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Thomas A. Simonian v. Maybelline LLC

March 1, 2011


The opinion of the court was delivered by: Judge Virginia M. Kendall


Plaintiff Thomas Simonian ("Simonian") filed suit against Defendant Maybelline LLC ("Maybelline") in a qui tam action on behalf of the public for false patent marking under 35 U.S.C. § 292(a). Simonian's Complaint alleges that Maybelline violated 35 U.S.C. § 292(a) by marking certain cosmetic products with expired patents. Maybelline moves to dismiss Simonian's Complaint based on lack of jurisdiction and failure to state a claim upon which relief can be granted. In the alternative, Maybelline moves to transfer the case to the Southern District of New York, pursuant to 28 U.S.C. § 1404(a). Maybelline also has a pending motion to stay this case pending release of a Federal Circuit decision relating to a relator's standing to bring a qui tam action under the false marking statute. For the following reasons, the Court denies Maybelline's Motion to Dismiss, grants Maybelline's Motion to Transfer, and denies as moot Maybelline's Motion to Stay.


The following facts are taken from Simonian's Complaint and are assumed to be true for purposes of this Motion to Dismiss. See Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). Simonian is an individual residing in Geneva, Illinois. (Compl. ¶ 4.) Maybelline is a producer of beauty and makeup products, including mascaras, and is incorporated and maintains its principal place of business in New York. (Compl. ¶¶ 5, 6.)

Simonian alleges that Maybelline marked certain mascara products with one or more expired patents in order to deceive the public and to "gain a competitive advantage in the market." (Compl. ¶ 2.) The expired patents at issue are United States Patent Numbers 4,898,193 ("the '193 Patent"); 4,993,440 ("the '440 Patent"); 4,871,536 ("the '536 Patent"); and 4,887,622 ("the '622 Patent"). (Compl. ¶ 2.) These four patents were issued to Maybelline between October 1989 and February 1991. (Compl. ¶¶ 10-13.) The '193 Patent expired on October 20, 2007. (Compl. ¶ 12.) The '440 Patent expired on July 27, 2009. (Compl. ¶ 13.) The '536 Patent expired on July 28, 2008. (Compl. ¶ 11.) Finally, the '622 Patent expired on November 30, 2007. (Compl. ¶ 10.) Mascara products including XXLPRO BY EYESTUDIO®, LASH DISCOVERY®, FULL 'N SOFT®, and VOLUM' EXPRESS® continue to be marked and sold with one or more of the expired patents. (Compl. ¶ 15.)

Simonian alleges that Maybelline "knew or should have known" about expiration of the patents because it is a "sophisticated company and has many decades of experience applying for, obtaining, and/or litigating patents." (Compl. ¶¶ 22, 24.) Maybelline also was aware of the illegality of false patent marking but "intentionally marked [its] products with the Expired Patents" in order to prevent competition and deceive the public. (Compl. ¶¶ 25, 28.)


When considering a motion to dismiss under Rule 12(b)(6), the Court accepts as true all facts alleged in the complaint and construes all reasonable inferences in favor of the plaintiff. See Murphy, 51 F.3d at 717. To state a claim upon which relief can be granted, a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "Detailed factual allegations" are not required, but the plaintiff must allege facts that, when "accepted as true . . . 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In analyzing whether a complaint has met this standard, the "reviewing court [must] draw on its judicial experience and common sense." Iqbal, 129 S. Ct. at 1950. When there are well-pleaded factual allegations, the Court assumes their veracity and then determines if they plausibly give rise to an entitlement to relief. Id.

Rule 9(b) elevates the pleading requirements for allegations of fraud: "In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Fed. R. Civ. P. 9(b)(emphasis added). But allegations of "[m]alice, intent, knowledge, and other conditions of a person's mind" may be alleged "generally." Id. Simonian meets the "particularity" standard if his Complaint points out the "who, what, when, where, and how" of the alleged fraudulent activity. DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990); Pirelli Armstrong Tire Corp. Retiree Medical Benefits Trust v. Walgreen Co., -- F.3d --, 2011 WL 183163, at *4 (7th Cir. Jan. 21, 2011).

This Rule 9(b) "particularity" calculus "may vary on the facts of a given case." Pirelli, 2011 WL 183163, at *4. For example, the Court can relax the elevated requirements of Rule 9(b) where the facts comprising the fraud are uniquely within the defendant's possession. Corley v. Rosewood Care Center Inc., 142 F.3d 1041, 1051 (7th Cir. 1998). Moreover, fraud allegations based on "information and belief" are generally unable to satisfy the "particularity" standard. Bankers Trust Co. v. Old Republic Ins. Co., 959 F.2d 677, 684 (7th Cir. 1992). But this is not a blanket rule; "information and belief" allegations can satisfy the particularity requirement of Rule 9(b) "so long as (1) the facts constituting the fraud are not accessible to the plaintiff and (2) the plaintiff provides 'the grounds for his suspicions.'" Pirelli, 2011 WL 183163, at *5.


I. Maybelline's Motion to Stay

As an initial matter, Maybelline requested a stay until the Federal Circuit released its ruling in Stauffer v. Brooks Brothers, Inc., 619 F.3d 1321 (Fed. Cir. 2010). The Federal Circuit has since ruled on this case and therefore the Court denies as moot Maybelline's Motion to Stay.

II. Maybelline's Motion to Dismiss

Maybelline moves to dismiss Simonian's Complaint for two independent reasons. First, Maybelline maintains that Simonian, as the relator, lacks Article III standing. Second, Maybelline argues that Simonian's Complaint fails to plead fraud ...

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