BlackBerry Limited v. Typo Products LLC

Filing 65

ORDER GRANTING PLAINTIFF'S 30 MOTION TO STRIKE AND DISMISS COUNTERCLAIM AND AFFIRMATIVE DEFENSES by Hon. William H. Orrick. Typo's inequitable conduct counterclaim and affirmative defense are DISMISSED. Typo's affirmative defenses for prosecution history estoppel (eleventh affirmative defense), equitable estoppel (twelfth), patent misuse (thirteenth), abandonment (twentieth), and comparative negligence (twenty-first) are STRUCK. Typo is granted LEAVE TO FILE AN AMENDED ANSWER AND COUNTERCLAIM within 30 days of this order. (jmdS, COURT STAFF) (Filed on 5/8/2014)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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BLACKBERRY LIMITED,

Case No. 14-cv-00023-WHO

Plaintiff,
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v.
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TYPO PRODUCTS LLC,
Defendant.

United States District Court
Northern District of California

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ORDER GRANTING PLAINTIFF'S
MOTION TO STRIKE AND DISMISS
COUNTERCLAIM AND
AFFIRMATIVE DEFENSES
Re: Dkt. No. 30

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INTRODUCTION
Plaintiff BlackBerry Limited has sued defendant Typo Products LLC for patent

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infringement, trade dress infringement and related causes of action. BlackBerry moves to dismiss

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Typo’s counterclaim and affirmative defense for inequitable conduct (seventh counterclaim and

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tenth affirmative defense) because they do not meet the heightened pleading standards of Federal

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Rule of Civil Procedure 9(b) and to strike Typo’s affirmative defenses for prosecution history

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estoppel (eleventh affirmative defense), equitable estoppel (twelfth affirmative defense), patent

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misuse (thirteenth affirmative defense), abandonment (twentieth affirmative defense), and

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comparative negligence (twenty-first affirmative defense) because none provides a factual basis

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for the defense. For the reasons stated below, I GRANT BlackBerry’s motion.

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DISCUSSION
I. INEQUITABLE CONDUCT COUNTERCLAIM AND AFFIRMATIVE DEFENSE
Inequitable conduct must be pleaded with particularity under Federal Rule of Civil

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Procedure 9(b). Exergen Corp. v. Wal–Mart Stores, Inc., 575 F.3d 1312, 1318 (Fed. Cir. 2009).

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To plead inequitable conduct with the requisite particularity, “the pleading must identify the

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specific who, what, when, where, and how of the material misrepresentation or omission

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committed before the PTO.” Id. at 1328. To meet the intent prong, the pleading “must include

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sufficient allegations of underlying facts from which a court may reasonably infer that a specific

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individual (1) knew of the withheld material information or of the falsity of the material

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misrepresentation, and (2) withheld or misrepresented this information with a specific intent to

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deceive the PTO.” Id. at 1328-29.

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Typo alleges that the ’964 patent is unenforceable because “inventors Jason Griffin, John

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Holmes, Mike Lazaridis, Herb Little, and/or Harry Major, and/or prosecuting attorney Robert H.

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Kelly, committed inequitable conduct by deliberately withholding one or more known material

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prior art references from the Patent and Trademark Office.” Counterclaim ¶ 27. Typo’s
inequitable conduct allegations relate to how the allegedly undisclosed prior art was material to the

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United States District Court
Northern District of California

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claims of the ’964 patent. But the allegations do not contain the particularity required to satisfy

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the heightened pleading requirements of Federal Rule of Civil Procedure 9(b).

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A. Who
“To plead with the required particularity the ‘who’ of the alleged material omission, [a]

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pleading must name a ‘specific individual associated with the filing or prosecution of the

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application[s] issuing as the’ patents-in-suit ‘who both knew of the material information and

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deliberately withheld or misrepresented it.’” Abaxis, Inc. v. Cepheid, 10-cv-02840-LHK, 2011

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WL 1044396, *3 (N.D. Cal. Mar. 22, 2011) (citing Exergen Corp. v. Wal-Mart Stores, Inc., 575

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F.3d 1312, 1329 (Fed. Cir. 2009)).

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Typo has not identified the specific individual associated with the filing or prosecution of

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the application, who both knew of the material information and deliberately withheld or

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misrepresented it. Instead, Typo has lumped together all of the named inventors and the

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prosecuting attorney and alleged that all, some, or one of them committed inequitable conduct.

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Typo alleges that

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Griffin, Holmes, Lazaridis, Little, Major and/or Kelly withheld from
the PTO several prior art products including the Smith Corona Spell
Mate 30 and Smith Corona Spell Right 200.
Counterclaims ¶ 28 (emphasis added). Typo also alleges that
Griffin, Holmes, Lazaridis, Little, Major and/or Kelly knew that the
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Smith Corona Spell Mate 30 and/or Smith Corona Spell Right 200
were prior art, knew that the Smith Corona Spell Mate 30 and/or
Smith Corona Spell Right 200 were but-for material to the
patentability of one or more claims of the ‘964 patent, and made a
deliberate decision to withhold them from the PTO thereby
committing inequitable conduct rendering the ‘964 Patent
unenforceable.”

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Id. ¶ 34.
That is not sufficient. See, e.g., Exergen, 575 F.3d at 1329 (pleading that referred

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generally to plaintiff’s “agents and/or attorneys” failed to identify “who” because it did not name
the specific individual associated “who both knew of the material information and deliberately
withheld or misrepresented it”); Oracle Corp. v. DrugLogic, Inc., 807 F. Supp. 2d 885, 898 (N.D.
Cal. 2011) (allegation that “Each attorney or agent who prepared or prosecuted the application”

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was insufficient).
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United States District Court
Northern District of California

Typo cites Abaxis, Inc. v. Cepheid, 10-cv-02840-LHK, 2011 WL 1044396 (N.D. Cal. Mar.
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22, 2011) in support of its argument that “[a]ccusing the inventors and/or a patent attorney of
inequitable conduct satisfies the ‘who’ requirement.” Opp. at 4. But unlike this case, the pleading

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in Abaxis contained factual allegations that the patent attorney at issue knew and withheld material
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information. Abaxis, 2011 WL 1044396, at *6-7. The factual allegations in Abaxis therefore
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identified the specific individual accused of inequitable conduct. There are no such allegations in
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this case.
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B. Knowledge of material information
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“[O]ne cannot assume that an individual, who generally knew that a reference existed, also
knew of the specific material information contained in that reference.” Exergen, 575 F.3d at 1330.
Accordingly, a pleading of inequitable conduct “must include sufficient allegations of underlying

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facts from which a court may reasonably infer that a specific individual knew of the withheld
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material information.” Abaxis, 2011 WL 1044396 (internal punctuation omitted) (citing Exergen,
575 F.3d at 1328). “A reasonable inference is one that is plausible and that flows logically from
the facts alleged, including any objective indications of candor and good faith.” Id.

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Typo alleges that the Spell Mate 30 and the Spell Right 200 prior art references were
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“widely available” (Counterclaims ¶ 28) and that

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Griffin, Holmes, Lazaridis, Little, Major and/or Kelly knew that the
Smith Corona Spell Mate 30 and/or Smith Corona Spell Right 200
were prior art, knew that the Smith Corona Spell Mate 30 and/or
Smith Corona Spell Right 200 were but-for material to the
patentability of one or more claims of the ‘964 patent, and made a
deliberate decision to withhold them from the PTO thereby
committing inequitable conduct rendering the ‘964 Patent
unenforceable.

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Counterclaims ¶ 34 (emphasis added). That is insufficient for me to reasonably infer that a

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specific individual knew of the withheld material information.1 To adequately plead knowledge,

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Typo must allege facts from which a reasonable inference of knowledge “flows logically.”

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Exergen, 575 F.3d at 1329 n.5. No inference flows logically from Typo’s present allegations.
C. Material and not cumulative

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Prior art references are not material if they are cumulative of other information already

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United States District Court
Northern District of California

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disclosed to the PTO.” Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1367

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(Fed. Cir. 2008). Accordingly, Typo must plead facts with particularity to show that the allegedly

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withheld references are not cumulative of other information disclosed during prosecution of the

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‘’964 patent.
BlackBerry contends that the Spell Mate 30 and the Spell Right 200 are not cumulative

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because they contain four specific limitations which, according to Typo, were not disclosed in any

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other prior art before the PTO.2 Answer ¶ 117 (listing four specific limitations disclosed in the

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Spell Mate 30 and the Spell Right 200). That is sufficient at this pleadings stage.
D. Specific intent

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A pleading of inequitable conduct must include sufficient allegations of underlying facts

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By pleading in the disjunctive that it was the Spell Mate 30 “and/or” the Spell Right 200, Typo
does not even clearly specify what the alleged actors had knowledge of.
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In its reply, BlackBerry notes that Typo’s opposition to the motion for preliminary injunction
argued that the Spell Mate 30 and the Spell Right 200 lack a “a lower row with four letter keys on
the left and three letter keys on the right”—one of the limitations that Typo now argues was
disclosed in the Spell Mate 30 and the Spell Right 200. Reply at 5-6. BlackBerry argues that,
consequently, “[b]ased upon Typo’s own arguments and the sworn testimony of its expert witness,
the Smith Corona references do not disclose relevant claim limitations to the ‘964 patent and
therefore cannot give rise to inequitable conduct.” Id. at 6. Whether or not the references do in
fact disclose this particular limitation is not an issue for determination at this pleadings stage.
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from which a court may reasonably infer that a specific individual withheld or misrepresented

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material information with a specific intent to deceive the PTO. Exergen, 575 F.3d at 1328-29. A

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conclosury allegation of specific intent is insufficient. See, e.g. Tessenderlo Kerley, Inc. v. Or-

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Cal, Inc., 11-cv-04100 WHA, 2012 WL 1094324, *4 (N.D. Cal. Mar. 29, 2012) (allegation that

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inventor “deliberately withheld this information with a specific intent to deceive the PTO” was

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insufficient because factual allegations “do not explain why this is a reasonable inference for the

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Court to make”).
Here, Typo has pleaded that “[t]he single most reasonable inference that can be drawn

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from the evidence is that Griffin, Holmes, Lazaridis, Little, Major and/or Kelly’s failure to
disclose the Spell Mate 30 and/or Smith Corona Spell Right 200 to the PTO was done with the

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United States District Court
Northern District of California

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specific intent to deceive the PTO.” Counterclaims ¶ 35. But Typo has not pleaded any facts

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from which I can reasonably make this inference. All that Typo has alleged is that a material

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reference which was widely available was not disclosed to the PTO. That is not sufficient to plead

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inequitable conduct. See, e.g., Exergen, 575 F.3d at 1330 (“Pleading on ‘information and belief’

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is permitted under Rule 9(b) when essential information lies uniquely within another party’s

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control, but only if the pleading sets forth the specific facts upon which the belief is reasonably

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based.”) (emphasis added).

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E.

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Identification of specific claims and limitations to which the withheld references are
relevant
A party alleging inequitable conduct must identity “which claims, and which limitations in

those claims, the withheld references are relevant to, and where in those references the material
information is found.” Exergen, 575 F.3d at 1329. Typo has not done so.
Typo alleges that BlackBerry’s inequitable conduct renders all of the asserted claims of the
’964 patent invalid. Answer ¶ 115. BlackBerry’s complaint, however, has not asserted any
particular claims. See Compl. ¶ 57 (alleging that “Typo has infringed and continues to infringe
one or more claims of the ‘964 Patent . . . .) (emphasis added). In its opposition brief, Typo cites
BlackBerry’s preliminary injunction motion for the proposition that “the asserted claims of the
‘964 patent are independent claim 19, and dependent claims 20 and 24.” Opp. at 4. But
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BlackBerry’s preliminary injunction motion is not its operative pleading. Typo must affirmatively

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state to which claims the withheld references are relevant.
In addition, Typo has not stated to which limitations within the claims of the ’964 patent

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the withheld references are relevant. Typo cites an Office Action containing the applicants’

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arguments for why the ’964 patent application should issue over the Siitonen reference, but Typo

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does not identify the actual limitations from the ’964 patent. Answer ¶ 117.

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To adequately plead inequitable conduct, Typo must affirmatively identify the specific

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claims of the ’964 patent to which the withheld references are relevant, the relevant limitations

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within those claims of the ’964 patent, and where in the withheld references the material
information is found. Typo cannot meet this burden indirectly by citing BlackBerry’s pleadings

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United States District Court
Northern District of California

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and Office Actions.

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II. OTHER AFFIRMATIVE DEFENSES
BlackBerry seeks to strike the following affirmative defenses for failing to meet the

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pleading requirements that this Court imposes on affirmative defenses:

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Eleventh Affirmative Defense (Prosecution History Estoppel)
Based on statements, representations, admissions, and/or other conduct during the
prosecution of the ‘964, ‘552 or D’775 patent applications and/or related patent
applications, BlackBerry is estopped from asserting any interpretation of the claims
of the ‘964, ‘552 or D’775 patents that would cover the Typo keyboard.

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¶ 120.

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Twelfth Affirmative Defense (Equitable Estoppel)
Each asserted claim of the ‘964, ‘552 and D’775 patents is unenforceable due the
doctrine of equitable estoppel.

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¶ 121.
Thirteenth Affirmative Defense (Patent Misuse)
Upon information and belief, BlackBerry’s claims are barred, in whole or in part,
because of patent misuse.

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¶ 122.
Twentieth Affirmative Defense (Abandonment)
Blackberry’s fourth through eighth causes of action asserted in the Complaint are
barred because Blackberry has abandoned any rights it may have had in its alleged
trade dress.
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¶ 131.

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Twenty First Affirmative Defense (Comparative Negligence)
Blackberry’s fourth through eighth causes of action asserted in the Complaint are
barred because any confusion or damage that Blackberry has suffered was directly
and proximately caused or contributed to by Blackberry’s own negligence in failing
to exercise reasonable care in protecting their alleged rights

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¶ 132.
Typo argues that the Court should not apply the Twombly/Iqbal pleading standard to its

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United States District Court
Northern District of California

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affirmative defenses. In support, Typo contends that the Ninth Circuit has not addressed whether
the heightened Twombly/Iqbal pleading standard applies to affirmative defenses and that district
courts in the Ninth Circuit, including the Central and Southern Districts of California, “have
rejected attempts to apply the Twombly/Iqbal pleading standard to affirmative defenses.” Opp. at
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Several judges in this Court have found that the Twombly/Iqbal standard applies to
affirmative defenses. See, e.g., Powertech Tech., Inc. v. Tessera, Inc., 2012 WL 1746848, *4-5
(N.D. Cal. May 16, 2012) (Wilken, J.); Perez v. Gordon & Wong Law Grp., P.C., 2012 WL
1029425, *8 (N.D. Cal. Mar. 26, 2012) (Koh, J.); Dion v. Fulton Friedman & Gullace LLP, 2012
WL 160221, *2 (N.D. Cal. Jan. 17, 2012) (Conti, J.); Bottoni v. Sallie Mae, Inc., 2011 WL
3678878, *1 (N.D. Cal. Aug. 22, 2011) (Beeler, M.J.); J&J Sports Prods., Inc. v. Mendoza-Govan,
2011 WL 1544886, *4 (N.D. Cal. Apr. 25, 2011) (Alsup, J.); Barnes v. AT&T Pension Ben. PlanNonbargained Program, 718 F. Supp. 2d 1167, 1172 (N.D. Cal. 2010) (Patel, J.).
Typo is correct that “none of the opinions constitute binding precedent that this Court is
required to follow.” Typo Opp. at 10. However, I agree with my colleagues that the
Twombly/Iqbal standard properly applies to affirmative defenses. As Judge Patel explained,
“applying the standard for heightened pleading to affirmative defenses serves a valid purpose in
requiring at least some valid factual basis for pleading an affirmative defense and not adding it to
the case simply upon some conjecture that it may somehow apply.” Barnes, 718 F. Supp. 2d at
1172 (citations omitted). “Applying the same standard will also serve to weed out the boilerplate
listing of affirmative defenses which is commonplace in most defendants' pleadings where many
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of the defenses alleged are irrelevant to the claims asserted.” Id.
Typo’s eleventh, twelfth, thirteenth, twentieth and twenty-first affirmative defenses do not

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plead any facts and therefore are insufficiently pleaded. Typo must plead some valid factual bases

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for pleading these defenses.

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CONCLUSION

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BlackBerry’s motion is GRANTED. Typo’s inequitable conduct counterclaim and

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affirmative defense are DISMISSED. Typo’s affirmative defenses for prosecution history

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estoppel (eleventh affirmative defense), equitable estoppel (twelfth), patent misuse (thirteenth),

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abandonment (twentieth), and comparative negligence (twenty-first) are STRUCK. Typo is
granted LEAVE TO FILE AN AMENDED ANSWER AND COUNTERCLAIM to address the

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United States District Court
Northern District of California

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deficiencies noted above. Any amended Answer and Counterclaim shall be filed within 30 days of

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this order.

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IT IS SO ORDERED.
Dated: May 8, 2014
______________________________________
WILLIAM H. ORRICK
United States District Judge

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