Fleming v. Escort, Inc. et al
Filing
268
MEMORANDUM DECISION AND ORDER Plaintiff's Renewed Motion to Dismiss Certain of Defendants' Counterclaims and Defenses (docket no. 212 ) is DENIED. Escort shall filed an Amended Answer and Counterclaim within 30 days from the dateof this decision. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (jp)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
HOYT A. FLEMING,
Case No. 1:12-CV-00066-BLW
Plaintiff,
MEMORANDUM DECISION AND
ORDER
v.
ESCORT, INC., et al.,
Defendants.
INTRODUCTION
The Court has before it Fleming’s renewed motion to dismiss Escort’s Second
Affirmative Defense and First Counterclaim. The motion is fully briefed and at issue.
For the reasons set forth below, the Court will deny the motion.
FACTUAL AND PROCEDURAL BACKGROUND
In an earlier-filed decision, the Court found that several of Escort’s affirmative
defenses and counterclaims were vague, and gave Escort one opportunity to avoid
dismissal and amend those allegations to provide more detail. See Memorandum
Decision (Dkt. No. 31) at p. 5. Escort responded by filing an Amended Answer and
Counterclaim, prompting a renewed motion to dismiss by Fleming as to a portion of that
pleading – specifically, Fleming moves to dismiss Escort’s Second Affirmative Defense
and First Counterclaim.
MEMORANDUM DECISION AND ORDER - 1
Part of the detail that Escort added to these allegations relied on the ESC17363
source code that was never actually used in any commercial product. See Memorandum
Decisions (Dkt. Nos. 178 & 208). Thus, ESC17363 cannot be used as a defense. Escort
recognizes this, and offers to withdraw the references to ESC17363. The Court will so
order, and will proceed to evaluate the sufficiency of Escort’s Second Affirmative
Defense without reference to the allegations regarding ESC17363.
LEGAL STANDARD
To survive a motion to dismiss, a counterclaim must contain sufficient factual
matter, accepted as true, to state a claim for relief that is plausible on its face. See Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 129 (2009).
A claim has facial plausibility when the claimant pleads factual content that allows the
court to draw the reasonable inference that the counter-defendant is liable for the
misconduct alleged. Twombly, 550 U.S. at 556.
The Ninth Circuit Court of Appeals has yet to address whether the Iqbal/Twombly
standard applies to affirmative defenses, and district courts within the Circuit are divided
on the issue. See Comercializadora Recmaq v. Hollywood Auto Mall, 2014 WL 3628272
(S.D.Cal. July 21, 2014) (discussing the division within the Circuit’s district courts).
This Court has adopted the Patent Local Rules from the Northern District of California
and hence looks there for guidance. Within that District, there is “widespread agreement”
that the Iqbal/Twombly standard applies to affirmative defenses. PageMelding, Inc. v.
MEMORANDUM DECISION AND ORDER - 2
ESPN, Inc., 2012 WL 3877686 at *1 (N.D.Cal. Sept. 6, 2012). The Court finds
PageMelding persuasive.
Applying Iqbal/Twombly to affirmative defenses means that “bare statements
reciting mere legal conclusions [in an affirmative defense] may not be sufficient.”
Hernandez v. Dutch Goose, Inc., 2013 WL 5781476 at *4 (N.D.Cal. Oct. 25, 2013). “Just
as a plaintiff’s complaint must allege enough supporting facts to nudge a legal claim
across the line separating plausibility from mere possibility, a defendant’s pleading of
affirmative defenses must put a plaintiff on notice of the underlying factual basis of the
defense.” Id.
At the same time, however, patent cases are unique. Shortly after the complaint is
filed, the Court’s Patent Local Rules require Fleming to detail its infringement claims,
and Escort to detail its invalidity claims. Thus, each side is entitled to a detailed
statement of their opponent’s allegations relatively early in the case. Consequently,
“there is much uncertainty as to the applicability of Twombly and Iqbal to patent
litigation generally, at least where, as here, the local rules prescribe a detailed process
requiring prompt disclosure of specific bases for claims and defenses.” Barnes & Noble,
Inc. v. LSI Corp., 849 F. Supp. 2d 925, 929 (N.D. Cal. 2012). To strike a balance, the
Barnes & Noble case evaluated the sufficiency of affirmative defenses by comparing the
detail in their allegations with the detail contained in the opponent’s complaint: “What is
good for the goose’s complaint should be good for the gander’s answer.” Id. The Court
finds this approach persuasive and will follow it in this case.
MEMORANDUM DECISION AND ORDER - 3
ANALYSIS
The only amendment Escort made to its First Counterclaim was to incorporate the
allegations from its Second Affirmative Defense. See Amended Answer (Dkt. No. 35) at
pp. 56–57. Thus, the adequacy of Escort’s First Counterclaim depends entirely upon the
sufficiency of the detail in its Second Affirmative Defense.
Escort’s amended Second Affirmative Defense consists of eight paragraphs.
Some of those paragraphs contain references to ESC17363 that the Court will not
consider in determining the sufficiency of the Second Affirmative Defense. The Court
will likewise ignore other paragraphs that contain references to matters that were resolved
in Fleming I. With all those matters stripped out, does Escort’s Second Affirmative
Defense meet the Iqbal/Twombly test?
The Court finds that it passes muster. For example, the file-wrapper estoppel
defenses are broad enough to invoke representations made by Fleming to the Patent and
Trademark Office (PTO) after the resolution of Fleming I. Escort’s defense is that such
representations narrow Fleming’s patents. To the extent that Escort’s file wrapper
defense relies on representations made to the PTO that were not considered in Fleming I,
the defense is appropriate. In addition, Escort alleges in detail its defense to Fleming’s
charge of willful infringement, and Fleming has stated that it is not trying to dismiss that
defense.
In examining these remaining defenses – the file wrapper defense and the defense
to the willful infringement claim – there is a rough equivalency between the detail in
MEMORANDUM DECISION AND ORDER - 4
Escort’s Second Affirmative Defense and Fleming’s complaint. Under the Barnes &
Noble test, discussed above, those defenses satisfy the Iqbal/Twombly test. Accordingly,
Fleming’s motion will be denied.
ORDER
Pursuant to the Memorandum Decision set forth above,
NOW THEREFORE IT IS HEREBY ORDERED, that the Plaintiff’s Renewed
Motion to Dismiss Certain of Defendants’ Counterclaims and Defenses (docket no. 212)
is DENIED.
IT IS FURTHER ORDERED, that all references to ESC17363, all references to
lines of code contained therein, and any defense relying on ESC17363 in Escort’s
Answer and Counterclaim are DEEMED STRICKEN, and Escort shall filed an Amended
Answer and Counterclaim without those references within thirty (30) days from the date
of this decision.
DATED: April 20, 2015
_________________________
B. Lynn Winmill
Chief Judge
United States District Court
MEMORANDUM DECISION AND ORDER - 5
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