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Simonian v. Cisco Systems

June 17, 2010

THOMAS SIMONIAN, PLAINTIFF,
v.
CISCO SYSTEMS, INC., DEFENDANT.



The opinion of the court was delivered by: Samuel Der-Yeghiayan United States District Court Judge

MEMORANDUM OPINION

SAMUEL DER-YEGHIAYAN, District Judge

This matter is before the court on Defendant Cisco Systems, Inc.'s (Cisco) motion to dismiss. For the reasons stated below, we grant the motion to dismiss.

BACKGROUND

Plaintiff Thomas Simonian (Simonian), who is a relator for the purposes of this qui tam action, alleges that Cisco has marked its products with expired patents, and provides Internet Protocol Set Top Box Model No. IPN330HD as an example. The Internet Protocol Set Top Box Model No. IPN330HD shown in the complaint was allegedly manufactured in October 2009. Seven of the patents marked on the Internet Protocol Set Top Box Model No. IPN330HD were allegedly expired at the time of the product's manufacture. According to Simonian, Cisco is a sophisticated company, with "decades of experience applying for, obtaining, and/or litigating patents." (Compl. Par. 17). Simonian contends that Cisco has knowledge that its products are marked with expired patents. Simonian also claims that Cisco "intentionally marked its products with the expired patents . . . to prevent competitors from entering the market and for the purpose of deceiving the public." (Compl. Par. 20). Simonian has brought a qui tam action against Cisco for false patent marking pursuant to 35 U.S.C. §292. Cisco has moved to dismiss Simonian's claim.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(1) (Rule 12(b)(1)) requires a court to dismiss an action when it lacks subject matter jurisdiction. United Phosphorus, Ltd. v. Angus Chemical Co., 322 F.3d 942, 946 (7th Cir. 2003). If the concern of the court or party challenging subject matter jurisdiction is that "subject matter jurisdiction is not evident on the face of the complaint, the motion to dismiss pursuant to Rule 12(b)(1) would be analyzed as any other motion to dismiss, by assuming for purposes of the motion that the allegations in the complaint are true." Id.; see also Ezekiel v. Michel, 66 F.3d 894, 897 (7th Cir. 1995)(stating that when reviewing a motion to dismiss brought under Rule 12(b)(1), this court "must accept as true all well-pleaded factual allegations, and draw reasonable inferences in favor of the plaintiff"). For the purpose of determining subject matter jurisdiction, this court "may properly look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists." Ezekiel, 66 F.3d at 897 (quoting Capitol Leasing Co. v. Federal Deposit Insurance Corp., 999 F.2d 188, 191 (7th Cir. 1993)). The burden of proof in a Rule 12(b)(1) motion is "on the party asserting jurisdiction." United Phosphorus, Ltd., 322 F.3d at 946.

In ruling on a motion to dismiss brought pursuant to Federal Rule of Civil Procedure Rule 12(b)(6) (Rule 12(b)(6)), a court must "take all of the factual allegations in the complaint as true" and make reasonable inferences in favor of the plaintiff. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009)(stating that the tenet is "inapplicable to legal conclusions"); Thompson v. Ill. Dep't of Prof'l Regulation, 300 F.3d 750, 753 (7th Cir. 2002). To defeat a motion to dismiss brought pursuant to Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Iqbal, 129 S.Ct. at 1949 (internal quotations omitted)(emphasis in original)(quoting in part Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

DISCUSSION

Cisco argues that Simonian's complaint should be dismissed because Simonian lacks standing to pursue his claim and because Simonian has not met the pleading requirements of Federal Rule of Civil Procedure 8(a) (Rule 8(a)) or Federal Rule of Civil Procedure 9(b) (Rule 9(b)).

I. Standing

Cisco argues that Simonian lacks standing to pursue a claim under 35 U.S.C. § 292 because he has not alleged that he is a competitor or a purchaser of the product. Generally, to meet the requirements of constitutional standing under Article III, a plaintiff must establish that he (1) suffered "an injury in fact," (2) that the injury is "fairly traceable to the challenged action of the defendant," and (3) that the injury is likely to be redressed by the court. Lujan v. Defender's of Wildlife, 504 U.S. 555, 561 (1992)(citations omitted)(internal quotations omitted). However, in this case, the plain language of 35 U.S.C. § 292(b) provides that "[a]ny person" is permitted to sue for false marking. 35 U.S.C. § 292(b). In addition, 35 U.S.C. § 292 is a qui tam statute. See Forest Group, Inc., 590 F.3d 1295, 1303 (Fed. Cir. 2009)(stating that "Congress' interest in preventing false marking was so great that it enacted a statute which sought to encourage third parties to bring qui tam suits to enforce the statute" and that "the false marking statute explicity permits qui tam actions"). In the case of qui tam statutes, an injury to the United States is sufficient to confer standing upon a relator. See Vermont Agency of Natural Resources v. U.S. ex rel. Stevens,529 U.S. 765, 773-74 (2000)(stating that "the assignee of a claim has standing to assert the injury in fact suffered by the assignor" and that therefore a qui tam statute "can reasonably be regarded as effecting a partial assignment of the Government's damages claim"). The United States is injured when the laws it enacts to protect the public are violated. See Id. at 771 (discussing injury to the sovereignty of the United States); Forest, 590 F.3d at 1302-03 (discussing the important public policy reasons for enforcing the false marking statute). Since the United States suffers an injury when the false marking statute is violated, Simonian has standing to assert a claim against Cisco under 35 U.S.C. § 292.

II. Sufficiency of the Complaint

Cisco argues that Simonian has not alleged sufficient facts to support his claims under either Rule 8(a) or Rule 9(b), and that therefore, Simonian's claim should be dismissed. To prevail on a claim for false marking, a plaintiff must show that a defendant marked "an unpatented ...


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