Case 6:11-cv-00622-LED-ZJH Document 279 Filed 03/21/14 Page 1 of 6 PageID #: 14123
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`Plaintiff,
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`ROY-G-BIV CORPORATION,
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`v.
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`ABB, LTD., ET AL.,
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`Defendants.
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`Case No. 6:11-cv-622
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`ORDER
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`Before the Court is ROY-G-BIV Corporation’s (“RGB”) Motion to Dismiss ABB, Inc.’s
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`(“ABB”) Counterclaims and Strike Affirmative Defenses (Docket No. 162). For the reasons
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`stated below, the Court DENIES RGB’s Motion. Accordingly, this Motion will no longer be
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`heard at the April 8, 2014 hearing. The hearing will continue as scheduled for all other pending
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`motions.
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`BACKGROUND
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`Plaintiff RGB filed this suit in November 2011 accusing several defendants, including
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`ABB, of infringing U.S. Patents No. 6,513,058 (“the ’058 Patent”), 6,516,236 (“the ’236
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`Patent”), 6,941,543 (“the ’543 Patent”), and 8,073,557 (“the ’557 Patent”) (collectively, “the
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`RGB Patents”). In its First Amended Answer (Docket No. 138), ABB asserted eight affirmative
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`defenses, including unenforceability due to inequitable conduct and equitable estoppel. Docket
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`No. 138 at 8. ABB’s First Amended Answer also included three counterclaims seeking
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`declaratory judgments of noninfringement, invalidity, and unenforceability due to inequitable
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`conduct. Id. at 48–49. Additionally, ABB included 217 paragraphs of factual allegations in
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`support of the affirmative defenses and counterclaims. Id. at 9–48. RGB now moves to dismiss
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`ABB’s unenforceability counterclaim under Federal Rule of Civil Procedure 12(b)(6) for failure
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`to state a claim upon which relief can be granted and to strike as insufficient ABB’s affirmative
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`defenses of unenforceability and equitable estoppel under Rule 12(f).
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`APPLICABLE LAW
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`Dismissal under Federal Rule of Civil Procedure 12(b)(6) is appropriate where a party
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`fails to state a claim upon which relief can be granted. The Court construes the complaint in the
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`plaintiff’s favor and takes all well-pleaded facts as true. Kane Enters. v. MacGregor (USA) Inc.,
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`322 F.3d 371, 374 (5th Cir. 2003). A complaint attacked by a Rule 12(b)(6) motion to dismiss
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`does not need detailed factual allegations, but a plaintiff must plead sufficient factual allegations
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`to show that he is plausibly entitled to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56,
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`570 (2007) (“[W]e do not require heightened fact pleading of specifics, but only enough facts to
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`state a claim to relief that is plausible on its face.”). However, allegations of fraud must meet the
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`heightened pleading requirements of Rule 9(b): “a party must state with particularity the
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`circumstances constituting fraud or mistake.”
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`Inequitable conduct, “although a broader concept than fraud, must be pled with
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`particularity under Rule 9(b).” Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1326
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`Fed. Cir. 2009). “[T]o plead the ‘circumstances’ of inequitable conduct with the requisite
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`‘particularity’ under Rule 9(b), the pleading must identify the specific who, what, when, where,
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`and how of the material misrepresentation or omission committed before the PTO.” Id. at 1328.
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`Although the “knowledge” and “intent” requirements may be averred generally, the pleadings
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`“must include sufficient allegations of underlying facts from which a court may reasonably infer
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`that a specific individual (1) knew of the withheld material information or of the falsity of the
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`material misrepresentation, and (2) withheld or misrepresented this information with a specific
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`intent to deceive the PTO.” Id. at 1328–29. As for the “materiality” element, the Exergen
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`standard requires the pleadings to identify “both ‘why’ the withheld information is material and
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`not cumulative, and ‘how’ an examiner would have used this information in assessing the
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`patentability of the claims.” Id. at 1329–30.
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`ANALYSIS
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`RGB argues that ABB’s counterclaims and defenses are insufficient because they did not
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`specify the “who, what, when, where, and how” of any material misrepresentation or omission
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`committed before the PTO.
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`RGB contends that ABB failed to adequately plead “who” breached the duty to the PTO
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`because its First Amended Answer repeatedly refers merely to “RGB, the named inventors,
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`and/or the prosecuting attorneys.” Docket No. 163 at 3 n.1. ABB responds that it effectively
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`identified “who” by specifying at least the named inventors, David W. Brown and Jay S. Clark,
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`as failing in their duty of candor to the PTO. Docket No. 172 at 4, 7, 9. By identifying these
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`specific individuals, ABB has met the “who” requirement of inequitable conduct pleading. Cf.
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`Exergen, 575 F.3d at 1329 (finding a complaint inadequate where pleading party failed to
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`identify any specific individuals responsible for withholding or misrepresenting information
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`before the PTO).
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`RGB also argues that ABB’s First Amended Answer failed to specify any specific prior
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`art withheld and the specific claims such prior art would invalidate, therefore insufficiently
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`pleading the “what” and “where” requirements. Docket No. 162 at 7, 9, 11, 14. ABB responds
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`that it did specify withheld prior art references and alleges that the contributions of those
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`references were incorporated into all asserted claims. Docket No. 172 at 4. ABB also asserts
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`that in some cases it identified specific claims. Id. Reviewing the First Amended Answer
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`evidences that ABB has identified the relevance of specific prior art to specific patent claims.
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`See Docket No. 138 at 27 (“RGB is asserting rights to both RGB’s Real-Time Mode and
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`Compumotor’s Code-Generating Mode in all of the claims in each of the patents in the suit.”); id.
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`at 99 (“McClung’s concept of ‘allow[ing] the user or programmer to specify where the resultant
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`code should go’ was incorporated into claims 8, 9, 11, 23, 24, 26, 38, 39, 41, 53, 54, and 56 of
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`the ’557 [P]atent, and in claims 8 and 9 of the ’236 [P]atent.”); id. at 40 (“The XKS Publication
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`is material to at least claims 1–5 of the ’058 [P]atent, claims 1–10 of the ’236 [P]atent, claims 5–
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`16 of the ’543 [P]atent, and claims 16–30 and 46–59 of the ’557 [P]atent. The XFS Publication
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`anticipates each and every limitation in these claims, and further renders obvious each and every
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`limitation when combines with other prior are references known at the time of RGB’s
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`applications.”). Accordingly, its First Amended Answer meets the “what” and “where”
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`requirements of inequitable conduct pleadings.
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`RGB further asserts that ABB failed to identify “why” the withheld information is
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`material and not cumulative and “how” a PTO examiner would have used any withheld
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`information when considering patentability. Docket No. 162 at 8, 11. ABB counters that its
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`First Amended Answer effectively alleges that the PTO would have included additional
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`individuals as inventors on the RGB Patents but for the misrepresentations. Docket No. 172 at 7.
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`Further, ABB argues that its First Amended Answer evidences “why” and “how” certain
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`withheld information would have been useful to the PTO because “the claims in the patents in
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`suit would not have issued” if RGB had properly disclosed the information. Id. at 9 (quoting
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`ABB’s First Amended Answer, Docket No. 138 at 30). By specifying the relevance and
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`materiality of allegedly withheld information, ABB’s assertions are sufficient to meet the “why”
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`and “how” requirements at the pleadings stage.
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`Finally, RGB contends that ABB’s First Amended Answer failed to adequately support
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`allegations of any specific intent to deceive the PTO. Docket No. 162 at 6, 8–10, 12, 13. ABB
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`argues that its pleading did present sufficient facts from which the Court may reasonably infer
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`the requisite intent. ABB asserts that RGB’s disclosures were purposefully misleading and
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`incomplete. Docket No. 172 at 8, 9, 12. Taking the alleged facts in ABB’s First Amended
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`Answer as true, as this Court is required to do at this stage, the Court can reasonably infer that
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`the inventors, RGB, or the prosecuting attorneys had a specific intent to deceive the PTO.
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`Much of RGB’s Motion is concerned with the merits of ABB’s counterclaims. Despite
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`the higher pleading standards for inequitable conduct under Federal Rule of Civil Procedure 9(b),
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`the proper focus at this stage of the litigation is on the sufficiency of Defendants’ pleadings
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`under the Federal Rules, rather than the merits of those claims. RGB will have an opportunity to
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`re-urge its challenges to ABB’s inequitable conduct case at the dispositive motion stage or at
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`trial. Further, because ABB’s affirmative defenses rely on the same allegations as its
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`counterclaims, the affirmative defenses are similarly well supported by ABB’s factual allegations
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`and will not be struck.
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`CONCLUSION
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`For the reasons stated above, RGB’s Motion to Dismiss ABB’s Counterclaims and Strike
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`Affirmative Defenses is DENIED.
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`__________________________________
`LEONARD DAVIS
`UNITED STATES DISTRICT JUDGE
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`So ORDERED and SIGNED this 21st day of March, 2014.
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