Crye Precision LLC v. Duro Textiles, LLC

112 F. Supp. 3d 69, 2015 U.S. Dist. LEXIS 77779, 2015 WL 3751658
CourtDistrict Court, S.D. New York
DecidedJune 16, 2015
DocketNo. 15cv1681 (DLC)
StatusPublished
Cited by5 cases

This text of 112 F. Supp. 3d 69 (Crye Precision LLC v. Duro Textiles, LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Crye Precision LLC v. Duro Textiles, LLC, 112 F. Supp. 3d 69, 2015 U.S. Dist. LEXIS 77779, 2015 WL 3751658 (S.D.N.Y. 2015).

Opinion

OPINION & ORDER

DENISE COTE, District Judge.

This lawsuit arises from a dispute ’ between a licensor of a patented camouflage pattern and its former licensee. The pleadings include the licensor’s claims for breach of contract and counterclaims seeking a declaration that-plaintiffs’ patents in the camouflage pattern are invalid.

This Opinion addresses two pending motions. On April 3, 2015, plaintiffs Crye Precision LLC (“Crye Precision”) and Lineweight LLC (“Lineweight”) (collectively “Crye”) moved pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss eight of the twelve counterclaims asserted by defendant Duro Textiles, LLC (“Duro”). Crye’s motion became fully submitted on May 1 and is granted. Among other things, Duro has failed to plausibly plead that plaintiffs’ [71]*71patents are invalid or to plead with particularity that Crye engaged in inequitable conduct.

On April 24, Duro moved pursuant to Fed.R.Civ.P. 12(b)(1) to dismiss two of the four causes of- action asserted in Crye’s Complaint. Duro’s motion became fully submitted on May 15 and is granted in part. Crye’s claim for unjust enrichment is barred by 28 U.S.C. § 1498(a). Crye’s claim for breach of contract is not barred-by Section 1498(a) to the extent that Crye is pursuing a claim for damages as’ opposed to injunctive rélief.

BACKGROUND

The following facts -are drawn from the pleadings and .the documents attached thereto. See Yung v. Lee, 432 F.3d 142, 146 (2d Cir.2005). For purposes of ruling on Duro’s motion, those facts are construed in favor of Crye. See Conyers v. Rossides, 558 F.3d 137, 143 (2d Cir.2009) (“Where, as here, the case is at the pleading stage and no evidentiary hearings have been held, .... in reviewing the grant of a motion to dismiss under Rule 12(b)(1) we must accept as true all material facts ah leged in the complaint and draw all reasonable inferences in the plaintiffs favor.” (citation omitted)). For purposes of ruling on Crye’s motion, they are viewed in the light most favorable to Duro. See Keiler v. Harlequin Enters. Ltd., 751 F.3d 64, 68 (2d Cir.2014) (noting that when deciding a motion to dismiss under Rule 12(b)(6), a court must “accept[] all factual allegations (but not legal conclusions) as true and draw[] all reasonable inferences in favor of the Dnonmovant]”).

I. MULTICAM and Crye’s Licensing

Over a decade ago, Crye developed a camouflage pattern known as MULTI-CAM for use on fabric. Crye claims proprietary rights in the color palette, shapes, and placement of shapes in MULTICAM. MULTICAM is the subject of at least- one U:S. design patent, Design Patent No. D592,861 (“'861 Patent”).1

Crye licenses printers to print and sell MULTICAM on fabric that is sold, to companies that manufacture uniforms and other equipment. in fulfillment of orders placed by or on behalf of the U.S. Department of Defense (“Government -Sales”). Crye also licenses printers to print and sell MULTICAM on fabric that is sold to companies that manufacture uniforms and other equipment for commercial sale (“Commercial Sales”).

In 2006, U.S. Army Special Operations units adopted MULTICAM. In 2010, MULTICAM was selected, as the standard issue camouflage pattern for all U.S. soldiers deployed to Afghanistan.

In 2008, Crye and Duro entered into a two-year license agreement. This agreement granted Duro the exclusive right to print and sell MULTICAM products in the United States in connection with both Government Sales and Commercial Sales.

In 2010, the U.S. Army insisted that Crye license additional printérs to print MULTICAM for Government Sales. In [72]*72response, Crye developed a network of printers, including Duro, which it appointed for two-year terms as non-exclusive licensees authorized to print and sell MULTICAM products in connection with Government Sales. Dui;o remained Crye’s exclusive licensee for. Commercial Sales.

II. Crye’s 2012 Agreement with Duro

Subsequently, in a 2012 agreement (“2012 Agreement”), Crye appointed Duro for another two-year term as a non-exclusive licensee authorized to print and sell MULTICAM products in connection with Government Sales. Duro retained exclusive rights with respect to Commercial Sales. Pursuant to Section 3(h) of the 2012 Agreement, Duro agreed not to “make any products that are similar to MULTICAM through color palette, pattern or arrangement or placement of any elements incorporated in MULTICAM.” Pursuant to Section 7(c), Duro further agreed that it would not “at any time during or after this Agreement” commit “any act or assistance to any act, which may infringe or lead to the infringement of any of Crye’s proprietary rights.”

According to Section 14(g), Duro acknowledged that any breach of its obligations under the 2012 Agreement “with respect to the proprietary rights or confidential information of Crye will cause Crye irreparable injury for which there are inadequate remedies at law, and therefore Crye will be entitled to equitable relief in addition to all other remedies provided, by this Agreement or available, at law.” And pursuant to Section 9(f), Duro’s obligations under Sections 3, 7, and 14 (among others) “shall survive termination or expiration of this Agreement.”

III. Events After the Expiration of the 2012 Agreement

In 2014, upon expiration of the 2012 license agreements with its various licensees, Crye entered into new non-exclusive license agreements with various printers. Under the new agreements, Crye authorized its licensees to .print and sell MULTI-CAM products in connection with both Government Sales and Commercial Sales (Duro no longer retained exclusive rights with respect to Commercial Sales). Duro rejected the new license agreement.- After efforts to negotiate a new license agreement with. Duro failed, Crye formally notified Duro that the 2012 Agreement had expired as of April 10, 2014.

Around May 2014, the U.S. Army announced its intention to switch the standard issue camouflage pattern from MUL-TICAM to a camouflage pattern known as Scorpion W2. According to Crye, Scorpion W2 uses MULTICAM’s color palette, shapes, and placement of shapes, and its overall appearance is virtually indistinguishable from MULTICAM’s.

Beginning in late 2014 or early 2015, Duro began printing and selling Scorpion W2 fabric for, and with the authorization and consent of, the U.S. Government. Because Scorpion W2 fabric is a product “similar to MULTICAM through color palette, pattern or arrangement or placement of any elements incorporated in MULTI-CAM,” Crye alleges that Duro’s printing arid sale of Scorpion W2 fabric breaches Sections 3(h) and 7(c) of the 2012 Agreement.

IV.Crye’s Original Action

Crye filed a complaint dated November 11, 2014 in this Court in case number 14cv9012 (DLC). That complaint was directed at Duro’s printing and sale of MULTICAM fabric after the expiration of the 2012 Agreement and included claims for breach of contract, trademark infringement, and patent infringement.

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Cite This Page — Counsel Stack

Bluebook (online)
112 F. Supp. 3d 69, 2015 U.S. Dist. LEXIS 77779, 2015 WL 3751658, Counsel Stack Legal Research, https://law.counselstack.com/opinion/crye-precision-llc-v-duro-textiles-llc-nysd-2015.