Opinion
No. 00-CV-0689E(M)
February 16, 2001
ATTORNEYS FOR THE PLAINTIFF: Michael R. McGee, Esq. and Jennifer L. Friedman, Esq., c/o McGee Gelman, Buffalo, NY.
ATTORNEYS FOR THE DEFENDANT: Jeffrey A. Sadowski, Esq. and Melanye K. Johnson, Esq., c/o Howard and Howard Attorneys, Bloomfield Hills, MI. Karen R. Kaczmarski, Esq., c/o Saperston Day, Buffalo, NY.
MEMORANDUM and ORDER
Plaintiff filed this action August 10, 2000 claiming that defendant had infringed two of its patents. An Answer, with counterclaims, was filed September 11, 2000. Presently before this Court is plaintiff's motion to dismiss defendant's counterclaims, to strike certain affirmative defenses and for a ruling that defendant had waived its defense of lack of personal jurisdiction. Such motion will be granted in part and denied in part.
Plaintiff is a New York corporation engaged in the business of manufacturing and selling, inter alia, "combined wall mount and electrical outlet boxes." Compl ¶ 2. Defendant is a Michigan corporation engaged in the manufacturing and selling [of] building products and building accessories. Answer ¶ 3. According to the Complaint, plaintiff alleges that it was assigned on July 31, 2000 United States Patent No. 5,920,033 ("the '033 patent") entitled "Combined Wall Mount and Electrical Outlet Box." Compl. ¶ 8. Plaintiff also alleges to have been assigned on July 31, 2000 United States Patent No. 5,578,791 ("`the 791 patent") entitled "Combined Wall Mount and Electrical Outlet Box." Compl. ¶ 14. Pursuant to the "assignment" of each patent, plaintiff states that it acquired the exclusive right to make, use, offer for sale and sell in the United States products embodying the invention of each patent. Compl. ¶¶ 9, 15. Such allegedly gave plaintiff the right to sue and seek relief for infringement of either. Ibid. With regard to each patent, plaintiff assets that defendant has been willfully infringing on "one or more of the product claims * * * through its manufacture, use, sale and/or offer for sale in the United States of combined wall mount and electrical outlet boxes." Compl. ¶¶ 10-11, 16-17.
The Complaint does not indicate what type of assignment was granted — i.e., whether plaintiff was granted legal title to the patent as by an exclusive license or whether plaintiff was granted a non-exclusive license thereto. The Complaint does state, however, that the patent was "duly and legally issued to John J. Bosse, Jr., who then "duly" assigned such patent to plaintiff. Compl. ¶¶ 8, 14.
See supra note 1.
Preliminarily, this Court notes that nowhere in defendant's Answer is a defense of lack of personal jurisdiction expressly asserted. If defendant has not raised such defense, it is axiomatic to state that its failure to raise this "defense of lack of jurisdiction over the person" may not now be raised because it was "neither made by motion * * * nor included in a responsive pleading * * *." FRCvP 12(h)(1). Indeed, defendant appears to have tacitly admitted the same by noting that, while "it has not waived any objections to personal jurisdiction" and "can make a defense to personal jurisdiction in a motion or in a responsive pleading or an amendment thereof," defendant "has yet to make any motions in this action, and [defendant} still has the opportunity to amend its Answer, [and] Affirmative Defenses *** as permitted by Federal Rule 15(a)." Defendant's Amended Opposition Brief at 4. However and as indicated by plaintiff, some "semblance" of an objection to personal jurisdiction is contained in Paragraph 6 of the Answer which states that defendant "lacks knowledge or information sufficient to form a belief as to the truth of the allegations contained in Paragraph 6 [of the Complaint], and must deny [the] same," such paragraph of the Complaint stating that this Court can exercise in personam jurisdiction over defendant. Plaintiff's Memorandum at 10. Although technical compliance with FRCvP 12(h)(1) would indicate that defendant waived the jurisdictional defense of lack of personal jurisdiction by not expressly asserting the same, in light of the aforementioned denial by defendant in its Answer such a ruling would elevate form over substance. Accordingly and because plaintiff was on notice, by defendant's denial of Paragraph 6 of the Complaint, that defendant contested plaintiff's assertion of personal jurisdiction, this Court cannot rule that defendant has waived its right to a defense of lack of personal jurisdiction by failing to assert such in its Answer.
"FRCvP" refers to the Federal Rules of Civil Procedure.
But see Morgan Guaranty Trust Co. of New York v. Blum, 649 F.2d 342, 345 (5th Cir. 1981) (noting that, pursuant to FRCvP 12(h)(1), a "personal jurisdiction defense cannot be raised in an amendment which requires leave of the court")
In its Answer, defendant raises six affirmative defenses, and plaintiff argues that four of such are improper. The disputed affirmative defenses are (1) that the "Complaint fails to state a claim upon which relief can be granted," (2) that "[t]he '033 [patent] is invalid and unenforceable," (3) that "[t]he '791 patent is invalid and unenforceable" and (4) that defendant reserved "the right to add additional Affirmative Defenses as discovery proceeds in this case." Affirmative Defenses ¶¶ 1, 4, 5, 6. Defendant also requests a declaratory judgment that, inter alia, United States Patent No. 5,952,610 ("the '610 patent"), held by plaintiff, is invalid and that the '033, '791 and '610 patents are unenforceable due to inequitable conduct. Counterclaim ¶¶ 7-8, 10.
To properly support its affirmative defense that plaintiff has failed to state a patent infringement claim, defendant must demonstrate that plaintiff has failed to allege "that * * * defendant makes, uses, offers to sell, or sells the patented invention within the United States, during the term of the patent, and without the authority of the patent holder." Advanced Cardiovascular Sys., Inc. v. Medtronic, Inc., 41 U.S.P.Q.2d 1770, 1773 (N.D. Cal. 1996); see also 35 U.S.C. § 271(a) (stating that, "[e]xcept as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefore, infringes the patent"). A review of the Complaint, however and as indicated above, reveals that plaintiff has stated a claim for patent infringement. Specifically, plaintiff has stated that it "acquired the right to make, use, offer for sale and sell in the United States products embodying the invention" of each patent and that defendant willfully infringed "one or more of [each patent's] product claims *** through its manufacture, use, sale and/or offer for sale in the United States of combined wall mount and electrical outlet boxes." Compl. ¶¶ 8-11, 14-17. When reviewing an allegation that plaintiff has failed to state a claim upon which relief can be granted and for the purpose of evaluating the sufficiency of pleadings, this Court accepts as true all factual allegations in the Complaint and draws therefrom all reasonable inferences in the plaintiff's favor. Cooper v. Parksky, 140 F.3d 433, 440 (2d Cir. 1998). Given that plaintiff has alleged the essential elements of patent infringement, its pleadings are sufficient to state claims for patent infringement and require this Court to strike this affirmative defense.
To properly support defendant's affirmative defenses that the '033 and '791 patents are invalid and unenforceable under the patent laws — including 35 U.S.C. § 102, 103 and 112 —, FRCvP 8 requires that such defenses be "set forth affirmatively" and give fair notice of the ground for each such affirmative defense. 5 Charles Alan Wright Arthur R. Miller, Federal Practice and Procedure 2d § 1274. In this regard, the undersigned is in agreement with the premise that, "[s]ince sections 101, 102, 103, and 112 provide numerous grounds for finding a patent invalid, defendant must provide a more specific statement of the basis for this defense in order to give [plaintiff] fair notice of the claims being asserted." Advanced Cardiovascular, at 1773. Accordingly, this Court must strike these affirmative defenses and grant leave to amend.
Defendant's affirmative defense which seeks to reserve "the right to add additional Affirmative Defenses as discovery proceeds in this case" is similarly unavailing. If, by the inclusion of such defense, defendant wishes to reserve the unilateral right to add new and different affirmative defenses as they become known to it at indeterminate times in the future, any such addition would violate, inter alia, the fair notice requirement of FRCvP 8 and circumvent FRCvP 15. See FRCvP 15(a) ("A party may amend the party's pleading once as a matter course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, the party may so amend it at any time within 20 days after it is served. Otherwise a party may amend the party's pleading only by leave court or by written consent of the adverse party; and leave shall be freely given when justice so requires."); see also FRCvP 12(f) (allowing this Court to strike "from any pleading any insufficient defense or any redundant, [or] immaterial matter"). To add any such additional defenses, the proper course is for defendant to proceed under FRCvP 15. Accordingly, defendant's affirmative defense which seeks to reserve to itself the unilateral right to add additional affirmative defenses is stricken with prejudice.
Insofar as defendant desires a declaratory judgment invalidating the '610 patent, it is incumbent upon defendant to establish the existence of an actual case or controversy. See 28 U.S.C. § 2201 ("In a case of actual controversy within its jurisdiction * * * any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought."). "[T]hat a patent exists does not alone create a right to challenge its validity in court." Intern. Medical Prosthetics v. Gore Enterprise, 787 F.2d 572, 576 (Fed. Cir. 1986). The actual case or controversy requirement is met where there is "both (1) an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit, and (2) present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity." Amana Refrigeration, Inc. v. Quadlux, Inc., 172 F.3d 852, 855 (Fed. Cir. 1999) In making this determination, the first step focuses on the patentholder's conduct, the second step on "that of the declaratory judgment plaintiff." Minds-Eye-View, Inc. v. Interactive Pictures Corp., 58 F. Supp.2d 5, 8 (N.D.N.Y. 1999). This is an "objective test is to be applied to the facts as they existed at the time "the claim was asserted." Bausch Lomb Inc. v. CIBA Corp., 39 F. Supp.2d 271, 273 (W.D.N.Y. 1999).
Citation and quotation marks omitted.
A review of defendant's papers in this case does not show the existence of such case or controversy with regard to the '610 patent. Indeed, defendant does not even allege that it has ever been accused of infringing the '610 patent. In support of such apprehension, defendant argues that because "the '610, '033, and '791 patents are related to the same or similar inventions and because Plaintiff has not hesitated to sue [defendant] on the '033 and '791 patents in the current action," it is reasonable to believe that a '610 patent infringement suit could be forthcoming. Defendant's Amended Opposition Brief at 2. However, such allegations alone d0 not establish a reasonable apprehension of a patent infringement suit. Furthermore, conspicuously absent from defendant's papers is any allegation that it is engaged in present activity which could constitute grounds for an infringement claim. Accordingly, this Court will dismiss without prejudice the first counterclaim with regard to the '610 patent and will grant leave to amend.
Defendant's counterclaim which seeks to render the '033, '791 and '610 patents unenforceable due to inequitable conduct is likewise unavailing. "According to the doctrine of inequitable conduct, a patent is rendered unenforceable if the patent applicant acted inequitably before the [Patent and Trademark Office] in prosecuting the patent." Chiron Corp. v.Abbott Labs., 156 F.R.D. 219, 220 (N.D. Cal. 1994). Moreover, it is generally accepted — and the parties d0 not dispute such in this case — that "an allegation of inequitable conduct sounds in fraud and therefore must comply with [FRCvP] 9(b)." Aktiebolag v. Genpharm, No. 98 Civ. 3657 (BSJ), 2000 WL 257119, at *1 (S.D.N.Y. Mar. 8, 2000). FRCvP 9(b) relevantly states that, "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." "[A] complaint making such allegations must `(1) specify the statements that the [defendant] contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.'" Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1128 (2d Cir. 1994) (quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993)). In support of its assertion that plaintiff acted inequitably, defendant argues that plaintiff "knowingly failed to disclose to the United States Patent and Trademark Office material information about prior art which anticipates, or renders obvious, the claimed invention" and that plaintiff's "failure to disclose this and other potentially material information renders the three patents unenforceable." Counterclaim ¶ 10. However, these general allegations d0 not satisfy any notion of particularity. Defendant has not provided "the particulars of what [plaintiff] failed to disclose and the circumstances indicating [plaintiff's] intent to mislead the [Patent and Trademark Office]." Advanced Cardiovascular, at 1775. In short, these allegations are simply too vague to inform plaintiff of those facts underlying defendant's claim of inequitable conduct, such that plaintiff can be expected to have notice of the offending conduct. Id., at 1774; see also Chiron Corp., at 221 ("Vague allegations of inequitable conduct may also be the launching of a `fishing expedition,' allowing the accuser to embark on wide-ranging discovery upon a thimble-full of facts. This is precisely the sort of tactical maneuvering that [FRCvP] 9(b) is designed to deter."). Consequently, this Court will dismiss the second counterclaim without prejudice and grant leave to amend.
Accordingly, it is hereby ORDERED that defendant's first and sixth affirmative defenses are dismissed with prejudice, that defendant's fourth and fifth affirmative defenses are dismissed without prejudice, that defendant's first counterclaim is dismissed without prejudice with regard to the '610 patent, that defendant's second counterclaim is dismissed without prejudice, that plaintiff's motion is in all other respects denied and that any amended answer must be filed not later than March 3, 2001.
DATED: Buffalo, N.Y. February 14, 2001.