United States District Court, N.D. Ohio, Eastern Division
MEMORANDUM OPINION AND ORDER
HONORABLE SARA LIOI, UNITED STATES DISTRICT JUDGE.
the Court is the motion of plaintiff Ravin Crossbows, LLC
(“Ravin”) to dismiss the counterclaims of
defendant/counter-claimant Hunter's Manufacturing Company
d/b/a TenPoint Crossbow Technologies
(“TenPoint”). (Doc. Nos. 46/47
[“Mot.”].) TenPoint has filed a memorandum in
opposition (Doc. No. 51 [“Opp'n”]), and Ravin
has filed a reply (Doc. No. 52 [“Reply”]). For
the reasons set forth herein, the motion is denied.
and TenPoint are parties to a Patent License Agreement under
which TenPoint licensed certain of its patents to Ravin.
(Doc. No. 41, Counterclaim [“Countercl.”] ¶
6.) A copy of the Patent License Agreement is attached to the
first amended complaint as Exhibit A, and is acknowledged by
TenPoint in its counterclaim. (Doc. No. 32-1, Ex. A
[“Agreement”]; Countercl. ¶ 6.) The
Agreement provided, in relevant part, as follows:
2.1 Royalty Payments.
For the license granted herein, Licensee [Ravin] shall pay to
Licensor [TenPoint] a royalty of eight percent (8%)
(“Royalty”) of the net sales price for each
Licensed Product manufactured, used or sold in the U.S., or
sold by Licensee anywhere in the world if manufactured in the
U.S. In consideration of the royalty-free Cross-License Grant
in Section 1.2 and a pre-paid, non-refundable Royalty payment
of $250, 000.00 U.S. (“Pre-Paid Royalty”) due
within 10 days of the Effective Date, Licensor agrees to
modify the Royalty to be (i) a fixed fee of $20.00 U.S. for
each Licensed Product manufactured in the U.S. and shipped
anywhere in the world, less Excluded Units; and (ii) after
the Pre-Paid Royalty is allocated to the Licensed Products,
Licensee shall have the option to buy-out the Royalty for the
balance of the Term for a one-time Royalty payment of $500,
000.00 US, less any Royalties paid in excess of the Pre-Paid
Royalty. As used herein, “Excluded Units” means
Licensed Products that are returns, warranty replacements,
write-offs, promotional units, including demonstration and
evaluation units, donations, and sponsorship or pro-staff
at 287.) The Agreement further provided that
“[r]oyalty payments are due quarterly with the payment
being received by Licensor no later than forty-five (45) days
at [sic] the end of each calendar quarter[, ]”
specifically, on May 15, August 14, November 14, and February
14. (Id. § 2.2.) The “Term” was
defined as “commenc[ing] on the Effective Date
[November __, 2015] and, unless terminated earlier [due to a
material breach and failure to remedy], . . . continu[ing]
until the last to expire of the Licensed Patents and
Cross-Licensed Patents . . . .” (Id. §
November or December of 2015, Ravin paid TenPoint the $250,
000.00 pre-paid, non-refundable royalty in accordance with
§ 2.1 of the Agreement. (FAC ¶ 13; Answer ¶
13.) On or about May 2, 2018, Ravin submitted to TenPoint a
check in the amount of $257, 120.00, claiming to exercise its
buy-out right under § 2.1. (FAC ¶ 14; Countercl.
¶¶ 23-24.) TenPoint did not accept payment from
Ravin, asserting that the buy-out option had already
“lapsed and expired.” (FAC ¶ 17; Countercl.
¶ 25.) In response, Ravin informed TenPoint (both
through counsel) that the $257, 120.00 payment included (a)
$175, 140.00 due for the royalties accruing during the First
Quarter of 2018; and (b) $81, 980.00 as “payment for
the buy-out Royalty for the balance of the Term.”
(Countercl. ¶ 26 & Ex. 3.) TenPoint eventually
returned the check to Ravin, uncashed. (Id. ¶
25, 2018, Ravin filed its complaint based on diversity
jurisdiction, which it later amended, seeking a declaratory
judgment that its exercise of the early buy-out option in the
Agreement was proper, lawful, and valid, and that it owed
TenPoint no further royalty payments or royalty reports. This
Court questioned whether the jurisdictional amount in
controversy had been established and directed the parties to
brief the matter. Ravin filed a brief, but TenPoint declined
to do so. Thereafter, based solely on the unrefuted
representations in Ravin's brief and accompanying
declaration, the Court determined that, as pleaded, the
amount in controversy was satisfied.
Standard of Review
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007)). “While legal conclusions can provide the
framework of a complaint, they must be supported by factual
allegations. When there are well-pleaded factual allegations,
a court should assume their veracity and then determine
whether they plausibly give rise to an entitlement to
relief.” Id. at 679.
ordinarily, matters outside the pleadings are not to be
considered on a motion to dismiss, “[a] copy of a
written instrument that is an exhibit to a pleading is a part
of the pleading for all purposes.” Fed.R.Civ.P. 10(c).
“In addition, when a document is referred to in the
pleadings and is integral to the claims, it may be considered
without converting a motion to dismiss into one for summary
judgment.” Commercial Money Ctr., Inc. v. Ill.
Union Ins. Co., 508 F.3d 327, 335-36 (6th Cir. 2007);
see also Amini v. Oberlin Coll., 259 F.3d 493, 502
(6th Cir. 2001).