DENNIS JAMES HUBEL, Magistrate Judge.
The plaintiff E.I. Du Pont de NeMours and Company ("DuPont") sues the defendants Heraeus Precious Metals North America Conshohocken LLC ("Heraeus") and SolarWorld Industries America, Inc. ("SolarWorld"), alleging infringement of DuPont's patent for a conductive metallization paste used in the production of photovoltaic solar cells, U.S. Patent No. 8,158,504 ("the `504 Patent"). DuPont alleges Heraeus is infringing the `504 Patent by manufacturing, using, and selling "front side silver photovoltaic paste compositions" that infringe "at least claims 1, 3, 11 and 12 of the `504 Patent under 35 U.S.C. § 271." Dkt. #6, Amended Cmpt., ¶ 13. DuPont claims SolarWorld is infringing the `504 Patent by using the infringing paste compositions in its manufacture of solar cells, which Solarworld then sells to its customers.
In response to DuPont's Amended Complaint, Heraeus has asserted three counterclaims. The third of these alleges DuPont violated Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), in connection with statements made by DuPont in a press release it issued on July 19, 2012. See Dkt. #25, Counterclaims, ¶¶ 22-26. DuPont moves, under Federal Rule of Civil Procedure 12(b)(6), to dismiss Heraeus's Lanham Act counterclaim for failure to state a claim for which relief can be granted. Dkt. ##37, 38 & 47. DuPont claims Heraeus has failed to plead the basic facts necessary to support its counterclaim. Dkt. #38, p. 3. In particular, DuPont complains Heraeus has failed to (1) identify the specific statement in DuPont's press release which Heraeus claims is false or misleading; (2) plead facts to show DuPont made the offending statement in bad faith; (3) plead facts to show "DuPont made a false or misleading description in a commercial advertisement about its own or another's product"; and (4) state how DuPont's statements in the press release either actually deceived, or have the tendency to deceive, a substantial segment of its audience. Id., pp. 3-4. DuPont argues each of these elements provides an independent basis for dismissal of Heraeus's counterclaim. Id., p. 4.
Heraeus argues it has properly pled its counterclaim. Heraeus also argues (1) there is no "bad faith" requirement for a section 43(a) claim; (2) Heraeus has pled sufficient facts to survive dismissal under federal pleading standards; and (3) alternatively, even if the court finds Heraeus has failed to allege sufficient facts to support its counterclaim, any dismissal should be without prejudice to allow Heraeus to amend the counterclaim to cure any deficiencies found by the court. Dkt. #42.
Chief Judge Aiken of this court set forth the standard for the court's consideration of a motion to dismiss in Gambee v. Cornelius, No. 10-CV-6265-AA, 2011 WL 1311782 (D. Or. Apr. 1, 2011) (Aiken, C.J.). Judge Aiken observed:
Id. at *2.
"As a general matter, a district court may not consider any material outside of the pleadings when ruling on a Rule 12(b)(6) motion." O'Connell-Babcock v. Multnomah County, Oregon, No. 08-cv-459-AC, slip op., 2009 WL 1139441 at *4 (D. Or. Apr. 24, 2009) (King, J.) (citing Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001)). However, the Ninth Circuit recognizes an exception to this rule that allows consideration of documents "`whose contents are alleged in a [pleading] and whose authenticity no party questions, but which are not physically attached to the. . . pleading.'" Parrino v. FHP, Inc., 146 F.3d 699, 705-06 (9th Cir. 1998) (quoting Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994)), superseded by statute on other grounds as recognized in Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 681 (9th Cir. 2006); Vanguard Prods. Group v. Merchandising Technologies, Inc., slip op., 2008 WL 939041, at *3 (D. Or. Apr. 3, 2008) (Brown, J.) (same; quoting Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001)). In the current case, Heraeus's counterclaim arises from statements made by DuPont in a press release issued on July 19, 2012. A copy of the press release is attached as Exhibit 1 to the Declaration of Matthew W. Brewer in Support of Plaintiff's Motion to Dismiss, Dkt. #39-1. Because the language of the press release is integral to Heraeus's Lanham Act counterclaim, and its authenticity is not at issue, the court may consider the press release in ruling on DuPont's motion to dismiss. See Parrino, supra.
The press release at issue is titled, "DuPont Addresses Patent Protection at Solarbuzz China Conference; Intellectual Property Theft Growing in Competitive Climate of Photovoltaics." Id. According to Heraeus, the release was issued and published on the internet, and also distributed by DuPont "directly to its customers and to Heraeus'[s] customers via email." Dkt. #25, p. 11. Among other things, the release discusses the growth of intellectual property theft in the photovoltaic industry, and mentions that DuPont filed the present case for patent infringement against Heraeus. In pertinent part, the release states as follows:
Dkt. #39-1, pp. 1-2.
As noted above, DuPont claims Heraeus has failed to identify the specific statement it contends is false and misleading. In response, Heraeus states its "counterclaim specifically identifies a false and misleading statement (`Heraeus has allegedly engaged in intellectual property theft'). . ., and alleges sufficient facts to support the conclusion that this statement was made in bad faith, that it is false and misleading, and that it has the tendency to deceive a substantial segment of its audience." Dkt. #42, ECF p. 10.
The court notes the statement, "Heraeus has allegedly engaged in intellectual property theft," does not appear anywhere in the press release. However, despite DuPont's assertion to the contrary, such an allegation is a reasonable inference that could be drawn from the press release, for two reasons. First, as Heraeus notes, the press release "juxtaposes statements that `[i]ntellectual Property (IP) theft is widespread' and `IP theft, left unchecked, has the potential to threaten the PV industry,' with statements regarding DuPont's lawsuits against Heraeus." Id., ECF p. 5. Second, a patent
Heraeus argues DuPont's statement is false because "DuPont's lawsuits against Heraeus fail to allege any copying, misappropriation, willfulness or other conduct that could be reasonably characterized as `IP theft.'" Dkt. #42, ECF pp. 5-6. Heraeus appears to misunderstand the nature of a patent as intellectual property. The distinction between "patent infringement" and "IP theft" is one without a difference: patent infringement is, in fact, a form of IP theft. In suing Heraeus for patent infringement, DuPont is effectively alleging that Heraeus has committed IP theft. Thus, the issue raised by Heraeus in its counterclaim is whether DuPont's statement that it has sued Heraeus for patent infringement, when juxtaposed with DuPont's other statements about IP theft in the industry, is sufficient to constitute a violation of Section 43(a) of the Lanham Act. More particularly, for purposes of a motion to dismiss, the question is whether Heraeus has pled "factual content that allows the court to draw the reasonable inference that [DuPont] is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L. Ed. 2d 868 (2009).
To prevail on its claim that DuPont violated Section 43(a) of the Lanham Act, Heraeus must show the press release contained a "false or misleading description of fact, or false or misleading representation of fact," which:
15 U.S.C. § 1125(a)(1).
In Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134 (9th Cir. 1997), the Ninth Circuit set out the elements of a Section 43(a) false advertising claim, as follows:
Southland, 108 F.3d at 1139 (footnote, internal citations omitted).
DuPont argues that in addition to these elements, Heraeus also is required to allege DuPont's representations were made in bad faith. Dkt. #38, p. 5 (citing Zenith Elecs. Corp. v. Exzec, Inc., 182 F.3d 1340, 1353 (Fed. Cir. 1999); CollegeNET, Inc. v. Xap Corp., 2004 WL 2303506, at *10 (D. Or. Oct. 12, 2004) (Hubel, M.J.); Vanguard Prods. Group, 2008 WL 939041 (D. Or. Apr. 3, 2008) (Brown, J.). In the CollegeNET case cited by DuPont, I held that "before a patentee may be held liable under § 43(a) for marketplace activity in support of its patent, and thus be deprived of the right to make statements about potential infringement of its patent, the marketplace activity must have been undertaken in bad faith." 2004 WL 2303506, at *10 (internal citations and quotation marks omitted).
In its Lanham Act counterclaim, Heraeus alleges the following facts:
Dkt. #25, ¶¶ 22-26.
The court finds these allegations adequately plead all five of the elements set forth by the Southland court. Even if DuPont shows its statements in the press release were literally true, Heraeus has alleged facts that plausibly suggest DuPont's statements were "likely to mislead or confuse" consumers of these products.
The court further finds, however, that bad faith is a necessary element of Heraeus's Lanham Act claim. See CollegeNET, supra. Heraeus has failed to allege that DuPont's statements about the potential infringement of its patent were made in bad faith. As a result, DuPont's motion to dismiss Heraeus's Lanham Act counterclaim is
IT IS SO ORDERED.