Athletic Training Innovations, LLC v. eTagz, Inc.

955 F. Supp. 2d 602, 2013 WL 3305552, 2013 U.S. Dist. LEXIS 91943
CourtDistrict Court, E.D. Louisiana
DecidedJuly 1, 2013
DocketCivil Action No. 12-2540
StatusPublished
Cited by8 cases

This text of 955 F. Supp. 2d 602 (Athletic Training Innovations, LLC v. eTagz, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Athletic Training Innovations, LLC v. eTagz, Inc., 955 F. Supp. 2d 602, 2013 WL 3305552, 2013 U.S. Dist. LEXIS 91943 (E.D. La. 2013).

Opinion

ORDER AND REASONS

NANNETTE JOLIVETTE BROWN, District Judge.

Before the Court is Defendant eTagz’s (“Defendant”) Motion to Dismiss,1 wherein it moves this Court for dismissal based on a lack of personal jurisdiction over Defendant and for Plaintiff Athletic Training Innovations, LLC’s (“Plaintiff’) alleged failure to state a claim upon which relief can be granted. Having considered the complaint, the motion, the opposition, the reply, the record, and the applicable law, for the following reasons, the Court will grant the pending motion and dismiss this action without prejudice.

I. Background

A. Factual Background

Plaintiff is a Louisiana limited liability company that sells athletic equipment and specially designed training shoes “almost exclusively on the internet and by phone.”2 When Plaintiff ships shoes to a purchaser, it accompanies the product with a DVD that demonstrates how to perform certain exercises. This film was produced by Plaintiffs predecessors since as early as 1991.3

Defendant, a Utah corporation with its principal place of business in Provo, Utah, owns U.S. patents nos. 6,298,332, 7,503,502, and 7,703,686 (“the patents”). These patents concern the use of a hangtag having a computer-readable medium that is attached to a product by a vendor and removed therefrom by purchaser.4 According to Plaintiff, the “broadest claims of aforementioned patents limit Defendant’s scope of protection to: 1) hangtags or labels that are secured to and removed from a vendor’s product; 2) the hangtag or label including a computer-readable medium thereon and 3) the medium including computer-readable instructions executable on a purchaser’s computer.”5 Plaintiff claims, therefore, that its practice of placing a DVD in the shipping container does not infringe on the patents.6

However, on September 7, 2012, Plaintiff received a letter from Defendant, alleging that it believed Plaintiffs products infringed the patents, and that it might take legal action.7 Plaintiff claims that after receiving this letter, it discovered on Defendant’s website that it has made many other similar threats against other companies that have included CDs or DVDs with their products.8 In addition, Plaintiff avers that Defendant’s website claims that its patents encompass the attachment of media for products at retail, and that “attachment” is defined as mere “inclusion.” Plaintiff argues that these statements essentially make infringement allegations against Plaintiff that are objectively false [605]*605and in bad faith.9 Therefore, Plaintiff brings six causes of action in the original complaint: (1) a declaratory judgment of non-infringement of the patents; (2) a declaratory judgment of invalidity of the patents; (3) a judgment that Defendant has violated the Sherman Antitrust Act; (4) relief for violations of Louisiana’s antitrust statutes; (5) relief for violations of Louisiana’s unfair competition laws; and (6) patent misuse.10

In Plaintiff’s First Supplemental and Amending Complaint,11 Plaintiff requests to “supplement and amend its original Complaint ... to further include the following allegations.”12 Plaintiff claims that on September 7, 2012, Defendant sent it a letter alleging that Plaintiffs product “utilized the invention embodied in the eTAGZ Patents.”13 However, Plaintiff contends that “merely including a video with a product” is unpatentable under 35 U.S.C. § 102(b), the on-sale bar, because “informational videos have accompanied products in commerce for decades.”14 Therefore, Plaintiff maintains that the September 7, 2012 letter was meant to “intentionally misrepresent the scope of Defendant’s patents to coerce, intimidate and manipulate Plaintiff into settlement,” and further, that the letter was also “part of a conspiracy by Defendant to injure Plaintiffs sales and marketing efforts.”15

After this letter, Plaintiff alleges that a representative and/or employee of Defendant “initiated at least three telephone calls to Plaintiffs employees located in the State of Louisiana in a further attempt to coerce a quick settlement based upon a frivolous claim of patent infringement.”16 Plaintiff claims that on at least one of these alleged calls, Defendant pretended to be a potential customer in order to “extract information from [Plaintiffs] employee.” 17 However, Plaintiff contends that Defendant’s employee eventually identified himself, and boasted that Defendant had already derived “millions of dollars in revenue” from other accused infringers.18 According to Plaintiff, Defendant indicated that if Plaintiff paid a “lump-sum fee” this matter would be resolved, and on one occasion Defendant sent an email to one of Plaintiffs employees located in Louisiana, requesting an “immediate, lump sum payment in lieu of litigation.”19

In addition to these factual allegations, Plaintiff adds two new causes of action. Styled as its seventh cause of action, Plaintiff seeks to hold Defendant liable in tort under Louisiana Civil Code article 2315.20 Finally, styled as its eighth cause of action, Plaintiff seeks to hold Defendant liable for extortion under Louisiana Revised Statute § 14:66 and 18 U.S.C. § 1951.21

B. Procedural Background

Plaintiff filed the initial complaint in this matter on October 18, 2012, invoking this Court’s federal question and diver[606]*606sity jurisdiction.22 On January 9, 2013, Defendant filed its first motion to dismiss,23 seeking dismissal under Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6), claiming that this Court does not have personal jurisdiction over it and that Plaintiff has failed to state a claim. On January 22, 2013, Plaintiff made two filings. Plaintiff filed a first supplemental and amending complaint,24 and then an opposition to the Defendant’s first motion to dismiss.25 On January 20, 2013, the Court denied the first motion to dismiss as moot, based on the filing of the supplemental and amending complaint.26

On February 4, 2013, Defendant filed a motion to reconsider the denial of its motion to dismiss.27 On February 5, 2013, Defendant filed the pending motion to dismiss asserting the same grounds for dismissal as in its first motion to dismiss, but also addressing claims and allegations added in the supplemental and amending complaint.28 On February 19, Plaintiff filed an opposition to the pending motion to dismiss.29 With leave of court, Defendant filed a reply on March 4, 2013.30

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Bluebook (online)
955 F. Supp. 2d 602, 2013 WL 3305552, 2013 U.S. Dist. LEXIS 91943, Counsel Stack Legal Research, https://law.counselstack.com/opinion/athletic-training-innovations-llc-v-etagz-inc-laed-2013.