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EZ Stak LLC v. Dejana Truck & Utility Equipment Co., LLC

United States District Court, N.D. Illinois, Eastern Division

June 12, 2018

EZ STAK, LLC, Plaintiff,
v.
DEJANA TRUCK & UTILITY EQUIPMENT COMPANY, LLC, Defendant.

          MEMORANDUM OPINION & ORDER

          Honorable Thomas M. Durkin United States District Judge

         Plaintiff EZ STAK, LLC has sued defendant Dejana Truck & Utility Equipment Company, LLC in a declaratory judgment action to decide the validity of Dejana's asserted patents relating to shelving systems installed in vans and trucks. Currently before the Court is EZ STAK's motion to dismiss Dejana's counterclaims pursuant to Fed.R.Civ.P. 12(b)(6) (R. 29). For the reasons explained below, the Court denies EZ STAK's motion.

         STANDARD

         The pleading standards set forth in Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) apply to patent infringement claims. Atlas IP, LLC v. Exelon Corp., 189 F.Supp.3d 768, 771 (N.D. Ill. 2016). Pursuant to these standards, a claim or counterclaim must provide “a short plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Through this statement, the opposing party must be given “fair notice” of the claim and the basis for it. Twombly, 550 U.S. at 555. This means the claim or counterclaim must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). “‘A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Mann, 707 F.3d at 877 (quoting Iqbal, 556 U.S. at 678). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Mann, 707 F.3d at 877.

         BACKGROUND

         The following facts are taken from Dejana's counterclaims. Dejana is a manufacturer and supplier of storage solutions for trucks and vans. R. 24 ¶ 7. Dejana owns U.S. Patent Nos. 8, 763, 820, 9, 010, 830, 9, 233, 647, 9, 381, 872, 9, 669, 773, and 9, 796, 339. Id. ¶ 1. All of these patents are for various aspects of Dejana's interior vehicle shelving systems, including Dejana products known as Katerack and DuraRac. Id. ¶¶ 7-9. Two of the patents are for shelving systems with cages to store ladders inside a vehicle (id. ¶¶ 12-22), two are for rack and tray devices for vehicle shelving systems (id. ¶¶ 23-30), and two are for locking mechanisms for vehicle shelving systems (id. ¶¶ 31-40).

         EZ STAK is a manufacturer of modular interior storage systems for trucks and vans. Id. ¶ 41. EZ STAK distributes products directly to customers and through third-party affiliated dealers. Id. ¶ 43. EZ STAK specializes in providing customized solutions, advertising itself as working one-on-one with clients to meet their storage needs. Id. ¶ 45.

         Dejana alleges that EZ STAK has agreed to make Dejana's patented shelving systems at a lower cost for multiple potential customers. Id. ¶¶ 67-82, 87-95. In particular, Dejana alleges that after it submitted proposed designs for a DuraRac shelving system to Peoples Gas, a utility provider, it learned that a copycat system would instead be manufactured by EZ STAK “based on Dejana's proposed drawings.” Id. ¶¶ 76-81. Dejana alleges that EZ STAK in fact manufactured and sold that copycat system to Peoples Gas. Id. ¶ 82.

         Dejana sent EZ STAK a cease-and-desist letter on January 19, 2017. Id. ¶ 74. In a response on January 24, 2017, EZ STAK expressly represented that it would “not manufacture the Katerack/DuraRac systems patented by Dejana.” Id. ¶ 75. Nevertheless, at a trade show in March 2017, EZ STAK allegedly displayed various products that Dejana's representatives inspected and confirmed included patented features from Dejana's Katerack and DuraRac shelving systems. Id. ¶¶ 83-86. And during the summer of 2017, Dejana learned that EZ STAK planned to supply a copycat shelving and ladder rack system for Goodman Networks, a field services company with whom Dejana had previously discussed supplying a DuraRac shelving system. Id. ¶¶ 87-95.

         On December 5, 2017, EZ STAK sued Dejana in a declaratory judgment action seeking adjudication of the validity of the asserted patents. R. 1. On February 28, 2018, Dejana filed patent infringement counterclaims spanning 567 paragraphs and over 100 pages, with a separate count for each of its six patents. R. 24 ¶¶ 1-567. Each of Dejana's six counterclaims is highly detailed, with descriptions of the relevant patent, descriptions and labeled drawings of the allegedly infringing products and their infringing features, and images of allegedly infringing products that used to be on EZ STAK's website but were subsequently removed. See id.

         Dejana alleges patent infringement not simply based on EZ STAK's making or selling products covered by the patents, but also based on EZ STAK's offering to sell such products. Id. ¶¶ 103, 183, 266, 343, 427, 489. Dejana seeks an injunction prohibiting all further infringement, including infringement by inducement and contributory infringement. Id. at p. 164. Dejana also seeks treble damages for willful infringement. Id. On April 11, 2018, Dejana served initial infringement contentions containing 12 claim charts and 20 appendices. R. 37-2; R. 37-3.

         ANALYSIS

         In its motion to dismiss, EZ STAK repeats the same basic refrain with respect to each of Dejana's counterclaims: that Dejana does “not compare the claims of the[ ] six patents to actual EZ STAK accused van installations.” E.g., R. 30 at 1. Instead, Dejana compares the patent claims to Dejana's drawings of allegedly infringing products and images that allegedly have been removed from EZ STAK's website. EZ STAK maintains that Dejana has not alleged an infringement theory that satisfies the plausibility standard set forth in Twombly and Iqbal.

         The Court agrees with Dejana that there are three fundamental problems with this argument. First, EZ STAK misunderstands Dejana's burden at the pleading stage. As the Federal Circuit recently explained when reversing an order dismissing patent infringement claims under Twombly and Iqbal, “[s]pecific facts are not necessary”; the opposing party need only be given “fair notice of what the [infringement] claim is and the ground upon which it rests.” Disc Disease Sols. Inc. v. VGH Sols., Inc., 888 F.3d 1256, 1260 (Fed. Cir. 2018). In other words, a party alleging patent infringement need not “‘prove its case at the pleading stage.'” Lifetime Indus., Inc. v. Trim-Lok, Inc., 869 F.3d 1372, 1379 (Fed. Cir. 2017) (quoting In re Bill of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1342 (Fed. Cir. 2012) (warning against requiring a “level of factual specificity” in pleading patent infringement that “would be dangerously close to requiring a plaintiff to prove he is entitled to relief at the pleading stage”)). The ...


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