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Trendx Enterprises, Inc. v. All-Luminum Products

April 18, 2012

TRENDX ENTERPRISES, INC.
PLAINTIFF,
v.
ALL-LUMINUM PRODUCTS, INC. D/B/A RIO BRANDS DEFENDANT.



The opinion of the court was delivered by: The Honorable Freda L. Wolfson, U.S.D.J.

*FOR PUBLICATION

OPINION

WOLFSON, United States District Judge:

Presently before the Court is a motion by Defendant All-luminum Products, Inc., doing business as Rio Brands ("Defendant" or "Rio Brands"), for partial judgment on the pleadings under Rule 12(c), or alternatively, for partial summary judgment. Defendant asks the Court to dismiss Plaintiff Trendx Enterprises, Inc.'s ("Plaintiff" or "Trendx") patent infringement claim (Count I) because Plaintiff failed to join the patent owner of the patents-in-suit and Plaintiff by itself lacks sufficient interest in the patents to bring this action on its own. Defendant does not attack any of Plaintiff's seven other causes of action. For the reasons that follow, Defendant's motion is granted and Plaintiff's claim of patent infringement is dismissed without prejudice.

I.BACKGROUND

In addressing Defendant's Motion to Dismiss, this Court must accept Plaintiff's allegations contained in the Complaint as true. See Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 457 (3d Cir. 2003); Dayhoff, Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 (3d Cir. 1996). Thus, the facts recited below taken from the Complaint do not represent this Court's factual findings.

Plaintiff alleges that Defendant infringes the following four patents: U.S. Patent No. 5,120,016 (the '016 patent); No. 5,575,234 (the '234 patent); No. 5,813,163, (the '163 patent); and No. 5,941,191 (the '191 patent) (collectively the "patents-in-suit" or "T-Bar patents"). The patents relate to technology that secures poles, umbrellas, rods, or similar objects to a structure, such as a deck or dock, without screws, nails, glue, or other means that may damage the deck or dock surface. Compl., ¶ 10. Plaintiff Trendx manufactures and markets products that utilize the T-Bar patents under the name "Deckster." Id. ¶¶ 9, 11. In particular, Trendx manufactures and sells devices "designed to be a receptacle for various items (i.e. Tiki torches, flag poles, market umbrellas, etc.) so they could be securely held to a deck or dock." Id. ¶ 11. Trendx alleges that Rio Brands has marketed and continues to market infringing devices also under the "Deckster" name. Id. ¶ 34.

The question before me is whether Trendx has standing to bring a claim for infringement. Trendx admits it does not own the patents at issue. Dysar Products, Inc. and Edward Dysarz (collectively "Dysarz") own the patents.*fn1 Compl., ¶ 7. But Trendx maintains it is the exclusive licensee of the T-Bar patents and controls all substantial rights in the patents. Id. ¶ 6.

Dysarz has a history with both Trendx and Rio Brands. Dysarz first licensed the T-Bar patents to Trendx through two agreements, one in 1999 and one in 2000, which gave Trendx the exclusive right to manufacture, market, or sell products containing the patented technology, excluding all marine products. Compl., ¶ 8. Dysarz retained the right to its technology as applied to marine products, such as fishing rod holders. Id. Trendx paid Dysarz royalties in exchange for its license. Id. Shortly after signing its license with Dysarz, Trendx entered into a sublicense agreement with Rio Brands. Id. ¶¶ 15, 16. Then in September 2005, Dysarz terminated its agreement with Trendx. Id. ¶ 21. Because this ended Trendx's right to sublicense, Rio Brand no longer had rights to the patented technology. Id. Less than a year later, in August 2006, Dysarz and Trendx renegotiated a licensing agreement, again limited only to nonmarine products. Id. ¶ 23.

Although Trendx notified Rio Brands that it had reacquired rights to the patents, they did not enter into a new sublicense. Id. ¶ 24.

In September 2006, Dysarz contacted Rio Brands to discuss past royalties from September 2005 through August 2006. Compl., ¶ 28. These conversations continued without success and in July 2008, Rio Brands brought a declaratory judgment action against Dysarz in the Eastern District of Pennsylvania to declare that its products did not infringe the '016 patent, the '234 patent, and the '163 patent. All-luminum Products, Inc. v. Dysarz, No. 08-3462, Complaint (E.D. Pa. July 24, 2008). Dysarz then filed a patent infringement action in the Eastern District of Texas on the same three patents. Dysarz v. All-luminum Products, Inc., No. 08-402, Complaint (E.D. Tex. Oct. 20, 2008). In December 2009, Dysarz and Rio Brands settled with regards to the '016 patent, the '234 patent, and the '163 patent ("Settled Patents"). Compl., ¶ 30. Dysarz released its claims against Rio Brands and granted Rio Brands an exclusive license in the '016 patent and a covenant not to sue with regards to the '234 and the '163 patents. License and Settlement Agreement, Articles II and III, attached as Ex. G to Declaration of Thomas Cunniff ("Settlement Agmt"). The '191 patent was not at issue in those matters. Trendx was not a party to either lawsuit or to the settlement. Compl., ¶¶ 29, 30. Trendx claims that this settlement has no effect on its patent rights as exclusive licensee of nonmarine products incorporating the T-Bar patented technology.

Two issues arise from these facts: (1) does Trendx's status as licensee give it standing to sue on these patents and (2) what effect, if any, does the settlement between Dysarz and Rio Brands have on this action.

II.LEGAL STANDARD

a.Motion for Judgment on the ...


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