Nomadix, Inc. v. Hospitality Core Servs. LLC, Case No. CV 14-08256 DDP (VBKx)
| Decision Date | 29 June 2015 |
| Docket Number | Case No. CV 14-08256 DDP (VBKx) |
| Court | U.S. District Court — Central District of California |
| Parties | NOMADIX, INC., Plaintiff, v. HOSPITALITY CORE SERVICES LLC, d/b/a BLUEPRINT RF, Defendant. |
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS/STRIKE COUNTERCLAIMS AND DEFENSES
Presently before the Court is Plaintiff's motion to dismiss certain counterclaims and strike corresponding affirmative defenses.
Plaintiff alleges that Defendant has infringed multiple patents1 of a system that redirects users' web browsers to a portal page so they may access a computer network in various locations. Defendant alleges that Plaintiff's system is essentially the same as a procedure that became available for public use in 1998. (Defendant's First Amended Counterclaim ("FACC"), ¶ 42.)
Defendant alleges that for some of the patents, Plaintiff failed to make the required disclosures of prior art in the field.2 (Id. at ¶ 13.) For example, the '894 patent includes a process whereby a gateway device facilitates a "handshake" with the computer, allowing the user to be redirected to a portal page. (Lezama Decl., Ex. 9, lines 25-40.) Defendant alleges that this same procedure is disclosed in Plaintiff's other prior art references, including Short et al. (Assigned to Nomadix, Inc.) WO98/404990, but Plaintiff neglected to submit these disclosures to the patent examiner. (FACC, ¶ 18.)
Defendant provides other similar examples of omitted prior art. (Id. at ¶¶ 19-24, 26-30.) E.g., Defendant alleges that Patent No. 6,182,139 ("the '139 patent") describes a materially similar gateway procedure which Plaintiff failed to disclose. (Id. at ¶ 26.) Allegedly, for the series of patents at issue, Plaintiff purposely omitted this information in order to intentionally deceive the patent examiner. (Id. at ¶ 14.) In some of Plaintiff's patent applications, Defendant alleges, it did makeprior art disclosures, but this information was buried in lengthy disclosure sections. (Id. at ¶ 12.)
Defendant further alleges that Plaintiff's patents are not enforceable due to either "inequitable conduct" on Plaintiff's part during prosecution, "prosecution laches," estoppel, or unclean hands. (Id. at ¶¶ 82-85.)
Defendant also alleges that the '894, '246, '266, '269 and '806 patent (the "captive portal" patents) are duplicative since they discuss nearly identical processes. (Id. at ¶ 8.)
Defendant also alleges that it "designed around" Plaintiff's patents by "practicing prior art" - that is, its allegedly infringing systems are simply combinations of known, pre-existing inventions or technology. (Id. at ¶ 62.)
Specific allegations as to each patent are as follows:
- the '894 and '399 patents:
Defendant alleges that "Nomadix failed to submit its own material prior art publications to the Patent Office," including an international patent application ("WO 98/40990") and a series of papers written by Leonard Kleinrock, a "named inventor" of the Nomadix patents. (Id. at ¶¶ 13-15.) Defendant alleges that the patents contain claims as to redirection technology that are materially similar to the prior publications, (id. at ¶¶ 17-19), and further alleges in general terms an intent to deceive the patent examiner. (Id. at ¶¶ 15, 18, 20.)
- the '399 and '690 patents:
Defendant also alleges that Plaintiff's attorney made misleading statements distinguishing another reference to prior art with regard to the '399 patent. (Id. at ¶ 21.) Defendant allegesthat Plaintiff "extended its misleading arguments" as to the '399 patent when it "silently allowed the claims of the '690 patent to be granted" without comment on the prior art relevant to both. (Id. at ¶ 21, 23.) Defendant also alleges that the '690 patent application "include[d] unreasonably voluminous prior-art disclosures having the effect of obscuring the most important prior-art references (commonly referred to as "burying" the most important references). (Id. at ¶ 12.) Defendant also alleges that Plaintiff failed to disclose prior art ("Brendel" and "RFC 1919") having to do with "TCP/IP handshakes" and "transparent proxying." (Id. at ¶¶ 26-30.) Defendant alleges that Plaintiff's attorney knew of the references and intentionally or recklessly omitted them. (Id. at ¶ 31.)
- the '246, '266, '269, and '806 patents:
Defendant alleges that Plaintiff also "buried" the most important prior art references in the applications for these patents. (Id. at ¶¶ 12, 24.) Defendant alleges that Plaintiff's attorney omitted the Brendel and RFC 1919 prior art from some of the applications and "buried" them in a mass of other references in other applications. (Id. at ¶¶ 26-31, 39.) Defendant also alleges that these patents depend on the '894 patent, and therefore they are "infected" with the inequitable conduct alleged as to that patent. (Id. at 38.)
Defendant therefore alleges counterclaims seeking declaratory judgments that their systems do not infringe Plaintiff's patents, that the patents are invalid, and/or that the patents are unenforceable on equitable grounds.
Plaintiffs have filed this motion to dismiss those counterclaims and strike associated affirmative defenses.
In order to survive a motion to dismiss for failure to state a claim, a complaint need only include "a short and plain statement of the claim showing that the pleader is entitled to relief." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 55 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint must include "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). When considering a Rule 12(b)(6) motion, a court must "accept as true all allegations of material fact and must construe those facts in the light most favorable to the plaintiff." Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir. 2000).
A court may strike any "redundant, immaterial, impertinent, or scandalous matter" from a pleading. Fed. R. Civ. P. 12(f). "A 'redundant' matter consists of allegations that constitute a needless repetition of other averments . . . ." Wilkerson v. Butler, 229 F.R.D. 166, 170 (E.D. Cal. 2005). Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993) rev'd as to other matters, 510 U.S. 517 (1994).
"[T]he function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from litigatingspurious issues by dispensing with those issues prior to trial . . . ." Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983).
As an initial matter, the Court notes that the parties' briefs in this motion and especially the counterclaim are densely written and filled with both technical jargon and unexplained patent terms of art. While none of this is fatal to the parties' arguments, it does increase the likelihood of misunderstanding and outright error.
A federal judge in Illinois recently adopted the following requirement of the lawyers in a patent case: New Medium LLC v. Barco N.V., No. 05 C 5620, 2009 WL 1098864, at *1 (N.D. Ill. Apr. 15, 2009). The Court expects the same in future filings in this case.
Defendant's first counterclaim seeks declaratory judgment that their systems do not infringe Plaintiff's patents because they merely "practice[] prior art" - that is, they rely on technology that predates Plaintiff's patents. (FACC, ¶¶ 58-62.)
However, the Federal Circuit has explained that "practicing prior art" is not a defense to an infringement claim.
Spectramed's argument is that Baxter, in order to establish literal infringement, must prove . . . [that] Spectramed'saccused devices must not be an adoption of the combined teachings of the prior art. This is not a correct statement of the law governing patent infringement. There is no requirement that the accused device be nonobvious in light of the prior art, or otherwise be itself patentable . . . . Questions of obviousness in light of the prior art go to validity of the [plaintiff's] claims, not to whether an accused device infringes.
Baxter Healthcare Corp. v. Spectramed, Inc., 49 F.3d 1575, 1583 (Fed. Cir. 1995). Defendant does not dispute this point in its opposition.
This is not to say Defendant cannot plead noninfringement. For example, the counterclaim alleges that Defendant "designed around" Plaintiff's patent, (FACC, ¶ 62), which is a perfectly legitimate defense. TiVo Inc. v. EchoStar Corp., 646 F.3d 869, 883 (Fed. Cir. 2011) (). But the Court emphasizes that reliance on prior art alone is insufficient to overcome an infringement claim.
Defendant's third counterclaim seeks declaratory judgment that Plaintiff's patents are not enforceable under a variety of equitable doctrines.
1. Inequitable Conduct
Defendant alleges that Plaintiff engaged in "inequitable conduct" during the prosecution of its patents by failing to disclose prior art and by "burying" the art in a way that made it hard for the patent examiners to find.
"Inequitable conduct is an equitable defense to patent infringement that, if proved, bars enforcement of a patent." Therasense, Inc. v....
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