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Racing Optics, Inc. v. Clear Defense, LLC

United States District Court, M.D. North Carolina

July 28, 2017

RACING OPTICS, INC., Plaintiff,
v.
CLEAR DEFENSE, LLC Defendant.

          MEMORANDUM OPINION AND ORDER

          LORETTA C. BIGGS, District Judge.

         Plaintiff, Racing Optics, Inc. (“Racing Optics”), initiated this action against Defendant, Clear Defense, LLC (“Clear Defense”), alleging patent infringement in violation of the Patent Act of 1952, 35 U.S.C. § 1. (ECF No. 1.) Before the Court are four motions: (1) Clear Defense's Motion for Summary Judgment on its First Defense under 28 U.S.C. § 1498, (ECF No. 28); (2) Racing Optics' Motion for Partial Summary Judgment to Dismiss Defendant's First Affirmative Defense under 28 U.S.C. § 1498 (ECF No. 31); (3) Clear Defense's Motion to File under Seal (ECF No. 34); and (4) Racing Optics' Motion to Seal Documents Filed in Support of Response in Opposition to Defendant's Motion for Summary Judgment Regarding Defendant's First Affirmative Defense under 28 U.S.C. § 1498 (ECF No. 42).

         For the reasons stated below, the Court (1) grants Clear Defense's motion for summary judgment; (2) denies Racing Optics' motion for partial summary judgment; (3) grants Clear Defense's motion to seal; and (4) grants in part and denies in part Racing Optics' motion to seal.

         I. BACKGROUND

         Racing Optics owns U.S. Patent No. 6, 847, 492 (“the ‘492 patent”), entitled “Optical Stack of Laminated Removable Lenses for Face Shields, Windows, and Displays, ” which contains three independent and six dependent claims. (ECF No. 1 ¶¶ 9, 11.) Racing Optics also owns U.S. Patent No. 7, 184, 217 (“the ‘217 patent”), entitled Optical Stack of Laminated Removable Lenses for Face Shields, Windows, and Displays, ” which contains four independent and twelve dependent claims. (Id. ¶¶ 10-11.) Each claim of the ‘492 and ‘217 Patents recites a stack of removable lenses with an adhesive between each of the lenses to laminate the layers together. (Id. ¶¶ 12-13; see generally ECF No. 7.)

         Clear Defense manufactures and sells to the United States Government five products comprised of five layers of laminated polymer film, with alternating layers of material and adhesive. (ECF No. 36 ¶¶ 4, 9.) These products are designed to be applied to the windows of the Cougar Mine Resistant Ambush Protected vehicle (“Cougar vehicle”), which is developed and owned by the United States Military. (Id. ¶ 4.) Each of the five products manufactured by Clear Defense for the Cougar vehicle has a National Stock Number (“NSN”), which is a code created by the United States Government to identify specific products to purchase from Clear Defense. (Id. ¶¶ 5, 7.) To purchase one of the five products, a Government contracting officer posts a request on the Defense Logistics Agency Internet Bid Board System (“DIBBS) using that product's assigned NSN. (Id. ¶¶ 21-22.) Once posted, Clear Defense responds to the request with an offer to fill the order, and then the contracting officer generates an Order for Supplies or Services, which is the contract for the particular order. (Id. ¶ 23.) Afterwards, Clear Defense ships the requested products to the Government. (Id.) In the last six years, [1] Clear Defense has sold the five products exclusively to the United States Government or one of its contractors for use by the United States Military. (Id. ¶ 19.) The Government has also designated Clear Defense as its sole provider of the five products. (See Id. ¶ 12.)

         On April 6, 2016, Racing Optics filed this lawsuit, alleging two claims of patent infringement against Clear Defense for selling the five products (“Accused Products”)[2] to the United States Military. (See ECF No. 1 at 4-7.) Clear Defense then filed its Answer, Counterclaims, and Defenses, admitting that it sold the Accused Products to the United States Military, and further raising certain defenses. (ECF No. 10 at 4, 7-9.) Specifically, in its First Defense, Clear Defense asserted that “Racing Optics failed to bring suit against the proper party” pursuant to 28 U.S.C. § 1498. (Id. at 7.) After Racing Optics moved to strike Clear Defense's First Defense, the Magistrate Judge directed the parties to file position papers and to propose a schedule for addressing Clear Defense's asserted defense. (See ECF No. 20.) The parties filed a joint position paper and proposed an abbreviated period of discovery to address only Clear Defense's asserted defense under 28 U.S.C. § 1498. (ECF No. 22.) In approving the parties' proposed discovery schedule, the Magistrate Judge also ordered that any dispositive motion addressing the § 1498 defense be filed on or before January 13, 2017. (ECF No. 23.)

         II. PENDING MOTIONS

         Both parties have timely moved, pursuant to Rule 56 of the Federal Rules of Civil Procedure, for summary judgment related to Clear Defense's First Defense under 28 U.S.C. § 1498. (ECF No. 28; ECF No. 31.) Clear Defense, in support of its motion for summary judgment on its defense under § 1498, contends the evidence establishes its manufacture or use of the Accused Products was “for the Government” and with its “authorization or consent.” (ECF No. 29 at 14-15.) Therefore, according to Clear Defense, Racing Optics' exclusive remedy for the alleged patent infringement is in an action against the United States in the United States Court of Federal Claims. (Id. at 2.) Racing Optics, in its motion for partial summary judgment, requests dismissal of Clear Defense's § 1498 defense, asserting that Clear Defense has failed to present sufficient evidence that its use of the Accused Products was with the Government's “authorization or consent.” (ECF No. 32 at 2-4.)

         III. LEGAL STANDARD

         Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is “material” if it might affect the outcome of the litigation, and a dispute is “genuine” if the evidence would permit a reasonable jury to find for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When the nonmoving party bears the burden of proof on an issue, the moving party is entitled to judgment as a matter of law if the nonmoving party “fail[s] to make a sufficient showing on an essential element of her case.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (noting that a “complete failure of proof” on an essential element of the case renders all other facts immaterial).

         The party seeking summary judgment bears the initial burden of “pointing out to the district court . . . that there is an absence of evidence to support the nonmoving party's case.” Id. at 325. To defeat summary judgment, the nonmoving party must designate “specific facts showing that there is a genuine issue for trial.” Id. at 324. The nonmoving party must support its assertions by citing to particular parts of the record, such as affidavits, depositions, answers to interrogatories, and admissions on file. Fed.R.Civ.P. 56(c)(1)(A); Celotex Corp., 477 U.S. at 324.

         The role of the court is not “to weigh the evidence and determine the truth of the matter” but rather “to determine whether there is a genuine issue for trial.” Liberty Lobby, 477 U.S. at 249. A genuine issue for trial exists only when “there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Id. “If the evidence is merely colorable or is not significantly probative, summary judgment may be granted.” Id. at 249-50 (citations omitted). When reviewing a motion for summary judgment, the court must “resolve all factual disputes and any competing, rational inferences in the light most favorable” to the nonmoving party. Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003) (quoting Wightman v. Springfield Terminal Ry. Co., 100 F.3d 228, 230 (1st Cir. 1996)). Further, where, as in this case, the court has before it cross-motions for summary judgment, the court reviews each of them separately to determine if either party is entitled to judgment as a matter of law. Id.

         IV. DISCUSSION

         The applicability of 28 U.S.C. § 1498(a) is the sole issue presented in the parties' motions for summary judgment. In construing § 1498(a), this Court must apply Federal Circuit law. Madey v. Duke Univ., 307 F.3d 1351, 1359 (Fed. Cir. 2002). ...


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