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Ice Castles, LLC v. Labelle Lake Ice Palace, LLC

United States District Court, D. Idaho

August 12, 2019

ICE CASTLES, LLC, a Utah Limited Liability Company, Plaintiff,
v.
LABELLE LAKE ICE PALACE, LLC, an Idaho Limited Liability Company; and LABELLE LAKE, LLC, an Idaho Limited Liability Company, Defendants.

          MEMORANDUM DECISION AND ORDER

          DAVID C. NYE CHIEF U.S. DISTRICT COURT JUDGE.

         I. INTRODUCTION

         Pending before the Court is Defendant LaBelle Lake Ice Palace, LLC, and LaBelle Lake, LLC's (collectively “Labelle Lake”) Motion for Bond (Dkt. 16) and Motion to Dismiss Claims 2 and 3 (Dkt. 25). On June 4, 2019, the Court held oral argument and took the motions under advisement. Upon review, and for the reasons set forth below, the Court DISMISSES WITHOUT PREJUDICE the Motion for Bond and DENIES the Motion to Dismiss.

         II. BACKGROUND

         Ice Castles and LaBelle Lake are business competitors that have each created their own ice attractions. Simply described, these are outdoor attractions, constructed of ice, that include sculptures, artistic creations, and structures that visitors can enter-such as tunnels and caves. Ice Castles is a Utah Limited Liability Company and currently has six locations in the United States and Canada. Labelle Lake is an Idaho Limited Liability Company and currently has one location in Rigby, Idaho. Thousands of individuals visit these attractions each year.

         In 2011, Brent Christensen-the original creator of Ice Castles ice structures, and a current manager at Ice Castles-filed a patent application entitled “Methods for Constructing Ice Structures.” In 2013, the United States Patent and Trademark Office (“USPTO”) granted the application. U.S. Patent No. 8, 511, 042 (“the ‘042 patent”) is the embodiment of Christensen's process.

         In September 2017, an individual associated with LaBelle Lake reached out to Ice Castles to discuss opening an ice attraction in Idaho. The Court is unaware of the extent to which the two companies negotiated these matters, but it is clear that a business agreement never materialized.

         During the winter of 2017-2018, LaBelle Lake built its own ice attraction in Rigby, Idaho, and began soliciting customers. Thereafter, in January 2018, Ice Castles retained legal counsel and sent two “cease and desist” letters to LaBelle Lake indicating its position that LaBelle Lake's attraction-more specifically how the attraction was created-violated the patented ice castle building technique protected in the ‘042 patent.

         LaBelle Lake responded to each letter indicating its position that it was not infringing on the ‘042 patent. Ultimately, Ice Castles filed the instant suit in December 2018, when it became apparent that LaBelle Lake planned to open its facility again for the 2018-2019 winter season.

         The overarching dispute in this case can be summed up quite simply as follows: Ice Castles asserts that LaBelle Lake infringes on the methodology outlined in the ‘042 patent as it relates to the construction of its ice sculptures and structures. LaBelle Lake, on the other hand, contends that its methods are sufficiently different to avoid infringement because it uses “ice logs” and not “icicles” in its designs.

         Shortly after suit was filed, LaBelle Lake filed a Motion for Bond (Dkt. 16), asserting that under Idaho Code section 48-1701 et seq., Ice Castles must post a sufficient bond to ensure the integrity of its suit. Shortly after it filed its Motion for Bond, LaBelle Lake filed a Motion to Dismiss two claims raised in Ice Castles Amended Complaint (Dkt. 25). The Court will address each motion in turn.

         III. ANALYSIS

         A. Motion for Bond (Dkt. 16)

         1. Legal Standard

         In 2014, the Idaho Legislature passed Idaho Code section 48-1701 et seq., entitled “Bad Faith Assertions of Patent Infringement, ” in an attempt to “facilitate the efficient and prompt resolution of patent infringement claims, protect Idaho businesses from abusive and bad faith assertions of patent infringement and build Idaho's economy, while at the same time carefully not interfering with legitimate patent enforcement actions.” Idaho Code § 48-1701(2).

         Under the Statute, the Court may consider numerous factors when determining whether a party has made a bad faith assertion of patent infringement including the following:

(a) The person sends a demand letter to a target without first conducting an analysis comparing the claims in the patent to the target's products, services or technology.
(b) The demand letter does not contain the following information:
(i) The patent number;
(ii) The name and address of the patent owner or owners and assignee or assignees, if any; and
(iii) The factual allegations concerning the specific areas in which the target's products, services and technology infringe the patent or are covered by the claims in the patent.
(c) The demand letter does not identify specific areas in which the products, services and technology are covered by the claims in the patent.
(d) The demand letter demands payment of a license fee or response within an unreasonably short period of time.
(e) The person offers to license the patent for an amount that is not reasonably based on the value of a license to the patent.
(f) The person asserting a claim or allegation of patent infringement acts in subjective bad faith, or a reasonable actor in the person's position would know or reasonably should know that such assertion is meritless.
(g) The claim or assertion of patent infringement is deceptive.
(h) The person or its subsidiaries or affiliates have previously filed or threatened to file one (1) or more lawsuits alleging patent infringement based on the same or similar claim, the person attempted to enforce the claim of patent infringement in litigation and a court found the claim to be meritless.
(i) Any other factor the court finds relevant.

         Idaho Code § 48-1703(2)(a)-(i). On the flip side, the Court may consider the following factors as evidence that a person has not made a bad faith assertion of patent infringement:

(a) The person engages in a good faith effort to establish that the target has infringed the patent and to negotiate an appropriate remedy.
(b) The person makes a substantial investment in the use of the patent or in the production or sale of a product or ...

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