GLASTON CORPORATION v. HHH EQUIPMENT RESOURCES

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

GLASTON CORPORATION & UNIGLASS )

ENGINEERING OY, )

)

Plaintiffs, )

)

v. )

) 1:21-CV-942

SALEM FABRICATION TECHNOLOGIES )

GROUP, INC., d/b/a HHH )

EQUIPMENT RESOURCES, )

)

Defendant. )

MEMORANDUM OPINION AND ORDER

THOMAS D. SCHROEDER, District Judge.

This case is before the court on the motion of Defendant Salem

Fabrication Technologies Group, Inc. (“Salem”) to dismiss

Plaintiff Glaston Corporation (“Glaston”) for lack of subject

matter jurisdiction pursuant to Federal Rule of Civil Procedure

12(b)(1). (Doc. 57.) Attendant to that motion are several motions

to seal filed by the parties (Docs. 60, 73, 86) and Plaintiffs’

motion to strike Salem’s reply brief or, in the alternative, to

file a surreply on the motion to dismiss (Doc. 90). For the

reasons that follow, the court declines to strike Salem’s reply,

allows Plaintiffs’ proposed surreply, and denies Salem’s motion to

dismiss. The motions to seal will be granted in part and denied

in part.

I. BACKGROUND

Plaintiffs Glaston and Uniglass Engineering OY (“Uniglass”)

commenced this action on December 9, 2021, alleging that Salem is

infringing on two patents, United States Patent No. 8,479,540 (the

“‘540 Patent” (Doc. 14-1)) and United States Patent No. 8,650,911

(the “‘911 Patent” (Doc. 14-2)), that describe a method and

apparatus for tempering glass (Doc. 1 ¶ 1). The facts of the

current complaint1 are more fully laid out in this court’s opinion

on Salem’s prior motion to dismiss. (Doc. 20.) Relevant to

Salem’s present motion, the complaint alleges that Uniglass is the

wholly-owned subsidiary of Glaston and that both the ‘540 and the

‘911 patents are assigned to and held by Uniglass, while Glaston

is the exclusive licensee of both patents. (Doc. 14 ¶¶ 4, 12-14).

Salem now challenges the veracity of the allegation that

Glaston is the exclusive licensee with rights in the patents at

issue sufficient to create standing in this case. (Doc. 57.)

Discovery has concluded, and the parties have briefed the question

of standing (see Docs. 58, 70, 84), creating a record on which the

court can decide the issue. In addition, both parties filed

several motions to seal related to briefing on the motion to

dismiss (Docs. 60, 73, 86), and Plaintiffs filed a motion to strike

Salem’s reply brief or, in the alternative, to file a surreply on

the motion to dismiss (Doc. 90). Those issues are similarly

briefed and ripe for review. (See Docs. 60, 73, 86, 91, 95, 96.)

1 Plaintiffs amended their complaint on January 27, 2022. (Doc. 14.)

II. ANALYSIS

A. Motion to Strike Reply or Allow Surreply

As a preliminary matter, Plaintiffs move to strike Salem’s

reply brief in support of its motion to dismiss. Plaintiffs argue

that the reply brief exceeds the scope of the prior briefing by

raising an argument of constitutional standing Salem failed to

make in its opening brief, which they contend addressed only

statutory standing. (Doc. 91 at 2-3.) Plaintiffs move to strike

any new arguments contained in and exhibits attached to Salem’s

reply brief or, in the alternative, to allow Plaintiffs leave to

file a surreply to address them. (Doc. 90.) Salem responds that

its reply brief merely clarifies how its constitutional standing

arguments should be interpreted, and it incorporates new exhibits

and evidence only to the extent necessary to rebut arguments raised

by Plaintiffs in their response. (Doc. 95 at 4-10.)

Federal Rule of Civil Procedure 12(f) provides that a court

“may strike from a pleading an insufficient defense or any

redundant, immaterial, impertinent, or scandalous matter.” Fed.

R. Civ. P. 12(f) (emphasis added). Because Salem’s reply brief

does not constitute a pleading, the motion to strike is improper

and will be denied. Plaintiffs’ motion to strike will nevertheless

be construed as a request not to consider the reply.

As Plaintiffs point out, Local Rule 7.3(h) provides that “[a]

reply brief is limited to discussion of matters newly raised in

the response.” L.R. 7.3(h); see Henry v. N.C. Acupuncture

Licensing Board, No. 1:15CV831, 2017 WL 401234, at *4 (M.D.N.C.

Jan. 30, 2017). Courts in this district “have consistently held

that ‘[r]eply briefs . . . may not inject new grounds . . . [and

that an] argument [that] was not contained in the main

brief . . . is not before the Court.’” Tyndall v. Maynor, 288

F.R.D. 103, 108 (M.D.N.C. 2013) (quoting Triad Int’l Maintenance

Corp. v. Aim Aviation, Inc., 473 F. Supp. 2d 666, 670 n.1 (M.D.N.C.

2006)). It is improper, under Local Rule 7.3(h), to wait until a

reply brief to raise new contentions not made in a party’s first

motion. See Jarvis v. Stewart, No. 1:04CV00642, 2005 WL 3088589,

at *1 (M.D.N.C. Nov. 17, 2005).

However, Salem correctly characterizes its reply brief as

within the scope of both its original brief and Plaintiffs’

response. Salem’s essential theory of dismissal in its original

brief is that this court lacks subject matter jurisdiction because

Plaintiffs failed to establish that Glaston suffers a recognized

injury in fact – i.e., has constitutional standing - under Article

III. (See Doc. 58 at 11-14.) In response, Plaintiffs argue that

Salem confuses constitutional standing with the requirements of

the statute (35 U.S.C. § 281, sometimes called “statutory

standing”) for patent infringement cases (Doc. 70 at 13-16), that

Glaston has standing by virtue of Uniglass’s standing (id. at 16-

20), that Glaston independently meets the requirements of Article

III standing in its own right (id. at 20-26), and that Uniglass

and Glaston have at all times acted as a single united party (id.

at 26-27). Salem’s reply is then tailored to providing

counterarguments on these points. (See, e.g., Doc. 84 at 7-14

(disputing with argument and evidence Plaintiffs’ argument that

Glaston has suffered injury in fact); id. at 14-15

(recontextualizing the argument that statutory standing and

constitutional standing are distinct under Lone Star Silicon

Innovations LLC v. Nanya Tech. Corp., 925 F.3d 1225, 1234 (Fed.

Cir. 2019)); id. at 16 (arguing that Uniglass’s standing does not

cure Glaston’s lack of standing).) Although Plaintiffs portray

these arguments and exhibits as new material improperly brought

for the first time on reply, the reply does not exceed the scope

of prior briefing, and it will be allowed.

However, the court will also grant Plaintiffs’ unopposed

request for leave to file the proposed surreply. Although

disfavored, surreplies are allowed “when fairness dictates based

on new arguments raised in the previous reply.” DiPaulo v. Potter,

733 F. Supp. 2d 666, 670 (M.D.N.C. 2010). To be sure, Local Rule

7.3(h) “exists to give the replying party a chance to rebut newly

raised arguments, not to give the replying party an unfair

advantage in having a chance to make new arguments that should

have been raised initially.” Pouncey v. Guilford Cnty., No.

1:18CV1022, 2020 WL 1274264, at *5 (M.D.N.C. Mar. 17, 2020). In

order to avoid any possible unfairness to Plaintiffs, and because

Salem does not oppose the filing of Plaintiffs’ surreply, the court

will allow the surreply (Doc. 90-1) and considers it for purposes

of Salem’s motion to dismiss.

B. Motion to Dismiss for Lack of Jurisdiction

Federal district courts are limited in their exercise of

judicial power. Exxon Mobil Corp. v. Allapattah Servs., Inc., 545

U.S. 546, 552 (2005). Here, Salem challenges Glaston’s standing

to remain in the case as part of this court’s subject matter

jurisdiction, which is addressed at this stage under Federal Rule

of Civil Procedure 12(b)(1). CGM, LLC v. BellSouth 14 Telecomms.,

Inc., 664 F.3d 46, 52 (4th Cir. 2011); see also Pitt Cnty. v.

Hotels.com, L.P., 553 F.3d 308, 311 (4th Cir. 2009) (noting

district court’s re-characterization of defendant’s challenge to

standing from a motion to dismiss for failure to state a claim

under Rule 12(b)(6) to a motion to dismiss for lack of subject

matter jurisdiction under Rule 12(b)(1)).

When resolving a motion pursuant to Rule 12(b)(1), “‘the

district court is to regard the pleadings as mere evidence on the

issue, and may consider evidence outside the pleadings without

converting the proceeding to one for summary judgment.’” Evans v.

B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999) (quoting

Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945

F.2d 765, 768 (4th Cir. 1991)). Where a defendant has not provided

evidence to dispute the veracity of the jurisdictional allegations

in the complaint, the court accepts facts alleged as true just as

it would under Rule 12(b)(6). Kerns v. United States, 585 F.3d

187, 192–93 (4th Cir. 2009) (citing Adams v. Bain, 697 F.2d 1213,

1219 (4th Cir. 1982)). However, where, as here, a defendant

challenges “the veracity of facts underpinning subject matter

jurisdiction,” the challenge to jurisdiction is a factual one, and

“the presumption of truthfulness normally accorded a complaint’s

allegations does not apply.” Id. at 192. Instead, the court must

consider all of the facts developed on the record and cited by the

parties, id., but ultimately, “the plaintiff bears the burden of

proving the truth of such facts by a preponderance of the

evidence.” U.S. ex rel Vuyyuru v. Jadhav, 555 F.3d 337, 347 (4th

Cir. 2009). Where subject matter jurisdiction turns on contested

facts, the trial judge may resolve the dispute unless the issue

turns on an essential element of a claim, in which case the jury

is the proper trier of fact. Id. at 348.

Salem argues that Glaston does not possess the kind of

exclusionary property rights in the asserted patents necessary for

it to have Article III standing. (Doc. 58 at 15.) According to

Salem, by Glaston’s own admissions in the complaint and to the

Patent and Trademark Office (“PTO”), Uniglass retains all property

rights in the two asserted patents. (Id. (citing Docs. 14 ¶ 12-

13, 59-4, 59-5 at 9).) Moreover, Salem argues that Glaston cannot

have rights in the patent, and therefore standing, merely by virtue

of its ownership of Uniglass. (Id. at 15-18.) Citing to the

discovery record and Glaston’s interrogatory responses, Salem

notes that Glaston produced no document ever showing that it is

the exclusive licensee of the ‘540 and ‘911 patents; instead, Salem

points out, Glaston’s theory is that “[b]y virtue of Glaston’s

acquisition of 100% of Uniglass’ shares, Uniglass is a wholly-

owned subsidiary of Glaston, and Glaston has exclusive rights to

all of Uniglass’s IP assets including the Asserted patents.” (Id.

at 10 (citing Doc. 59-1 at 4-5).) Salem contends that case law

from the Federal Circuit and various district courts forecloses

the theory that Glaston’s ownership interests suffice to create

exclusive rights in the patents, so in the absence of any other

evidence of an express or implied promise to grant exclusive rights

in the patent to Glaston, Glaston lacks standing to proceed. (Id.

at 16-18 (citing Spine Sols., Inc. v. Medtronic Sofamor Danek USA,

Inc., 620 F.3d 1305, 1318 (Fed. Cir. 2010), abrogated on other

grounds by Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. 93

(2016); Alarm.com, Inc. v. SecureNet Techs. LLC, 345 F. Supp. 3d

544, 550-51 (D. Del. 2018); Bioverativ Inc. v. CSL Behring LLC,

No. 17-914-RGA, 2021 WL 3471688, at *4 (D. Del. Aug. 6, 2021);

Lans v. Gateway 2000, Inc., 84 F. Supp. 2d 112, 123 n.10 (D.D.C.

1999), aff’d sub nom. Lans v. Digit. Equip. Corp., 252 F.3d 1320,

1328 (Fed. Cir. 2001)).) Finally, Salem argues that Glaston cannot

cure its lack of standing by obtaining exclusive property rights

in the patent at this point, as standing must exist “at the

inception of the lawsuit” and cannot later be established by a

subsequent changes in status. (Id. at 18-19 (citing Sicom Sys.,

Ltd. v. Agilent Techs., Inc., 427 F.3d 971, 975-76 (Fed. Cir.

2005)).)2

Plaintiffs advance several arguments in response to Salem’s

motion. First, on a procedural level, Plaintiffs argue that

Salem’s motion raises a matter of statutory rather than

constitutional standing in the wake of Lone Star, which must be

addressed as a motion to dismiss for failure to state a claim under

Rule 12(b)(6). (Doc. 70 at 13-16.) As the time for motions

pursuant to Rule 12(b)(6) has passed, Plaintiffs argue, Salem’s

motion is improper and should be denied. (Id.) Second, Plaintiffs

argue that where Uniglass’s standing has been firmly established,

Glaston’s standing need not be questioned, as only one plaintiff

requires standing for the Plaintiffs to proceed. (Id. at 16-20.)

Third, Plaintiffs argue that Glaston has established Article III

2 Salem also seeks dismissal of Glaston’s claims with prejudice on the

ground that Glaston engaged in “highly questionable conduct” by

“misrepresent[ing] the nature of its property rights” in the complaint

and in discovery. (Doc. 58 at 19.) Salem further seeks attorneys’ fees

for defending against the claims Plaintiff brought against it, asserting

that Salem was required to conduct discovery of Glaston’s damages claims

when, Salem asserts, Glaston lacks standing. (Id. at 19-21.) Because

the complaint merely alleges that Glaston is the “exclusive licensee”

of the patents (Doc. 14 ¶ 14) and the court finds that Glaston has

standing, it need not address these arguments further.

standing. (Id. at 20-26.) Citing numerous facts in the record,

Plaintiffs contend that Glaston has the exclusive right to make,

use, and sell products and services under the patents, and it has

the exclusive right to control enforcement of them. (Id. at 20-

25.) In other words, Plaintiffs contend, Glaston has rights as an

exclusive licensee that were sufficiently violated by Salem’s

alleged infringement to establish an injury in fact. (Id.)

Moreover, Plaintiffs argue that Glaston’s injury is fairly

traceable to Salem’s alleged conduct, and they maintain that this

injury is likely to be redressed by a favorable judicial decision.

(Id. at 25-26.) Finally, Plaintiffs note that at all times

throughout this litigation, Glaston and Uniglass have acted as a

single Plaintiff providing identical testimony and evidence in the

case.3

In its reply brief, Salem responds to the contention that it

improperly focused on statutory standing and challenges Glaston’s

constitutional standing. Maintaining that Lone Star did not

eliminate the requirement that a Plaintiff be the patent holder or

exclusive licensee for the purposes of Article III (Doc. 84 at 14-

15), Salem argues that Glaston has not suffered an injury in fact

because the record does not establish that it is an exclusive

3 Plaintiffs also respond to Salem’s arguments seeking dismissal with

prejudice and attorneys’ fees, denying that any “highly questionable

conduct” took place during discovery and arguing that fee shifting is

inappropriate. (Doc. 70 at 27-30.) For the reasons set out in note 2,

supra, the court need not address those arguments.

licensee, either expressly or impliedly or by virtual assignment,

particularly because organizations other than Glaston practice the

patent (id. at 8-14). As part of this argument, Salem contends

that Glaston is not even properly named as a party in this case,

as only a company named “Glaston Oyj Abp” could be identified in

the documents produced in discovery. (Id. at 9-12). In addition,

Salem argues, Uniglass’s standing does not by itself establish

Glaston’s standing, United States law rather than Finnish law

controls the standing inquiry, and purported evidence produced

after the close of discovery fails to establish standing. (Id. at

16-19.)

In their surreply, Plaintiffs provide context for the

allegations and evidence cited by Salem that different

corporations are practicing the patents. (Doc. 90-1.) They note

that Glaston’s corporate documents reference how Glaston Oyj Abp

is simply the Finnish equivalent name for Plaintiff Glaston

Corporation, that the businesses cited as practicing the patents

are either wholly-owned subsidiaries belonging to the Glaston

Corporation Group or otherwise not practicing the two patents at

issue, and that the evidence in context fully supports the

conclusion that Glaston enjoys the exclusive rights to make, use,

and enforce the patents. (Id. at 5-8.)

To begin, the court addresses the parties’ dispute over the

proper inquiry for assessing constitutional standing in the

context of a patent case. As with any federal case, a plaintiff

must allege “‘such a personal stake in the outcome of the

controversy as to warrant his invocation of federal court

jurisdiction and to justify exercise of the court’s remedial powers

on his behalf’” for a claim to be justiciable. White Tail Park,

Inc. v. Stroube, 413 F.3d 451, 458 (4th Cir. 2005) (quoting Planned

Parenthood of S.C. v. Rose, 361 F.3d 786, 789 (4th Cir. 2004)).

This is “an integral component of the case or controversy

requirement.” CGM, 664 F.3d at 52 (citation and internal quotation

marks omitted). The party seeking to invoke federal court

jurisdiction bears the burden of satisfying this Article III

standing requirement. Miller v. Brown, 462 F.3d 312, 316 (4th

Cir. 2006). To meet that burden, a plaintiff must demonstrate (1)

that it has suffered an injury in fact that is “concrete and

particularized” and “actual or imminent”; (2) that the injury is

fairly traceable to the challenged conduct; and (3) that a

favorable decision is likely to redress the injury. Lujan v.

Defenders of Wildlife, 504 U.S. 555, 560–61 (1992).

In patent infringement cases, while the Supreme Court was

historically restrictive as to transferees of patents who claimed

to have suffered an injury in fact to assert a federal patent

infringement claim, see Gayler v. Wilder, 51 U.S. 477 (1851)

(holding that assignee of patent rights can sue for infringement);

Waterman v. MacKenzie, 138 U.S. 252 (1891) (holding that licensee

has no right in own name to sue third parties for infringement),

the Court over time both clarified and modified those restrictions.

Pertinent here, the Court has recognized the right of exclusive

licensees to assert rights in the patent in an infringement case,

at least as long as the licensees appeared with the patent holder.

Indep. Wireless Tel. Co. v. Radio Corp. of Am., 269 U.S. 459

(1926), reh’g denied, 270 U.S. 84 (1926). After the Court

separated statutory standing from constitutional standing in

Lexmark International, Inc. v. Static Control Components, Inc.,

572 U.S. 118, 128 n.4 (2014), the Federal Circuit acknowledged the

inquiry for Patent Act statutory standing as distinct from that

for constitutional injury in fact. Intell. Tech LLC v. Zebra

Techs. Corp., 101 F.4th 807, 814 (Fed. Cir. 2024) (citing Lone

Star, 925 F.3d at 1234-35). Whether a plaintiff has a cause of

action raises “a matter of statutory interpretation,” whereas

constitutional standing inquires whether a plaintiff alleges a

“case or controversy” within the meaning of Article III. Lexmark,

572 U.S. at 126.

As a result, Plaintiffs are correct that whether Glaston’s

interest in the ‘540 and ‘911 Patents is sufficient to meet the

“patentee” requirement of 35 U.S.C. § 281 is not properly before

the court, both because it raises an issue of statutory standing

under the Patent Act and because the time for a Rule 12(b)(6)

motion has passed. CGM, LLC v. BellSouth Telecommc’ns, Inc., 664

F.3d 46, 51-52 (4th Cir. 2011) (distinguishing statutory standing

as distinct from Article III standing). However, the parties have

cited no Federal Circuit case that has determined that an

infringement plaintiff may possess less than an exclusionary right

and still suffer constitutional injury in fact.4 In Intellectual

Tech LLC, which was decided after Lone Star, for example, the

Federal Circuit still looked to and treated the party’s possession

of “an exclusionary right” as sufficient to confer constitutional

standing. 101 F.4th at 814 (emphasis in original); cf. Vericool

World LLC v. TemperPack Techs., Inc., No. 1:23CV1761, 2024 WL

3594709, at *3 (E.D. Va. July 2, 2024) (stating that cases

conflating statutory and constitutional standing are “no longer

good law” but suggesting that “a party can suffer financial harm

from a patent infringer even if that party holds no exclusionary

rights in the patent itself”).

Here, then, because Plaintiffs assert that Uniglass holds the

patents as assignee (Doc. 14 ¶¶ 12, 13), Plaintiffs may establish

standing by showing by a preponderance of the evidence that Glaston

possesses some exclusionary right — e.g., is an exclusive

licensee — under the two patents vis-à-vis Salem to establish

Glaston’s constitutional standing. Intellectual Tech LLC, 101

4 Lone Star found constitutional standing even though the plaintiff’s

exclusionary rights fell short of “all substantial rights” in the patent.

Lone Star, 925 F.3d. at 1234-35.

F.4th at 814. Plaintiffs have done so here. While Salem notes

there is no evidence of a written exclusive license, there is no

such requirement for the purposes of standing. Aspex Eyewear,

Inc. v. Altair Eyewear, Inc., 288 F. App’x 697, 705-06 (Fed. Cir.

2008) (finding corporate ownership, operation as exclusive

licensee, and testimony that oral and implied license agreements

existed sufficient to create fact issue); see Waymark Corp. v.

Porta Sys. Corp., 334 F.3d 1358, 1364 (Fed. Cir. 2003) (recognizing

the validity of parties’ argument that there was an alleged

exclusive license); Rite–Hite Corp. v. Kelley Co., Inc., 56 F.3d

1538, 1552 (Fed. Cir. 1995) (en banc) (“To be an exclusive licensee

for standing purposes, a party must have received, not only the

right to practice the invention within a given territory, but also

the patentee’s express or implied promise that others shall be

excluded from practicing the invention within that territory as

well.”) (emphasis added); Weinar v. Rollform, Inc., 744 F.2d 797,

806–07 (Fed. Cir. 1984) (refuting the argument that exclusive

licensing rights need to be recorded as provided for in 35 U.S.C.

§ 261 to be established). Only assignments need be in writing.

35 U.S.C. § 261. Instead, an exclusive license may be established

by evidence of an oral or even an implied exclusive licensing

agreement. Aspex Eyewear, 288 F. App’x at 705-06.5 Where the

5 While Plaintiffs argue that Finnish law controls the question of

assignee of a patent brings an infringement action, it is

permissible the holder of an oral or implied exclusive license to

join it in the litigation. Waymark, 334 F.3d at 1364.

On the present record, Glaston has demonstrated sufficient

evidence to support a finding of an implied exclusive licensing

agreement between it and Uniglass for the ‘540 and ‘911 Patents.

The record shows that Glaston has been granted the exclusive right

to make, use, and sell products under the asserted patents in the

United States. (Doc. 70-2 ¶¶ 4, 7, 10; Doc. 70-3 ¶¶ 8-9, 11, 14.)

Glaston also enjoys the exclusive right to control enforcement of

the asserted patents. (Doc. 70-2 ¶¶ 4, 7, 10; Doc. 70-3 ¶ 14.)

Glaston’s patent manager manages the entire patent portfolio

related to the business, including the two patents held by Uniglass

here, and Glaston, not Uniglass, has paid all maintenance fees on

the asserted patents. (Doc. 70-2 ¶¶ 7, 9.) To the extent any

royalties are ever paid on the licensing of Uniglass patents,

including the two patents asserted in this case, those payments

are paid to Glaston. (Id. ¶ 8.) Moreover, Uniglass does not

supervise Glaston and cannot prevent Glaston from exercising its

rights to fully and exclusively exploit these patents, including

their enforcement, licensing, or sale, and Uniglass cannot

licensing and allows for the licensing agreement to be implied rather

than in writing (Doc. 72 at 22-23), that argument is immaterial. The

same is true under federal law in the United States, so the court need

not decide which body of law controls on this issue.

initiate any action with respect to the ‘540 and ‘911 Patents,

including licensing, unless directed to do so by Glaston. (Id.

¶ 10.) Although Salem cites to the testimony of Jukka Vehmas, the

inventor of the two patents (who assigned all patent rights to

Uniglass) and an employee of Glaston, as refuting the existence of

any exclusive licensing agreement for the two patents at issue

(Doc. 58 at 10-11), when Vehmas was asked who at Uniglass was

responsible for managing Uniglass’s patent portfolio, he responded

“Glaston.” (Doc. 70-4 at 4-5; Doc. 70-5 at 2.) Uniglass’s

chairman of the board, Sasu Koivumaki, confirmed this. (Doc. 70-

2 at 3 (confirming that a written license for the patents was

deemed unnecessary because Glaston directs “[a]ll decisions with

respect to Uniglass” and thus “Glaston has full and exclusive

control over Uniglass and its assets, including its patents”.)

Testimony is likewise consistent that no other party has the right

to make, use, and sell products under the asserted patents, or to

enjoy the enforcement rights. (Doc. 70-4 at 3-5.) Therefore,

Glaston has demonstrated sufficient evidence to support a finding

that it possesses an implied exclusive license from Uniglass as to

both patents.

Salem’s arguments to the contrary are unavailing. Initially,

the fact that the complaint names “Glaston Corporation” instead of

“Glaston Oyj Abp” is not fatal, as Glaston Corporation is merely

the English translation of Glaston Oyj Abp. Glaston’s publicly

available Articles of Association explicitly state as much, and

this document supports the conclusion that Glaston Corporation is

properly named in this case. See Articles of Association of

Glaston Corporation, https://glaston.net/wp-content/uploads/2023/

05/Glaston-Corporation-Articles-of-Association-15-05-2023.pdf

(last accessed Aug. 5, 2024) (“The company’s business name is

Glaston Oyj Abp; in English, Glaston Corporation. The company is

domiciled in Helsinki, Finland.”).

Moreover, Salem’s argument that any theory of rights Glaston

has are premised on its parent-subsidiary relationship with

Uniglass is unnecessarily restrictive. It is true that total

corporate ownership of the patent holder alone is insufficient to

confer standing. See Spine Solutions, 620 F.3d at 1317-18.

Additional facts, however, may elevate the relationship beyond

mere ownership. For example, in Alarm.com, Inc. v. SecureNet

Technologies LLC, 345 F. Supp. 3d 544 (D. Del. 2018), the district

court found standing based on an implied exclusive licensing

theory. There, the disputed plaintiff corporation wholly owned

the plaintiff corporation that held the patent at issue, the two

companies shared the same president, the businesses had no

operations separate and distinct from one another, and the parent

corporation was actually responsible for the practice of the

patent. Id. at 550-552. Similar additional facts are present

here. In addition to the record evidence already recited, there

is evidence that Uniglass is the equivalent “shell” corporation to

the subsidiary corporation in Alarm.com. Uniglass has no

employees, no capital assets, no documents, and no business

activities separate from Glaston. (Doc. 70-2 ¶ 5.) Uniglass

exists as an internal Glaston holding company for certain patents

originally assigned to it, including the patents at issue here.

(Id.) All decisions made with respect to Uniglass are at the

discretion and direction of Glaston acting through its leadership

team (id. ¶¶ 5-6; Doc. 70-3 ¶ 10). Therefore, Plaintiffs’ theory

of exclusive licensing is based on more than mere corporate

ownership, and there are multiple facts sufficient to support the

existence of an implied license.

Salem’s argument that other entities are manufacturing and

selling the patents is similarly insufficient at this stage to

defeat Glaston’s constitutional standing. Salem argues that

Glaston Finland Oy produces furnaces pursuant to the patents and

Glaston America, Inc. sells them, defeating any argument that

Glaston Corporation is an exclusive licensee. (Doc. 84 at 10-11.)

However, exclusive licensing does not require that others not be

allowed to practice the patents; rather, it requires that the

exclusive licensee have the power to control which other entities

engage in that business within their exclusionary domain. See,

e.g., Novartis AG v. Actavis, Inc., 243 F. Supp. 3d 534, 540-44

(D. Del. 2017); WiAV Sols. LLC v. Motorola, Inc., 631 F.3d 1257,

1266-67 (Fed. Cir. 2010) (“[A]n exclusive licensee does not lack

constitutional standing to assert its rights under the licensed

patent merely because its license is subject not only to rights in

existence at the time of the license but also to future licenses

that may be granted only to parties other than the accused.”);

Lone Star, 925 F.3d at 1234-35; see also 8 Donald S. Chisum, Chisum

on Patents § 21.03 (“This theory should govern who constitutes an

exclusive licensee for standing purposes. The issue should be

whether the patent owner is precluded after the date of the

instrument from granting further licenses within the stated area

given to the licensee.”) (footnote omitted).

Here, there is evidence that Glaston is the entity with this

control. (See, e.g., Doc. 70-2 ¶ 10 (indicating that Glaston has

effective complete control over Uniglass’s decision-making such

that Glaston maintains an exclusive license to the patents).) The

fact that the corporations Salem contends are practicing the

patents (Glaston America and Glaston Finland) are subsidiaries and

part of the Glaston group of companies is consistent with the

conclusion that Glaston is an exclusive licensee, as these other

companies may merely work at Glaston’s direction. Cf. WiAV Sols.,

631 F.3d at 1266-67 (finding that establishing standing does not

require a plaintiff to show “that it has the right to exclude all

others from practicing the patent” but merely “that it has the

right under the patents to exclude the Defendants from engaging in

the alleged infringing activity and therefore is injured by the

Defendants’ conduct” (emphasis in original)).

Therefore, Plaintiffs have adduced sufficient evidence to

support the conclusion that Glaston enjoys exclusionary rights in

the ‘540 and ‘911 Patents, which is sufficient to withstand Salem’s

challenge Glaston’s constitutional standing to sue at this stage.

Having reached this conclusion, the court need not address

Glaston’s alternative arguments. Salem’s motion to dismiss for

lack of subject matter jurisdiction will therefore be denied.

C. Motions to Seal

Both parties have moved to seal certain documents and

information pertaining to Salem’s motion to dismiss and related

briefing. (See Docs. 60, 73, 86.) In particular, Salem seeks to

seal the following:

•

A description of a portion of the deposition

transcript of Jukka Vehmas (December 8, 2023)

(appearing in Doc. 58 and under provisional seal in

Doc. 61); and

•

An excerpt from the deposition transcript of Jukka

Vehmas (December 8, 2023) (appearing in Doc. 59-3

and under provisional seal in Doc. 62-3).

(See Doc. 60.) Plaintiffs filed a response brief in support of

Salem’s request to seal. (Doc. 64.) Plaintiffs also seek to seal

the following:

•

A description of the testimony in portions of the

February 1, 2024 declaration of Sasu Koivumäki

(appearing in Doc. 70 and under provisional seal in Doc.

72);

•

An excerpt from the February 1, 2024 declaration of Sasu

Koivumäki (appearing in Doc. 70-2 and under provisional

seal in Doc. 72-2);

•

A description of portions of the February 2, 2024

declaration of Henri Kaikkonen (appearing in Doc. 70 and

under provisional seal in Doc. 72);

•

An excerpt from the February 2, 2024 declaration of Henri

Kaikkonen (appearing in Doc. 70-3 and under provisional

seal in Doc. 72-3);

•

A description of portions of the December 8, 2023

deposition transcript of Jukka Vehmas (appearing in Doc.

70 and under provisional seal in Doc. 72);

•

An excerpt from the December 8, 2023 deposition

transcript of Jukka Vehmas (appearing in Doc. 70-4 and

under provisional seal in Doc. 72-4); and

•

A description of the indemnification arrangement of a

party in this case (appearing in Doc. 70 and under

provisional seal in Doc. 72).

(See Doc. 73.) Salem, too, filed a response brief supporting this

motion to seal. (Doc. 78.)6 Finally, the parties jointly seek to

seal the following information pursuant to a consent motion filed

by Salem:

•

Information describing the identity and contact

information of Glaston Finland OY and Glaston

America, Inc.’s customers (appearing in Doc. 84 and

under provisional seal in Doc. 87).

(Doc. 86.) The parties are thus in agreement with one another and

have asked the court to seal portions of deposition transcripts

and declarations related to the proprietary business operations or

relationships and confidential business documents of the parties

in this case, as well as any references in the briefing to that

information.

“[T]he courts of this country recognize a general right to

inspect and copy . . . judicial records and documents.” Nixon v.

Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978). “The operations

of the courts and the judicial conduct of judges are matters of

utmost public concern,” Landmark Commc’ns, Inc. v. Virginia, 435

U.S. 829, 839 (1978), “and the public’s business is best done in

public,” Cochran v. Volvo Grp. N. Am., LLC, 931 F. Supp. 2d 725,

6 Salem protests the inclusion of any reference to the indemnification

arrangement of a party in this case and asks specifically that it be

struck or alternatively redacted. (Doc. 78 at 2-5.) Plaintiffs oppose

any motion to strike the inclusion of those references. (Doc. 83). For

the reasons stated, supra, striking is not proper because the document

is not a pleading. However, the court considers the request to redact

the information, on which all parties agree.

727 (M.D.N.C. 2013). “When parties call on the courts, they must

accept the openness that goes with subsidized dispute resolution

by public (and publicly accountable) officials.” Doe v. Pub.

Citizen, 749 F.3d 246, 271 (4th Cir. 2014) (internal quotation

marks omitted).

When a party makes a request to seal judicial records, a

district court “must comply with certain substantive and

procedural requirements.” Va. Dep’t of State Police v. Wash. Post,

386 F.3d 567, 576 (4th Cir. 2004). Procedurally, the court must

(1) give the public notice and a reasonable opportunity to

challenge the request to seal; (2) “consider less drastic

alternatives to sealing”; and (3) if it decides to seal, make

specific findings and state the reasons for its decision to seal

over the alternatives. Id. “As to the substance, the district

court first ‘must determine the source of the right of access with

respect to each document,’ because [o]nly then can it accurately

weigh the competing interests at stake.” Id. (citing Stone v.

Univ. of Md. Med. Sys. Corp., 855 F.2d 178, 181 (4th Cir. 1988)).

“Generally, the public interest in disclosure heightens as the

underlying motions are directed more to the merits and as the case

proceeds toward trial.” SmartSky Networks, LLC v. Wireless Sys.

Sols., LLC, 630 F. Supp. 3d 718, 732 (M.D.N.C. 2022). Under this

court’s Local Rules, “[n]o motion to seal will be granted without

a sufficient showing by the party claiming confidentiality as to

why sealing is necessary and why less drastic alternatives will

not afford adequate protection, with evidentiary support.”

M.D.N.C. L.R. 5.4(c)(3).

Sealing confidential business information may be appropriate

absent an improper purpose and countervailing interests. See

Nixon, 435 U.S. at 598; Adjabeng v. GlaxoSmithKline, LLC, No.

1:12CV568, 2014 WL 459851, at *3 (M.D.N.C. Feb. 5, 2014). In order

to determine whether confidential business information should be

sealed, courts consider (1) “whether the party has shown that the

information sought to be sealed is confidential”; (2) “whether

disclosure would harm the party’s competitive standing or

otherwise harm its business interests”; (3) “whether the motion is

narrowly tailored”; and (4) “whether the interests in non-

disclosure are compelling and heavily outweigh the public's

interest in access to the information.” Sims v. BB&T Corp., No.

1:15-CV-732, 2018 WL 3466945, at *2 (M.D.N.C. July 18, 2018).

Furthermore, “personal information of third parties is often

subject to protection, given the privacy interests at stake for

individuals who are not part of the suit.” Stevens v. Cabarrus

Cnty. Bd. Ed., 1:20-CV-335, 2022 WL 4620906, at *15 (M.D.N.C. Sept.

30, 2022). However, it is not enough to assert generally that

exhibits contain “sensitive and confidential business information”

without supplying “specific underlying reasons for the district

court to understand how [the party’s interest] reasonably could be

affected by the release of such information.” Trs. of Purdue Univ.

v. Wolfspeed, Inc., No. 1:21-CV-840, 2023 WL 2776193, at *2

(M.D.N.C. Feb. 28, 2023) (quoting Wash. Post, 386 F.3d at 579).

For the reasons set out below, the court will grant the

parties’ motions to seal except to the extent the court has found

it necessary to discuss and thus reveal those facts in this

memorandum opinion.

As to the first motion to seal, which pertains to portions of

the deposition transcript of Jukka Vehmas and Salem’s description

of it (appearing in Docs. 58 & 59-3 (redacted) and Docs. 61 & 62-

3 (sealed)), the parties argue that the portions they seek to seal

contain limited confidential information regarding Glaston’s

proprietary business interests and strategies, specifically

confidential and proprietary business information in the form of

corporate strategies on intellectual property licensing to third

parties and monetization of corporate intellectual property.

(Doc. 64 at 3-4.) Sealing this information would be appropriate

here, as courts will seal confidential business information where

access to judicial records could provide a “source[] of business

information that might harm a litigant’s competitive standing,”

SmartSky Networks, LLC v. Wireless Sys. Sols., LLC, No. 20-cv-

00834, 2022 WL 4933117, at *8 (M.D.N.C. Sept. 26, 2022) (quotation

omitted), particularly licensing and marketing strategies,

Smithkline Beecham Corp. v. Abbott Labs., 1:15CV360, 2017 WL

11552659, at *5-*6 (M.D.N.C. Mar. 7, 2017). In addition, the

redactions have previously been reviewed and narrowed by both

parties (see Docs. 62, 65), and there are no less drastic

alternatives available. The sealed information involves only two

pages (pages 153-54) of the Vehmas deposition, and Salem only

reveals fourteen lines of the quote of it (comprising four

questions and responses) in its brief. Moreover, in reaching its

decision, the court was able to consider the evidence but discuss

it in general terms without undermining the core of the analysis.

Therefore, sealing portions of the deposition transcript of Jukka

Vehmas and Salem’s description of it (appearing in Docs. 58 & 59-

3 (redacted) and Docs. 61 & 62-3 (sealed)) is proper here, and the

court will grant that motion.

As to the second motion to seal, which pertains to portions

of two pages of the February 1, 2024 declaration of Sasu Koivumäki

and descriptions of it (appearing in Docs. 70 & 70-2 (redacted)

and Docs. 72 & 72-2 (sealed)), portions of the February 2, 2024

declaration of Henri Kaikkonen and descriptions of it (appearing

in Docs. 70 & 70-3 (redacted) and Docs. 72 & 72-3 (sealed)),

portions of the December 8, 2023 deposition transcript of Jukka

Vehmas and descriptions of it (appearing in Docs. 70 & 70-4

(redacted) and Docs. 72 & 72-4 (sealed)), and a description of an

indemnification arrangement of a party in this case (appearing in

Doc. 70 (redacted) and Doc. 72 (sealed)), the balance of factors

is a bit different. As above, the parties correctly argue that

these materials contain sensitive, confidential information that

is integral to the competitive operations of the parties, including

the details of a party’s contractual relationship with one of its

suppliers and additional proprietary business information in the

form of corporate management, control, and strategy, particularly

in relation to management of the patent portfolio. (Docs. 73, 78,

83.) Likewise, the parties have worked to narrow their redactions

together, and no alternative less drastic remedy is available.

However, in reaching its decision on the merits of the motion, the

court determined it was necessary to rely on and disclose some of

the information the parties sought to seal. In particular,

information about Glaston’s ownership relationship with Uniglass

and the details of its arrangement regarding rights to the two

patents at issue were indispensable to the court’s finding that an

implied exclusive licensing agreement may exist. Therefore,

public interest in access to the information that the court relied

upon is substantial, and it outweighs the interest of the parties

in sealing that information. On balance, then, the court will

deny the motion to seal to the extent that it conflicts with the

disclosures made by the court herein and will otherwise grant the

motion.

Commensurate with this ruling, the redacted briefs and

exhibits at docket entries 70, 70-2, 70-3, and 70-4 and their

sealed counterparts at docket entries 72, 72-2, 72-3, and 72-4

must be modified so that the redactions are limited to that which

the court has left undisturbed in its analysis and the information

the court relied upon and revealed are made public. In Plaintiffs’

response brief (Docs. 70 (redacted) & 72 (sealed)), the redactions

should be limited so that the following passages are no longer

redacted:

•

The passage beginning with “and all decisions made

with respect to . . .” and ending with

“. . . separate from Glaston. Exh. 1 ¶ 5; Exh. 3

at 20-22.” (Doc. 70 at 9-10; Doc. 72 at 9-10.)

•

The passage beginning with “Glaston’s patent

manager manages . . .” and ending with

“. . . litigation, at Glaston’s control.” (Doc. 70

at 10; Doc. 72 at 10.)

•

The passage beginning with “to the extent any

royalties . . .” and ending with “. . . made to

Glaston. Exh. 1 ¶ 8.” (Doc. 70 at 20; Doc. 72 at

20.)

•

The passage beginning with “Glaston also has the

exclusive right . . .” and ending with

“. . . asserted patents. Exh. 1 ¶¶ 4, 7, 10; Exh.

2 ¶ 14.” (Doc. 70 at 21; Doc. 72 at 21.)

•

The passages beginning with “Uniglass cannot

diminish . . .” and ending with “. . . assign its

interests in the patent. Ex. 1 ¶ 10.” (Doc. 70 at

22; Doc. 72 at 22.)

•

The passage which states “the parent company

controls all business of the subsidiary.” (Doc. 70

at 24; Doc. 72 at 24.)

•

The passage which states “at the control of

Glaston.” (Doc. 70 at 26; Doc. 72 at 26.)

•

The passages beginning with “When asked ‘who . . .”

and ending with “. . . ‘Glaston.’ Id. pp. 157-58.”

(Doc. 70 at 26-27; Doc. 72 at 26-27.)

•

The passage which states “Uniglass has no

documents.” (Doc. 70 at 27; Doc. 72 at 27.)

•

The passage beginning with “When asked ‘who . . .”

and ending with “. . . ‘Glaston.’ Id. pp. 157-58.”

(Doc. 70 at 26-27; Doc. 72 at 26-27.)

•

The passage beginning with “the only discovery

provided . . .” and ending with “. . . no

employees, documents or records.” (Doc. 70 at 29;

Doc. 72 at 29.)

In the declaration of Sasu Koivumki (Docs. 70-2 (redacted) &

72-2 (sealed)), the redactions should be limited so that they no

longer include the redactions proposed to paragraphs 5, 7, 8, 9,

and 10. In the declaration of Henri Kaikkonen (Docs. 70-3

(redacted) & 72-3 (sealed)), the redactions to the document should

be removed in their entirety. In the provided excerpts from the

deposition transcript of Jukka Vehmas (Docs. 70-4 (redacted) & 72-

4 (sealed)), the redactions should be limited so that they no

longer include line 25 on page 157 and lines 1-2 on page 158 of

the transcript. Once these modifications are made, the parties

shall file the new copies of these documents on the docket.

Finally, as to the third motion to seal, which pertains to

information describing the identity and contact information of the

customers of Glaston Finland OY and Glaston America, Inc.

(appearing in Doc. 84 (redacted) and Doc. 87 (sealed)), the

proprietary interests of Glaston as to the identity of these

customers whose information would otherwise be disclosed without

their consent clearly predominate. Therefore, finding that this

information has properly been identified as confidential, the

court will grant the consent motion to seal this information.

III. CONCLUSION

For the reasons stated herein,

IT IS ORDERED that the motion of Glaston and Uniglass to

strike Salem’s reply brief (Doc. 90) is DENIED but that Plaintiffs’

alternative motion to file a surreply is GRANTED. Plaintiffs shall

file their proposed surreply (Doc. 90-1) as a separate docket entry

forthwith.

IT IS FURTHER ORDERED that the parties’ motions to seal (Docs.

60, 73, 86) are GRANTED IN PART and DENIED IN PART. The parties

shall forthwith file new redacted versions of the documents subject

to the motion to seal consistent with this memorandum opinion and

order.

IT IS FURTHER ORDERED that Salem’s motion to dismiss Glaston

for lack of constitutional standing pursuant to Federal Rule of

Civil Procedure 12(b)(1) is DENIED. (Doc. 57.)

/s/ Thomas D. Schroeder

United States District Judge

August 9, 2024