Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-00632/USCOURTS-casd-3_17-cv-00632-1/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1338pt Patent Infringement

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3:17-CV-0632-CAB-(MDD)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

IPS GROUP, INC., a Pennsylvania 

corporation,

Plaintiff,

v.

CIVICSMART, INC., et al.,

Defendants.

Case No.: 3:17-CV-0632-CAB-(MDD)

ORDER FOR ARGUMENT ON 

MOTION TO DISMISS

On May 26, 2017, Plaintiff IPS Group, Inc., filed a First Amended Complaint against 

Defendants CivicSmart, Inc., Duncan Parking Technologies, Inc., and Duncan Solutions, 

Inc. (collectively “Defendants”). [Doc. No. 23.] Defendants moved to dismiss asserting 

improper venue, claim splitting, failure to state a claim and lack of subject matter 

jurisdiction. [Doc. No. 41.] The motion has been fully briefed. [Doc. No. 57 and 58.] 

Having reviewed the submissions, the Court finds that oral argument would be helpful. A 

hearing on this motion will therefore be held on Monday, August 7, 2017 at 11:00 a.m. 

in Courtroom 4C.

At the hearing the parties should be prepared to address the following issues.

1. Venue for the Patent Infringement Claims 

With regard to the patent infringement claims, Plaintiff alleges in the amended 

complaint that venue is proper in this district as to Defendants CivicSmart and Duncan 

Parking, under 28 U.S.C. § 1400(b), because they both have committed acts of 

infringement in this district and maintained a regular and established place of business in 

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this district. Defendants challenge that allegation. The Court finds that under the 

circumstances of this litigation, Defendants did not waive their right to contest venue by 

not raising it in their motion to dismiss the initial complaint. The Supreme Court’s decision 

in TC Heartland intervened, and as a result Plaintiff found it necessary to revise its venue 

allegation in the amended complaint. This is therefore Defendants’ first opportunity to 

contest Plaintiff’s venue assertion on the challenged allegation. 

Defendants CivicSmart and Duncan Parking argue that Plaintiff’s conclusory 

allegation that they have committed acts of infringement in this district is insufficient to 

demonstrate that venue is proper. They contend that neither CivicSmart nor Duncan 

Parking has made, sold, offered for sale or used the accused device in this district. [Doc. 

No. 41-1, at 11.]1 Plaintiff responds that an allegation of infringement is itself sufficient 

to establish venue so Defendants’ venue challenge must fail. [Doc. No. 57, at 12, 18.] The 

law on this issue is far from clear. E.g., compare 17 Moore’s Federal Practice—Civil § 

110.01 (defendant has the burden of establishing that venue is improper) with 15 C. Wright, 

A. Miller & E. Cooper, Federal Practice and Procedure § 3826 (4th Ed. 2017) (when the 

defendant has made a proper objection, the burden is on the plaintiff to establish that the 

chosen district is a proper venue.) 

Whichever party bears the burden, at this juncture neither party has provided the 

Court with a factual basis for its position. Plaintiff’s allegation on information and belief, 

that “Duncan Parking and CivicSmart have made, used, sold, offered for sale, or imported 

into California (and this District) the products that are the subject of IPS Group’s claims” 

is a conclusory allegation devoid of factual support. Defendants’ blanket denial is also 

argument without factual support. If the Court granted leave to amend, what evidence 

would support Plaintiff’s allegation of acts of infringement in this District? What evidence 

would Defendants offer to contest that assertion?

 

1 Pinpoint page citations to documents in the record are to the ECF page number at the top of the page. 

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2. Claim Splitting

Plaintiff alleges that CivicSmart directly and indirectly infringes U.S. Patent No. 

8,595,054 (First Cause of Action) and U.S. Patent No. 7,854,310 (Second Cause of Action) 

as a result of its marketing and sales of the accused Liberty Meters. The Court understands 

these accused devices to be the same devices and patents at issue in IPS v. Duncan 

Solutions, Case No. 3-15-cv-1526. Therefore, is it correct that the allegations of 

infringement by CivicSmart raised in the present case are independent of the acts of 

Duncan Solutions and Duncan Parking in the 2015 case? If yes, again what is the evidence 

CivicSmart independently committed acts of infringement of these patents in this District?

If not, what is the purpose of asserting infringement against CivicSmart for the same 

products at issue in the 2015 case?

3. The Lanham Act Claim

Plaintiff alleges that CivicSmart and Duncan Parking violated the Lanham Act by 

falsely relating to unidentified city employees in Milwaukee, Wisconsin, in response to a 

request for proposal, that IPS acknowledged that the Liberty Meter without a solar panel 

would not infringe any IPS Group patents. Plaintiff contends this is a material false 

statement made as part of a commercial transaction intended to deceive its audience and 

that it injured IPS by diverting the Milwaukee contract from IPS. Assuming these factual 

allegations to be true, Plaintiff has not however demonstrated how Defendants caused this 

false statement made to a city employee in a bidding process to enter interstate commerce. 

There are no facts supporting this necessary element in the complaint. What facts can 

Plaintiff proffer to demonstrate that each of the Defendants caused the alleged false 

statement to enter interstate commerce? 

The general and unsupported allegations that Defendants have made this false claim 

to other consumers at other times and in this District, are not sufficient.

4. California State Law Violations under B&P Code §§ 17200 and 17500

The complaint offers only speculative assertions without any factual information that 

Defendants made, or will make, false and misleading statements to California municipal 

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employee to induce the purchase of Liberty Meters instead of IPS Group’s meters. If 

granted leave to amend, what facts can Plaintiff proffer to support these causes of action? 

It is SO ORDERED.

Dated: August 1, 2017

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