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Emseal Joint Systems Ltd. v. Schul International Co. LLC

United States District Court, D. New Hampshire

August 6, 2018

Emseal Joint Systems, Ltd., Plaintiff
v.
Opinion No. 2018 DNH 159 Schul International Co., LLC; Steven R. Robinson; Brian J. Iske; Willseal, LLC; and Ion Management, LLC, Defendants

          ORDER

          Steven J. McAuliffe United States District Judge.

         Plaintiff, Emseal Joint Systems, Ltd., filed suit against Shul International Co., Steven R. Robinson, Brian J. Iske, Willseal, LLC, and Ion Management, LLC, asserting claims for patent infringement, violation of the New Hampshire Consumer Protection Act/Unfair and Deceptive Trade Practices (“CPA”), and unjust enrichment. Defendants have moved for judgment on the pleadings on plaintiff's unjust enrichment claim. Robinson and Iske have moved for judgment on plaintiff's Consumer Protection Act claim. Both motions are granted.

         Standard of Review

         Federal Rule of Civil Procedure 12(c) provides that, “[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings.” “The standard of review of a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) is the same as that for a motion to dismiss under Rule 12(b)(6).” Marrero-Gutierrez v. Molina, 491 F.3d 1, 5 (1st Cir. 2007) (citations omitted). Accordingly, “[t]he court accepts the plaintiff's well-pleaded facts as true and draws all reasonable inferences in the plaintiff's favor.” Holder v. Town of Newton, No. 09-CV-341-JD, 2010 WL 3211068, at *1 (D.N.H. Aug. 11, 2010) (citing Citibank Global Mkts., Inc. v. Santana, 573 F.3d 17, 23 (1st Cir. 2009)).

         To survive defendants' motion, each count of plaintiff's complaint must allege all of the essential elements of a viable cause of action and “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation and internal punctuation omitted). Judgment on the pleadings will be entered “only if the uncontested and properly considered facts conclusively establish the movant's entitlement to a favorable judgment.” Aponte-Torres v. Univ. of P.R., 445 F.3d 50, 54 (1st Cir. 2006).

         Background

         As alleged in its complaint, Emseal is the sole owner of the following patents: U.S. Patent No. 8, 739, 495B1[1] issued by the United State Patent and Trademark Office (“USPTO”) on June 3, 2014; U.S. Patent No. 9, 528, 262B2, issued by the USPTO on December 27, 2016 (“the ‘262 patent”); U.S. Patent No. 9, 644, 368B1, issued by the USPTO on May 9, 2017 (“the ‘368 patent”); U.S. Patent No. 9, 670, 666B1, issued by the USPTO on June 6, 2017 (“the ‘666 patent”); and U.S. Patent No. 9, 637, 915B1, issued by the USPTO on May 2, 2017 (“the ‘915 patent”) (collectively, the “Patents in Suit”). All of the Patents in Suit are entitled “Fire and Water Resistant Expansion Joint System.” According to plaintiffs, several of defendants' products infringe one or more claims of the Patents in Suit, and, defendants manufacture and sell, or cause others to manufacture and sell, those infringing products without a license.

         Plaintiff alleges that defendants do minimal research and development of their own; copy plaintiff's test regime, and its patented products and methods; and maintain minimal support infrastructure. As a result, says plaintiff, Defendants are able to price their infringing products unfairly, thus “creat[ing] or maintain[ing] a monopoly and/or harm[ing] competition.” Compl. ¶ 23. Plaintiff further alleges that defendants make disparaging and misleading statements to potential purchasers of Emseal patented products, which tarnishes plaintiff's reputation and impacts plaintiff's ability to leverage its patents. Finally, plaintiff contends that defendants provide inferior support infrastructure, which harms the entire fire seal industry.

         Discussion

         1. Unjust Enrichment

         Defendants make two arguments in support of their position that the court should enter judgment on plaintiff's unjust enrichment claim. First, defendants contend that, because plaintiffs have not alleged a quasi-contractual relationship between them, unjust enrichment is not applicable. Second, defendants assert that plaintiff's unjust enrichment claim is either barred by Patent Act preemption, or is covered by a New Hampshire statutory cause of action.

         Defendants correctly point out that plaintiff's unjust enrichment claim simply re-pleads its patent infringement and CPA claims, adding only an allegation that defendants unjustly benefited from their purported misdeeds. In support of its unjust enrichment claim, plaintiff incorporates by reference its earlier allegations, and alleges that defendants, as a result of the alleged conduct, “will unjustly benefit from and be unjustly enriched by, their own intentional and wrongful acts.” Compl. ¶ 42.

         Under New Hampshire law, “[u]njust enrichment is an equitable remedy that is available when an individual receives a benefit which would be unconscionable for him to retain.” Axenics, Inc. v. Turner Constr. Co., 164 N.H. 659, 669, 62 A.3d 754 (2013) (internal quotation marks and emphasis omitted). Plaintiff does not explicitly allege a benefit received by defendants in its complaint, nor does plaintiff address that point in its briefing. However, plaintiff's theory seems to be that, by copying Emseal's patented products, methods, and test regimes, defendants benefited by saving money they otherwise would have had to spend on research and development. And, as a result of those savings, defendants have been able to price their competing (and infringing) products lower than Emseal's products, thereby presumably benefitting by selling more products.

         Here, plaintiff's unjust enrichment claim, as pled, is preempted. “[F]ederal patent law preempts any state law that purports to define rights based on inventorship.” Univ. of Colo. Found. v. Am. Cyanamid Co., 196 F.3d 1366, 1372 ...


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