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Kremerman v. Open Source Steel, LLC

United States District Court, W.D. Washington, Seattle

September 8, 2017

ELLIOT KREMERMAN, Plaintiff,
v.
OPEN SOURCE STEEL, LLC, et al., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS

          BRIAN A. TSUCHIDA, UNITED STATES MAGISTRATE JUDGE.

         This matter comes before the Court on the motion to dismiss of Defendants Open Source Steel LLC (“OSS”), Joshua Dellay, and James Dellay. Dkt. 34. Plaintiff Elliot Kremerman asserts six claims in his Complaint: (1) direct infringement of U.S. Design Patent Nos. D775, 310 and D776, 238 (“the ‘310 and ‘238 patents, ” respectively) (collectively “the Patents”) under 35 U.S.C. § 271(a); (2) induced infringement of the Patents under 35 U.S.C. § 271(b); (3) contributory infringement of the Patents under 35 U.S.C. § 271(c); (4) trade dress infringement under § 43(a) of the Lanham Act; (5) unfair business practices under California Business & Professional Code § 17200(a) (“Unfair Competition Law” hereafter, the “UCL”); and (6) unjust enrichment. Dkt. 1.

         Defendants do not challenge Kremerman's claim of direct infringement of the Patents in the instant motion. Kremerman stipulates to dismissal of the contributory infringement claim and withdraws § 32 of the Lanham Act as a basis for unlawful business acts and practices under the UCL. Dkt. 38. Thus, the claims remaining at issue are: (1) induced infringement; (2) trade dress infringement under § 43(a) of the Lanham Act; (3) unfair business practices under California state law based on trade dress infringement; and (4) unjust enrichment.

         The parties did not seek oral argument on the motion. Dkt. 72. Having reviewed the motion, response (Dkt. 38), reply (Dkt. 40), and supplemental authorities filed by the parties after this case was transferred from the Northern District of California (Dkts. 68 and 71), the Court grants the motion to dismiss as to Kremerman's induced infringement and unjust enrichment claims. The Court denies the remainder of the motion to dismiss.

         BACKGROUND

         Kremerman is the sole inventor on the Patents. The ‘310 Patent was issued on December 27, 2016 for a “BENT DISTILLATION HEAD.” Dkt. 1 (Complaint), Exhibit A. The ‘238 Patent was issued on January 10, 2017 for a “STRAIGHT PATH DISTILLATION HEAD." Id., Exhibit B. Kremerman alleges the Patents cover the many ornamental features of his glassware, such as the overall bent head design, bent and straight extended distillation path directly above the load flask port, discharge condenser with distinctive fluid ports, and sized adapter regions between the extended distillation path and other elements of the devices. Id., ¶ 11 and Exhibits A and B (engineering drawings).

         Kremerman created and first started selling the bent distillation head covered by the '310 Patent on July 6, 2015. He created and first started selling the straight path distillation head covered by the '238 Patent in December of 2015. Kremerman sold his distillation heads on the Internet and through other direct marketing channels. Dkt. 1, ¶ 16. Kremerman alleges that as a result of his extensive and consistent advertising, promotion and sales throughout the United States, the Kremerman product trade dress has acquired distinctiveness and enjoys secondary meaning among consumers, identifying Kremerman as the source of the products. Id., ¶¶ 28-29.

         Kremerman alleges Defendants slavishly copied the patented design and marketed it for sale, even using pictures of Kremerman's products, copied from Kremerman's website, to advertise its own infringing products. Dkt. 1, ¶ 18, Exhibits C and D.

         OSS is a limited liability company organized under the laws of Washington, with offices in Kent, Washington. Defendants Joshua and James Dellay, both of Washington, are co-founders and owners of OSS. OSS makes and supplies various distillation glassware and laboratory equipment. Dkt. 34, p. 7.

         Kremerman alleges that on April 22, 2016, his counsel sent a letter to Defendant James Dellay and OSS “putting them on notice of their pending infringement based on plaintiff's then pending patent applications.” Kremerman also alleges that OSS had actual knowledge that their actions constituted patent infringement based on their close copying or “reverse engineering” of the patent designs and at the very least, had knowledge of the existence of the Patents ten days after the ‘238 Patent issued, when he filed his complaint on January 10, 2017. Dkt. 1, ¶¶21, 22.

         ANALYSIS

         A. Standard

         In considering a Rule 12(b)(6) motion to dismiss, the Court must determine whether the plaintiff has alleged sufficient facts to state a claim for relief which is “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible if the plaintiff has pled “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). In making this assessment, the Court accepts all facts alleged in the complaint as true, and makes all inferences in the light most favorable to the non-moving party. Barker v. Riverside County Office of Educ., 584 F.3d 821, 824 (9th Cir.2009) (internal citations omitted). The Court is not, however, bound to accept the plaintiff's legal conclusions. Iqbal, 556 U.S. at 678. While detailed factual allegations are not necessary, the plaintiff must provide more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555.

         B. Induced ...


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