2:11-cv-10675-JAC-MAR Doc # 68 Filed 09/27/11 Pg 1 of 33 Pg ID 2864
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`UNITED STATES DISTRICT COURT
` EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`INC., a
`FEDERAL-MOGUL WORLD WIDE,
`Michigan corporation, and FEDERAL-MOGUL
`CORPORATION, a Michigan corporation,
`
`Plaintiffs,
`
`Case No. 11-10675
`Honorable Julian Abele Cook, Jr.
`
`v.
`
`MAHLE GMBH, a German corporation, and MAHLE
`ENGINE COMPONENTS USA, INC., a Delaware
`corporation,
`
`Defendants.
`
`ORDER
`
`This case pertains to claims by the Plaintiffs, Federal-Mogul World Wide, Inc., and Federal-
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`Mogul Corporation (collectively identified as “Federal-Mogul”), that the Defendants, Mahle GmbH
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`and Mahle Engine Components USA, Inc.( collectively identified as “Mahle”), infringed upon their
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`rights under U.S. Patent No. 6,260,472 (“the ‘472 Patent”), which precludes all other persons and
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`entities from making, using, selling, and offering to utilize their patented inventions without
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`authority. They have also accused these two Defendants of a variety of other actionable violations
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`(i.e., breach of contract, misappropriation of trade secrets, unfair competition, as well as an
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`infringement of another patent, namely U.S. Patent No. 6,557,457 (“the ‘457 Patent”).
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`There are three motions currently pending before the Court for resolution. The first is a
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`request by Federal-Mogul for the Court to issue a preliminary injunction which, if granted, would
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`prevent an infringement of the ‘472 and ‘457 Patent. The other two motions reflect separate – but
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`nearly identical – efforts by the Defendants to obtain a dismissal of the claims by Federal-Mogul
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`1
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`2:11-cv-10675-JAC-MAR Doc # 68 Filed 09/27/11 Pg 2 of 33 Pg ID 2865
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`or, alternatively, to obtain the entry of a summary judgment on the amended complaint.
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`I.
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`The parties to this litigation are competitors in the automotive supply industry. Federal-
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`Mogul manufactures and sells a variety of parts and components for vehicle engines which include
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`friction-welded steel pistons.1 One of the two Defendants, Mahle GmbH, is a German corporation
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`in the business of manufacturing components and systems for combustion engines, including the
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`manufacture and sale of, inter alia, pistons for use by diesel engine manufacturers. The other
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`Defendant, Mahle Engine Components USA, Inc., is a Tennessee based corporation that
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`manufactures and sells pistons throughout the United States. A third entity, and a non-party to
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`this litigation, is Manufacturing Technology, Inc. (“M Tech”) which manufactures many of
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`Federal-Mogul’s steel friction-welded pistons.
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`A brief inquiry into the history of each company is necessary in order for the Court to
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`resolve the pending motions.
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`Purchase and Sale of Metal Leve
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`Mahle acquired more than fifty percent of the voting shares of a Brazilian-based
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`corporation, Metal Leve, S.A. (“Metal Leve Brazil”) and Metal Leve, Inc. (“Metal Leve America”)
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`in June of 1996. Both of these companies (collectively identified as “Metal Leve”) were in the
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`business of manufacturing and selling pistons and other engine parts during all of the times that are
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`relevant to this litigation. Metal Leve Brazil conducted its operations in the United States through
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`1The parties are in agreement that Federal-Mogul holds a forty five percentage share of
`the steel pistons market in the United States. By virtue of a license from Federal-Mogul World
`Wide, Federal-Mogul has become the owner of the ‘472 and ‘457 Patents.
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`2
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`Metal Leve America.
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`Approximately one year after the acquisition of Metal Leve by Mahle, the Federal Trade
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`Commission (“FTC”) expressed its concerns that this transaction would unfairly lessen competition
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`in the United States market for “articulated pistons.”2 It was the FTC’s view that (1) Mahle held
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`more than a fifty percentage share of the market, and (2) Metal Leve had a forty-five percentage
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`share of sales for articulated pistons, which produced a combined market share of more than ninety
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`five percent. An investigation by the FTC ensued.
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`During the pendency of this federal agency’s review, it entered into an “Agreement to Hold
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`Separate” (“Separation Agreement”) with Mahle and Metal Leve for the purpose of “preserving
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`[these entities’] piston businesses and other businesses as viable independent businesses pending
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`the [FTC’s] investigation,” and to “prevent any anticompetitive effects resulting from the
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`Acquisition. . . .” (Mahle Mot Dismiss, Exh. 12 at 2). As a part of the Separation Agreement,
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`Mahle and Metal Leve agreed to hold their businesses separate and apart, and to run them
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`independently of each other. Metal Leve Brazil also agreed to provide the employees of Metal Leve
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`America with needed technical knowledge for at least two years after the divestiture in an effort
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`to ensure that their business in the United States would become fully competitive in the American
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`market. Finally, Mahle agreed, inter alia, that it would not (1) exercise supervision or control over
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`Metal Leve or any of its business operations, directly or indirectly, and (2) receive, have access to,
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`or use any of Metal Leve’s confidential information, except for that information which would have
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`been otherwise available in the normal course of business if the acquisition had not taken place.
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`2According to the FTC, “articulated pistons” are two-piece pistons with a crown made of
`steel and a skirt made of aluminum, in which these two parts are able to move independently of
`each other.
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`3
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`(Id. at 4). The Separation Agreement defined the phrase, “confidential information” as being
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`“competitively sensitive or proprietary information [which included] financial information,
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`customer lists, price lists, prices, engineering, manufacturing, and marketing methods, patents,
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`technologies, processes, research and development or other trade secrets.” (Id).Ultimately, Mahle
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`entered into a consent order with the FTC on June 4, 1997 which required it to divest its interests
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`in Metal Leve America and Metal Leve Brazil pertaining to the piston market in the United States.
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`In its order, the FTC made reference to the Separation Agreement, which contained the following
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`language:
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`F.
`
`Respondents shall comply with all terms of the Agreement to Hold Separate signed
`by the Respondents and accepted by the Commission on August 30, 1996, which
`is attached to this Order and made a part hereof, and which shall continue in effect
`until such time as Respondents have accomplished the divestiture required by this
`Order.
`
`(Mahle Mot. Dismiss,. Exh. 8 at 7). Mahle chose to accomplish the divestiture by requiring Metal
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`Leve Brazil to sell its interests in Metal Leve America to T&N Industries (“T&N”) on March 19,
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`1997 through a Stock Purchase Agreement.
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`Mahle claims that, acting upon the terms of this “Stock Purchase Agreement” and related
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`documents, Metal Leve Brazil continued to supply Metal Leve America with Brazilian-made
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`pistons for an ultimate sale to customers in the United States for at least three years until 2000. It
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`also notes that notwithstanding the sale of Metal Leve America to T&N, (1) Mahle continued to
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`operate Metal Leve Brazil as its owner, and (2) some of the engineers, who remained with Metal
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`leve Brazil, had worked on the development of piston technology in cooperation with Metal Leve
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`America.
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`The parties have identified certain terms within the “Stock Purchase Agreement” which, in
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`their opinions, were thought to be important. For its part, Federal-Mogul argues that certain aspects
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`of the “Stock Purchase Agreement” required Mahle to (1) divest of all of its shares in Metal Leve
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`America, (2) force Metal Leve Brazil to transfer to T&N all right title, and interest of whatever
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`nature in assets related to certain pistons involved with Metal Leve America’s friction-welded steel
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`piston business and (3) “use its commercially reasonable efforts to keep confidential and to cause
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`its employees to keep confidential” all proprietary information related to Metal Leve America’s
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`articulated piston technology confidential and, specifically, not to share it with Mahle or any of its
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`subsidiaries. By contrast, Mahle submits that the “Stock Purchase Agreement” was of limited time
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`(three years from the closing date) and scope, and made with a recognition that T&N was acquiring
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`assets from a company that would continue as a competitor. Moreover, Mahle emphasizes that the
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`parties to the “Stock Purchase Agreement” were mostly concerned with restricting Metal Leve
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`Brazil from developing and manufacturing articulated pistons, directly or through the hiring of its
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`technical employees who worked on those products.
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`Purchase of T&N by Federal-Mogul
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`In 1998, Federal-Mogul acquired the assets of T&N, along with the existing piston business
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`of Metal Leve. The result was Federal-Mogul’s acquisition of the same business that Mahle had
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`been required to sell to T&N. According to Mahle, the FTC soon thereafter complained of antitrust
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`violations that had been created by the transaction, allegedly based on Federal-Mogul’s eighty
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`percentage share of the worldwide market for “thinwall bearings” used in car, truck, and heavy
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`equipment engines. Federal-Mogul was allegedly required to divest substantial assets from this
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`portion of its business, including by requiring certain engineers to leave its employment rolls, and
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`forcing it to provide incentives to those engineers who stayed with the eventual acquiring entity.
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`The Patents at Issue in this Lawsuit
`
`A.
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`The ‘472 Patent
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`Federal-Mogul contends that it was awarded the’472 Patent (“One-Piece Integral Skirt
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`Piston and Method of Making the Same”) for its development of an innovative one-piece piston that
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`is made completely of steel and formed by a friction-welding process. According to Federal-
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`Mogul, this product is made from two steel halves that are friction-welded together to form one
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`piece.
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`“Friction-welding” is a process whereby one of the two parts that are to be secured
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`together is rotated at a very high speed and then mated together with the other part under a very
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`high force. After the singular piece piston is formed, the “flashings” (i.e. the protrusions of excess
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`material at the welding joint) caused by the friction-welding process can be removed during
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`finishing. As Mahle points out, when it was originally issued in July of 2001, the ‘472 patent
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`featured only a single claim which involved a method for making a certain kind of piston, and
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`included a friction-welding step. Nevertheless, the United States Patent and Trademark Office
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`(“USPTO”) granted a request by Mahle and another competitor to reexamine the ‘472 patent.
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`Mahle asserts that, on the basis of its reexamination inquiry, the USPTO rejected the single claim
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`of the ‘472 Patent on at least four separate occasions, opining that the invention was obvious in
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`light of a combination of prior art within earlier-issued patents.3 This ultimately led to the
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`cancellation of the single claim of the ‘472 Patent in its original form. According to Mahle, the
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`amendments to the ‘472 Patent that were ultimately upheld by the Board of Patent Appeals were
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`combined with the ‘472 Patent’s original claim 1, and that combination is what now appears in the
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`3According to Mahle, the earlier references were to“Berchem (U.S. Patent 4,532,686),
`German (DE Patent 3,302,671) issued to Dursch, and FWM.” (Mahle Opp. to Prelim. Inj. at 7).
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`‘472 Patent as claim 5. In its entirety, claim 5 of the ‘472 Patent in its current form describes:
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`A method of making a piston having a crown and a skirt formed as one piece with
`the crown, said method comprising: forming a single piece upper crown member of
`steel having a central body portion, an outer annular sidewall depending from said
`body portion for receiving at least one ring groove, and an annular connecting collar
`depending from said body portion in radially inwardly spaced relation to said
`sidewall and presenting a joining face at a lower free end thereof; forming a single
`piece lower crown member of steel as a discrete component separate from said upper
`crown member and including, as part of the one piece lower crown member
`structure, a pair of pin boss portions, a pair of oppositely disposed skirt portions
`formed as one piece with and bridging said pin boss portions, and an annular
`connecting collar extending upwardly from the pin boss portions and presenting a
`joining face at a free end thereof; bringing the aligned joining face of the upper
`crown member into engagement with the joining face of the lower crown member;
`and friction-welding the connecting collars together to produce a permanent friction-
`weld joint across the joining faces in such manner as to secure the upper crown
`member intimately to the lower crown member to provide a resultant unified one-
`piece construction of the joined crown members, and wherein during the step of
`friction welding, forming a resultant flashing of material at the joining faces
`extending circumferentially about the connecting collars and projecting radially
`outwardly of the connecting collars toward said skirt portions, wherein the flashing
`of material also extends radially inwardly of the connecting collars following
`welding, and wherein the lower crown member is constructed such that the flashing
`of material that extends radially inwardly of the connecting collars is formed to be
`open to a space defined between radially inner-most margins of the pin bosses.
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`(Amended Compl. Exh. C, col. 2, lines 27-60). It is Mahle’s alleged violation of claim 5 that forms
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`the basis of Federal-Mogul’s request for the Court to issue a preliminary injunction.
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`In their pleadings in opposition to the request for injunctive relief, the Defendants
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`collectively assert that the ‘472 Patent is invalid because of two pieces of prior art. According to
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`them, the first prior art was contained in Metal Leve’s friction-welded steel pistons that had been
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`made for an entity called Cummins between 1995 and 1998. They collectively accuse Federal-
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`Mogul of withholding this prior art from the USPTO, even though it purportedly contained the
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`same feature that Federal-Mogul sought to patent through claim 5. These Defendants also note that
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`Federal-Mogul acquired the unit within the Metal Leve corporate structure that created the
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`Cummins’ piston. Additionally, Mahle accuses Federal-Mogul of committing a purposeful
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`omission by failing to disclose the existence of another patent; namely, the “Japan ‘157
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`Reference.”4 In Mahle’s opinion, the “Japan ‘157 Reference” contains features that invalidate
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`claim 5 of the ‘472 Patent because it constituted prior art. They also accuse Federal-Mogul of
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`misconduct by failing to cite this prior art to the USPTO in its prosecution of the ‘472 Patent,
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`especially since it was apparently willing to do so in its prosecution of another piston patent, No.
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`7,870,669 (“the ‘669 Patent”), which was being litigated at the same time by the same patent
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`attorney.
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`B.
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` The ‘457 Patent
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`The ‘457 Patent (“Bushingless Piston and Connecting Rod Assembly and Method of
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`Manufacture”) appears to comprise 23 claims. According to Federal-Mogul, it is a method patent,
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`and relates to a piston assembly which utilizes a coating of a special material (i.e., manganese
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`phosphate) on various components, in place of conventional bushings. (Amended Compl. Exh. B).
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`Comparatively speaking, the parties devote significantly less time discussing the ‘457 Patent, its
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`novelty, or its prosecution history. Mahle believes that any legal claims that are based on the ‘457
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`Patent lack merit because the amended complaint does not identify a single infringing product.
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`Alleged Acts of Infringement
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`A.
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`Infringement of the ‘472 Patent
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`Recently, Federal-Mogul and Mahle have been competing for an opportunity to supply steel
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`pistons to the General Motors Corporation (“GM”) for use in its new Duramax diesel engine.
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`4In their responsive pleadings, Mahle refers to it in its complete form as the JP 60-166157
`reference.
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`Although Federal-Mogul acknowledges that GM is not slated to launch its new engine until the
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`2015 model year (according to Mahle, this date has now been delayed until 2017), it maintains that
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`this auto manufacturer and its suppliers are currently making plans relating to the development of
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`this diesel engine which, in its judgment, makes time to be of the essence.
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`Based upon its belief that Mahle has been soliciting GM’s business with a friction-welded
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`steel piston which infringes upon its‘472 Patent, Federal-Mogul initiated this lawsuit. As noted, it
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`also filed a petition for a preliminary injunction, in which it accuses Mahle of infringing the ‘472
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`patent by producing a piston under the name of MonoWeld® which it believes encompasses each
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`element in claim 5 of the ‘472 Patent.5 To support this argument, Federal-Mogul points to a
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`declaration that had been prepared by one of its employees, Keri Westbrooke, who works as the
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`Director of Engineering and Technology and came to the Company in 1998 as a former employee
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`of Metal Leve America during the acquisition of T&N by Federal-Mogul. As part of his
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`declaration, Westbrook prepared a claim chart which (1) contains a picture of the MonoWeld®
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`piston as it allegedly appears in Mahle GmbH’s German-language literature, and (2) labels, with
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`the letters A-F, each aspect of the MonoWeld® piston that he believes infringes the five elements
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`which comprise claim 5 of the ‘472 Patent. (Fed. Mogul’s. Mot. Prelim. Inj., Exh. C at Attachment
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`1). Preliminary discovery has revealed additional evidence which Federal-Mogul believes supports
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`its claim, including (1) a nomination contract from GM to Mahle indicating that the program was
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`awarded to Mahle in Morristown, Tennessee; (2) two separate emails from an employee of Mahle
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`on February 21, 2011 which indicate that (a) “DMAX has nominated MAHLE Morristown to
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`5The Court notes that Federal-Mogul did not include the ‘457 Patent in its request for
`injunctive relief against Mahle.
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`supply a top-welded steel piston for the MY2015 DMAX 6.6L V8 diesel engine!” and (b) “[s]ince
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`MAHLE Morristown will be a new supplier for DMAX [the GM Representative] send to me [sic]
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`the forms to be completed so that she can set-up the contract.” (Pl’s. Reply to Pr. Inj. Motion Ex.
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`3); and (3) design options presented to GM by Mahle including a friction-welded steel piston
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`design. Additionally, discovery which was conducted as late as July 15, 2011 and submitted to the
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`Court on July 21, 2011 - just four days before a hearing on the currently pending motion, reveals
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`what Federal-Mogul believes is extensive documentation in the form of purchase orders and
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`drawings addressed from Mahle GmbH and Mahle Engine to M Tech requesting what appears to
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`be steel friction-welded pistons for 10 different diesel engines for 5 different companies.
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`In its responsive pleadings, Mahle does not appear to contest the accuracy of Federal-
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`Mogul’s depiction of the MonoWeld® piston or Westbrook’s claim chart. Rather, Mahle
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`emphasizes that (1) the illustration of the MonoWeld® piston was taken from its German product
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`literature, (2) the depicted piston design will be made only in a manufacturing plaint in Rottweil,
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`Germany, and will be sold only to Volvo in Europe, (3) the piston in the picture is not yet being
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`sold in Europe, and (4) the piston design in the Westbrook claim chart is not made or sold anywhere
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`in the United States. Moreover, while Mahle acknowledges having obtained a commitment from
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`GM to use its pistons for the 2015 Duramax engine program, it argues that the pistons are not
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`substantially similar to the European MonoWeld® design as depicted in Westbrook’s claim chart.
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` In addition to the allegations which surround the GM business, Federal-Mogul claims that
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`Mahle is providing piston samples to Caterpillar, Inc. in the United States which also infringe its
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`‘472 Patent. According to Federal-Mogul, Caterpillar is a patent sophisticated company, and one
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`of its managers approached Westbrook with a request for Federal-Mogul to grant it a license under
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`the ‘472 Patent. Westbrook asserts that he was told that Mahle is supplying steel friction-welded
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`pistons to Caterpillar for use in its C145 engine. Westbrook, presumably relying upon that
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`conversation, opined that Caterpillar sought to obtain a license which would insure that Mahle
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`could continue to supply steel friction-welded pistons to them in the production of the C145.
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`Ultimately, the request for a license was denied. Federal-Mogul also points to purchase orders,
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`drawings, and invoices from Mahle to M Tech, obtained through expedited discovery, which
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`purport to show requests for M Tech to friction-weld a steel piston for Caterpillar’s C145 engine
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`program, which is conducted in the United States. In Federal-Mogul’s opinion, the drawings
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`illustrate Mahle’s infringement through the presence of characteristic flashing, as described above.
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`Moreover, Federal-Mogul points to documents on Mahle’s letterhead which appear to forecast a
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`meeting at the “MAHLE Tech Center, Detroit to kick off the Caterpillar C145 MonoWeld piston
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`program.” (Fed Mogul’s Reply to Prelim. Inj., Ex. 7).
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`Mahle disputes this evidence sharply, citing the deposition testimony of Michael Wilder that
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`(1) the Caterpillar C145 engine program was cancelled based on a complete redesign of the engine,
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`and (2) even if it had not been cancelled, it is impossible for the design of the GM DMAX piston
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`to infringe the ‘472 Patent design.
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`B.
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`Infringement of the ‘457 Patent
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`Federal-Mogul has proffered that which it claims to be a “Statement of Work” (although
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`it is technically labeled a “Statement of Requirements”) prepared by GM in connection with the
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`2015 program. Federal-Mogul avers that, according to the “Statement of Work,” GM requires its
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`vendor to produce a steel piston assembly that is coated entirely with manganese phosphate, and
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`contains a steel piston body, along with a steel connecting rod, and a steel wrist pin.
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`Federal-Mogul suggests that most, if not all, of these requirements incorporate the elements
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`of claim 1 of the ‘457 patent, which contain the following description:
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`1.
`
`a
`
`a
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`A piston assembly for an internal combustion engine comprising:
`a
`piston body formed with a cross bore having a steel
`running surface;
`steel connecting rod having a cross bore with a steel
`running surface aligned with said cross bore of said
`piston body;
`steel wrist pin disposed in said aligned bores and
`coupling said piston body and said connecting rod,
`said wrist pin having a steel running surface; and
`coating of manganese phosphate applied to at least
`one of said steel running surfaces of said wrist pin,
`said connecting rod and said piston body.
`
`a
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`(Amend. Comp. Exh. B, col. 3 lines 54-67).6 Federal-Mogul thus opines that, in light of the
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`requirements of GM’s “Statement of Work” for the 2015 diesel engine program, the admission by
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`Mahle that it has offered to sell steel pistons for the 2015 program is conclusive proof that it has
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`infringed the ‘457 Patent.
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`Finally, Federal-Mogul asserts that a further review of a document from Mahle offering to
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`sell GM steel friction-welded pistons reveals the inclusion of a device which would infringe the ‘457
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`Patent. This apparently includes the Duramax contract, in which Mahle has allegedly agreed to coat
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`all of its infringing steel friction-welded pistons with manganese phosphate.
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`The Disputed Role of M Tech
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`According to Federal-Mogul, (1) M Tech supplies it with friction-welding services on an
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`ongoing basis, and (2) its engineering professionals have heard comments from unidentified workers
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`6In an apparent acknowledgment that claim 1 of the ‘457 Patent does not require a
`manganese phosphate coating of the entire piston assembly, Federal - Mogul notes that
`“[l]ogically, if the entire piston assembly is required to be coated with manganese phosphate, the
`claim limitation requiring that any one of the running surfaces of the wrist pin, connecting rod,
`or piston body be coated is met.” ((Fed Mogul’s. Opp. to Mot. Dismiss at 8).
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`at the M Tech site who have commented that M Tech was also making steel friction-welded pistons
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`for Mahle which are replicas of Federal-Mogul pistons. Federal-Mogul also claims that (1) during
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`a February 2011 conference call with an M Tech engineer, two of its engineers (Norbert G.
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`Schneider and Carmo Ribeiro) heard comments that led them to believe that their Company is
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`making steel friction-welded pistons of possibly poorer quality for Mahle GmbH and/or Mahle, Inc.,
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`and (2) Schneider’s review of the M Tech log books in February of 2011 revealed that, in his
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`judgment, M Tech had also performed friction-welding piston projects for Mahle.
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`Furthermore, Federal-Mogul proffers purchase orders, invoices, drawings, and the deposition
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`remarks of an M Tech witness (Dietmar Spindler) who opined that M Tech (1) played no role in
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`forming, designing, or supplying the piston components, and (2) received the parts to be welded
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`from Mahle, welded the parts, and shipped them back. (Fed. Mogul’s Opp. to Mot. Dismiss, Exh
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`1).
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`II.
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`Turning first to the motions by Mahle to dismiss and/or enter a summary judgment as to all
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`aspects of Federal-Mogul’s amended complaint, the Court will resolve these requests simultaneously
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`because these Defendants have raised similar arguments to support their respective positions in this
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`controversy.
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`Fed R. Civ. P. 8(a)(2) requires a plaintiff’s complaint to provide “a short and plain statement
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`of the claim showing that the pleader is entitled to relief [in order to] give the defendant fair notice
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`of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550
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`U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957) and Fed. R. Civ. P.
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`8(a)(2)). While this pleading standard does not mandate “detailed” factual allegations, it does require
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`2:11-cv-10675-JAC-MAR Doc # 68 Filed 09/27/11 Pg 14 of 33 Pg ID 2877
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`more than the bare assertion of legal conclusions. See Twombly, 550 U.S. at 555. Therefore, the
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`complaint must offer more than “an unadorned, the defendant-unlawfully-harmed me accusation.”
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`Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Otherwise, it is subject to dismissal under Rule
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`12(b)(6).
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`Here, the Defendants have moved, in part, to dismiss Federal-Mogul’s complaint under Fed.
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`R. Civ. P. 12(b)(6). Generally, when considering such a dispositive motion, a court must construe
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`the complaint in a light that is most favorable to the plaintiffs, accept their factual allegations as
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`being true, and draw all reasonable factual inferences in the plaintiffs’ favor. Tipton v. Corr. Med.
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`Services, Inc., No. 08-421, 2009 WL 2135226 (W.D. Mich. July 15, 2009). However, “[a] pleading
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`that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will
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`not do.’” Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 555). Moreover, “[t]hreadbare
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`recitals of the elements of a cause of action, supported by mere conclusory statements, do not
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`suffice.” Id. Claims are capable of surviving a Rule 12(b)(6) motion only if the “[f]actual allegations
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`[are] enough to raise a right to relief above the speculative level . . . on the assumption that all [of]
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`the allegations in the complaint are true . . . .” Twombly, 550 U.S. at 555. As emphasized by Iqbal,
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`a complaint must contain sufficient factual matter that, when accepted as true, states a claim that is
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`“plausible” on its face:
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`[O]nly a complaint that states a plausible claim for relief survives a motion to
`dismiss. Determining whether a complaint states a plausible claim for relief [is] . .
`. a context-specific task that requires the reviewing court to draw on its judicial
`experience and common sense. But where the well-pleaded facts do not permit the
`court to infer more than the mere possibility of misconduct, the complaint has
`alleged-but it has not “show[n]”-“that the pleader is entitled to relief. Iqbal, 129
`S.Ct. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)) (internal citations omitted).
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`Iqbal, 129 S.Ct. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)) (internal citations omitted).
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`14
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`2:11-cv-10675-JAC-MAR Doc # 68 Filed 09/27/11 Pg 15 of 33 Pg ID 2878
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`As an alternative measure of recovery, the Defendants have moved for the entry of a
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`summary judgment pursuant to Fed. R. Civ. P. 56(c). Under this Rule, a motion for a summary
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`judgment should be granted only if a party “show[s] that there is no genuine issue as to any material
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`fact and that [it] is entitled to a judgment as a matter of law.” The burden is on the movant to
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`demonstrate the absence of a genuine issue of a material fact. See Anderson v. Liberty Lobby, Inc.,
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`477 U.S. 242, 248 (1986).
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`In assessing a summary judgment motion, the Court is obliged to examine the pleadings,
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`depositions, answers to interrogatories, admissions, and affidavits in a light that is most favorable
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`to the nonmoving party. Fed. R. Civ. P. 56(c); Boyd v. Ford Motor Co., 948 F.2d 283, 285 (6th Cir.
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`1991); Bender v. Southland Corp., 749 F.2d 1205, 1210-11 (6th Cir. 1984). It is the responsibility
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`of the court to determine “whether . . . there are any genuine factual issues that properly can be
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`resolved only by a finder of fact because they may reasonably be resolved in favor of either party.”
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`Anderson, 477 U.S. at 250. A dispute is genuine only “if the evidence is such that a reasonable jury
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`could return a verdict for the nonmoving party.” Id. at 248. Hence, a summary judgment must be
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`entered only if (1) the evidence clearly suggests that the contested matter is “so one-sided that [the
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`proponent] must prevail as a matter of law,” id. at 252, or (2) the opponent fails to present evidence
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`which is “sufficient to establish the existence of an element essential to its case, and on which it will
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`bear the burden of proof at trial.” Celotex Corp., 477 U.S. 317, 322 (1986). Importantly, the
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`presentation of a mere scintilla of supporting evidence is insufficient. See Anderson, 477 U.S. at
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`252, quoted in Street v. J.C. Bradford & Co., 886 F.2d 1472, 1477 (6th Cir. 1989).
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`The amended complaint in this action contains four distinct counts, all of which will be
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`III.
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`15
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`2:11-cv-10675-JAC-MAR Doc # 68 Filed 09/27/11 Pg 16 of 33 Pg ID 2879
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`evaluated seriatim; to wit, (1) patent infringement in violation of 35 U.S.C. § 271, (2) breach of the
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`Separation Agreement, (3) misappropriation of trade secrets, and (4) unfair competition in violation
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`of Michigan common law.
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`As a threshold matter, the Court declines the invitation by the Defendants to dismiss the
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`Plaintiffs’ claims on grounds that it lacks subject matter jurisdiction. Congress has established that
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`under 28 U.S.C. § 1338(a), the district courts “shall have original jurisdiction of any civil action
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`arising under any Act of Congress relating to patents, plant variety protection, copyrights and
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`trademarks.” Moreover, under the well-pleaded complaint rule, subject matter jurisdiction will be
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`found if the plaintiff’s well-pleaded complaint shows that a federal question exists. See generally,
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`Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987) (“federal jurisdiction exists only when a
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`federal question is presented on the face of the plaintiff’s properly pleaded complaint.”); Litecubes,
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`LLC v. Northern Light Products, Inc., 523 F.3d 1353, 1360 (Fed. Cir. 2008) (“subject matter
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`jurisdiction exists if a well-pleaded complaint establishes either that federal patent law creates the
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`ca