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Paul Luka v. the Procter and Gamble Co.

March 28, 2011

PAUL LUKA, PLAINTIFF,
v.
THE PROCTER AND GAMBLE CO., ) INNOVATIVE BRANDS, LLC, IDELLE ) LABS, LTD., AND HELEN OF TROY, LTD., DEFENDANTS.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge:

MEMORANDUM OPINION AND ORDER

Paul Luka has sued Procter and Gamble Co. (P&G), Innovative Brands, LLC (Innovative), Idelle Labs, Ltd. (Idelle), and Helen of Troy, Ltd. pursuant to the patent false marking statute, 35 U.S.C. § 292. He alleges that the defendants caused a product called Sure Max antiperspirant to be marked with the numbers of two expired U.S. patents. Each of the defendants has moved to dismiss Luka's claims for failure to state a claim and on the ground that section 292 contravenes the "Take Care" clause of Article II of the Constitution. For the reasons stated below, the Court dismisses Luka's claims against P&G, Idelle, and Helen of Troy for failure to state a claim but denies Innovative's motion to dismiss.

Facts

Luka's claims concern two expired U.S. patents, specifically, patent numbers 5,000,356 and 5,156,834. The '356 patent covers technology for a dispenser to release a discrete amount of an antiperspirant product with each turn on a knob at the base of the dispenser. Luka alleges that the '356 patent was issued on March 19, 1991 and expired on October 11, 2008. Am. Compl. ¶¶ 4, 17 & 21. The '834 patent covers a composition of an antiperspirant product that allows it to be dispensed as a paste or cream. Luka alleges that it was issued on October 20, 1992 and expired on October 20, 2009. Id. ¶¶ 5, 22 & 26.

P&G was the original assignee of both patents. See Compl., Exs. A & B. In his amended complaint, Luka alleges that P&G sold or licensed the Sure Max product to Innovative in September 2006 and that Innovative sold or licensed the product to Helen of Troy in March 2010. Am. Compl. ¶¶ 29-30. He alleges on information and belief that P&G continued to "exert[ ] significant control over the manufacture, marketing and sale of the Sure Max product" even after selling or licensing it, evidenced by the fact that logos and trademarks that P&G owned or controlled appeared on the product as late as April 2010. Id. ¶¶ 31-32.

Luka alleges that the defendants and their agents marked the packaging of Sure Max antiperspirant with the '356 and '834 patents even after their expiration. Id. ¶¶ 35-36. He alleges on information and belief that they did so "in order to deceive the public and gain a competitive advantage in the market." Id. ¶¶ 33-34. Luka also alleges that due to the defendants' marking of the product with the patents, "those who view the marking are likely to believe that the [patents] afford[ ] patent protection to the Sure Max product." Id. ¶¶ 39 & 42.

Luka alleges on information and belief that each of the defendants "is a sophisticated company that has experience in applying for and prosecuting patents," has an in-house legal department, and has retained outside counsel to deal with patent and other intellectual property matters. Id. ¶¶ 45-48. He further alleges that the patents and their expiration dates were considered in connection with the licensing transactions and that each of the defendants knew or should have known of the patents' expiration dates. Id. ¶¶ 49-51, 54-57, 59-60, 63-64.

Luka alleges that Idelle is the parent of Innovative and Helen of Troy. Id. ¶¶ 13-14.*fn1 He alleges, on information and belief, that Idelle "was involved in and exerted significant control over" both of those entities' decisions to purchase the rights to the Sure Max product and/or the relevant licenses and was aware of the patents' expiration dates. Id. ¶¶ 52-53, 61-62, 65-66.

With his response to the defendants' motions to dismiss, Luka provided a copy of a patent and technology license agreement between P&G and Innovative that he obtained via discovery. See Pl.'s Resp. to Defs.' Mots. to Dismiss, Ex. B.*fn2 In the agreement, dated September 25, 2006, P&G granted Innovative a perpetual, non-exclusive license under the '356 and '834 patents (among others) to make, use, import, distribute, market, offer for sale, and sell certain licensed products, specifically, antiperspirants sold under the Sure brand. Id. ¶¶ 1.5, 1.7, 2.1 & Sched. 1.7. The agreement provided that the license would continue "until the expiration of the last expired patent of the Licensor Patent Rights." Id. ¶ 3.1. It listed the expiration dates of the '356 and '834 patents as March 19, 2008 and October 20, 2009 respectively. Id. Sched. 1.7.*fn3 The "last expired patent" under section 3.1 was listed in the agreement as expiring in October 2016, several years after the expiration of the '356 and '834 patents.

In the agreement, Innovative agreed that it and its contract manufacturers would "comply with all applicable laws and regulations, including consumer protection and safety legislation, in importation of materials, manufacture, marketing and distribution of the Licensed Products." Id. ¶ 5.3. The agreement also contained the following provision concerning patent marking:

5.4 Product Marking. Consistent with Licensor's practice immediately prior to the date hereof, Licensee shall place in a conspicuous location, on any product made or sold under the Licensor Patent Rights, a patent notice in accordance with the applicable patent marking laws of the country in which the product is made and/or sold and indicate that these patents are under license from The Procter & Gamble Company, should such markings serve as legal notice to would-be infringers.

Id. ¶ 5.4.

Discussion

The patent false marking statute provides as follows: § 292. False marking (a) Whoever, without the consent of the patentee, marks upon, or affixes to, or uses in advertising in connection with anything made, used, offered for sale, or sold by such person within the United States, or imported by the person into the United States, the name or any imitation of the name of the patentee, the patent number, or the words "patent," "patentee," or the like, with the intent of counterfeiting or imitating the mark of the patentee, or of deceiving the public and inducing them to believe that the thing was made, offered for sale, sold, or imported into the United States by or with the consent of the patentee; or Whoever 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; or Whoever marks upon, or affixes to, or uses in advertising in connection with any article, the words "patent applied for," "patent pending," or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public-- Shall be fined not more than $500 for every such offense.

(b) Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the ...


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