Order Granting-In-Part Defendant's 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction, MIS Sciences Corp. v. RPost Communications Limited, et al., Case No. 14-cv-00376-VC (Judge Vince Chhabria)
The comedian Stephen Wright once quipped: "I went to a general store but they wouldn't let me buy anything specific." Judge Chhabria could possibly relate to that wisdom. In MIS Sci. Corp. v. RPost Commc'n LTD, Case No. 14-cv-00376-VC, Judge Chhabria recently ruled that declaratory judgment jurisdiction was proper where a patent holder made clear but general accusations of infringement in its communications to an accused infringer, but did not specify what products it actually believed were infringing.
In MIS, the plaintiff MIS Sciences Corp. ("MIS") sought a declaratory judgment that several patents owned by defendants RPost Communications Limited, RPost Holdings, Inc., and RMail Limited (collectively, "RPost") were invalid and not infringed by MIS. RPost moved to dismiss the DJ action for lack of subject matter jurisdiction under FRCP 12(b)(1), claiming that there was no case or controversy because it had never specifically identified any MIS products that it contended were infringing. Judge Chhabria disagreed, and denied the motion as to the first twelve counts, but granted the motion as to the thirteenth.
Before MIS filed its declaratory judgment action, RPost sent two communications to MIS which the court found to constitute sufficient affirmative acts related to the enforcement of RPost's patents so as to establish an actual controversy for the first twelve counts. Namely, RPost sent a letter containing a "preliminary summary analysis" comparing claims of its patents with various features of MIS products, and threatening litigation if MIS did not cease using the alleged infringing technology. Three months later, RPost followed-up with an email bearing the subject line "Final Letter – Cease & Desist" again threatening litigation if MIS did not stop using the alleged infringing technology. Judge Chhabria found that the letter and email put MIS in the position of having to choose whether to abandon the features identified in the letter or risk litigation, thereby establishing subject matter jurisdiction for purposes of a declaratory judgment action.
As noted, RPost contended that the letter and email were insufficient to create subject matter jurisdiction because they did not specify MIS products by name. However, Judge Chhabria found that for purposes of subject matter jurisdiction and a motion under 12(b)(1), the failure to list the products by name was not fatal. He found that while the letter did not name the accused products, it did specify the type of technology that was claimed to be infringing, and the infringement chart RPost included in its communications to MIS described the ways which RPost believed specific features of MIS products infringed its patents. Additionally, the letter referenced "the above identified products/services," which Judge Chhabria found suggested that the failure to identify products by name was inadvertent. He stated that while a failure to identify products by name may cause a complaint to fall short of the Iqbal and Twombly pleading standards, RPost's 12(b)(1) motion was limited to subject matter jurisdiction. He found that RPost's communications provided sufficient information for MIS to determine which products were alleged to infringe RPost's patents, and how. Thus, with regard to the first twelve counts, Judge Chhabria found that the communications were sufficient to establish an actual controversy over which there was federal jurisdiction.
However, Judge Chhabria granted the motion to dismiss as to the thirteenth claim. The patents to which this singular DJ claim was directed were not referenced in the body of its communications, nor were they included in the infringement chart. Rather, they were only included in a list of patents appended to the end of the letter. Since there were no specific infringement allegations regarding these patents in the communications, and because MIS did not allege that RPost took any other affirmative act to enforce these patents, Judge Chhabria found that MIS failed to allege a case or controversy to support jurisdiction over this claim.
To use Steven Wright's analogy, RPost went in with general accusations, but did not accuse a specific product. That was, for the most part, good enough for Judge Chhabria to find that subject matter jurisdiction existed to bring a declaratory judgment suit on the validity and infringement of RPost's patents.
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