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Armstrong Pump, Inc. v. Mr. Thomas Hartman D/B/A the Hartman Company

March 25, 2012

ARMSTRONG PUMP, INC. PLAINTIFF,
v.
MR. THOMAS HARTMAN D/B/A THE HARTMAN COMPANY, AND OPTIMUM ENERGY, LLC, DEFENDANTS.



The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court

DECISION AND ORDER

I. INTRODUCTION

This case was referred to United States Magistrate Judge Hugh B. Scott pursuant to 28 U.S.C. § 636(b)(1)(A) and (B). On December 29, 2011, Magistrate Judge Scott issued a Report and Recommendation (Docket No. 84) on Defendant Optimum Energy's Motion to Dismiss Plaintiff's Amended Counterclaim for a Declaratory Judgment of Patent Invalidity (Docket No. 70)*fn1 and its Motion for Partial Summary Judgment (Docket No. 78). He recommends that Optimum's motion to dismiss Plaintiff's counterclaim be granted and, in light of that recommendation, that there is no need to rule on Optimum's motion for partial summary judgment.

Presently before this Court are both Optimum's (Docket No. 87) and Armstrong's (Docket No. 88) objections to the Report and Recommendation. The objections are fully briefed, and the matter is now before this Court for review.

II. BACKGROUND

Armstrong commenced this contract action on May 28, 2010, and filed an Amended Complaint on March 8, 2011. Its claims relate to a License Agreement between Armstrong and Hartman, involving three patents then owned by Hartman to which he granted Armstrong certain exclusive rights.*fn2 Hartman also entered into a license agreement with Defendant Optimum Energy granting it certain other rights in the same patents. Armstrong now claims that Hartman breached their License Agreement and that Optimum Energy tortiously interfered with that Agreement.

In answering the Amended Complaint, Optimum alleged that it is Hartman's successor in interest in the at-issue License Agreement, and asserted counterclaims against Armstrong for breach of contract and patent infringement. Armstrong answered Optimum's counterclaims, and asserted counterclaims against Optimum and crossclaims against Hartman, alleging additional breaches of the License Agreement.

Armstrong subsequently sought leave to amend its answer and counterclaims as to Optimum to add counterclaims for patent invalidity. The motion to amend was granted, and Armstrong filed its amended answer on August 8, 2011. Optimum thereafter moved to dismiss Armstrong's newly-added counterclaims (Docket No. 70), and to estop Armstrong from claiming that its products marked with the LOOP patents do not practice the LOOP patents (Docket No. 78). These two motions are the subject of the challenged Report and Recommendation.

In his Report and Recommendation, Magistrate Judge Scott concluded that Armstrong's counterclaims for patent invalidity fail to meet minimal pleading standards. Armstrong objects to the recommendation that its counterclaims be dismissed for failure to state a claim. The Magistrate Judge further concluded that, in light of the first recommendation, there is no need to address Optimum's request that Armstrong be estopped from claiming its products do not practice the LOOP patents. Both Armstrong and Optimum contend that the recommendation on the first motion does not negate the need to address the second motion, and proceed to argue for opposing outcomes in that regard.

III. DISCUSSION

A. Standard of Review

A district court reviews those portions of a report and recommendation to which a party has timely objected under a de novo standard of review. 28 U.S.C. § 636(b)(1)(C). The district court may adopt those portions of a report and recommendation to which no objections have been made, as long as no clear error is apparent from the face of the record. United States v. Singleton, 608 F. Supp. 2d 397, 401 (W.D.N.Y. 2009) (citing White v. Fischer, No. 04-CV-5358, 2008 U.S. Dist. LEXIS 69110, 2008 WL 4210478, at *1 (S.D.N.Y. Sept. 12, 2008)).

After reviewing the Report and Recommendation and the objections thereto, the district court "may accept, reject, or modify, in whole or in part, the findings or recommendations made by ...


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