Medical Components, Inc. v. Osiris Medical, Inc.

226 F. Supp. 3d 753, 2016 U.S. Dist. LEXIS 183296, 2016 WL 8199684
District Court, W.D. Texas·Decided December 29, 2016·No. EP-15-CV-305-PRM·Published·Cited by 4 cases

Opinion

ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

PHILIP R. MARTINEZ UNITED STATES DISTRICT JUDGE

On this day, the Court considered Defendants Osiris Medical, Inc. (“Osiris”) and Raul Garcia, Jr.’s “Corrected Motion for Summary Judgment... Dismissing Plaintiffs’ Second Amended Complaint with Prejudice for Lack of Subject Matter Jurisdiction under Article III of the U.S. Constitution” (ECF No. 116) [hereinafter “Motion”], filed on August 31, 2016; Plaintiffs Medical Components, Inc. (“Med-comp”) and Martech Medical Products, Inc.’s (“Martech”) “Opposition to Defendants’ Corrected Motion for Summary Judgment” (ECF No. 119) [hereinafter “Response”], filed on September 14, 2016; and Defendants’ “Reply to Plaintiffs’ Opposition to Defendant’ Motion for Summary Judgment (Corrected)” (ECF No. 125) [hereinafter “Reply”], filed on September 21, 2016, in the above-captioned cause.

Defendants contend that the Court lacks jurisdiction to preside over Plaintiffs’ declaratory judgment action because of justi-ciability concerns. Mot. 4. For the reasons discussed below, the Court will grant Defendants’ Motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

This case arises out of a dispute concerning a patent license agreement (“PLA”) involving.Defendant Garcia’s patented Huber needle—United States Patent No. 7125,398 (“the.’398 Patent Needle”). Second Am. Compl. for Declaratory J. of Non-Infringement of U.S. Patent No. 7125,398 1, July 22, 2016, ECF No. 95 [hereinafter “Second Amended Complaint”].1 Defendant Osiris granted Plaintiff Medcomp license to use the intellectual property rights to manufacture and sell the ’398 Patent Needle. Second Am. Compl. 3.

After the PLA expired, Defendant Osiris sent Plaintiff Medcomp a letter dated July 8, 2015 (“July 2015 Letter”). See Second Am. Compl. Ex. C, at 1. In the July 2015 Letter, Defendant Osiris requested compensation for “any new product development” and information regarding Plaintiff [759] Medcomp’s “efforts to obtain FDA 510k approval [sic] this product and any new products derived from the efforts of [Defendant] Garcia, in whole or in part.” Id. (emphasis added). Shortly thereafter, Plaintiffs allege that Defendant Garcia accused Plaintiff Medcomp' of “infringing the ’398 patent” *on two different occasions. See Second Am. Compl. 6.

Plaintiff Medcomp has created three different Huber needles—V2, V3, and V4. See Technical Tutorial Hr’g Tr. 32, June 10, 2016, EOF No. 81 (indicating V2, V3, and V4 are simply Plaintiffs’ internal nomenclature). Two of Plaintiffs’ Huber needles—V3 and V4—were developed after filing the Original Complaint. See Mot. Ex. 7-8. Plaintiff Medcomp’s Director of Engineering testified that Plaintiffs conceived V3 and V4 during the first quarter of 2016. See id. Plaintiff Medcomp has invested over $1 million in- “designing, developing, preparing to manufacture, and protecting the intellectual property of these [V2, V3, and V4] products.” See Resp. 8 (citing Decl. of Timothy M. Schweikert, May 5, 2016, ECF No. 73-2). Additionally, Plaintiffs are ready to make a “couple hundred thousand” V4 units. Resp. Ex. A.

On October 19, 2015, Plaintiffs Medcomp and Martech subsequently initiated the instant declaratory action seeking the Court’s declaration that they did not infringe upon the ’398 Patent Needle. Original Compl. 1.

Thereafter, Plaintiffs have ceased pursuing V2 and V3, and instead have focused their efforts in bringing V4 to market in three different ways. See Mot. Exs. 2, 4 (Dep. of PI. Medcomp’s Project Management Director); see also Technical Tutorial Hr’g Tr. 33 (“[Plaintiff Medcomp] is going to launch the Y4 ... but [Plaintiff Medcomp] would like declaratory judgment on V2, V3, and V4.”). First, on March 18, 2016, Plaintiff Medcomp filed a provisional patent application with the U.S. Patent and Trademark Office (“PTO”) for V4. Notice 132-208, May 13, 2016, ECF No. 75-1. Second, on July 28, 2016, Plaintiff Medcomp filed for trademark registration of the name “Pro-Lock” for V4. Mot. Ex. 10. Finally, on August 19, 2016, Plaintiff Medcomp received FDA acknowledgment of the filing of a 510(k) application for V4. Mot. Ex. 9.2

[760] The Court ordered Plaintiffs to replead their First Amended Complaint, which had complied with Form 18, a now defunct form, because “amendments to the Federal Rules of Civil Procedure abrogated Form 18 in favor of the more stringent pleading requirements of Federal Rule of Civil Procedure 8.” See Order Granting Defs.’ Mots, to Dismiss 8, July 12, 2016, ECF No. 90. Plaintiffs, for the first time in any of their pleadings, enumerated V2, V3, and V4 in their Second Amended Complaint. Second Am. Compl. 4-5.

Defendants then filed the instant Motion arguing that the Court lacks jurisdiction due to justiciability concerns. Mot. 10.

II. LEGAL STANDARD

A. Federal Circuit

At the outset, the Court recognizes that Federal Circuit law governs case or controversy issues involving declaratory judgment determinations about patent infringement or validity. See Adenta GmbH v. OrthoArm, Inc., 501 F.3d 1364, 1368 (Fed. Cir. 2007).

B. Motion to Dismiss For Lack of Subject-Matter Jurisdiction Standard of Review

Although Defendants submit a Motion seeking summary judgment, the Court construes the Motion as a motion to dismiss for lack of subject-matter jurisdiction. See United States v. One 1988 Dodge Pickup, 959 F.2d 37, 39 (5th Cir. 1992) (“[I]t is clear that the proper characterization of the motion for these purposes is not determined by the label that the motion bears.”) (analyzing Federal Rules of Civil Procedure 55 and 60). Consequently, the Court will analyze Defendants’ Motion as a Rule 12(b)(1) motion. See id.

Rule 12(b)(1) requires dismissal of a complaint for “lack of subject-matter jurisdiction” if the Court lacks statutory or constitutional power to adjudicate the case. Federal courts are courts of limited jurisdiction, which without jurisdiction conferred by statute, lack the power to adjudicate claims. Stockman v. Fed. Election Comm’n, 138 F.3d 144, 151 (5th Cir. 1998). “In general, where subject matter jurisdiction is being challenged, the trial court is free to weigh the evidence and resolve factual disputes in order to satisfy itself that it has the power to hear the case.” Montez v. Dep’t of Navy, 392 F.3d 147, 149 (5th Cir. 2004).

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Medical Components, Inc. v. Osiris Medical, Inc., 226 F. Supp. 3d 753, 2016 U.S. Dist. LEXIS 183296, 2016 WL 8199684 (W.D. Tex. 2016).

226 F. Supp. 3d 753 (Medical Components, Inc. v. Osiris Medical, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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