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Radiation Stabilization Solutions LLC v. Accuray Inc. and Cancer Treatment Centes of America

August 21, 2012

RADIATION STABILIZATION SOLUTIONS LLC, PLAINTIFF,
v.
ACCURAY INC. AND CANCER TREATMENT CENTES OF AMERICA, DEFENDANTS.



The opinion of the court was delivered by: Judge Sharon Johnson Coleman

MEMORANDUM OPINION AND ORDER

Plaintiff, Radiation Stabilization Solutions LLC ("RSS"), filed an amended complaint on November 30, 2011, alleging direct patent infringement against defendant Cancer Treatment Centers of America ("CTCA"), and inducement and contributory patent infringement against CTCA and defendant Accuray, Inc. ("Accuray"). Defendants filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. This Court heard oral arguments on the motion on June 29, 2012. For the reasons that follow, this Court grants in part and denies in part defendants' motion to dismiss.

Background

RSS is a Texas limited liability company and is the exclusive licensee of United States Patent No. 6,118,848 ("the '848 patent"). (Dkt. 7, Pl.'s First Am. Compl.) Accuray is a California corporation that manufactures the Tomo Hi-Art treatment system ("the Tomo machine"). CTCA is a hospital conducting business in Zion, Illinois, that uses the Tomo machine. The '848 patent is a utility patent with fifteen claims that cover the invention of a "System to Stabilize an Irradiated Internal Target." (Id. at Ex. A.)

RSS alleges that CTCA is directly infringing the '848 patent under 35 U.S.C. § 271(a) by "making, using, offering for sale, and/or selling within the United States, and/or importing into the United States devices using Image Guided Radiation Therapy, including at least the Tomo Hi-Art treatment system." RSS further alleges that CTCA and Accuray are inducing the infringement of the patent under 35 U.S.C. § 271(b), and contributing to the infringement under 35 U.S.C. § 271(c).

Legal Standard

When deciding a motion to dismiss in a patent case, district courts apply the law of the regional circuit. McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1355--56 (Fed. Cir. 2007). To survive a 12(b)(6) motion, 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). A "short and plain" statement requires the plaintiff to provide sufficient facts to plausibly suggest that the allegations could have occurred, and to give fair notice to the defendant as to what the complaint is about. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007).

Discussion

1. CTCA, Inc. as a Party

Defendants argue three main bases for dismissal of the Amended Complaint with prejudice. First, defendants assert that this Court should dismiss RSS's claims against CTCA for failure to name a specific entity. Defendants claim that RSS's failure to include CTCA's corporate designation, "Inc.", should warrant dismissal with prejudice of CTCA as a party to the case. Defendants contend that no entity known as CTCA is licensed in Illinois to administer radiation therapy, or owns or operates a Tomo Hi-Art treatment system. Defendants further contend that CTCA, Inc., located in Schaumburg, Illinois, is a healthcare marketing and management company that provides business services to a network of cancer treatment hospitals, not healthcare services. However, a brief search on CTCA, Inc.'s website reveals that CTCA comprises of multiple medical centers, one in Zion, Illinois, along with a corporate office in Schaumburg, Illinois. Facility Addresses, http://www.cancercenter.com/contact-us/facility-addresses.cfm. Moreover, Accuray's website lists "CTCA Midwest Regional Center" as a "TomoTherapy" treatment center in Zion, IL. Treatment Centers in Illinois, USA, http://accuray.com/treatment-centers/USA/IL.

In support of their argument, defendants cite Elliston v. Ill. Cent. R.R. Co., No. 06-552, 2006 U.S. Dist. LEXIS 83552 (S.D. Ill. 2006). In Elliston, the plaintiff mistakenly named and served defendant "Trak Tech" instead of "Track Tech". Id. at *2. The court dismissed the case with prejudice regarding defendant, Trak Tech, but plaintiff was allowed to amend its complaint to include the proper defendant. Id. at *3. While Elliston involved an actual mistaken defendant in place of the intended one, the responding party that has been served with the instant motion (and complaint) is the defendant that RSS intended to sue. Therefore, it is irrelevant that RSS left out the corporate designation because the proper party has been notified and is aware of a pending action. Amendment of the complaint to provide the correct corporate and affiliate designation will rectify the problem. Moreover, just as the intended defendant, Track Tech, in Elliston was not dismissed; CTCA, Inc. will not be dismissed either. This Court grants RSS leave to amend its complaint to include CTCA's corporate designation.

Defendants also argue that CTCA is at most a peripheral defendant, and that the only reason CTCA was joined as a party was to anchor venue in this district. Venue for claims arising out of patent infringement is proper in the "judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business." 28 U.S.C. § 1400(b). Other than RSS's failure to include CTCA's corporate designation, defendants do not dispute CTCA, Inc.'s residence in the forum state. Instead, defendants cite to Calmedica LLC v. Novoste Corp., No. 03 C 3924, 2004 WL 413296 (N.D. Ill. Jan. 30, 2004). In that case, Calmedica, a California resident, sued Novoste, a Georgia resident, along with Rush, an Illinois resident, in the Northern District of Illinois alleging that the medical device Novoste manufactured and Rush used infringed its patent. Id. at *2. The court granted defendants' motions to sever and transfer venue after finding that Rush was merely one of more than fifty hospitals around the country that was using this device, and other than Rush, Calmedica nor Novoste had any connections to the forum state. Id. at *3.

The instant case shares some factual similarity with Calmedica, but is distinguishable.

Like Calmedica, CTCA, the hospital using the alleged infringing device, is the only party that is a resident of the forum state, and is one of numerous hospitals throughout the country and around the world that uses Accuray's Tomo machine. See Treatment Centers, http://www.accuray.com/treatment-centers/USA. However, the inventor of the patent and the attorneys that were involved in the patent's prosecution reside in the forum state giving RSS, at the least, a higher interest in litigating in the forum state than Calmedico. See Radiation Stabilization v. Varian, No. 11 C 7701, 2012 WL 1886456 at **2, 3 (N.D. Ill. May 17, 2012) (finding that the location of key witnesses heavily weighed in favor of denying ...


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