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Karl Storz Endoscopy-America Inc v. Integrated Medical Systems International Inc

United States District Court, N.D. Alabama, Northern Division

July 11, 2019

KARL STORZ ENDOSCOPY-AMERICA INC., Plaintiff,
v.
INTEGRATED MEDICAL SYSTEMS INTERNATIONAL, INC., Defendant.

          MEMORANDUM OPINION

          KARON OWEN BOWDRE, CHIEF UNITED STATES DISTRICT JUDGE

         This matter comes before the court on “Defendant's Motion to Dismiss First Amended Complaint and Initial Memorandum in Support of Motion.” (Doc. 64). For the reasons stated below, this court WILL GRANT IN PART and DENY IN PART Defendant's motion to dismiss this case.

         Plaintiff Karl Storz Endoscopy-America Inc., a medical device manufacturer, filed its original complaint against Defendant Integrated Medical Systems International, Inc., a direct competitor, in August 2012. (Doc. 1). In October 2012, the parties jointly moved to stay the proceedings until resolution of the United States Patent and Trademark Office's inter partes reexamination of the patents at issue in this case. (Doc. 12).

         The USPTO concluded its reexamination and reissue proceedings in October 2018 by confirming all the claims in one of KSEA's patents and reissuing KSEA's other patent, though with several amendments and eighteen additional claims. (Doc. 55). Plaintiff KSEA subsequently moved for leave to amend its original complaint. (Doc. 58). This court granted Plaintiff's motion, and Plaintiff filed its amended complaint on November 20, 2018, alleging additional and continuing violations between its original and amended complaints. Defendant filed a motion to dismiss Plaintiff's amended complaint, (doc. 64), and a motion to stay all discovery until this court ruled on the motion to dismiss, (doc. 65). The court granted Defendant's motion to stay and now addresses Defendant's motion to dismiss. (Doc. 73).

         For the reasons stated below, the court WILL GRANT IN PART and WILL DENY IN PART Defendant's motion to dismiss and WILL LIFT the stay in this case.

         I. Factual Background

         Plaintiff Karl Storz Endoscopy-America, Inc. manufacturers and sells medical products, including endoscopes. Defendant Integrated Medical Systems International, Inc. repairs and resells medical products, including endoscopes. As an endoscope reseller, Defendant IMS directly competes with Plaintiff KSEA's endoscope business.

         KSEA filed a method[1] patent application for assembling endoscopes with the United States Patent and Trademark Office on August 18, 2005. (Doc. 63-1 at 2).

         Sometime in 2007, KSEA obtained an allegedly IMS-repaired endoscope that it believed violated its then-pending patent application. (Doc. 63 at ¶ 11). KSEA contacted IMS regarding its alleged infringement on March 12, 2009; IMS denied any violation but refused to certify in writing that it did not perform the steps of KSEA's then-pending method patent.

         KSEA filed a machine[2] patent application for an endoscope with the USPTO on March 30, 2009. (Doc. 63-1 at 11).

         Pursuant to KSEA's 2005 patent application, the USPTO issued KSEA U.S. Patent No. 7, 530, 945 (the ‘945 patent) on May 12, 2009. (Doc. 63 at ¶ 7). The ‘945 patent constitutes a method patent, with claim 1 providing a “method for assembling an endoscope having a tubular shaft [containing] an optical system having several components . . . at least partially surrounded by a tube made of both a transparent and a shrunk material.” (Doc. 63-1 at 9).

         In December 2010, KSEA filed a prior lawsuit in this court alleging infringement of the ‘945 claim against IMS. See Complaint, Karl Storz GMBH & Co. KG v. Integrated Med. Sys. Int'l, Inc., 2:10-CV-3547-AKK (N.D. Ala. Dec. 21, 2010), ECF No. 1. Judge Kallon dismissed that lawsuit on June 30, 2011, reasoning that “the allegations [] permit the court to infer only the mere possibility of infringement.” Karl Storz Gmbh & Co. KG v. Integrated Med. Sys. Int'l, Inc., No. 2:10-CV-3547-AKK, 2011 WL 13134015, at *3 (N.D. Ala. June 30, 2011).

         The USPTO issued KSEA's second patent, U.S. Patent No. 8, 029, 437 (the ‘437 patent), on October 4, 2011. (Doc. 63-1 at 11). The ‘437 patent constitutes a machine patent, with claim 1 describing an endoscope comprising “a tubular shaft [containing] an optical system having several components . . . directly surrounded by a support piece made of a shrunk material, wherein said shrunk material is a transparent material.” (Doc. 1-2 at 9).

         In December 2011, KSEA obtained two IMS-repaired endoscopes it believed infringed or evidenced infringement of the ‘945 method patent and the ‘437 machine patent. (Doc. 63 at ¶¶ 12-13).

         KSEA filed the original complaint in this action on August 15, 2012, alleging patent infringement against IMS. (Doc. 1). The complaint incorporated photographs of all three IMS-repaired endoscopes to support its infringement claims. IMS responded by requesting inter partes patent reexamination by the USPTO in September 2012. (Doc. 7). Pending resolution of the reexamination proceedings, the court stayed this case. (Doc. 13).

         The USPTO denied reexamination for all claims of the ‘945 patent and for claims 1-7 of the ‘437 patent, but it ordered reexamination for claims 8-14 of the ‘437 patent. (Doc. 63 at ¶ 22). After amendments during reexamination, the USPTO ultimately confirmed the patentability of claims 8-14 of the ‘437 patent. (Doc. 63 at ¶ 23).

         Pursuant to KSEA's reissue application filed in June 2013, the USPTO reissued the ‘437 patent as U.S. Patent No. RE47, 044 (the ‘044 patent) on September 28, 2018, adding claims 15- 32. (Doc. 63-1 at 2).

         The court subsequently lifted the stay and gave KSEA leave to file an amended complaint. (Doc. 62). In its amended complaint, KSEA alleges that it discovered two more IMS-repaired endoscopes that infringed KSEA's patents, one in 2013 and one in 2016. (Doc. 63 at ¶¶ 14-15).

         IMS now moves to dismiss KSEA's amended complaint under Federal Rule of Civil Procedure 12(b)(6). (Doc. 64). The court stayed discovery in this matter pending the resolution of IMS's motion to dismiss. (Doc. 73).

         II. Standard of Review

          A Rule 12(b)(6) motion to dismiss attacks the legal sufficiency of the complaint. Generally, the Federal Rules of Civil Procedure require only that the complaint provide a “‘short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957) (quoting Fed.R.Civ.P. 8(a)). The Supreme Court explained that “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A complaint states a facially plausible claim for relief “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted).

         The court accepts all factual allegations as true on a motion to dismiss under Rule 12(b)(6). See, e.g., Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000). However, legal conclusions unsupported by factual allegations are not entitled to that assumption of truth. Iqbal, 556 U.S. at 678.

         III. Discussion

         Defendant IMS's motion to dismiss presents several arguments for dismissing Plaintiff KSEA's infringement claims. The motion presents arguments for dismissing (1) KSEA's claims related to the ‘945 patent and claims 1-14 of the ‘044 patent; (2) KSEA's claims related to claims 15-32 of the ‘044 patent; (3) KSEA's claims under the doctrine of equivalents as to both patents; and (4) KSEA's claims of induced and willful infringement. This Memorandum Opinion addresses each in turn.

         A. ‘945 Patent and Claims 1-14 of the ...


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