Washington State University v. Pro Orchard Management LLC

CourtDistrict Court, E.D. Washington
DecidedNovember 2, 2020
Docket2:20-cv-00038
StatusUnknown

This text of Washington State University v. Pro Orchard Management LLC (Washington State University v. Pro Orchard Management LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Washington State University v. Pro Orchard Management LLC, (E.D. Wash. 2020).

Opinion

1 Nov 02, 2020 SEAN F. MCAVOY, CLERK 2

3 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 4 WASHINGTON STATE No. 2:20-cv-00038-SMJ 5 UNIVERSITY,

6 Plaintiff, ORDER DENYING MOTION FOR v. JUDGMENT ON THE 7 PLEADINGS AND GRANTING PRO ORCHARD MANAGEMENT MOTION TO COMPEL 8 LLC, a Washington limited liability company; and APPLE KING LLC, 9 a Washington limited liability company.

10 Defendants.

12 To begin, the Court denied Pro Orchard Management LLC (“Pro Orchard”) 13 and Apple King LLC’s (“Apple King”) (collectively, “Defendants”) motion for 14 judgment on the pleadings under Federal Rule of Civil Procedure 12(c), ECF No. 15 37, at a hearing addressing other issues of concern. The motion addressed an 16 inoperative complaint. Even so, the Court finds Plaintiff Washington State 17 University (“WSU”) has pleaded enough facts in its First Amended Complaint, ECF 18 No. 10, to satisfy the Iqbal standard. 19 Also pending before the Court is WSU’s motion to compel discovery. ECF 20 No. 49. The Court grants the motion to compel. 1 BACKGROUND 2 WSU owns United States Plant Patent No. 21,710 (“Plant Patent”). ECF No.

3 10-1. The Plant Patent protects intellectual property developed by WSU called the 4 “WA 2” apple cultivar. ECF No. 10 (“FAC”)1 ¶ 1. Breeding a new apple cultivar 5 takes several years and involves many steps. See ECF No. 10-1. The WA 2 apple

6 originated from a seed collected from the fruit of the “Splendour” cultivar, which 7 WSU researchers fertilized with a “Gala” male parent. ECF No. 10-1 at 2. 8 According to the Plant Patent, “‘WA 2’ is an attractive apple that is distinct in 9 appearance from that of other commercially grown apples and has outstanding

10 texture, being very firm, crisp and juicy, both fresh and after 60 days of regular cold 11 storage.” Id. at 2–3. 12 Before the Plant Patent issued, WSU assigned the patent application to

13 Washington State University Research Foundation (“Research Foundation”), a 14 nonprofit corporation that formerly handled technology licensing for WSU. Id. ¶ 15 11. The Research Foundation thus owned the Plant Patent when it issued, but later 16 reassigned it to WSU, and WSU continues to hold the Plant Patent today. Id.

17 In February 2011, the Research Foundation started entering Non-Exclusive 18 License Agreements for WA 2 with Washington growers. Id. ¶ 12. The Research 19

20 1 Though this docket entry contains WSU’s First Amended Complaint, this memorandum will refer to it simply as the “Complaint” for clarity and brevity. 1 Foundation entered a Non-Exclusive License Agreement (“Agreement”) for WA 2 2 apples with Keller Fruit, Inc. (“Keller Fruit”), a grower. Id. ¶ 14. Pro Orchard

3 likewise grows apples. Id. ¶ 3. Apple King packs and sells apples. Id. ¶ 3. 4 Defendants have the same owners as Keller Fruit. Compare ¶¶ 3 & 4 with ¶ 14. 5 The Agreement granted Keller Fruit the right to propagate, use, and sell WA

6 2 apple trees or apples. Id. ¶ 16. It did not grant any rights to Pro Orchard or Apple 7 King. Id. ¶ 16. Defendants learned of the Plant Patent shortly after it was issued. Id. 8 ¶ 18; see also ECF No. 27 ¶ 18 (Defendants admit in their Answer that “they ‘have 9 been aware of Plant Patent No. 21,710.’”).

10 WSU alleges Pro Orchard “has grown WA 2 trees, asexually reproduced WA 11 2 trees, harvested apples from WA 2 trees, and consigned WA 2 apples for sale,” 12 all without a license. Id. ¶ 19. WSU alleges in detail that Pro Orchard has (1) made

13 the patented plant by asexually reproducing WA 2 trees through grafting; (2) used 14 the patented plant by growing WA 2 trees and harvesting their apples; and (3) sold 15 the patented plant by consigning WA 2 apples for sale. Id. ¶¶ 20–23. Defendants 16 admit these allegations in their Answer: “Keller Fruit Inc. d/b/a Defendant Pro

17 Orchard Management has grafted, planted, and grown WA 2 trees, and consigned 18 them for sale to Apple King.” ECF No. 27 ¶ 21. 19 WSU also alleges Defendants have induced third parties to infringe its Plant

20 Patent. FAC ¶ 24. By consigning WA 2 apples that Pro Orchard has harvested to 1 Apple King for Apple King to sell, WSU alleges Pro Orchard has induced Apple 2 King to infringe its Plant Patent. Id.

3 WSU alleges it has not licensed Apple King to sell the WA 2 apples. Id. ¶ 26. 4 Apple King packs the unlicensed WA 2 apples that it receives on consignment from 5 Pro Orchard and then sells them to third parties. Id. Apple King sells these

6 consigned WA 2 apples through brokerage firms. Id. Right now, WSU does not 7 know the persons or entities that bought the WA 2 apples from Apple King. Id. 8 In sum, WSU claims Defendants have directly infringed its patents and 9 induced others to infringe its patent. See generally id.

10 Defendants move for judgment on the pleadings under Federal Rule of Civil 11 Procedure 12(c). ECF No. 37. Defendants argue WSU has failed to allege they make, 12 use, offer to sell, or sell WA 2 apples; Apple King cannot be a direct infringer

13 because, as consignee, it did not sell any WA 2 apples; providing scion wood is not 14 an infringing act; and neither Apple King nor Pro Orchard has induced infringement 15 even if either provided WA 2 scion wood to third-party growers. See generally id. It 16 also claims WSU omits several necessary parties requiring mandatory joinder. Id. at

17 19–21. 18 WSU opposes the motion. ECF No. 41. WSU argues it has plausibly alleged 19 direct infringement against both Pro Orchard and Apple King. Id. at 12–19. Pro

20 Orchard (1) grafted the patented plant, which constitutes asexual reproduction; (2) 1 grew WA 2 fruit trees and harvested the fruit, which constitutes use of patented 2 plant; and (3) sold the patented plant by consigning WA 2 apples to Apple King for

3 sale. Id. at 13. WSU alleges that “Apple King packs the unlicensed WA 2 apples 4 that it receives on consignment from Pro Orchard Management and then sells them 5 to third parties,” without a license to do so. Id. at 14. It further contends it has

6 plausibly alleged induced infringement. Id. at 19–24. And other potentially 7 infringing growers are neither necessary nor indispensable parties. Id. at 24–27. In 8 the event the Court grants Defendants’ motion, WSU finally asks the Court to grant 9 it leave to amend. Id. at 24.

10 WSU also moves to compel Defendants to respond to seven interrogatories 11 and six requests for production (“RFP”) seeking discovery on Defendants’ 12 infringing activities and affirmative defenses. Defendants responded to the motion

13 to compel, ECF No. 54, WSU replied, ECF No. 57, and Defendants filed a surreply, 14 ECF No. 60. 15 STANDARD OF REVIEW 16 Under Federal Rule of Civil Procedure 8(a)(2), a complaint must contain a

17 “short and plain statement of the claim showing that the pleader is entitled to 18 relief.” The complaint need not provide “detailed factual allegations,” but it 19 “requires more than labels and conclusions, and a formulaic recitation of the

20 elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 1 544, 555 (2007). Plaintiffs must plead enough facts “to ‘state a claim to relief that 2 is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting

3 Twombly, 550 U.S. at 570).

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Washington State University v. Pro Orchard Management LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/washington-state-university-v-pro-orchard-management-llc-waed-2020.