United States District Court, N.D. New York
DOUGLAS J. NASH, ESQ., GABRIEL M. NUGENT, ESQ., JASON C. HALPIN, ESQ., JOHN D. COOK, ESQ., KATHRYN DALEY CORNISH, ESQ., Hiscock, Barclay Law Firm, Syracuseb, NY, for the Plaintiff.
KATHRYN R. GRASSO, ESQ., JOSEPH P. LAVELLE, ESQ., ANDREW N. STEIN, ESQ., DLA Piper LLP, Washington, DC, DAVID M. LASCELL, ESQ., ERIKA N.D. STANAT, ESQ., JERAULD E. BRYDGES, ESQ., Harter, Secrest Law Firm, Rochester, NY, for the Defendant.
MEMORANDUM-DECISION AND ORDER
GARY L. SHARPE, Chief Magistrate Judge.
On July 5, 2011, plaintiff PPC Broadband, Inc. commenced this patent infringement action against defendant Corning Gilbert Inc. (Compl., Dkt. No. 1.) In its answer, Gilbert asserted several counter claims, including state law claims for "Intentional Interference with Business Relationships, " "Abuse of Process, " and Commercial Disparagement." (Dkt. No. 6 ¶¶ 132-42.) Pending is PPC's motion for summary judgment seeking dismissal of Gilbert's state law counter claims. (Dkt. No. 125.) For the reasons that follow, PPC's motion is granted.
Both PPC and Gilbert are engaged in the business of designing and manufacturing coaxial cable connectors. ( See generally Compl., Dkt. No. 1.) On July 21, 2000, PPC filed a patent application for a coaxial cable connector, which was approved and a patent issued to PPC on May 6, 2003 as U.S. Patent No. 6, 558, 194 ("194 patent"). ( Id. ¶¶ 1, 23, 24; Dkt. No. 1, Attach. 2.) On January 21, 2003, PPC filed another patent application for a coaxial cable connector, which was approved and a patent issued to PPC on February 1, 2005 as U.S. Patent No. 6, 848, 940 ("940 patent"). (Compl. ¶¶ 1, 26, 27; Dkt. No. 1, Attach. 3.)
PPC alleges that Gilbert has infringed the 194 and 940 patents by making, using, selling, offering for sale, selling, and/or importing coaxial cable connectors, specifically Gilbert's UltraRange and UltraShield series connectors, that infringe on PPC's patents. (Compl. ¶¶ 45-58.)
As relevant here, Gilbert had established business relationships with Cox Communications and Comcast Corporation to supply them with Gilbert's coaxial cable connectors. (Pl.'s Statement of Material Facts (SMF) ¶¶ 1-2, Dkt. No. 125, Attach. 13; Def.'s SMF ¶¶ 20, 27, Dkt. No. 176, Attach. 1.) Specifically, on May 27, 2011, Gilbert was selected by Cox Communications to be its exclusive supplier of coaxial cable connectors, a fact of which PPC was aware. (Def.'s SMF ¶¶ 16-17.) Beginning some time in July 2011, PPC communicated to Cox and Comcast its belief that Gilbert's connectors infringed PPC's patents, that a lawsuit was potentially forthcoming, and that as a result, Gilbert may be unable to continue providing products to Cox and Comcast on an ongoing basis. ( Id. ¶ 20; Dkt. No. 177, Attach. 9 at 5-7, 32; Dkt. No. 177, Attach. 13 at 6-7, 9-11; Dkt. No. 177, Attach. 10 at 2, 5, 7-8.)
III. Standard of Review
The standard of review pursuant to Fed.R.Civ.P. 56 is well established and will not be repeated here. For a full discussion of the standard, the court refers the parties to its decision in Wagner v. Swarts, 827 F.Supp.2d 85, 92 (N.D.N.Y. 2011), aff'd sub nom. Wagner v. Sprague, 489 F.Appx. 500 (2d Cir. 2012).
PPC contends, as an initial matter, that Gilbert's state law counter claims are preempted by federal patent law and should therefore be dismissed. (Dkt. No. 125, Attach. 12 at 3-8.) Further, PPC argues that as to the merits of the claims, Gilbert has either failed to allege, or is unable to establish, all required elements of the causes of action. ( Id. at 8-25.) In response, Gilbert asserts that its claims are not preempted by federal law, and that PPC has not established that it is entitled to judgment as a matter of law on the state law counter claims. (Dkt. No. 176 at 9-25.) Because PPC's state tort law liability for its conduct in communications asserting infringement of its patents and warning of potential litigation is preempted by federal patent law, PPC's motion is granted.
"[F]ederal patent law preempts state-law tort liability for a patentholder's good faith conduct in communications asserting infringement of its patent and warning about potential litigation." Globetrotter Software, Inc. v. Elan Computer Grp., Inc., 362 F.3d 1367, 1374 (Fed. Cir. 2004); see Hunter Douglas, Inc. v. Harmonic Design, Inc., 153 F.3d 1318, 1336 (Fed. Cir. 1998) ("federal patent law bars the imposition of liability for publicizing a patent in the marketplace unless the plaintiff can show that the patentholder acted in bad faith."). Thus, in order for Gilbert to avoid preemption and maintain its state law tort claims arising from PPC's protection of its patent and communications with Gilbert's current or potential customers, Gilbert would have to allege and prove that PPC acted in "bad faith, " 800 Adept, Inc. v. Murex Sec., Ltd., 539 F.3d 1354, 1369 (Fed. Cir. 2008), "even if bad faith is not otherwise an element of the ...