IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF IOWA
`CENTRAL DIVISION
`
`INTERNATIONAL MOTOR CONTEST
`ASSOCIATION, INC., an Iowa
`corporation,
`
`Plaintiff,
`
`No. C 05-3080-MWB
`
`vs.
`
`TODD ALLEN STALEY, individually
`and d/b/a UNITED STATES RACING
`ASSOCIATION, and d/b/a UNITED
`STATES MODIFIED TOURING
`SERIES; and UNITED STATES
`MODIFIED TOURING SERIES, INC.,
`an Iowa corporation,
`
`Defendants.
`
`MEMORANDUM OPINION AND
`ORDER REGARDING PLAINTIFF’S
`MOTION TO DISMISS
`COUNTERCLAIMS AND MOTION
`TO STRIKE AFFIRMATIVE
`DEFENSES,
`and
` DEFENDANTS’ MOTIONS TO
`STRIKE PORTIONS OF
`PLAINTIFF’S MOTIONS AND
`REPLY BRIEF
`
`____________________
`
`TABLE OF CONTENTS
`
`I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
`A. Allegations In The Complaint
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
`B. The Defendants’ Challenged Defenses And Counterclaims
`. . . . . . . . . 4
`C. The Motions Before The Court
`. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
`
`II. ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
`A. The Defendants’ Motions To Strike Improper References
`. . . . . . . . . . 8
`1.
`Arguments of the parties
`. . . . . . . . . . . . . . . . . . . . . . . . . 8
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`

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`b.
`
`Applicable standards . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
`2.
`Application of the standards . . . . . . . . . . . . . . . . . . . . . . 11
`3.
`B. IMCA’s Motion To Strike Affirmative Defenses . . . . . . . . . . . . . . . . 14
`1.
`Arguments of the parties
`. . . . . . . . . . . . . . . . . . . . . . . . 14
`2.
`Applicable standards . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
`3.
`Application of the standards . . . . . . . . . . . . . . . . . . . . . . 19
`the Noerr-Pennington doctrine bar
`a.
`Does
`the
`challenged affirmative defenses? . . . . . . . . . . . . . . . 19
`Are “misuse of copyright” and “unclean hands”
`defenses to copyright infringement actions?
`. . . . . . . 21
`i.
`The “misuse of copyright” defense . . . . . . . . . 21
`ii.
`The “unclean hands” defense . . . . . . . . . . . . 25
`Has either defense been adequately pleaded? . . . . . . . 27
`i.
`The “misuse” defense as pleaded . . . . . . . . . . 27
`ii
`The “unclean hands” defense as pleaded . . . . . 33
`Specific allegations . . . . . . . . . . . . . . . . . . . . . . . . 35
`d.
`C. IMCA’s Motion To Dismiss Counterclaims . . . . . . . . . . . . . . . . . . . 36
`1.
`Arguments of the parties
`. . . . . . . . . . . . . . . . . . . . . . . . 37
`2.
`Applicable standards . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
`a.
`Abuse of process under Iowa law . . . . . . . . . . . . . . 42
`b.
`Sufficiency of the defendants’ pleadings . . . . . . . . . . 45
`Does the Noerr-Pennington doctrine stand as an
`c.
`insuperable bar? . . . . . . . . . . . . . . . . . . . . . . . . . 47
`
`c.
`
`III. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
`
`The motions now before the court in this case ask the court to decide what
`
`defenses and counterclaims the defendants can assert to the plaintiff’s claims
`
`of copyright infringement and what allegations the court can properly consider in deciding
`
`that question. One of the principal issues is whether the Noerr-Pennington doctrine bars
`
`2
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`the defendants’ affirmative defenses of “misuse” of copyright and “unclean hands” and
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`their counterclaims of abuse of process.
`
`I. INTRODUCTION
`
`A. Allegations In The Complaint
`
`In a Complaint filed December 30, 2005, plaintiff International Motor Contest
`
`Association, Inc. (IMCA), alleges that it is an Iowa corporation, with its principal place
`
`of business in Vinton, Benton County, Iowa. IMCA alleges that it was organized in 1915
`
`and, therefore, is the oldest sanctioning body for automobile racing in the United States.
`
`IMCA alleges that its franchisees operate in the United States and Canada as promoters to
`
`stage and conduct automobile racing events under the rules and regulations of the IMCA
`
`in which only IMCA licensed drivers may compete. IMCA alleges, further, that it is the
`1
`
`holder of numerous copyrights for its “Official Rules.”
`
`IMCA alleges that individual defendant Todd Allen Staley, a resident of Webster
`
`City, Hamilton County, Iowa, is also in the business of promoting racing events. IMCA
`
`alleges that Staley is or was, at times material to this litigation, doing business as United
`
`States Racing Association (USRA) and as United States Modified Touring Series
`
`(USMTS). IMCA alleges, further, that corporate defendant United States Modified
`
`Touring Series, Inc. (USMTS, Inc.), is an Iowa corporation, which was administratively
`
`1
`
`IMCA alleges that is the holder of copyrights for its “Official Rules” for 1990
`through and including 2005, and cites copyright certifications TX 6-1/1-598; TX 6-246-
`000; TX 6-246-001; TX 6-246-002; TX 6-246-003; TX 6-245-997; TX 6-245-998; and TX
`245-999. Although IMCA asserts that these copyright certifications are “incorporated by
`reference” into its Complaint “as if set forth [therein] in full,” see Complaint, ¶ 19, IMCA
`has not attached a single copyright certification or any copy of its “Official Rules” to its
`Complaint.
`
`3
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`dissolved on August 5, 2002, but reinstated on April 23, 2004, and that Staley is its
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`president and corporate agent. IMCA alleges that Staley did business as USMTS, Inc.,
`
`during the period that the corporation was administratively dissolved. IMCA alleges that,
`
`at all times material to its Complaint, Staley was promoting racing events and soliciting
`
`promoters as part of the USMTS race series and soliciting promoters and race track
`
`operators to agree to promote and conduct weekly races sanctioned under the USRA rules.
`
` IMCA alleges that the USRA rules, however, were copied from IMCA’s rules and
`
`regulations, that the defendants represented that the IMCA rules were their own, and that
`
`the defendants reproduced, published, and used the IMCA rules, either unchanged or with
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`minor changes rendering them strikingly and substantially similar to IMCA’s rules, as the
`
`rules of the USRA for the defendants’ financial gain. IMCA contends that such
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`infringement of its copyrighted rules continued despite two notices to cease and desist such
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`conduct. IMCA alleges that it has sustained and will continue to sustain damages and
`
`irreparable harm from the loss in value of its exclusive rights under its copyrights.
`
`Therefore, in a single claim for relief from copyright infringement, IMCA prays for
`
`judgment against the defendants for actual and statutory damages; temporary and
`
`permanent injunctions; an accounting of all uses, reproductions, copies, memorializations,
`
`publications, and disseminations of copyrighted works of IMCA; reasonable attorney fees
`
`and the costs of this suit; and such other statutory, legal, and equitable relief as the court
`
`deems just and proper.
`
`B. The Defendants’ Challenged Defenses And Counterclaims
`
`In an Answer and Counterclaims filed March 22, 2006, the defendants deny
`
`IMCA’s copyright infringement claim. The defendants assert, inter alia, that rules of a
`
`contest cannot be copyrighted. In addition, they assert several affirmative defenses, of
`
`4
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`which the third and fourth are of interest here, because IMCA has challenged them, as well
`
`as two Counterclaims for “abuse of process,” one by Staley against IMCA, and one by
`
`USMTS, Inc., against IMCA, which IMCA has also challenged. The court will consider
`
`these challenged affirmative defenses and Counterclaims in more detail.
`
`In their Third Affirmative Defense, the defendants allege, in essence, “[t]hat the
`
`complaint of the Plaintiff I.M.C.A. has been brought not to protect any claimed copyright
`
`it owns or claims to own, but [to] harass, oppress and damage the Defendants and to force
`
`the Defendants out of business or to coerce the Defendants into selling [their] businesses
`
`to the Plaintiff, I.M.C.A.” Defendants’ Answer, Third Affirmative Defense, ¶ 5. The
`
`allegations of improper conduct upon which this defense is based include the following:
`
`threatening defendants with a lawsuit for rights far beyond the limited monopoly granted
`
`by IMCA’s copyrights amounting to abuse and misuse of a copyright; asserting claims in
`
`this lawsuit as efforts to eliminate the defendants as competitors and to increase IMCA’s
`
`profits on contracts with suppliers, manufacturers, and distributors of racing tires and other
`
`racing parts; claiming that IMCA’s copyright prohibits anyone from making reference to
`
`parts required under IMCA’s rules, including demands that the defendants cease using the
`
`IMCA logo or acronym or making any unauthorized use of or reference to IMCA
`
`approved products, which demands the defendants contend were made with the purpose
`
`and intent to keep any racer who purchased and used IMCA mandated products from
`
`racing in USMTS events; using its baseless lawsuit to increase its market share in the stock
`
`car race sanctioning business by burdening the defendants with the costs of defense; and
`
`fixing prices for racing tires its members are required to buy. See id. at ¶¶ 6-11. The
`
`defendants contend that the abuse and misuse of any claimed copyright bars any recovery
`
`or relief IMCA seeks on its copyright infringement claim.
`
`5
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`In their Fourth Affirmative Defense, the defendants assert “[t]hat if the Plaintiff
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`I.M.C.A. is found to have a valid copyright on rules, the Plaintiff I.M.C.A.’s copyright
`
`does not extend to keeping others from using those rules, i.e. holding racing events that
`
`utilize the rules [in] which Plaintiff I.M.C.A. claims to hold a copyright certificate.”
`
`Defendants’ Answer, Fourth Affirmative Defense, ¶ 1. Thus, the defendants assert that
`
`IMCA has “unclean hands” and is attempting to use legal proceedings to protect an
`
`improper extension of its claimed copyright and that a court in equity should withhold its
`
`aid to IMCA, because IMCA’s actions are contrary to the public interest. Id. at ¶¶ 3-4.
`
`The defendants again assert that the efforts of IMCA that are contrary to the public interest
`
`include attempting to control 60-70 percent of a specific racing tire market and price fixing
`
`in violation of IOWA CODE § 553.5.
`
`In their nearly identical Counterclaims, Staley and USMTS, Inc., each
`
`assert—apparently on the basis of some thirty-three paragraphs of allegations of jurisdiction
`
`and venue, identification of the parties, and factual background—that IMCA has engaged
`2
`in “abuse of process.” The portions of their Counterclaims specifically identified as
`
`“Counts” allege that, on or about December 30, 2005, the date that IMCA filed this
`
`lawsuit, IMCA “intentionally used the federal court process to oppress, harass, and cause
`
`an undue burden of expense on the Counterclaim Plaintiff” in question. Defendant’s
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`Answer, Counterclaim of Todd Staley, ¶ 34 & Counterclaim of USMTS, Inc., ¶ 34. The
`
`counterclaimants assert, further, that IMCA has used the legal process primarily to
`
`eliminate or harm its business competitor, USMTS, Inc., and not to obtain temporary or
`
`2
`
`IMCA points out that the defendants never incorporate their various factual
`allegations into the Counts of their Counterclaims. The defendants respond that the
`purpose of the factual allegations and the relationship of those factual allegations to their
`Counterclaims are obvious.
`
`6
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`permanent injunctive relief or monetary damages and that, as a result, the counterclaimants
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`have suffered damages, including emotional distress to Staley, and unnecessary attorney
`
`fees and lost time for both counterclaimants from defending against IMCA’s lawsuit. Id.
`
`at ¶¶ 35-36. As relief, the counterclaimants pray for actual and punitive damages, as well
`
`as costs of their action.
`
`C. The Motions Before The Court
`
`Instead of filing a reply to the Counterclaims filed by Staley and UMSTS, Inc., on
`
`April 15, 2006, IMCA filed a Motion To Dismiss And Motion To Strike (docket no. 9)
`
`seeking an order dismissing the Counterclaims pursuant to Rule 12(b)(6) of the Federal
`
`Rules of Civil Procedure and striking the defendants’ third and fourth affirmative defenses
`
`or portions thereof pursuant to Rule 12(f). On April 27, 2006, the defendants filed both
`
`a Motion To Strike Improper References In Plaintiff’s Motions (docket no. 10) and a
`
`Resistance To Plaintiff’s Motions To Strike And Dismiss (docket no. 11). On May 7,
`
`2006, IMCA filed a reply in further support of its motions to dismiss and to strike (docket
`
`no. 12), which prompted the defendants to file another Motion To Strike Improper
`
`References In Plaintiff’s Reply Brief (docket no. 13) on May 9, 2006. IMCA filed its
`
`resistance to the defendants’ first motion to strike improper references on May 15, 2006
`
`(docket no. 14), and a response to the defendants’ second motion to strike improper
`
`reference on May 27, 2006, including a motion to strike or deny the defendants’ motion
`
`as an improper surrebuttal or surreply. (docket no. 16).
`
`IMCA requested oral arguments on its original Motion To Dismiss And Motion To
`
`Strike, and the court deemed it likely that oral arguments would be of benefit on the
`
`defendants’ motions to strike improper references, as well as on IMCA’s motions.
`
`Therefore, the court heard oral arguments on all pending motions on June 13, 2006.
`
`7
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`Plaintiff IMCA was represented by Richard A. Bartolmei of Bartolomei & Lange, P.L.C.,
`
`in Des Moines, Iowa. Defendants Staley and USMTS, Inc., were represented by Robert
`
`A. Nading II of the Nading Law Firm in Ankeny, Iowa.
`
`The pending motions are now fully submitted, and the court turns to their
`
`disposition. The court finds that it is most logical to begin its analysis with the
`
`defendants’s motions to strike, which assert that IMCA is relying on improper allegations
`
`and information, not found in the pleadings, to support its motions to strike and to dismiss,
`
`because the defendants’ motions relate to what the court may consider in its disposition of
`
`IMCA’s motions.
`
`II. ANALYSIS
`
`A. The Defendants’ Motions To Strike Improper References
`
`As noted above, on April 27, 2006, the defendants filed a Motion To Strike
`
`Improper References In Plaintiff’s Motions (docket no. 10) and on May 9, 2006, they filed
`
`a Motion To Strike Improper References In Plaintiff’s Reply Brief (docket no. 13). IMCA
`
`filed its resistance to the defendants’ first motion to strike improper references on May 15,
`
`2006 (docket no. 14), and a resistance to the defendants’ second motion to strike improper
`
`references, including a motion to strike the defendants’ motion as an improper surrebuttal
`
`or surreply, on May 27, 2006 (docket no. 16).
`
`1.
`
`Arguments of the parties
`
` The defendants’ arguments in favor of their two motions to strike are essentially
`
`the same: They contend that IMCA is relying on matters not contained in the pleadings
`
`as grounds for dismissal of their affirmative defenses and Counterclaims, contrary to Rule
`
`12(b). They argue that the court should disregard such improper references, because it
`
`would be premature to convert IMCA’s motion to dismiss into a motion for summary
`
`8
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`judgment, as would be required if the court were to consider matters outside of the
`
`pleadings. Although the defendants do not identify with any specificity what improper
`
`references are purportedly contained in IMCA’s motions, they do identify one such
`
`allegedly improper reference in IMCA’s reply brief, that being IMCA’s assertion that the
`
`defendants’ Counterclaim is an attempt to set the stage for discovery in support of a
`
`purported antitrust claim arising out of IMCA’s alleged activities with non-party Racing
`3
`Tires of America (RTA), a maker of racing tires. The defendants contend that IMCA
`
`is using such unpleaded allegations as the basis for seeking dismissal of defenses and
`
`Counterclaims asserting misuse of copyrights and sham litigation to avoid having to answer
`
`the defendants’ contentions and to avoid discovery into and scrutiny of IMCA’s improper
`
`actions.
`
`In response to the defendants’ first motion to strike improper references, IMCA
`
`points out that the defendants did not identify any specific allegations that the defendants
`
`believe constitute references to matters outside of the record or any specific allegations that
`
`the court should strike. Instead, IMCA contends that it is the defendants who have injected
`
`improper matters into the pleadings in this case, which IMCA has been forced to challenge
`
`in its own motions to dismiss and to strike. IMCA also asserts that the defendants fail to
`
`cite any authority requiring the court to strike supposedly improper references, where Rule
`
`12(b) provides only for conversion of a Rule 12(b)(6) motion into a motion for summary
`
`judgment when matters outside of the pleadings are considered.
`
`In their response to the defendants’ second motion to strike, the one seeking to
`
`strike improper references in IMCA’s reply brief, IMCA not only resists the defendants’
`
`3
`
`The defendants explain that IMCA recently severed a long-standing contractual
`relationship with RTA and that they now have a contractual relationship with RTA.
`
`9
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`motion but moves to strike or deny it as an improper surrebuttal or surreply. IMCA
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`asserts that no Federal Rule of Civil Procedure or local rule of this district permits a
`
`surrebuttal or surreply to a reply brief, and that the defendants have already resisted
`
`IMCA’s motion on the merits. IMCA also asserts that the defendants’ second motion to
`
`strike looks much like the defendants’ first motion to strike, although it does identify one
`
`sentence in IMCA’s reply that the defendants assert should be stricken. IMCA also asserts
`
`that the defendants’ motions to strike reflect inconsistent positions about arguments based
`
`on reasonable inferences from facts pleaded, suggesting that the court should allow such
`
`arguments when made by the defendants, but exclude them when made by IMCA, which
`
`IMCA argues is both incorrect and unfair.
`
`2.
`
`Applicable standards
`
`The defendants’ motions to strike are based primarily on the portion of Rule 12(b),
`
`which provides as follows:
`
`If, on a motion asserting the defense numbered (6) to dismiss
`for failure of the pleading to state a claim upon which relief
`can be granted, matters outside the pleading are presented to
`and not excluded by the court, the motion shall be treated as
`one for summary judgment and disposed of as provided by
`Rule 56, and all parties shall be given reasonable opportunity
`to present all material made pertinent to such a motion by Rule
`56.
`
`FED. R. CIV. P. 12(b); see also Buck v. F.D.I.C., 75 F.3d 1285, 1288 & n. 3 (8th Cir.
`
`1996). Although Rule 12(b) generally prohibits consideration of matters outside of the
`
`pleadings on a motion to dismiss, the court may consider certain matters outside of the
`
`pleadings without converting the motion into a motion for summary judgment. For
`
`example, the court may consider documents outside of the pleadings where “the plaintiffs’
`
`claims are based solely on the interpretation of the documents [submitted] and the parties
`
`10
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`do not dispute the actual contents of the documents.” Jenisio v. Ozark Airlines, Inc.,
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`Retirement Plan, 187 F.3d 970, 972 n.3 (8th Cir. 1999) (citing Silver v. H & R Block,
`
`Inc., 105 F.3d 394, 397 (8th Cir. 1997)). Nor is a motion to dismiss automatically
`
`converted into one for summary judgment “simply because one party submits additional
`
`matters in support of or opposition to the motion,” because “[s]ome materials that are part
`
`of the public record or do not contradict the complaint may be considered by a court in
`
`deciding a Rule 12(b)(6) motion to dismiss.” Missouri ex rel. Nixon v. Coeur D’Alene
`
`Tribe, 164 F.3d 1102, 1107 (8th Cir. 1999), cert. denied, 527 U.S. 1039 (1999). Finally,
`
`even where matters outside of the pleadings are presented to the court, a motion to dismiss
`
`is not converted into a motion for summary judgment “where the district court’s order
`
`makes clear that the judge ruled only on the motion to dismiss.” Skyberg v. United Food
`
`and Commercial Workers Int’l Union, AFL-CIO, 5 F.3d 297, 302 n.2 (8th Cir. 1993).
`
`Where the district court has made the posture of its disposition clear, the appellate court
`
`will “treat the case as being in that posture.” Id.
`
`3.
`
`Application of the standards
`
`Taking the last issue raised by the parties first, the court agrees that there is no
`
`specific provision in either the Federal Rules of Civil Procedure or the local rules for a
`
`surreply or surrebuttal brief, but neither is there any prohibition on the consideration of
`
`a surreply or surrebuttal, in the court’s discretion. More to the point, however, the court
`
`does not agree with IMCA that the defendants’ motions to strike improper references are
`
`only surreplies or surrebuttals. Rather, whatever the merits of those motions to strike
`
`might be, they are properly (if somewhat vaguely) targeted at material that the defendants
`
`contend cannot be considered on a motion to dismiss. See FED. R. CIV. P. 12(b) (matters
`
`outside of the pleadings cannot be considered on a motion to dismiss for failure to state a
`
`claim without converting the motion into a motion for summary judgment). Therefore, the
`
`11
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`court will deny IMCA’s motion to strike the defendants’ second motion to strike improper
`
`references as improper surrebuttal or surreply.
`
`Turning to the merits of the defendants’ motions to strike improper references,
`
`while the court might be able to consider the copyright certifications upon which IMCA’s
`
`claim is based, which presumably would be relevant to IMCA’s motion to dismiss the
`
`defendants’ Counterclaims and to strike the defendants’ affirmative defenses, the copyright
`
`certifications were not submitted. See Jenisio, 187 F.3d at 972 n.3 (the court may
`
`consider documents outside of the pleadings on a Rule 12(b)(6) motion to dismiss, if the
`
`documents are submitted and the parties do not dispute their contents). Although IMCA
`
`asserted at oral arguments that the court could consider its copyright certifications, even
`
`though they were not attached to IMCA’s Complaint, by taking judicial notice of the
`
`certifications as matters of public record, the court does not necessarily agree that it can
`
`consider matters of public record until and unless they are submitted by a party in support
`
`of or opposition to a motion to dismiss. See Coeur D’Alene Tribe, 164 F.3d at 1107 (the
`
`court may also consider on a Rule 12(b)(6) motion documents that are public records when
`
`they are submitted in support of or opposition to a motion to dismiss). Indeed, the
`
`defendants’ challenges seem to be leveled primarily at allegations found only in the
`
`plaintiff’s briefs, unsupported by any pleadings or documentary evidence submitted with
`
`the complaint or any other filing. Such allegations, if any, would clearly fall outside the
`
`realm of matters that the court can consider on a Rule 12(b)(6) motion to dismiss. See
`
`Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Gross v. Weber, 186 F.3d 1089, 1090 (8th
`
`Cir. 1999) (“On a motion to dismiss, we review the district court’s decision de novo,
`
`accepting all the factual allegations of the complaint as true and construing them in the
`
`light most favorable to [the non-movant].”) (emphasis added).
`
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`However, the court finds that it would be premature to convert IMCA’s Rule
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`12(b)(6) motion to dismiss Counterclaims into a Rule 56 motion for summary judgment,
`
`where the matters purportedly outside of the pleadings are poorly identified, and any such
`
`matters are unsubstantiated by any factual submissions of the parties, no discovery has
`
`been conducted, and the defendants assert that matters outside of the pleadings, as well as
`
`matters specifically alleged in the pleadings, are hotly contested. See FED. R. CIV. P.
`
`12(b) (“[W]here matters outside the pleading are presented to and not excluded by the
`
`court, the motion shall be treated as one for summary judgment and disposed of as
`
`provided by Rule 56, and all parties shall be given reasonable opportunity to present all
`
`material made pertinent to such a motion by Rule 56”); see also Buck, 75 F.3d at 1288 &
`
`n. 3. Rather, under the circumstances, the court deems it appropriate to consider only
`
`allegations in the pleadings, and to disregard matters outside of the pleadings, in the
`
`court’s disposition of IMCA’s motions to dismiss or strike. See Skyberg, 5 F.3d at 302
`
`n.2 (“[W]here the district court’s order makes clear that the judge ruled only on the motion
`
`to dismiss,” the appellate court will “treat the case as being in that posture.”). To that
`
`extent, the defendants’ motions to strike improper references are granted.
`
`Again, because the defendants have only poorly identified the matters outside of the
`
`pleadings that IMCA has purportedly referred to in support of its motion and reply brief,
`
`if they have identified them at all, the court will have to sift through IMCA’s arguments
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`to determine which ones are premised on matters not referenced in the pleadings and,
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`therefore, must be disregarded.
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`B. IMCA’s Motion To Strike Affirmative Defenses
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`The court turns, next, to that portion of IMCA’s April 15, 2006, motion seeking
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`an order striking the defendants’ third and fourth affirmative defenses pursuant to
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`Rule 12(f). IMCA seeks to strike the third affirmative defense in its entirety, or failing
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`that, to strike paragraphs 8 through 13 of that defense, and to strike the fourth affirmative
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`defense in its entirety, or failing that, to strike paragraph 14 of that defense. The
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`defendants have resisted this part of IMCA’s motion.
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`1.
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`Arguments of the parties
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`IMCA contends that the defendants’ third affirmative defense is insufficient, because
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`a defense of abuse or misuse of a copyright cannot be based on allegations of antitrust
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`violations or price fixing as a matter of law. IMCA contends, further, that a copyright
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`holder who files suit to protect its copyrights is immune to such a defense or claim under
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`the Noerr-Pennington doctrine. IMCA also asserts that the mere threat to bring a
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`copyright infringement action, seeking only remedies available for copyright infringement,
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`cannot be the basis for a defense of abuse or misuse of a copyright. IMCA contends that
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`the defendants have not adequately alleged that IMCA has misused or abused its copyrights
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`to impede the defendants from creating and disseminating any new, non-infringing
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`copyrighted works or that the filing of this lawsuit was for such an improper purpose, so
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`that the defendants have simply failed to state a defense of misuse or abuse of copyright.
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`Turning to more specific portions of the third affirmative defense, IMCA contends
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`that paragraph 8 of the third affirmative defense alleges that, in a cease and desist letter,
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`IMCA improperly claimed that its copyrights prevented the defendants from making
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`unauthorized use of the IMCA logo and acronym. IMCA contends that this paragraph
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`should be stricken, because the portion of the cease and desist letter referred to involved
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`IMCA’s assertion of its trademark rights, which are not at issue in this suit, in which
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`IMCA is only asserting claims concerning infringement of its copyrights. Thus, IMCA
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`contends that this paragraph of the defense is impertinent and immaterial and
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`mischararacterizes IMCA’s claim in this lawsuit. IMCA adds that the defendants’
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`allegation of the purpose for IMCA’s assertion of its trademark rights is wholly without
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`factual basis and is illogical, impertinent, scandalous, meaningless, and prejudicial.
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`IMCA also contends that paragraphs 9 through 13 of the third affirmative defense
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`improperly assert a defense based on a prior business and contractual relationship between
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`IMCA and RTA to which the defendants were not a party as well as other purported
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`antitrust and price-fixing violations. None of the allegations in these paragraphs, IMCA
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`contends, have anything to do with copyright infringement or constitute cognizable
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`defenses to copyright infringement, and in any event, all are barred by the Noerr-
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`Pennington doctrine, which IMCA contends immunizes copyright infringement actions
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`from claims of antitrust violations. IMCA also contends that, as pleaded, these allegations
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`fail to state any cognizable defense, because the factual allegations would not give rise to
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`any antitrust or price-fixing violation. Finally, IMCA contends that this affirmative
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`defense fails, because the defendants have nowhere alleged that IMCA’s copyright
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`infringement action is a “sham,” nor have they alleged any adequate basis for asserting
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`that the action is a “sham,” so that the defendants cannot exploit an exception to the Noerr-
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`Pennington doctrine.
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`IMCA contends that the defendants’ fourth affirmative defense, likewise, fails to
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`state a legally cognizable and sufficient defense, this time because the defendants have
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`made no factual allegations sufficient to demonstrate “unclean hands,” nor have they
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`identified any legal basis for their assertion that “unclean hands” is an equitable defense
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`to a copyright infringement action. Moreover, IMCA asserts that this defense alleges no
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`factual basis for a claim that IMCA has improperly tried to expand its copyrights beyond
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`their legitimate scope in violation of the public interest. IMCA reiterates that the Noerr-
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`Pennington doctrine bars this affirmative defense. Thus, IMCA contends that this defense
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`should likewise be stricken as immaterial and impertinent and not responsive to the issues
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`involved in this lawsuit.
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`In response, the defendants argue that abuse or misuse of a copyright based on
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`antitrust violations or other anticompetitive conduct is a valid defense to a copyright
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`infringement action. They assert, further, that the Noerr-Pennington doctrine bars only
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`certain claims, but not affirmative defenses. Thus, they contend that IMCA has cited no
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`good authority for striking their third and fourth affirmative defenses. They also argue
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`that, contrary to IMCA’s contentions, they have alleged sufficient facts to give rise to
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`affirmative defenses based on abuse or misuse of copyrights, because they have alleged
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`facts showing that IMCA attempted to expand its copyright improperly in violation of
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`public policy. They cite as examples allegations that IMCA has used its copyrights to
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`harass the defendants and to burden their business, to fix prices on racing products, to
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`obtain an unfair market share of certain racing products, and to prevent other entities from
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`promoting races involving comparable rules or equipment. They contend that their third
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`affirmative defense relates to the improper expansion of IMCA’s copyrights nationally,
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`while the fourth affirmative defense relates to such improper conduct in violation of Iowa
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`law. Those pleadings, they contend, should be permitted to stand unless and until IMCA
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`can show that there is no factual basis for them, for example, on a motion for summary
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`judgment, but that a motion to strike such defenses on the pleadings is premature. The
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`defendants also argue that they have adequately pleaded facts showing such improper
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`conduct by IMCA that the court should decline to exercise its equitable powers on IMCA’s
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`behalf.
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`Case 3:05-cv-03080-MWB Document 20 Filed 06/19/06 Page 16 of 51
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`In the portion of its reply relating to its motion to strike the affirmative defenses,
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`IMCA contends that the defendants have failed to allege any nexus between the copyrights
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`at issue and the alleged antitrust violations, and