United States District Court, E.D. Virginia, Richmond Division
MEMORANDUM OPINION (PLAINTIFFS MOTION TO DISMISS
DEFENDANT'S INEQUITABLE CONDUCT COUNTERCLAIM)
E. Hudson United States District Judge
MATTER is before the Court on Plaintiff ORBCOMM, Inc.'s
("Plaintiff) Motion to Dismiss Defendant CalAmp
Corp.'s ("Defendant") Counterclaim and to
Strike Its Inequitable Conduct Defense (ECF No. 38), filed on
August 9, 2016. On July 19, 2016, Defendant filed its First
Amended Answer (ECF No. 27) to this patent infringement suit.
Defendant's First Amended Answer included an affirmative
defense and a counterclaim both alleging that one of the
patents-in-suit is unenforceable because of Plaintiff s
inequitable conduct. Plaintiff has moved to dismiss the
inequitable conduct counterclaim pursuant to Federal Rule of
Civil Procedure 12(b)(6) and to strike the inequitable
conduct defense pursuant to Federal Rule of Civil Procedure
12(f). Each side has filed memoranda supporting their
respective positions. For the reasons set forth below, the
Court will deny Plaintiffs Motion.
lawsuit involves five separate but interrelated patents. Only
one of them, U.S. Patent No. 6, 611, 686 ("the '686
patent"), is the subject of the inequitable conduct
required by Rule 12(b)(6) of the Federal Rules of Civil
Procedure, the Court assumes the claimant's well-pleaded
allegations to be true and views all facts in the light most
favorable to it. T.G. Slater & Son v. Donald P. &
Patricia A. Brennan, LLC, 385 F.3d 836, 841 (4th Cir.
2004) (citing Mylan Labs, Inc. v. Matkari, 7 F.3d
1130, 1134 (4th Cir. 1993)). At this stage, the Court's
analysis is both informed and constrained by the four corners
of Defendant's Counterclaim. However, the Court may also
consider documents attached to the counterclaim, "so
long as they are integral to the complaint and
authentic." Philips v. Pitt Cty. Mem'l
Hosp., 572 F.3d 176, 180 (4th Cir. 2009). Viewed through
this lens, the facts are as follows.
2014, the '686 patent was owned by Joseph Smith
("Smith"), the patent's named inventor. (Am.
Answer ¶ 178, ECF No. 27.) On June 3, 2014, Smith filed
separate lawsuits in the Eastern District of Texas against
Honeywell International, Inc. and ORBCOMM, Inc., alleging
infringement of the '686 patent by both Honeywell and
ORBCOMM. (Id. ¶¶ 178-79.) On July 14,
2014, Smith filed yet another action in the Eastern District
of Texas, this time against SkyBitz, Inc., again alleging
infringement of the '686 patent. (Id. ¶
180.) On October 13, 2014, the district court consolidated
the Honeywell and SkyBitz cases, designating Honeywell as the
lead case ("Honeywell case").
19, 2015, the district court issued a claim construction
memorandum opinion and order ("Honeywell Claim
Construction Order") in the Honeywell case.
(Id. ¶ 184.) In the Honeywell Claim
Construction Order, the court concluded that the patent
examiner had made an obvious clerical error in the '686
patent that could be corrected by the court. (Id.)
Specifically, the court construed the term "inputs to be
controlled" in claims 15 and 48 of the '686 patent
to mean "inputs to be monitored." (Id.)
SkyBitz moved for reconsideration of this construction,
arguing that the '686 patent did not contain a clerical
error and that the district court did not have the authority
to change the claim language. (Id. ¶ 85-86.)
August 3, 2015, the district court consolidated the
Honeywell case and the ORBCOMM case, designating
ORBCOMM as the lead case ("ORBCOMM case").
(Id. ¶ 187). The court vacated its
Honeywell Claim Construction Order so that claim
construction could start over in the newly consolidated case.
(Id. Ex. 3, at 2.) The court thus denied
SkyBitz's motion for reconsideration as moot.
(Id. Ex. 3, at 3.) At the time of the ORBCOMM
case consolidation, and throughout the remainder of the
Eastern District of Texas litigation, Herbert Kerner
("Kerner") represented ORBCOMM. (Id.
claim construction brief for the newly consolidated case,
ORBCOMM stated that it had "decided to adopt the
position of Skybitz" with respect to the term
"inputs to be controlled." (Id.¶
188.) This was a change in ORBCOMM's position. Before the
consolidation, ORBCOMM and Smith had agreed to the
court's construction from the Honeywell case.
(Id. Ex.4, at 8 n.l.) In its claim construction
brief, ORBCOMM also argued that there was "no basis to
'correct' the term at issue." (Id.
¶ 189.) ORBCOMM asserted that "inputs to be
controlled" did not meet the requirements for judicial
correction because there was not an error obvious on the face
of the patent. (Id. Ex. 4, at 13.) ORBCOMM
maintained that it was improper for the court to rely on the
patent's prosecution history in making a correction to
the claim language. (Id. Ex. 4, at 14, 17 n.2.) As
evidence of there being no obvious error on the face of the
'686 patent, ORBCOMM pointed to Smith's arguments in
the Honeywell claim construction where he, as the
inventor, denied any error in the "inputs to be
controlled" language. (Id. ¶ 189). ORBCOMM
also went on to argue that, because there was no obvious
error on the face of the patent, the term "inputs to be
controlled" was indefinite, rendering claims 15 and 48
invalid. (Id. Ex. 4, at 17-20.)
district court adopted ORBCOMM's argument. It issued a
claim construction memorandum opinion and order
("ORBCOMM Claim Construction Order") in
the consolidated case on September 10, 2015. (Id.
¶ 190.) The court found that "the error is not
evident from the face of the patent, " and thus the
court "does not have the authority to correct the patent
in such circumstances." (Id. Ex. 5, at 14). The
court further found that "said inputs to be
controlled" was indefinite, rendering claims 15 and 48
of the '686 patent invalid. (Id.) At the heart
of the court's analysis was the fact that throughout both
the Honeywell and ORBCOMM claim
construction processes Smith "argue[d] for an
alternative construction of the phrase 'input to be
controlled.'" (Id. ¶ 190.)
October 13, 2015, the district court granted a stipulated
motion to dismiss the ORBCOMM case. (Id. ¶
191.) In conjunction with the lawsuit being dismissed,
ORBCOMM became the owner of the '686 patent.
(Id. ¶ 192.)
November 4, 2015, Kerner, representing ORBCOMM, the new
patent owner, petitioned the United States Patent and
Trademark Office ("PTO") seeking to change the
"inputs to be controlled" language of the '686
patent-the same language subject to the previous litigation.
(Id. at 194). Kerner sought an expedited issuance of
certificate of correction pursuant to Manual of Patent
Examining Procedure ("MPEP") § 1480.01.
(Id. at 195). To demonstrate that the "inputs
to be controlled" language was an error attributable
solely to the PTO, Kerner only included the patent
examiner's amendment to the '686 patent language
dated December 13, 2010, and the district court's vacated
Honeywell Claim Construction Order. (See
Id. Ex. 6.) Kerner did not disclose, however, that the
Honeywell Claim Construction Order had been vacated,
nor did he provide any other documents from the
Honeywell or ORBCOMM litigation. (See
id.) The PTO granted Kerner's request for correction
on December 21, 2015. (Id. ¶ 194.)
motion to dismiss under Rule 12(b)(6) tests the sufficiency
of a complaint; importantly, it does not resolve contests
surrounding the facts, the merits of a claim, or the
applicability of defenses." Republican Party of N.C.
v. Martin,980 F.2d 943, 952 (4th Cir. 1992). A
reviewing court must consider the well-pleaded allegations as
true and view the complaint in the light most favorable to
the claimant; legal conclusions enjoy no such deference.
Ashcroft v. Iqbal,556 U.S. 662, 678 (2009). The
Federal Rules of Civil Procedure generally "require
only 'a short and plain statement of the claim showing
that the pleader is entitled to relief, ' in order to
'give the defendant fair notice of what the ... claim is
and the grounds upon which it rests."' Bell Atl.
Corp. v. Twombly,550 U.S. 544, 555 (2007) (quoting
Conley v. Gibson,355 U.S. 41, 47 (1957)). However,
the defense of inequitable conduct in patent cases triggers
the more stringent pleading requirements of Rule ...