Opinion
Case No. 04-2125-GTV.
November 3, 2004
MEMORANDUM AND ORDER
This patent infringement action is before the court on Plaintiff Great Plains Laboratory, Inc. and Counterclaim-Defendant William Shaw's motion to dismiss one counterclaim and strike three affirmative defenses asserted by Defendant Metametrix Clinical Laboratory ("Metametrix") (Doc. 24). Plaintiff provides analytical products and services related to nutritional and metabolic testing of medical patients, including autistic patients. William Shaw is Plaintiff's president. In furtherance of its business, Plaintiff obtained U.S. Patent No. 5,686,311, ("the '311 patent") entitled "Diagnosis of Autism and Treatment Therefor." Plaintiff brought this action against Defendants Metametrix and Great Smokies Diagnostic Laboratory, alleging that they have engaged in patent infringement and have induced others to infringe the '311 patent. Defendant Metametrix asserted several affirmative defenses, including unclean hands, inequitable conduct before the U.S. Patent and Trademark Office, and misuse. Defendant Metametrix also requested as one of its counterclaims that the court find the '311 patent unenforceable. Plaintiff and William Shaw argue that Defendant Metametrix's affirmative defenses must be struck and the counterclaim must be dismissed because they are not pleaded with particularity. For the following reasons, the court grants Plaintiff and William Shaw's motion in part and denies it in part (Doc. 24).
First, Defendant Metametrix agrees that the affirmative defense of inequitable conduct before the Patent and Trademark Office must be pleaded with the particularity required under Fed.R.Civ.P. 9(b), see Ferguson Beauregard/Logic Controls v. Mega Sys., LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003), and withdraws that affirmative defense. Accordingly, the motion is granted with respect to the affirmative defense of inequitable conduct.
Second, Defendant Metametrix contends that both defenses of unclean hands and misuse need only be pleaded pursuant to Fed.R.Civ.P. 8. The court agrees. See Resqnet.com, Inc. v. Lansa, Inc., No. 01-3578 (RWS), 2004 WL 1627170, at *4 (S.D.N.Y. July 21, 2004) (holding that misuse and inequitable conduct are different defenses and have different pleading standards);Raines v. Switch Mfg., No. 96-2648 DLJ, 1997 WL 578547, at *7 (N.D. Cal. July 28, 1997) (granting the defendant leave to amend to plead unclean hands defense in conformance with Rule 8); see also Advanced Cardiovascular Sys., Inc. v. Medtronic, Inc., No. 95-3577 DLJ, 1996 WL 467293, at *13 (N.D. Cal. July 24, 1996) (holding that unclean hands and misuse only must be pleaded with particularity where the defenses rest on allegations of inequitable conduct before the Patent and Trademark Office).
Finally, Defendant Metametrix argues that it has met the relaxed pleading standards of Fed.R.Civ.P. 8. In its Answer and Counterclaims, Defendant Metametrix alleges, inter alia, that: (1) Plaintiff and Shaw's claim that they have the exclusive "legal use of the microbial metabolites for autism" is well beyond the scope of the '311 patent, and is made in an attempt to discredit Metametrix; (2) Plaintiff and Shaw have contacted customers and potential customers of Metametrix, claiming that these customers and potential customers and Metametrix are infringing the '311 patent, when that claim is false — all in an attempt to intimidate such customers and discourage their creating or maintaining a relationship with Metametrix; (3) Plaintiff and Shaw conducted a purported "blind" evaluation of Metametrix's testing procedures, which was a sham perpetrated in an attempt to wrongfully discredit Metametrix; (4) Plaintiff and Shaw "fraudulently convey[ed] to the public that Metametrix's testing was and is unreliable"; (5) Plaintiff and Shaw falsely conveyed to the public that Metametrix did not engage in industry standard proficiency testing; and (6) Plaintiff and Shaw may be engaging in Medicare fraud and/or abuse if Medicare approves and pays for their organic testing, as they imply in a further attempt to discredit Metametrix.
These factual allegations provide support for both a misuse defense and an unclean hands defense. Misuse occurs when a patentee tries to "broaden the 'physical or temporal scope' of the patent grant with anticompetitive effect." Va. Panel Corp. v. MAC Panel Co., 133 F.3d 860, 868 (Fed. Cir. 1997) (citations omitted). "The defense of misuse is . . . an outgrowth of the equitable principle of unclean hands." McCullough Tool Co. v. Well Surveys, Inc., 395 F.2d 230, 238 (10th Cir. 1968) (citation omitted). The unclean hands defense is based on the maxim that "he who comes into equity must come with clean hands." Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814 (1945).
Plaintiff and Shaw do not acknowledge these allegations. They appear to rest their argument on the fact that Defendant Metametrix merely states, "Plaintiff's claims are barred by the doctrine of unclean hands," and "Plaintiff has engaged in misuse of the '311 Patent" in the "Affirmative Defenses" portion of its Answer. The court concludes that Defendant Metametrix's Answer and Counterclaims should be read as a whole. When read as a complete document, the allegations satisfy Rule 8's requirement of a "short and plain" statement.
Plaintiff and William Shaw offer only one reason for dismissing Defendant Metametrix's counterclaim seeking a ruling that the '311 patent is unenforceable: it is based on affirmative defenses that should be struck. Because the court has denied Plaintiff and Shaw's motion to strike the defenses other than inequitable conduct, it also denies the motion to dismiss.
IT IS, THEREFORE, BY THE COURT ORDERED that Plaintiff and Counterclaim-Defendant William Shaw's motion to strike three affirmative defenses and one counterclaim of Defendant Metametrix (Doc. 24) is granted in part and denied in part. The court strikes the affirmative defense of inequitable conduct before the Patent and Trademark Office, but the other defenses and the counterclaim remain in the case.
Copies or notice of this order shall be transmitted to counsel of record.
IT IS SO ORDERED.