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Simonian v. Blistex

November 3, 2010

THOMAS A. SIMONIAN, RELATOR,
v.
BLISTEX, INC., DEFENDANT.



The opinion of the court was delivered by: Amy J. St. Eve, District Court Judge

MEMORANDUM OPINION AND ORDER

Relator, Thomas A. Simonian, has brought a qui tam action against Defendant, Blistex, Inc., contending that Blistex has engaged in false patent marking in violation of 35 U.S.C. § 292.

(R. 1.) Specifically, Simonian alleges that Defendant marked certain of its BLISTEX® products with U.S. Patent Number 4,887,924 after that patent had expired, thus contravening Section 292. (Id.)

Defendant has filed a motion to dismiss pursuant to Rules 12(b)(1), 12(b)(6) and 9(b), and in the alternative pursuant to Rule 12(c). (R. 26.) In light of the Federal Circuit's recent decision in Stauffer v. Brooks Bros., Inc., 619 F.3d 1321 (2010), Blistex has relinquished its argument that the Court should dismiss the lawsuit under Fed. R. Civ. P. 12(b)(1) for lack of subject-matter jurisdiction. (R. 38 at 1.) Defendant nevertheless maintains that the Court should dismiss the complaint with prejudice because the allegations fail to state a claim upon which relief could be granted. In particular, Blistex argues that the complaint does not give rise to a plausible right to relief because the allegations are "wholly speculative" as to Defendant's alleged deceptive intent. (R. 27 at 10.) Defendant further contends that the allegations fail to satisfy the strictures of Rule 9(b), which require plaintiffs to plead fraud with particularity. (R. 27 at 9-13; R. 33 at 3-10; R. 38 at 1-3.)

For the reasons explained below, the Court denies Defendant's motion to dismiss.

BACKGROUND

On February 23, 2010, Relator filed a complaint alleging false patent marking on the part of Blistex for alleged violations of 35 U.S.C. § 292. (R. 1.) Section 292 provides, in relevant part, that: "[w]hoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article, the word "patent" or any word or number importing that the same is patented for the purpose of deceiving the public . . . [s]hall be fined not more than $500 for every such offense." 35 U.S.C. § 292.

Simonian alleged that Defendant marked its BLISTEX®-branded lip-balm products with the '924 patent, entitled "Angled Tip Applicator," which expired on February 19, 2008. (Id. at ¶¶ 10-16.) He further alleged that the offending packaging was designed and printed after the date of expiration. (Id. at ¶ 18.) The complaint further provides that Defendant is a sophisticated company, which has experience applying for, obtaining, and litigating patents. (Id. at ¶¶ 20-24, 28-29.) Relator also alleges that Blistex has an in-house legal department and has retained outside counsel, and that its attorneys have experience in the field of intellectual property. (Id. at ¶¶ 20-24.)

The instant case is one of several lawsuits that Simonian has brought in this District against various companies that he alleges have violated 35 U.S.C. § 292. See, e.g., Simonian v. Allergan, Inc., No. 10-CV-02414 (N.D. Ill.); Simonian v. Amgen, Inc., 10-CV-01540 (N.D. Ill.); Simonian v. Adv. Vision Research, Inc., 10-CV-01310 (N.D. Ill.); Simonian v. Oreck Corp. et al., 10-CV-1224; Simonian v. Irwin Indus. Tool Co., 10-CV-1260 (N.D. Ill.); Simonian v. Cisco Sys., Inc., No. 10-CV-1306 (N.D. Ill.). On June 21, 2010, Defendant filed the motion to dismiss that is presently before the Court. (R. 26.).

LEGAL STANDARD

"A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted." Hallinan v. Fraternal Order of Police of Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). Pursuant to Rule 8, a complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). As the Seventh Circuit recently explained, this "[r]ule reflects a liberal notice pleading regime, which is intended to 'focus litigation on the merits of a claim' rather than on technicalities that might keep Relators out of court." Brooks v. Ross, 578 F.3d 574, 580 (7th Cir. 2009) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002)). This short and plain statement must "give the defendant fair notice of what the claim is and the grounds upon which it rests ." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Under the federal notice-pleading standards, a plaintiff's "factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. Put differently, 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, -- U.S. --, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 570); see also Cooney v. Rossiter, 583 F.3d 967, 971 (7th Cir. 2009) (holding that the amount of factual allegations required to state a plausible claim for relief depends on the complexity of the legal theory). "[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint." Erickson v. Pardus, 551 U.S. 89, 94 (2007); Justice v. Town of Cicero, 577 F.3d 768, 771 (7th Cir. 2009) (holding that the court construes complaints in the light most favorable to the plaintiff, drawing all possible inferences in the plaintiff's favor).

Beyond the requirements of Rule 12(b)(6), Rule 9(b) requires all allegations of fraud to be "state[d] with particularity," although "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). "The rule requires the plaintiff to state the identity of the person who made the misrepresentation, the time, place, and content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff." Vicom, Inc. v. Harbridge Merch. Servs., Inc., 20 F.3d 771, 777 (7th Cir. 1994) (internal quotations omitted); see also United States ex. rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849, 853 (7th Cir. 2009)(holding that alleging fraud with particularity "means the who, what, when, where, and how: the first paragraph of any newspaper story.") (quoting DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990)).

ANALYSIS

I. The Court Will Not Dismiss the Complaint Under ...


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