PHILIP A. BRIMMER, District Judge.
This matter is before the Court on the Motion to Dismiss [Docket No. 122] filed by defendant International Playthings, LLC ("IPT"). The motion is fully briefed and ripe for resolution.
On September 16, 2010, plaintiff Two Moms and a Toy, LLC ("Two Moms") brought this action against IPT because of alleged infringement of United States Patent No. 6,782,567 (the "'567 Patent"). The '567 patent was issued on August 31, 2004 for an invention called the "Fountain Water Toy Utilizing A Battery-Powered Pump" and is owned by inventors Linda Austin and Anne Argent. Docket No. 119 at 6, ¶ 12-13. Ms. Austin and Ms. Argent have assigned their interests in the '567 patent to plaintiff Two Moms.
In its third amended complaint, Two Moms alleges that defendant IPT sold and continues to sell two toys that allegedly infringe the '567 patent under the Yookidoo, Ltd. ("Yookidoo") brand name. The two Yookidoo toys are called the "Flow `N' Fill Spout" and the "Stack `N' Stream Tub Fountain." Docket No. 119 at 7, ¶ 17. Two Moms asserts that, in 2009, it alerted Michael Varda, president of IPT, about the alleged infringement. Id. at 8, ¶ 18. Two Moms avers that, despite Mr. Varda's knowledge of the potentially infringing products, IPT continues to sell the Yookidoo toys.
Two Moms also alleges that, although IPT never applied for a patent for the Yookidoo toys and the toys are currently not patented, IPT has falsely marked the Yookidoo toys with "patent pending" labels. Id. at 9, ¶ 21. According to Two Moms, the "patent pending" labels on the Yookidoo toys deter potential licensees and consumers from purchasing the rights to the '567 patent and from buying Two Moms products because they are concerned about possible exposure to liability for infringing a patent. In addition, Two Moms contends that IPT knowingly applied the "patent pending" labels because IPT is represented by "competent patent counsel," and "evidence exists" that IPT continues to sell the Yookidoo toys although it was informed on April 19, 2011 that the Yookidoo toys were unpatented and a patent application was never filed. Docket No. 119 at 12-13, ¶¶ 26-27.
Based on the aforementioned facts, Two Moms asserts claims for relief against IPT for (1) patent infringement in violation of 35 U.S.C. § 271(a), (2) inducing infringement in violation of 35 U.S.C. § 271(b), (3) false marking in violation of 35 U.S.C. § 292, (4) false advertising in violation of 15 U.S.C. § 1125, and (5) deceptive trade practices in violation of the Colorado Consumer Protection Act ("CCPA"), Colo.Rev. Stat. § 6-1-105 et seq. Docket No. 119 at 14-19. On October 31, 2011, IPT filed this motion to dismiss Two Moms' claims for false marking, false advertising, and deceptive trade practices in violation of the CCPA. Docket No. 122 at 1.
"The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's Complaint alone is legally sufficient to state a claim for which relief may be granted." Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir.2003) (citations omitted). In doing so, the Court "must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff." Alvarado v. KOB-TV, LLC, 493 F.3d 1210, 1215 (10th Cir.2007) (quotation marks and citation omitted). At the same time, however, a court need not accept conclusory allegations. Moffett v. Halliburton Energy Servs., Inc., 291 F.3d 1227, 1232 (10th Cir. 2002).
Generally, "[s]pecific facts are not necessary; the statement need only `give the defendant fair notice of what the claim is and the grounds upon which it rests.'" Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197,
However, "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 shown — that the pleader is entitled to relief." Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks and alteration marks omitted). Thus, even though modern rules of pleading are somewhat forgiving, "a complaint still must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory." Bryson, 534 F.3d at 1286 (quotation marks and citation omitted).
Two Moms' third claim for relief asserts that IPT falsely marked the Yookidoo toys in violation of 35 U.S.C. § 292.
For a false marking claim pursuant to § 292, Two Moms must satisfy the heightened pleading standard set forth in Rule 9(b) of the Federal Rules of Civil Procedure. In re BP Lubricants USA., Inc., 637 F.3d 1307, 1310 (Fed.Cir.2011). Rule 9(b) requires a plaintiff to plead in detail `the specific who, what, when, where, and how' of the alleged fraud. Id. at 1309. In order to satisfy Rule 9(b)'s pleading requirements, a plaintiff must "provide some objective indication to reasonably infer that the defendant was aware" of his or her unlawful conduct. Id. at 1311. The facts leading to the fraud must "set forth more than the neutral facts necessary to identify the transaction." Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (emphasis in original) (citation omitted).
To show an intent to deceive, a plaintiff must show both knowledge that a statement is false and a purpose of deceit. Pequignot v. Solo Cup Co., 608 F.3d 1356, 1363 (Fed.Cir.2010). In this case, plaintiff's allegations are insufficient to establish a plausible inference that IPT knew
IPT also claims that Two Moms does not adequately plead that it suffered competitive injury as the result of IPT's false marking. Docket No 122 at 7-8. IPT asserts that, because Two Moms is not a competitor in the sale of toys, Two Moms cannot satisfy the competitive injury prong
Several district courts interpreting the newly enacted America Invents Act have required a plaintiff to be a competitor of the defendant in order to show competitive injury.
Two Moms has provided no authority in support of its position that a non-competitor can assert a claim under the newly amended false marking statute. Moreover, Two Moms' complaint does not identify a potential licensee who was deterred or that any potential licensee expressed concern about IPT's false marking. Thus, Two Moms has not alleged actual competitive injury; it has only asserted that it could lose or that it could have already lost potential licensees. See We-Flex, LLC v. NBSP, Inc., 2012 WL 1440439, at *6-7 (S.D.Tex. April 25, 2012) (a competitive injury "complaint needs to provide actual instances of cognizable injury, not just a list of potential harms, as well as facts suggesting that the harm claimed was the result of false marking."). Consequently, the Court finds that, because Two Moms and IPT are not competitors and Two Moms does not allege more than a potential injury, Two Moms has not pled sufficient facts to plausibly assert that IPT's false marking resulted in competitive injury. Fisher-Price, Inc. v. Kids II, Inc., 2011 WL 6409665, at *10 (W.D.N.Y. Dec. 21, 2011) (dismissing a claim by an actual competitor for failing to allege sufficient facts "making it plausible to find [the false marker's] alleged mismarking has resulted in [the § 292 claimant] suffering a competitive injury"). Accordingly, Two Moms' claim for false marking is dismissed for failure to state a claim.
As noted above, in order "to have standing for a false advertising claim, the
IPT argues that plaintiff's claim under the CCPA should be dismissed because plaintiff does not allege with the required specificity that IPT engaged in deceptive trade practices in violation of Colo.Rev. Stat. § 6-1-105. Docket No. 122 at 14.
A valid claim under the CCPA consists of the following elements: "(1) that the defendant engaged in an unfair or deceptive trade practice; (2) that the challenged practice occurred in the course of defendant's business, vocation, or occupation; (3) that it significantly impacts the public as actual or potential consumers of the defendant's goods, services, or property; (4) that the plaintiff suffered injury in fact to a legally protected interest; and (5) that the challenged practice caused the plaintiff's injury." Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142, 146-47 (Colo.2003). All elements of a CCPA claim must be met; otherwise, the claim falls as a matter of law. HealthONE of Denver, Inc. v. UnitedHealth Group, Inc., 805 F.Supp.2d 1115, 1120 (D.Colo.2011).
To assert a claim under the CCPA, Two Moms must meet the heightened Rule 9(b) pleading standard. HealthONE, 805 F.Supp.2d at 1120-21. In its complaint, Two Moms asserts the following with respect to IPT's conduct in violation of the CCPA:
Docket No. 119 at 18-19, ¶ 53 (emphasis added). As the Court discussed above, these facts are insufficient to show that IPT sanctioned the use of the "patent pending" label on the Yookidoo toys with the knowledge that the label was false. See Crowe v. Tull, 126 P.3d 196, 204 (Colo. 2006) ("A CCPA claim will only lie if the plaintiff can show the defendant knowingly engaged in a deceptive trade practice.") (citation omitted); HealthONE, 805 F.Supp.2d at 1121 ("Rule 9(b) requires a complaint to `set forth the time, place and contents of the false representation, the identity of the party making the false statements and the consequences thereof,'" citing Koch v. Koch Industries, Inc., 203 F.3d 1202, 1236 (10th Cir.2000)). Given that plaintiff's complaint fails to meet the particularity required to assert a valid CCPA claim, plaintiff's claim pursuant to the CCPA will be dismissed.
For the foregoing reasons, it is