Case 3:18-cv-00347-CAB-MDD Document 152 Filed 01/30/19 PageID.17156 Page 1 of 4
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`UNITED STATES DISTRICT COURT
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`SOUTHERN DISTRICT OF CALIFORNIA
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`NUVASIVE, INC.,
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`Plaintiff,
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`v.
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`ALPHATEC HOLDINGS, INC.,
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`Defendant.
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` Case No.: 3:18-CV-347-CAB-MDD
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`ORDER GRANTING IN PART AND
`DENYING IN PART MOTION TO
`STRIKE AND MOTION TO DISMISS
`COUNTERCLAIMS
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`[Doc. No. 132]
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`This matter is before the Court on Plaintiff NuVasive, Inc.’s motion to strike or
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`dismiss four of Defendant Alphatec Holdings, Inc.’s counterclaims. The motion has been
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`fully briefed, and the Court deems it suitable for submission without oral argument. For
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`the following reasons, the motion is granted in part and denied in part.
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`I.
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`Procedural Background
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`Although this case was filed less than a year ago, it already has an extensive litigation
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`history, most of which is irrelevant to the instant motion. On February 13, 2018, NuVasive
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`filed a complaint alleging that Alphatec infringed eight of NuVasive’s patents. [Doc. No.
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`1.] On May 14, 2018, the Court dismissed with prejudice two infringement claims
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`concerning design patents. [Doc. No. 45.] On May 21, 2018, Alphatec answered the
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`complaint and asserted counterclaims that each of the allegedly infringed patents is invalid.
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`[Doc. No. 55.] On September 11, 2018, the parties filed a stipulation and joint motion
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`agreeing to allow NuVasive to file an amended complaint that added claims for
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`infringement of three additional patents. [Doc. No. 107.] The Court granted the motion
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`the following day [Doc. No. 109], and NuVasive filed its first amended complaint (“FAC”)
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`on September 13, 2018 [Doc. No. 110].
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`3:18-CV-347-CAB-MDD
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`Case 3:18-cv-00347-CAB-MDD Document 152 Filed 01/30/19 PageID.17157 Page 2 of 4
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`On October 12, 2018, Alphatec answered the FAC and asserted fourteen
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`counterclaims alleging that NuVasive’s patents are invalid or unenforceable. [Doc. No.
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`114.] On October 26, 2018, NuVasive filed a motion to strike or dismiss five of Alphatec’s
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`counterclaims. [Doc. No. 120.] Instead of responding to NuVasive’s motion, Alphatec
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`filed an amended counterclaim, leading the Court to deny NuVasive’s motion as moot.
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`[Doc. Nos. 125, 126.] NuVasive then filed a motion to strike or dismiss four of the
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`counterclaims in the amended counterclaim. [Doc. No. 132.] This last motion is currently
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`before the Court.
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`II. Discussion
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`NuVasive’s amended complaint includes claims for infringement of four NuVasive
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`patents: U.S. Patent No. 8,439,832 (the “‘832 Patent”); U.S. Patent No. 9,833,227 (the
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`“‘227 Patent”); U.S. Patent No. 9,924,859 (the “‘859 Patent”); and U.S. Patent No.
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`9,974,531 (the “‘531 Patent”). The ‘832, ’227, ‘859, and ‘531 Patents are all directed
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`toward systems and methods for accessing a targeted disc space through a lateral, trans-
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`psoas path. Counts X through XIII of Alphatec’s amended counterclaim assert that each
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`of these four patents is unenforceable due to inequitable conduct during their prosecutions.
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`“Inequitable conduct is an equitable defense to patent infringement that, if proved,
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`bars enforcement of a patent.” Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d
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`1276, 1285 (Fed. Cir. 2011) (en banc). The elements of “inequitable conduct are: (1) an
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`individual associated with the filing and prosecution of a patent application made an
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`affirmative misrepresentation of a material fact, failed to disclose material information, or
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`submitted false material information; and (2) the individual did so with a specific intent to
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`deceive the [Patent and Trademark Office (“PTO”)].” Exergen Corp. v. Wal-Mart Stores,
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`Inc., 575 F.3d 1312, 1327 n.3 (Fed. Cir. 2009).
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`“Intent and materiality are separate requirements.” Therasense, 649 F.3d at 1290.
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`The intent element requires a showing that “the patentee acted with the specific intent to
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`deceive the PTO. A finding that the misrepresentation or omission amounts to gross
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`negligence or negligence under a ‘should have known’ standard does not satisfy this intent
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`requirement.” Id. (internal citation omitted). Specific intent to deceive means an “intent
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`to deceive must be ‘the single most reasonable inference able to be drawn from the
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`evidence.’” Id. (citation omitted). “[T]he materiality required to establish inequitable
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`conduct is but-for materiality.” Id. at 1291. In cases of alleged omissions of submissions
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`of prior art to the PTO, “the court must determine whether the PTO would have allowed
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`the claim if it had been aware of the undisclosed reference.” Id.
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`An inequitable conduct counterclaim must be pled with particularity under Federal
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`Rule of Civil Procedure 9(b). Exergen, 575 F.3d at 1326. Rule 9(b) states: “In alleging
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`fraud or mistake, a party must state with particularity the circumstances constituting fraud
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`or mistake.” In cases of inequitable conduct, the “particularity” in Rule 9(b) requires
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`“identification of the specific who, what, when, where, and how of the material
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`misrepresentation or omission committed before the PTO.” Id. at 1327.
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`Moreover, although “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 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.
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`Id. at 1328-29. “A reasonable inference is one that is plausible and that flows logically
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`from the facts alleged, including any objective indications of candor and good faith.” Id.
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`at 1329 n.5.
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`Here, Alphatec alleges that NuVasive patent prosecution counsel withheld one or
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`more prior art references, of which counsel was aware, that would have been material to
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`the allowance of each patent. NuVasive has moved to dismiss these counterclaims [Doc.
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`No. 132] on the basis that Alphatec has not met the pleading criteria of Federal Rule of
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`Civil Procedure 9(b). Having reviewed the allegations of the amended counterclaim and
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`the submissions of the parties, the Court denies the motion as to the ‘832 Patent (Count X);
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`the ‘227 Patent (Count XI); and the ‘859 Patent (Count XII). The counterclaims as to
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`inequitable conduct during the prosecution of these patents sufficiently identify the specific
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`art that Alphatec claims was withheld, the relationship of the art to the claim limitations,
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`the identity prosecution attorney, and how that counsel was aware of the art during the
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`prosecution of each patent.
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`NuVasive’s motion challenges almost all aspects of Alphatec’s allegations asserting
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`they are without merit, but for purposes of notice and the sufficiency of the pleading the
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`allegations are sufficient. If anything NuVasive’s detailed challenge underscores that the
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`pleadings provide sufficient notice as to what conduct Alphatec claims regarding each
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`challenged patent in support of its inequitable conduct claims. The Court will not reach
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`the merits of these allegations in a motion to dismiss.
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`As to the ‘531 Patent (Count XIII), however, NuVasive’s motion is granted.
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`Alphatec failed to demonstrate how the Kanter reference is relevant to the claims of the
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`‘531 Patent, and what in Kanter would have been material to the allowance of the ‘531
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`Patent. Thus, Alphatec has not presented a plausible claim that the Kanter disclosure is
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`material to the patentability of the ‘531 Patent.
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`III. Disposition
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`As discussed above, NuVasive’s motion to dismiss is GRANTED with respect to
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`Counterclaim XIII, and DENIED with respect to Counterclaims X, XI, and XII.
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`Counterclaim XIII is DISMISSED WITHOUT PREJUDICE. Alphatec shall have until
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`February 14, 2019 to file an amended counterclaim for inequitable conduct during the
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`prosecution of the ‘531 Patent, if it so desires.
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`It is SO ORDERED.
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`Dated: January 30, 2019
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