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Cocona, Inc. v. Columbia Sportswear Co.

United States District Court, D. Colorado

September 12, 2017

COCONA, INC., a Delaware corporation, Plaintiff,
v.
COLUMBIA SPORTSWEAR COMPANY, an Oregon company, Defendant.

          RECOMMENDATION REGARDING DEFENDANT'S MOTION TO TRANSFER OR DISMISS

          CRAIG B. SHAFFER UNITED STATES MAGISTRATE JUDGE.

         This matter comes before the court on Defendant Colombia Sportswear Company's [hereinafter Columbia] motion to transfer or dismiss (doc. # 15) filed on June 8, 2017. District Judge Christine M. Arguello referred the motion to this court. Doc. 18. Plaintiff Cocona, Inc's response (doc. # 23) was submitted on June 29, 2017, and Columbia tendered its reply (doc. # 27) on July 12, 2017. On July 24, 2017 the court ordered (doc. # 28) both parties to submit simultaneous briefing on the issue of Cocona's patent as public information. Parties submitted their briefs (docs. # 31, 32) on July 31, 2017. The court has reviewed the motions and all related briefing and exhibits, the entire case file, and the applicable law, and is sufficiently advised in the premises.

         Procedural Background

         Cocona, Inc. is a Delaware corporation located in Boulder, Colorado that develops technology for use in outdoor apparel. Columbia Sportswear Company is an Oregon based manufacturer of clothing for outdoor recreation. As early as 2009, Cocona and Columbia explored a possible business relationship that never consummated. In contemplating this relationship, both parties signed the “Reciprocal Non-Disclosure Agreement” [hereinafter Agreement], referenced in the motion to transfer.

         Plaintiff Cocona commenced this action by filing its Complaint (doc. # 1) on May 15, 2017. Plaintiff's Amended Complaint (doc. # 11) was filed on May 25, 2017 and remains the operative pleading in this case. Plaintiff alleges that Columbia infringed upon Cocona's United States Patent Number 8, 945, 287 B2, titled “Active Particle-Enhanced Membrane and Methods for Making and Using the Same, ” [hereinafter ‘287 Patent] and issued on February 3, 2015. Specifically, Cocona asserts that Columbia has been offering for sale garments containing a laminate layer which infringe the ‘287 Patent.

         Columbia argues in its motion to transfer that the forum-selection clause in the Agreement, signed on December 3, 2009, requires Cocona to bring the case in Oregon. Columbia contends that the forum-selection clause is enforceable, and that the phrase “regarding this agreement” should be broadly construed to include the current action. Columbia maintains that it will rely on “facts regarding the agreement to support defenses to Cocona's claims, ” and thus “the present case is a proceeding regarding the agreement.” In response, Cocona argues that courts only enforce a forum-selection clause when the claims fall within its scope, and that the current patent infringement claims do not “regard” the Agreement.

         Defendant Columbia also moves to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. According to Columbia, dismissal is appropriate because Cocona's use of the term “product” in place of “composition, ” means that essential allegations are missing. Columbia further argues that because Cocona has failed to expressly state that the infringing products are within the maximum moisture vapor transmission rate enumerated in claim 27 of the ‘287 Patent, Cocona has not sufficiently alleged a violation of every element of the claim. Cocona contends that its use of the term “product” rather than “composition” does not require dismissal at the pleading stage, and that its allegations of the infringing products' moisture vapor transmission rate is sufficient for the court to infer that the accused products plausibly infringe each element of the asserted claim.

         Analysis

         A. Motion to Transfer

         Defendant moves to transfer based on the Agreement's forum-selection clause. A valid forum-selection clause is enforceable through a motion pursuant to 28 U.S.C. § 1404(a). See Atlantic Marine Const. Co. v. U.S. Dist. Court for Western Dist. of Texas, 134 S.Ct. 568, 575 (2013). The forum-selection clause that Columbia seeks to enforce states, “The venue of any proceedings regarding this Agreement shall be in the state and federal courts in Oregon.” See Agreement attached as Exhibit 1 to Declaration of Adam Kelly (doc. # 16-1 at ¶ 17). The parties disagree over how broadly or narrowly to construe the phrase “regarding this Agreement.”[1]

         The interpretation of a contract is a question for the court and is treated as a matter of law. May v. Chicago Ins., 260 Or. 285, 292, 490 P.2d 150, 153 (Or. 1971).[2] The court applies a three-step methodology for contract interpretation. Nixon v. Cascade Health Services, 205 Or.App. 232, 238, 134 P.3d 1027, 1030-31 (Or. Ct. App. 2006). First, the court should determine whether a contractual provision is ambiguous. Id. Part of a contract is ambiguous when it can, in context, be reasonably given more than one meaning. Pacific First Bank v. New Morgan Park Corp., 319 Or. 342, 348, 876 P.2d 761, 764 (Or. 1994). In making that determination the court is to consider the provision “in the context of the agreement as a whole and in light of the circumstances underlying the formation of the contract.” Batzer Const., Inc v. Boyer, 204 Or.App. 309, 317, 129 P.3d 773, 778 (Or. Ct. App. 2006). Next, the court may rely on the extrinsic evidence of the contracting parties' intent. Nixon, 205 Or.App. at 238-39, 134 P.3d at 1031. Finally, if a provision is still ambiguous, the court relies on the appropriate maxims of construction. Id.[3]

         The parties signed the Agreement when they were engaged in preliminary negotiations over a potential business relationship. See Defendant's Motion (doc. # 15 at pp. 2, 6). The first section of the Agreement states the intent to “protect the confidential and proprietary nature of the information disclosed by either party.” See Agreement, doc. # 16-1. The Agreement contemplates confidential information that could be written, oral, or intangible. Id. at ¶ 2. The Agreement also excludes information made publicly known without wrongdoing, and stipulates that it expires after 3 years with certain provisions surviving. Id. at ¶¶ 3, 17. Columbia maintains that some of the information discussed under the Agreement involved manufacturing techniques of products now covered by the ‘287 Patent. See Defendant's Reply (doc. # 27 at p. 4, referencing Amended Complaint ¶¶ 16-18, 27). Ultimately, the parties never made any arrangement following the negotiations under the Agreement. Id.

         To support its contention that this action does not regard the Agreement, Cocona points to language that states the Agreement was “for the sole purpose of evaluating a potential business relationship, ” and “[a]ny future business relationship between the parties regarding the subject matter hereof shall be the subject of a separate agreement to be negotiated and executed by the parties.”[4] See Plaintiff's Response (doc. # 21 at p. 10) (citing Agreement, doc. # 16-1 at 1, ¶¶ 4, 9). Cocona argues that because the Agreement did not grant any license or patent rights, it has no bearing on the infringement of a public patent. Cocona contends that the parties could have written a broader forum-selection clause had they intended the Agreement to govern all future actions concerning the parties. See Kwiecinski v. Medi-Tech Int'l Corp., No. 3:14-CV-01512-BR, 2015 WL 3905224, at *5 (D. Or. June 25, 2015).

         Columbia argues in its brief (doc. # 32) that it will rely on equitable defenses relating to the course of dealing under the Agreement, and alleges that Cocona amended its pending patent application, prior to issuance, in an effort to include Columbia's products. Columbia cites a series of cases for the proposition that “regarding this agreement” should be interpreted broadly to include the current action. However, none of the cases Defendant identifies, even those construing the forum-selection clause broadly, support reading the language “regarding” so expansively as to include the current action. See Teran v. GB Intern., ...


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