion; consideration of those issues is premature at this juncture since without the patent owner as a named plaintiff, the court finds that this action cannot be maintained against defendants.

BACKGROUND

Plaintiff is in the business of marketing surface paving technologies. As part of its business, it develops, markets, uses and owns the rights to certain asphalt recycling and paving technologies, techniques and processes, including, the Novachip thin-overlay process ("Novachip Process"), a process patented under United States Patent No. 5,069,578 (the "'578 Patent"). (Compl., filed July 21, 2009, ¶ 5.)

The '578 Patent was issued to Screg Routes et. Travaux Publics, predecessor in interest to Societe Internationale Routiere ("S.I.R."), on December 3, 1991 for an invention entitled "Method and Device for Producing A Surface Coating on a Surface Such as a Road," known and marketed as the Novachip Process. (Id. at ¶ 6.) Pursuant to an Agreement for the Exploitation of Technology with S.I.R. and assignments of rights therein, Koch Materials Company ("Koch") came to own an exclusive license and right to market, use and apply the Novachip Process under the '578 Patent in the State of California and throughout most of the United States. (Id. at ¶ 7.) SemMaterials, L.P. ("SemMaterials") subsequently acquired Koch's exclusive rights in the '578 Patent. On May 18, 2009, plaintiff acquired all of SemMaterials exclusive rights in the '578 Patent. (Id.)

By sublicense agreement, defendants previously used and applied the Novachip Process protected by the '578 Patent in the State of California. On or about April 23, 2009, defendants' right to use and apply the Novachip Process terminated. (Id. at ¶ 8.) However, plaintiff alleges defendants have continued to use and apply the Novachip Process without authorization or approval. Plaintiff alleges defendants' actions have continued since May 18, 2009, despite notice of plaintiff's rights in the '578 Patent. (Id. at ¶ 9.)

Plaintiff claims that defendants' unauthorized use and application of the Novachip Process protected by the '578 Patent constitutes a willful, knowing infringement of the '578 Patent. (Id. at ¶ 10.) Plaintiff asserts that by virtue of its "exclusive license and right to market, use and apply the Novachip Process protected by the '578 Patent, plaintiff has the right to sue for infringement of the '578 Patent and recover damages for such infringement." (Id. at ¶ 11.)

STANDARD

1. Federal Rule of Civil Procedure 12(b)(6)*fn2 On a motion to dismiss, the allegations of the complaint must be accepted as true. Cruz v. Beto, 405 U.S. 319, 322 (1972). The court is bound to give the plaintiff the benefit of every reasonable inference to be drawn from the "well-pleaded" allegations of the complaint. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 753 n.6 (1963). Thus, the plaintiff need not necessarily plead a particular fact if that fact is a reasonable inference from facts properly alleged. See id.

Nevertheless, it is inappropriate to assume that the plaintiff "can prove facts which it has not alleged or that the defendants have violated the... laws in ways that have not been alleged." Associated Gen. Contractors of Calif., Inc. v. Calif. State Council of Carpenters, 459 U.S. 519, 526 (1983). Moreover, the court "need not assume the truth of legal conclusions cast in the form of factual allegations." United States ex rel. Chunie v. Ringrose, 788 F.2d 638, 643 n.2 (9th Cir. 1986). Indeed, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)(citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

Ultimately, the court may not dismiss a complaint in which the plaintiff alleged enough facts to "state a claim to relief that is plausible on its face." Iqbal, 129 S.Ct. at 1949 (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Only where a plaintiff has failed to "nudge [his or her] claims across the line from conceivable to plausible," is the complaint properly dismissed. Id. at 1952. When there are well-pleaded factual allegations, "a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. at 1950.

2. General Standing Principles

The question of standing is whether the litigant is entitled to have the court decide the merits of the dispute or the particular issues. Warth v. Seldin, 422 U.S. 490, 498 (1975). "The doctrine of standing limits federal judicial power and has both constitutional and prudential components." ...


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