Oracle Corp. v. Druglogic, Inc.

• Decision Date: 08 August 2011
• Docket Number: No. C 11–00910 JCS.,C 11–00910 JCS.
• Citation: 807 F.Supp.2d 885
• Court: U.S. District Court — Northern District of California
• Parties: ORACLE CORPORATION, et al., Plaintiffs, v. DRUGLOGIC, INC., Defendant.

807 F.Supp.2d 885

ORACLE CORPORATION, et al., Plaintiffs,

v.DRUGLOGIC, INC., Defendant.

No. C 11–00910 JCS.

United States District Court, N.D. California.

Aug. 8, 2011.

Christina Marie Von Der Ahe, Indra Neel Chatterjee, Karen G. Johnson–McKewan, Michael C. Spillner, Orrick, Herrington & Sutcliffe, LLP, San Francisco, CA, Deborah Kay Miller, Lesley Elizabeth Kothe, Oracle USA, Inc. Legal Department, Redwood Shores, CA, Peggy E. Bruggman, Morrison & Foerster LLP, Palo Alto, CA, for Plaintiffs.

Gabriel I. Opatken, Joseph N. Hosteny, Niro Scavone Haller & Niro, Gregory P. Casimer, Chicago, IL, Martin L. Fineman, Davis Wright Tremaine LLP, San Francisco, CA, Peter J. Davis, Whiteford Taylor & Preston, Baltimore, MD, Stephen Allan Weitzman, Stephen A. Weitzman, Columbia, MD, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO DISMISS AND STRIKE DEFENDANT'S COUNTERCLAIMS AND AFFIRMATIVE DEFENSES [Docket No. 44]

JOSEPH C. SPERO, United States Magistrate Judge.I. INTRODUCTION

Plaintiffs Oracle Corporation and Oracle International Corporation (“Oracle”) filed this action against Defendant DrugLogic, Inc. (“DrugLogic”) alleging that DrugLogic infringed upon Oracle's U.S. Patent No. 6,684,221 (“the '221 patent”), entitled, “Uniform Hierarchical Information Classification and Mapping System.” Oracle also sought a declaratory judgment of non-infringement upon DrugLogic's U.S. Patent No. 6,789,091 (“the '091 patent”) and a declaratory judgment of the invalidity of the '091 patent. DrugLogic, in turn, has asserted various affirmative defenses and counterclaims. Before the Court is Oracle's Motion to Dismiss and Strike DrugLogic's Counterclaims and Affirmative Defenses (“the Motion”). In its Motion, Oracle requests that the Court dismiss DrugLogic's Second and Fifth Counterclaims and strike DrugLogic's Third, Fourth, and Fifth Affirmative Defenses and its allegation of willful infringement and prayer for enhanced damages in its First Counterclaim. A hearing on the Motion was held on August 5, 2011. For the reasons stated below, the Motion is GRANTED IN PART and DENIED IN PART.

II. BACKGROUNDA. Facts and Procedural History

On December 17, 2010, DrugLogic filed a complaint against Oracle and Phase Forward, Inc. (“Phase Forward”), a company acquired by Oracle in 2010, in the United States District Court for the Northern District of California, Civil Action No. 10–05771 JCS. Complaint at ¶ 15. In that complaint, DrugLogic alleged that Oracle and Phase Forward infringed upon DrugLogic's '091 patent, “Method and System for Web–Based Analysis of Drug Adverse Effects,” by making and selling the Empirica Signal product suite. Id. at ¶ 16; see also Answer, Affirmative Defenses, Counterclaims and Demand for Jury Trial (“Affirmative Defenses and Counterclaims”), Ex. A ('091 patent). In addition, DrugLogic alleged that Oracle and Relsys International, Inc. (“Relsys”), a company acquired by Oracle in 2009, infringed upon the '091 patent by making and selling the Argus Perceptive product suite. Complaint at ¶ 16. DrugLogic also asserted a breach of contract claim against Oracle arising out of the Co–Marketing and Development Agreement (“the Agreement”) between DrugLogic and Relsys. Id. On February 23, 2011, DrugLogic voluntarily dismissed this Complaint without prejudice. Id. at ¶ 17.

On February 25, 2011, Oracle initiated the instant action by filing a complaint against DrugLogic, alleging infringement of Oracle's '221 patent, “Uniform Hierarchical Information Classification and Mapping System,” through the design, marketing, manufacture, and/or sale of the Qscan product suite. Id. at ¶¶ 1, 9–10. Oracle also seeks a declaratory judgment of non-infringement upon DrugLogic's '091 patent and invalidity of the '091 patent. Id. at ¶ 21. On April 21, 2011, DrugLogic filed its Affirmative Defenses and Counterclaims. DrugLogic asserted the following counterclaims against Oracle: 1) infringement of the '091 patent; 2) breach of contract based on the Agreement between DrugLogic and Relsys; 3) declaratory judgment of non-infringement of the '221 patent; 4) declaratory judgment of invalidity of the '221 patent; and 5) declaratory judgment of unenforceability of the '221 patent. Affirmative Defenses and Counterclaims at ¶¶ 66, 77, 79, 90, 98, 105.

Oracle filed the present Motion to Dismiss and Strike DrugLogic's Counterclaims and Affirmative Defenses on May 16, 2011. DrugLogic opposes the Motion. On July 7, 2011, DrugLogic filed a Notice of New Authority relevant to its Opposition and attached a copy of Am. Calcar Inc. v. Am. Honda Motor Co., Inc., 651 F.3d 1318 (Fed.Cir.2011).

B. Relevant Affirmative Defenses and Counterclaims

DrugLogic asserts various affirmative defenses and counterclaims against Oracle. Below, the Court summarizes the affirmative defenses and counterclaims relevant to the Motion.

1. Third Affirmative Defense—Inequitable Conduct and Unenforceability of the ' 221 Patent

In its Third Affirmative Defense, DrugLogic alleges that Oracle's '221 patent is unenforceable due to Oracle's inequitable conduct. Affirmative Defenses and Counterclaims at ¶ 30. In particular, DrugLogic alleges that Oracle failed to disclose all non-cumulative, material prior art of which it was aware to the United States Patent and Trade Office (“PTO”) during the prosecution of the '221 patent. Id. DrugLogic asserts that this duty to disclose was owed by Oracle; the purported inventor of the '221 patent, Kim Rejndrup; the attorneys and agents who prepared or prosecuted the '221 patent; and all other persons substantively involved in the preparation or prosecution of the '221 patent. Id. at ¶¶ 31, 32. DrugLogic states that all individuals with such a duty to disclose provided almost no prior art to the PTO during the prosecution of the '221 patent despite Oracle's awareness of then-existing hierarchical relational medical thesauruses such as WHO–Drug, COSTART, Read Codes, and CPT as well as the “free MeSH database of Medical Subject headings, the Metathesaurus database files of the National Library of Medicine.” Id. at ¶ 33. DrugLogic asserts that the only “purported” prior art references provided to the PTO during prosecution of the '221 patent were Oracle marketing documents published after the filing date of the provisional application for the '221 patent. Id.

DrugLogic alleges that the specification of the '221 patent states that “[c]ommon vendor-supplied dictionaries” include WHO–Drug, COSTART, and CPT. Id. at ¶ 34. DrugLogic states that these “vendor dictionaries” are all hierarchical relational medical thesaurus dictionaries, and neither Oracle, the inventor of the '221 patent, Oracle's patent counsel, or any other person substantively involved in the preparation or prosecution of the '221 patent provided copies or excerpts of WHO–Drug, COSTART, or CPT to the PTO. Id. at ¶¶ 35, 36.

DrugLogic alleges that Oracle and the inventor of the '221 patent, through patent counsel, provided the following brief summary of the invention:

The presently claimed system is operable to store and classify a plurality of terms, such as clinical or scientific terms according to a hierarchy of relations. The relations define and organize the terms according to more general and more specific terms. In other words, the relations may indicate which terms may be subclasses[,] superclasses[,] or synonyms of other terms. Such organization is beneficial in scientific or medical studies where large quantities of data are processed and consistency among term usage may not be deterministic.

Id. at ¶ 37. DrugLogic asserts that this statement also describes already-existing hierarchical relational medical thesaurus dictionaries such as WHO–Drug, COSTART, CPT, Unified Medical Language System, Metathesaurus, and MeSH, at least some of which were known to Oracle, the inventor of the '221 patent, and their patent counsel. Id. at ¶ 38.

DrugLogic alleges that Oracle and the inventor of the '221 patent also made the following statement to the PTO:

Accordingly, the system disclosed herein allows a thesaurus or repository of terms to be employed to correlate and normalize research data from a plurality of sources thereby allowing a research team to process such data according to a common denominator referring to a particular element drug or compound[,] for example.

Id. at ¶ 39. DrugLogic claims that this statement does not distinguish the '221 patent from already-existing hierarchical relational medical thesaurus dictionaries including WHO–Drug, COSTART, CPT, Unified Medical Language System, Metathesaurus, and MeSH. Id. at ¶ 40.

DrugLogic states that the '221 patent was granted after its claims were narrowed to require that it be a thesaurus of clinical terms used in conjunction with a clinical study. Id. at ¶ 41. DrugLogic contends that this does not distinguish the '221 patent from then-existing medical thesauruses and that throughout the prosecution of the '221 patent, Oracle, its inventor, and patent counsel all failed to disclose to the PTO that WHO–Drug, COSTART, CPT, Unified Medical Language System, Metathesaurus, and MeSH were all hierarchical relational medical thesaurus dictionaries that contain clinical terms used in conjunction with clinical studies. Id. at ¶¶ 41, 42.

Finally, DrugLogic alleges that, on information and belief, Oracle's failure to provide the PTO with copies or excerpts of the WHO–Drug, COSTART, CPT, and MeSH hierarchical relational medical thesaurus dictionaries, and its failure to inform the PTO that WHO–Drug, COSTART, CPT, and MeSH contain clinical terms used in conjunction with clinical studies, constitute intentional acts or omissions done with the intent to deceive. Id. at ¶ 43.

2. Fourth Affirmative Defense—Other Affirmative Defenses Based on Later Discovered Evidence

As a Fourth Affirmative Defense, DrugLogic reserves all affirmative defenses under Federal Rule of Civil Procedure 8(c) and the Patent laws of the United...