United States District Court, D. Minnesota
Red Rhino Leak Detection, Inc., Plaintiff and Counterclaim Defendant,
Anderson Manufacturing Company, Inc., Defendant and Counterclaimant.
G. Swartz and Mark F. Warzecha, Widerman Malek, PL,
Melbourne, FL, and Jack E. Pierce, Bernick Lifson,
Minneapolis MN, for Plaintiff and Counterclaim Defendant Red
Rhino Leak Detection, Inc.
V. Padmanabhan and Erin O. Dugan, Padmanabhan & Dawson,
PLLC, Minneapolis, MN for Defendant and Counterclaimant
Anderson Manufacturing Company, Inc.
OPINION AND ORDER
C. Tostrud United States District Judge
case is the second of two patent-infringement cases pending
in this District between Plaintiff Red Rhino Leak Detection,
Inc. and Defendant Anderson Manufacturing Company, Inc. In
the earlier-filed action, Red Rhino alleged that a product
Anderson sold for detecting leaks in swimming pools violated
U.S. Patent No. 9, 464, 959 ("the '959
Patent"). In this case, Red Rhino alleges that two of
Anderson's products, the Light Tester and the LeakTrac
Light Cover Version 2 (the "Light Cover" and, with
the Light Tester, the "Accused Products") infringe
Red Rhino's U.S. Patent No. 10, 088, 383 (the '383
Patent"), of which the '959 Patent is a parent
patent. Am. Compl. ¶ 9, Counts I-III [ECF No. 16];
id. Ex. B at 1 (the '"383 Patent")
(identifying parent parents) [ECF No. 16-2 at 2]. Anderson
did not move to dismiss Red Rhino's First Amended
Complaint in this action; instead, on January 2, 2019, it
answered and counterclaimed, seeking declaratory judgments of
non-infringement, invalidity, and unenforceability.
Countercl. Counts I-III [ECF No. 19]. Two months later, on
March 1, 2019, Anderson moved for Rule 11 sanctions against
Red Rhino and its counsel, in the form of an order
"awarding Anderson Manufacturing its attorney's fees
incurred in defending Red Rhino's baseless claims, and
dismissing this action with prejudice." ECF No. 27. The
Court held a single hearing on Anderson's sanctions
motion in this action and on claim construction,
cross-motions for summary judgment, and a motion to exclude
expert testimony in the first-filed Red Rhino case.
See ECF Nos. 48, 50. The motions in the first-filed
case have been resolved by a separate order. See
generally Red Rhino Leak Detection, Inc. v. Anderson Mfg.
Co., Inc., No. 17-cv-2189 (ECT/DTS), 2019 WL 4039972
(D.Minn. Aug. 27, 2019) ("Red Rhino 7").
For the reasons that follow, Anderson's motion for
sanctions in this action will be denied.
the relevant portions of Rule 11(b), an attorney filing a
complaint "certifies that to the best of the
person's knowledge, information, and belief, formed after
an inquiry reasonable under the circumstances: ... (2) the
claims ... are warranted by existing law . . .; [and] (3) the
factual contentions have evidentiary support or, if
specifically so identified, will likely have evidentiary
support after a reasonable opportunity for further
investigation or discovery[.]" Fed.R.Civ.P. 11(b).
"Rule 11 requires that an attorney conduct a reasonable
inquiry of the factual and legal basis for a claim before
filing."Coonts v. Potts, 316 F.3d 745, 753
(8th Cir. 2003). A reasonable inquiry requires that "the
prefiling investigation must uncover a factual basis for the
plaintiffs allegations, as well as a legal basis."
Id. In resolving a Rule 11 motion, the district
court inquires "whether a reasonable and competent
attorney would believe in the merit of an argument."
Miller v. Bittner, 985 F.2d 935, 939 (8th Cir. 1993)
context of the pre-suit investigation of a patent claim, Rule
11 requires, "at a minimum . . . that an attorney
interpret the asserted patent claims and compare the accused
device with those claims before filing a claim alleging
infringement." Q-Pharma, Inc. v. Andrew Jergens
Co., 360 F.3d 1295, 1300-01 (Fed. Cir. 2004). In doing
so, an attorney may not simply rely on the claim construction
of his or her client, "but instead [must] perform an
independent claim analysis." Antonious v. Spalding
& Evenflo Companies, 275 F.3d 1066, 1072 (Fed. Cir.
2002). A plaintiff claiming infringement "must be
prepared to demonstrate to both the court and the alleged
infringer exactly why it believed before filing the claim
that it had a reasonable chance of proving
infringement." View Eng 'g, Inc. v. Robotic
Vision Sys., Inc., 208 F.3d 981, 986 (Fed. Cir. 2000).
Rhino's First Amended Complaint accuses Anderson of
direct infringement, induced infringement, and contributory
infringement of multiple claims of the '383 Patent.
See Am. Compl. at Counts I-III. For purposes of this
motion, the Parties focus all but exclusively on claim 1,
which is the only independent claim Red Rhino asserts, and
furthermore focus on the direct-infringement claim, because
without a showing of direct infringement, an
induced-infringement or contributory-infringement claim
cannot succeed. See Hi Ltd. P'ship v. Microsoft
Corp., 598 F.3d 831, 851 (Fed. Cir. 2010) ("To
prove inducement, the patentee must show direct infringement,
and that the alleged infringer knowingly induced infringement
and possessed specific intent to encourage another's
infringement." (quotation omitted)); Refac
Int'l, Ltd. v. IBM, 798 F.2d 459, 460 (Fed. Cir.
1986) ("Proving direct infringement is essential to
proving contributory infringement."). Accordingly, the
question presented by Anderson's Rule 11 motion is
whether Red Rhino conducted a reasonable inquiry, and
discovered a reasonable legal and factual basis, for its
claim that the Light Tester and the Light Cover directly
infringe claim 1 of the '383 Patent, which basis a
reasonable and competent attorney would believe to be
meritorious. Coonts, 316 F.3d at 753;
Miller, 985 F.2d at 939.
of the '383 Patent claims, in relevant part:
A leak detecting device for a swimming pool light in a water
filled swimming pool comprising:
a housing having a continuous perimeter edge sized to extend
around a swimming pool light forming a hollow interior having
a threaded rod extending through an aperture in said housing;
an anchoring attachment secured to an end of the threaded rod
for immovably anchoring the housing to an underwater swimming
an annular resilient seal secured to said perimeter edge . .
an inlet forming an opening through said housing and
extending into the opening providing accessible
[sic] from an exterior to selectively deliver a dye
solution for leak detection purposes into the
interior of said housing;
whereby the flow of the dye inserted in the interior
is observable by a user of the device for determining leakage
underwater within the defined perimeter relative to
the defined ...