Magistrate Judge Fallon Considers Motions to Dismiss and Strike
November 11, 2015
Publication| Intellectual Property
Discussion
In Courtesy Prods. LLC v. Hamilton Beach Brands, Inc., C.A. No. 13-2012-SLR-SRF (D. Del. Oct. 20, 2015), Magistrate Judge Fallon considered a motion to dismiss plaintiff’s willful infringement claims and a motion to dismiss defendant’s inequitable conduct defense and counterclaim. Judge Fallon recommended denying defendant’s renewed motion to dismiss plaintiff’s willful infringement claims and granting plaintiff’s motion to dismiss and strike defendant’s inequitable conduct counterclaim and defense (with leave to amend).
In considering the motion to dismiss willful infringement, Judge Fallon found that plaintiff’s amended complaint sufficiently alleged willfulness because it pled the three required elements of objective recklessness (pre-filing knowledge of the patent-in-suit, sales of the accused products, and knowledge that those customers will use the accused products for its infringing use) and pled a sufficient link between such objective recklessness and defendant’s knowledge. The court rejected defendant’s argument that the District of Delaware has required more detail in prior decisions and found that the allegations of objective recklessness in this case were sufficient.
In considering the motion to dismiss and strike defendant’s inequitable conduct counterclaim and defense, Judge Fallon adhered to well-established Delaware precedent holding that inequitable conduct is a fraud-based claim and subject to a heightened pleading standard. Accordingly, both the counterclaim and defense must set forth the specific “who, what, when, where, and how of the material misrepresentation or omission committed before the PTO.” With these requirements in mind, Judge Fallon considered the three prongs of inequitable conduct separately (misrepresentation of fact, but-for materiality, and intent to deceive) and found that the first and third prongs were sufficiently pled but that particularized allegations establishing but-for materiality were lacking. Stated differently, Judge Fallon held that defendant failed to sufficiently plead that the misrepresentations were the but-for cause of the patent’s allowance at the PTO. In so holding, Judge Fallon relied on the patent’s prosecution history (which was admittedly outside of the allegations in the complaint) because it was in the public record.
Trends
Willfulness and inequitable conduct face scrutiny by the District Court, but may survive depending on the facts on a particular case. Recent developments in inequitable conduct case law have not radically changed the court’s analysis of such claims.