IPS Group, Inc. v. Civicsmart, Inc.
3:17-cv-00632
S.D. Cal.Oct 25, 2017Background
- IPS Group sued CivicSmart, Duncan Parking, and Duncan Solutions alleging infringement of multiple patents and related false advertising and state unfair-competition claims; First Amended Complaint filed May 26, 2017.
- Defendants moved to dismiss for improper venue (patent claims), claim splitting, failure to state claims (Lanham Act, California FAL/UCL), and lack of subject-matter jurisdiction; motions fully briefed and argued August 7, 2017.
- IPS alleged venue under 28 U.S.C. § 1400(b) based on acts of infringement and an established place of business in the Southern District of California; defendants challenged the sufficiency of the infringement allegations.
- The accused patents in Causes Three–Six were asserted against CivicSmart and Duncan Parking; Causes One–Two duplicated issues pending in an earlier 2015 case against Duncan Solutions.
- Lanham Act and California FAL/UCL claims rested on an alleged misrepresentation made in a Milwaukee RFP response and other unspecified communications.
- IPS sought a preliminary injunction to enjoin alleged false advertising and unfair business practices; the injunction motion depended on surviving the merits of the dismissed claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Venue for patent infringement (§ 1400(b)) | IPS: allegation of infringement and established place of business in district suffices | Defs: conclusory infringement allegation insufficient; they did not make/sell/use accused devices in district | Court: Denied dismissal — IPS provided sufficient factual support to show venue for purposes of the challenge; defendants waived challenge to second prong by not timely raising it |
| Claim splitting (duplicate patent claims with 2015 case) | IPS: claims properly pled here | CivicSmart: parent corp. liability duplicates claims pending in 2015 case | Court: First and Second Causes dismissed here as moot after IPS amended 2015 case to add CivicSmart |
| Lanham Act § 43(a) claim | IPS: misrepresentation in RFP was commercial speech aimed at affecting purchasing and qualifies as actionable false advertising | Defs: statement to Milwaukee officials in response to an RFP is not advertising or promotion disseminated to the relevant purchasing public | Court: Dismissed Lanham Act claim for failure to state a claim — allegations fail Coastal Abstract dissemination requirement |
| California FAL (§17500) and UCL (§17200) claims | IPS: same misrepresentation supports state-law claims | Defs: allegations lack specificity; fraud-based claims require Rule 9(b) particularity | Court: Dismissed FAL and UCL claims for failure to plead with particularity under Rule 9(b) |
| Preliminary injunction to enjoin advertising/unfair practices | IPS: will suffer irreparable harm absent injunction; merits likely to succeed | Defs: merits lacking because Lanham/FAL/UCL claims deficient | Court: Denied — IPS failed to show likelihood of success on the merits (dismissed claims) |
Key Cases Cited
- TC Heartland LLC v. Kraft Food Grp. Brand LLC, 137 S. Ct. 1514 (2017) (venue for patent actions governed by §1400(b))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard — plausibility under Rule 8)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard — plausibility and Twombly/Iqbal framework)
- Coastal Abstract Serv. v. First Am. Title Ins. Co., 173 F.3d 725 (9th Cir. 1999) (Lanham Act requires dissemination to relevant purchasing public for advertising/promotional element)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (Rule 9(b) particularity applies to UCL/FAL claims grounded in fraud)
- Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) (standard for preliminary injunction requires likelihood of success and irreparable harm)
- Weinberger v. Romero-Barcelo, 456 U.S. 305 (1982) (injunctive relief requires showing of irreparable injury and inadequacy of legal remedies)
- Int’l Franchise Ass’n v. City of Seattle, 803 F.3d 389 (9th Cir. 2015) (preliminary injunction factors articulated and applied)
- Global Horizons, Inc. v. U.S. Dep’t of Labor, 510 F.3d 1054 (9th Cir. 2007) (court may end preliminary-injunction analysis if no probability of success on the merits)