Cocona, Inc. v. Sheex, Inc.

92 F. Supp. 3d 1032, 2015 U.S. Dist. LEXIS 76421, 2015 WL 3661394
CourtDistrict Court, D. Colorado
DecidedJune 12, 2015
DocketCivil Action No. 15-cv-0541-WJM-MJW
StatusPublished

This text of 92 F. Supp. 3d 1032 (Cocona, Inc. v. Sheex, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cocona, Inc. v. Sheex, Inc., 92 F. Supp. 3d 1032, 2015 U.S. Dist. LEXIS 76421, 2015 WL 3661394 (D. Colo. 2015).

Opinion

ORDER GRANTING MOTION TO DISMISS

William J. Martinez, United States District Judge

Plaintiff Cocona, Inc. (“Cocona”) sues Defendant Sheex, Inc. (“Sheex”) for declaratory judgment that Cocona does not infringe certain of Sheex’s patents, and that those patents are invalid. (ECF No. 1.) Based on Sheex’s covenant not to sue Cocona for infringement of those patents, Sheex moves to dismiss this action for lack of subject matter jurisdiction. (ECF No. 9.) The Court finds that the covenant not to sue eliminates the “case of actual controversy” required by the Declaratory Judgment Act, 28 U.S.C. § 2201(a), and consequently eliminates subject matter jurisdiction. Sheex’s motion is therefore granted.

[1033]*1033I. LEGAL STANDARD

A motion under Rule 12(h)(1) is a request upon the court to dismiss a claim for lack of subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1). A plaintiff bears the burden of establishing that the court has jurisdiction. Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir.1974). Dismissal of a complaint under Rule 12(b)(1) is proper when the Court lacks subject matter jurisdiction over a claim for relief. See SBM Site Servs., LLC v. Garrett, 2012 WL 628619, at *1 (D.Colo. Feb. 27, 2012).

When a court’s subject matter jurisdiction is challenged, the court may review materials outside the pleadings without converting the Rule 12(b)(1) motion to dismiss into a motion for summary judgment. Davis ex rel. Davis v. United States, 343 F.3d 1282, 1296 (10th Cir.2003) (stating that “when a party challenges the allegations supporting subject-matter jurisdiction, the ‘court has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts’ ” (quoting Holt v. United States, 46 F.3d 1000, 1003 (10th Cir.1995)); Pringle v. United States, 208 F.3d 1220, 1222 (10th Cir.2000); Holt, 46 F.3d at 1003.

Only where the jurisdictional question is intertwined with the merits (not present here) is conversion of a Rule 12(b)(1) motion into a motion for summary judgment under Rule 56 appropriate. Id.; WJM Revised Practice Standards III.D.3.

II. FACTUAL & PROCEDURAL BACKGROUND

A. Cocona and Sheex

Both Cocona and Sheex are in the business of “performance bedding,” i.e., bed sheets and similar textiles that incorporate capabilities such as moisture-wicking and breathability. (ECF No. 1 ¶ 11; ECF No. 12 at 2-3.) Sheex possesses at least two patents in this field. See United States Patent No. 8,402,580; United States Patent No. 8,566,982. Cocona, for its part, claims “patented 37.5® technology,” which “is, at its core, a process for embedding active particles into fibers in such a way that yarns spun from the fibers have improved performance characteristics in such areas as capturing and releasing moisture vapors.” (ECF No. 12 at 2.)

The record does not specify whether Sheex manufactures bedding or only licenses its innovations to manufacturers. Cocona, however, is only a licensor:

Licensees of Cocona’s 37.5® technology are authorized to purchase from Coco-na’s partner mills yarns, fabrics, or finished goods made from fibers that incorporate Cocona’s embedded active particle technology. To the extent Co-cona’s licensees purchase yarns or fabrics, those materials are then woven or knit by the licensee into finished goods at the licensee’s own manufacturing facilities.

(Id.) Cocona further claims that it

works closely with its licensees throughout the process of creating a finished good. Cocona provides its licensees with product quality guidelines targeted at ensuring that any finished good includes a sufficient amount of fibers that incorporate the 37.5® technology to achieve maximum performance benefits. Cocona also provides its licensees with testing data and testing methodologies related to the 37.5® technology as incorporated into the specific finished goods. Once Cocona has performed quality control measures and is satisfied that its licensee has manufactured a finished product that properly incorporates the 37.5® technology, Cocona assists the licensee with its marketing and sales efforts, including advertising and promoting the products. As part of this [1034]*1034marketing push, Cocona requires the licensees to prominently display Cocona’s trademark-protected 37.5® logo on the finished goods.

(Id. at 3.)

B. The Delaware Lawsuit

In November 2014, Sheex sued Cocona for patent infringement in the United States District Court for the District of Delaware. See Sheex, Inc. v. Cocona Inc., Case No. 1:14-cv-01398-LPS-CJB (D. Del., filed Nov. 12, 2014). (See also ECF Nos. 1-1, 1-6.) Sheex then issued a press release accusing Cocona of infringement at least with regard to “Sleep 37.5 Sheets,” which Sheex attributed to Cocona. (ECF No. 1-5.)

Sheex never served its complaint on Co-cona, although Cocona learned about it anyway. (ECF No. 1 ¶¶ 28-29.) Indeed, it appears that the parties’ principals had at least informal settlement discussions. (ECF Nos. 20-1, 20-2, 20-3.) In March 2015, for unexplained reasons, Sheex voluntarily dismissed the Delaware lawsuit without prejudice. (ECF No. 1-4 at 3; ECF No. 1-7.)

C. This Lawsuit and the Covenant Not to Sue

“With no assurances from Sheex that it did not intend to re-file its patent infringement claims,” Cocona. chose to file this action for declaratory judgment. (ECF No. 12 at 2.) Cocona seeks a declaration that it does not infringe Sheex’s patents, and that those patents are otherwise invalid. (ECF No. 1 ¶¶ 44-59.)

A little over a month after Cocona filed this lawsuit, Sheex transmitted a “covenant not to sue” to Cocona, which the Court will refer to as the “Covenant.” It reads in full as follows:

THIS COVENANT NOT TO SUE is made as of April 28, 2015 by Sheex, Inc. (“Sheex”), the owner of U.S. Patent Nos. 8,402,580 (“the ’580 Patent”) and 8,566,-982 (“the ’982 Patent”). Cocona, Inc. (“Cocona”) has sued Sheex in the United States District Court for the District of Colorado, Case No. l:15-cv-541-MJW, for declaratory judgment of noninfringement and invalidity of the ’580 and ’982 patents. Pursuant to Super Sack Mfg. Corp. v. Chase Packaging Corp., 57 F.3d 1054, 1058 (Fed.Cir.1995), Sheex makes the following covenant not to sue for the purpose of resolving all issues in this litigation. Cocona has represented to Sheex that it does not and has not made, had made, offered to sell, or sold performance sheets.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Lujan v. Defenders of Wildlife
504 U.S. 555 (Supreme Court, 1992)
MedImmune, Inc. v. Genentech, Inc.
549 U.S. 118 (Supreme Court, 2007)
Dow Jones & Co., Inc. v. Ablaise Ltd.
606 F.3d 1338 (Federal Circuit, 2010)
Pringle v. United States
208 F.3d 1220 (Tenth Circuit, 2000)
Davis Ex Rel. Davis v. United States
343 F.3d 1282 (Tenth Circuit, 2003)
Janssen Pharmaceutica, NV v. Apotex, Inc.
540 F.3d 1353 (Federal Circuit, 2008)
Benitec Australia, Ltd. v. Nucleonics, Inc.
495 F.3d 1340 (Federal Circuit, 2007)
SanDisk Corp. v. STMicroelectronics, Inc.
480 F.3d 1372 (Federal Circuit, 2007)
Arrowhead Industrial Water, Inc. v. Ecolochem, Inc.
846 F.2d 731 (Federal Circuit, 1988)
Amana Refrigeration, Inc. v. Quadlux, Inc.
172 F.3d 852 (Federal Circuit, 1999)
Brown v. Federal Bureau of Investigation
793 F. Supp. 2d 368 (District of Columbia, 2011)

Cite This Page — Counsel Stack

Bluebook (online)
92 F. Supp. 3d 1032, 2015 U.S. Dist. LEXIS 76421, 2015 WL 3661394, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cocona-inc-v-sheex-inc-cod-2015.