Free Motion for Attorney Fees - District Court of Arizona - Arizona

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6 IN THE UNITED STATES DISTRICT COURT
7 FOR THE DISTRICT OF ARIZONA
8 True Center Gate Leasing, Inc., an Arizona) No. CV-02-1 109-PHX-DGC
corporation, g
9
O Plaintiff] E ‘
1
vs. ORDER
11
12 Sonoran Gate, L.L.C., an Arizona limited ‘
liability company; K-Zell Metals, Inc., an -
13 Arizona corporation; Donald Kamrnerzell
and Barbara Kammerzell, husband and
14 wife; and Mike O’Connor, an individual,
15 Defendants.
16
17 Pending before the Court are the following motions: (1) Defendant K—Ze1l Metals’
18 motion to dismiss the eleventh and twelfth causes of action for lack of subject matter
19 jurisdiction, (2) Plaintiff True Center Gate Leasing’s motion for partial summary judgment
20 on its eleventh cause of action for declaratory relief, (3) Defendants K-Zell Metals’ and
21 Donald and Barbara Kammerzell’s motion for summary judgment, (4) Defendant Mike
22 O’Connor’s motion for summary judgment, and.(5) Defendant Sonoran Gate L.L.C.’sjoinder
23 in the other Defendants’ motions with respect to the first, second, third, and eighth causes
24 of action. The Court will deny the motion to dismiss and Plaintiffs motion for partial
25 summary judgment and grant in part Det`endants’ motions for summary judgment}
26 .*..;..-;.1.
27 ‘ Sonoran Gate’sjoinder in Defendants’ motions for stunmary judgment was not filed
until March 30, 2005, and generally would be regarded as untimely. As explained in the
28 j oinder, however, Sonoran drafted and intended to tile a timely joinder on August 20, 2004,
EXHIBIT A
Case 2:02-cv-01109-DGC Document 223-2 Filed O1/17/2006 Page 1 of 3

I 1 I. K-Zell’s Motion to Dismiss for Lack of Subject Matter Jurisdiction.
2 Plaintiff ’s eleventh and twelfth causes of action seek judgments declaring Defendant
3 K-Zell’s ‘201 and *094 Patents invalid. 2nd Suppl. Cornpl.1]1l 118-46. K—Zell argues that
4 there is no case or controversy and Plaintiff is merely seeking an advisory opinion because
5 K-Zell has not threatened to enforce the patents. Mot. at 23-26 (Doc. #90-1). The defense
6 of lack of subject matter jurisdiction may be raised at any time by the parties or the court.
7 See Fed. R. Civ. P. 12(h)(3); Augustine v. United States, 704 F .2d 1074, 1077 (9th Cir. 1983).
8 Whether a case or controversy exists is a question of law for the court to decide.
9 See Dainippon Screen Mfg. Co. v. CFM T; Inc., 142 F.3d 1266, 1273 (Fed. Cir. 1998).
10 The Federal Circuit has developed a two·part test for determining whether a case or
1 I controversy exists in declaratory judgment patent actions:
12 There must be both (1) an explicit threat or other action by the pater1tee,_which
is §i‘§§lfi=§L£°s‘E?2F£i;§E.%Ei§Ii2‘§It‘a°&hidiiriilii§°€/f.’L‘i%‘3uilaé2'$Sf§r"£
14 infringement or concrete steps taken with the intent to conduct such activity. -e
15 Sierra Applied Sciences, Inc. v. Advanced Energy Indus., Inc., 363 F .3d 1361, 1373 (Fed.
16 Cir. 2004). "The tirst prong looks to the patentholder’s conduct, and the second prong looks
17 to the potential infi·inger’s conduct." Id. Plaintiff bears the burden of establishing that
18 jurisdiction existed over its declaratory judgment action when the complaint was filed. Id. ,
19 In November 2003, the Court granted Plaintiffs motion for leave to file a first
20 supplemental complaint that added the eleventh cause of action. Docs. ##56-57. The Court
21 found that there was an actual controversy between Plaintiff and K-Zell regarding the *201
22 Patent because Plaintiff had sufficiently alleged a reasonable apprehension that it would face
23 an infringement suit if it continued to manufacture its products. Id. at 3. Pursuant to the
24 —-;—————
25 and failed to do so through a clerical error. Sonoran’s explanation is confirmed by the fact .
that Sonoran filed and served a revised statement of facts on August 31, 2004 Doc. #96 and
26 a joinder in the Def`endants’ replies on January I3, 2005 Doc. #122. The parties have been
27 aware from these filings that Sonoran intended to join the motions. The Court will treat
Sonoran’s joirrder as timely filed, but will not consider any facts or arguments asserted by
28 Sonoran to which the other parties have not had an opportunity to respond.
. 2 - I I
Case 2:02-cv-01109-DGC Document 223-2 Filed O1/17/2006 Page 2 of 3

4 1 parties' stipulation, Plaintiff tiled the operative second supplemental complaint that added
2 the twelfth cause of action. Docs. ##67-71.
3 Plaintiff has presented sufficient evidence to satisfy the first prong of the case-or-
4 controversy test with respect to both the eleventh and twelfth causes of action. During a
5 May 2002 telephone conversation, Donald Kammerzell of K-Zell informed Diane Fleming
6 of True Center that he was starting a separate business to build horse race starting gates.2
7 When Fleming told him that True Center would have a problem with that because the gate
8 designs belonged to True Center, Kamrnerzell disagreed and told Fleming that she should
9 consult an attorney because he had received a legal opinion that the gate designs were his
I0 property. Karmnerzell wamed Fleming that True Center "should be careful" in using the
ll gate designs because he had sought patent protection on the designs. Fleming became
12 “quite animated” and perceived Kammerzell’s comments as a threat that he was going to take
13 legal action against True Center. Pl.’s SOF 1] 36. The Court finds that Kamrnerze11’s
14 comments constitute a sufficient threat to create reasonable apprehension on Plaintiff s part
15 that it will face an infringement suit if it continues to manufacture its products.
I6 Plaintiff has also satisfied the second prong of the case-or-controversy test. Plaintiff
17 has presented evidence that it is manufacturing the gate described in the ‘20l Patent and has
18 manufactured gates by the method described in the ‘094 Patent. P1.’s SOF 1] 37; Pl.’s Mot.
19 P. Sumrn. J. Although Plaintiff contends that its products do not infringe the ‘20l and *094
20 Patents because the Patents are invalid, its present activity could potentially constitute
21 infringement. See Sierra Applied Sciences, 363 F .3d at 1373.
22 The Court will deny K-Zell‘s motion to dismiss because the Court has subject matter
23 jurisdiction over the eleventh and twelfth causes of action. See Dainqapen, 142 F.3d at 1273
24 (district court “did not err in concluding that an actual controversy existed between the
25 parties and did not abuse its discretion in exercising jurisdiction over the controvcrsy");
26 Societe de Condiriomrement en Aluminum v. Hunter Eng Qg C0., 655 F .2d 938, 945-46 (9th
27
28 2 Kammeizell and Mike O’Com1or had formed Sonoran Gate, L.L.C., in January 2002.
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