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Kit Check, Inc. v. Health Care Logistics, Inc.

United States District Court, S.D. Ohio, Eastern Division

June 13, 2018

KIT CHECK, INC., Plaintiff,

          Vascura, Magistrate Judge

          OPINION & ORDER


         This matter is before the Court on Plaintiff Kit Check, Inc.'s (“KCI”) Motion to Strike Insufficient Defenses from the Answer of Defendant Health Care Logistics (“HCL”). (ECF No. 11). For the reasons that follow, the Court GRANTS KCI's Motion to Strike HCL's Affirmative Defenses. (ECF No. 11). In particular, the Court STRIKES WITHOUT PREJUDICE HCL's affirmative defenses four, eight, twelve, sixteen, twenty, twenty-four, and twenty-eight.

         I. BACKGROUND

         KCI is the holder of seven patents relevant to this civil action, including U.S. Patent No. 8, 990, 099 (the “‘099 patent”); 9, 037, 479 (the “'479 patent”); 9, 058, 412 (the “‘412 patent”); 9, 058, 413 (the “‘413 patent”); 9, 367, 665 (the “‘665 patent”); 9, 734, 294 (the “‘294 patent”); and 9, 805, 169 (the “‘169 patent”). (ECF No. 1). KCI claims, among other things, that HCL has infringed the aforementioned patents. (ECF No. 1 at 2). KCI filed its Complaint on December 1, 2017 requesting “(i) declaratory relief confirming that KCI is the owner of the trade secrets and intellectual property concerning the KCI Product; (ii) injunctive relief ordering HCL to cease its intentional, wrongful, and unfair use of KCI's trade secrets, and its infringement of KCI's patents, in order to compete with KCI's business; and (iii) monetary relief compensating KCI for the economic harm caused by HCL's unlawful actions.” (ECF No. 1).

         HCL answered KCI's complaint on January 2, 2018. (ECF No. 6). On January 19, 2018, KCI moved to strike seven of HCL's affirmative defenses. (ECF No. 11). On February 9, 2018, HCL filed its First-Amended Answer, Affirmative Defenses, and Counterclaims to Plaintiff's Complaint (“First-Amended Answer”) (ECF No. 18), as well as a memorandum in opposition to KCI's motion to strike. (ECF No. 19). The affirmative defenses that KCI seeks to strike were set out identically in both HCL's initial pleading and in its First-Amended Answer.[1] KCI filed a reply to HCL's memorandum in opposition on February 21, 2018. (ECF No. 21). KCI's motion to strike, (ECF No. 11), is ripe for review.


         A. Motion to Strike

         The Court, upon motion or on its own, “may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). Motions to strike are entrusted to the “sound discretion of the trial court, but are generally disfavored.” Yates-Mattingly v. University of Cincinnati, No. 1:11-cv-753, 2013 WL 526427, at *1 (S.D. Ohio Feb. 11, 2013). Indeed, “[s]triking pleadings is considered a drastic remedy to be used sparingly and only when the purposes of justice so require.” Id. (citing Brown & Williamson Tobacco Corp. v. United States, 201 F.2d 819, 822 (6th Cir. 1953)). The Court should not grant a motion to strike if “the insufficiency of the defense is not clearly apparent, or if it raises factual issues that should be determined on a hearing on the merits.” Joe Hand Promotions, Inc. v. Havens, 2:13-cv-0093, 2013 WL 3876176, at *1 (S.D. Ohio July 26, 2013) (internal quotation omitted). On the other hand, “motions to strike ‘serve a useful purpose by eliminating insufficient defenses and saving the time and expense which would otherwise be spent in litigating issues which would not affect the outcome of the case.'” Id. (internal quotations omitted).

         B. Inequitable Conduct

         “Inequitable conduct is an equitable defense to patent infringement that, if proved, bars enforcement of a patent.” Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011). The doctrine of inequitable conduct evolved to embrace misconduct such as egregious affirmative acts of misconduct intended to deceive both the U.S. Patent and Trademark Office (“PTO”) and the courts, as well as nondisclosure of information to the PTO. Id. at 1287. The Federal Circuit set out heightened requirements for pleading inequitable conduct in patent cases in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009). “‘[I]nequitable conduct, while a broader concept than fraud, must be pled with particularity' under Rule 9(b).” Id. at 1326 (quoting Ferguson Beauregard/Logic Controls, Div. of Dover Resources, Inc. v. Mega Sys., LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003)). “Whether inequitable conduct has been pleaded with particularity under Rule (9)(b) is a question governed by Federal Circuit law.” Exergen Corp., 575 F.3d at 1318 (citing Cent. Admixture Pharmacy Servs., Inc. v. Advanced Cardiac Solutions, P.C., 483 F.3d 1347, 1357 (Fed. Cir. 2007)).

         Federal Rule of Civil Procedure 9(b) provides that “a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” The Federal Circuit announced that “to plead the ‘circumstances' of inequitable conduct with ‘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.” Exergen Corp., 575 F.3d at 1328. Although conditions of mind may be alleged generally under Rule 9(b), pleading inequitable conduct requires that “the pleadings allege sufficient underlying facts from which a court may reasonably infer that a party acted with the requisite state of mind.” Id. at 1327. The Federal Circuit noted that the substantive elements of inequitable conduct are (1) an individual associated with the filing and prosecution of a patent application made an affirmative misrepresentation of a material fact, failed to disclose material information, or submitted false material information; and (2) the individual did so with a specific intent to deceive the PTO. Id. at 1327 n.3. However, “simply aver[ring] the substantive elements of inequitable conduct, without setting forth the particularized factual bases for the allegation, does not satisfy Rule 9(b).” Id. at 1326-27 (Fed. Cir. 2009). The standard for pleading inequitable conduct was summarized by the Federal Circuit as follows: “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 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. at 1328-29 (footnote omitted).

         The pleading standard set forth in Exergen “applies to allegations of inequitable conduct in affirmative defenses.” Proctor & Gamble Co. v. Team Technologies, Inc., Not Reported in F.Supp. 2d, No. 1:12-cv-552, 2012 WL 6001753, at *3 (S.D. Ohio Nov. 30, 2012) (citations omitted). Generally, “[c]ourts should not permit an unsupported inequitable conduct defense to be asserted or maintained.” Proctor & Gamble Co. v. Team Technologies, Inc., No. 1:12-cv- 552, 2012 WL 6001753, at *3 (S.D. Ohio Nov. 30, 2012).

         III. ...

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