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Bionix Development Corp. v. Sklar Corp.

October 14, 2009

BIONIX DEVELOPMENT CORPORATION, PLAINTIFF,
v.
SKLAR CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Joyner, J.

MEMORANDUM AND ORDER

Before the Court is Defendant's Motion to Dismiss Count II of Plaintiff's Second Amended Complaint for Failure to State a Claim (Doc. No. 99) pursuant to Federal Rule of Civil Procedure 12(b)(6), and responses thereto (Doc. Nos. 108, 114, 117). For the reasons set forth in this Memorandum, the Court grants Defendant's Motion in part and denies in part.

I. BACKGROUND*fn1

Plaintiff, Bionix Development Corporation ("Bionix"), develops, manufactures, and sells a variety of plastic ear curettes. These ear curettes are designated as surgical instruments and are used by physicians to remove wax from the outer ear canal so that physicians can view the ear drum or canal and observe them for any problems. Bionix owns U.S. Design Patent Numbers D415,275; D420,133; D439,338; D449,888 and D450,676 which cover the designs of its curettes. Defendant, Sklar Corporation ("Sklar"), also manufactures ear curettes.

On July 15, 2003, Bionix sued Sklar, in the United States District Court for the Northern District of Ohio for design patent infringement, trade dress infringement and unfair competition in connection with the sale of Sklar's ear curettes. Bionix believed that Sklar was selling a variety of plastic ear curettes which infringed on its patents.

The parties voluntarily entered into a settlement agreement on October 22, 2004 ("2004 Settlement Agreement"). Meaningful settlement negotiations took place between the parties August 3, 2004 through October 22, 2004. In the 2004 Settlement Agreement it states:

1. Commitments by Sklar. Sklar, on behalf of itself and its partners, joint ventures, and affiliates agrees that:

(a) Sklar will not manufacture, import, offer to sell or sell any plastic ear curette that has a notch in the handle . . . .

(b) The parties agree that Sklar may continue to sell its entire line of ear curettes as such curettes are presently manufactured and sold in the color white, but without the notch . . . .

(c) Except to the extent of the activities permitted in sections 1(a) and (b), Sklar agrees that it will not directly infringe, contributorily infringe, induce infringement of the patents, or infringe the tradedress of Bionix.

Plaintiff's Second Amended Complaint Exhibit H.

On October 24, 2007, Bionix sued Sklar again alleging patent infringement. The complaint also included a breach of contract claim based on Sklar's outsourcing of certain curettes to India, a fraudulent misrepresentation claim and a fraudulent non-disclosure claim based on Sklar's failure to disclose its Indian outsourcing to Bionix during settlement negotiations in 2003 and 2004.

On January 8, 2008, Bionix filed a motion to amend its complaint. The Court denied Bionix leave to amend any fraudulent non-disclosure claims, but granted Bionix's request to amend its fraudulent misrepresentation and breach of contract claims. The Court advised Bionix that a fraudulent misrepresentation claim must state with particularity the circumstances constituting fraud under Federal Rule of Civil Procedure 9(b).

On March 5, 2008, Sklar filed a motion to dismiss Count Two of the Amended Complaint. However, the Court stayed Sklar's motion to dismiss in order to allow limited discovery regarding the breach of contract claim. Then on May 22, 2009, Bionix filed a motion for leave to file a second amended complaint. In July 2009, this Court granted Bionix's request for leave to file a second amended complaint and dismissed Sklar's Motion to Dismiss Count II of the Amended ...


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