Case 1:16-cv-02690-AT Document 126-3 Filed 08/09/16 Page 1 of 5
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`Exhibit C
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`Case 1:16-cv-02690-AT Document 126-3 Filed 08/09/16 Page 2 of 5
`SIPCO, LLC v. Control4 Corp., Not Reported in F.Supp.2d (2012)
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`2012 WL 526074
`Only the Westlaw citation is currently available.
`United States District Court,
`N.D. Georgia,
`Atlanta Division.
`
`SIPCO, LLC, Plaintiff,
`v.
`CONTROL4 CORP., Digi International, Inc.,
`Home Automation, Inc., Schneider Electric
`Buildings Americas, Inc., Schneider Electric USA,
`Inc. and Siemens Industry, Inc., Defendants.
`
`Civil Action No. 1:11–cv–0612–JEC.
`|
`Feb. 16, 2012.
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`Attorneys and Law Firms
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`John C. Herman, Jessica M. Kattula, Peter M. Jones,
`Ryan K. Walsh, Robbins Geller Rudman & Dowd, LLP,
`Atlanta, GA, for Plaintiff.
`
`Benjamin Damstedt, Sriranga R. Veeraraghavan,
`Timothy S. Teter, Cooley, LLP, Palo Alto, CA, Daniel
`Arthur Kent, Kent Law, P.C., Alpharetta, GA, Aamir A.
`Kazi, Noah C. Graubart, Thad Charles Kodish, Fish &
`Richardson, P.C., Christina M. Baugh, Henry D. Fellows,
`Jr., Fellows La Briola, LLP, Atlanta, GA, Ruffin B.
`Cordell, Fish & Richardson, Washington, DC, Joseph A.
`Saltiel, Terrence J. Truax, Jenner & Block, Chicago, IL,
`for Defendants.
`
`be DENIED, the parties' Joint Motion for Entry of a
`Proposed Scheduling Order [166] should be GRANTED,
`and plaintiff's Motions for Leave [177] and [179] should
`be DENIED.
`
`BACKGROUND
`
`The Court has described the facts underlying this case in
`detail in several previous orders. Briefly, plaintiff alleges
`that defendants have infringed plaintiff's patents covering
`certain wireless network technology. (Compl. [1] at ¶¶
`1–5.) Plaintiff originally filed this infringement action
`against defendants in the Eastern District of Texas. (Id.
`at ¶ 24.) In response, defendant Siemens Industry, Inc.
`(“Siemens”) filed suit against plaintiff in this district,
`initiating the companion case Siemens Ind., Inc. v. SIPCO,
`LLC, Case No. 1:10–cv–2478–JEC. The Texas court
`subsequently transferred the present action to this district
`pursuant to 28 U.S.C. § 1404(a). (Order [133].)
`
`The case is presently before the Court on plaintiff's
`motions (1) to align the parties so that SIPCO is the
`plaintiff in the companion Siemens case, (2) to transfer
`the case back to the Eastern District of Texas, and (3)
`for leave to file a motion to strike the inequitable conduct
`affirmative defense asserted by several defendants. (Pl.'s
`Mot. to Align the Parties [153], Mot. to Transfer [154]
`and Mots. for Leave [177] and [179].) In addition, the
`parties have filed a joint motion for entry of a proposed
`scheduling order to govern claim construction discovery,
`statements and briefing. (Joint Mot. for Scheduling Order
`[166].)
`
`ORDER & OPINION
`
`JULIE E. CARNES, Chief Judge.
`
`*1 This case is presently before the Court on plaintiff's
`Motion to Align the Parties [153], plaintiff's Motion
`to Transfer the Case to the Eastern District of Texas
`[154], the parties' Joint Motion for Entry of a Proposed
`Scheduling Order [166], and plaintiff's Motions for Leave
`to File Motions to Strike Certain Counterclaims and
`Affirmative Defenses [177] and [179]. The Court has
`reviewed the record and the arguments of the parties and,
`for the reasons set out below, concludes that plaintiff's
`Motion to Align the Parties [153] should be DENIED as
`moot, plaintiff's Motion to Transfer the Case [154] should
`
`DISCUSSION
`
`I. Dismissal Of Siemens And Alignment Of The Parties
`In its recent order in the companion case, the Court
`agreed to sever Siemens from the present action and to
`consolidate all of the claims involving Siemens with the
`claims asserted in Siemens v. SIPCO. Siemens Ind., Inc.
`v. SIPCO, LLC, Case No. 1:10–cv–2478–JEC at Docket
`No. 72. In accordance with that order, plaintiff has filed
`an answer in Siemens v. SIPCO in which it asserts the
`patent infringement claim that it initially pursued against
`Siemens in this action. Id. at Docket No. 74. Accordingly,
`the Court DISMISSES Siemens as a defendant in this
`case. As Siemens is no longer a party to this action,
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` © 2016 Thomson Reuters. No claim to original U.S. Government Works.
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`Case 1:16-cv-02690-AT Document 126-3 Filed 08/09/16 Page 3 of 5
`SIPCO, LLC v. Control4 Corp., Not Reported in F.Supp.2d (2012)
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`plaintiff's motion to align the parties [153] is DENIED as
`moot. The Court will address alignment, and any other
`issues that deal exclusively with defendant Siemens, in
`Siemens v. SIPCO.
`
`II. Plaintiff's Motion To Transfer
`*2 Although this case was only recently transferred
`pursuant to 28 U.S.C. § 1404(a), plaintiff has filed
`transfer the case back to Texas under the same statute.
`to Transfer [154].) Section 1404(a) provides that: “[f]or
`the convenience of parties and witnesses, in the interest
`of justice, a district court may transfer any civil action to
`any other district or division where it might have been
`brought.” 28 U.S.C. § 1404(a). The moving party bears the
`burden of establishing the propriety of a transfer under
`§ 1404(a). In re Ricoh Corp., 870 F.2d 570, 573 (11th
`Cir.1989). The burden is difficult to meet here, where the
`Texas court has already applied § 1404(a) and concluded
`that Georgia is the most convenient forum. (Order [133].)
`
`In spite of the Texas court's prior ruling, plaintiff argues
`that a transfer to the Eastern District of Texas is
`appropriate because (1) Siemens is no longer a party to
`the case and (2) the Texas court has become more familiar
`with the patents at issue by conducting a Markman
`hearing in the related case of SIPCO, LLC v. Datamatic,
`Ltd., No. 6:09–cv–0532–LED–JDL. (Pl.'s Br. in Supp. of
`Mot. to Transfer [154] at 2–3.) According to plaintiff,
`the Texas court's justification for transferring the case
`out of Texas was exclusively related to Siemens. (Id. at
`10.) Thus, the basis for the Texas court's transfer order
`has “evaporate[d]” now that Siemens has been severed
`from the action. (Id. at 3.) In addition, plaintiff contends
`that judicial economy favors the Texas forum, as that
`court has been educated on the relevant technology via the
`Markman hearing in Datamatic. (Id.)
`
`Neither of plaintiff's arguments is persuasive. As an initial
`matter, the Texas court's transfer order does not depend
`solely or even primarily on issues related to Siemens.
`(Order [133].) Rather, the Texas court concluded that
`all of the relevant private and public interest factors,
`including the convenience of witnesses and the relative
`availability of evidence, weighed heavily in favor of
`a transfer to Georgia. (Id. at 2, 5–8.) As for the
`educational opportunities provided by the hearing in
`Datamatic, the Texas court received all of the briefing
`for the hearing and held a teleconference concerning the
`Markman proceedings prior to issuing its transfer order.
`
`(Defs.' Resp. to Mot. to Transfer [163] at 7.) The Texas
`court rejected plaintiff's judicial economy argument in its
`subsequent order, expressly finding that the Datamatic
`litigation did not weigh in favor of conducting the
`litigation in Texas. (Order [133] at 6–7.)
`
`Based on the stated rationale of the transfer order, one
`of the most important considerations for the Texas court
`was the fact that plaintiff is a Georgia corporation with
`its hub of operations in Atlanta and strong ties to the
`Northern District of Georgia, while neither plaintiff nor
`any of the defendants has any relevant connection to the
`Eastern District of Texas. (Id. at 5, 7.) This remains an
`important, and ultimately determinative, factor in this
`case. See Manuel v. Convergys Corp., 430 F.3d 1132, 1137
`(11th Cir.2005) (discussing the relevance of the plaintiff's
`connections to the forum in conducting a § 1404(a)
`analysis). In light of this factor weighing against transfer,
`and given the Texas court's prior ruling rejecting all of
`the arguments asserted by plaintiff in the present motion,
`there simply is no basis for transferring the case back to the
`Eastern District of Texas. Accordingly, plaintiff's motion
`to transfer [154] should be DENIED.
`
`III. Plaintiff's Motions For Leave
`*3 In its motions for leave, plaintiff seeks permission
`to file a motion to strike the affirmative defense of
`inequitable conduct asserted by various defendants. 1
`(Pl.'s Mots. for Leave [177] and [179].) The substantive
`motion to strike is attached to the motions for leave.
`(Pl.'s Br. in Supp. of Mot. to Strike [178] and [179] at
`Ex. A.) The motion to strike is based on the Federal
`Circuit's recent en banc decision in Therasense, Inc. v.
`Becton, Dickinson & Co., 649 F.3d 1276 (Fed.Cir.2011).
`According to plaintiff, the Therasense decision tightened
`the requirements for proving inequitable conduct such
`that defendants' allegations in support of the defense are
`now insufficient as a matter of law. (Pl.'s Br. [178] at 1–
`2.) Based on an analysis of Therasense, and the resolution
`of other substantive issues underlying plaintiff's motion
`to strike, the Court concludes that plaintiff's motions for
`leave [177] and [179] should be DENIED as futile.
`
`A. Motion To Strike Standard
`Plaintiff's motion to strike is governed by Rule 12(f)
`of the Federal Rules of Civil Procedure. See FED. R.
`CIV. P. 12(f). Rule 12(f) permits the Court to strike
`from a pleading any “insufficient defense” or otherwise
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`Case 1:16-cv-02690-AT Document 126-3 Filed 08/09/16 Page 4 of 5
`SIPCO, LLC v. Control4 Corp., Not Reported in F.Supp.2d (2012)
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`“redundant, immaterial, [or] impertinent” matter. Id.
`Motions to strike generally are disfavored. Resolution
`Trust Corp. v. Youngblood, 807 F.Supp. 765, 769
`(N.D.Ga.1992) (O'Kelley, J.). They are not the proper
`vehicle for resolving disputed issues of fact, or for deciding
`“substantial questions of law.” Id. However, a defense that
`clearly is insufficient as a factual and legal matter “should
`be stricken to eliminate the unnecessary delay and expense
`of litigating it.” Id.
`
`B. Applicable Law
`Inequitable conduct is an equitable defense to patent
`infringement
`that bars enforcement of a patent.
`Therasense, Inc., 649 F.3d at 1285. 2 To prevail on the
`defense, an accused infringer must show that a patent
`applicant made a material misrepresentation or omission
`with the specific intent to deceive the PTO. Id. at
`1287. In Therasense, the Federal Circuit heightened the
`requirements for proving both the materiality and the
`intent prongs. Id. at 1290–96. Addressing materiality,
`the Circuit Court held that “the materiality required to
`establish inequitable conduct is but-for materiality.” Id. at
`1291. In other words, the accused infringer must show that
`the patent would not have issued if the applicant had made
`a full and truthful disclosure. Id. As to intent, the Court
`required clear and convincing evidence of the applicant's
`specific intent to deceive the PTO. Therasense, Inc., 649
`F.3d at 1290.
`
`In addition to the legal standards that are applicable under
`Therasense, inequitable conduct is subject to the specificity
`requirements of Federal Rule 9(b). Exergen Corp. v. Wal–
`Mart Stores, Inc., 575 F.3d 1312, 1326 (Fed.Cir.2009).
`Rule 9(b) provides that: “[i]n alleging fraud or mistake,
`a party must state with particularity the circumstances
`constituting fraud or mistake.” FED. R. CIV. P. 9(b). As
`applied in this context, Rule 9(b) “requires identification
`of the specific who, what, when, where, and how of the
`material misrepresentation or omission committed before
`the PTO.” Exergen Corp., 575 F.3d at 1327.
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`C. Sufficiency Of The Pleadings
`*4 The allegations in the Answer comply with the
`dictates of Therasense and the pleading requirements of
`Rule 9(b). In the Answer defendants assert that, during
`the prosecution of the patents at issue, the inventor and
`the prosecuting attorneys deliberately withheld material
`references to prior art that would have precluded one
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`or more of the claims of the patents. (Schneider Defs.'
`Answer [169] at ¶¶ 61–114 and Def. Digi's Amended
`Answer [176] at ¶¶ 69–141.) Defendants identify the
`specific undisclosed prior art, and describe in detail the
`significance of its claims and limitations to the patents
`involved in this case. (Id.) Defendants further allege facts
`that, if believed, suggest a specific intent to deceive the
`PTO. (Id.) At the pleading stage, nothing more is required.
`Therasense, Inc., 649 F.3d at 1290–91 and Exergen Corp.,
`575 F.3d at 1328. See also VG Innovations, Inc. v. Minsurg
`Corp., 2011 WL 1466181 at *3–4 (M.D.Fla.2011) (finding
`that similar allegations “conform to the requisite pleading
`standard”).
`
`in
`indicated above, plaintiff correctly assesses
`As
`its motion to strike that Therasense heightened the
`evidentiary requirements for proving inequitable conduct.
`(Pl.'s Br. in Supp. of Mot. to Strike [179] at 1–2, 4.)
`Applying Therasense, plaintiff points out several problems
`that defendants will likely encounter in their attempt
`to establish the defense. (Id. at 5–15.) For example,
`plaintiff questions defendants' ability to meet the clear and
`convincing evidence standard by showing that a specific
`intent to deceive the PTO is “the single most reasonable
`inference able to be drawn from the evidence.” (Id. at 5–
`9.) Plaintiff also suggests that its history of disclosing prior
`art in related patent applications is inconsistent with an
`“intent to deceive” the PTO. (Id. at 13.)
`
`While such arguments might be persuasive on summary
`judgment, they do not provide a basis for granting
`plaintiff's motion to strike. See The Braun Corp. v.
`Vantage Mobility Int'l, LLC, 2010 WL 403749 at *5
`(N.D.Ind.2010) (the defendant is not required at the
`pleading stage to prove the merits of its inequitable
`conduct claim) and Resolution Trust Corp., 807 F.Supp.
`at 769 (motions to strike cannot be used to test the
`evidentiary basis for a pleading). At this juncture in the
`litigation the Court is not assessing the sufficiency of
`the evidence, but rather the adequacy of the allegations.
`Johnson Outdoors Inc. v. Navico, Inc., 774 F.Supp.2d
`1191, 1198 n. 7 (M.D.Ala.2011) (refusing to “try the
`case on the pleadings” on a motion to strike inequitable
`conduct allegations). As defendants have adequately
`pled inequitable conduct, plaintiff's motion to strike the
`defense is without merit. Accordingly, it would be futile to
`grant plaintiff's motions for leave.
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`Case 1:16-cv-02690-AT Document 126-3 Filed 08/09/16 Page 5 of 5
`SIPCO, LLC v. Control4 Corp., Not Reported in F.Supp.2d (2012)
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`IV. Joint Motion For Entry Of Proposed Scheduling
`Order
`Finally, the parties have filed a joint motion for the
`entry of a scheduling order governing claim construction
`discovery, statements and briefing. (Joint Mot. for
`Scheduling Order [166] at Ex. A.) The parties have agreed
`to the proposed schedule, and it appears from the docket
`that they have attempted to conduct the litigation in
`accordance with it. When they were unable to comply with
`certain deadlines set forth in the schedule, the parties filed
`a joint motion for an extension, which was granted by
`the Court. (Joint Mot. for Extension of Time [216] and
`Order [217].) As amended by those extensions, the Court
`GRANTS as unopposed the joint motion for entry of the
`proposed scheduling order [166].
`
`CONCLUSION
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`*5 For the foregoing reasons, the Court finds that
`plaintiff's Motion to Align the Parties [153] should be
`DENIED as moot, plaintiff's Motion to Transfer the Case
`[154] should be DENIED, the parties' Joint Motion for
`Entry of a Proposed Scheduling Order [166] should be
`GRANTED as unopposed, and plaintiff's Motions for
`Leave to File Motions to Strike Certain Counterclaims
`and Affirmative Defenses [177] and [179] should be
`DENIED.
`
`SO ORDERED.
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`All Citations
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`Not Reported in F.Supp.2d, 2012 WL 526074
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`Footnotes
`1
`In fact, plaintiff seeks leave to file two motions to strike, each of which is directed to the answer of a separate defendant.
`(Pl.'s Mots. for Leave [177] and [179].) As the motions to strike are substantially the same, the Court refers to the motions
`in the singular and addresses them in tandem.
`The issue of inequitable conduct is unique to patent law. Exergen Corp. v. Wal–Mart Stores, Inc., 575 F.3d 1312, 1326
`(Fed.Cir.2009). Accordingly, Federal Circuit law is controlling. Id.
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`End of Document
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`© 2016 Thomson Reuters. No claim to original U.S. Government Works.
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` © 2016 Thomson Reuters. No claim to original U.S. Government Works.
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