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Oakley, Inc v. Bugaboos Eyewear Corp

December 15, 2010

OAKLEY, INC.,
PLAINTIFF,
v.
BUGABOOS EYEWEAR CORP, AND BUGABOOS EYEWEAR (U.S.) INC.,
DEFENDANT.



The opinion of the court was delivered by: Honorable Janis L. SammartinoUnited States District Judge

(Doc. No. 27)

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT ON DEFENDANT'S SEVENTH COUNTERCLAIM FOR FALSE MARKING

Defendants Bugaboos Eyewear, Corp., and Bugaboos Eyewear (U.S.) Inc., (collectively Bugaboos) allege in its counterclaim that Plaintiff Oakley, Inc. (Oakley) falsely marked its products in violation of 35 U.S.C. § 292, the patent false marking statute. In response, Oakley motions for summary judgment on the issue whether warranty cards-packaged with the eyewear sold-can give rise to a false marking claim. To make its decision, the Court considers Oakley's motion (Doc. No. 27 (Mot. Summ. J.)), Bugaboos' response in opposition (Doc. No. 59 (Opp'n)), and Oakley's reply in support. (Doc. No. 67 (Reply).) And having done so, the Court GRANTS Oakley's motion for summary judgment on the seventh counterclaim with respect to warranty cards. On a related note, Bugaboos requests the Court delay adjudication of Oakley's motion on two bases: first, that adjudication of Oakley's motion is improper at this time, and second, that Bugaboos requires additional discovery under Federal Rule of Civil Procedure 56(f). Both requests are DENIED.

BACKGROUND

Oakley and Bugaboos are both in the eyewear business. On November 6, 2009, Oakley filed a first amended complaint against Bugaboos. (Doc. No. 7 (FAC).) Oakley asserted claims for infringement of U.S. Design Patent D580,963, U.S. Patent 5,387,949, U.S. Patent 5,638,145, Trademark 2,393,107, Trademark 2,900,432, and Trademark 2,768,242. Six months later, Bugaboos filed its answer and counterclaims. (Doc. No. 12 (Counterclaim).) Oakley answered the counterclaims soon thereafter. (Doc. No. 15.) And on August 26, 2010, Oakley filed the present motion for summary judgment on Bugaboos' seventh counterclaim.

Bugaboos' seventh counterclaim is for false marking arising under 35 U.S.C. § 292. Bugaboos contends that Oakley eyewear "are sold with a box or package directing a purchaser to examine the packaging or enclosed warranty card for a list of patents covering the enclosed product." (Counterclaim ¶ 46.) The package states "[t]his product may be protected by one or more U.S. and international patents identified on the packaging or enclosed warranty card." (Id.) And the "enclosed warranty card" contains a listing of United States and foreign patents. Each warranty card also states "patents pending in the USA" even though there are allegedly no patents pending. (Id. ¶ 62.) And finally, one version of the warranty card not only includes patents that are not owned by Oakley, but also patents that are unrelated to glasses. (Id. ¶¶ 75 & 76.)

Oakley understood Bugaboos' counterclaim to mean that "the list of patents on the warranty card constitutes false marking because numerous patents do not all apply to the enclosed products, some patents are expired, and other patents are erroneous numbers." (Mot. Summ. J. at 2.) And based on that understanding, Oakley brings its motion for summary judgment. Oakley argues that the warranty cards and the list of patents found on the warranty cards cannot give rise to liability under § 292 as a matter of law. (Id.)

In its opposition to Oakley's motion, Bugaboos also raises two new issues. First, Bugaboos argues that the motion for summary judgment should be denied because Oakley's false marking violations extend beyond the warranty cards. (Opp'n at 22--23.) Second, Bugaboos argues that Oakley's motion is premature and additional time should be granted for Bugaboos to obtain additional discovery. (Opp'n at 23.)

Thus, this Order discusses two topics. The Court will first discuss Oakley's motion for summary judgment. As part of this discussion, the Court will resolve the issue whether Oakley's motion for summary judgment should be denied in light of other potential bases for false marking liability. The second portion of the Order will discuss whether Bugaboos' request for additional discovery under Rule 56(f).

OAKLEY'S MOTION FOR SUMMARY JUDGMENT

1. Legal Standard

Federal Rule of Civil Procedure 56 permits a court to grant summary judgment where (1) the moving party demonstrates the absence of a genuine issue of material fact and (2) entitlement to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "Material," for purposes of Rule 56, means that the fact, under governing substantive law, could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v. Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). For a dispute to be "genuine," a reasonable jury must be able to return a verdict for the nonmoving party. Anderson, 477 U.S. at 248.

The initial burden of establishing the absence of a genuine issue of material fact falls on the moving party. Celotex, 477 U.S. at 323. The movant can carry his burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party "failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Id. at 322--23. "Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987).

Once the moving party establishes the absence of genuine issues of material fact, the burden shifts to the nonmoving party to set forth facts showing that a genuine issue of disputed fact remains. Celotex, 477 U.S. at 324. The nonmoving party cannot oppose a properly supported summary judgment motion by "rest[ing] on mere allegations or denials of his pleadings." Anderson, 477 U.S. at 256. When ruling on a summary judgment motion, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

2. Analysis

Before getting into the nitty-gritty, it helps to visualize the items at issue. When a consumer purchases a pair of Oakley eyewear, the consumer receives a box.*fn1 After opening it, the purchaser discovers-among other things-a pair of eyewear and a warranty card.

Bugaboos' false marking counterclaim is brought under 35 U.S.C. § 292. Section 292 states in relevant part:

Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word "patent" or any word or number importing that the same is patented for the purpose of deceiving the public . . . [s]hall be fined not more than $500 for every such offense.

35 U.S.C. § 292. When broken down, the statute has four important parts: (1) the word "patent" or any word or number importing that an article is patented, (2) marked on, affixed to, or used in advertising in connection with, (3) an unpatented article, (4) with intent to deceive the public. See Clontech Labs., Inc. v. Invitrogen Corp., 263 F. Supp. 2d, 780, 791 (D. Del. 2003).

From the statutory morass, a roadmap is revealed. A plaintiff must first find some instance of "the word 'patent' or any word or number conveying that an article is patented." 35 U.S.C. § 292.For the purposes of discussion, the Court refers to this as the "patent coverage language" or "coverage language." The Court uses this instead of "marking," because "marking" in the patent context conjures 35 U.S.C. § 287, the notice statute. And involving § 287 in the fray has only served to confuse the matter.

Once the patent coverage language has been established, the analysis moves to elements two and three. The plaintiff must show that the coverage language is "marked upon" an unpatented article, "affixed to" an unpatented article, or "used in advertising in connection with" an unpatented article. If any of the three occur, the plaintiff must finally establish ...


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