447 F.Supp.3d 535
N.D. Tex.2020Background
- Competing hoverboard manufacturers: Hangzhou Chic (and related companies Unicorn and Shenzhen) own U.S. patents (’155, ’802, D’723) invented by Jiawei Ying; GoLabs (and retailers Walmart/Amazon) sell products allegedly covered by a different patent (’278) by Shane Chen.
- Between Oct 2018–Jun 2019 Hangzhou Chic/Unicorn filed infringement complaints with Amazon and contacted Walmart; Amazon repeatedly delisted and relisted GoLabs products; plaintiffs later sued GoLabs, Walmart, and Amazon.
- GoLabs and Walmart asserted counterclaims including inequitable conduct (challenging enforceability of the asserted patents), Lanham Act false-advertising/common-law unfair competition, Sherman Act antitrust claims (Walker Process and sham litigation/attempted monopolization), and tortious interference with contract.
- Plaintiffs moved to dismiss under Rule 12(b)(6) eight counterclaims, arguing insufficient pleading of intent/materiality for inequitable conduct, Noerr-Pennington/subjective-good-faith protection for asserting patents, failure to plead antitrust market/monopoly, and that Amazon’s at-will delisting cannot support tortious-interference with contract.
- The court denied dismissal of inequitable-conduct claims as to the ’155 and ’802 patents (but dismissed the D’723 inequitable-conduct claim), and denied dismissal of Lanham Act, Sherman Act (section 2) and common-law unfair competition counterclaims; it dismissed tortious interference with contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Inequitable conduct as to ’155 patent | Ying disclosed prior art and pleadings insufficiently allege intent/materiality | Ying mischaracterized prior art (’278), omitted Hovertrax prototype and Kickstarter pages; acted knowingly with intent to deceive PTO | Denied dismissal — pleaded materiality, knowledge, and plausible intent for ’155 |
| Inequitable conduct as to ’802 patent (continuation) | Same defects as to ’155; no new facts | Same misrepresentations/omissions carried into continuation application | Denied dismissal — inequitable conduct for ’802 rises/falls with ’155 |
| Inequitable conduct as to D’723 design patent | Failure to plead specific intent from alleged inventorship discrepancy | Alleged Ying mislisted inventorship to conceal prior Chinese application | Granted dismissal — conclusory intent allegations insufficient |
| Lanham Act (§43(a)) and common-law unfair competition | Noerr-Pennington shields good-faith patent assertions; claims are barred if plaintiffs acted in protection of patent rights | Plaintiffs asserted patents in bad faith and made false/misleading representations to third-party sellers, causing delistings and loss | Denied dismissal — allegations support falsity, deception, materiality, injury; Noerr-Pennington not controlling given alleged bad faith |
| Sherman Act antitrust (Walker Process / sham litigation / attempted monopolization) | Failure to define relevant market or plead dangerous probability of monopoly; plaintiffs cite Noerr-Pennington | Plaintiffs used allegedly unenforceable patents and systematic delisting pressure to exclude competitors; U.S. hoverboard market alleged | Denied dismissal — pleaded U.S. hoverboard market, patterns of anticompetitive conduct, and plausible danger of attaining market power |
| Tortious interference with contract | Plaintiffs argue third-party delistings (e.g., Amazon) suffice | Defendants point to interference causing delistings and damage | Granted dismissal — Amazon vendor relationship was at-will; Texas law requires breach for tortious-interference-with-contract claim |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard for Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must permit reasonable inference of liability; courts need not accept conclusory allegations)
- Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009) (inequitable-conduct claims must satisfy Rule 9(b) identifying who/what/when/where/how)
- Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (intent to deceive cannot be inferred solely from materiality)
- Molins PLC v. Textron, Inc., 48 F.3d 1172 (Fed. Cir. 1995) (inequitable conduct includes affirmative misrepresentations and failures to disclose)
- Prof’l Real Estate Inv’rs, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49 (1993) (Noerr-Pennington and objective-baseless standard for litigation-related liability)
- Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993) (elements for attempted monopolization under Section 2 of the Sherman Act)
- Nilssen v. Osram Sylvania, 504 F.3d 1223 (Fed. Cir. 2007) (inequitable conduct in one patent can infect related family patents)
- El Paso Healthcare Ltd. v. Murphy, 518 S.W.3d 412 (Tex. 2017) (Texas law requires breach to sustain tortious-interference-with-contract claim)