Roland Corporation v. Inmusicbrands, Inc.

NOTICE OF MOTION AND MOTION to Dismiss Counterclaims and Strike Affirmative Defenses

C.D. Cal.November 10, 2016

4851-5162-1180.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Victor de Gyarfas (State Bar No. 171950) email: vdegyarfas@foley.com Sandeep Deol (State Bar No. 285545) email: sdeol@foley.com FOLEY & LARDNER LLP 555 South Flower Street, Suite 3500 Los Angeles, CA 90071-2411 Telephone: 213-972-4500 Facsimile: 213-486-0065 Attorneys for Plaintiff ROLAND CORPORATION UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION ROLAND CORPORATION, a Japanese corporation Plaintiff, v. INMUSICBRANDS, INC., a Florida Corporation, Defendant. Case No: 2:16-cv-6256 CBM (AJWx) PLAINTIFF’S NOTICE OF MOTION AND MOTION TO DISMISS COUNTERCLAIMS AND STRIKE AFFIRMATIVE DEFENSES; MEMORANDUM OF POINTS AND AUTHORITIES Date: December 13, 2016 Time: 10:00 a.m. Judge: Hon. Consuelo B. Marshall Ctrm: 2 Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 1 of 20 Page ID #:355 4851-5162-1180.1 i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS I. Introduction ..................................................................................................... 1 II. Factual Background ......................................................................................... 1 A. Defendant’s Affirmative Defenses ....................................................... 1 B. Defendant’s Counterclaims ................................................................... 3 III. Applicable Legal Standards ............................................................................ 4 A. Motions To Dismiss And Rule 8(a)(2) Pleading Of Claims For Relief4 B. Motions To Strike ................................................................................. 4 C. Pleading Rule 8(c) Affirmative Defenses ............................................. 5 IV. Defendant’s Counterclaims Lack An Adequate Factual Basis To Support The Applicable Pleading Standards And Should Be Dismissed ............................... 7 V. All Of Defendant’s “Defenses” Either Are Pleaded Inadequately Or Are Not Affirmative Defenses And Should Be Stricken......................................................... 7 A. Defendant’s First “Defense” - Failure To State A Claim .................... 8 B. Defendant’s Second “Defense” - Non-Infringement ........................... 8 C. Defendant’s Third “Defense” - Invalidity ............................................ 9 D. Defendant’s Fourth “Defense” - No Doctrine of Equivalents ............. 9 E. Defendant’s Fifth “Defense” - Recovery Barred By § 286 ............... 10 F. Defendant’s Sixth “Defense” - Laundry List Of Equitable Defenses 11 G. Defendant’s Seventh “Defense” - Unenforceability .......................... 11 H. Defendant’s Eighth “Defense” - Reservation of Affirmative Defenses ........................................................................................................ 13 I. Defendant’s Ninth “Defense” - No Injunction ................................... 13 VI. Conclusion ..................................................................................................... 14 Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 2 of 20 Page ID #:356 4851-5162-1180.1 i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) Cases Advanced Transit Dynamics, Inc. v. Ridge Corp., No. CV 15-1877 BRO ........................................................................................ 13 Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937 (2009) ...................................................... 1, 4, 5, 6 Audionics System, Inc. v. AAMP of Florida, Inc., No. CV 12-10763 MMM (JEMx) (C.D. Cal. Nov. 19, 2013) ............................. 5 Barnes v. AT & T Pension Benefit Plan-Nonbargained Program, 718 F. Supp. 2d 1167 (N.D. Cal. 2010) ........................................................... 5, 8 Bell Atlantic Cop. v. Twombly, 550 U.S. 544 (2007) ................................................................................. 1, 4, 5, 6 BlackBerry Ltd. v. Typo Products LLC, Case No. 3:14-cv-00023-WHO, 2014 WL 1867009 (N.D. Cal. May 8, 2014)......................................................................................................... 5 Central Admixture Pharmacy Servs., Inc. v. Advanced Cardiac Solutions, P.C., 482 F.3d 1347 (Fed. Cir. 2007) .......................................................................... 12 Circ-Cell Skincare, LLC v. Simon, No. 2:15-cv-6061-CBM, 2016 WL 5922671 (C.D. Cal. Apr. 6, 2016) (Marshall, J.) .............................................................................................. 4 CTF Dev., Inc. v. Penta Hospitality, LLC, Case No. 3:09-cv-02429-WHA, 2009 WL 3517617 (N.D. Cal. Oct. 26, 2009) ....................................................................................................... 6 Desert European Motorcars, Ltd.. v. Desert European Motorcars, Inc., No. EDCV 11-197 ............................................................................................... 8 Dion v. Fulton Friedman & Gullace LLP, Case No. 3:11-2727-SC, 2012 WL 160221 (N.D. Cal. Jan. 17, 2012) ..................................................................................................................... 6 Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009) .......................................................................... 12 Figueroa v. Stater Bros. Markets, No. CV 13-3364 FMO .......................................................................................... 5 Gibson Brands, Inc. v. John Hornby Skewes & Co., No. CV 14-00609 DDP SSX, 2014 WL 4187979 (C.D. Cal. Aug. 22, 2014) ............................................................................................................... 6 Gonzalez v. Preferred Freezer Servs., LBF, LLC, No. CV 12-3467 ODW FMO, 2012 WL 2602882 (C.D. Cal. July 5, 2012) ................................................................................................................. 8 Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 3 of 20 Page ID #:357 4851-5162-1180.1 ii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Infineon Technologies AG v. Volterra Semiconductor Corporation, No. C 11-6239 MMC (N.D. Cal. May 1, 2013) (Ex. 5) ............................... 10, 11 Information Planning and Management Service Inc. v. Dollar General Corp., No. 2:15cv206 (E.D. Va. Jan. 5, 2016) (Ex. 4) .................................................... 9 J & J Sports Prod., Inc. v. Ramirez Bernal, 2014 WL 2042120 (E.D. Cal. May 16, 2014) ...................................................... 7 Jacobson v. Persolve, LLC, Case No. 5:14-cv-00735-LHK, 2014 WL 4090809 (N.D. Cal. Aug. 19, 2014) ...................................................................................................... 5 Johnson v. Lucent Techs. Inc., 653 F.3d 1000 (9th Cir. 2011), as amended (Aug. 19, 2011) .............................. 4 Miller v. Ghirardelli Chocolate Co., No. C 12-04936 LB, 2013 WL 3153388 (N.D. Cal. June 19, 2013) ................... 6 Multimedia Patent Trust v. Microsoft Corp., 525 F. Supp. 2d 1200 (S.D. Cal. 2007) .............................................................. 12 PageMelding, Inc. v. ESPN, Inc., No. C 11-06263 WHA, 2012 WL 3877686 (N.D. Cal. Sept. 6, 2012) ..................................................................................................................... 6 Powertech Tech., Inc. v. Tessera, Inc., No. C 10-945 CW, 2012 WL 1746848 (N.D. Cal. May 16, 2012) ...................... 6 Qarbon.com Inc. v. eHelp Corp., 315 F. Supp. 2d 1046 (N.D. Cal. 2004) ............................................................... 7 R.D. Jones, Stop Experts, Inc., v. Carmanah Technologies, No. 9:13-cv-80695-KMM (S.D. Fla. Jan. 5, 2014) (Ex. 7) explained ............................................................................................................. 13 Ramirez v. Ghilotti Bros. Inc., 941 F. Supp. 2d 1197 (N.D. Cal. 2013) ............................................................... 5 Roe v. City of San Diego, 289 F.R.D. 604 (S.D. Cal. 2013) .......................................................................... 5 Sliding Door Co. v. KLS Doors, LLC, No. EDCV 13-00196 JGB, 2013 WL 2090298 (C.D. Cal. May 1, 2013) ..................................................................................................................... 7 Technology Licensing Corp. v. Pelco, Inc., No. 11 C 8544 (N.D. Ill. Mar. 5 2012) (Ex. 3) ..................................................... 9 Trading Technologies Intl, Inc. vs. CQG, et al., No. 05 C 4811 (N.D. Ill. Oct. 31, 2012) (Ex. 6) .......................................... 10, 11 Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 4 of 20 Page ID #:358 4851-5162-1180.1 iii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc) .......................................................... 12 Ujhelyi v. Vilsack, Case No. 4:12-cv-04282-JSW, 2013 WL 6174491 (N.D. Cal. Nov. 25, 2013) ...................................................................................................... 5 Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970 (9th Cir. 2010) ................................................................................ 4 Statutes 35 U.S.C. §§ 101, 102, 103 ....................................................................................... 7 35 U.S.C. § 102 ........................................................................................................ 12 35 U.S.C. §§ 102, 103 ........................................................................................... 2, 9 35 U.S.C. § 103 ........................................................................................................ 12 35 U.S.C. § 286 .................................................................................................... 2, 10 35 U.S.C. § 287 ........................................................................................................ 10 Fed. R. Civ. P. 8(a) ..................................................................................................... i Fed. R. Civ. P. 8(a)(2)................................................................................................ 4 Fed. R. Civ. P. 8(c) ............................................................................................ 1, 5, 6 Fed. R. Civ. P. 8(c)(1)................................................................................................ 5 Fed. R. Civ. P. 9(b) .................................................................................................. 12 Fed. R. Civ. P. 10(b) ................................................................................................ 11 Fed. R. Civ. P. 12(b)(6) ............................................................................................. 4 Fed. R. Civ. P. 12(f) ............................................................................................. 4, 12 Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 5 of 20 Page ID #:359 4851-5162-1180.1 i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TO DEFENDANT AND ITS ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that, on December 13, 2016 at 10:00 a.m. or as soon thereafter as the matter may be heard in the above-identified Court, located at 312 N. Spring St., Los Angeles, CA 90012, Courtroom 2, second floor, Plaintiff will and hereby does move this Court to dismiss Defendant’s counterclaims pursuant to Fed. R. Civ. P. 12(b)(6) and strike Defendant’s affirmative defenses pursuant to Fed. R. Civ. P. 12(f). The basis for this motion is that Defendant’s pleading of its counterclaims and affirmative defenses fails to meet the pleading standards articulated by the Supreme Court in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937 (2009) because Defendant’s allegations do not allege a sufficient factual basis. Further, some of Defendant’s purported defenses are not affirmative defenses and do not provide fair notice. This motion is made following the conferences of counsel, pursuant to Local Rule 7-3, which were held on November 2, 2016 and November 7, 2016.1 This Motion is based on this Notice, the Memorandum of Points and Authorities herein, the pleadings on file in this action, and such further argument and evidence as the Court may entertain. Respectfully submitted, Dated: November 10, 2016 /s/ Victor de Gyarfas Victor de Gyarfas FOLEY & LARDNER LLP Attorneys for Plaintiff ROLAND CORPORATION 1 During the meet and confers, Plaintiff’s counsel repeatedly asked Defendant’s counsel whether Defendant would agree to amend in order to avoid motion practice. Defendant refused to amend and instead proposed that the parties engage in a N.D. Cal. type exchange of contentions. See Ex. 9. Plaintiff declined Defendant’s proposal, as such an exchange would not resolve all the issues raised in this motion, and is not typical in the C.D. Cal. Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 6 of 20 Page ID #:360 4851-5162-1180.1 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Defendant’s Counterclaims fail to meet the Rule 8(a) pleading standards articulated by the Supreme Court in Bell Atlantic Cop. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937 (2009) because they fail to allege any factual basis. Indeed, counterclaims pleaded almost identically to Defendant’s have been found “radically insufficient.” Defendant’s counterclaims should therefore be dismissed. Additionally, Defendant’s boilerplate affirmative defenses fail to meet the pleading standard of Rule 8(c), as interpreted by decisions of the Central District of California and other courts in this circuit, because they either they fail to allege any factual basis, or they are not even affirmative defenses. Accordingly, all of Defendant’s affirmative defenses should be stricken to avoid wasting the parties’ and the court’s resources litigating spurious issues. II. FACTUAL BACKGROUND On August 19, 2016 Plaintiff filed a detailed complaint alleging infringement of eight U.S. patents (Doc. 1). Defendant InMusic Brands, Inc. (“Defendant” or “InMusic”) did not challenge the sufficiency of the complaint, and two months later, on October 24, 2016, filed its Answer and Counterclaims (Doc. 22), Ex. 1. A. Defendant’s Affirmative Defenses In its Answer, Defendant stated nine “Affirmative Defenses And Other Defenses” in boilerplate fashion at pp. 7-9. Those defenses are set forth verbatim below: FIRST DEFENSE The Complaint fails to state a claim upon which relief can be granted. SECOND DEFENSE InMusic has not willfully or otherwise infringed any valid and/or Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 7 of 20 Page ID #:361 4851-5162-1180.1 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 enforceable claim of U.S. Patent Nos. 7,385,135; 6,921,857; 6,756,535; 6,271,458; 6,121,538; 6,881,885; 6,632,989; or 7,459,626 (collectively the “Asserted Patents”), either directly, indirectly, literally, or under the doctrine of equivalents. THIRD DEFENSE Upon information and belief, and as likely will be supported by evidence after a reasonable opportunity for further investigation and discovery, one or more claims of the Asserted Patents is invalid for failure to comply with the conditions and requirements for patentability specified in 35 U.S.C. §§ 102, 103 and/or 112. FOURTH DEFENSE Roland is estopped from construing any claim of any of the Asserted Patents to be infringed or to have been infringed, either literally or by application of the doctrine of equivalents, because of admissions, representations, and/or statements made to the United States Patent and Trademark Office during prosecution of any application leading to the issuance of any Asserted Patent, because of disclosure of language in the specifications of the Asserted Patents, and/or because of limitations in the claims of the Asserted Patents. FIFTH DEFENSE To the extent Roland seeks to recover damages for any alleged infringement that occurred more than six years prior to the filing of the Complaint, such recovery is barred under 35 U.S.C. § 286. SIXTH DEFENSE Roland’s claims are barred, and the claims of the Asserted Patents are unenforceable, in whole or in part, by the doctrines of laches, unclean hands, waiver, and/or estoppel including, but not limited to, Roland’s unreasonable delay in asserting the Asserted Patents. SEVENTH DEFENSE Upon information and belief, and as likely will be supported by evidence after a reasonable opportunity for further investigation and discovery, one or more Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 8 of 20 Page ID #:362 4851-5162-1180.1 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of the Asserted Patents is unenforceable because during their prosecution, the United States Patent and Trademark Office was not fully advised of all material facts and prior art, which information if disclosed would have caused the application(s) to be rejected. EIGHTH DEFENSE Roland’s claims are barred by, and inMusic asserts all affirmative defenses permitted under, the statutes, laws and regulations under which Plaintiffs seek relief. NINTH DEFENSE Roland is not entitled to any injunctive relief because Roland has, at a minimum, no irreparable injury and an adequate remedy at law, and it has unreasonably delayed in asserting its putative patent rights. Defendant failed to plead any facts at all in connection with those affirmative defenses. B. Defendant’s Counterclaims Similar to its fact-free pleading of affirmative defenses, Defendant’s counterclaims seek declarations of invalidity of all of the patents-in-suit, but plead those counterclaims with no facts whatsoever. Each of Defendant’s counterclaims is pleaded in the following fashion, with xxx being replaced by the last three digits of the asserted patent: Upon information and belief, the patent fails to meet statutory requirements and/or all of the limitations of the purported invention claimed in the ‘xxx patent are present in prior art references that were available sufficiently prior so as to render each asserted claim of the ‘xxx patent invalid for failure to comply with the patent laws, including, but not limited to, 35 U.S.C. §§ 102, 103 and/or 112. Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 9 of 20 Page ID #:363 4851-5162-1180.1 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 III. APPLICABLE LEGAL STANDARDS A. Motions To Dismiss And Rule 8(a)(2) Pleading Of Claims For Relief Federal Rule of Civil Procedure 8(a)(2) requires counterclaims to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” See Circ-Cell Skincare, LLC v. Simon, No. 2:15-cv-6061-CBM (MRWx), 2016 WL 5922671, at *1 (C.D. Cal. Apr. 6, 2016) (Marshall, J.). A counterclaim that fails to meet that standard is subject to dismissal under Federal Rule of Civil Procedure 12(b)(6), which allows a court to dismiss for “failure to state a claim upon which relief can be granted.” In reviewing a motion to dismiss under Rule 12(b)(6), the Court takes all facts pled as true and construes them in the light most favorable to the nonmoving party. See Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Johnson v. Lucent Techs. Inc., 653 F.3d 1000, 1010 (9th Cir. 2011), as amended (Aug. 19, 2011). However, the “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Ashcroft, 556 U.S. at 663. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678. “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Id. B. Motions To Strike 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). The role of a Rule 12(f) motion to strike is to avoid the expense of time and money that results from litigating “spurious issues” by discarding those issues in advance of trial. Whittlestone, Inc. v. Handi- Craft Co., 618 F.3d 970, 973 (9th Cir. 2010) (quoting Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on other grounds, 510 U.S. 517 (1994)). “An affirmative defense may be insufficient as a matter of pleading or as a matter Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 10 of 20 Page ID #:364 4851-5162-1180.1 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of law.” Roe v. City of San Diego, 289 F.R.D. 604, 608 (S.D. Cal. 2013). “A defense is insufficiently pled if it fails to give the plaintiff fair notice of the nature of the defense.” Barnes v. AT & T Pension Benefit Plan-Nonbargained Program, 718 F. Supp. 2d 1167, 1170 (N.D. Cal. 2010); see also Roe, 289 F.R.D. at 608(“The defendant must articulate the affirmative defense clearly enough that the plaintiff is not a victim of unfair surprise.”) C. Pleading Rule 8(c) Affirmative Defenses Rule 8(c) addresses affirmative defenses and requires that a party “affirmatively state any avoidance or affirmative defense” in the responsive pleading. Fed. R. Civ. P. 8(c)(1). “An affirmative defense, under the meaning of Federal Rule of Civil Procedure 8(c), is a defense that does not negate the elements of the plaintiff's claim, but instead precludes liability even if all of the elements of the plaintiff's claim are proven.” Barnes, 718 F. Supp. 2d at 1173-74. Neither the United States Supreme Court nor the Ninth Circuit has determined what standard should be used to determine the sufficiency of a defendant's affirmatives defenses, and there is a split among district courts, but “most district courts in this circuit agree that the heightened pleading standard of Twombly and Iqbal . . . is now the correct standard to apply to affirmative defenses.” Ramirez v. Ghilotti Bros. Inc., 941 F. Supp. 2d 1197, 1204 (N.D. Cal. 2013); see also Figueroa v. Stater Bros. Markets, No. CV 13-3364 FMO JEMX, 2013 WL 4758231, at *3 (C.D. Cal. Sept. 3, 2013); Jacobson v. Persolve, LLC, Case No. 5:14-cv-00735-LHK, 2014 WL 4090809, at *5-6 (N.D. Cal. Aug. 19, 2014); BlackBerry Ltd. v. Typo Products LLC, Case No. 3:14-cv-00023-WHO, 2014 WL 1867009, at *5 (N.D. Cal. May 8, 2014); Ujhelyi v. Vilsack, Case No. 4:12-cv-04282-JSW, 2013 WL 6174491, at *2 (N.D. Cal. Nov. 25, 2013). This court should adopt the heightened pleading standard of Twombly and Iqbal for affirmative defenses. The Central District decision in Audionics System, Inc. v. AAMP of Florida, Inc., No. CV 12-10763 MMM (JEMx) (C.D. Cal. Nov. Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 11 of 20 Page ID #:365 4851-5162-1180.1 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19, 2013), at 8-10 (Ex. 2) recently provided a thorough discussion of the appropriate pleading standards to apply to affirmative defenses and concluded that applying the heightened pleading standard to affirmative defenses is consistent with the language of Rule 8(c) and promotes fairness and efficiency. See also PageMelding, Inc. v. ESPN, Inc., No. C 11-06263 WHA, 2012 WL 3877686, at *3 (N.D. Cal. Sept. 6, 2012) (applying the Iqbal-Twombly standard in a patent case and striking affirmative defenses); Powertech Tech., Inc. v. Tessera, Inc., No. C 10-945 CW, 2012 WL 1746848, at *4-5 (N.D. Cal. May 16, 2012) (same). Under the Twombly and Iqbal standard, “the simple listing of a series of conclusory statements asserting the existence of an affirmative defense without stating a reason why that affirmative defense might exist is not sufficient.” Miller v. Ghirardelli Chocolate Co., No. C 12-04936 LB, 2013 WL 3153388, at *3 (N.D. Cal. June 19, 2013) (internal quotation marks omitted). The courts that have applied this standard require the defendant to allege enough facts in its answer to make the affirmative defense viable on its face. See Gibson Brands, Inc. v. John Hornby Skewes & Co., No. CV 14-00609 DDP SSX, 2014 WL 4187979, at *4 (C.D. Cal. Aug. 22, 2014). This heightened standard “serves to weed out the boilerplate listing of affirmative defenses which is commonplace in most defendant's pleadings.” Id. (emphasis added). After Iqbal, “the burden is on the defendant to proffer sufficient facts and law to support an affirmative defense, and not on the plaintiff to gamble on interpreting an insufficient defense in the manner defendant intended.” CTF Dev., Inc. v. Penta Hospitality, LLC, Case No. 3:09-cv-02429-WHA, 2009 WL 3517617, at *7-8 (N.D. Cal. Oct. 26, 2009). “Just as a plaintiff's complaint must allege enough supporting facts to nudge a legal claim across the line separating plausibility from mere possibility, a defendant's pleading of affirmative defenses must put a plaintiff on notice of the underlying factual bases of the defense.” Dion v. Fulton Friedman & Gullace LLP, Case No. 3:11-2727-SC, 2012 WL Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 12 of 20 Page ID #:366 4851-5162-1180.1 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 160221, at *2 (N.D. Cal. Jan. 17, 2012). “Merely reciting a legal doctrine, without alleging facts supporting the doctrine's application in the case, fails to provide fair notice of the affirmative defense.” See J & J Sports Prod., Inc. v. Ramirez Bernal, 2014 WL 2042120, at *6 (E.D. Cal. May 16, 2014). IV. DEFENDANT’S COUNTERCLAIMS LACK AN ADEQUATE FACTUAL BASIS TO SUPPORT THE APPLICABLE PLEADING STANDARDS AND SHOULD BE DISMISSED In Sliding Door Co. v. KLS Doors, LLC, No. EDCV 13-00196 JGB, 2013 WL 2090298, at *4 (C.D. Cal. May 1, 2013), the defendant attempted to assert invalidity counterclaims in almost the same fashion as InMusic, stating that Defendants “allege that one or more claims of the 729 Patent are invalid for failure to meet the requirements of patentability.” That pleading was found not to give “fair notice” to Plaintiff and the counterclaim was dismissed. Here, InMusic’s pleading of its counterclaims similarly states no facts, and merely recites, in boilerplate fashion, various sections of section 35 of the United States Code. Even, pre-Iqbal/Twombly, merely stating that a patent is “invalid under 35 U.S.C. §§ 101, 102, 103 and/or 112” was held to be not just insufficient, but “radically insufficient,” and was dismissed. Qarbon.com Inc. v. eHelp Corp., 315 F. Supp. 2d 1046, 1050-1051 (N.D. Cal. 2004). Because InMusic has done no more than the defendants in Sliding Door and Qarbon.com, and has failed to give fair notice, all of its counterclaims for invalidity should be dismissed. V. ALL OF DEFENDANT’S “DEFENSES” EITHER ARE PLEADED INADEQUATELY OR ARE NOT AFFIRMATIVE DEFENSES AND SHOULD BE STRICKEN Defendant has essentially listed every defense contemplated by the U.S. Code without any basis or showing of plausibility. These defenses all suffer from the same fatal flaw: they recite a principle of law that might (or might not) constitute a defense, but they do not include a single fact suggesting why or how Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 13 of 20 Page ID #:367 4851-5162-1180.1 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 that principle applies to this case. That pleading is the same type of unadorned “laundry list” that this district held in Gonzalez v. Preferred Freezer Servs., LBF, LLC, No. CV 12-3467 ODW FMO, 2012 WL 2602882, at *3 (C.D. Cal. July 5, 2012) was “obviously improper at any stage.” Even under a notice pleading standard, most of these defenses do no more than purport to inform Roland that there are a number of legal principles that might operate as defenses to a patent infringement claim. That pleading sometimes provides notice of the law, which the parties are deemed to know and understand, but it provides no notice whatsoever of how the law applies to this case. See Barnes, 718 F. Supp. 2d at 1172. A. Defendant’s First “Defense” - Failure To State A Claim Defendant’s first defense states: “The Complaint fails to state a claim upon which relief can be granted.” Failure to state a claim is not an affirmative defense. Instead, it “is a mere legal conclusion without supporting facts linking that theory to the case at bar, and therefore is insufficient to give Plaintiff fair notice of the basis of this defense.” Desert European Motorcars, Ltd.. v. Desert European Motorcars, Inc., No. EDCV 11-197 RSWL (DTBx), 2011 WL 3809933, at *1 (C.D. Cal. Aug. 25, 2011). Accordingly, this boilerplate “defense” should be stricken with prejudice as it was in Desert European Motorcars. B. Defendant’s Second “Defense” - Non-Infringement Defendant’s second defense states: “InMusic has not willfully or otherwise infringed any valid and/or enforceable claim of U.S. Patent Nos. 7,385,135; 6,921,857; 6,756,535; 6,271,458; 6,121,538; 6,881,885; 6,632,989; or 7,459,626 (collectively the ‘Asserted Patents’), either directly, indirectly, literally, or under the doctrine of equivalents.” As with all of the “defenses,” this defense fails to plead a single fact and stands in stark contrast to Roland’s pleading of infringement. Because Defendant Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 14 of 20 Page ID #:368 4851-5162-1180.1 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 has failed to give fair notice of the basis of this defense it should be stricken. As an independent basis to strike this defense, the purported defense of “non-infringement,” whether willful or not, “violates the fundamental nature of an [affirmative defense] as accepting all of the allegations of a complaint but then going on to explain why defendant is nevertheless not liable.” Technology Licensing Corp. v. Pelco, Inc., No. 11 C 8544, at 2 (N.D. Ill. Mar. 5 2012) (Ex. 3). Accordingly, this “defense” should be stricken with prejudice, as it was in Technology Licensing Corp. C. Defendant’s Third “Defense” - Invalidity Defendant’s third defense states: “Upon information and belief, and as likely will be supported by evidence after a reasonable opportunity for further investigation and discovery, one or more claims of the Asserted Patents is invalid for failure to comply with the conditions and requirements for patentability specified in 35 U.S.C. §§ 102, 103 and/or 112.” As an initial matter, the uncertain nature of Defendant’s statement of this defense, invoking “information and belief,” which at best, will “likely be supported by evidence after a reasonable opportunity for further investigation” implies that Defendant did not even have any basis for this defense at the time it was pled, and merely hopes that in the future it may discover some basis for it. Such a pleading plainly provides no facts and is an insufficient pleading. This pleading is identical in lack of substance to Defendant’s counterclaims, which were stricken in Information Planning and Management Service Inc. v. Dollar General Corp., No. 2:15cv206, at 9-10 (E.D. Va. Jan. 5, 2016) (Ex. 4). Because such a pleading “merely lists code sections and fails to provide any facts” it was stricken, and InMusic’s affirmative defense should also be stricken. D. Defendant’s Fourth “Defense” - No Doctrine of Equivalents Defendant’s fourth defense states: “Roland is estopped from construing any claim of any of the Asserted Patents to be infringed or to have been infringed, Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 15 of 20 Page ID #:369 4851-5162-1180.1 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 either literally or by application of the doctrine of equivalents, because of admissions, representations, and/or statements made to the United States Patent and Trademark Office during prosecution of any application leading to the issuance of any Asserted Patent, because of disclosure of language in the specifications of the Asserted Patents, and/or because of limitations in the claims of the Asserted Patents.” Again, Defendant fails to plead a single fact in this defense and it should be stricken. The N.D. Cal. addressed a substantially identical affirmative defense in Infineon Technologies AG v. Volterra Semiconductor Corporation, No. C 11-6239 MMC, at 4-5 (N.D. Cal. May 1, 2013) (Ex. 5). The asserted defense in that case was: “In light of statements made during the prosecution of the patents-in-suit or related applications, prosecution history estoppel on one or more of [the patents-in- suit] bars [Plaintiff’s] proposed claim constructions and/or bars [Plaintiff] from proving infringement on the asserted claims under the doctrine of equivalents.” The court in Infineon noted that “Such allegation does no more than state the obvious, i.e., that an affirmative defense of prosecution history estoppel is based on statements made by the patent applicant during the prosecution of the patent,” and struck the defense. This court should also strike this defense. E. Defendant’s Fifth “Defense” - Recovery Barred By § 286 Defendant’s fifth defense states: “To the extent Roland seeks to recover damages for any alleged infringement that occurred more than six years prior to the filing of the Complaint, such recovery is barred under 35 U.S.C. § 286.” Again, Defendant fails to identify a single fact in connection with this purported defense. The Court in Trading Technologies Intl, Inc. vs. CQG, et al., No. 05 C 4811, at 1-2 (N.D. Ill. Oct. 31, 2012) (Ex. 6) addressed a similarly pleaded defense: “Plaintiff is not entitled to any damages for the time period that it was not in compliance with the marking requirements under 35 U.S.C. § 287.” The court in Trading Technologies found that Defendant’s pleading was “insufficient to Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 16 of 20 Page ID #:370 4851-5162-1180.1 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 satisfy the requirements of Rule8(a) because” it was “devoid of any factual basis.” InMusic’s pleading is just as devoid of any factual basis and should be stricken. F. Defendant’s Sixth “Defense” - Laundry List Of Equitable Defenses Defendant’s sixth defense states: “Roland’s claims are barred, and the claims of the Asserted Patents are unenforceable, in whole or in part, by the doctrines of laches, unclean hands, waiver, and/or estoppel including, but not limited to, Roland’s unreasonable delay in asserting the Asserted Patents.” Yet again, Defendant fails to plead a single fact and does not even come close to providing any clue as to what it even means by these defenses. Nearly identically defenses were pled in Trading Technologies at 1-2, and Infineon Technologies at 5-8 and were struck because they failed to plead any factual basis. Additionally, as Infineon Technologies at 6 explained, in language equally applicable in this case: “Such collective pleading is insufficient for a number of reasons. First, [Defendant] must plead each defense separately, as it is unclear which alleged facts support each asserted defense. See Fed. R. Civ. P. 10(b). Second, [Plaintiff] has asserted [multiple] patents against [Defendant] and has not made clear which equitable defense(s) are meant to apply to which patent(s).” Finally, each of Defendant’s purported equitable defenses has numerous elements and Defendant was required to plead facts in support of each of the elements. See Infineon Technologies at 6-8. Accordingly, Defendant’s laundry list of equitable defenses should be stricken. G. Defendant’s Seventh “Defense” - Unenforceability Defendant’s seventh defense states: “Upon information and belief, and as likely will be supported by evidence after a reasonable opportunity for further investigation and discovery, one or more of the Asserted Patents is unenforceable because during their prosecution, the United States Patent and Trademark Office was not fully advised of all material facts and prior art, which information if Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 17 of 20 Page ID #:371 4851-5162-1180.1 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 disclosed would have caused the application(s) to be rejected.” Again, Defendant fails to identify any facts with respect to any of the patents-in-suit regarding how the patents could be “unenforceable.” For this reason alone, this “defense” should be stricken. It is also unclear what Defendant is even trying to convey with this purported defense. Prior art and facts unknown to the Patent Office could conceivably render a patent invalid as anticipated under 35 U.S.C. § 102 or obvious under 35 U.S.C. § 103, but invalidity is different than “unenforceability.” Alternatively, a patent may be held “unenforceable” due to “inequitable conduct.” Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011) (en banc). To prevail on a claim of inequitable conduct, the accused infringer must prove by clear and convincing evidence that the patent applicant knew of a prior art reference, knew that it was material, and made a deliberate decision to withhold it. Id. at 1290. The affirmative defense of inequitable conduct, “falls within the strictures of Rule 9(b).” Multimedia Patent Trust v. Microsoft Corp., 525 F. Supp. 2d 1200, 1211 (S.D. Cal. 2007); see Central Admixture Pharmacy Servs., Inc. v. Advanced Cardiac Solutions, P.C., 482 F.3d 1347, 1356 (Fed. Cir. 2007) (“We have held that ‘inequitable conduct, while a broader concept than fraud, must be pled with particularity,’” quoting Ferguson Beauregard/Logic Controls, Inc. v. Mega Sys., LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003)); see also Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1326-27 (Fed. Cir. 2009) (inequitable conduct counterclaim and defense must be pled with particularity under Rule 9(b)). Inequitable conduct defenses not pled with adequate particularity should be stricken. Multimedia Patent Trust, 525 F. Supp. 2d at 1211 (“[A]n inequitable conduct defense to a patent infringement claim may be stricken pursuant to Rule 12(f) for failure to plead with particularity”). Here, Defendant does not come anywhere close to pleading unenforceability with particularity and this “defense” Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 18 of 20 Page ID #:372 4851-5162-1180.1 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 should be stricken. H. Defendant’s Eighth “Defense” - Reservation of Affirmative Defenses Defendant’s eighth defense states: “Roland’s claims are barred by, and inMusic asserts all affirmative defenses permitted under, the statutes, laws and regulations under which Plaintiffs seek relief.” This pleading is perhaps Defendant’s most egregious as it does not even identify a legal theory, let alone a factual basis. In essence, Defendant is attempting to reserve defenses that it has not thought of, investigated, or perhaps even knows exists. As the Court in R.D. Jones, Stop Experts, Inc., v. Carmanah Technologies, No. 9:13-cv-80695-KMM, at 5 (S.D. Fla. Jan. 5, 2014) (Ex. 7) explained: “Defendants’ reservation of rights clause is not an affirmative defense because it does not respond to the initial complaint or raise facts which negate Plaintiffs’ claims.” Just as such a defense was stricken in R.D. Jones, it should be stricken with prejudice in this case. I. Defendant’s Ninth “Defense” - No Injunction Defendant’s ninth defense states: “Roland is not entitled to any injunctive relief because Roland has, at a minimum, no irreparable injury and an adequate remedy at law, and it has unreasonably delayed in asserting its putative patent rights.” As with all of Defendant’s purported defenses, Defendant fails to plead any facts in connection with this defense, and it should be stricken. Further, this purported defense does no more than deny the presence of factors necessary for an injunction. This defense is not properly pled because entitlement to an injunction is part of Plaintiff’s prima facie case. See Advanced Transit Dynamics, Inc. v. Ridge Corp., No. CV 15-1877 BRO (MANx), at 2-3 (C.D. Cal. Aug. 6, 2015) (striking a no injunctive relief defense without leave to amend) (Ex. 8). This “defense” should be stricken with prejudice. Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 19 of 20 Page ID #:373 4851-5162-1180.1 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VI. CONCLUSION Defendant has not pleaded any facts in connection with any of its counterclaims or affirmative defenses. The court should dismiss all of the counterclaims and strike all of the affirmative defenses to avoid the expense of time and money that results from litigating spurious issues. Dated: November 10, 2016 /s/ Victor de Gyarfas Victor de Gyarfas FOLEY & LARDNER LLP Attorneys for Defendant ROLAND CORPORATION Case 2:16-cv-06256-CBM-AJW Document 25 Filed 11/10/16 Page 20 of 20 Page ID #:374 4841-5554-7196.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Victor de Gyarfas (State Bar No. 171950) email: vdegyarfas@foley.com Sandeep Deol (State Bar No. 285545) email: sdeol@foley.com FOLEY & LARDNER LLP 555 South Flower Street, Suite 3500 Los Angeles, CA 90071-2411 Telephone: 213-972-4500 Facsimile: 213-486-0065 Attorneys for Plaintiff ROLAND CORPORATION UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION ROLAND CORPORATION, a Japanese corporation Plaintiff, v. INMUSICBRANDS, INC., a Florida Corporation, Defendant. Case No: 2:16-cv-6256 CBM (AJWx) DECLARATION OF VICTOR de GYARFAS IN SUPPORT PLAINTIFF’S MOTION TO DISMISS COUNTERCLAIMS AND STRIKE AFFIRMATIVE DEFENSES Date: December 13, 2016 Time: 10:00 a.m. Judge: Hon. Consuelo B. Marshall Ctrm: 2 Case 2:16-cv-06256-CBM-AJW Document 25-1 Filed 11/10/16 Page 1 of 3 Page ID #:375 4841-5554-7196.1 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I, Victor de Gyarfas, declare: 1. I am counsel of record for Plaintiff Roland Corporation. 2. Attached hereto as Exhibit 1 is a true and correct copy of Defendant InMusic Brands, Inc.’s (“Defendant” or “InMusic”) Answer and Counterclaims (Doc. 22) filed on October 24, 2016. 3. Attached hereto as Exhibit 2 is a true and correct copy of Audionics System, Inc. v. AAMP of Florida, Inc., No. CV 12-10763 MMM (JEMx) (C.D. Cal. Nov. 19, 2013), with relevant portions highlighted. 4. Attached hereto as Exhibit 3 is a true and correct copy of Technology Licensing Corp. v. Pelco, Inc., No. 11 C 8544 (N.D. Ill. Mar. 5 2012), with relevant portions highlighted. 5. Attached hereto as Exhibit 4 is a true and correct copy of Information Planning and Management Service Inc. v. Dollar General Corp., No. 2:15cv206 (E.D. Va. Jan. 5, 2016), with relevant portions highlighted. 6. Attached hereto as Exhibit 5 is a true and correct copy of Infineon Technologies AG v. Volterra Semiconductor Corporation, No. C 11-6239 MMC (N.D. Cal. May 1, 2013), with relevant portions highlighted. 7. Attached hereto as Exhibit 6 is a true and correct copy of Trading Technologies Intl, Inc. vs. CQG, et al., No. 05 C 4811 (N.D. Ill. Oct. 31, 2012), with relevant portions highlighted. 8. Attached hereto as Exhibit 7 is a true and correct copy of R.D. Jones, Stop Experts, Inc., v. Carmanah Technologies, No. 9:13-cv-80695-KMM (S.D. Fla. Jan. 5, 2014), with relevant portions highlighted. 9. Attached hereto as Exhibit 8 is a true and correct copy of Advanced Transit Dynamics, Inc. v. Ridge Corp., No. CV 15-1877 BRO (MANx) (C.D. Cal. Aug. 6, 2015), with relevant portions highlighted. Case 2:16-cv-06256-CBM-AJW Document 25-1 Filed 11/10/16 Page 2 of 3 Page ID #:376 4841-5554-7196.1 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10. I participated in conferences of counsel with Defendant’s counsel, pursuant to Local Rule 7-3, which were held on November 2, 2016 and November 7, 2016. During the conferences, I repeatedly asked Defendant’s counsel whether Defendant would agree to amend in order to avoid motion practice. Defendant refused to amend and instead proposed that the parties engage in an exchange of certain contentions. Plaintiff declined Defendant’s proposal, as such an exchange would not resolve all the issues raised in this motion, and is not typical in the C.D. Cal. A true and correct copy of an email string relating to those discussions is attached hereto as Exhibit 9, with relevant portions highlighted. I declare under penalty of perjury that the foregoing is true and correct. Dated: November 10, 2016 /s/ Victor de Gyarfas Victor de Gyarfas Case 2:16-cv-06256-CBM-AJW Document 25-1 Filed 11/10/16 Page 3 of 3 Page ID #:377 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DOLL AMIR & ELEY LLP GREGORY L. DOLL (SBN 193205) gdoll@dollamir.com PAUL M. TORRES (SBN 240590) ptorres@dollamir.com 1888 Century Park East, Suite 1850 Los Angeles, California 90067 Tel: 310.557.9100 Fax: 310.557.9101 HINCKLEY, ALLEN & SNYDER, LLP CRAIG M. SCOTT (admitted pro hac vice) cscott@hinckleyalllen.com CHRISTINE K. BUSH (admitted pro hac vice) cbush@hinckleyalllen.com REBECCA F. BRIGGS (admitted pro hac vice) rbriggs@hinckleyalllen.com 100 Westminster Street, Suite 1500 Providence, Rhode Island 02903 Tel: 401.274.2000 Fax: 401.277.9600 Attorneys for Defendant InMusic Brands, Inc. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA ROLAND CORPORATION, A JAPANESE CORPORATION, PLAINTIFF, V. INMUSIC BRANDS, INC., A FLORIDA CORPORATION, DEFENDANT. Case No. 2:16-CV-06256-CBM-AJW The Hon. Consuelo B. Marshall ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF Complaint served: 9/2/16 Current response date: 9/23/16 NEW RESPONSE DATE: 10/24/16 Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 1 of 16 Page ID #:337 EXHIBIT 1 Page 3 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 1 of 16 Page ID #: 8 2 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendant inMusic Brands, Inc. (“inMusic”) responds to Plaintiff Roland Corporation’s (“Roland”) Complaint as follows: JURISDICTION AND VENUE 1. This paragraph contains conclusions of law for which no response is required. To the extent a response is required, denied. 2. This paragraph contains conclusions of law for which no response is required. To the extent a response is required, denied and Defendant specifically denies committing acts of infringement in this jurisdiction. 3. This paragraph contains conclusions of law for which no response is required. To the extent a response is required, denied. THE PARTIES 4. InMusic lacks knowledge or information sufficient to form a belief as to the truth of the allegations and, therefore, denies the same. 5. Admitted that inMusic is a Florida corporation with a principal place of business in Cumberland, Rhode Island and is the last registered owner of the U.S. trademark “Alesis,” but otherwise denies the remaining allegations contained in paragraph 5 of the Complaint. 6. Denied. GENERAL ALLEGATIONS 7. InMusic lacks knowledge or information sufficient to form a belief as to the truth of the allegations and, therefore, denies the same. 8. InMusic lacks knowledge or information sufficient to form a belief as to the truth of the allegations and, therefore, denies the same. 9. InMusic admits that U.S. Patent No. 7,385,135 (the “’135 Patent”) is entitled “Electronic percussion instrumental system and percussion detecting apparatus therein,” but lacks knowledge or information sufficient to form a belief as to the truth of the remaining allegations and, therefore, denies the same. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 2 of 16 Page ID #:338 EXHIBIT 1 Page 4 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 2 of 16 Page ID #: 79 3 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10. InMusic admits that U.S. Patent No. 6,921,857 (the “’857 Patent”) is entitled “Electronic percussion instrumental system and percussion detecting apparatus therein,” but lacks knowledge or information sufficient to form a belief as to the truth of the remaining allegations and, therefore, denies the same. 11. InMusic admits that U.S. Patent No. 6,756,535 (the “’535 Patent”) is entitled “Electronic percussion instrumental system and percussion detecting apparatus therein,” but lacks knowledge or information sufficient to form a belief as to the truth of the remaining allegations and, therefore, denies the same. 12. InMusic admits that U.S. Patent No. 6,271,458 (the “’458 Patent”) is entitled “Electronic percussion instrumental system and percussion detecting apparatus therein,” but lacks knowledge or information sufficient to form a belief as to the truth of the remaining allegations and, therefore, denies the same. 13. InMusic admits that U.S. Patent No. 6,121,538 (the “’538 Patent”) is entitled “Electronic percussion instrumental system and percussion detecting apparatus therein,” but lacks knowledge or information sufficient to form a belief as to the truth of the remaining allegations and, therefore, denies the same. 14. InMusic acknowledges that U.S. Patent No. 6,881,885 (the “’885 Patent”) is entitled “Electronic pad with vibration isolation features,” but lacks knowledge or information sufficient to form a belief as to the truth of the remaining allegations and, therefore, denies the same. 15. InMusic acknowledges that U.S. Patent No. 6,632,989 (the “’989 Patent”) is entitled “Electronic pad with vibration isolation features,” but lacks knowledge or information sufficient to form a belief as to the truth of the remaining allegations and, therefore, denies the same. 16. InMusic acknowledges that U.S. Patent No. 7,459,626 (the “’626 Patent”) is entitled “Apparatus and method for detecting displacement of a movable member of an electronic musical instrument,” but lacks knowledge or information sufficient to Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 3 of 16 Page ID #:339 EXHIBIT 1 Page 5 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 3 of 16 Page ID #: 80 4 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 form a belief as to the truth of the remaining allegations and, therefore, denies the same. 17. Denied. 18. InMusic admits that it received a letter from Roland’s counsel on or about March 11, 2011, the contents of which speaks for itself, and further admits that inMusic responded to that correspondence and denied all substantive allegations. To the extent the allegations of this paragraph differ from the terms of the letter referenced in paragraph 18, they are denied, and inMusic denies the allegations of infringement. 19. InMusic admits that it received a letter from Roland’s counsel on or about February 3, 2015, the contents of which speaks for itself, and further admits that inMusic responded to that correspondence and denied all substantive allegations. To the extent the allegations of this paragraph differ from the terms of the letter referenced in paragraph 19, they are denied, and inMusic denies the allegations of infringement. 20. Denied. FIRST CAUSE OF ACTION PATENT INFRINGEMENT, 35 U.S.C. § 271 21. InMusic incorporates by reference its responses to the allegations contained in Paragraphs 1-20 of the Complaint as though fully set forth herein. 22. InMusic admits that Roland purports to assert a claim for patent infringement, but otherwise denies the remaining allegations of paragraph 22 of the Complaint. The ‘135 Patent 23. Claim 1 of the ‘135 patent speaks for itself. To the extent the allegations of this paragraph differ from the ‘135 patent, they are denied. 24. Denied. 25. Denied. 26. Denied. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 4 of 16 Page ID #:340 EXHIBIT 1 Page 6 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 4 of 16 Page ID #:381 5 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 27. Denied. The ‘857 Patent 28. Claim 1 of the ‘857 patent speaks for itself. To the extent the allegations of this paragraph differ from the ‘857 patent, they are denied. 29. Denied. 30. Denied. 31. Denied. 32. Denied. The ‘535 Patent 33. Claim 1 of the ‘535 patent speaks for itself. To the extent the allegations of this paragraph differ from the ‘535 patent, they are denied. 34. Denied. 35. Denied. 36. Denied. 37. Denied. The ‘458 Patent 38. Claim 6 of the ‘458 patent speaks for itself. To the extent the allegations of this paragraph differ from the ‘458 patent, they are denied. 39. Denied. 40. Denied. 41. Denied. 42. Denied. The ‘538 Patent 43. Claim 1 of the ‘538 patent speaks for itself. To the extent the allegations of this paragraph differ from the ‘538 patent, they are denied. 44. Denied. 45. Denied. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 5 of 16 Page ID #:341 EXHIBIT 1 Page 7 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 5 of 16 Page ID #:382 6 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 46. Denied. 47. Denied. The ‘885 Patent 48. Claim 30 of the ‘885 patent speaks for itself. To the extent the allegations of this paragraph differ from the ‘885 patent, they are denied. 49. Denied. 50. Denied. 51. Denied. 52. Denied. The ‘989 Patent 53. Claim 1 of the ‘989 patent speaks for itself. To the extent the allegations of this paragraph differ from the ‘989 patent, they are denied. 54. Denied. 55. Denied. 56. Denied. 57. Denied. The ‘626 Patent 58. Claim 3 of the ‘626 patent speaks for itself. To the extent the allegations of this paragraph differ from the ‘626 patent, they are denied. 59. Denied. 60. Denied. 61. Denied. 62. This paragraph contains conclusions of law for which no response is required. To the extent a response is required, inMusic lacks knowledge or information sufficient to form a belief as to the truth of the allegations and, therefore, denies the same. 63. Denied. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 6 of 16 Page ID #:342 EXHIBIT 1 Page 8 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 6 of 16 Page ID #:383 7 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 64. Denied. 65. Denied. 66. Denied. 67. Denied. PRAYER FOR RELIEF InMusic denies that Roland is entitled to the relief requested in its Complaint, and specifically denies each and all of the allegations and prayers for relief contained in paragraphs A-I of Roland’s Complaint. AFFIRMATIVE DEFENSES AND OTHER DEFENSES Further answering Roland’s Complaint, and as additional defenses thereto, inMusic asserts the following additional defenses, without assuming the burden of proof when the burden of proof on any issue would otherwise rest with the Roland. inMusic expressly reserves the right to amend its answer and defenses as additional information becomes available and/or is otherwise discovered. FIRST DEFENSE The Complaint fails to state a claim upon which relief can be granted. SECOND DEFENSE InMusic has not willfully or otherwise infringed any valid and/or enforceable claim of U.S. Patent Nos. 7,385,135; 6,921,857; 6,756,535; 6,271,458; 6,121,538; 6,881,885; 6,632,989; or 7,459,626 (collectively the “Asserted Patents”), either directly, indirectly, literally, or under the doctrine of equivalents. THIRD DEFENSE Upon information and belief, and as likely will be supported by evidence after a reasonable opportunity for further investigation and discovery, one or more claims of the Asserted Patents is invalid for failure to comply with the conditions and requirements for patentability specified in 35 U.S.C. §§ 102, 103 and/or 112. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 7 of 16 Page ID #:343 EXHIBIT 1 Page 9 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 7 of 16 Page ID #:384 8 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FOURTH DEFENSE Roland is estopped from construing any claim of any of the Asserted Patents to be infringed or to have been infringed, either literally or by application of the doctrine of equivalents, because of admissions, representations, and/or statements made to the United States Patent and Trademark Office during prosecution of any application leading to the issuance of any Asserted Patent, because of disclosure of language in the specifications of the Asserted Patents, and/or because of limitations in the claims of the Asserted Patents. FIFTH DEFENSE To the extent Roland seeks to recover damages for any alleged infringement that occurred more than six years prior to the filing of the Complaint, such recovery is barred under 35 U.S.C. § 286. SIXTH DEFENSE Roland’s claims are barred, and the claims of the Asserted Patents are unenforceable, in whole or in part, by the doctrines of laches, unclean hands, waiver, and/or estoppel including, but not limited to, Roland’s unreasonable delay in asserting the Asserted Patents. SEVENTH DEFENSE Upon information and belief, and as likely will be supported by evidence after a reasonable opportunity for further investigation and discovery, one or more of the Asserted Patents is unenforceable because during their prosecution, the United States Patent and Trademark Office was not fully advised of all material facts and prior art, which information if disclosed would have caused the application(s) to be rejected. EIGHTH DEFENSE Roland’s claims are barred by, and inMusic asserts all affirmative defenses permitted under, the statutes, laws and regulations under which Plaintiffs seek relief. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 8 of 16 Page ID #:344 EXHIBIT 1 Page 10 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 8 of 16 Page ID #:385 9 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NINTH DEFENSE Roland is not entitled to any injunctive relief because Roland has, at a minimum, no irreparable injury and an adequate remedy at law, and it has unreasonably delayed in asserting its putative patent rights. WHEREFORE, inMusic requests the following relief: A. That Roland’s Complaint be dismissed with prejudice; B. That inMusic be awarded its attorneys’ fees and costs to defend this action; and C. Such other relief as this Court deems necessary and just. COUNTERCLAIM FOR DECLARATORY RELIEF Counterclaim Plaintiff inMusic Brands, Inc. (“inMusic”) for its Counterclaim against Counterclaim Defendant Roland Corporation (“Roland”), avers as follows: Nature of the Case inMusic brings this Counterclaim under the patent laws of the United States, 35 U.S.C. § 1 et seq., and the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, to obtain a declaratory judgment that each and every asserted claim of U.S. Patent Nos. 7,385,135 (the “’135 Patent”); 6,921,857 (the “’857 Patent”); 6,756,535 (the “’535 Patent”); 6,271,458 (the “’458 Patent”); 6,121,538 (the “’538 Patent”); 6,881,885 (the “’885 Patent”); 6,632,989 (the “’989 Patent”); and/or 7,459,626 (the “’626 Patent”) is invalid. The Parties 1. InMusic is a Florida corporation with its principal place of business in Cumberland, Rhode Island. 2. Upon information and belief, Roland is a Japanese corporation with its principal place of business in Hamamatsu, Japan and has offices in Los Angeles, California. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 9 of 16 Page ID #:345 EXHIBIT 1 Page 11 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 9 of 16 Page ID #:386 10 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Jurisdiction 3. This Counterclaim arises under the patent laws of the United States, 35 U.S.C. § 1 et seq., and the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202. This Court has subject matter jurisdiction over this counterclaim pursuant to 28 U.S.C. §§ 1331 and 1338. 4. This Court has personal jurisdiction over Roland because it has consented to personal jurisdiction for this action in this District by filing the Complaint for Patent Infringement on August 19, 2016 (the “Complaint”). 5. Venue is proper in this district for this counterclaim pursuant to 28 U.S.C. § 1391(b)-(c). Facts 6. In its Complaint, Roland alleges, among other things, that it is the owner of the ‘135 patent, the ‘857 patent, the ‘535 patent, the ‘458 patent, the ‘538 patent, the ’885 patent, the ‘989 patent, and the ‘626 patent. In its Complaint, Roland also alleges that inMusic infringes one or more claims of each of the above-referenced patents. inMusic denies that it infringes any valid and/or enforceable claim of any of the patents in suit. 7. As a result, there is an actual justiciable controversy between inMusic and Roland concerning the validity and enforceability of the ‘135 patent, the ‘857 patent, the ‘535 patent, the ‘458 patent, the ‘538 patent, the ’885 patent, the ‘989 patent, and the ‘626 patent. COUNT I Declaration of Invalidity of U.S. Patent 7,385,135 8. Counterclaim Plaintiff inMusic repeats and incorporates by reference, as though set forth in full, all of the allegations set forth in paragraphs 1 through 7 of this Counterclaim. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 10 of 16 Page ID #:346 EXHIBIT 1 Page 12 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 10 of 16 Page ID #:387 11 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9. Upon information and belief, the patent fails to meet statutory requirements and/or all of the limitations of the purported invention claimed in the ‘135 patent are present in prior art references that were available sufficiently prior so as to render each asserted claim of the ‘135 patent invalid for failure to comply with the patent laws, including, but not limited to, 35 U.S.C. §§ 102, 103 and/or 112. COUNT II Declaration of Invalidity of U.S. Patent 6,921,857 10. Counterclaim Plaintiff inMusic repeats and incorporates by reference, as though set forth in full, all of the allegations set forth in paragraphs 1 through 9 of this Counterclaim. 11. Upon information and belief, the patent fails to meet statutory requirements and/or all of the limitations of the purported invention claimed in the ‘857 patent are present in prior art references that were available sufficiently prior so as to render each asserted claim of the ‘857 patent invalid for failure to comply with the patent laws, including, but not limited to, 35 U.S.C. §§ 102, 103 and/or 112. COUNT III Declaration of Invalidity of U.S. Patent 6,756,535 12. Counterclaim Plaintiff inMusic repeats and incorporates by reference, as though set forth in full, all of the allegations set forth in paragraphs 1 through 11 of this Counterclaim. 13. Upon information and belief, the patent fails to meet statutory requirements and/or all of the limitations of the purported invention claimed in the ‘535 patent are present in prior art references that were available sufficiently prior so as to render each asserted claim of the ‘535 patent invalid for failure to comply with the patent laws, including, but not limited to, 35 U.S.C. §§ 102, 103 and/or 112. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 11 of 16 Page ID #:347 EXHIBIT 1 Page 13 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 1 of 16 Page ID #:388 12 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COUNT IV Declaration of Invalidity of U.S. Patent 6,271,458 14. Counterclaim Plaintiff inMusic repeats and incorporates by reference, as though set forth in full, all of the allegations set forth in paragraphs 1 through 13 of this Counterclaim. 15. Upon information and belief, the patent fails to meet statutory requirements and/or all of the limitations of the purported invention claimed in the ‘458 patent are present in prior art references that were available sufficiently prior so as to render each asserted claim of the ‘458 patent invalid for failure to comply with the patent laws, including, but not limited to, 35 U.S.C. §§ 102, 103 and/or 112. COUNT V Declaration of Invalidity of U.S. Patent 6,121,538 16. Counterclaim Plaintiff inMusic repeats and incorporates by reference, as though set forth in full, all of the allegations set forth in paragraphs 1 through 15 of this Counterclaim. 17. Upon information and belief, the patent fails to meet statutory requirements and/or all of the limitations of the purported invention claimed in the ‘538 patent are present in prior art references that were available sufficiently prior so as to render each asserted claim of the ‘538 patent invalid for failure to comply with the patent laws, including, but not limited to, 35 U.S.C. §§ 102, 103 and/or 112. COUNT VI Declaration of Invalidity of U.S. Patent 6,881,885 18. Counterclaim Plaintiff inMusic repeats and incorporates by reference, as though set forth in full, all of the allegations set forth in paragraphs 1 through 17 of this Counterclaim. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 12 of 16 Page ID #:348 EXHIBIT 1 Page 14 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 12 of 16 Page ID #:389 13 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19. Upon information and belief, the patent fails to meet statutory requirements and/or all of the limitations of the purported invention claimed in the ‘885 patent are present in prior art references that were available sufficiently prior so as to render each asserted claim of the ‘885 patent is invalid for failure to comply with the patent laws, including, but not limited to, 35 U.S.C. §§ 102, 103 and/or 112. COUNT VII Declaration of Invalidity of U.S. Patent 6,632,989 20. Counterclaim Plaintiff inMusic repeats and incorporates by reference, as though set forth in full, all of the allegations set forth in paragraphs 1 through 19 of this Counterclaim. 21. Upon information and belief, the patent fails to meet statutory requirements and/or all of the limitations of the purported invention claimed in the ‘989 patent are present in prior art references that were available sufficiently prior so as to render each asserted claim of the ‘989 patent invalid for failure to comply with the patent laws, including, but not limited to, 35 U.S.C. §§ 102, 103 and/or 112. COUNT VII Declaration of Invalidity of U.S. Patent 7,459,626 22. Counterclaim Plaintiff inMusic repeats and incorporates by reference, as though set forth in full, all of the allegations set forth in paragraphs 1 through 21 of this Counterclaim. 23. Upon information and belief, the patent fails to meet statutory requirements and/or all of the limitations of the purported invention claimed in the ‘626 patent are present in prior art references that were available sufficiently prior so as to render each asserted claim of the ‘626 patent invalid for failure to comply with the patent laws, including, but not limited to, 35 U.S.C. §§ 102, 103 and/or 112. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 13 of 16 Page ID #:349 EXHIBIT 1 Page 15 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 13 of 16 Page ID #:390 14 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PRAYER FOR RELIEF WHEREFORE, inMusic Brands, Inc., prays that this Court grant the following relief: A. Dismissal with prejudice of Roland’s Complaint and all claims for relief therein and entry of an order denying Roland any relief in this action; B. Entry of declaratory judgment that each asserted claim of U.S. Patent No. 7,385,135; U.S. Patent No. 6,921,857; U.S. Patent No. 6,756,535; U.S. Patent No. 6,271,458; U.S. Patent No. 6,121,538; U.S. Patent No. 6,881,885; U.S. Patent No. 6,632,989; and U.S. Patent No. 7,459,626 that Roland alleges that inMusic has infringed is invalid; C. An injunction permanently enjoining and restraining Roland and its officers, agents, subsidiaries, partners, servants, employees, and attorneys, and those persons in active concert or participation with them from asserting, enforcing, or threatening or attempting to enforce U.S. Patent No. 7,385,135; U.S. Patent No. 6,921,857; U.S. Patent No. 6,756,535; U.S. Patent No. 6,271,458; U.S. Patent No. 6,121,; U.S. Patent No. 6,881,885; U.S. Patent No. 6,632,989; and U.S. Patent No. 7,459,626 against inMusic, and its affiliates, distributors, customers, suppliers and end- users of the accused products; D. A declaration that this action is an exceptional case and an award to inMusic of its attorney’s fees and expenses pursuant to 35 U.S.C. §285; E. An award to inMusic of its cost of suit; and F. A grant to inMusic of such other relief as the Court may deem just and proper. Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 14 of 16 Page ID #:350 EXHIBIT 1 Page 16 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 14 of 16 Page ID #:391 15 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEMAND FOR JURY TRIAL Defendant/Counterclaim Plaintiff inMusic hereby demands a trial by jury on all issues so triable in this action. Respectfully Submitted, Dated: October 24, 2016 Attorneys for Defendant inMusic Brands, Inc. HINCKLEY, ALLEN & SNYDER LLP By: /s/ Craig M. Scott CRAIG M. SCOTT (pro hac vice) cscott@hinckleyalllen.com CHRISTINE K. BUSH (pro hac vice) cbush@hinckleyalllen.com REBECCA F. BRIGGS (pro hac vice) rbriggs@hinckleyalllen.com 100 Westminster Street, Suite 1500 Providence, Rhode Island 02903 Tel: 401.274.2000 Fax: 401.277.9600 DOLL AMIR & ELEY LLP GREGORY L. DOLL (SBN 193205) gdoll@dollamir.com PAUL TORRES (SBN 240590) ptorres@dollamir.com 1888 Century Park East, Suite 1850 Los Angeles, California 90067 Tel: 310.557.9100 Fax: 310.557.9101 Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 15 of 16 Page ID #:351 EXHIBIT 1 Page 17 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 15 of 16 Page ID #:392 INMUSIC BRANDS, INC.’S ANSWER TO COMPLAINT AND COUNTERCLAIM FOR DECLARATORY RELIEF CASE NO. 2:16-CV-06256-CBM-AJW 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE The undersigned hereby certifies that all counsel of record who are deemed to have consented to electronic service are being served with a copy of this document via the Court’s CM/ECF system per Local Rule CV-5-3.2.2 on October 24, 2016.. Paul M. Torres 56096041 (71187.170644) Case 2:16-cv-06256-CBM-AJW Document 22 Filed 10/24/16 Page 16 of 16 Page ID #:352 EXHIBIT 1 Page 18 Case 2:16-cv-06256-CBM-AJW Document 25-2 Filed 11/10/16 Page 16 of 16 Page ID #:393 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA AUDIONICS SYSTEM, INC. d.b.a. CRUX INTERFACING SOLUTIONS, a California Company, Plaintiff, vs. AAMP OF FLORIDA, INC., d.b.a. AAMP OF AMERICA, INC., a Florida Company, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CASE NO. CV 12-10763 MMM (JEMx) ORDER GRANTING AAMP OF FLORIDA, INC.’S MOTION TO STRIKE AUDIONICS SYSTEM, INC.’S AFFIRMATIVE DEFENSES I. BACKGROUND A. Factual Background This is a patent dispute between Audionics System, Inc. d/b/a Crux Interfacing Solutions (“Crux”) and AAMP of Florida, Inc. (“AAMP”). AAMP owns the rights to U.S. Patent No. 8,014,540 (“the ’540 patent”) and 8,184,825 (“the ‘825 patent”) (together, “the patents”). The patents disclose interface devices for vehicle accessories that are adapted to permit the use of EXHIBIT 2 Page 19 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 1 of 18 Page ID #:394 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 factory-installed remote vehicle stereo controls with after-market replacement stereos.1 The ’540 patent issued on September 6, 2011.2 It protects a “Remote Control Interface for Replacement Vehicle Stereos.”3 The ’825 patent issued on May 22, 2012,4 and protects a “Vehicle Remote Control Interface for Controlling Multiple Electronic Devices.”5 The patents both claim priority through U.S. Patent No. 6,956,952 (“the ’952 patent”), which was filed November 17, 1999.6 The named inventor of both of the asserted patents is Brett D. Riggs, a current AAMP employee.7 AAMP alleges that Crux’s interface devices, which it sells under the trade names “SOOGM-15,” “SOOGM-16,” and “SOOGM-16B,” infringe claims 1 and 9 of the ’540 patent.8 It asserts that the same devices also infringe claims 1, 6, and 15 of the ’825 patent.9 B. Requests for Judicial Notice AAMP requests that the court take judicial notice of an order issued by the United States Patent and Trademark Office (“PTO”) denying an ex parte request for reexamination of the ’540 1Declaration of Steven A. Wilson in Support of AAMP’s Opening Claim Construction Brief (“Wilson Decl.”), Docket No. 58-1 (June 17, 2013), Exh. A (’540 Patent), col. 1:16-21; see also Wilson Decl., Exh. B (’825 Patent), col. 1:17-20. 2Complaint, No. 13-1950, Docket No. 1 (Dec. 27, 2012), ¶ 6. 3Id. 4Id., ¶ 15. 5Id. 6Opposition re: Motion to Strike Affirmative Defenses (“Opposition”), Docket No. 115 (Oct. 28, 2013) at 2. 7’540 Patent at 1; ’825 Patent at 1. 8Complaint, ¶ 9. 9Id., ¶ 18. 2 EXHIBIT 2 Page 20 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 2 of 18 Page ID #:395 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 patent.10 Crux requests that the court take judicial notice of the prosecution history of the ’952 patent and the ’540 patent.11 Under Rule 201(b) of the Federal Rules of Evidence, “[t]he court may judicially notice a fact that is not subject to reasonable dispute because it: (1) is generally known within the trial court’s territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” FED.R.EVID. 201(b). “Judicial notice is appropriate for records and ‘reports of administrative bodies.’” United States v. 14.02 Acres of Land More or Less in Fresno County, 547 F.3d 943, 955 (9th Cir. 2008) (quoting Interstate Natural Gas Co. v. Southern California Gas Co., 209 F.2d 380, 385 (9th Cir. 1954)). For this reason, courts can take judicial notice of documents issued by the PTO. See Iconfind, Inc. v. Google, Inc., No. 2:11-cv-0319-GEB-JFM, 2012 WL 158366, *1 (E.D. Cal. Jan. 18, 2012) (“Since the prosecution history is a public record that is ‘capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned,’ the request is granted”); Aten Intern. Co., LTD v. Emine Tech. Co., Ltd., No. SACV 09-0843 AG (MLGx), 2010 WL 1462110, *1 (C.D. Cal. Apr. 12, 2010) (taking judicial notice of a PTO report); Sorenson v. Fein Power Tools, No. 09cv558 BTM (CAB), 2009 WL 3157487, *1 n. 1 (S.D. Cal. Sept. 28, 2009) (taking judicial notice of PTO documents); Coinstar, Inc. v. Coinbank Automated Sys., Inc., 998 F.Supp. 1109, 1114 (N.D. Cal. 1998) (taking judicial notice of two patents and documents from the file history of a patent). Neither request is opposed. The court therefore takes judicial notice of the PTO order denying reexamination of the ’540 patent, and of the prosecution history of the ’952 and ’540 patents. C. Procedural History Crux filed an action seeking a declaratory judgment of noninfringement, invalidity, and 10Motion to Strike Affirmative Defenses (“Motion to Strike”), Docket No. 82-1 (Aug. 22, 2013) at 5 n. 2; id., Exh. A, Docket No. 82-3 (Aug. 22, 2013). 11Opposition at 9. 3 EXHIBIT 2 Page 21 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 3 of 18 Page ID #:396 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 unenforceability on December 17, 2012.12 On June 20, 2013, the court entered an order consolidating this action with a patent infringement action against Crux that AAMP had filed in the United States District Court for the Middle District of Florida and that had been transferred to this district.13 Crux answered AAMP’s complaint on August 2, 2013, asserting twenty affirmative defenses.14 On August 22, 2013, AAMP filed a motion to strike defenses one through four, seven through twelve, and fifteen through twenty in Crux’s answer. Affirmative defenses one through four assert that the ’540 patent is invalid under 35 U.S.C. § 112 because it fails (1) to enable a person of ordinary skill in the art to make and/or use the purported inventions claimed therein; (2) to set forth an adequate written description of the purported inventions claimed; (3) to provide the best mode known to the putative inventors of practicing the purported inventions; and (4) to satisfy the definiteness requirement.15 Affirmative defenses nine through twelve repeat these defenses as to the ’825 patent.16 Affirmative defenses seven and fifteen assert the ’540 and ’825 patents, respectively, are invalid because they fail to set forth the proper inventors of the patented inventions.17 Affirmative defenses eight and sixteen assert that Crux did not infringe the ’540 and ’825 patents respectively because the any finding of infringment would be based on a claim construction that is barred by the doctrines of prosecution disclaimer and/or prosecution history estoppel.18 The remaining affirmative defenses AAMP seeks to strike allege that (17) the 12Id. at 9. 13Order re: Consolidation of Case Under Case Number CV 12-10763 and Termination of Case Number CV 13-01950, Docket No. 60 (June 20, 2013). 14Answer, Docket No. 77 (Aug. 2, 2013). 15Id., ¶¶ 25-28. 16Id., ¶¶ 33-36. 17Id., ¶¶ 31, 39. 18Id., ¶¶ 32, 40. 4 EXHIBIT 2 Page 22 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 4 of 18 Page ID #:397 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 complaint fails to state a claim on which relief can be granted; (18) enforcement of the patents is barred by laches, waiver, estoppel, and/or unclean hands; (19) AAMP has failed to comply with the marking requirements of 35 U.S.C. § 287; and (20) AAMP’s claims of infringement of the patents are barred by its inequitable conduct before the PTO.19 Crux opposes the motion.20 II. DISCUSSION A. Legal Standard Governing Motions to Strike Rule 12(f) allows a court to “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” FED.R.CIV.PROC. 12(f). “The essential function of a Rule 12(f) motion is to ‘avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial.” Bureerong v. Uvawas, 922 F.Supp. 1450, 1478 (C.D. Cal. 1996) (quoting Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), overruled on other grounds, 510 U.S. 517 (1994)). Motions to strike under Rule 12(f) are “generally regarded with disfavor because of the limited importance of pleading in federal practice, and because they are often used as a delaying tactic.” Neilson v. Union Bank of Cal., N.A., 290 F.Supp.2d 1101, 1152 (C.D. Cal.2003). “An affirmative defense may be insufficient as a matter of pleading or as a matter of law. It may be insufficiently pleaded where it fails to provide the plaintiff with fair notice of the defense asserted.” Vogel v. Huntington Oaks Del. Partners, LLC, 291 F.R.D. 438, 440 (C.D. Cal. 2013) (citing Wyshak v. City Nat. Bank, 607 F.2d 824, 827 (9th Cir. 1979)). “It also may be insufficient as a matter of law where ‘there are no questions of fact, . . . any questions of law are clear and not in dispute, and . . . under no set of circumstances could the defense succeed.’” Huntington Oaks Del. Partners, LLC, 291 F.R.D. at 440 (quoting Ganley v. Cnty. of San Mateo, No. C06-3923 TEH, 2007 WL 902551, *1 (N.D. Cal. Mar. 22, 2007). If a motion to strike is granted, “[i]n the absence of prejudice to the opposing party, leave to amend should be freely 19Id., ¶¶ 40, 41, 43. 20Opposition. 5 EXHIBIT 2 Page 23 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 5 of 18 Page ID #:398 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 given.” Wyshak, 607 F.2d at 826. B. Legal Standard Governing the Pleading of Affirmative Defenses AAMP moves to strike affirmative defenses one through four, seven through twelve, and fifteen through nineteen because they are insufficiently pled under Rule 8 of the Federal Rules of Civil Procedure.21 The parties dispute whether the notice” pleading standard articulated in Wyshak continues to govern the pleading of affirmative defenses following the Supreme Court’s decisions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009). These cases hold under Rule 8 that a complaint must contain enough facts to state a claim that is plausible on its face.22 Compare Wyshak, 607 F.2d at 827 (“The key to determining the sufficiency of pleading an affirmative defense is whether it gives plaintiff fair notice of the defense,” citing Conley v. Gibson, 355 U.S. 41, 474-8 (1957)), with Iqbal, 556 U.S. at 678 (A complaint must “contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ . . . A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged”); Twombly, 550 U.S. at 545 (“Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)” (citations omitted)). As one court in this circuit recently noted, “[n]either the Ninth Circuit, nor any other Circuit Court of Appeals . . . has ruled on this issue.” Dodson v. Gold Country Foods, Inc., 2:13-CV-0336-TLN-DAD, 2013 WL 5703345, *2 (E.D. Cal. Oct. 18, 2013). District courts in the circuit, moreover, are divided on the proper pleading standard to apply in assessing the adequacy of affirmative defenses. See Perez v. Gordon & Wong Law Grp., P.C., 11-CV-03323- LHK, 2012 WL 1029425, *6 (N.D. Cal. Mar. 26, 2012) (“The question winding its way through district courts throughout this circuit and throughout the country . . . is whether the ‘plausibility’ pleading standard for [antitrust] complaints announced in [Twombly], and extended to all civil 21Motion to Strike at 1. 22Id. at 1; Opposition at 19. 6 EXHIBIT 2 Page 24 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 6 of 18 Page ID #:399 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 complaints in [Iqbal], redefines what constitutes ‘fair notice’ of an affirmative defense pled in an answer”); Vogel v. Linden Optometry APC, No. CV 13-00295 GAF (SHx), 2013 WL 1831686, *2 (C.D. Cal. Apr. 30, 2013) (collecting cases). Crux argues that the court should not extend Iqbal and Twombly to affirmative defenses.23 It contends that textual differences between Rules 8(a) and 8(c) require that different pleading standards be applied to complaints and affirmative defenses.24 Crux asserts that while Rule 8(a) requires that plaintiffs “show” they are entitled to relief, Rule 8(c) merely requires that defendants “affirmatively state” any affirmative defenses.25 Courts applying the notice pleading standard to affirmative defenses focus on this discrepancy between the plain language of the two rules. See Vogel, 2013 WL 1831686 at *3 (“There are, notably, important linguistic differences between Federal Rule of Civil Procedure 8(a)(2), which governs complaints, and Rule 8(c), which governs affirmative defenses”); Kohler v. Big 5 Corp., 2:12-CV-00500-JHN, 2012 WL 1511748, *2 (C.D. Cal. Apr. 30, 2012) (“[A]pplying the same standard of pleading to claims and affirmative defenses, despite [the] clear distinction in the rules’ language, would run counter to the Supreme Court’s warning in Twombly that legislative action, not ‘judicial interpretation,’ is necessary to ‘broaden the scope’ of specific federal pleading standards,” quoting Kohler v. Islands Restaurants, LP, 280 F.R.D. 560, 566 (S.D. Cal. 2012)); Figueroa v. Baja Fresh Westlake Vill., Inc., CV 12- 769-GHK (SPx), 2012 WL 2373254, *2 (C.D. Cal. May 24, 2012) (“Plaintiff argues generally that the Twombly/lqbal pleading standard is applicable to all affirmative defenses. We disagree, in large part because of the textual difference between Rule 8(a) and Rule 8(c)”); Tyco Fire Products LP v. Victaulic Co., 777 F.Supp.2d 893, 900 (E.D. Pa. 2011) (“In light of the differences between Rules 8(a) and 8(c) in text and purpose, the Court concludes that Twombly and Iqbal do not apply to affirmative defenses”). Crux does not explain, however, why these textual differences did not compel use of distinct pleading standards prior to Twombly and Iqbal, 23Opposition at 19. 24Id. 25Id. 7 EXHIBIT 2 Page 25 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 7 of 18 Page ID #:400 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 when courts applied a common pleading standard. See Qarbon.com Inc. v. eHelp Corp., 315 F.Supp.2d 1046, 1049 (N.D. Cal. 2004) (“Affirmative defenses are governed by the same pleading standard as complaints”). Crux also argues that the Supreme Court purposefully excluded affirmative defenses from the heightened pleading standard, as evidenced by the Twombly and Iqbal Courts’ consistent use of the terms “complaint” and “claim” in their discussion of Rule 8(a), and the fact that they made no mention of “defense” or Rule 8(c).26 Courts applying the lower pleading standard embrace this argument. See Big 5 Copr., 2012 WL 1511748 at *2 (“Twombly and Iqbal are limited to pleadings covered by Fed.R.Civ.P. 8(a)(2),” citing Islands Restaurants, 280 F.R.D. at 566)); Figueroa v. Marshalls of CA, LLC, CV11-06813-RGK (SPx), 2012 WL 1424400, *1 (C.D. Cal. Apr. 23, 2012) (“Plaintiff contends that the pleading standard of [Twombly and Iqbal] applies to affirmative defenses. The Court disagrees. Twombly and Iqbal address only Rule 8(a)”). While it is true that Twombly and Iqbal did not discuss Rule 8(c), the issue of pleading affirmative defenses was not before the Court. Crux does not explain why the Court’s silence with respect to affirmative defenses constituted an implicit holding that the pleading standard for such defenses remained unchanged. See Huntington Oaks Del. Partners, LLC, 291 F.R.D. at 440 (“[S]imply because the issue was not before the Supreme Court does not mean Twombly’s logic applies with any less force to affirmative defenses”); see also United States v. Dyess, 730 F.3d 354, 366 n. 1 (4th Cir. 2013) (“[T]here is nothing that requires that we interpret a court’s silence on an argument as a decision rejecting the argument on its merits”). While AAMP does not argue expressly that the court should apply the heightened pleading standard of Twombly/Iqbal, it cites two district court decision that apply the “plausibility” standard to affirmative defenses - Gonzalez v. Preferred Freezer Servs., LBF, LLC, CV 12-3467 ODW (FMOx), 2012 WL 2602882 (C.D. Cal. July 5, 2012), and Powertech Tech., Inc. v. Tessera, Inc., C 10-945 CW, 2012 WL 1746848 (N.D. Cal. May 16, 2012). The Gonzalez and Powertech courts both reasoned that because Rule 8's requirements with respect to pleading defenses in an 26Id. at 19-20. 8 EXHIBIT 2 Page 26 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 8 of 18 Page ID #:401 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 answer parallel the requirements for pleading claims in a complaint, the same standard should apply both to claims and defenses. As the Powertech court explained: “Twombly and Iqbal changed the legal foundation underlying the Ninth Circuit’s Wyshak decision, and the reasoning in those decisions also applies in the context of affirmative defenses. At the time Wyshak was decided, the fair notice pleading standard was governed by Conley v. Gibson, which held that a complaint could not be dismissed for failure to state a claim unless it appeared beyond doubt that the plaintiff could prove no set of facts in support of his claim which would entitle him to relief. In Wyshak, the Ninth Circuit applied the Conley pleading standard for complaints to the pleading of affirmative defenses. However, the Supreme Court’s Twombly and Iqbal decisions in 2007 and 2009, respectively, departed from Conley and redefined the pleading requirements under Rule 8. Courts have observed that Rule 8’s requirements with respect to pleading defenses in an answer parallel the Rule’s requirements for pleading claims in a complaint, and this parallelism appears to be the very reason the Ninth Circuit applied Conley to the pleading of affirmative defenses in Wyshak. Especially in light of the fact that the defendant bears the burden of proof on an affirmative defense, as the plaintiff does on a claim for relief, Twombly’s rationale of giving fair notice to the opposing party would seem to apply as well to affirmative defenses given the purpose of Rule 8(b)’s requirements for defenses.” 2012 WL 1746848 at *4. See also Gonzalez, 2012 WL 1746848 at *2-3 (quoting Powetech). Other district courts in the circuit applying a heightened standard to affirmative defenses have relied on similar reasoning. See Barnes v. AT & T Pension Ben. Plan-Nonbargained Program, 718 F.Supp.2d 1167, 1172 (N.D. Cal. 2010) (“Rule 8’s requirements with respect to pleading defenses in an answer parallels the Rule’s requirements for pleading claims in a complaint. . . . The court can see no reason why the same principles applied to pleading claims should not apply to the pleading of affirmative defenses which are also governed by Rule 8”); Figueroa v. Stater Bros. Markets, Inc., CV 13- 3364 FMO (JEMx), 2013 WL 4758231, *3 (C.D. Cal. Sept. 3, 2013) (quoting Barnes). 9 EXHIBIT 2 Page 27 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 9 of 18 Page ID #:402 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Applying the heightened pleading standard to affirmative defenses also promotes fairness and efficiency. See Racick v. Dominion Law Associates, 270 F.R.D. 228, 233 (E.D.N.C. 2010) (“The majority of the district courts . . . have concluded that the plausibility standard articulated in Twombly and Iqbal applies to the pleading of affirmative defenses. . . . The reasoning cited by these courts typically is two-fold. First, the courts recognize that what is good for the goose is good for the gander, and reason that ‘it makes neither sense nor is it fair to require a plaintiff to provide the defendant with enough notice that there is a plausible, factual basis for her claim under one pleading standard and then permit a defendant under another pleading standard simply to suggest that some defense may possibly apply in the case.’ Second, the courts note that ‘[b]oilerplate defenses clutter the docket and . . . create unnecessary work’ and extend[ ] discovery” (citations omitted)); see also Memory Control Enter., LLC v. Edmunds.com, Inc., CV 11-7658 PA (JCx), 2012 WL 681765, *4 (C.D. Cal. Feb. 8, 2012) (“District courts holding that the heightened standard applies reason that if a plaintiff’s claims are subject to Twombly and Iqbal, then it is only right to similarly subject a defendant’s affirmative defenses to this standard”); Barnes, 718 F.Supp.2d at 1172 (“‘Applying the standard for heightened pleading to affirmative defenses serves a valid purpose in requiring at least some valid factual basis for pleading an affirmative defense and not adding it to the case simply upon some conjecture that it may somehow apply.’ . . . Applying the same standard will also serve to weed out the boilerplate listing of affirmative defenses which is commonplace in most defendants’ pleadings where many of the defenses alleged are irrelevant to the claims asserted” (citations omitted)). The court finds these arguments in support of applying Iqbal and Twombly to affirmative defenses persuasive.27 Accordingly, the court concludes that affirmative defenses must satisfy the Twombly/Iqbal pleading standard and allege sufficient facts to demonstrate plausibility. See, e.g., 27The Ninth Circuit cited Wyshak’s fair notice standard in Simmons v. Navajo Cty., 609 F.3d 1011, 1023 (9th Cir. 2010), after Iqbal was decided. As other courts have noted, however, that case “did not have the issue of Rule 8 pleading standards squarely before it, and its citation appeared in a discussion focused on when, not how, to plead an affirmative defense.” Powertech Tech., 2012 WL 1746848 at *4 (quoting Perez v. Gordon & Wong Law Group, P.C., No. 11-CV-03323-LHK, 2012 WL 1029425, *8 n. 4 (N.D. Cal. Mar. 26, 2012)). 10 EXHIBIT 2 Page 28 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 10 of 18 Page ID #:403 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PageMelding, Inc. v. ESPN, Inc., No. C 11-06263 WHA, 2012 WL 3877686, *3 (N.D. Cal. Sept. 6, 2012) (applying the Iqbal-Twombly standard in a patent case and striking affirmative defenses with leave to amend); Powertech Tech., 2012 WL 1746848 at *4-5 (same); Anticancer Inc. v. Xenogen Corp., 248 F.R.D. 278, 282 (S.D. Cal. 2007) (holding, in a patent case, that Twombly’s heightened pleading standard applies to affirmative defenses). C. Whether the Court Should Strike Crux’s Affirmative Defenses 1. Whether the Court Should Strike Affirmative Defenses 1-4, 7-12, 15-17, and 19 Crux’s first through fourth, seventh through twelfth, fifteenth through seventeenth, and nineteenth affirmative defenses do not plead any facts. Crux argues that a motion to strike should not be granted unless the court is convinced “that there are no questions of fact, that any questions of law are clear and not in dispute, and that under no set of circumstances could the claim or defense succeed.”28 Crux is only partially correct. As discussed, an affirmative defense can either be insufficiently pled or be insufficient as a matter of law. Huntington Oaks Del Partners, LLC, 291 F.R.D. at 440. Crux’s argument concerns insufficiency as a matter of law; Crux’s affirmative defenses fail, however, because they are not adequately pled. Crux relies on bare legal conclusions in pleading each of the defenses; no facts are alleged to show how they support the availability of the defense. Because Crux pleads no facts demonstrating that the defenses are plausible, each fails the Iqbal/Twombly standard. Accordingly, the court grants AAMP’s motion to strike these defenses.29 28Opposition at 23. 29Crux’s seventeenth affirmative defense asserts that AAMP’s complaint “fails to state any claim upon which relief can be granted.” Several courts in this circuit have held that “failure to state a claim” is not a proper affirmative defense, but rather a defect in a plaintiff’s prima facie case. See J & J Sports Productions, Inc. v. Vizcarra, No. 11-1151 SC, 2011 WL 4501318, *3 (N.D. Cal. Sept. 27, 2011); Desert European Motorcars, Ltd.. v. Desert European Motorcars, Inc., No. EDCV 11-197 RSWL (DTBx), 2011 WL 3809933, *1 (C.D. Cal. Aug. 25, 2011); J & J Sports Productions, Inc. v. Mendoza-Govan, No. C 10-05123 WHA, 2011 WL 1544886, *5 (N.D. Cal. Apr. 25, 2011); see also Barnes, 718 F.Supp.2d at 1174; Perez v. Gordon & Wong Law Grp., P.C., No. 11-CV-03323-LHK, 2012 WL 1029425, *11 (Mar. 26, 2012). Other courts 11 EXHIBIT 2 Page 29 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 11 of 18 Page ID #:404 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. Whether Crux’s Twentieth Affirmative Defense Satisfies Rule 9(b) The parties agree that Crux’s twentieth affirmative defense, which alleges inequitable conduct, “falls within the strictures of Rule 9(b).” Multimedia Patent Trust v. Microsoft Corp., 525 F.Supp.2d 1200, 1211 (S.D. Cal. 2007); see Central Admixture Pharmacy Servs., Inc. v. Advanced Cardiac Solutions, P.C., 482 F.3d 1347, 1356 (Fed. Cir. 2007) (“We have held that ‘inequitable conduct, while a broader concept than fraud, must be pled with particularity,’” quoting Ferguson Beauregard/Logic Controls, Inc. v. Mega Sys., LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003)); see also Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1326-27 (Fed. Cir. 2009) (inequitable conduct counterclaim and defense must be pled with particularity under Rule 9(b)). Inequitable conduct defenses not pled with adequate particularity can be stricken. Multimedia Patent Trust, 525 F.Supp.2d at 1211 (“[A]n inequitable conduct defense to a patent infringement claim may be stricken pursuant to Rule 12(f) for failure to plead with particularity”). To meet the pleading requirements of Rule 9(b), a defendant asserting an inequitable conduct defense “must identify the specific who, what, when, where, and how” of the alleged have declined to strike this affirmative defense. See Valley Community Bank v. Progressive Cas. Ins. Co., No. 5:11-cv-00574-JF (HRL), 2011 WL 1833116, *3 (N.D. Cal. May 13, 2011) (denying a motion to strike a “failure to state a claim upon which relief may be granted” defense, because “Federal Rule of Civil Procedure 12(h)(2) provides that failure to state a claim upon which relief may be granted is a defense that may be raised in any pleading allowed or ordered under Federal Rule of Civil Procedure 7(a); one of the pleadings allowed under Rule 7(a) is an answer”); Cal. Dept. of Toxic Substances Control v. Alco Pacific, Inc., 217 F.Supp.2d 1028, 1043 (C.D. Cal. 2002) (“Where the defense is asserted in a party’s answer, rather than as a Rule 12(b)(6) motion, plaintiff bears the burden pursuant to Rule 12(f) of demonstrating that there is no question of fact or significant question of law that precludes assertion of the defense. Moreover, there is little prejudice in permitting such a defense, as it generally has the same effect as a general denial, and the content of the pleadings is fixed”); Venta (bvba) v. Top Disposal II, Inc., No. 00 C 3172, 2001 WL 111235, * 1 n. 2 (N.D. Ill. Feb. 08, 2001) (“As a hyper-technical point, some courts have maintained that ‘failure-to-state-a-claim’ may not be an affirmative defense, because such a claim attacks the legal sufficiency of the pleading, rather than raising a matter outside the pleading. . . . However, a number of courts in the Northern District of Illinois have refused to strike a failure-to-state-a-claim defense merely because it responds to matters in the pleadings, as opposed to raising new matters”). Accordingly, the court declines to strike Crux’s seventeenth affirmative defense on this basis. 12 EXHIBIT 2 Page 30 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 12 of 18 Page ID #:405 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 material misrepresentation or omission committed before the Patent and Trademark Office (“PTO”). Exergen Corp., 575 F.3d at 1328. The defendant must also include “sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO.” Id. The gravamen of Crux’s inequitable conduct defense is that AAMP knew of certain products (“the Soundgate products”) that were material prior art to the patents in suit during prosecution, but withheld this information from the PTO.30 Crux identifies two individuals who allegedly knew about the Soundgate products: Brett D. Riggs (“Riggs”), the named inventor,31and Michael H. Trenholm (“Trenholm”), the attorney of record for prosecution of the ’952 and ’540 patents.32 Crux contends that AAMP’s discovery responses show that the company too knew of the Soundgate products during patent prosecution.33 Crux asserts that AAMP, Riggs, and Trenholm failed to disclose the Soundgate products to the PTO as prior art during prosecution of the ’540 patent, and during prosecution of the ’952 patent, from which the ’540 patent and ’825 patents derive.34 Crux also alleges “on information and belief” that the failure to disclose the Soundgate products was specifically intended to deceive the PTO.35 As a threshold matter, Crux’s assertion “on information and belief” that AAMP’s failure to disclose the Soundgate products was specifically intended to deceive the PTO is insufficient to give rise to an inference of deceptive intent. See Exergen Corp., 575 F.3d at 1330 (“Deceptive 30Answer, ¶ 53. 31Id., ¶¶ 45, 50. 32Id., ¶ 51. 33Id., ¶ 50. 34Id., ¶¶ 54-55, 57. 35Id. 13 EXHIBIT 2 Page 31 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 13 of 18 Page ID #:406 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 intent in this case was pleaded solely on ‘inform[ation] and belie[f].’ Pleading on ‘information and belief’ is permitted under Rule 9(b) when essential information lies uniquely within another party’s control, but only if the pleading sets forth the specific facts upon which the belief is reasonably based” (citation omitted)). The court therefore looks to Crux’s factual allegations to determine whether it has provided sufficient circumstantial evidence to allow the court reasonably to infer deceptive intent. See Human Genome Sciences, Inc. v. Genentech, Inc., 2:11-CV-6519- MRP, 2011 WL 7461786, *3 (C.D. Cal. Dec. 9, 2011) (“Because intent is a condition of [the] mind, direct evidence of intent is rarely available. This requires an accused infringer to attempt to prove deceptive intent through circumstantial evidence”); see also Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290 (Fed. Cir. 2011) (“Because direct evidence of deceptive intent is rare, a district court may infer intent from indirect and circumstantial evidence”). Crux does not allege sufficient facts that would permit a jury to infer deceptive intent. While Crux’s answer contains facts indicating that AAMP knew of the Soundgate products during the prosecution of the patents in suit, knew they were material, and failed to disclose the products to the PTO, these facts by themselves do not support an inference of deceptive intent. See Human Genome Sciences, Inc., 2011 WL 7461786 at *4 (“[A]s recently reiterated in Therasense, proving that an applicant knew of a reference, should have known of its materiality, and failed to disclose the reference to the PTO is insufficient on its own to prove a specific intent to deceive,” citing Therasense, 649 F.3d at 1290). In its opposition, Crux repeats specific statements Trenholm made to the PTO during the prosecution of the ’952 and ’540 patents to support its contention that AAMP acted with deceptive intent.36 The statements merely show, however, that Trenholm did not disclose the Soundgate products to the PTO; they do not show that his failure to disclose was motivated by an intent to deceive. Human Genome Sciences, 2011 WL 7461786 at *4 (“Most of HGS’ alleged facts fail to provide a reasonable inference that Genentech had an intent to deceive the PTO. Those allegations fail because they either provide mere conclusory statements that Genentech intended 36Opposition at 9-10. 14 EXHIBIT 2 Page 32 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 14 of 18 Page ID #:407 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to deceive the PTO or because they merely assert the fact that a misrepresentation or omission occurred. . . . [T]he fact that a misrepresentation or omission occurred cannot, standing on its own, provide a plausible basis for a claim for relief”); see also Theranese, 649 F.3d at 1290. Crux also asserts in its opposition that neither the ’952 patent nor any of its child patents would have issued had AAMP disclosed the Soundgate products to the PTO.37 This assertion demonstrates that the information AAMP withheld is material, but the materiality of an omission or misrepresentation may not be used to support an inference of deceptive intent. Pixion, Inc. v. Citrix Sys., Inc., C 09-03496 SI, 2012 WL 762005, *5 (N.D. Cal. Mar. 8, 2012) (“[I]ntent must be proven separately from materiality, regardless of how significant or material the withheld reference is,” citing Astrazeneca Pharm. v. Teva Pharm. USA, 583 F.3d 766, 770 (Fed. Cir. 2009)); Human Genome Sciences, 2011 WL 7461786 at *4 (“Because intent and materiality are now two separate inquiries, the Court cannot draw conclusions based on the level of materiality of the undisclosed art. And because the Court cannot draw conclusions based on the level of materiality, HGS’ allegation for this alleged omission is merely consistent with liability” (internal quotation marks omitted)). Finally, Crux asserts in its answer that AAMP did disclose the Soundgate products to the PTO during its prosecution of the ’825 patent, “less than a month before the Notice of Allowance was issued on March 20, 2012.”38 Crux contends this disclosure was made “almost 14 years after AAMP . . . knew of the Soundgate products.”39 AAMP’s disclosure of the Soundgate products to the PTO in its prosecution of a later patent would seem to undermine, rather than support, an inference of deceptive intent. As AAMP notes, if it intended to deceive the PTO by concealing the Soundgate products during its prosecution of the ’952 and ’540 patents, it would be “undeniably poor strategy” to disclose those very products to the PTO in its later prosecution of the related ’825 patent. See Exergen Corp., 575 F.3d at 1329 n. 5 (“A reasonable inference is 37Id. at 10-11. 38Answer, ¶ 56. 39Id. 15 EXHIBIT 2 Page 33 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 15 of 18 Page ID #:408 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 one that is plausible and that flows logically from the facts alleged, including any objective indications of candor and good faith”); Mycone Dental Supply Co., Inc. v. Creative Nail Design, Inc., CIV.A. 11-4380 JBS, 2013 WL 3216145, *5 (D.N.J. June 24, 2013) (“[A]ccording to the Federal Circuit, a court is not free to disregard the patentee’s objective indications of candor and good faith when it assesses whether the pleadings create a reasonable inference of specific intent to deceive the PTO”). In its opposition to AAMP’s motion to strike, Crux asserts new facts that it has obtained through discovery in this action and that it contends support its inequitable conduct affirmative defense.40 Crux contends that the patents at issue had an additional inventor, Terry Weeder, and that AAMP did not disclose Weeder’s contributions to the PTO.41 Given these facts, it urges the court not to strike its inequitable conduct defense, arguing that AAMP’s motion “puts form over substance by requiring more pleadings on issues that have been thoroughly explored in discovery.”42 Crux’s argument misapprehends the nature of this motion, which tests the sufficiency of the pleadings, and does not consider evidence the parties have developed through discovery. See Munoz v. PHH Corp., No. 1:08-cv-0759-AWI-BAM, 2013 WL 1278509, *6 (E.D. Cal. Mar. 26, 2013) (“Defendants’ arguments concerning new information uncovered through discovery disregard the legal standards on Rule 12 motions. A motion to strike affirmative defenses under Federal Rule of Civil Procedure 12(f) looks to the face of the pleadings to determine whether the defenses are sufficient or not. In deciding a motion to strike, a court will not consider matters outside the pleadings, and well-pleaded facts will be accepted as true (internal citations and quotations omitted)). While the information Crux has obtained during discovery indicates that leave to amend should be given, its inequitable conduct affirmative defense, as alleged, does not satisfy Rule 9(b). AAMP’s motion to strike Crux’s twentieth defense must therefore be granted. 40Opposition at 13-18. 41Id. 42Id. at 18. 16 EXHIBIT 2 Page 34 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 16 of 18 Page ID #:409 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3. Whether the Court Should Strike Crux’s Eighteenth Affirmative Defense Crux’s eighteenth affirmative defense alleges that “AAMP’s attempted enforcement of the ’540 patent and ’825 patent against Crux [is] barred by laches, waiver, estoppel and/or unclean hands.”43 Crux contends that this affirmative defense should not be stricken, asserting that it “is very similar to inequitable conduct because the defense of inequitable conduct is developed from the doctrine of unclean hand[s].”44 It does not address the defense’s reference to laches, waiver or estoppel and its answer contains nothing more than a conclusory assertion that these defenses apply. Moreover, as discussed, Crux has failed to plead adequate facts supporting its inequitable conduct affirmative defense, it has also failed to plead the factual basis for its unclean hands defense sufficiently. The court therefore grants AAMP’s motion to strike Crux’s eighteenth affirmative defense in its entirety. See Human Genome Sciences, 2011 WL 7461786 at *8 (“Because the pleading here relies on the same facts for the unclean hands defense as it does for the inequitable conduct counterclaim, and because the inequitable conduct counterclaim fails in large part due to HGS’ failure to plead facts showing an intent to deceive, the unclean hands defense must be stricken”). III. CONCLUSION For the reasons stated, the court grants AAMP’s motion to strike Crux’s first through fourth, seventh through twelfth, and fifteenth through twentieth affirmative defenses. As Crux may plausibly be able to allege the defenses by pleading additional facts, the court grants it leave to amend. See Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995) (“‘[A] district court should grant leave to amend . . . unless it determines that the pleading could not possibly be cured by the allegation of other facts,’” quoting Cook, Perkiss & Liehe v. N. Cal. Collection Serv., 911 F.2d 43Answer, ¶ 42. 44Opposition at 24. 17 EXHIBIT 2 Page 35 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 17 of 18 Page ID #:410 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 242, 247 (9th Cir. 1990)). Any amended answer must be filed within twenty days of the date of this order. No new affirmative defenses can be pled. DATED: November 19, 2013 MARGARET M. MORROW UNITED STATES DISTRICT JUDGE 18 EXHIBIT 2 Page 36 Case 2:16-cv-06256-CBM-AJW Document 25-3 Filed 11/10/16 Page 18 of 18 Page ID #:411 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION TECHNOLOGY LICENSING ) CORPORATION, ) ) Plaintiff, ) ) v. ) No. 11 C 8544 ) PELCO, INC., ) ) Defendant. ) MEMORANDUM ORDER Pelco, Inc. (“Pelco”) has filed its Answer and Counterclaims to the patent infringement complaint brought against it by Technology Licensing Corporation (“Technology Licensing”). This memorandum order is issued sua sponte to address some problematic aspects of that responsive pleading.1 First, each of Answer ¶¶3, 5 and 6 follow a proper (at least in technical terms) invocation of the disclaimer permitted by Fed. R. Civ. P. (“Rule”) 8(b)(5) as the predicate for getting the benefit of a deemed denial--but that language is then followed immediately by the phrase “and therefore denies those allegations.” That is of course oxymoronic--how can a party that asserts (presumably in good faith) that it lacks even enough information to form a belief as to the truth of an allegation then proceed to deny it in accordance with Rule 11(b)? In candor, the matters dealt with in the text suggest the1 need for more in-house lawyer training by the prominent law firm that represents Pelco. EXHIBIT 3 Page 37 Case 2:16-cv-06256-CBM-AJW Document 25-4 Filed 11/10/16 Page 1 of 3 Page ID #:412 Accordingly the quoted phrase is stricken from each of those paragraphs of the Answer. Next this Court turns to the asserted affirmative defenses (“ADs”) that follow the Answer itself. They too present some problems: 1. AD 1 asserts noninfringement, but in doing so it violates the fundamental nature of an AD as accepting all of the allegations of a complaint but then going on to explain why defendant is nevertheless not liable (or perhaps, as in the case of comparative negligence, may be liable for less than the plaintiff claims)--see, e.g., App’x ¶5 to State Farm Mut. Auto. Ins. Co. v. Riley, 199 F.R.D. 276, 279 (N.D. Ill. 2001). In this instance AD 2 is directly at odds with Complaint ¶¶7 and 8, and so it is stricken. 2. AD 3 is an impermissible laundry list that gives no clue as to the grounds for any of the contentions set out there. Under the federal system, notice pleading is incumbent on defendants as well as plaintiffs, so AD 3 is stricken without prejudice to the potential reassertion and presentment of any of the listed defenses if accompanied by suitable fleshed-out support. Finally, this Court would appreciate a brief explanation, at the next status hearing, of the reason that patent infringement cases so often spawn counterclaims seeking declaratory 2 EXHIBIT 3 Page 38 Case 2:16-cv-06256-CBM-AJW Document 25-4 Filed 11/10/16 Page 2 of 3 Page ID #:413 judgments--counterclaims that are nothing more than the flipside of the complaints involved. That practice cannot stem from any requirement in 35 U.S.C. §285, which Pelco’s counsel cite as supporting part of the relief sought, for that provision permits the award of fees to the “prevailing party” without reference to which side of the “v.” sign that party occupies. ________________________________________ Milton I. Shadur Senior United States District Judge Date: March 5, 2012 3 EXHIBIT 3 Page 39 Case 2:16-cv-06256-CBM-AJW Document 25-4 Filed 11/10/16 Page 3 of 3 Page ID #:414 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Norfolk Division INFORMATION PLANNING AND MANAGEMENT SERVICE INC., Plaintiff, DOLLAR GENERAL CORPORATION, Defendant. CIVIL ACTION NO. 2:15cv206 MEMORANDUM OPINION AND ORDER Before the Court is Information Planning and Management Service Inc.'s ("Plaintiff") Motion to Dismiss Counterclaim and Strike Affirmative Defense. For the reasons stated below. Plaintiffs Motion to Dismiss Count Two of the Counterclaim and to Strike the Third Affirmative Defense is GRANTED. However, Defendant is GRANTED leave to amend its Answer. I. FACTUAL AND PROCEDURAL HISTORY On May 13. 2015, Plaintiff filed its Complaint alleging that Dollar General Corporation ("Defendant") committed patent infringement and tortious interference with a contract. ECF No. 1. Specifically, Plaintiff asserts that Defendant misrepresented to Foxfire Printing and Packaging. Inc. ("Foxfire"), a third party in contract with Plaintiff, that Defendant had a license to United States Patent No. 7,287,001 ("'001 patent"). Compl. 1 29. The '001 patent is assigned to Plaintiff. Id. at ^j 20. Foxfireobtained a license for the "001 patent from Plaintiffand was in contract to pay Plaintiff for printed matter Foxfire provided to any unlicensed retailer. Id. at *'\ 34. Defendant's alleged misrepresentation that it held a license to the '001 patent caused Foxfire to infringe on the patent by not paying royalties to Plaintiff for Defendant's use of the '001 EXHIBIT 4 Page 40 Case 2:16-cv-06256-CBM-AJW Document 25-5 Filed 11/10/16 Page 1 of 10 Page ID #:415 patent. Id. at ^38. Plaintiff alleges that Defendant had knowledge ofthe contract between Plaintiff and Foxfire. Id. at 1| 36. On July 30, 2015, Defendant filed itsAnswer, Affirmative Defenses, and Counterclaims. ECF No. 13. Defendant asserted numerous affirmative defenses and two counterclaims requesting declaratory judgment of non-infringement and invalidity of the "001 patent. Answer fflj 8-19. On August 20, 2015, Plaintiff filed the instant Motion to Dismiss Counterclaim and Strike Affirmative Defense requesting dismissal of count two of Defendant's counterclaim and its third affimiative defense, both alleging invalidity of the '001 patent. ECF No. 18. On August 31, 2015, Defendant filed its Response in Opposition. ECF No. 19. On September 3, 2015, Plaintiff filed its Reply. ECF No. 20. On September 15, 2015, Plaintiff filed a Notice of Hearing requesting that a hearing regarding this matter be held on October 13, 2015 at 9:30 am or as soon thereafter as it may be heard. ECF No. 21. The Court declined to conduct a hearing on this matter finding it sufficiently briefed in the pleadings. II. STANDARD OF REVIEW A. Motion to Dismiss Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for dismissal of actions that fail to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). The United States Supreme Court has stated that in order "| tjo survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausibleon its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting BellAll. Corp. v. Twombly, 550 U.S. 544, 570 (2007)) (internal quotations omitted). Specifically, "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at EXHIBIT 4 Page 41 Case 2:16-cv-06256-CBM-AJW Document 25-5 Filed 11/10/16 Page 2 of 10 Page ID #:416 678. Moreover, at the motion to dismiss stage, the court is bound to accept all of the factual allegations in the complaint as true. Id. However, "[t]hreadbare recitals of the elements ofa cause of action, supported by mere conclusory statements, do not suffice." Id. Assessing the claim is a "context-specific task that requires the reviewing court to draw on itsjudicial experience and common sense." Id. at 679. In considering a Rule 12(b)(6) motion to dismiss, the Court cannot consider "matters outside the pleadings" without converting the motion to a summary judgment proceeding. Fed. R. Civ. P. 12(d). Nonetheless, the Court may still "consider documents attached to the complaint, see Fed. R. Civ. P. 10(c), as well as those attached to the motion to dismiss, so long as they are integral to the complaint and authentic." Sec y ofStatefor Defence v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007); see also Basset! v. Nat'l CollegiateAthletic Ass'n, 528 F.3d 426,430 (6th Cir. 2008) ("When a court is presented with a Rule 12(b)(6) motion, it may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant's motion to dismiss so long as they are referred to in the Complaint and arc central to the claims contained therein."). B. Motion to Strike Rule 12(1) allows the court on its own or on motion to strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. Fed. R. Civ. P. 12(0- In granting a Rule 12(0 motion to strike, the court must determine that "the challenged allegations arc so unrelated to the plaintiffs claims as to be unworthy of any consideration as a defense and that their presence in the pleading throughout the proceeding will be prejudicial to the moving party." Grant v. BankofAm.. N.A., No. 2:13cv342,2014 WL 792119. at *2 (E.D. Va. Feb. 25, 2014) (internal quotation marks and citations omitted). A 3 EXHIBIT 4 Page 42 Case 2:16-cv-06256-CBM-AJW Document 25-5 Filed 11/10/16 Page 3 of 10 Page ID #:417 motion to strike usually requires a showing that denial of the motion would prejudice the moving party. United States v. Gwinn, No. 5:06-cv-00267, 2006 WL 3377636, at *1 (S.D. W. Va. Nov. 20. 2006). Prejudice may be demonstrated if the answer does not clearly articulate to which claims the affirmative defenses apply. Francisco v. Verizon S.. Inc.. No. 3:09cv737, 2010 WL 2990159, at *5 (E.D. Va. July 29, 2010). However, the Fourth Circuit has held, "Rule 12(0 motions are generally viewed with disfavor because striking a portion of a pleading is a drastic remedy and because it is often sought by the movant simply as a dilator) tactic." Waste Mgmt. Holdings. Inc. v. Gilmore. 252 F.3d 316, 347 (4th Cir. 2001) (internal quotations omitted). Further, Rule 12(f) "imposes a sizable burden on the movant, and courts typically strike defenses only when they have no possible relation to the controversy." Lopez v. Asmar's Mediterranean Food, Inc., 2011 WL 98573, at *1 (E.D. Va. Jan. 10, 2011) (internal quotations omitted). When a motion to strike is granted, the Court should generally grant leave to amend the stricken pleading. Old Dominion Univ. Research Found, v. Aqua Terra Int'l, LLC, No. 2:14CV305, 2014 WL 5790944, at *3 (E.D. Va. Nov. 5. 2014) (citing Grant. 2014 WL 792119, at *3). III. DISCUSSION In its Motion to Dismiss Counterclaim and Strike Affimiative Defense. Plaintiff asserts that Defendant merely lists code sections and fails to allege any facts to support its counterclaim or affirmative defense of invalidity. In its Opposition. Defendant argues that different standards govern the pleading of counterclaims and affirmative defenses and asserts that it has complied with the requisite standards. Defendant contends that Rule 8(c) requiring a defendant to "affirmatively state any avoidance or affirmative defense" and the pre-TwomhlylIqbal standard of "whether the challengeddefense are contextually comprehensible and possibly related to the EXHIBIT 4 Page 43 Case 2:16-cv-06256-CBM-AJW Document 25-5 Filed 11/10/16 Page 4 of 10 Page ID #:418 controversy" govern affirmative defenses rather than Rule 8(a) and the Twombly/Iqbal standards as Plaintiff alleges. Flame S.A. v. Indus. Carriers, Inc., No. 2:13-CV-658, 2014 WL 2871432, at *2 (E.D. Va. June 24, 2014). Defendant also contends that although Rule 8(a) and Twombly/Iqbal govern counterclaims. Defendant's counterclaim is sufficiently detailed to meet these standards. Defendant offers three public policy concerns to support its position: 1)the Federal Circuit has approved the use of the"bare bones" template of Form 18 in the Appendix of the Federal Rules of Civil Procedure by plaintiffs, so Defendant's pleading should be considered sufficiently detailed. 2) Plaintiff had seven years to develop its claim, which does not identify which of the 61 claims of the patent have been infringed, while Defendant only had two months to respond to Plaintiffs Complaint, and 3) based on the orderly course of patent infringement cases. Plaintiffshould first provide its infringement contentions in order for Defendant to provide a more detailed response. Defendant also adds details in its response regarding the specific grounds on which the patent is invalid and requests leave to amend its Answer pursuant to Rule 15(a)(2) if the Court grants Plaintiffs Motion. Defendant's counterclaim alleging invalidity stales in relevant part: "Dollar General denies IPMS's allegations of infringement and asserts that one or more of the claims of the '001 Patent arc invalid because they fail to meet the patentability requirements of Title 35, United States Code, including but not limited to35U.S.C. § 101. 102. 103 and/or 112." Answer 10-11.11 16. Defendant agrees with Plaintiff that Twombly/lqbal provides the appropriate standard to evaluate the sufficiency of the counterclaim. The Fourth Circuit has held, "To survive the motion [to dismiss], a complaint (or counterclaim, as is the case here) must contain sufficient facts to state a claim that is 'plausible on its face.'" E.I. du Pont de Nemours & Co. v. Kolon 5 EXHIBIT 4 Page 44 Case 2:16-cv-06256-CBM-AJW Document 25-5 Filed 11/10/16 Page 5 of 10 Page ID #:419 Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (quoting BellAll. Corp. v. Twombly. 550 U.S. 544. 570 (2007)). In accordance, the Eastern District of Virginia has held, "[A] complaint or counterclaim must raise •more thana sheer possibility" that the party is liable, and go beyond pleading facts that arc 'merely consistent with a [party's] liability.'" Meijer v. Thompson, 655 F. Supp. 2d 607. 623 (E.D. Va. 2009) (citing Ashcroft v. Iqbal. 556 U.S. 662, 677 (2009)). According to this standard, Defendant has failed to provide any facts to support its counterclaim. In a similar case, the Eastern District of Virginia held, "[A]s evidenced by defendant's answer, the claim of patent invalidity is based on a laundry list of United States Code sections. ... Sections 101, 102, 103, and 112 offer numerous grounds for finding a patent invalid, and thus a defendant must provide a more specific statement of the grounds for invalidity in order to give the patent holder notice of the defense." TecSec, Inc. v. Protegrity, Inc., No. CIVA2:01CV233. 2001 WL 802064, at *2 (E.D. Va. June 27, 2001) (internal citations omitted) (citing Advanced CardiovascularSys., Inc. v. Medtronic, Inc., 41 U.S.P.Q.2d 1770, 1773 (N.D. Cal. 1996); Boss Prods. Corp. v. Tapco lnt'l Corp., 2001 WL 135819, at *2 (W.D.N.Y. Feb. 16. 2001)). As in TecSec, Defendant merely lists code sections without referencing specific content of the sections or any facts supporting its counterclaim of invalidity. Therefore, Defendant's counterclaim fails to state a claim upon which relief can be granted. Defendant's affirmative defense alleging invalidity states: "Each and every claim of United States Patent No. 7.287.001 is invalid, unenforceable, and/or void due to failure to meet the requirements of the United States patent laws. 35 U.S.C. § 100, et seq.. including without limitation 35 U.S.C. §§ 101-103. 112, I I6and for double patenting." Answer 6. «i 45. ECF No. 13. Prior to the Supreme Court's decisions in Twombly and Iqbal. the Court held: EXHIBIT 4 Page 45 Case 2:16-cv-06256-CBM-AJW Document 25-5 Filed 11/10/16 Page 6 of 10 Page ID #:420 [A]ll the Rules require is "a short and plain statement of the claim that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests. The illustrative forms appended to the Rules plainly demonstrate this. Such simplified "notice pleading* is made possible by the liberal opportunity for discovery and the other pretrial procedures established by the Rules to disclose more precisely the basis of both claim and defense and to define more narrowly the disputed facts and issues. Conley v. Gibson, 355 U.S. 41, 47-48 abrogated by Bell All. Corp. v. 'Twombly, 550 U.S. 544 (2007). In accordance, the Fourth Circuit held that "general statements of affirmative defenses were sufficient provided they gave plaintiffs fair notice of the defense." Flame S.A. v. Indus. Carriers, Inc.. No. 2:13-CV-658, 2014 WL 2871432, at *2 (E.D. Va. June 24, 2014); see Clem v. Corbeau, 98 Fed. Appx. 197. 203 (4th Cir. 2004) ("'An affirmative defense may be pleaded in general terms and will be held to be sufficient... as long as it gives plaintiff fair notice of the nature of the defense."') (quoting 5 Charles Allan Wright & Arthur R. Miller. Federal Practice & Procedure § 1274, at 455-56 (2d ed. 1990)). Since the Twombly and Iqbal decisions, Fourth Circuit district courts are divided on whether the Twombly/lqbal standard applies to affimiative defenses, and the Fourth Circuit Court of Appeals has not yet resolved this issue. Racick v. Dominion LawAssocs., 270 F.R.D. 228, 233-34 (E.D.N.C. 2010) ("Neither the Fourth Circuit Court of Appeals, nor any other circuit court of appeals, has addressed whether Twombly and Iqbal should be interpreted as applying to affirmative defenses. There is a split of authority among the district courts to address the question. The majority of the district courts-including every district court within the Fourth Circuit to have considered the issue-have concluded that the plausibility standard articulated in EXHIBIT 4 Page 46 Case 2:16-cv-06256-CBM-AJW Document 25-5 Filed 11/10/16 Page 7 of 10 Page ID #:421 Twombly and Iqbal applies to the pleading of affirmative defenses.") (citing Francisco v. Verizon S, Inc., No. 3:09cv737, 2010 WL 2990159, at *7-8 (E.D. Va. July 29, 2010) (collecting cases); Bradshaw v. Ililco Receivables. LLC, 725 F. Supp. 2d 532, 535-37 (D. Md. July 27, 2010): Palmer v. Oakland Farms. Inc., No. 5:10cv00029. 2010 WL 2605179, at *5 (W.D. Va. June 24. 2010)); see also Pennell v. Vacation Reservation Ctr., LLC, No. 4:11CV53, 2011 WL 6960814, at *3 (E.D. Va. Sept. 20, 2011) ("This conflict is not confined to the courts of this district. Our sister court, the Western District of Virginia, is similarly divided, compare Odyssey Imaging. LLC v. Cardiology Assocs. ofJohnston, LLC. 752 F. Supp. 2d 721, 726-27 (W.D. Va. 2010) {Twombly/lqbal standard does not apply to affirmative defenses), with Palmer v. Oakland Farms, Inc., No. 5:10cv29, 2010 WL 2605179, at *3-*5 (W.D. Va. June 24, 2010) (Twombly/Iqbal standard does apply to affirmative defenses)...."). There are also conflicting decisions on this issue within federal district courts nationwide. See. e.g., Wells Fargo & Co. v. UnitedStates, 750 F. Supp. 2d 1049, 1051-52 (D. Nev. 2014) (holding that Twombly/Iqbal standard does not apply to affirmative defenses and noting intra-district split). There is substantial difference within the Eastern District of Virginia's decisions regarding application of the Twomblv/Iqbal standard to affirmative defenses. See Francisco. 2010 WL 2990159 at *1 (applying the Twombly/Iqbal pleading standard to affirmative defenses): but see Malibu Media. LLC v. Guastaferro. No. 1:14-CV-l 544. 2015 WL 4603065. at *2 (E.D. Va. July 28, 2015) ("[T]his Court has held that the heightened pleadings requirements of Iqbal and Twombly do not apply to affimiative defenses."); Flame S.A. v. Indus. Carriers, Inc., No. 2:13-CV-658, 2014 WL 2871432, at *2 (E.D. Va. June 24, 2014) ("Having reviewed the law, the Court agrees that Twombly/lqbal do not apply to the pleading of affirmative defenses."); Grant v. Bank ofAm.. N.A. 2014 WL 792119 (E.D. Va. Feb. 25. 2014) ("[T]his Court declines to hold EXHIBIT 4 Page 47 Case 2:16-cv-06256-CBM-AJW Document 25-5 Filed 11/10/16 Page 8 of 10 Page ID #:422 affirmative defenses to the same pleading standards required by Rule 8(a). Instead, this Court looks to whether the challenged defenses are contextually comprehensible."): Lopez v. Asmar's Mediterranean Food. Inc.. No. L10CV1218 JCC, 2011 WL 98573, at *l-*2 (E.D. Va. Jan. 10, 2011) ("To date, no appeals courts have considered whether this standard should apply to affirmative defenses as well as claims for relief. A number of district courts have addressed the issue however. Most-including every Fourth Circuit court so far-have found that Twombly/Iqbal should apply to affirmative defenses, though a sizeable minority has found otherwise. This Court finds itself in the minority.... |U]nder Rule 8(b)(1)(A). *[a]n affirmative defense may be pleaded in general terms and will be held to be sufficient... as long as it gives plaintiff fair notice of the nature of the defense.'") (citing Clem v. Corbeau. 98 F. App'x 197 (4th Cir. 2004)). Despite disagreement over the appropriate standard that applies to the pleading of affirmative defenses, as with the counterclaim of invalidity, Defendant's affirmative defense of invalidity lacks sufficient factual support. Even applying the prc-Twombly/Iqbal standard, Defendant does not provide Plaintiff with sufficient information to be put on notice of the specific grounds on which the patent is allegedly invalid. Accordingly, Defendant's pleading also does not meet the more stringent Twombly/Iqbal standard requiring sufficient facts to indicate a plausible claim. Moreover, Defendant's policy arguments are unpersuasive and do not save its insufficient pleading. Defendant merely lists code sections and fails to provide any facts to support its counterclaim or affirmative defense of invalidity. Defendant did not provide details about the specific grounds of the alleged invalidity until its Opposition to Plaintiffs Motion to Dismiss in which it states, "Dollar General even gives Plaintiff further context by identifying specific statutes that support invalidity due to unpatentable subject matter (35 U.S.C. § 101), anticipation (35 U.S.C. § 9 EXHIBIT 4 Page 48 Case 2:16-cv-06256-CBM-AJW Document 25-5 Filed 11/10/16 Page 9 of 10 Page ID #:423 102), obviousness (35 U.S.C. § 103), defects in the specification (35 U.S.C. § 112), failure to correctly list inventors (35 U.S.C. § 116), and double patenting." Opp. 4, ECF 19. However, Defendant does not provide facts to support these assertions. Therefore, Defendant failed to sufficiently plead the counterclaim and affimiative defense of invalidity in its Answer. IV. CONCLUSION Despite contention over the proper standard that applies to sufficiently plead affirmative defenses. Defendant must provide facts to support its counterclaims and affirmative defenses. Defendant fails to provide any facts to support its counterclaim and affirmative defense of invalidity. For the reasons slated herein, Plaintiffs Motion to Dismiss Count Two of the Counterclaim and to Strike the Third Affirmative Defense is GRANTED. However, Defendant is GRANTED leave to amend its Answer within FIFTEEN (15) DAYS of the date of this Order. IT IS SO ORDERED. rsL Norfolk, Virginia Raymond A. Jackson JanuaryT ,2016 UmtedStatesD,strictJudSe EXHIBIT 4 Page 49 Case 2:16-cv-06256-CBM-AJW Document 25-5 Filed 11/10/16 Page 10 of 10 Page ID #:424 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 By order filed April 16, 2013, the Court deemed the matter appropriate for decision on the parties’ respective filings and vacated the hearing scheduled for April 19, 2013. U ni te d St at es D is tr ic t C ou rt Fo r t he N or th er n D is tri ct o f C al ifo rn ia IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA INFINEON TECHNOLOGIES AG, Plaintiff, v. VOLTERRA SEMICONDUCTOR CORPORATION, Defendant. / No. C 11-6239 MMC ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION TO DISMISS DEFENDANT'S COUNTERCLAIMS AND STRIKE DEFENDANT'S AFFIRMATIVE DEFENSES Before the Court is the “Second Motion to Dismiss Volterra’s Counterclaims and Strike Volterra’s Affirmative Defenses,” filed March 15, 2013, by plaintiff Infineon Technologies AG (“Infineon”). Defendant Volterra Semiconductor Corporation (“Volterra”) has filed opposition, to which Infineon has replied. Having read and considered the papers submitted in support of and in opposition to the motion, the hereby Court rules as follows.1 DISCUSSION In the instant action, Infineon alleges Volterra directly and indirectly infringes U.S. Patent Nos. 5,945,730 (“the ‘730 patent”), 7,095,281 (“the ‘281 patent”), 5,402,017 (“the ‘017 patent”), and 6,621,343 (“the ‘343 patent”). In Volterra’s “Amended Answer to [Infineon’s] Second Amended Complaint, and Counterclaims” (“AAC”), Volterra asserts four Case3:11-cv-06239-MMC Document236 Filed05/01/13 Page1 of 9 EXHIBIT 5 Page 50 Case 2:16-cv-06256-CBM-AJW Document 25-6 Filed 11/1 /16 Page 1 of 9 Page ID #:425 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 Volterra asserts counterclaims of “Declaratory Judgment of Invalidity and Non- Infringement” of each patent asserted by Infineon. (See AAC ¶¶ 127-154.) 3 Volterra asserts the following affirmative defenses: (1) “Non-Infringement,” (2) “Invalidity,” (3) “Limitations on Damages,” (4) “Prosecution History Estoppel,” (5) “Equitable Defenses,” and (6) “License/Patent Exhaustion.” (See AAC at 35-37.) 4 Volterra has likewise amended its affirmative defense of non-infringement and now alleges specific categories of products and exemplars of those products that assertedly do not infringe Infineon’s patents. (See AAC at 35:22-36:6.) 5 Infineon does not argue to the contrary. 2 counterclaims2 and six affirmative defenses.3 Infineon moves to dismiss Volterra’s counterclaims to the extent Volterra seeks declarations of invalidity and indirect non- infringement; additionally, Infineon moves to strike Volterra’s affirmative defenses alleging invalidity, indirect non-infringement, prosecution history estoppel, and equitable defenses. 1. Indirect Non-Infringement Infineon alleges Volterra indirectly infringes each of the above-referenced four patents, by inducing infringement by third parties, and, as to two of said patents, by contributing to such infringement. In its prior order, the Court dismissed, for failure to plead sufficient facts, Volterras’ counterclaims and affirmative defenses alleging indirect non- infringement and afforded Volterra leave to amend. (See Order, filed Feb. 7, 2013, at 2, 4.) By the instant motion, Infineon argues Volterra again fails to allege facts showing it does not induce infringement of, or contributorily infringe, its patents. The Court disagrees. First, Volterra, in the AAC, now identifies a general category of non-infringing products for each of Infineon’s patents and identifies at least one specified exemplar of a non-infringing product in each category (see AAC ¶¶ 130, 137, 144, 151),4 thereby alleging sufficient facts to plead a claim of direct non-infringement.5 Infineon’s claims of indirect infringement by Volterra are, in essence, based on Volterra’s alleged direct infringement, i.e., the sale by Volterra of products that are themselves alleged to be infringing. (See Second Amended Compl. ¶¶ 32, 52, 84, 104 (alleging Volterra induces infringement “by offering for sale and selling the infringing Volterra products to third-parties such that Case3:11-cv-06239-MMC Document236 Filed05/01/13 Page2 of 9 EXHIBIT 5 Page 51 Case 2:16-cv-06256-CBM-AJW Document 25-6 Filed 11/1 /16 Page 2 of 9 Page ID #:426 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 those third-parties may use, offer for sale, sell, and/or import the infringing Volterra products and services in a manner that directly infringes”); id. ¶¶ 62, 114 (alleging “HP, among other customers of Volterra, directly infringe the [ ] patent by making, using, importing, offering to sell, and/or selling the infringing Volterra products, or products that incorporate the infringing Volterra products, in the United States”).) Infineon’s indirect infringement claims are not based on the manner in which Volterra markets a non-infringing product to customers who then use such product to produce an infringing product, see DSU Med. Corp. v. JMS Co., Ltd., 471 F.3d 1293, 1305-06 (Fed. Cir. 2006), nor does Infineon allege that Volterra’s products are components “especially made or especially adapted for use” in such infringing products, see 35 U.S.C. § 271(c). A reasonable inference thus can be drawn that Volterra’s claims of indirect non-infringement are not based on an allegation that Volterra does not encourage its customers to incorporate Volterra’s allegedly infringing products into their own products, but rather are based on the allegation that Volterra’s products are non-infringing. Accordingly, the motion will be denied as to Volterra’s counterclaims and affirmative defenses of indirect non-infringement. 2. Invalidity By prior order the Court also dismissed, for failure to plead sufficient facts, Volterra’s counterclaims and affirmative defenses of invalidity. (See Order, filed Feb. 7, 2013, at 1, 4.) To the extent the counterclaims and affirmative defenses are based on 35 U.S.C. §§ 101 and 112, the Court finds the allegations are sufficiently pleaded. Volterra alleges the patents fail to comply with § 101 for the asserted reason that the patents “lack patentable subject matter” and fail to comply with § 112 for the asserted reason that the patents are “indefinite, fail to provide an adequate written description or fail to enable one of skill in the art to make and use the alleged inventions.” (See AAC at 36:9-15, ¶¶ 133, 140, 147, 154.) With respect to § 101, given the traditional subject matter covered by the patents, it is doubtful anything more can be said. See Diamond v. Diehr, 450 U.S. 175, 185 Case3:11-cv-06239-MMC Document236 Filed05/01/13 Page3 of 9 EXHIBIT 5 Page 52 Case 2:16-cv-06256-CBM-AJW Document 25-6 Filed 11/1 /16 Page 3 of 9 Page ID #:427 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 (1981) (citing, as examples of non-patentable subject matter, “a new mineral discovered in the earth,” “a new plant found in the wild,” “the law of gravity”). With respect to § 112, although, technically, the task of proving a negative is not impossible, the Court will not require Volterra, in the context of a pleading, to point to the particular sentences, phrases, or words it asserts are deficient and then to set forth its argument as to what additional information would be necessary to cure such deficiencies. As to Volterra’s newly added allegation that the patents fail to comply with §§ 102 and 103 for the reason that the patents “are not new or novel in light of the prior art” or “are obvious in light of the prior art” (see AAC at 36:12-13, ¶¶ 133, 140, 147, 154), the Court agrees with Infineon that such generic allegation lacks sufficient factual detail to comply with the Court’s prior order. Given the current posture of the discovery proceedings, however, the Court finds that an order requiring Volterra to plead specific items of prior art would run counter to the orderly progression of discovery delineated in the Patent Local Rules of this district. In particular, a dispute as to the sufficiency of Infineon’s infringement contentions remains pending before the Magistrate Judge hearing discovery matters in the instant case, and said Magistrate Judge’s order staying Volterra’s invalidity contentions until said dispute is resolved remains in effect. (See Order, filed Jan. 28, 2013, at 8:10-12.) Under such circumstances, the Court will not require Volterra to amend its invalidity counterclaims and affirmative defenses. Accordingly, the motion will be denied with respect to Volterra’s counterclaims and affirmative defenses of invalidity. 3. Prosecution History Estoppel As its Fourth Affirmative Defense, Volterra asserts “Prosecution History Estoppel.” In the Court’s prior order, said affirmative defense was dismissed for failure to provide “fair notice.” (See Order, filed Feb. 7, 2013, at 4:2-3.) Infineon argues the AAC fails to add sufficient facts to provide fair notice of the basis of the defense. The Court agrees. Volterra’s Fourth Affirmative Defense now reads, as follows: “In light of statements Case3:11-cv-06239-MMC Document236 Filed05/01/13 Page4 of 9 EXHIBIT 5 Page 53 Case 2:16-cv-06256-CBM-AJW Document 25-6 Filed 11/1 /16 Page 4 of 9 Page ID #:428 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 made during the prosecution of the patents-in-suit or related applications, prosecution history estoppel on one or more of [the patents-in-suit] bars [Infineon’s] proposed claim constructions and/or bars [Infineon] from proving infringement on the asserted claims under the doctrine of equivalents.” (See AAC at 36:23-26.) The only change Volterra has made is to add the introductory phrase “[i]n light of statements made during the prosecution of the patents-in-suit or related applications.” Such allegation does no more than state the obvious, i.e., that an affirmative defense of prosecution history estoppel is based on statements made by the patent applicant during the prosecution of the patent. The Court recognizes that Volterra, at this stage of the proceedings, may not have acquired all the information necessary for it to plead the particular representations underlying such a defense. Nevertheless, at this time, Volterra’s pleading remains subject to challenge. At such time as Volterra has the information necessary to adequately plead such an affirmative defense, it may move to amend its answer. Accordingly, the motion will be granted with respect to Volterra’s affirmative defense of prosecution history estoppel. 4. Equitable Defenses In its prior answer, Volterra asserted the affirmative defenses of Laches, Unclean Hands, Waiver, and Equitable Estoppel, which affirmative defenses were stricken for failure to provide notice of the bases thereof. In its AAC, Volterra combines all four defenses into its Fifth Affirmative Defense, titled “Equitable Defenses.” (See AAC at 37:3-4 (alleging “[p]laintiff’s claims are barred in whole or in part by one or more of the doctrines of equitable estoppel, laches, unclean hands, waiver and/or other applicable equitable defenses”).) In support of all said defenses, Volterra alleges that Infineon “delayed filing this action for an unreasonably long and inexcusable period of time” and that Infineon “improperly used information it learned from discovery in [a different action between the parties] that was subject to a provision in a protective order . . . for the purposes of bringing and prosecuting this action.” (See AAC at 37:5-6, 14-17.) Case3:11-cv-06239-MMC Document236 Filed05/01/13 Page5 of 9 EXHIBIT 5 Page 54 Case 2:16-cv-06256-CBM-AJW Document 25-6 Filed 11/1 /16 Page 5 of 9 Page ID #:429 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 Infineon’s argument that Volterra also must allege Volterra’s knowledge of the asserted patents is not persuasive, as the authority on which Infineon relies concerns the specific defense of implied license, not, as here, equitable estoppel in its broader form. See Winbond Electronics Corp. v. Int’l Trade Comm’n, 262 F.3d 1363, 1374 (Fed. Cir. 2001) (holding, in case alleging implied license, alleged infringer must have knowledge of patent “for this form of estoppel”). The Court likewise finds unpersuasive Infineon’s argument that Volterra must comply with the heightened pleading requirements of Rule 9(b); the defense, as currently pleaded is not based on fraud. 6 Such collective pleading is insufficient for a number of reasons. First, Volterra must plead each defense separately, as it is unclear which alleged facts support each asserted defense. See Fed. R. Civ. P. 10(b). Second, Infineon has asserted four patents against Volterra and has not made clear which equitable defense(s) are meant to apply to which patent(s). In amending its affirmative defenses, Volterra must plead each defense separately and plead facts showing how each defense applies to each patent. Additionally, as set forth below, the AAC lacks allegations sufficient to plead certain of the elements of said defenses. a. Equitable Estoppel To plead an affirmative defense of equitable estoppel, a party must plead facts showing (1) the patentee “communicate[d] something in a misleading way, either by words, conduct or silence,” (2) the alleged infringer “relie[d] upon that communication,” and (3) due to its reliance, the alleged infringer “would be harmed materially if the [patentee] [were] later permitted to assert any claim inconsistent with his earlier conduct.” See A.C. Aukerman Co. v. R.L. Chaides Const. Co., 960 F.2d 1020, 1041 (Fed. Cir. 1992) (internal citation and quotation omitted). In the AAC, Volterra fails to allege any facts showing how it would be materially harmed. Rather, Volterra alleges such element solely in conclusory terms. (See AAC at 37:5-6 (alleging plaintiff “delayed filing this action for an unreasonably long and inexcusable period of time to the detriment of Volterra and its customers”)). If Volterra amends its affirmative defense, it must plead facts showing the manner in which it was harmed by plaintiff’s conduct.6 // Case3:11-cv-06239-MMC Document236 Filed05/01/13 Page6 of 9 EXHIBIT 5 Page 55 Case 2:16-cv-06256-CBM-AJW Document 25-6 Filed 11/1 /16 Page 6 of 9 Page ID #:430 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 Infineon argues the defense only applies where a plaintiff has acted with “fraudulent intent.” (See Mot. at 16:3.) The Court disagrees. Although the doctrine of unclean hands requires a showing of more than negligence, see Dollar Sys., Inc. v. Avcar Leasing Sys., Inc., 890 F.2d 165, 173 (9th Cir. 1989) (noting “bad intent is the essence of the defense”), Infineon cites to no case holding such defense always requires a showing of fraud. Rather, the cases on which Infineon relies are limited to the specific circumstances presented therein. See Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 842 (9th Cir. 2002) (holding, where plaintiff brought false advertising suit under Lanham Act and sought to counter defense of laches “by alleging that the defendant made claims [about defendant’s product] knowing they were false,” plaintiff could not “escape laches under the unclean hands doctrine” unless the Court was left with “a firm conviction that the defendant acted with [such] fraudulent intent”); Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1287-88 (Fed. Cir. 2011) (noting, where unclean hands defense is based on allegation of “inequitable conduct,” intent to deceive Patent and Trademark Office must be shown). 7 b. Laches To adequately plead an affirmative defense of laches, a party must allege facts showing (1) “the plaintiff delayed filing suit for an unreasonable and inexcusable length of time from the time the plaintiff knew or reasonably should have known of its claim against the defendant,” and (2) “the delay operated to the prejudice or injury of the defendant.” See A.C. Aukerman Co., 960 F.2d at 1032. Infineon argues Volterra has failed to adequately allege the injury or prejudice it has suffered as a result of Infineon’s actions. For the reasons discussed above, the Court agrees. If Volterra chooses to amend, it must plead facts showing such injury or prejudice. c. Unclean Hands “The doctrine of unclean hands bars relief to a plaintiff who has violated conscience, good faith or other equitable principles in his prior conduct, as well as to a plaintiff who has dirtied his hands in acquiring the right presently asserted.” Seller Agency Council, Inc. v. Kennedy Ctr. for Real Estate Educ., Inc., 621 F.3d 981, 986 (9th Cir. 2010) (internal quotation and citation omitted).7 As discussed above, Volterra has not adequately pled facts showing it sustained any injury as a result of Infineon’s assertedly inequitable conduct. See PenneCom B.V. v. Merrill Lynch & Co., Inc., 372 F.3d 488, 493 (2d Cir. 2004) (noting unclean hands doctrine applies where plaintiff has committed an unconscionable act and “has injured the party attempting to invoke the doctrine”). If Case3:11-cv-06239-MMC Document236 Filed05/01/13 Page7 of 9 EXHIBIT 5 Page 56 Case 2:16-cv-06256-CBM-AJW Document 25-6 Filed 11/1 /16 Page 7 of 9 Page ID #:431 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 Volterra chooses to amend, it must plead facts showing the manner in which it was injured. d. Waiver “Waiver is the intentional relinquishment of a known right with knowledge of its existence and the intent to relinquish it.” See United States v. King Features Entm’t, Inc., 843 F.2d 394, 399 (9th Cir. 1988). To establish waiver, a party must show: “(1) the patentee, through statements or conduct, gave an affirmative grant of consent or permission to make, use, or sell to the alleged infringer; (2) the alleged infringer relied on that statement or conduct; and (3) the alleged infringer would, therefore, be materially prejudiced if the patentee is allowed to proceed with its claim.” See Winbond Electronics Corp., 262 F.3d at 1374. Here, the AAC lacks factual allegations sufficient to plead waiver. Volterra’s allegation that Infineon “has been interested in acquiring Volterra and has been studying Volterra and its products and technology for many years” (see AAC at 37:7-8) does not suffice to show Infineon intentionally relinquished its rights to enforce the patents-in-suit. If Volterra chooses to amend, it must remedy the said deficiency. Accordingly, the motion will be granted with respect to Volterra’s equitable defenses with leave to amend. CONCLUSION 1. Infineon’s motion to dismiss and to strike is hereby GRANTED in part and DENIED in part as follows: a. To the extent the motion seeks an order striking the Fourth Affirmative Defense, the motion is hereby GRANTED, and the Fourth Affirmative Defense is hereby STRICKEN. b. To the extent the motion seeks an order striking the Fifth Affirmative Defense, the motion is hereby GRANTED, and the Fifth Affirmative Defense is hereby STRICKEN with leave to amend. Volterra’s amended pleading, if any, shall be filed on or before May 22, 2013. Case3:11-cv-06239-MMC Document236 Filed05/01/13 Page8 of 9 EXHIBIT 5 Page 57 Case 2:16-cv-06256-CBM-AJW Document 25-6 Filed 11/1 /16 Page 8 of 9 Page ID #:432 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 c. In all other respects the motion is hereby DENIED. IT IS SO ORDERED. Dated: May 1, 2013 MAXINE M. CHESNEY United States District Judge Case3:11-cv-06239-MMC Document236 Filed05/01/13 Page9 of 9 EXHIBIT 5 Page 58 Case 2:16-cv-06256-CBM-AJW Document 25-6 Filed 11/1 /16 Page 9 of 9 Page ID #:433 Order Form (01/2005) United States District Court, Northern District of Illinois Name of Assigned Judge or Magistrate Judge Sharon J. Coleman Sitting Judge if Other than Assigned Judge CASE NUMBER 05 C 4811 DATE 10/31/2012 CASE TITLE Trading Technologies Intl, Inc. Vs. CQG, et al. DOCKET ENTRY TEXT Trading Technologies filed a motion to strike CQG’s affirmative defenses ¶¶ 2 & 5 and to strike CQG’s counterclaims I-IV (non-infringement and invalidity)[341]. The motion to strike the affirmative defenses is granted with leave to replead and the motion to strike the counterclaims as redundant is denied. O[ For further details see text below.] Docketing to mail notices. STATEMENT Trading Technologies filed a motion to strike CQG’s affirmative defenses ¶¶ 2 & 5 and to strike CQG’s counterclaims I-IV (non-infringement and invalidity). The motion to strike the affirmative defenses is granted with leave to replead and the motion to strike the counterclaims as redundant is denied. Trading Technologies moves to strike CQG’s affirmative defenses ¶¶ 2 & 5 because they constitute bare-bones pleading that fails to meet notice pleading requirements. Affirmative defenses are subject to the pleading requirements of the Federal Rules of Civil Procedure, they must set forth a “short and plain statement” of all the material elements of the defense asserted; bare legal conclusions are not sufficient. See Fed. R. Civ. P. 8(a); Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1294 (7th Cir. 1989); Renalds v. S.R.G. Restaurant Group, 119 F.Supp.2d 800, 802 (N.D.Ill. 2000). Paragraph two of CQG’s affirmative defenses states, “Plaintiff’s claims are barred by the doctrines of estoppel, acquiescence, implied license, and/or unclean hands.” Paragraph five states, “Plaintiff is not entitled to any damages for the time period that it was not in compliance with the marking requirements under 35 U.S.C. § 287.” This Court finds that CQG’s 05C4811 Trading Technologies Intl, Inc. Vs. CQG, et al. Page 1 of 3 Case: 1:05-cv-04811 Document #: 352 Filed: 10/31/12 Page 1 of 3 PageID #:4035 EXHIBIT 6 Page 59 Case 2:16-cv-06256 CBM-AJW Document 25-7 Filed 1/10/16 Page 1 of 3 Page ID #:434 STATEMENT affirmative defenses contained in paragraphs two and five are insufficient to satisfy the requirements of Rule 8(a) because they are devoid of any factual basis. Pursuant to Rule 15(a)(2), this Court will allow CQG twenty-one days to replead the affirmative defenses at issue here. Trading Technologies also moves to strike as redundant pursuant to Rule 12(f) CQG’s counterclaims I-IV seeking declaratory judgment for non- infringement and invalidity. Pursuant to Rule 12(f), the Court can strike “any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). “Motions to strike are ‘not favored and will not be granted unless it appears to a certainty that plaintiffs would succeed despite any state of the facts which could be proved in support of the defense.’” Williams v. Jader Fuel Co., 944 F.2d 1388, 1400 (7th Cir. 1991). Trading Technologies asserts that CQG’s counterclaims seeking declaratory judgment for non-infringement and invalidity are redundant because the issues of infringement and validity of the patents-in-suit will be addressed by litigation of the complaint against CQG. In support of this position, Trading Technologies cites three orders from courts in this district; an order issued by the Honorable Rebecca Pallmeyer in which she declined to decide whether, in a copyright infringement case, the copyright misuse doctrine may be asserted as a counterclaim for declaratory relief, Nielsen Co. (US), LLC v. Truck Ads, LLC, 2011 U.S. Dist. LEXIS 6453 (N.D. Ill. Jan. 24, 2011), and two orders issued sua sponte by the Honorable Milton Shadur, Performance Proxy Research, LLC v. Microsoft Corp., 2010 U.S. Dist. LEXIS 1938 (N.D. Ill. Jan. 11, 2010) (counterclaim for invalidity was stricken as redundant) and Trading Techs. Int’l, Inc. v. CQG, Inc., 2010 U.S. Dist. LEXIS 81923 (N.D. Ill. Aug. 12, 2010) (counterclaims stricken by the court for failure to satisfy the notice pleading requirements). Yet, other judges in this district have indicated that counterclaims for invalidity may be asserted. See Sloan Valve Co. v. Zurn Indus., 712 F. Supp. 2d 743, 750 (N.D. Ill. 2010) (St. Eve, J.), and Trading Techs. Int’l, Inc. v. BCG Ptnrs., Inc., 2011 U.S. Dist. LEXIS 99415 (N.D. Ill. Sept. 2, 2011) (Kendall, J.). Moreover, there is additional authority holding that courts have jurisdiction over declaratory judgment claims for invalidity and non-infringement even though there is not yet a claim for infringement or the initial claim for 05C4811 Trading Technologies Intl, Inc. Vs. CQG, et al. Page 2 of 3 Case: 1:05-cv-04811 Document #: 352 Filed: 10/31/12 Page 2 of 3 PageID #:4036 EXHIBIT 6 Page 60 Case 2:16-cv-06256 CBM-AJW Document 25-7 Filed 1/10/16 Page 2 of 3 Page ID #:435 STATEMENT patent infringement is resolved in favor of the alleged infringer. See MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764, 166 L. Ed. 2d 604 (2007); Sandisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372, 1381 (Fed. Cir. 2007); Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1348 (Fed. Cir. 2005). This Court declines to strike CQG’s counterclaims as redundant. Therefore, Trading Technologies’ motion to strike CQG’s counterclaims is denied. 05C4811 Trading Technologies Intl, Inc. Vs. CQG, et al. Page 3 of 3 Case: 1:05-cv-04811 Document #: 352 Filed: 10/31/12 Page 3 of 3 PageID #:4037 EXHIBIT 6 Page 61 Case 2:16-cv-06256 CBM-AJW Document 25-7 Filed 1/10/16 Page 3 of 3 Page ID #:436 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA Case No. 9:13-cv-80695-KMM R.D. JONES, STOP EXPERTS, INC., and RRFB GLOBAL, INC., Plaintiffs, vs. CARMANAH TECHNOLOGIES CORPORATION, CARMANAH TECHNOLOGIES (US) CORPORATION, and SPOT DEVICES, INC., Defendants. / ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’ MOTION TO STRIKE, AND/OR DEEM DENIALS, DEFENDANTS’ AFFIRMATIVE DEFENSES TO VERIFIED COMPLAINT THIS CAUSE came before the Court upon Plaintiffs R.D. Jones, Stop Experts, Inc., and RRFB Global, Inc.’s (“Plaintiffs”) Motion to Strike, and/or Deem Denials, Defendants’ Affirmative Defenses to Verified Complaint (ECF No. 72). Defendants Carmanah Technologies Corporation and Carmanah Technologies (US) Corporation (“Defendants”) filed a Response (ECF No. 82) and Plaintiffs filed a Reply (ECF No. 94). For the reasons set forth below, Plaintiffs’ Motion is granted in part and denied in part. I. LEGAL STANDARD1 Pursuant to Federal Rule of Civil Procedure 12(f), a court “may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed. R. 1 The Court finds that a summary of the background in this case is not necessary for purposes of this Order. For background information on the case see the Court’s December 13, 2013 Order (ECF No. 107). EXHIBIT 7 Page 62 Case 2:16-cv-06256-CBM-AJW Document 25-8 Filed 11/10/16 Page 1 of 6 Page ID #:437 2 Civ. P. 12(f). The Court has broad discretion when considering a motion to strike. Morrison v. Executive Aircraft Refinishing, Inc., 434 F. Supp. 2d 1314, 1317-18 (S.D. Fla. 2005). However, motions to strike are disfavored by the courts and several courts have characterized these motions as “time wasters.” See, e.g., Holtzman v. B/E Aerospace, Inc., No. 07-80551, 2008 WL 2225668, at *1 (S.D. Fla. May 29, 2008); Royal Palm Sav. Ass’n v. Pine Trace Corp., 716 F. Supp. 1416, 1417 (M.D. Fla. 1989). Courts generally deny such motions “unless the allegations have no possible relation to the controversy, may confuse the issues, or may cause prejudice to one of the parties.” Ayers v. Consol. Constr. Servs. of S.W. Fla., Inc., No. 2:07-CV-123, 2007 WL 4181910, at *1 (M.D. Fla. Nov. 26, 2007). “Affirmative defenses are . . . subject to the general pleading standard of Fed.R.Civ.P. 8(a), which requires a ‘short and plain statement’ of the asserted defense.” Romero v. S. Waste Sys., LLC, 619 F. Supp. 2d 1356, 1358 (S.D. Fla. 2009). Despite liberal pleading requirements, “where the affirmative defenses are no more than ‘bare bones conclusory allegations, [they] must be stricken.’” Morrison v. Executive Aircraft Refinishing, Inc., 434 F. Supp. 2d 1314, 1318 (S.D. Fla. 2005)) (quoting Microsoft Corp. v. Jesse's Computers & Repair, Inc., 211 F.R.D. 681, 684 (M.D. Fla. 2002)); see also Romero, 619 F. Supp. 2d at 1358 (“While the rule does not require presentation of detailed facts, it does require the party raising the affirmative defense to ‘do more than make conclusory allegations.’”) (quoting Microsoft Corp., 211 F.R.D. at 684); see also Gonzalez v. Spears Holdings, Inc., No. 09-60501-cv-60501, 2009 WL 2391233, at *1 (S.D. Fla. July 31, 2009) (“Although Rule 8 does not obligate a defendant to set forth detailed factual allegations, a defendant must give the plaintiff fair notice of the nature of the defense and the grounds upon which it rests.”) (internal quotations omitted); see also Katz v. Chevaldina, 12-cv- 22211, 2013 WL 2147156, at *2 (S.D. Fla. May 15, 2013). A court must not tolerate shotgun EXHIBIT 7 Page 63 Case 2:16-cv-06256-CBM-AJW Document 25-8 Filed 11/10/16 Page 2 of 6 Page ID #:438 3 pleading of affirmative defenses, and should strike vague and ambiguous defenses which do not respond to any particular count, allegation or legal basis of a complaint. Katz, 2013 WL 2147156, at *2 (citing Morrison, 434 F. Supp. 2d at 1318). Furthermore, an affirmative defense should be stricken if it is insufficient as a matter of law. Microsoft Corp., 211 F.R.D. at 683. “A defense is insufficient as a matter of law only if: (1) on the face of the pleadings, it is patently frivolous, or (2) it is clearly invalid as a matter of law.” Id. II. ANALYSIS Defendants’ Answer asserts twelve affirmative defenses (ECF No. 55). Plaintiffs’ Motion takes issue with nine of the twelve affirmative defenses. Pls.’ Mot., at 1-2. Specifically, Plaintiffs assert that: (1) Affirmative Defense nos. 1, 2, and 10 are mere denials and should be deemed denials, (2) Affirmative Defense nos. 3, 4, 6, 8, 11, and 12 are insufficiently pled and should be stricken, and (3) Defendants’ reservation of rights clause listed under “Additional Defenses” is not a defense and should be stricken. See generally Pls.’ Mot. In their Response Defendants do not object to the striking of Affirmative Defense no. 1 with prejudice. Defs.’ Resp., at 1. Thus, Affirmative Defense no. 1 will be stricken from the Answer. Affirmative Defenses, at ¶ 1 (ECF No. 55 at p. 17-22). However, the Court finds that Affirmative Defense nos. 2 and 10 are sufficient as a matter of law and thus, Plaintiffs’ request that they be deemed denials will be denied. Id. at ¶¶ 2, 10. This is because the Court finds that they are proper defenses since they are more than mere attacks on the Plaintiffs’ pleading. The Court also finds that Affirmative Defense nos. 3 and 4 are sufficiently pled. Affirmative Defenses, at ¶¶ 3, 4. Each affirmative defense fulfills the ‘short and plain statement’ standard of Federal Rule of Civil Procedure 8(a) by putting the Plaintiffs on fair notice of the nature of the defenses and the grounds upon which they rest. See Gonzalez v. Spears Holdings, EXHIBIT 7 Page 64 Case 2:16-cv-06256-CBM-AJW Document 25-8 Filed 11/10/16 Page 3 of 6 Page ID #:439 4 Inc., 2009 WL 2391233, at *1 (S.D. Fla. July 31, 2009). Thus, Affirmative Defense nos. 3 and 4 will not be stricken from the Answer. The Court finds that Affirmative Defense nos. 6, 8, and 11 are insufficiently pled. Defendants do not object to the striking of Affirmative Defense nos. 6 and 8. Defs.’ Resp., at 1. Affirmative Defense no. 11 states: “Plaintiffs’ claims are barred, in whole or in part [sic], by unclean hands.” Affirmative Defenses, at ¶ 11. The Court finds this defense conclusory. See Lynch v. Cont’l Group, Inc., No. 12-cv-21648, 2013 WL 166226, at *4 (S.D. Fla. Jan. 15, 2013) (granting Defendant leave to replead affirmatives defenses of laches, wavier, estoppel, and unclean hands because “Defendant has not pled all of the necessary elements for each of these defenses.”). Thus, Affirmative Defense nos. 6, 8 and 11 will be stricken from the Answer. Plaintiffs argue that Affirmative Defense no. 12, which raises inequitable conduct as a defense, should be stricken because it is not pled with the particularity required by Federal Rule of Civil Procedure 9(b). Affirmative Defenses, at ¶¶ 12-25; Defs.’ Mot., at 7. To plead the circumstances of inequitable conduct with the requisite particularity under rule 9(b), the pleading must identify the specific who, what, when where and how of the material misrepresentation or omission committed before the PTO. See Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1328 (Fed. Cir. 2009). Furthermore, while knowledge and intent may be averred generally “a pleading of inequitable conduct under Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO.” Id. at 1328-29. The Court finds that Affirmative Defense no. 12 is pled with the particularity required by Rule 9(b). Defendants identify the who, what, when, and how elements and present sufficient underlying EXHIBIT 7 Page 65 Case 2:16-cv-06256-CBM-AJW Document 25-8 Filed 11/10/16 Page 4 of 6 Page ID #:440 5 facts from which the Court can reasonably infer that inequitable conduct may have taken place. The Court does not find that Defendants use of the term “on information and belief” in pleading Affirmative Defense no. 12 renders it insufficient. Thus, Affirmative Defense no. 12 will not be stricken from the Answer. Finally, the Court finds that Defendants’ “reservation of rights clause,” which is included under “Additional Defenses” should be stricken from the Answer as a matter of law. Additional Defenses, at ¶ 26. An affirmative defense is one that admits to the complaint, but avoids liability, wholly or in part, by new allegations of excuse, justification or other negating matter. Pujals ex rel. El Rey De Los Habanos, Inc. v. Garcia, 777 F. Supp. 2d 1332, 1327 (S.D. Fla. 2011). Defendants’ reservation of rights clause is not an affirmative defense because it does not respond to the initial complaint or raise facts which negate Plaintiffs’ claims. See Gonzalez v. Spears Holdings, Inc., No. 09-cv-60501, 2009 WL 2391233, at *4 (S.D. Fla. July 31, 2009); see also Achievement & Rehabilitation Ctrs. v. City of Lauderhill, No. 12-cv-61628, 2012 WL 6061762, at *2 (S.D. Fla. Dec. 6, 2012). To the extent that Defendants wish to add additional affirmative defenses, they will have to move this Court for leave to amend. Id. As a result, Defendants’ reservation of rights clause will be stricken from the Answer. III. CONCLUSION For the foregoing reasons, it is ORDERED AND ADJUDGED that Plaintiffs’ Motion to Strike, and/or Deem Denials, Defendants’ Affirmative Defenses to Verified Complaint (ECF No. 72) is GRANTED IN PART AND DENIED IN PART as follows: EXHIBIT 7 Page 66 Case 2:16-cv-06256-CBM-AJW Document 25-8 Filed 11/10/16 Page 5 of 6 Page ID #:441 6 1. Plaintiffs’ Motion is GRANTED with respect to Affirmative Defense no. 1 and “Additional Defenses” (¶ 26). Affirmative Defense no. 1 and “Additional Defenses” are stricken from the Answer with prejudice. 2. Plaintiffs’ Motion is GRANTED with respect to Affirmative Defense nos. 6, 8, and 11. Defendants are granted leave to amend these defenses within ten (10) days of the date of entry of this Order or they will be stricken from the Answer with prejudice. 3. Plaintiffs’ Motion is DENIED regarding Affirmative Defense nos. 2, 3, 4, 10, and 12. DONE AND ORDERED in Chambers at Miami, Florida, this ____ day of January, 2014. ________________________________ K. MICHAEL MOORE UNITED STATES DISTRICT JUDGE cc: All counsel of record 5th Kevin Michael Moore Digitally signed by Kevin Michael Moore DN: cn=Kevin Michael Moore, o, ou, email=k_michael_moore@flsd.uscourts.gov, c=US Date: 2014.01.05 17:18:06 -05'00' EXHIBIT 7 Page 67 Case 2:16-cv-06256-CBM-AJW Document 25-8 Filed 11/10/16 Page 6 of 6 Page ID #:442 LINK: UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. CV 15-1877 BRO (MANx) Date August 6, 2015 Title ADVANCED TRANSIT DYNAMICS, INC. v. RIDGE CORP., et al. CV-90 (06/04) CIVIL MINUTES - GENERAL Page 1 of 6 Present: The Honorable BEVERLY REID O’CONNELL, United States District Judge Renee A. Fisher Not Present N/A Deputy Clerk Court Reporter Tape No. Attorneys Present for Plaintiffs: Attorneys Present for Defendants: Not Present Not Present Proceedings: (IN CHAMBERS) ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION TO STRIKE AFFIRMATIVE DEFENSES [61] I. INTRODUCTION In the instant motion, Plaintiff Advanced Transit Dynamics seeks an Order striking certain of Defendant Ridge Corporation’s affirmative defenses: the Third (“no injunctive relief”), Fourth (“failure to state a claim for relief”), Fifth (“laches”), and Sixth (“lack of notice”). (Dkt. No. 61.) Defendant opposes the motion. For the following reasons, the motion is GRANTED IN PART.1 II. LEGAL STANDARD “The court may strike from a pleading an insufficient defense . . . .” Fed. R. Civ. P. 12. “[M]otions to strike are typically viewed with disfavor because they are often used for purposes of delay, and because of the strong judicial policy favoring resolution on the merits.” United States ex rel. Ruhe v. Masimo Corp., 929 F. Supp. 2d 1033, 1038 (C.D. Cal. 2012). Given the “disfavored status” of such motions, “courts often require ‘a showing of prejudice by the moving party’ before granting the requested relief.” Cal. Dep’t of Toxic Substances Control v. Alco Pac., Inc., 217 F. Supp. 2d 1028, 1033 (C.D. 1 After consideration of the papers filed in support of and in opposition to the instant motion, the Court deems this matter appropriate for decision without oral argument of counsel. See Fed. R. Civ. P. 78; C.D. Cal. Local Rule 7-15. EXHIBIT 8 Page 68 Case 2:16-cv-06256-CBM-AJW Document 25-9 Filed 11/10/16 Page 1 of 6 Page ID #:443 LINK: UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. CV 15-1877 BRO (MANx) Date August 6, 2015 Title ADVANCED TRANSIT DYNAMICS, INC. v. RIDGE CORP., et al. CV-90 (06/04) CIVIL MINUTES - GENERAL Page 2 of 6 Cal. 2002) (citation omitted). “The possibility that issues will be unnecessarily complicated or that superfluous pleadings will cause the trier of fact to draw ‘unwarranted’ inferences at trial is the type of prejudice that is sufficient to support the granting of a motion to strike.” Id. (citing Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1528 (9th Cir. 1993)). “To strike an affirmative defense, the moving party must convince the court ‘that there are no questions of fact, that any questions of law are clear and not in dispute, and that under no set of circumstances could the defense succeed.’” S.E.C. v. Sands, 902 F. Supp. 1149, 1165 (C.D. Cal. 1995), aff’d sub nom. S.E.C. v. First Pac. Bancorp, 142 F.3d 1186 (9th Cir. 1998) (citations omitted). “In reviewing a motion to strike, the court must view the pleadings under attack in the light most favorable to the pleader.” Masimo, 929 F. Supp. 2d at 1038. An affirmative defense is sufficiently pled if “it gives plaintiff fair notice of the defense.” Simmons v. Navajo County, 609 F.3d 1011, 1023 (9th Cir. 2010) (quoting Wyshak v. City Nat’l Bank, 607 F.2d 824, 827 (9th Cir. 1979) (per curiam)); accord Baroness Small Estates, Inc. v. BJ’s Rests., Inc., No. CV 11-00468-JST (Ex), 2011 WL 3438873, at *5 (C.D. Cal. Aug. 5, 2011) (“The Ninth Circuit . . . has not required a heightened pleading standard for affirmative defenses.”). “Ultimately, whether to grant a motion to strike lies within the sound discretion of the district court.” Alco Pac., 217 F. Supp. 2d at 1033. III. DISCUSSION A. Third Affirmative Defense - “No Injunctive Relief” Ridge’s third affirmative defense, “no injunctive relief,” states that “ATD is not entitled to preliminary or permanent injunctive relief because (i) ATD is not likely to succeed on the merits of its claims, (ii) any alleged injury to ATD is not immediate or irreparable, (iii) a balancing of the public and private interests in the case favors Ridge, and (iv) ATD has an adequate remedy at law.” (Answer & Countercl., Dkt. No. 27 at 11.) Advanced Transit cites a case which struck a similar “affirmative defense” because it went to the merits of the case and “is inappropriately presented as an affirmative defense.” (Mot., Dkt. No. 61-1 at 5 (citing Quintana v. Baca, 233 F.R.D. 562, 566 (C.D. Cal. 2005) (internal quotations omitted)). In other words, a true affirmative defense EXHIBIT 8 Page 69 Case 2:16-cv-06256-CBM-AJW Document 25-9 Filed 11/10/16 Page 2 of 6 Page ID #:444 LINK: UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. CV 15-1877 BRO (MANx) Date August 6, 2015 Title ADVANCED TRANSIT DYNAMICS, INC. v. RIDGE CORP., et al. CV-90 (06/04) CIVIL MINUTES - GENERAL Page 3 of 6 “plead[s] matters extraneous to the plaintiff’s prima facie case, which deny plaintiff’s right to recover, even if the allegations of the complaint are true.” Dairy Employees Union Local No. 17 v. Ferreira Dairy, No. 5:14-CV-01295-RSWL-M, 2015 WL 505934, at *3 (C.D. Cal. Feb. 6, 2015) (quoting G & G Closed Circuit Events, LLC v. Nguyen, No. 10-CV-00168-LHK, 2010 WL 3749284, at *5 (N.D. Cal. Sept. 23, 2010)). Here, Defendant’s third “affirmative defense” does no more than deny the presence of factors necessary for an injunction. This defense is not properly pled because entitlement to an injunction is part of Advanced Transit’s prima facie case. Cloud B, Inc. v. Glopo, Inc., 14-CV-00896 BRO (RZx), Dkt. No. 26 at 7 (C.D. Cal. June 5, 2014) (quoting Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1088 (9th Cir. 2002) (“A defense which demonstrates that plaintiff has not met its burden of proof is not an affirmative defense.”).) Accordingly, the Court STRIKES the Third Affirmative Defense without leave to amend. B. Fourth Affirmative Defense - “Failure to State a Claim for Relief” Likewise, “[f]ailure to state a claim” is not an affirmative defense. Enough for Everyone, Inc. v. Povo Craft & Novelty, Inc., No. CV 11-1161 DOC (MLGx), 2012 U.S. Dist. LEXIS 6745, at *8 (striking “failure to state a claim” because it “identifies a pleading deficiency and is not an affirmative defense”). Accordingly, the Court STRIKES the Fourth Affirmative Defense without leave to amend. C. Fifth Affirmative Defense - “Laches” Advanced Transit concedes that laches is an affirmative defense, but argues that the Answer fails to provide any facts supporting the defense. (Mot., Dkt. No. 61-1 at 7.) And Advanced Transit argues that no such facts could be alleged, because “Ridge has already admitted to the Court that it did not complete its design of the Accused Product until March 11, 2015, a mere two days before ATDynamics filed the Complaint,” and that “Ridge further admitted that its first sale of the current version of the Accused Product took place on or around March 19, 2015, one week after this action was filed.” (Id. at 7-8 (emphasis in original).) Plaintiffs do not argue that Twombly/Iqbal apply to affirmative defenses, and indeed, “fair notice-and not plausibility-is the appropriate standard to use in EXHIBIT 8 Page 70 Case 2:16-cv-06256-CBM-AJW Document 25-9 Filed 11/10/16 Page 3 of 6 Page ID #:445 LINK: UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. CV 15-1877 BRO (MANx) Date August 6, 2015 Title ADVANCED TRANSIT DYNAMICS, INC. v. RIDGE CORP., et al. CV-90 (06/04) CIVIL MINUTES - GENERAL Page 4 of 6 determining the sufficiency of an affirmative defense.” Cloud B, 14-CV-000896 BRO (RZx), Dkt. No. 26 at 5. The Ninth Circuit “has not required a heightened pleading standard for affirmative defenses.” Id. at 4 (quoting Baroness Small Estates, Inc. v. BJ’s Rests., Inc., SACV 11-00468-JST (Ex), 2011 U.S. Dist. LEXIS 86917, at *5 (C.D. Cal. Aug. 5, 2011). Textual differences between Rule 8(a), which requires “a short and plain statement of the claim showing that the pleader is entitled to relief,” and Rule 8(c), which requires a party to “affirmatively state any avoidance or affirmative defenses,” support this distinction. Id. (citing Enough for Everyone, 2012 U.S. Dist. LEXIS 6745 at *5-6). Finally, from a policy perspective, plaintiffs are differently situated from defendants with respect to the time available to prepare claims, and with respect to the possibility that a “barebones complaint” could “open the gates to expensive discovery and force an extortionate settlement.” Id. at 5 (quoting Leon v. Jacobson Transp. Co., No. 10 C 4939, 2010 WL 4810600, at *1 (N.D. Ill. Nov. 19, 2010)). Thus, the question here is whether Ridge has provided “fair notice of the defense.” Ridge argues that the Complaint itself and facts Plaintiff provided in connection with the pending motion for preliminary injunction provide adequate facts to give fair notice of a laches defense. (Opp’n, Dkt. No. 66 at 8.) Ridge points to the allegations that “Defendant advertised the accused products” in July 2014, and that Advanced Transit received substantial information about Ridge’s product and Ridge’s discussions with customers during 2013 and 2014. (Id. (quoting Am. Compl., Dkt. No. 14 at ¶ 7, Smith Decl. in Supp. of Pl.’s Mot. for Prel. Inj., Dkt. No. 15-4 at ¶¶ 41-43).) Ridge also relies on statements made by its witnesses in opposing Advanced Transit’s preliminary injunction motion, including that Ridge continued to develop its product during the time Advanced Transit knew about Ridge’s efforts. (Opp’n at 8-9 (citing McDonald in Supp. of Def.’s Opp’n to Mot. for Prelim. Inj., Dkt. No. 32 at ¶ 22).) Ridge relies on cases denying a motion to strike a defense where the underlying facts are within the moving party’s control, are alleged in the Complaint, or are in other pleadings. (Opp’n at 8 (citing Pac. Dental Servs., LLC v. Homeland Ins. Co., No. 13- 749-JST (JPRx), 2013 U.S. Dist. LEXIS 100056, at *19 (C.D. Cal. July 17, 2013); Thompson v. APM Terminals Pac. Ltd., No. 10-677, 2010 U.S. Dist. LEXIS 142537, at *6 (N.D. Cal. Aug. 20, 2010); Securimetrics, Inc. v. Hartford Cas. Ins. Co., No. 05-917, 2005 U.S. Dist. LEXIS 43533, at *15-16 (S.D. Cal. Oct. 4, 2005).) But these cases do EXHIBIT 8 Page 71 Case 2:16-cv-06256-CBM-AJW Document 25-9 Filed 11/10/16 Page 4 of 6 Page ID #:446 LINK: UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. CV 15-1877 BRO (MANx) Date August 6, 2015 Title ADVANCED TRANSIT DYNAMICS, INC. v. RIDGE CORP., et al. CV-90 (06/04) CIVIL MINUTES - GENERAL Page 5 of 6 not rely on the same combination of pleadings and extraneous factual declarations that Ridge relies on here. Therefore, the Court STRIKES the Fifth Affirmative Defense as insufficiently pled. However, Ridge has now provided a theory that, whatever its merits, would survive a motion to strike if pled, because “[t]o strike an affirmative defense, the moving party must convince the court that there are no questions of fact, that any questions of law are clear and not in dispute, and that under no set of circumstances could the defense succeed.” Sands, 902 F. Supp. at 1165. The Court therefore GRANTS leave to amend the Fifth Affirmative Defense. D. Sixth Affirmative Defense - “Lack of Notice” Advanced Transit argues that (1) “lack of notice” is not a defense to patent infringement, (2) to the extent Ridge meant “lack of knowledge,” that is a denial of the prima facie case, not an affirmative defense, and (3) to the extent Ridge meant it as a damages limitation, Ridge provided no factual allegation in support. (Mot., Dkt. No. 61- 1 at 8.) Advanced Transit argues that leave to amend would be futile because Ridge admitted that it filed a statement with the USPTO on February 18, 2015 identifying the asserted patents before the date of the Complaint in this action. (Id. (citing Answer, Dkt. No. 27 at ¶ 27).) Ridge responds that the text of its affirmative defense clearly referred to options 2 and 3 above-lack of knowledge and a damages limitation-and that its knowledge of the asserted patents is irrelevant because both indirect infringement and presuit damages require presuit knowledge of infringement, not mere knowledge of the patents. (Opp’n at 10 (quoting Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1025 (2015); Amsted Indus. Inc. v. Buckeye Steel Castings Co., 24 F.3d 178, 187 (Fed. Cir. 1994).) Once again, this only alleges that there are defects in Advanced Transit’s prima facie case, and does not constitute an affirmative defense. Accordingly, the Court STRIKES the Sixth Affirmative Defense without leave to amend. EXHIBIT 8 Page 72 Case 2:16-cv-06256-CBM-AJW Document 25-9 Filed 11/10/16 Page 5 of 6 Page ID #:447 LINK: UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA CIVIL MINUTES - GENERAL Case No. CV 15-1877 BRO (MANx) Date August 6, 2015 Title ADVANCED TRANSIT DYNAMICS, INC. v. RIDGE CORP., et al. CV-90 (06/04) CIVIL MINUTES - GENERAL Page 6 of 6 IV. CONCLUSION The motion is GRANTED IN PART. The Court STRIKES the Third, Fourth, and Sixth Affirmative Defenses without leave to amend. The Court STRIKES the Fifth Affirmative Defense with leave to amend. IT IS SO ORDERED. Initials of Preparer rf EXHIBIT 8 Page 73 Case 2:16-cv-06256-CBM-AJW Document 25-9 Filed 11/10/16 Page 6 of 6 Page ID #:448 1 de Gyarfas, Victor From: de Gyarfas, Victor Sent: Friday, November 04, 2016 2:32 PM To: Scott, Craig M.; Paul Torres; Gregory Doll Cc: Katherine Ferguson; Deol, Sunny; Bush, Christine K.; Briggs, Rebecca F.; Deol, Sunny Subject: RE: Roland/InMusic Your proposal was presented and you know Roland’s position from my email below. You may or may not be aware that the C.D. Cal. does not have a standard set of patent local rules and your approach is not “customary in patent cases” in the C.D. Cal. In any event, even in districts that do have patent local rules, motions to dismiss/strike on the grounds Roland would assert are routinely granted. Further, InMusic was required to research its purported “affirmative defenses,” some of which are not actually affirmative defenses, as well as its Counterclaims, before filing its Answer and Counterclaims. I am happy to have a follow up call next week, but let’s do it on Monday, as we will need to get started on the motion Monday unless InMusic agrees to amend. I would propose doing the call at either 10 am Pacific or Noon Pacific on Monday. Let me know if either of those times work. From: Scott, Craig M. [mailto:cscott@hinckleyallen.com] Sent: Friday, November 04, 2016 2:21 PM To: de Gyarfas, Victor; Paul Torres; Gregory Doll Cc: Katherine Ferguson; Deol, Sunny; Bush, Christine K.; Briggs, Rebecca F.; Deol, Sunny Subject: RE: Roland/InMusic Victor, Thanks for letting me know Roland’s position. However, my proposal is not simply for Roland to “provide infringement contentions for all of its claims.” At your request, we spoke on Wednesday to address your Twombly/Iqbal concerns relative to certain Affirmative Defenses and Counterclaims. In advance of the call, I requested that you confirm whether your client is asserting infringement as to any more than the one claim per patent‐in‐suit identified in the Complaint. That request remains outstanding. During our call, I proposed that instead of diverting resources on a motion to strike/dismiss, that we proceed in a manner consistent with other Districts with local patent rules: Roland forwards its infringement contentions as to all claims for all patents, followed by inMusic providing its non‐infringement and invalidity contentions. In addition, once your side discloses all of its claims, it likely will inform whether the inMusic’s affirmative defenses require supplementation (such as the laches and estoppel defenses). In addition, discovery requests would also serve to flesh out the claims and defenses in this case. You indicated that you hadn’t considered this approach and would take it to your client. I continue to believe that this sequence, customary in patent cases, will advance party and judicial economy. If your client, presented with the full contours of our suggested approach, still insists on filing such a motion, then I suggest we have a follow‐up call next week. Please consider including this email in any submission to the Court, but I continue to believe such a motion is unnecessary. EXHIBIT 9 Page 74 Case 2:16-cv-06256-CBM-AJW Document 25-10 Filed 11/10/16 Page 1 of 6 Page ID #:449 2 Craig Craig M. Scott Partner Hinckley Allen 100 Westminster Street, Suite 1500 Providence, RI 02903-2319 p: 401-457-5124 | f: 401-457-5125 28 State Street Boston, MA 02109-1775 p: 617-345-9000 | f: 617-345-9020 cscott@hinckleyallen.com From: VDeGyarfas@foley.com [mailto:VDeGyarfas@foley.com] Sent: Wednesday, November 02, 2016 8:26 PM To: Scott, Craig M.; Paul Torres; Gregory Doll Cc: Katherine Ferguson; SDeol@foley.com; Bush, Christine K.; Briggs, Rebecca F.; SDeol@foley.com Subject: RE: Roland/InMusic Craig, Thanks for speaking with me today. I was able to contact Roland. Roland declines your proposal to provide infringement contentions for all of its claims. Roland will proceed to file the motion to strike/dismiss unless InMusic will agree to amend its Answer and Counterclaims by 11/14/16. As Roland would need to start work on the motion to dismiss by 11/7/16, please let us know no later than 11/7/16 Noon Pacific whether InMusic will amend. If Roland is put to the work of filing the motion to strike/dismiss and then InMusic amends, Roland will seek its attorney fees for having filed the motion to strike/dismiss. I am available on Friday if you want to discuss the issues further. Victor de Gyarfas Foley & Lardner LLP 555 South Flower Street, Suite 3500 Los Angeles, CA 90071 213-972-4613 vdegyarfas@foley.com From: de Gyarfas, Victor Sent: Friday, October 28, 2016 9:19 AM To: Scott, Craig M.; Paul Torres; Gregory Doll Cc: Katherine Ferguson; Deol, Sunny; Bush, Christine K.; Briggs, Rebecca F. Subject: RE: Roland/InMusic EXHIBIT 9 Page 75 Case 2:16-cv-06256-CBM-AJW Document 25-10 Filed 11/10/16 Page 2 of 6 Page ID #:450 3 Thanks. Let’s do Wednesday at 1 Eastern / 10 Pacific. We can use this call in: Toll-free dial-in number (U.S. and Canada): (855) 423-6539 Conference code: 590 974 6379 From: Scott, Craig M. [mailto:cscott@hinckleyallen.com] Sent: Friday, October 28, 2016 8:39 AM To: de Gyarfas, Victor; Paul Torres; Gregory Doll Cc: Katherine Ferguson; Deol, Sunny; Bush, Christine K.; Briggs, Rebecca F. Subject: RE: Roland/InMusic Counsel, As requested, our availability early next week is: Tuesday from 4‐5 ET and Wednesday from 9‐2 ET. Please let us know what’s best or if you would like us to propose additional dates/times. Please advise in advance of our call whether Roland will be asserting any more than the one claim per patent‐in‐suit that is identified in the Complaint. Craig Craig M. Scott Partner Hinckley Allen 100 Westminster Street, Suite 1500 Providence, RI 02903-2319 p: 401-457-5124 | f: 401-457-5125 28 State Street Boston, MA 02109-1775 p: 617-345-9000 | f: 617-345-9020 cscott@hinckleyallen.com From: VDeGyarfas@foley.com [mailto:VDeGyarfas@foley.com] Sent: Wednesday, October 26, 2016 5:32 PM To: Scott, Craig M.; Paul Torres; Gregory Doll Cc: Katherine Ferguson; SDeol@foley.com Subject: RE: Roland/InMusic Counsel: We have reviewed your Answer and Counterclaims. We believe that many of the defenses (at least the 1st, 2nd, 3rd, 4th, 6th, 7th, 8th, and 9th defenses) and the counterclaims are not adequately pleaded under EXHIBIT 9 Page 76 Case 2:16-cv-06256-CBM-AJW Document 25-10 Filed 11/10/16 Page 3 of 6 Page ID #:451 4 Iqbal/Twombly. Accordingly, unless we can come to some agreement concerning an amended pleading, Roland will move to strike the defenses and dismiss the counterclaims. Please let me know when you would be available for a Local Rule 7-3 conference of counsel. I am tied up most of the day tomorrow and Friday but have more availability next week. Victor de Gyarfas Foley & Lardner LLP 555 South Flower Street, Suite 3500 Los Angeles, CA 90071 213-972-4613 vdegyarfas@foley.com From: Scott, Craig M. [mailto:cscott@hinckleyallen.com] Sent: Wednesday, September 21, 2016 2:29 PM To: de Gyarfas, Victor; Paul Torres; Gregory Doll Cc: Katherine Ferguson Subject: RE: Roland/InMusic Thanks, Victor. I’ll look forward to speaking with you. Craig Craig M. Scott Partner Hinckley Allen 100 Westminster Street, Suite 1500 Providence, RI 02903-2319 p: 401-457-5124 | f: 401-457-5125 28 State Street Boston, MA 02109-1775 p: 617-345-9000 | f: 617-345-9020 cscott@hinckleyallen.com From: VDeGyarfas@foley.com [mailto:VDeGyarfas@foley.com] Sent: Wednesday, September 21, 2016 1:11 PM To: Paul Torres; Gregory Doll Cc: Scott, Craig M.; Katherine Ferguson Subject: RE: Roland/InMusic Paul, That looks fine. You have my permission to file with my electronic signature. Thanks - Victor From: Paul Torres [mailto:ptorres@dollamir.com] Sent: Wednesday, September 21, 2016 10:06 AM To: de Gyarfas, Victor; Gregory Doll EXHIBIT 9 Page 77 Case 2:16-cv-06256-CBM-AJW Document 25-10 Filed 11/10/16 Page 4 of 6 Page ID #:452 5 Cc: Scott, Craig M.; Katherine Ferguson Subject: RE: Roland/InMusic Thank you, Victor. In accordance with the extension, we plan to file the attached stipulation. Please let us know if we have your permission to file it with your electronic signature, or if you have comments. Thanks again. ‐Paul From: VDeGyarfas@foley.com [mailto:VDeGyarfas@foley.com] Sent: Tuesday, September 20, 2016 12:09 PM To: Gregory Doll Cc: Scott, Craig M. ; Paul Torres Subject: RE: Roland/InMusic Greg, Roland is agreeable to the 30 day extension. Thanks - Victor From: Gregory Doll [mailto:gdoll@dollamir.com] Sent: Monday, September 19, 2016 9:20 AM To: de Gyarfas, Victor Cc: Scott, Craig M.; Paul Torres Subject: Roland/InMusic Hi Victor - Good meeting you by telephone this morning. By this email, I wanted to pass on my contact information and request the 30‐day extension to respond to the complaint under the local rules. Our firm (myself along with Paul Torres) will be acting as local counsel. Craig Scott (and other members of his firm) of Hinckley Alllen will be lead counsel for the defendant. Both are cc’d on this email. Craig will be reaching out to your shortly to introduce himself. Thanks for considering the extension. Your courtesy will be reciprocated. Thanks. Greg Gregory Doll | Doll Amir Eley LLP | Phone 310.557.9100 | Facsimile 310.557.9101 1888 Century Park East, Suite 1850 Los Angeles, CA 90067 | www.dollamir.com This e-mail is for the sole use of the intended recipients(s) and contains information belonging to Doll Amir & Eley, which is confidential and/or legally privileged. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or taking of any action in reliance on the contents of this e-mail information is strictly prohibited. If you have received this e-mail in error, please immediately notify the sender by reply e-mail and destroy all copies of the original message. The preceding email message may be confidential or protected by the attorney-client privilege. It is not intended for transmission to, or receipt by, any unauthorized persons. If you have received this message in error, please (i) do not read it, (ii) reply to the sender that you received the message in error, and (iii) erase or destroy the EXHIBIT 9 Page 78 Case 2:16-cv-06256-CBM-AJW Document 25-10 Filed 11/10/16 Page 5 of 6 Page ID #:453 6 message. Legal advice contained in the preceding message is solely for the benefit of the Foley & Lardner LLP client(s) represented by the Firm in the particular matter that is the subject of this message, and may not be relied upon by any other party. The preceding email message may be confidential or protected by the attorney-client privilege. It is not intended for transmission to, or receipt by, any unauthorized persons. If you have received this message in error, please (i) do not read it, (ii) reply to the sender that you received the message in error, and (iii) erase or destroy the message. Legal advice contained in the preceding message is solely for the benefit of the Foley & Lardner LLP client(s) represented by the Firm in the particular matter that is the subject of this message, and may not be relied upon by any other party. The preceding email message may be confidential or protected by the attorney-client privilege. It is not intended for transmission to, or receipt by, any unauthorized persons. If you have received this message in error, please (i) do not read it, (ii) reply to the sender that you received the message in error, and (iii) erase or destroy the message. Legal advice contained in the preceding message is solely for the benefit of the Foley & Lardner LLP client(s) represented by the Firm in the particular matter that is the subject of this message, and may not be relied upon by any other party. The preceding email message may be confidential or protected by the attorney-client privilege. It is not intended for transmission to, or receipt by, any unauthorized persons. If you have received this message in error, please (i) do not read it, (ii) reply to the sender that you received the message in error, and (iii) erase or destroy the message. Legal advice contained in the preceding message is solely for the benefit of the Foley & Lardner LLP client(s) represented by the Firm in the particular matter that is the subject of this message, and may not be relied upon by any other party. EXHIBIT 9 Page 79 Case 2:16-cv-06256-CBM-AJW Document 25-10 Filed 11/10/16 Page 6 of 6 Page ID #:454 4832-5390-2908.1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION ROLAND CORPORATION, a Japanese corporation Plaintiff, v. INMUSICBRANDS, INC., a Florida Corporation, Defendant. Case No: 2:16-cv-6256 CBM (AJWx) [PROPOSED] ORDER GRANTING PLAINTIFF’S MOTION TO DISMISS COUNTERCLAIMS AND STRIKE AFFIRMATIVE DEFENSES Case 2:16-cv-06256-CBM-AJW Document 25-11 Filed 11/10/16 Page 1 of 6 Page ID #:455 4832-5390-2908.1 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Before the Court is Plaintiff Roland Corporation’s (“Roland”) motion to dismiss all of Defendant InMusic Brand’s (“InMusic”) counterclaims and strike all of InMusic’s affirmative defenses. Upon consideration of the motion, InMusic’s arguments in opposition, Roland’s reply, and argument of counsel, the Court grant’s Roland’s motion. I. FACTUAL BACKGROUND On August 19, 2016 Plaintiff filed a complaint alleging infringement of eight U.S. patents. InMusic did not challenge the sufficiency of the complaint, and two months later, on October 24, 2016, filed its Answer and Counterclaims (Doc. 22). In its Answer, Defendant stated nine “Affirmative Defenses And Other Defenses” at pp. 7-9. Those defenses are (1) failure to state a claim; (2) non- infringement; (3) invalidity; (4) no doctrine of equivalents because of prosecution history estopppel; (5) recovery is barred by 35 U.S.C. § 286; (6) unenforceability due to laches, unclean hands, waiver, and/or estoppel; (7) unenforceability because the Patent and Trademark Office was not fully advised of all material facts and prior art; (8) reservation of unidentified affirmative defenses; (9) no injunctive relief. Defendant failed to plead any facts in connection with those affirmative defenses. Defendant also asserted counterclaims seeking declarations of invalidity of all of the patents-in-suit, but pled those counterclaims with no facts. II. LEGAL STANDARDS Federal Rule of Civil Procedure 8(a)(2) requires counterclaims to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” See Circ-Cell Skincare, LLC v. Simon, No. 2:15-cv-6061-CBM (MRWx), 2016 WL 5922671, at *1 (C.D. Cal. April 6, 2016). A counterclaim that fails to meet that standard is subject to dismissal under Federal Rule of Civil Procedure 12(b)(6), which allows a court to dismiss for “failure to state a claim upon which Case 2:16-cv-06256-CBM-AJW Document 25-11 Filed 11/10/16 Page 2 of 6 Page ID #:456 4832-5390-2908.1 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 relief can be granted.” In reviewing a motion to dismiss under Rule 12(b)(6), the Court takes all facts pled as true and construes them in the light most favorable to the nonmoving party. See Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Johnson v. Lucent Techs., Inc., 653 F.3d 1000, 1010 (9th Cir. 2011). However, the “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Ashcroft, 556 U.S. at 663. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. at 678. “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Id. 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). The role of a Rule 12(f) motion to strike is to avoid the expense of time and money that results from litigating “spurious issues” by discarding those issues in advance of trial. Whittlestone, Inc. v. Handi- Craft Co., 618 F.3d 970, 973 (9th Cir. 2010) (quoting Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on other grounds, 510 U.S. 517 (1994)). “An affirmative defense may be insufficient as a matter of pleading or as a matter of law.” Roe v. City of San Diego, 289 F.R.D. 604, 608 (S.D. Cal. 2013). “A defense is insufficiently pled if it fails to give the plaintiff fair notice of the nature of the defense.” Barnes v. AT & T Pension Benefit Plan-Nonbargained Program, 718 F. Supp. 2d 1167, 1170 (N.D. Cal. 2010); see also Roe, 289 F.R.D. at 608(“The defendant must articulate the affirmative defense clearly enough that the plaintiff is not a victim of unfair surprise.”) Rule 8(c) addresses affirmative defenses and requires that a party “affirmatively state any avoidance or affirmative defense” in the responsive pleading. Fed. R. Civ. P. 8(c)(1). “An affirmative defense, under the meaning of Federal Rule of Civil Procedure 8(c), is a defense that does not negate the elements Case 2:16-cv-06256-CBM-AJW Document 25-11 Filed 11/10/16 Page 3 of 6 Page ID #:457 4832-5390-2908.1 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of the plaintiff's claim, but instead precludes liability even if all of the elements of the plaintiff's claim are proven.” Barnes, 718 F. Supp. 2d at 1173-74. Neither the United States Supreme Court nor the Ninth Circuit has determined what standard should be used to determine the sufficiency of a defendant's affirmatives defenses, and there is a split among district courts, but “most district courts in this circuit agree that the heightened pleading standard of Twombly and Iqbal . . . is now the correct standard to apply to affirmative defenses.” Ramirez v. Ghilotti Bros. Inc., 941 F. Supp. 2d 1197, 1204 (N.D. Cal. 2013); see also Figueroa v. Stater Bros. Markets, Inc., CV 13- 3364 FMO (JEMx), 2013 WL 4758231, at *3 (C.D. Cal. Sept. 3, 2013); Jacobson v. Persolve, LLC, Case No. 5:14-cv-00735-LHK, 2014 WL 4090809, at *5-6 (N.D. Cal. Aug. 19, 2014); BlackBerry Ltd. v. Typo Products LLC, Case No. 3:14-cv-00023-WHO, 2014 WL 1867009, at *5 (N.D. Cal. May 8, 2014); Ujhelyi v. Vilsack, Case No. 4:12-cv-04282-JSW, 2013 WL 6174491, at *2 (N.D. Cal. Nov. 25, 2013). The Central District decision in Audionics System, Inc. v. AAMP of Florida, Inc., No. CV 12-10763 MMM (JEMx) (C.D. Cal. Nov. 19, 2013), at 8-10 (Ex. 2) recently provided a discussion of the appropriate pleading standards to apply to affirmative defenses and concluded that applying the heightened pleading standard to affirmative defenses is consistent with the language of Rule 8(c) and promotes fairness and efficiency. See also PageMelding, Inc. v. ESPN, Inc., No. C 11- 06263 WHA, 2012 WL 3877686, at *3 (N.D. Cal. Sept. 6, 2012) (applying the Iqbal-Twombly standard in a patent case and striking affirmative defenses); Powertech Tech., Inc. v. Tessera, Inc., C 10-945 CW, 2012 WL 1746848, at *4-5 (N.D. Cal. May 16, 2012) (same). Under the Twombly and Iqbal standard, “the simple listing of a series of conclusory statements asserting the existence of an affirmative defense without stating a reason why that affirmative defense might exist is not sufficient.” Miller v. Ghirardelli Chocolate Co., No. C 12-04936 LB, 2013 WL 3153388, at *3 (N.D. Case 2:16-cv-06256-CBM-AJW Document 25-11 Filed 11/10/16 Page 4 of 6 Page ID #:458 4832-5390-2908.1 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Cal. June 19, 2013) (internal quotation marks omitted). The courts that have applied this standard require the defendant to allege enough facts in its answer to make the affirmative defense viable on its face. See Gibson Brands, Inc. v. John Hornby Skewes & Co., No. CV 14-00609 DDP (SSx), 2014 WL 4187979, at *4 (C.D. Cal. Aug. 22, 2014). This heightened standard “serves to weed out the boilerplate listing of affirmative defenses which is commonplace in most defendant's pleadings.” Id. (emphasis added). After Iqbal, “the burden is on the defendant to proffer sufficient facts and law to support an affirmative defense, and not on the plaintiff to gamble on interpreting an insufficient defense in the manner defendant intended.” CTF Dev., Inc. v. Penta Hospitality, LLC, Case No. 3:09-cv-02429-WHA, 2009 WL 3517617, at *7-8 (N.D. Cal. Oct. 26, 2009). “Just as a plaintiff's complaint must allege enough supporting facts to nudge a legal claim across the line separating plausibility from mere possibility, a defendant's pleading of affirmative defenses must put a plaintiff on notice of the underlying factual bases of the defense.” Dion v. Fulton Friedman & Gullace LLP, Case No. 3:11-2727-SC, 2012 WL 160221, at *2 (N.D. Cal. Jan. 17, 2012). “Merely reciting a legal doctrine, without alleging facts supporting the doctrine's application in the case, fails to provide fair notice of the affirmative defense.” See J & J Sports Prod., Inc. v. Ramirez Bernal, 2014 WL 2042120, at *6 (E.D. Cal. May 16, 2014). III. DISCUSSION In Sliding Door Co. v. KLS Doors, LLC, No. EDCV 13-00196 JGB (DTBx), 2013 WL 2090298, at *4 (C.D. Cal. May 13, 2013), the defendant attempted to assert invalidity counterclaims in almost the same fashion as InMusic, stating that Defendants “allege that one or more claims of the 729 Patent are invalid for failure to meet the requirements of patentability.” That pleading was found not to give “fair notice” to Plaintiff and the counterclaim was dismissed. Here, InMusic’s pleading of its counterclaims similarly states no facts, and Case 2:16-cv-06256-CBM-AJW Document 25-11 Filed 11/10/16 Page 5 of 6 Page ID #:459 4832-5390-2908.1 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 merely recites, in boilerplate fashion, various sections of section 35 of the United States Code. Even, pre-Iqbal/Twombly, merely stating that a patent is “invalid under 35 U.S.C. §§ 101, 102, 103 and/or 112” was held to be not just insufficient, but “radically insufficient,” and was dismissed. Qarbon.com Inc. v. eHelp Corp., 315 F. Supp. 2d 1046, 1050-1051 (N.D. Cal. 2004). Because InMusic has done no more than the defendants in Sliding Door and Qarbon.com, and has failed to give fair notice, the motion is granted with respect to all of InMusic’s counterclaims for invalidity. Similarly, InMusic fails to plead any facts in connection with its affirmative defenses and the motion is granted with respect to all of InMusic’s affirmative defenses. Because Defendant’s first, second, eighth, and ninth defenses are not affirmative defenses, those defenses are stricken with prejudice. IT IS SO ORDERED. Dated: ________________________________ UNITED STATES DISTRICT JUDGE Case 2:16-cv-06256-CBM-AJW Document 25-11 Filed 11/10/16 Page 6 of 6 Page ID #:460