Trademark Trial and Appeal Board Electronic Filing System. http://estta.uspto.gov
`ESTTA457215
`ESTTA Tracking number:
`02/17/2012
`
`Filing date:
`IN THE UNITED STATES PATENT AND TRADEMARK OFFICE
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`92054976
`Plaintiff
`Sandwich Isles Trading Co., Inc.
`MARTIN E HSIA
`CADES SCHUTTE LLP
`1000 BISHOP STREET, 12TH FLOOR
`HONOLULU, HI 96813
`UNITED STATES
`mhsia@cades.com, cmiwa@cades.com, bhairston@cades.com
`Opposition/Response to Motion
`Martin E. Hsia, Reg. No. 32,471
`mhsia@cades.com, cmiwa@cades.com, bhairston@cades.com,
`lchongkee@cades.com
`/Martin E. Hsia/
`02/17/2012
`Response to Motion for a More Definite Statement.pdf ( 5 pages )(22850 bytes )
`Exhibit A.pdf ( 49 pages )(1988162 bytes )
`Exhibit B.pdf ( 45 pages )(1748801 bytes )
`Certificate of Service.pdf ( 1 page )(13338 bytes )
`
`Proceeding
`Party
`
`Correspondence
`Address
`
`Submission
`Filer's Name
`Filer's e-mail
`
`Signature
`Date
`Attachments
`
`

`
`IN THE UNITED STATES PATENT & TRADEMARK OFFICE
`
`BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
`
`SANDWICH ISLES TRADING CO., INC.,
`
`
`
`Petitioner,
`
`
`v.
`
`
`
`VDF FUTURECEUTICALS, INC.,
`
`
`
`Respondent.
`
`
`
`)
`)
`)
`) Cancellation No. 92054976
`)
`) Registration Nos. 3,163,412, 3,165,945,
`) 3,155,230, 3,155,231, 3,155,232, 3,420,510,
`) 3,643,304, 3,646,701, 3,160,267
`)
`)
`
`PETITIONER’S RESPONSE TO RESPONDENT’S
`MOTION FOR A MORE DEFINITE STATEMENT
`
`I.
`
`INTRODUCTION.
`
`Petitioner SANDWICH ISLES TRADING CO., INC. (“Petitioner” or “SITC”),
`
`submits this memorandum for its response to the Motion For A More Definite Statement filed
`
`herein on February 7, 2012 (the “Motion”), by Respondent VDF FUTURECEUTICALS, INC.
`
`(“Respondent” or “VDF”). For the reasons set forth below, Petitioner respectfully submits that:
`
`(1)
`
`the Board’s consideration of the Motion should be stayed or
`deferred, as this entire proceeding should be suspended pending
`the disposition of a civil action in the U.S. District Court for the
`District of Hawaii, involving the same parties and the same
`trademark claims; or
`
`(2)
`
`the Motion should be denied as Respondent has not shown that it
`cannot make a responsive pleading.
`
`II.
`
`ARGUMENT.
`
`A.
`
`This Proceeding, Including Disposition of Respondent’s Motion,
`Should Be Suspended Pending Disposition of the Hawaii Civil Action.
`
`Petitioner filed its Petition for Cancellation herein on December 27, 2011.
`
`Respondent’s Answer to the Petition was due on February 7, 2012. Rather than file an Answer,
`
`

`
`
`
`
`
`Cancellation No. 92054976
`
`Respondent filed its Motion on February 7, 2012. However, prior to the filing of Respondent’s
`
`Motion, on February 6, 2012, Petitioner filed in this proceeding a Motion To Suspend Pending
`
`Civil Action (the “Motion to Suspend”).
`
`Pursuant to the Motion to Suspend, Petitioner submits that the Board should
`
`suspend this cancellation proceeding pending the outcome of a civil action between the same
`
`parties and involving, among other issues, the same cancellation claims asserted in this
`
`proceeding. The civil action pending in the United States District Court for the District of
`
`Hawaii, captioned VDF Futureceuticals, Inc. v. Sandwich Isles Trading Co., Inc., CV11-00288
`
`ACK/RLP (USDC, District of Hawaii), commenced on April 29, 2011, with the filing of a
`
`Complaint by VDF against SITC for patent infringement (the “Hawaii Civil Action”). SITC
`
`filed a Counterclaim in the Hawaii Civil Action and, more recently, an Amended Counterclaim,
`
`both asserting counterclaims for, among other things, cancellation of the same U.S. Trademark
`
`Registrations that Petitioner seeks to cancel in this proceeding, on the grounds that the
`
`COFFEEBERRY mark is generic or descriptive.
`
`The Hawaii Civil Action has recently been stayed pending an ex parte re-
`
`examination of the patents asserted by VDF. Prior to the stay, although VDF did not file an
`
`Answer to SITC’s original Counterclaim in the Hawaii Civil Action, it is notable that VDF filed
`
`a “Partial Motion to Dismiss Counts II, IV-VII” of SITC’s Counterclaim, including SITC’s
`
`counterclaim for cancellation of the VDF trademark registrations – without asserting any need
`
`for a more definite statement regarding SITC’s counterclaim that the COFFEEBERRY mark is
`
`generic or descriptive. See copy of VDF Partial Motion to Dismiss at pp. 17 - 22, without
`
`exhibits, attached hereto as Exhibit “A.” Instead, VDF argued that SITC’s trademark
`
`cancellation counterclaims should be dismissed because SITC lacked standing and/or there was
`
`
`
`2
`
`

`
`
`
`
`
`Cancellation No. 92054976
`
`no “actual case or controversy” for purposes of establishing jurisdiction for declaratory
`
`judgment. Id. Although the Court in the Hawaii Civil Action granted the Motion to Dismiss, in
`
`part, it further ordered that SITC would be allowed to file an Amended Counterclaim, which
`
`SITC filed on January 26, 2012, including the counterclaim to cancel the same trademark
`
`registrations at issue in this proceeding, on the same grounds – viz. that the COFFEEBERRY
`
`mark is generic or descriptive. See copy of SITC’s First Amended Counterclaim at pp. 24 - 28,
`
`35 - 37, without exhibits, attached hereto as Exhibit “B.”
`
`In view of the identity of the trademark cancellation counterclaims in the Hawaii
`
`Civil Action and the cancellation grounds asserted in this proceeding, a suspension of this
`
`proceeding is appropriate. If the Board grants Petitioner’s Motion to Suspend, it need not decide
`
`Respondent’s Motion at this time. Accordingly, Petitioner submits that the Board should defer
`
`its determination of this Motion, unless it decides to deny the Motion to Suspend.
`
`B.
`
`Respondent Has Not Shown That It Cannot Make a Responsive Pleading.
`
`Although rarely filed, a motion for a more definite statement may be filed in a
`
`cancellation proceeding in cases where the petition is so vague and ambiguous that the
`
`respondent cannot reasonably be required to frame a responsive pleading. See TBMP § 505.01
`
`at 500-32 (3rd Ed., May 2011). However, the movant’s standard is high, as “[a] motion for a
`
`more definite statement is appropriate only in those cases where the pleading states a claim upon
`
`which relief can be granted, but is so vague or ambiguous that the movant cannot make a
`
`responsive pleading in good faith or without prejudice to itself.” Id. In order to prevail on a
`
`motion for a more definite statement, the movant must therefore : (1) identify the allegations at
`
`issue and demonstrate that they are, in fact, vague and ambiguous; and (2) show that the movant
`
`is unable to reasonably formulate a responsive pleading to the allegations, even if they are vague
`
`and ambiguous.
`
`
`
`3
`
`

`
`
`
`
`
`Cancellation No. 92054976
`
`In this case, Respondent VDF has not demonstrated that it cannot make a
`
`responsive pleading with regard to Petitioner SITC’s claim that the COFFEEBERRY mark is
`
`generic or descriptive in relation to “some or all” of the goods specified in the VDF registrations.
`
`There is no vagueness or ambiguity regarding the goods at issue – they are all specifically listed
`
`in Respondent’s registrations. Because the goods are all plainly listed in the registrations,
`
`Respondent can easily respond as to whether or not “COFFEEBERRY” is generic or descriptive
`
`as to each item in its registrations, on an item-by-item basis. Notwithstanding Respondent’s
`
`conclusory argument, there is also no vagueness or ambiguity regarding the portions of the
`
`registered mark alleged to be generic or descriptive – the Petition clearly alleges that
`
`“COFFEEBERRY” is generic or descriptive. See Petition, at ¶¶ 10 – 25.
`
`Respondent has not only failed to demonstrate that the Petition is vague or
`
`ambiguous. Respondent has also failed to show that it cannot reasonably frame a response to the
`
`Petition. For instance, Respondent fails to state that it cannot simply deny that
`
`“COFFEEBERRY” is generic or descriptive in relation to each one of the goods specified in the
`
`registrations, much less explain why it cannot do so. Under these circumstances, it would be
`
`unnecessary under, and contrary to, the pleading guidelines (viz. “a short and plain statement of
`
`the ground(s) for cancellation”) (see TBMP at § 309.03(a)(2)) to require Petitioner to
`
`“specifically identify [ ] those goods that Petitioner alleges to be descriptive and/or generic for
`
`each of Respondent’s marks” (Motion at 6).
`
`It is apparent that the real motive behind Respondent’s Motion is to avoid filing
`
`an Answer to the Petition at this time. If Respondent had filed an Answer in this proceeding, the
`
`Answer would have evidenced an “actual case or controversy” between the parties with regard to
`
`VDF’s trademark registrations. In the Hawaii Civil Action, however, VDF has taken the
`
`
`
`4
`
`

`
`
`
`
`
`Cancellation No. 92054976
`
`position that there is no such “case or controversy,” and therefore, the Hawaii court has no
`
`jurisdiction over SITC’s declaratory judgment Counterclaim (which seeks a declaration that
`
`VDF’s Trademark Registrations are invalid because the COFFEEBERRY mark is generic or
`
`descriptive). See copy of VDF Partial Motion to Dismiss at pp. 19 - 22, without exhibits,
`
`attached hereto as Exhibit “A.” Respondent’s ulterior motive militates against its requisite good
`
`faith inability to frame a responsive pleading.
`
`III. CONCLUSION.
`
`For the reasons set forth above, Petitioner respectfully submits that Respondent’s
`
`Motion should either be deferred in view of the pending Hawaii Civil Action, or denied.
`
`DATED: Honolulu, Hawaii, February 17, 2012.
`
`
`
`/s/ Martin E. Hsia
`Martin E. Hsia, Reg. No. 32,471
`CADES SCHUTTE
`A Limited Liability Law Partnership LLP
`1000 Bishop Street, Suite 1200
`Honolulu, HI 96813
`Tel: (808) 521-9200
`
`Attorneys for Petitioner
`SANDWICH ISLES TRADING CO., INC.
`
`
`
`
`
`5
`
`

`
`EXHIBIT “A”
`
`

`
`Case 1:‘|’|-cv-00288-ACK -RLP Document 17
`314
`
`Filed 07/19/11 Page 1 of3
`
`Page|D #:
`
`OF COUNSEL:
`
`MCCORRISTON MILLER MUKAI MACKINNON LLP
`
`ROBERT G. KLEIN
`
`#1192—0
`
`klein
`
`rn4law.co1n
`
`LISA W. CATALDO
`
`#6159—0
`
`cataldo@m4law.com
`JORDON J. KIMURA
`
`#9182-0
`
`kimura@m4law.oom
`Five Waterfront Plaza, 4th Floor
`500 Ala Moana Boulevard
`
`Honolulu, Hawai‘i 96813
`
`Tel. No.:
`Fax No.:
`
`(808) 529-7300
`(808) 524-8293
`
`SIDLEY AUSTIN LLP
`
`J. RANDAL WEXLER
`
`#6270814—Illinois Bar Number
`
`jwexler@sidley.co1n
`One South Dearborn St
`
`Chicago, Illinois 60603-2302
`Tel. No.:
`(31.2) 853-7000
`Fax. No.: (312) 853-7036
`
`FISH & ASSOCIATES, PC
`
`ROBERT D. FISH
`
`#14971 1—California Bar Number
`
`#23 795 9~California Bar Number
`
`#274105—California Bar Number
`
`rf1sh@fishiplaw.com
`MEI TSANG
`
`mtsa:r1g@fishiplaw.oom
`JOSEPH A. ANDELIN
`
`jandelin@f1shiplaw.com
`2603 Main Street, Suite 1000
`
`Irvine, California 92614-4271
`Tel. No.:
`(949) 943-8300
`Fax No.:
`(949)943-8358
`
`Attorneys for Plaintiff
`VDF FUTURECEUTICALS, INC.
`
`59879/2516311
`
`EXHIBIT A
`
`

`
`Case 1:11-cv—O0288—ACK ~RLP Document 17
`315
`
`Filed 07/19/11 Page 2 of 3
`
`Page|D #:
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF HAWAI‘I
`
`CIVIL NO. 11-00288 ACK/RLP
`
`PLAINTIFF VDF
`
`FUTURECEUTICALS, INC.’S
`PARTIAL MOTION TO DISMISS
`
`COUNTS II AND IV-VIII OF
`
`DEFENDANT SANDWICH ISLES
`
`TRADING CO. INC., D/B/A KONA
`
`RED, INC.’S COUNTERCLAIM
`AGAINST PLAINTIFF VDF
`
`) .
`
`3
`
`) 3 3 I ) I I
`
`} FUTURECEUTICALS, INC., FILED
`JUNE 14, 2011; MEMORANDUM IN
`
`SUPPORT OF MOTION;
`
`CERTIFICATE OF WORD COUNT;
`DECLARATION OF ROBERT G.
`
`KLEIN; EXHIBITS “A”-“D”;
`CERTIFICATE OF SERVICE
`
`[RELATED TO DOCKET #15-1]
`
`NO TRIAL DATE SET
`
`I I I ) 3 I ) ) I ) )
`
`VDF FUTURECEUTICALS, INC.,
`
`Plaintiff,
`
`VS.
`
`SANDWICH ISLES TRADING CO.
`
`INC., D/B/A KONA RED, INC, and
`
`DOES 1 THROUGH 20,
`
`Defendants.
`
`PLAINTIFF VDF FUTURECEUTICALS, INC.’S PARTIAL MOTION TO
`DISMISS COUNTS II, IV-VIII OF DEFENDANT SANDWICH ISLES
`TRADING CO. INC., D/B/A KONA RED, INC.’S COUNTERCLAIM AGAINST
`PLAINTIFF VDF FUTURECEUTICALS INC. FILED JUNE 14 2011
`
`Plaintiff VDF Futureceuticals, Inc. (“VDF”), by and through its respective
`
`attorneys, McCorriston Miller Mukai MacKinnon LLP, Sidley Austin LLP, and
`
`Fish & Associates, PC, hereby respectfully moves this Court for an order
`
`dismissing Counts IIB & C and IV-VIII of Defendant Sandwich Isles Trading Co.
`
`59879/25 1 633,1
`
`l\J
`
`

`
`Case 1:11-cv—OO288-ACK —RLP Document 17
`316
`
`Filed 07/19/11 Page 3 of 3
`
`PagelD #:
`
`Inc., d/b/a Kona Red, Inc.’s (“SITC”) Counterclaim Against Plaintiff VDF
`
`Futureceuticals, Inc., filed June 14, 2011 (“Counterclaim”). This Motion should be
`
`granted on the basis that Counts IIB & C and IV—VIII of the Counterclailn fail to
`
`state a claim under Fed. R. Civ. P. l2(b)(l) & (6) or meet the heightened pleading
`
`standard under Fed. R. Civ. P. 9(b).
`
`This Motion is ‘brought pursuant to Rules 7, 8, 9(b) and 12(b)(6) of the
`
`Federal Rules of Civil Procedure and is supported by the attached memorandum,
`
`the pleadings and papers on file in this action, and such additional evidence and
`
`argument as may be presented to the Court at any hearing on this Motion.
`
`DATED: Honolulu, Hawai‘i, July 19, 2011.
`
`/s/Robert G. Klein
`
`ROBERT G. KLEIN
`
`LISA W. CATALDO
`
`J ORDON J. KIMURA
`
`J. RANDAL WEXLER (Pro hac vice)
`ROBERT D. FISH (Pro hac vice)
`MEI TSANG (Pro hczc vice)
`JOSEPH A. ANDELIN (Pro hac vice)
`
`Attorneys for Plaintiff
`VDF F UTURECEUTICALS, INC.
`
`59879/251633,}
`
`3
`
`

`
`Case 1:11-cv-OO288—ACK —RLP Document 17-1
`#: 317
`
`Filed 07/19/11 Page 1 of 46
`
`Page|D
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF HAWAI‘I
`
`VDF FUTURECEUTICALS, INC.,
`
`Plaintiff,
`
`VS.
`
`SANDWICH ISLES TRADING co.
`
`INc., D/B/A KONA RED, INC, and
`
`DOES 1 THROUGH 20,
`
`Defendants.
`
`1 1—OO288 ACK/RLP
`
`) CIVIL NO.
`)
`) MEMORANDUM IN SUPPORT OF
`MOTION
`
`\/\/\./\/\./\/\/~./\/
`
`59879/251633. I
`
`

`
`Case 1:11-cv-00288-ACK -RLP Document 17-1
`#: 318
`
`Filed 07/19/11 Page 2 of 46
`
`PageID
`
`TAB LE OF CONTENTS
`
`Rage
`
`INTRODUCTION ................................................................................................... .. I
`
`BACKGROUND ..................................................................................................... .. 2
`
`ARGUMENT .......................................................................................................... .. 3
`
`I.
`
`PLEADING STANDARD ............................................................................ .. 3
`
`A.
`
`B.
`
`Pleading Standard for Counts IV—VI .................................................. .. 3
`
`The Pleading Standard for Counts II, VII—VIII .................................. .. 4
`
`II.
`
`THE INEQUITABLE CONDUCT CLAIM (COUNT IIB) SHOULD
`BE DISMISSED WITH PREJUDICE .......................................................... .. 5
`
`A.
`
`B.
`
`Factual Allegations ............................................................................. .. 6
`
`SITC’s Legal Theories Of Inequitable Conduct Fail ......................... .. 7
`
`1.
`
`2.
`
`Argument presented to the PTO cannot constitute
`inequitable conduct................................................................... .. 7
`
`Failing to remind the PTO of prior art previously known
`to it, and positions previously asserted based on it, is not
`inequitable conduct ................................................................. ..
`
`l
`
`l
`
`C.
`
`SITC fails to plead with particularity as required by Exergen ......... .. 13
`
`I.
`
`SITC fails to plead “but for” materiality as required
`under Therasense, and thus does not adequately plead the
`“how” and “why.” .................................................................. .. 14
`
`2.
`
`SITC fails to plead intent with the necessary particularity.
`
`16
`
`III.
`
`SITC’S CLAIM FOR PATENT MISUSE (COUNT IIC) CONTAINS
`ONLY CONCLUSORY ALLEGATIONS AND SHOULD BE
`
`DISMISSED ................................................................................................ .. 16
`
`IV.
`
`THE TRADEMARK CLAIMS SHOULD BE DISMISSED UNDER
`
`l2(b)(l) BECAUSE SITC LACKS STANDING ....................................... .. 17
`
`59879/251633.!
`
`i
`
`

`
`Case 1:11~cv—OO288-ACK —RLP Document 17-1
`#: 319
`
`Filed 07/19/11 Page 3 of 46
`
`PageID
`
`A.
`
`B.
`
`C.
`
`Factual Allegations ........................................................................... .. I7
`
`Count V — Cancellation of Trademark Registrations Should Be
`Dismissed Because SITC Is An Intermeddler Who Lacks
`
`Standing ............................................................................................ .. 18
`
`Count IV — Declaratory Judgment Action (Trademark
`Invalidity) Should Be Dismissed For Lack Of Actual “Case”
`And “Controversy” ........................................................................... .. 19
`
`V.
`
`THE STATE LAW CLAIMS (COUNTS VI—\/III) SHOULD BE
`DISMISSED ................................................................................................ .. 22
`
`A.
`
`B.
`
`Factual Allegations ........................................................................... .. 23
`
`Federal Patent and Trademark Law Precludes the State Law
`
`Claims ............................................................................................... .. 25
`
`1.
`
`2.
`
`SITC does not plead “subjective” bad faith. .......................... .. 26
`
`SITC failed to adequately plead “objective” bad faith ........... .. 27
`
`C.
`
`SITC’s Tortious Interference with an Existing Contract Claim
`(Count VIA) Is Insufficiently Pled ................................................... .. 28
`
`1.
`
`2.
`
`3.
`
`SITC Fails To Plead That VDF Intentionally Induced A
`Third Party To Breach A Contract. ........................................ .. 29
`
`SITC Fails to Plead that VDF Lacked Justification. .............. .. 30
`
`SITC Fails to Plead Subsequent Breach of Contract by a
`Third Party .............................................................................. .. 31
`
`D.
`
`E.
`
`SITC’s Tortious Interference with a Prospective Business
`Advantage Claim (Count VIB) Is Insufficiently Plead .................... .. 31
`
`SITC’s Unfair Methods of Competition (HRS Section 480-2)
`Claim (Count VII) Is Insufficiently Plead ........................................ .. 32
`
`l.
`
`2
`
`The Trademark Letter ............................................................. .. 34
`
`The § I54(d) Patent Letter ...................................................... .. 34
`
`59879/251633.]
`
`ii
`
`

`
`Case 1:11-cv—0O288-ACK -RLP Document 17-1
`#: 320
`
`Filed 07/19/11 Page 4 of 46
`
`PageID
`
`F.
`
`SITC Fails to State a Claim for Unfair Competition and
`Deceptive Trade Practices (HRS Section 481A—3) (Count VIII) ..... .. 36
`
`CONCLUSION ..................................................................................................... .. 37
`
`59379/251633.:
`
`iii
`
`

`
`Case 1:11—cv—00288-ACK -RLP Document 17-1
`#2 321
`
`Filed 07/19/11 Page 5 of 46
`
`Page|D
`
`TABLE OF AUTHORITIES
`
`Pagegsz
`
`CASES
`
`800 Adept Inc v Murex Sec. Ltd.,
`539 F.3d 1354 (Fed. Cir. 2008) ................................................................... ..25
`
`Advanced Cardiovascular Sys. Inc. v. Scimed Sys., Inc.,
`No. C-96-0950 DLJ, 1996 WL 467277 (ND. Cal. 1996) .................... .. 16, I7
`
`Avery Dennison Corp. v. Cont’l Datalabel, Inc.,
`No. 10 C 2744,2010 U.S. Dist. LEXIS 126030 (N.D. I11. Nov. 30,
`2010) ............................................................................................................ .. 12
`
`Bell At]. Corp. v. Twomb_ly,
`550 U.S. 544 (2007) .......................................................................... .. 3, 26, 36
`
`C1amp—All Corp. V. Cast Iron Soil Ijipe Institute,
`1987 WL 9760 (D. Mass. 1987) ................................................................. ..19
`
`Cunningham V. Laser Golf Corp,
`222 F.3d 943 (Fed. Cir. 2000) ..................................................................... .. 18
`
`Davis v. Four Seasons Hotel Ltd.,
`
`122 I~Iawai‘i 423, 228 P.3d 303 (2010) ....................................................... .. 32
`
`DirecTV, Inc. v. Hoa Huynh,
`503 F.3d 847 (9th Cir. 2007) .............................................................. .3, 27, 36
`
`Ditri v. Coldwell Banker Residential Affiliates,
`954 F.2d 869 (3rd. Cir. 1992) ..................................................................... .. 19
`
`E&J Gallo v. Proximo Spirits, Inc.,
`V—F-10-411 LJO SKO, 2010 WL 3386481 (E.D. Cal. 2010) ..................... .. 20
`
`Ex Parte Jeremy Ziegler & Bruce Zabava,
`2010 Pat. App. LEXIS 1679,2010 WL 638261 (B.P.A.I. Feb. 19,
`2010) ............................................................................................................ .. 10
`
`Ex Farte Kevin Vasconi,
`2011 Pat. App. LEXIS 692, 2011 WL 514298 (B.P.A.I. Jan. 12,2011) .... .. 10
`
`S9879/2516311
`
`iv
`
`

`
`Case 1:11—cv-00288~ACK -RLP Document 17-1
`#2322
`
`Filed 07/19/11 Page 6 of 46
`
`PagelD
`
`Exergen Corp. V. Wal-Mart Stores, Inc.,
`575 F.3d 1312 (Fed. Cir. 2009) ............................................................ ..passim
`
`Experience HendrixL_Ii3C V. HendrixLicensing.com,
`766 F. Supp. 2d 1122 (W.D. Wash. 2011) .................................................. ..2l
`
`Fiskars, Inc. V. Hunt Mfg. Co.,
`221 F.3d 1318 (Fed. Cir. 2000) ................................................................... .. 12
`
`Globetrotter Software,_Inc. V. Elan Computer Group, Inc.,
`362 F.3d 1367 (Fed. Cir. 2004) ................................................................... ..25
`
`Golden Gulf Corp. V. Jordache Enterprises,
`896 F. Supp. 337 (S.D.N.Y. 1995) .............................................................. ..26
`
`GoV’t Emples. Ins. Co. V. Dizol,
`133 F.3d 1220 (9th Cir. 1998) ..................................................................... ..20
`
`GoV’tE1nples. Ins. Co. V. Dizol,
`176 F. Supp; 2d 1005 (D. Haw. 2000) ........................................................ ..20
`
`Haw. Cmty. Fed. Credit Union V. Keka,
`94 Hawai‘i 213, 11 P.3d 1 (2000) ............................................................... ..33
`
`Innogenetics, N.V. V. Abbott Labs.,
`512 F.3d 1.363 (Fed. Cir. 2008) ..................................................................... .. 8
`
`Interstate Natural Gas Co. V. S. Cal. Gas Co.,
`
`209 F.2d 380 (9th Cir. 1953) ......................................................................... .. 9
`
`Johnson V. Ass’n of Apt. Owners,
`No. 0600106 HG—KSC, 2006 U.S. Dist. LEXIS 61106 (D. Haw. Aug.
`24, 2006) .................................................................................................. .. 4, 33
`
`Kam Ctr. Specialty Corp. V. LWC IV Corp,
`No. 27439, 2007 Haw. LEXIS 283 (2007) ................................................... .. 4
`
`Leibert V. Finance Factors,
`
`71 Haw. 285, 788 F.2d 833 (1990) ............................................................... ..4
`
`Letica Corp. V. Sweetheart Cup C0,,
`790 F. Supp. 702 (ED. Mich. 1992) ........................................................... ..26
`
`S9879/2516331
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`V
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`

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`Filed 07/19/11 Page 7 of 46
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`Page|D
`
`Lipton Indus, Inc. v. Ralston Purina,
`670 F.2d 1024 (C.C.P.A. 1982) .................................................................. ..18
`
`Malava, LLC v. Innovative Beverage Group Holdings,
`No. 09cv173 WQH (WVG), 2010 WL 4868024 (S.D. Cal. Nov. 22,
`2010) ............................................................................................................ ..21
`
`MedIrnmune, Inc. v. Genentech, Inc.,
`549 U.S. 118 (2007) .............................................................................. .. 20, 22
`
`
`Metrokane V. Built NY Inc.,
`Nos. 06 Civ. 14447 (LAK) (MHD), 07 Civ. 2084 (LAK) (MHD),
`2008 U.S. Dist. LEXIS 107937 (S.D.N.Y. 2008) ....................................... .. 30
`
`Mikohn Gaming Corp. V. Acres Gaming, Inc.,
`165 F.3d 891 (1998) .................................................................................... ..27
`
`
`Monster Cable Prods. Inc. v. Euroflex S.R.L.,
`
`642 F. Supp. 2d 1001 (N.D. Cal. 2009) ...................................................... ..22
`
`Norian Corp. v. Stryker CO1‘[:_).,
`363 F.3d 1321 (Fed. Cir. 2004) ................................................................. .. 8, 9
`
`Prasco, LLC V. Medicis Pharm. Corp.,
`537 F.3d 1329 (Fed. Cir. 2008) ................................................................... ..21
`
`Rhoades v. Avon Products,
`
`504 F.3d 1151 (9th Cir. 2007) ............................................................... ..20, 21
`
`Robert’s Haw. Sch. Bus, Inc. v. Laupahoehoe Transp. Co.,
`91 Hawai‘i 224, 982 P.2d 853 (1999) ......................................................... .. 31
`
`Sakugawa v. Countrywide Bank, FSB,
`769 F. Supp. 2d 1211 (D. Haw. 2011) ........................................................ ..32
`
`
`Sierra Club v. Morton
`
`405 U.S. 727 (1972) .................................................................................... .. 18
`
`Smallwood v. NCSoft Corp.,
`730 F. Supp. 2d 1213 (D. Haw. 2010) .......................................................... ..4
`
`Star—Kist Foods v. 13.1. Rhodes & C0,,
`
`735 F.2d 346 (9th Cir.1984) ........................................................................ .. 18
`
`59879/251633.}
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`Filed 07/19/11 Page 8 of 46
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`Stephens V. Tech Int’l, Inc.,
`
`393 F.3d 1269 (Fed. Cir. 2004) ............................................................. ..26, 30
`
`Sunrich Food Group V. Pac. Foods of 012,
`233 F. Supp. 2d 1273 (D. Or. 2002) ..................................................... .. 18, 19
`
`
`Therasense Inc. v. Becton Dickinson & C0,,
`2011 U.S. App. LEXIS 10590 (Fed. Cir. May 25, 2011) ........................... .. 14
`
`Weinberg V. Mauch,
`78 Hawai‘i 40, 890 P.2d 277 (1995) ........................................................... .. 29
`
`Wilson V. Fitter,
`
`No. CV 09-1162—DDP, 2009 WL 6908049 (C.D. Cal. Nov. 5, 2009) ....... .. 30
`
`Young v. Lumenis,_Inc.,
`492 F.3d 1336 (Fed. Cir. 2007) ..................................................................... .. 7
`
`Zenith Elecs. Corp. V. Exzec, Inc.,
`182 F.3d 1340 (Fed. Cir. 1999) ................................................................... .. 25
`
`STATUTES
`
`15 U.S.C.§ 1064 ................................................................................................... .. 18
`
`35 U.S.C. § 154(d) ................................................................................................. ..23
`
`Haw. Rev. Stat. § 480-2 ........................................................................................ .. 32
`
`OTHER AUTHORITIES
`
`J. Thomas McCarthy, 2 MCCARTHY oN TRADEMARKS AND UNFAIR
`COMPETITION § 11:91 (4th ed.) .................................................................... .. 30
`
`Robert Matthews, 4 ANNOTATED PATENT DIGEST § 28:9 ........................................ .. 4
`
`59879/251633.!
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`vii
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`

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`Case 1:11-cv—OO288—ACK -RLP Document 17-1
`#: 325
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`Filed 07/19/11 Page 9 of 46
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`MEMORANDUM IN SUPPORT OF MOTION
`
`INTRODUCTION
`
`On April 29, 201 1, Plaintiff VDF Futureceuticals, Inc. (“VDF”) filed a
`
`complaint alleging that Defendant Sandwich Isles Trading Co. Inc. (“SITC”)
`
`infringes three patents assigned to VDF: US. Patent Nos. 7,754,263 (“’263
`
`Patent”), 7,807,205 (“’205 Patent”), and 7,815,959 (“’959 Patent”). See generally
`
`Exhibit “A.”
`
`In response, SITC purported to file eight counterclaims. Two of the
`
`counterclaims actually assert multiple claims and have been improperly combined
`
`into a single count. For purposes of this Motion to Dismiss, VDF has separated
`
`each improperly combined claim. The counterclaims are: patent claims: (a)
`
`noninfringement (Count I); (b) patent invalidity (Count IIA); (c) inequitable
`
`conduct (Count IIB); (d) patent misuse (Count IIC); (e) lack of provisional rights
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`(Count III); trademark claims: (f) trademark invalidity — declaratory judgment
`
`(Count IV); (g) trademark cancellation ~ Lanham Act (Count V); state law claims:
`
`(h) tortious interference with existing contract (Count VIA); (j) tortious
`
`interference with prospective business advantage (Count VIB); (k) unfair
`
`competition - Hawai‘i Revised Statues (“HRS”) section 480-2 (Count VII); and
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`(m) deceptive trade practices - HRS section 48lA—3 (Count VIII).
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`59879/251633.!
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`As discussed below, VDF moves to dismiss: Counts IIB & C and IV—Vlll
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`for failure to state a claim under Fed. R. Civ. P. l2(b)(l) & (6). This Court should
`
`enter an order dismissing Counts IIB & C and IV~VIII with prejudice.
`
`BACKGROUND
`
`This is a patent infringement lawsuit. VDF has spent resources developing
`
`its technology and obtained patent protection for that technology. SITC infringes
`
`these patents, and VDF seeks to enforce its rights. SITC apparently disagrees with
`
`VDF’s infringement claim, which it has the right to do. But SITC’s counterclaims
`
`improperly seek to transform this dispute into something it is not, pursuing claims
`
`that have no basis in law with factual allegations that are woefully inadequate or
`
`directly contradicted by the attached documents they reference.
`
`SITC asserts “inequitable conduct” claims premised upon SITC’s
`
`disagreement with VDF’s arguments presented to the PTO—arguments based on
`
`fully disclosed prior art. Unsurprisingly, VDF is permitted to make arguments in
`
`favor of patentability in reference to disclosed prior art without the risk of
`
`committing inequitable conduct. VDF filed no claims related to its trademarks, yet
`
`SITC pursues cancellation of VDF’s marks based on allegations that ignore
`
`fundamental legal requirements. SITC also pursues a myriad of state law claims
`
`based on nothing more than routine correspondence between an owner of patents
`
`and trademarks (VDF) and potential infringers (specifically, a company called
`
`59879/251633.!
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`2
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`Filed 07/19/11 Page 11 of 46
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`PagelD
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`XOWii, LLC (“XOWii”)). Again, unsurprisingly, letters by patent and trademark
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`owners to potential infringers cannot support state law tort claims absent bad faith,
`
`which SITC utterly fails to plead. And, having attached the letters themselves, the
`
`pleading deficiencies for the state law claims are significant and incurable. This
`
`Court should separate the wheat from the chaff by dismissing these baseless claims
`
`so this patent suit can move forward.
`
`ARGUMENT
`
`I.
`
`PLEADING STANDARD
`
`A.
`
`Pleading Standard for Counts IV-VI
`
`To survive a Fed. R. Civ. P. l2(b)(1) or (6) motion to dismiss, “[f]actual
`
`allegations must be enough to raise a right to relief above the speculative level .
`
`.
`
`.
`
`on the assumption that all the allegations in the complaint are true (even if doubtful
`
`in fact).” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). “While a
`
`complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed
`
`factual allegations .
`
`.
`
`. a plaintiffs obligation to provide the ‘grounds’ of his
`
`‘entitlement to relief’ requires more than labels and conclusions, and a formulaic
`
`recitation ofthe elements ofa cause of action will not do.” ld.; see DirecTVL Inc. v.
`
`l_rl_oa. Huvnh, 503 F.3d 847, 854 (9th Cir. 2007) (holding that “allegations that
`
`parrot the language of [a statute]...are not well~pleaded facts”). Dismissal is
`
`appropriate when facts alleged do not state a claim that is “plausible on its face.”
`
`59879/251633.l
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`3
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`PagelD
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`Twombly, 550 U.S. at 570. SITC’s trademark (Counts IV, V) and tortious
`
`interference (Counts VIA, VIB) claims fail to state a claim under this standard.
`
`B.
`
`The Pleading Standard for Counts II. VII-VIII
`
`SITC’s claims of inequitable conduct (Count 11B) and patent misuse (Count
`
`IIC) must be pled with particularity pursuant to Rule 9(b). Exergen Corp. v. Wal—
`
`
`
`Mart Stores Inc., 575 F.3d 1312, 1326 (Fed. Cir. 2009) (en banc) (“lnequitable
`
`conduct, while a broader concept than fraud, must be pled with particularity under
`
`Rule 9(b).”); Robert Matthews, 4 ANNOTATED PATENT DIGEST § 28:9, attached
`
`hereto as Exhibit “B” (“The specific conduct that an accused infringer alleges
`
`constitutes misuse ofthe patent should be pled with particularity”).
`
`SITC’s state law unfair competition and deceptive trade practice claims
`
`(Counts VII, VIII) must also be pled with particularity under Rule 9(b). Leibert v.
`
`Finance Factors, 71 Haw. 285, 287, 788 P.2d 833, 835 (1990) (stating that “a case
`
`for unfair and deceptive business practices brought under HRS [sections] 480-2
`
`and 480—13...is, in essence, a fraud case”); Kam Ctr. Specialty Corp. v. LWC IV
`
`Qgrg, No. 27439, 2007 Haw. LEXIS 283, at *30 (2007); Smallwood v. NCSoft
`
`Corp”, 730 F. Supp. 2d 1213, 1233 (D. Haw. 2010); Johnson V. Ass’n of Apt.
`
`Owners, No. 06—00106 HG—KSC, 2006 U.S. Dist. LEXIS 61106 (D. Haw. Aug. 24,
`
`2006) (“unfair and deceptive trade practices claim is a fraud based claim that must
`
`be pled with particularity as required