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TUESDAY, SEPTEMBER 6, 2011

Order on Motions to Dismiss

ERBE USA, Inc. v. Byrne Medical, Inc., 1:11-cv-01480 (N.D. Ga. July 22, 2011) (Totenberg, J.)

The Court denied Defendant Byrne’s motion to dismiss Plaintiff ERBE’s false marking and false advertising claims. The Court found that such claims were not barred by the parties’ arbitration settlement agreement, under which ERBE released Byrne from claims that were alleged or could have been alleged in the parties’ former arbitration over a distribution agreement. According to the Court, Byrne failed to show that the false marking and false advertising claims arose out of or related to the distribution agreement itself and therefore could not have been brought in the arbitration.

Further, the Court held that ERBE adequately pled its claims for false marking and false advertising. ERBE alleged that Byrne falsely marked two of its products with knowledge that such products were not covered by its patent. ERBE’s complaint included specific statements made during the patent’s prosecution regarding claim limitations and allegations that Byrne’s products did not meet those limitations. The Court found that such facts were sufficient to reasonably infer that Byrne had the requisite knowledge and intent to deceive when it marked its products and advertised its products as being protected by the patent.

Finally, the Court granted Byrne’s motion to dismiss ERBE’s claim for a declaratory judgment of patent invalidity. ERBE alleged that it planned to introduce a product that Byrne claimed is covered by Byrne’s patent. According to the Court, such allegations fell short of establishing that a case or controversy existed between the parties.