The Chamberlain Group, Inc. v. Techtronic Industries Co., Ltd. et al

Filing 322

MEMORANDUM OPINION AND ORDER Signed by the Honorable Harry D. Leinenweber on 3/22/2017:Mailed notice(wp, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHER DISTRICT OF ILLINOIS
EASTERN DIVISION

THE CHAMBERLAIN GROUP, INC.,
Plaintiff,
v.
TECHTRONIC INDUSTRIES CO.,
LTD., TECHTRONIC INDUSTRIES
NORTH AMERICA, INC., ONE
WORLD TECHNOLOGIES, INC.,
OWT INDUSTRIES, INC., ET
TECHNOLOGY (WUXI) CO. LTD.,
and RYOBI TECHNOLOGIES, INC.,

Case No.

16 C 6097

Judge Harry D. Leinenweber

Defendants.

MEMORANDUM OPINION AND ORDER
Defendants’

Motion

for

Leave

to

File

a

Revised

First

Amended Answer [ECF No. 258] is granted in part and denied in
part.

Defendants may amend their Answer to include the proposed

allegations, counterclaims, and inequitable conduct affirmative
defense relating to the ’966 patent, except for those charging
misrepresentation of ’966 patent claims and non-disclosure of
the

’676

prior

Defendants’

Motion

counterclaims,
patent.

art

and

patent.

with

respect

affirmative

The
to

Court
the

defenses

denies

proposed

as

futile

allegations,

concerning

the

’275

The Court also denies as futile leave to amend to

include the proposed patent misuse affirmative defense.

I.
A.

BACKGROUND

Procedural Background

Plaintiff Chamberlain Group, Inc. (“Chamberlain”) brought
this

litigation

Ryobi

garage

alleging

door

that

openers

certain

(“GDOs”)

patents it holds on GDO technology:

models

infringe

of

Defendants’

claims

of

two

U.S. Patent Nos. 7,224,275

(“the ’275 patent”) and 7,635,966 (“the ’966 patent”).

The ’275

patent recites a GDO featuring a wireless status condition data
transmitter that wirelessly relays status condition messages to
one or more remote peripherals, such as a smart phone.

The ’966

patent covers a GDO with a rechargeable, removable battery that
can

be

used

to

power

other

electrical

equipment

physically

separate from the GDO.
Defendants filed their first Answer and Counterclaims on
July 5, 2016 [ECF No. 50].

Several months later, Defendants

moved for leave to amend [ECF No. 154] based on Chamberlain’s
alleged

failure

Trademark
patent.

Office

to

disclose

(the

“PTO”)

to

the

prior

United
art

States

material

Patent
to

the

and
’966

On January 5, 2017, the Court denied Defendants’ Motion

because their proposed answer failed to allege adequately the
materiality of the withheld prior art.

(See, ECF No. 242 at 4-5

(citing Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312,
1329-30 (Fed. Cir. 2009)).)

- 2 -

On January 18, 2017, Defendants again moved for leave to
amend

[ECF

No.

258],

this

time

attaching

a

more

detailed

proposed answer and also alleging inequitable conduct in the
procurement

of

the

’275

patent.

Defendants

seek

to

add

affirmative defenses of inequitable conduct, patent misuse, and
unclean hands to infringement of both patents.

The proffered

affirmative defenses derive from Defendants’ allegations - fully
detailed

in

their

proposed

inequitable

conduct

and

antitrust

counterclaims - that Chamberlain procured the two patents at
issue

by

withholding

prosecution

and,

in

material
the

case

prior
of

the

art

from

’966

the

PTO

patent,

during

materially

misrepresenting the scope of certain claims.
B.

Factual Background

Defendants’ proffered Answer and Counterclaims contain the
following allegations.
an

engineer

who

Mr. James J. Fitzgibbon (Fitzgibbon”) is

holds

and

at

all

relevant

times

held

the

position of “Director of Intellectual Capital” at Chamberlain.
His

responsibilities

include

maintaining

the

company’s

patent

portfolio and working with inventors and patent counsel during
prosecution.
Chamberlain
Fitzgibbon

(ECF

No.

determines
meets

with

258-1
to

pursue

outside

application. (Id. ¶ 24.)

(“Ctrclm.”)

patent

a

¶

17,

patent

counsel

to

19.)

Once

application,
prepare

the

During prosecution, Fitzgibbon reviews

- 3 -

office

actions

and

assists

outside

counsel

in

responding

to

them. (Id. ¶ 25.)
1.

Prosecution of the ’275 Patent

Chamberlain filed the ’275 patent application on May 29,
2003,

the

issued

same

as

(Ctrclm.

day

U.S.

¶¶

15,

that

it

Patent

No.

20.)

The

filed

a

patent

7,071,813
’813

application

(“the

patent

’813

that

patent”).

discloses

a

movable

barrier opener that transmits status signals to reflect its own
operational states and a corresponding remote control apparatus
that

receives

such

signals

and

effects

a

variety

facilitated control strategies. (Id. ¶¶ 15, 35).

of

user-

On March 28,

2005, the Examiner rejected certain proposed claims of the ’813
patent

application,

No. ,388,559

to

finding

Cohen

barrier

operator
a

door

garage

anticipated

(“Cohen”).

that

whether

them

Cohen

transmits
or

lock

a

is

by

U.S.

Patent

a

movable

teaches

state

signal

opening,

open,

indicating
closing

or

closed. (¶¶ 16, 61-62.)
Fitzgibbon is the sole named inventor on both the ’275 and
’813

patents.

(Ctrclm.

¶

19.)

During

prosecution

of

these

patents, he reviewed copies of office actions with Chamberlain’s
outside patent counsel, Fitch, Even, Taben & Flannery (“Fitch
Even”),

and

had

access

therein, including Cohen.

to

the

prior

art

references

cited

Although Fitzgibbon admits that he

reviewed Cohen, he failed to disclose it to the Examiner during
- 4 -

prosecution of the ’275 patent. (Id. ¶¶ 30, 61-62.)

Just prior

to

Cohen,

the

rejection

of

the

’813

patent

claims

over

on

March 16, 2005, the Examiner issued a non-final rejection of the
proposed claims of the ’275 patent, finding them anticipated and
obvious in view of U.S. Patent No. 5,402,105 to Doyle, et al.
(“Doyle”).
Response,

(Id.

¶

34.)

Fitzgibbon

In

and

a

June

Fitch

21,

Even

2005

counsel

Office

Action

attempted

to

overcome the rejection by arguing that Doyle did not transmit
status condition signals corresponding to a present operational
status condition defined, at least in part, by at least two
operating states. (Id. ¶ 34.)

They did not disclose Cohen,

which the PTO had cited during prosecution of the ’813 patent as
teaching “automatically wirelessly transmitting a status signal
111 (i.e., state signal).” (Id. ¶¶ 36, 40.)
2.

Prosecution of the ’966 Patent

On behalf of Chamberlain, Mr. Kenneth Samples of Fitch Even
filed the ’966 patent application.
Mr.

Butler,

application

had
or

no
in

involvement
writing

the

in

Whereas the named inventor,
the

decision

application,

to

file

Fitzgibbon

the

again

played a prominent role both in reviewing Mr. Butler’s invention
disclosure

form

and

in

prosecution.

(Ctrclm.

¶¶

71-72.)

Fitzgibbon was also involved in prosecuting Chamberlain’s U.S.
Patent

App.

No. 7,786,619

No.

2003/0063715

(“the

’619

(“Peplinski”)

patent”),
- 5 -

of

which

and
he

U.S.
is

the

Patent
named

inventor. (Id. ¶ 73.)
Chamberlain

Fitzgibbon was also aware of a GDO line

developed

for

Sears

retail

stores

(“Craftsman”),

which practices the ’619 patent and was modified in the course
of developing the disclosures for the ’966 patent. (Id. ¶ 156.)
Defendants

allege

references,

that

whereas

Fitzgibbon

the

Fitch

had

Even

knowledge

lawyers

of

all

(Messrs.

four

Samples,

Peters, and Levstik) lacked knowledge of Craftsman. (Id. ¶ 159.)
In

a

May

11,

2009

Office

Action

Response,

Chamberlain,

through Fitzgibbon and attorney Nicholas Peters of Fitch Even,
amended the claims of the ’966 patent to overcome the Examiner’s
obviousness

rejection

No. 7,002,312

to

over

Wojciak

two

cited

(“Wojciak”)

No. 5,781,107 to Ji (“Ji”).

references,
in

view

U.S.
U.S.

of

Patent
Patent

(They had previously overcome a

rejection based on Wojciak in view of U.S. App. No. 2002/0180600
to Kirkland, et al. (“Kirkland”).)
does

not

teach

two

limitations

They argued that Wojciak

of

claim

1:

a

rechargeable

battery connected through circuitry to provide power to the head
unit of a barrier movement operator; and electrically powered
equipment other than and physically separable from the barrier
movement operator. (Id. ¶ 78.)

They further argued that Ji does

not disclose that (1) this equipment comprises “an apparatus for
receiving

the

at

least

equipment

can

be

powered

battery

to

perform

a

one

rechargeable

by

the

at

predetermined
- 6 -

battery

least

one

function,”

where

the

rechargeable
or

(2)

“the

rechargeable

battery

is

charged

movement operator.” (Ibid.)
claim 1.)

by

and

used

by

a

barrier

(Both of these are limitations of

In addition, they represented that claims 9 and 19 of

the ’966 patent contain limitations similar to that of claim 1
and argued for their patentability over Wojciak and Ji for the
same reasons. (Id. ¶¶ 79, 148.)

Those claims, in fact, do not

require the presence of such electrically powered equipment but
instead

relate

to

a

rechargeable

battery

“being

removably

connectable to” and “configured” to connect to such equipment.
(Id. ¶ 148.)
The

Examiner

issued

a

notice

of

allowance

on

August

8,

2009, stating that the prior art fails to disclose or suggest
the following limitations of claims 1, 9, 15, and 19:

“battery

charging station in electrical communication with at least one
rechargeable battery and in electrical communications with the
head unit to supply power”; “barrier movement operable [sic]
having
battery

head

unit”;

charging

“circuitry

station

to

electrically

supply

power

connected
from

the

to

at

the

least

rechargeable [sic] battery to the head unit [sic]”; “powered
equipment . . . physically
barrier

movement

separate

operator”;

and

or

separable

“perform

from

the

predetermined

function.” (Ctrclm. ¶ 80.)
In

sum,

no

one

involved

in

prosecuting

the

’966

patent

disclosed Peplinski, which describes a barrier movement operator
- 7 -

with

a

battery

discloses
system.

a

backup

barrier

system,

movement

or

the

operator

’619

with

a

patent,
backup

which
battery

Similarly, no one disclosed U.S. Patent No. 6,923,676

(“the ’676 patent”), which was previously cited against the ’619
patent as disclosing “a plug allowing the battery to be replaced
and the battery could be used with a moveable barrier operator”
and other electrically powered equipment. (Ctrclm. ¶¶ 114, 160.)
Further, Fitzgibbon did not disclose the Craftsman GDO, which
features

a

battery

backup

system

whose

batteries

can

be

interchanged with another GDO to open or close its garage door.
Indeed, Chamberlain and its counsel failed to disclose any prior
art reference in connection with the ’966 patent application.
(Id. ¶¶ 67, 74.)
II.

LEGAL STANDARD

A plaintiff may amend its complaint “only with the opposing
party’s written consent or the court’s leave.”
P. 15(a)(2).

This

leave

should

“always” or “automatically.”

be

“freely

FED. R. CIV.

given,”

but

not

Hukic v. Aurora Loan Servs., 588

F.3d 420, 432 (7th Cir. 2009); see also, Crest Hill Land Dev.,
LLC

v.

City

of

Joliet,

396

F.3d

801,

804

(7th

Cir.

2005).

District courts have broad discretion to deny leave to amend
where there is undue delay, bad faith, dilatory motive, repeated
failure to cure deficiencies, undue prejudice to the non-movant,
or where amendment would be futile.
- 8 -

Hukic, 588 F.3d at 432

(quotation

omitted);

see

also,

Independent

Trust

Corp.

v.

Stewart Info. Servs. Corp., 665 F.3d 930, 943 (7th Cir. 2012).
An amendment is futile if the amended claims could not survive a
Rule

12(b)(6)

motion

to

dismiss.

See,

Arlin-Golf,

LLC

v.

Village of Arlington Heights, 631 F.3d 818, 822-23 (7th Cir.
2011).
To

survive

a

Rule

12(b)(6)

motion,

“the

complaint

must

contain sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face.”

Independent

Trust, 665 F.3d at 934 (internal quotation marks omitted).

The

issue is not whether the claimant will ultimately prevail but
whether it is entitled to offer evidence to support the claims.
AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011)
(quotation omitted).

Indeed, an asserted claim “need not be

probable, only plausible:

‘a well-pleaded complaint may proceed

even if it strikes a savvy judge that actual proof of those
facts is improbable, and that a recovery is very remote and
unlikely.’”
Atl.

Corp.

plausibility
requirement,

Independent Trust, 665 F.3d at 935 (citing Bell
v.

Twombly,

standard,
“asks

for

550

U.S.

while
more

not

than

defendant has acted unlawfully.”

a

544,

556

(2007)).

akin

to

a

sheer

possibility

The

probability
that

a

Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009) (citation omitted).

Where a complaint pleads

facts that are merely consistent with liability, it “stops short
- 9 -

of the line between possibility and plausibility.” Id. (internal
quotation marks omitted).
III.
A.
“Patent

DISCUSSION

Inequitable Conduct

applicants

have

a

duty

to

prosecute

patent

applications in the PTO with candor, good faith, and honesty.”
Advanced Magnetic Closures, Inc. v. Rome Fastener Corp., 607
F.3d 817, 829 (Fed. Cir. 2010) (internal quotation marks and
alteration omitted); see also, 37 C.F.R. § 1.56(a).
this

duty

material

–

“including

facts,

submission

of

failure
false

affirmative

to

disclose

material

Breach of

misrepresentations

material

information

–

information,
coupled

intent to deceive, constitutes inequitable conduct.”

with

of
or
an

Honeywell

Int’l Inc. v. Universal Avionics Sys. Corp., 488 F.3d 982, 999
(Fed. Cir. 2007).
two elements:
prosecution

An inequitable conduct claim therefore has

“(1) an individual associated with the filing and

of

a

patent

application . . . failed

to

disclose

material information” to the PTO; and “(2) the individual did so
with a specific intent to deceive” the PTO.
at 1327 n.3.

Exergen, 575 F.3d

Federal Circuit law governs whether the facts

alleged suffice to plead inequitable conduct. Id. at 1318.
Concerned that inequitable conduct could “devolve into a
magic incantation to be asserted against every patentee,” the
Federal

Circuit

requires

that

inequitable

- 10 -

conduct

be

pleaded

with particularity under Rule 9(b).
27,

1331.

elements

“A
of

pleading

inequitable

particularized

factual

that

Exergen, 575 F.3d at 1326-

simply

conduct,
bases

avers

without

for

the

satisfy Rule 9(b).” Id. at 1326-27.

the

substantive

setting

forth

allegation,

the

does

not

Support for an inequitable

conduct claim requires “[a] reasonable inference . . . that is
plausible and that flows logically from the facts alleged.” Id.
at 1329 n.5.

Chamberlain

motion is untimely.
Defendants

fail

first

contends

that

Defendants’

More substantively, Chamberlain argues that

to

plead

both

the

materiality

and

intent

elements of the inequitable conduct counterclaims.
1.
Defendants

first

October 31, 2016.
proposed Answer

Timeliness

sought

leave

to

amend

the

Answer

on

Although the allegations in Defendants’ new

with

respect

to

the

’966

patent

are

largely

consistent with their prior Motion, Defendants have added an
entirely new inequitable conduct counterclaim based on the ’275
patent.

Defendants claim that, in light of the December 2016

deposition of James Fitzgibbon, they injected the ’275 patent
inequitable

conduct

affirmative

defenses.

Chamberlain

argues

counterclaim

and

(ECF

(“Defs.’

that

No.

both

258

counterclaims

unduly prejudicial.

- 11 -

the

corresponding
Mot.”)

are

at

2.)

untimely

and

The Court sees no reason to dismiss the inequitable conduct
counterclaims for untimeliness.
not

yet

been

(typically
lessens

an

the

imposed,
arduous

and

First, a discovery cutoff has

the

fact

enterprise)

opportunity

cost

inequitable conduct issues.

that

of

is

Markman

already

briefing

complete

additional

only

discovery

on

Second, in seeking leave to amend,

Defendants have not spurned a court-imposed deadline.

Indeed,

Defendants’ Federal Circuit appeal largely mooted the Court’s
original

scheduling

order,

and

the

Court

postponed

Markman

activities and the trial date as a result. (See, ECF No. 217.)
The result is no different simply because Defendants have
already sought and been denied leave to amend the Answer to add
’966 patent inequitable conduct allegations.
engage

the

without

untimeliness

more,

attorneys’

arguments

Defendants’

identities

and

advanced

knowledge

prior

art

The Court did not

of

there
the

references

because,

prosecuting
a

few

months

before moving to amend does not clearly amount to undue delay.
Cf., e.g., Continental Bank, N.A. v. Meyer, 10 F.3d 1293, 129798 (7th Cir. 1993) (upholding denial of motion to amend when the
defendant

was

in

possession

amendment

was

based

for

of

more

facts

than

two

on

which

years);

the

proposed

Collaboration

Properties, Inc. v. Tandberg ASA, No. 05 C 1940, at *2 (N.D.
Cal. Jan. 25, 2007) (rejecting an untimeliness argument where
the defendant possessed “nearly all of the evidence it now cites
- 12 -

in support of its proposed inequitable conduct defense for more
than a year”); Inline Connection Corp. v. AOL Time Warner Inc.,
237 F.R.D. 361 (D. Del. 2006) (denying leave to amend where the
defendants admittedly had all the information necessary to plead
new inequitable conduct allegations over two years before the
proposed amendments were filed).

And far from delaying unduly,

Defendants refiled their revised amended answer within two weeks
of the Court’s order denying leave.
The

likelihood

particularly

where

of
“the

prejudice

is

availability

similarly
of

the

minimal,

information

regarding inequitable conduct is primarily within the control of
[Chamberlain].”

Cordance Corp. v. Amazon.com, Inc., 255 F.R.D.

366, 373 (D. Del. 2009).

Further, Chamberlain has known of

Defendants’ intent to add inequitable conduct issues into this
case for nearly six months, and it is litigating Defendants’
inequitable conduct charges in a parallel ITC proceeding.

The

Court appreciates that the allegations there may well implicate
patents and withheld prior art that are not at issue in this
case.

(See,

ECF

No.

308

at

2.)

However,

the

relevant

individuals from whom discovery may be necessary appear to be
substantially the same across both proceedings.
Therefore,

the

Court

finds

that

Defendants’

Motion

is

timely as to the proposed inequitable conduct counterclaims and
affirmative defenses.
- 13 -

2.
a.

Futility
Materiality

To satisfy Rule 9(b) as to materiality, a pleading must set
forth

the

“who,

what,

misrepresentation

or

when,

where,

omission

and

how

committed

of

the

before

material

the

PTO.”

Exergen, 575 F.3d at 1327 (citing DiLeo v. Ernst & Young, 901
F.2d 624, 627 (7th Cir. 1990)).

Information withheld from the

PTO is material only when “the PTO would not have allowed a
claim

had

it

been

aware

of

the

undisclosed

prior

art.”

Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276,
1291 (Fed. Cir. 2011) (en banc).
Prior

art

disclosures

are

“not

material

if

[they

are]

cumulative of other information already disclosed to the PTO.”
Honeywell, 488 F.3d at 1000; see also, Exergen, 575 F.3d at
1329-30 (“[T]he pleading . . . does not identify the particular
claim limitations, or combination of claim limitations, that are
supposedly

absent

from

the

information

of

record.

Such

allegations are necessary to explain both ‘why’ the withheld
information
examiner

is

would

patentability

material
have

of

the

used

and

not

this

claims.”);

cumulative,

information
37

C.F.R.

in
§

and

‘how’

assessing
1.56(b).

an
the
This

Court, along with others in this Circuit, rejects the notion
that Exergen requires blind formalism, such as inclusion in the
pleadings of the word “non-cumulative.”
- 14 -

See, e.g., Bone Care

Int’l, LLC v. Pentech Pharms., Inc., No. 08 C 1083, 2010 WL
1655455, at *6 (N.D. Ill. Apr. 23, 2010).
I.

The ’275 patent

The Court first notes that Defendants have adequately met
the “who,” “what,” “when,” and “where” prongs of Exergen.

They

have identified relevant individuals by name, a specific office
action response Chamberlain filed on a specific date, withheld
prior art (i.e., Cohen), relevant disclosures therein, and at
least claim 1 of the ’275 patent (as what would otherwise not
have issued).

Chamberlain does not contest that Defendants meet

these prongs of Exergen.

Rather, it argues that Defendants fail

to identify “how the allegedly withheld prior art is material
over the prior art technology considered by the examiner during
prosecution . . . and identified on the face of the ’275 patent
and/or the specific features that Cohen adds that TTI contends
were not already present in the prior art of record.”

(ECF

No. 272 (“Pl.’s Opp.”) at 2.)
Defendants

make

only

a

few

“how” and “why” of materiality.

allegations

relevant

to

the

First, they state that the PTO

rejected certain claims of the ’813 patent as anticipated by
Cohen’s disclosure of “automatically wirelessly transmitting a
status

signal

111

(i.e.,

state

signal).”

(Ctrclm.

¶

40.)

Second, they allege that Chamberlain in a June 21, 2005 Office
Action Response distinguished prior art cited against the ’275
- 15 -

patent application (such as Doyle) by arguing that “it did not
involve transmission of state signals” but without disclosing
Cohen.

(Id.

¶¶

Chamberlain’s

41-42.)

agents

Third,

“kn[ew]

according

that

to

Cohen

Defendants,

disclosed

the

transmission of state signals” and that the ’275 patent would
not have issued “[b]ut for the failure of Mr. Fitzgibbon through
CGI’s attorneys at Fitch Even to disclose Cohen to the PTO.”
(Id. ¶¶ 42, 57.)
The

Court

finds

that

these

allegations

are

insufficient

under Exergen because there is no factual basis whatsoever from
which to infer that Cohen’s disclosures are non-cumulative.
Smith

Plastics

Limited

v.

Plascon

Packaging,

Inc.,

No.

DS

15

C

5760, 2016 WL 69632 (N.D. Ill. Jan. 6, 2016), is not to the
contrary.
agents

There the defendants alleged that the plaintiff’s

during

asserting

prosecution

novelty

of

an

amendment

patent

the

filed

at

issue,

and

prior

response
to

which

“claims 1 and 11 did not issue, while after the [challenged]
assertion of novelty, they did.” Id. at *5.
Defendants

nakedly

that

Chamberlain’s

’275

patent

claim 1.
other

claims

assert

without

omission
over

of

Doyle

associated

Cohen
caused

when
the

Here, however,
factual

support

distinguishing
Examiner

to

allow

Pleading such facts with particularity is crucial:

references

before

the

Examiner

contain

the

if

disclosures

cumulative of Cohen’s, then failure to disclose Cohen was not
- 16 -

material

to

patentability.

See,

e.g.,

Exergen,

575

F.3d

at

1329-30; Nalco Co. v. Turner Designs, Inc., No. 13 C 2727, 2014
WL

645365,

Turner’s
showing

at

*5

(N.D.

proposed
that

Cal.

amendment

the

’380

Feb.

and

19,

2014)

patent

reply
was

brief

not

(“Absent
are

from

any

facts

of

other

cumulative

references before the PTO.”); Aevoe Corp. v. AE Tech. Co., LTD.,
No. 12 C 53, 2013 WL 876036, at *8 (D. Nev. Mar. 7, 2013) (“[T]o
satisfy the ‘why’ component, Defendants’ counterclaim must also
plead with particularity that the withheld information is not
cumulative

of

prosecution.
counterclaim.”).

the

information

Such

facts

Both

the

actually

are
face

absent
of

the

disclosed
from

’275

during

Defendants’

patent

and

the

prosecution history suggest that this, in fact, was precisely
the case.
Besides Doyle, the face of the ’275 patent lists dozens of
prior art references that the Examiner cited during prosecution.
Immediately following the maligned June 21, 2005 Office Action
Response,

the

including

claim

1,

arguments

as

based

Examiner
by

rejected
curtly

“moot

in

the

’275

dismissing
view

of

patent

Chamberlain’s

the

new

claims,
Doyle-

ground(s)

of

rejection” – “anticipat[ion] by either Morris or Chang, newly
cited.”

App. No. 10/447,663 File History, Sept. 2, 2005 Office

Action, at 2, 5.

The Examiner interpreted Morris to show:

- 17 -

[T]he movable barrier operator 112 that includes a
controller
18
having
a
plurality
of
potential
operational status conditions, defined at least in
part by a plurality of operating states 12, 14, 16,
48; . . . and a wireless status condition data
transmitter, col. 4, lines 42-44, that transmits a
status condition signal that corresponds to a present
operational status condition defined at least in part,
by at least two operating states from the plurality of
operating states, see col. 5, lines 5-13 and 37-55.
Id. at 2-3.

Similarly, the Examiner read Chang to disclose “the

movable barrier operator comprising a controller having plural
operating states as defined by the movable barrier interface
sensor 20 wherein a wireless transmitter 51 transmits the status
signals to a remotely located receiver, see figure 5.” Id. at 3.
Therefore,

it

is

simply

not

plausible

that

disclosing

Cohen

would have changed anything, because the Examiner rejected the
’275 patent claims based on references with disclosures that are
apparently

identical

attribute to Cohen.
important

that

in

relevant

part

to

those

Defendants

In this factual milieu, it is all the more

Defendants

plausibly

allege

“how”

Cohen’s

purportedly anticipating disclosure of “automatically wirelessly
transmitting a status signal 111 (i.e., state signal)” was not
cumulative of the other prior art before the Examiner.
Defendants also fall short by failing plausibly to allege
how

the

Examiner

Defendants’
claim 1’s

would

proposed
first

have

answer

limitation

deployed
only

that

- 18 -

Cohen.

states
Cohen

For

with

discloses

example,

respect
a

to

“remote

control

apparatus”

that

is

“capable

of

transmitting

a

state

signal 111,” which indicates “whether a door 140, which may be a
garage door, is opening, open, closing or closed.”
¶¶ 46-47.)

(Ctrclm.

Therefore, Cohen’s state signal indicates only one

status – that of the garage door. But the first limitation of
claim

1

of

the

’275

patent

recites

a

“controller

having

a

plurality of potential operational status conditions,” such as
those related to the garage door, the operating lights, vacation
mode, etc. (’966 patent at 8:6-7; 4:5-45 (emphasis added).)
anticipate,

a

single

reference

must

limitation of a challenged claim.

disclose

each

and

To

every

See, e.g., Verdegaal Bros. v.

Union Oil Co. of California, 814 F.2d 628, 631 (Fed. Cir. 1987).
Defendants have not plausibly alleged that such is the case with
Cohen, and they have not remedied the problem by identifying any
other

prior

Cohen

in

art

an

with

which

obviousness

the

Examiner

rejection.

would

Because

have
even

combined
accepting

Defendants’ allegations does not sufficiently “put [Chamberlain]
on notice as to . . . how that information would have changed
the
fail

examiner’s
to

make

decision
an

regarding”

adequate

patentability,

materiality

showing.

Defendants
Cumberland

Pharms., Inc. v. Mylan Institutional LLC, No. 12 C 3846, 2012 WL
6567922, at *6 (N.D. Ill. Dec. 14, 2012).
Therefore,
concerning

the

Cohen’s

Court

finds

materiality

to

- 19 -

that
the

Defendants’
’275

patent

allegations
would

not

survive a Rule 12(b)(6) motion to dismiss.

Defendants fail to

plead adequately the “how” and/or “why” elements of materiality.
This is “especially” problematic where Defendants “have had the
benefit of extensive discovery.”

Waters Indus., Inc. v. JJI

Int’l, Inc., No. 11 C 3791, 2012 WL 5966534, at *6 (N.D. Ill.
Nov. 28, 2012).

As such, the Court denies as futile leave to

amend Defendants’ Answer to add inequitable conduct affirmative
defenses or counterclaims based on fraud in the procurement of
the ’275 patent.
II.

The ’966 patent

As for the ’966 patent, the Court again first notes that
Defendants have adequately met the “who,” “what,” “when,” and
“where” prongs of Exergen.
several

relevant

Peters,

and

Their proposed answer identifies

individuals

Livstik),

by

specific

name

(at

office

least

action

Fitzgibbon,

responses

that

Chamberlain filed on certain dates, where the withheld prior art
references (i.e., Peplinski, the ’619 patent, the ’676 patent,
and

Craftsman)

patent,

the

disclose

nature

of

information

alleged

pertinent

affirmative

to

the

’966

misrepresentations,

and at least claim 9 as the subject matter of the ’966 patent
that would not have issued but for the challenged conduct.
Chamberlain

does

prongs of Exergen.

not

contest

that

Defendants

meet

these

As it did with respect to the ’275 patent,

however, Chamberlain disputes Defendants’ showing of “why” and
- 20 -

“how

the

allegedly

withheld

prior

art

is

material

and

non-

cumulative of the ’966 patent’s teaching that GDOs with backup
batteries

were

Chamberlain

known.”

does

misrepresentation
asserts

that

(ECF

not

No.

272

appear

to

allegations.

Defendants

(“Pl.’s
respond

to

Chamberlain

have

simply

Opp.”)

2.)

Defendants’

more

revised

at

generally

their

prior

inadequate allegations “to add invalidity contentions for the
allegedly
pleading

withheld
standard

prior

art,”

required

flunking

show

to

thus

but-for

the

heightened

materiality

and

intent. (Ibid.)
Overcoming the inadequacies explored above with respect to
the ’275 patent allegations, Defendants have adequately pleaded
materiality

of

the

withheld

prior

art

to

the

’966

patent.

First, Defendants have alleged facts plausibly showing that the
references

before

the

Examiner

did

not

contain

disclosures

cumulative of those in the four withheld references.

See, e.g.,

Exergen, 575 F.3d at 1329-30.

The ’966 patent examiner allowed

the

action

claims

conduct.

in

the

very

next

following

the

challenged

During prosecution of the ’275 patent, by contrast,

the Examiner followed the Office Action Response that Defendants
claim should have disclosed Cohen by mooting all the arguments
raised

therein

references
Cohen.

and

instead

containing

citing

ostensibly

against
equivalent

the

’275

patent

disclosures

to

In addition, the face of the ’966 patent only lists the
- 21 -

three references (Ji, Wojciak, and Kirkland), all of which were
distinguished prior to or during the challenged Office Action
Response.

As

in

DS

Smith,

Defendants

have

pointed

to

an

amendment and response – in which Chamberlain’s agents asserted
patentability over the three cited prior art references - “prior
to which” the claims did not issue but after which “they did.”
DS Smith, 2016 WL 69632 at *5.
Second,

no

apparent

lacuna

in

Defendants’

pleading

forestalls effective notice to Chamberlain of how the withheld
references

would

have

changed

the

Examiner’s

decision.

In

contrast to their allegations regarding procurement of the ’275
patent,

Defendants

include

in

their

’966

counterclaim

quotes

from the notice of allowance clearly indicating what limitations
the Examiner found missing from the cited prior art – many of
which Defendants allege are disclosed in the four withheld prior
art references. (Ctrclm. ¶ 80.)

This suffices to plead the

“why”

inequitable

and

“how”

of

Chamberlain’s

conduct.

See,

e.g., Weber-Stephen Products LLC v. Sears Holding Corp., No. 13
C 1686, 2014 WL 656753, at *5 (N.D. Ill. Feb. 20, 2014) (finding
the “why” and “how” of materiality adequately pleaded where the
Examiner’s
defendant’s

reasons

for

allegations

allowance
about

were

what

incompatible

the

withheld

disclosed); Sloan, 2012 WL 1108129 at *6, 9 (same).

- 22 -

with

the

prior

art

Similarly, Defendants have adequately pled the “how” and
“why”

of

materiality

misrepresentations.

with

respect

Defendants

allege

to
that

the

alleged

Fitzgibbon

and

Peters made no argument relative to claims 9 and 19 independent
of their argument with respect to claim 1 that Wojciak and Ji do
not disclose the electrically powered equipment other than and
separate

or

separable

Instead,

they

from

requested

the

that

barrier
the

movement

Examiner

operator.

withdraw

its

rejections over Wojciak and Ji simply because “[c]laims 9 and 19
contain

limitations

No. 10/447,663

File

Response, at 10.

similar

to

History,

that

May

11,

of

claim
2009

1.”

App.

Office

Action

However, as Defendants note, claims 9 and 19

do not require the presence of electrically powered equipment.
Defendants also claim that the withheld prior art discloses this
limitation of claim 1.

Crucially, Defendants’ allegation that

the cited misrepresentations in the May 11, 2009 Office Action
Response led to issuance of the patent at issue, is supported by
the Examiner’s ensuing allowance of the subject claims.

Cf.

Courtesy Products LLC v. Hamilton Beach Brands, Inc., No. 13 C
2012, 2015 WL 6159113, at *6 (D. Del. Oct. 20, 2015), adopting
recommendation, 2016 WL 354745, at *1 (D. Del. Jan. 28, 2016)
(conditioning materiality of misrepresentations on allegations
that they were the but-for cause of allowance and on whether the
examiner allowed or rejected the subject claims in the ensuing
- 23 -

office

action).

allowance

That

immediately

the

Examiner

following

issued

these

the

statements

notice

of

adequately

establishes the “how” and “why” of materiality.
Finally,

the

Court

rejects

Chamberlain’s

argument

that

disclosure in the ’966 patent prior art background section of a
barrier

movement

establishes

operator

cumulativeness

with
of

the

a

battery

withheld

backup

system

references.

The

specification’s terse summary of the state of “current barrier
movement

operators”

Defendants

claim

is

were

not

as

extensive

withheld.

As

as

far

the

as

disclosures

the

Court

can

discern, the only relevant background statements from the ’966
patent are:

first, “[s]ome current barrier movement operators

can be powered via a backup battery”; second, “[t]hese battery
backups are independent items which are typically used only for
operating the barrier movement operator”; and third, “[t]hese
systems require some method to recharge the batteries either
built into the operator or as an additional power supply for
battery charging.” (’966 patent at 1:31-42.)
references,

however,

generally

describe

The four withheld

stand-alone

battery

back-up units that are physically separate pieces of equipment
capable of being plugged into the head unit either to receive
power from it or serve as a battery back-up.
describe

how

the

same

units

can

be

removed

They further
and

used

with

multiple GDOs and how these units contain electrical components
- 24 -

and equipment that are powered by the back-up battery.
ECF

No.

282

describe

(“Defs.’

certain

“circuitry”

Reply”)

aspects

connecting

of

the

at

9-10.)

the

head

In

addition,

technology,

unit

and

a

(See,

such

they

as

battery

the

charging

station, that constitute limitations of claim 9 but are entirely
absent from the background section.

(See, e.g., Ctrclm. ¶¶ 110-

112, 123-125, 142-145; ’966 patent at 8:19-21 (claim 9).)

These

alleged disclosures are not only richer and more extensive than
the

summary’s

contradict

the

description;
summary.

at

times

(Compare,

they
e.g.,

even

appear

Ctrclm.

¶

to
122

(describing how the ’676 patent’s rechargeable backup battery
can be used to power “any number of electronic devices”); with
’966 patent at 1:37-39 (“These battery backups are independent
items which are typically used only for operating the barrier
movement operator.”).)
The cases Chamberlain cites are inapposite because they all
concern proof of inequitable conduct after the presentation of
evidence.

See, e.g., Andrew Corp. v. Gabriel Elecs., Inc., 847

F.2d 819, 824 (Fed. Cir. 1988) (“We affirm the district court’s
conclusion that inequitable conduct has not been proved by clear
and convincing evidence.”); Vandenberg v. Dairy Equip. Co., 740
F.2d 1560, 1568 (Fed. Cir. 1984) (“The proof here falls short of
the

clear

and

convincing

evidence

needed

to

prove

fraud.”);

Bayer AG v. Housey Pharms., Inc., 128 Fed.Appx. 767 (Fed Cir.
- 25 -

2005) (appeal after declaratory judgment); Berry Plastics Corp.
v. Intertape Polymer Corp., No. 10 C 76, 2016 WL 4486182, at *13
(S.D. Ind. Aug. 25, 2016) (“Berry has failed to prove, by clear
and convincing evidence, that the Applicants withheld the prior
art. . . .”).
must

allege

fact,

some

Such cases are not instructive on what Defendants
under
of

Exergen

these

to

cases

plead

inequitable

actually

undercut

conduct.

In

Chamberlain’s

argument, either because they state that prior art not made of
record before the PTO is inherently not cumulative, Berry, 2016
WL 4486182 at *12, or because they concern withheld references
that were disclosed by name in the patent specification, which
is clearly not the case here.

See, Bayer AG, 128 Fed.Appx. at

770 (“Dr. Housey did not knowingly withhold the Uehara 1985 and
Hsiao 1986 references from the PTO.

He clearly disclosed them

by including them in the ’281 patent’s specification.”).

At the

pleading stage, Chamberlain cannot taint undisclosed prior art
references

with

cumulativeness

based

purely

on

generic

descriptions of prior art technology in the specification.
Because Defendants have alleged the “who,” “what,” “where,”
“when,” “how,” and “why” of the challenged conduct, the Court
finds that Defendants have adequately pleaded materiality under
Exergen with respect to the ’966 patent.

- 26 -

b.

Intent

“[A] pleading of inequitable conduct under Rule 9(b) must
include sufficient allegations of underlying facts from which a
court may reasonably infer that a specific individual (1) knew
of the withheld material information or of the falsity of the
material misrepresentation, and (2) withheld or misrepresented
this information with a specific intent to deceive the PTO.”
Exergen, 575 F.3d at 1328-29. Because an uncited reference “may
be many pages long, and its various teachings may be relevant to
different applications for different reasons . . . one cannot
assume that an individual, who generally knew that a reference
existed,

also

contained

in

knew
that

of

the

specific

material

Id.

1330

reference.”

at

information
(emphasis

in

original).
After Therasense, courts “can no longer infer intent to
deceive from non-disclosure of a reference solely because that
reference was known and material.”
Arts,

Inc.,

694

F.3d

1367,

1372-73

Therasense, 649 F.3d at 1290).

1st Media, LLC v. Elec.
(Fed.

Cir.

2012)

(citing

While the inference of deceptive

intent need not be the “single most reasonable” inference, it
must be plausible and flow from the facts alleged.

Itex, Inc.

v. Westex, Inc., 2010 WL 2901793, at *2 (N.D. Ill. July 21,
2010) (citing Exergen, 575 F.3d at 1329 n.5).

- 27 -

I.
As

discussed

The ’275 patent

above,

Defendants’

inequitable

conduct

allegations with respect to procurement of the ’275 patent are
wanting

in

materiality.

Nonetheless,

the

Court

analyzes

specific intent as an independent and alternative ground for
denying leave to amend.
Defendants allege on information and belief that Fitzgibbon
“acted with specific intent to deceive the PTO when withholding
the Cohen reference.” (Ctrclm. ¶¶ 58, 63.)
aver

specific

intent

based

on

While permissible to

information

and

belief,

the

pleading must set forth the specific facts on which the belief
is

reasonably

based.

Exergen,

575

F.3d

at

1330-31.

Those

specific facts are that Fitzgibbon reviewed Cohen at some point,
was aware that the PTO cited it against the ’813 patent, and
worked with Fitch Even during prosecution of both the ’813 and
’275

patents

¶¶ 61, 64.)

to

review

and

respond

to

office

actions.

(Id.

In response, Chamberlain argues that Defendants

fail Exergen by alleging mere knowledge of Cohen on the part of
Fitzgibbon and nothing beyond simple non-disclosure to the PTO.
Chamberlain

also

points

to

testimony

from

Fitzgibbon

to

the

effect that he did not believe Cohen contained information that
was

material

Defendants

to

have

the

’275

failed

to

patent.
plead

The
facts

Court
giving

finds
rise

that
to

a

reasonable belief that Fitzgibbon, to the extent he was aware of
- 28 -

Cohen, both knew that it contained disclosures material to the
’275 patent and withheld it from the PTO during prosecution with
the specific intent to defraud the PTO.
Defendants’

allegations

that

Fitzgibbon

knew

of

the

materiality of Cohen to the ’275 patent claims are implausible
in

light

of

deposition,

discovery

Fitzgibbon

already

obtained.

testified

At

extensively

his

that

second

he

viewed

Cohen as disclosing “an independent device” separate and apart
from a “conventional movable barrier operator” that was capable
only of identifying the state of the garage door (and not other
states of the GDO controller). (Fitzgibbon Tr. 265:2-6, 266:20267:4,

274:24-275:11,

Fitzgibbon

did

not

276:5-7,

expressly

281:6-12.)

employ

the

To

words

the

extent

“material”

or

“immaterial” to describe Cohen, the thrust of his testimony is
clear

enough

intent

to

implicate

inadequately

deposition

pled

testimony

Waters,

where

that

the

in

which

the

prosecuting

withholding

of

court

found

attorney

the

gave

prior

art

references at issue stemmed from his assessment that they were
not

material.

Defendants

See,

premise

Waters,
the

need

2012

WL

for

an

5966534

at

amended

*6.

That

complaint

on

Fitzgibbon’s testimony (see, Defs.’ Mot. at 2 (“Based on Mr.
Fitzgibbon’s admissions, TTI has amended its Affirmative Defense
of

Inequitable

include

the

Conduct

’275

and

counts

patent.”),

for

obviates

- 29 -

fraud
their

on

the

PTO

argument

to

that

evaluating his testimony here impermissibly encroaches on the
merits.
DS Smith is in accord.
individuals

associated

There, the defendants alleged that

with

the

plaintiff

had

“directed

the

filing” with the PTO of some of the references that they later
failed to disclose.

DS Smith, 2016 WL 69632 at *6 (describing

their “oversight of the application filing of many of the prior
art

references”).

combined

with

The

court

found

that

individuals’

involvement

patent

plaintiff’s

the

applications

and

in

this
in

allegation,

other

responding

to

of

the

office

actions, gave rise to a plausible inference that they knew that
the withheld prior art references were material to patentability
of the patent at issue.
that

Fitzgibbon

application,

Here, however, there is no indication

directed

and

thus

DS

the

filing

Smith

does

of
not

the

Cohen

support

patent

Defendants’

allegation that he knew of specific information in Cohen that
was

material

allegations

to

only

the

’275

support

a

patent.

Instead,

reasonable

inference

Defendants’
of

general

knowledge of Cohen coupled with mere non-disclosure.
Even

if

the

Court

ignores

Fitzgibbon’s

deposition

testimony, the weight of case law would still counsel against
validating Defendants’ allegations of scienter.
situation

like

that

presented

in

This is not a

Cumberland,

where

the

“inference of intent” was “bolstered . . . by allegations that
- 30 -

the

withheld

references

were

not

simply

known

to

[the

named

inventor and overseer of drug development at Cumberland], but
were also previously relied upon by Cumberland and/or the FDA
for the approval of the NDA filed for Acetadote [a commercial
embodiment encompassed by the patent at issue].”
2012

WL

6567922

scenario

akin

Pharms.,

Inc.,

at

to

*11-12.

that

No.

08

Nor

have

Defendants

in

Bone

Care

Int’l,

C

1083,

2010

WL

LLC

1655455

Cumberland,
presented
v.

a

Pentech

(N.D.

Ill.

Apr. 23, 2010), where the intent allegations satisfied Exergen.
The defendants in that case alleged that two patent attorneys
involved in prosecution of the patent at issue “previously had
cited

the

specific

omitted

material

earlier patent applications.”

in

connection

with

the

Bone Care, 2010 WL 1655455 at *5.

In contrast to Cumberland and Bone Care, Defendants have not
alleged that Chamberlain submitted Cohen in an attempt to gain
intellectual property protection, cited Cohen in connection with
earlier patent applications, or otherwise deployed Cohen in its
service.

Rather, Defendants merely allege that Fitzgibbon was

aware

and

of

at

some

point

reviewed

Cohen

because

it

was

asserted against the separate ’813 patent.
For

these

reasons,

Defendants

fail

to

plead

facts

supporting a reasonable inference that Fitzgibbon had knowledge
of

Cohen’s

allegedly

material

information

and

intended to defraud the PTO by not disclosing it.
- 31 -

specifically
As such, the

Court denies as futile Defendants’ motion to amend with respect
to the ’275 patent on the independent ground that they fail to
plead scienter adequately under Exergen.
II.
The

Court

finds

The ’966 patent

Defendants’

’966

allegations

sufficient

under Exergen to plead specific intent to defraud the PTO, at
least

as

to

references.

the

Peplinski,

’619

patent,

and

Craftsman

First, Defendants have sufficiently alleged that

the accused individuals had detailed knowledge of Peplinski and
the

’619

patent

by

virtue

of

earlier filing with the PTO.

their

role

in

directing

their

Samples, at least, had detailed

knowledge of Peplinski because he prosecuted that application
before the PTO.

Fitch Even also prosecuted the ’619 patent

application on behalf of Chamberlain.

Defendants claim that

Fitzgibbon helped develop Peplinski, which was also cited during
prosecution

of

the

’619

patent

(for

which

Fitzgibbon

is

the

named inventor), and that Chamberlain owns both Peplinski and
the ’619 patent.

Thus, Defendants do not plead “only that the

applicants had general knowledge of the [four] undisclosed prior
art references or . . . simply ‘had become aware’ of the prior
art

references.”

omitted).

Rather,

DS
as

Smith,
in

DS

2016

WL

Smith,

69632
the

at

*6

accused

(quotation
individuals

“directed the filing of some of the uncited references with the
PTO” – specifically, Peplinski and the ’619 patent. Id.
- 32 -

The

Craftsman

allegations

similarly

go

knowledge or general awareness of a reference.

beyond

mere

Defendants claim

that Chamberlain designed and manufactured the Craftsman GDO for
Sears with Fitzgibbon’s help, that the Craftsman GDO practices
the ’619 patent, and that it was used as a test platform for
developing
knowledge

the
of

’966

patent

Craftsman’s

technology.

material

Inferring

disclosures

specific

based

on

such

intimate familiarity with the reference is reasonable and a far
cry from Exergen’s prohibitions.
Additionally,
procurement

of

Defendants’

the

’966

allegations

patent

much

more

with

respect

to

track

the

closely

sufficient allegations in Cumberland than do their ’275 patent
allegations.

Unlike the third-party Cohen reference, Fitzgibbon

oversaw crucial aspects of the development of Peplinski, the
’619 patent, and the Craftsman GDO.
*11-12.

See, 2012 WL 6567922 at

Indeed, Chamberlain, through Fitzgibbon and the Fitch

Even individuals, submitted the first two of these references
for

the

purpose

of

gaining

intellectual

property

protection.

Therefore, Defendants have adequately pleaded facts that, when
combined

with

their

allegations

on

information

and

belief,

support the reasonable inference that the identified individuals
knew

of

the

specific

material

information

references.

- 33 -

in

the

withheld

The

Court

finds,

however,

that

Defendants’

intent

allegations with respect to the ’676 patent are too weak to meet
Exergen’s demands.

Defendants allege only that the ’676 patent

was cited during prosecution of the ’619 patent as disclosing a
plug allowing replacement of the battery, which could be used
with

a

movable

involvement

of

barrier

the

operator.

accused

persons

Notwithstanding
in

prosecuting

the

the
’619

patent, such allegations approximate those concerning Cohen and
fail for all the same reasons.
are

even

Fitzgibbon

weaker.

Whereas

reviewed

Cohen,

respect to the ’676 patent.

In fact, the allegations here

Defendants
there

is

no

at

least

such

allege

that

allegation

with

Instead, Defendants claim only that

Fitzgibbon and the other individuals must have known of the ’676
patent’s

specific

material

information

because

the

Examiner

cited the ’676 patent as prior art during prosecution of the
’619 patent.

Thus, Defendants have only alleged the mere fact

of these individuals’ involvement in a patent prosecution during
which a third-party patent was cited as prior art.
more,

the

disclosure

Court

cannot

of

reference

a

known and material.”

infer

“intent

solely

to

because

deceive
that

Without
from

non-

reference

was

1st Media, 694 F.3d at 1372-73.

Second, Defendants adequately plead that non-disclosure of
the

Peplinski,

’619

patent,

and

Craftsman

references

product of specific intent to defraud the PTO.
- 34 -

was

a

Consider first

Peplinski.

Mr. Peters allegedly argued that the “cited prior

art did not teach a rechargeable battery used to power a head
unit” while failing to disclose Peplinski, which he knew from
the ’619 patent proceedings to disclose a rechargeable battery
used to power a head unit. (Ctrclm. ¶ 165.)

This constitutes a

“positive assertion[] of novelty about [a] feature[] critical to
the issuance” of the patent, and indicates plausible allegations
of specific intent to deceive.
Defendants
Fitzgibbon

allege
also

other

knew

DS Smith, 2016 WL 69632 at *7.

facts

this

making

feature

of

it

plausible

Peplinski

and,

that

by

disclosing it, specifically intended to defraud the PTO.

not

(See,

e.g., id. ¶ 155 (“Mr. Fitzgibbon was aware of Peplinski during
the prosecution of the ’966 Patent because it was developed in
CGI’s Advanced Development Group, which he founded in 1998.”).)
To the extent Defendants do not levy similar allegations
with respect to the ’619 patent or Craftsman, other facts in
their

proposed

inference

that

answer

suffice

these

two

to

entitle

references

specific intent to deceive.

were

Defendants
also

to

withheld

an
with

Chief among these is the allegation

that no one from Chamberlain or Fitch Even filed an information
disclosure
during

statement

prosecution

or
of

submitted
the

’966

any

prior

patent.

art

This

whatsoever
supports

a

reasonable inference that non-disclosure of the references was
accompanied by deceptive intent.

See, e.g., Weber-Stephen, 2014

- 35 -

WL 656753 at *5 (finding that the allegation that the plaintiff
submitted

“no

prior

art

whatsoever

in

connection

with”

the

patent application at issue supported a reasonable inference of
non-disclosure with deceptive intent) (emphasis in original).
The last specific intent issue concerns Defendants’ more
petite allegations that Peters and Fitzgibbon made affirmative
misrepresentations to the PTO.

Defendants assert that, after

distinguishing prior art on the basis that it did not disclose
claim 1’s electrically powered equipment other than and separate
or

separable

Fitzgibbon

from

the

represented

barrier
that

movement

claims

9

operator,

and

claim 1 to gain allowance of those claims.
that

withheld

prior

art

references

do

19

were

Peters

and

similar

to

Defendants allege

indeed

disclose

this

limitation of claim 1 and that claims 9 and 19 do not, in fact,
require

such

equipment

but

instead

relate

to

a

rechargeable

battery “being removably connectable” or “configured” to connect
to such equipment.

Defendants face two problems, each of which

corresponds to the two alleged misrepresentations.
First, it is not reasonable to infer that Fitzgibbon and
Peters specifically intended to defraud the PTO in asserting the
novelty of claim 1 over the cited prior art.

In fact, they were

merely representing that the cited prior art (Ji and Wojciak)
does not teach claim 1’s “equipment” limitation.

Nothing in

Defendants’ proposed answer alleges that those two references,
- 36 -

alone or in combination, disclose the “equipment” limitation of
claim

1.

Whether

limitation

is

concerning

the

affirmative

withheld

irrelevant
cited

to

references

whether

references’

misrepresentation.

As

the

might

teach

challenged

teachings
such,

this

statement

amounted

Defendants

to

have

an
not

even pleaded facts that are consistent with a specific intent to
deceive, let alone facts that make an inference of such intent
reasonable.
Second, with respect to the similarity posited between the
limitations of claim 1 and claims 9 and 19, while Defendants
have pleaded facts consistent with a specific intent to deceive,
an

Exergen

inference

reasonable.
contain

of

Defendants

“equipment”

specific
simply

limitations

intent

allege
that

to

that
are

deceive
claims

different

9

is
and

from

not
19
the

corresponding limitations of claim 1 such that these limitations
cannot be said to be “similar” – at least not in context, where
Chamberlain’s agents were trying to distinguish the claims over
Ji and Wojciak.
inquiry

into

It is not necessary to engage in a semantic

differences

between

the

words

“similar”

and

“identical” (although reading claims 1, 9, and 19 leaves this
generalist Court with the impression that many facets of their
“equipment” limitations are indeed “similar”).

The rub is that,

even assuming factual inaccuracy of the statement, Defendants’
bare allegations fall too close to impermissibly “call[ing] into
- 37 -

question

every

possible

mistake

or

misstep

made

by

the

applicants without any evidence that those mistakes or missteps
were made with an intent to deceive.”

Human Genome Sciences,

Inc. v. Genentech, Inc., No 2:11 C 6519, 2011 WL 7461786, at *6
(C.D. Cal. Dec. 9, 2011).

Absent are factual allegations that

would make an inference of specific intent to deceive any more
likely than other possible explanations:

laziness, excusable

oversight, incompetence, or indeed permissible zealous argument
in favor of patentability on the part of Chamberlain’s agents.
While the inference of specific intent to deceive need not be
“the single most reasonable inference,” Itex, 2010 WL 2901793 at
*5

(emphasis

consistent
beyond

the

in

with

original),

liability

mere

Defendants

plus

possibility

something

of

specific

must
to

plead

tip

intent

“facts

the

scales”

to

deceive.

Human Genome Sciences, 2011 WL 7461786, at *3 (citing Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009)).
Therefore, the Court finds that Defendants have adequately
pleaded specific intent to deceive the PTO under Exergen as to
the withholding of the Peplinski, ’619 patent, and Craftsman
references.
Answer

to

It therefore grants Defendants leave to amend the
include

the

allegations

related

to

those

three

references and to add an inequitable conduct counterclaim and
affirmative defense based on procurement of the ’966 patent.
contrast,

because

Defendants

have

- 38 -

failed

to

plead

By

specific

intent adequately under Exergen, the Court denies lave to amend
with respect to the allegations concerning non-disclosure of the
’676 patent and misrepresentations of claims 1, 9, and 19.
B.
Defendants
under

section

also
2

Antitrust Act.

of

bring
the

Antitrust
counterclaims

Sherman

Act

of

and

unlawful

under

the

monopoly
Illinois

“[T]he enforcement of a patent procured by fraud

on the Patent Office may be violative of [§] 2 of the Sherman
Act provided the other elements necessary to a [§] 2 case are
present.”

Walker Process Equip., Inc. v. Food Mach. & Chem.

Corp., 382 U.S. 172, 174 (1965).
plead

both

Walker

Process

Therefore, Defendants must

fraud

–

which,

like

inequitable

conduct, is subject to Rule 9(b)’s standards – and an antitrust
violation.
Defendants

incorporate

by

reference

their

inequitable

conduct allegations with respect to both asserted patents and do
not state independent facts to support other wrongful conduct
with respect to the ’275 patent. (Ctrclm. ¶¶ 176-177).
Defendants

have

failed

to

satisfy

Rule

9(b)’s

Because

heightened

pleading standard with respect to the ’275 patent allegations,
they

flunk

the

fraud

prong

of

Walker

Process.

The

Court

therefore denies as futile Defendants’ motion for leave to amend
the Answer to add the antitrust counterclaims regarding the ’275
patent. (See, Jan. 5, 2017 Order at 6.)
- 39 -

However, the opposite

is true with respect to the ’966 patent.
finds

that

allegations

Defendants’
suffice

associated

under

Exergen

and

Because the Court

inequitable
Rule

9(b),

conduct
they

have

sufficiently met the fraud prong of Walker Process.
To establish the antitrust prong of a Walker Process claim,
Defendants must allege that Chamberlain holds “monopoly power in
the relevant market” and “willfully acquired or maintained that
power by anticompetitive means.”
(citation omitted).

Delano Farms, 655 F.3d at 1351

As a general matter, monopoly power may be

inferred from the predominant share of the market.
Grinnell Corp., 384 U.S. 563, 571 (U.S. 1966).

U.S. v.

If Defendants

“fail to identify any facts from which the court can infer . . .
sufficient market power to have been able to create a monopoly,
their § 2 claim may be properly dismissed.”

Endsley v. City of

Chicago, 230 F.3d 276, 282 (7th Cir. 2000).

Courts interpret

the Illinois Antitrust Act in light of federal antitrust law
upon

which

it

is

modeled.

Laughlin

v.

Evanston

Hosp.,

550

N.E.2d 986, 990 (Ill. 1990).
Defendants

likewise

make

the

requisite

Walker

Process

antitrust allegations – namely, that a relevant market exists
and

that

market.

Chamberlain
Defendants

residential

GDO

possesses
define

market

the

monopoly
relevant

(Ctrclm.

¶

184),

power
market
with

within

that

as

U.S.

the

Chamberlain’s

“HD950WF and [Defendants’] Ryobi GD200 [being] essentially sole
- 40 -

competitors

at

their

price

quotation marks omitted).)

point.”

(Id.

¶

181

(internal

Defendants highlight Chamberlain’s

statement that it is a “two-player market – CGI and everyone
else.” (Id. ¶¶ 182-183, 189.)

They also assert the presence of

a monopoly within this market, reiterating that Chamberlain has
a 70-80 percent market share. (Id. ¶¶ 172, 190.)

Further, they

point to statements by Chamberlain that Defendants’ competition
harms its ability to maintain its prices. (See, id. ¶¶ 185-187.)
As such, the Court finds that Defendants have satisfied
Walker Process with respect to the ’966 patent and grants leave
to amend the Answer to include the proposed allegations.
C.

Patent Misuse

The key patent misuse inquiry is whether the patentee has
impermissibly broadened the physical or temporal scope of the
patent grant in a manner that produces anticompetitive effects.
See, Princo Corp. v. Int’l Trade Comm’n, 616 F.3d 1318, 1328
(Fed.

Cir.

2010)

(en

banc)

(“Where

the

patentee

has

not

leveraged its patent beyond the scope of rights granted by the
Patent Act, misuse has not been found.”) (citations omitted).
“[P]roof

of

an

establish

misuse

antitrust
of

a

violation,”

patent

in

suit

however,
unless

the

“does
conduct

not
in

question restricts the use of that patent and does so in one of
the

specific

ways

that

have

been

- 41 -

held

to

be

outside

the

otherwise

broad

scope

of

the

patent

grant.”

Id.

at

1329

(emphasis added).
Where

a

patent

misuse

defense

is

premised

on

patent

enforcement, the recent trend among district courts is to allow
such

a

defense

to

survive

a

motion

to

dismiss

so

long

as

Defendants can allege facts to plead “bad faith and improper
purpose in bringing the suit.”

Glaverbel Societe Anonyme v.

Northlake Mktg. & Supply, Inc., 45 F.3d 1550, 1558 (Fed. Cir.
1995);

see,

e.g.,

ESCO

Corp.

v.

Cashman

Equip.

Co.,

158

F.Supp.3d 1051, 1070-71 (D. Nev. 2016); Nalco, 2014 WL 645365 at
*10.

A lawsuit is brought in bad faith only if “the lawsuit

[is]

objectively

litigant

could

baseless

in

realistically

the

sense

expect

that

success

no

on

reasonable

the

merits.”

Prof’l Real Estate Investors, Inc. v. Columbia Pictures Indus.,
Inc., 508 U.S. 49, 60 (1993).
goal

is

not

to

win

a

A purpose is improper “if its

favorable

judgment,

but

to

harass

a

competitor and deter others from competition, by engaging the
litigation

process

itself,

regardless

of

the

outcome.”

Glaverbel, 45 F.3d at 1558.
Therefore, to plead patent misuse, Defendants must allege
facts

justifying

a

reasonable

inference

that

Chamberlain

(1)

acted with bad faith and improper purpose in bringing the suit
and (2) impermissibly broadened the scope of the patent grant
with anticompetitive effect.

See, e.g., ESCO, 158 F.Supp.3d at
- 42 -

1069-70 (citing 25 U.S.C. 271(d)(3)); Nalco, 2014 WL 645365 at
*10; Rego-Fix AG v. Techniks, Inc., No. 10 C 1188, 2011 WL
471370, at *2 (S.D. Ind. Feb. 2, 2011) (citing Glaverbel, 45
F.3d at 1558).
Given

the

Court’s

determination

that

the

’275

patent

inequitable conduct counterclaim is insufficiently pleaded, “so
too is the patent misuse claim to the extent that it relies on
inequitable

conduct.”

VDF

FutureCeuticals,

Inc.

v.

Sandwich

Isles Trading Co., No. 11 C 288, 2011 WL 6820122, at *7-8 (D.
Haw.

Dec.

27,

2011);

accord

Target

Training

Int’l,

Ltd.

v.

Extended Disc N. Am., Inc., No. H-10-3350, 2011 WL 3235683, at
*4-5 (S.D. Tex. Jul. 27, 2011).

And it fares no better to the

extent it relies on the antitrust allegations, because the Court
has found those allegations similarly inadequate.

Because there

are no other independent allegations pertinent to patent misuse,
Defendants

have

failed

to

show

bad

faith

on

Chamberlain in seeking to enforce the ’275 patent.

the

part

of

Amending the

Answer to add a ’275 patent misuse defense would be futile.
By

contrast,

the

Court

finds

Defendants’

allegations

concerning the ’966 patent adequate under Exergen and WalkerProcess.

Thus, bad faith is sufficiently established to survive

a motion to dismiss.

Further, the Court is willing to accept

that Defendants, by incorporating their antitrust allegations,
sufficiently plead that Chamberlain’s enforcement of the ’966
- 43 -

patent

is

problem,

likely

to

engender

however,

is

the

anticompetitive

absence

of

any

effects.

further

The

allegations

regarding improper purpose in bringing this litigation or how it
attempts to broaden the scope of the ’966 patent grant.
example,

Defendants

have

not

sufficiently

alleged

For
that

Chamberlain brought this case “to harass a competitor and deter
others from competition” rather than win a favorable judgment.
Glaverbel, 45 F.3d at 1558.

Similarly, if a plaintiff’s conduct

“is reasonably within the patent grant, i.e., [if] it relates to
subject matter within the scope of the patent claims,” then “the
practice does not have the effect of broadening the scope of the
patent

claims

and

thus

cannot

constitute

patent

misuse.”

Virginia Panel Corp. v. MAC Panel Co., 133 F.3d 860, 869 (Fed.
Cir. 1997) (citations and internal quotations omitted).
Because Defendants have not pleaded facts to establish, for
example, that Chamberlain brought this lawsuit against a product
(the Ryobi GDO) “that no reasonable person could believe . . .
infringed” the issued claims, the Court lacks a rationale for
finding that Chamberlain’s litigation conduct is amenable to a
patent misuse defense.

Nalco, 2014 WL 645365 at *12-13; see,

e.g., Otsuka Pharm. Co., Ltd. v. Torrent Pharms. Ltd., Inc., 118
F.Supp.3d 646, 658-59 (D.N.J. 2015) (dismissing as futile the
defendant’s counterclaim for patent misuse because it “hinge[d]
upon [the patentee’s] allegedly bad faith conduct in pursuing
- 44 -

its

patent

infringement

action”

but

“failed

to

plead

any

allegation” that the patentee had, with anticompetitive effect,
impermissibly broadened the physical or temporal scope” of the
two patents); cf. Microthin.com, Inc. v. Siliconezone USA, LLC,
No. 06 C 1522, 2006 WL 3302825, at *10 (N.D. Ill. Nov. 14, 2006)
(authorizing patent misuse defense where the defendant alleged
that the plaintiff, after being informed in separate litigation
of prior use and sale of products practicing its patents, then
“attempted

to

‘based

mouse

on

against

unlawfully
pads,’

Defendant

expand
by

for

(quotation omitted).

the

scope

attempting

its

to

[of]

its

enforce

‘Kitchenzone’

patents,

its

cutting

patents
boards”)

The gravamen of Defendants’ allegations –

that Chamberlain and its agents failed to disclose prior art
during prosecution and then brought this litigation – does not
relate

to

broadening

the

physical

or

temporal

scope

of

the

patent.
Therefore, the Court denies Defendants’ Motion with respect
to the patent misuse affirmative defense on grounds of futility.
D.

Unclean Hands

As relevant, establishing unclean hands requires proof of
inequitable conduct plus a showing that the plaintiff’s conduct
immediately relates to the claim it has asserted against the
defendant.
910

F.2d

See, Consol. Aluminum Corp. v. Foseco Int’l Ltd.,
804,

810

(Fed.

Cir.

1990).

- 45 -

The

Court

therefore

examines the sufficiency of Defendants’ unclean hands pleading
with these twin elements in mind.
With respect to the ’275 patent, Defendants fail to state a
claim of inequitable conduct under Exergen.

Where an accused

infringer’s unclean hands defense is based on alleged acts of
inequitable

conduct,

allegations.
205065,

See,

at

*7.

it

rises

e.g.,
Thus,

and

falls

Collaboration
without

a

based

on

Properties,

basis

for

those

2007

unclean

WL

hands

independent of the alleged inequitable conduct, Defendants can
only survive a Rule 12(b)(6) motion with plausible allegations
of

“egregious

misconduct”

relating

to

this

litigation.

Therasense, 649 F.3d at 1287; see also, Human Genome Sciences,
Inc. v. Genentech, Inc., No. 2:11 C 6519, 2011 WL 7461786, at *8
(C.D. Cal. Dec. 9, 2011).

Defendants have not done so, and the

Court therefore denies leave to amend to include the proposed
unclean hands defense to infringement of the ’275 patent.
However,
adequately
that

with

allege

their

respect

to

inequitable

unclean

hands

the
conduct

defense

’966

patent,

under

based

on

Defendants

Exergen,
the

passes muster under the first prong of Foseco.

same

meaning
conduct

As for the

second prong, the Court easily finds an immediate relationship
between

the

alleged

inequitable

conduct

before

the

PTO

and

Chamberlain’s claim in this litigation of infringement of the
’966 patent.

See, e.g., Aptix Corp. v. Quickturn Design Sys.,
- 46 -

269 F.3d 1369, 1377 (Fed. Cir. 2001) (noting as part of an
unclean

hands

analysis

that

“[e]ven

presumably

innocent

licensees . . . would be properly barred from enforcing the
patent, had the rights thereunder accrued through inequitable
conduct”); Worldwide Home Products, Inc. v. Bed Bath and Beyond,
Inc., No. 11 C 3633, 2013 WL 247839, at *1-2 (S.D.N.Y. 2013)
(denying motion to dismiss where the defendants’ unclean hands
defense stated that “‘Plaintiff’s claims are barred, in whole or
in part, by the doctrine of unclean hands’ based on Plaintiff’s
‘misrepresentations . . . during the prosecution of the patent
application . . . and,
holding

of

further,

information

from

Plaintiff’s
the

USPTO

intentional

that

is

with-

material’”)

(quotation omitted); Collaboration Properties, 2007 WL 205065 at
*7 (noting that an unclean hands defense may rest on allegations
of inequitable conduct before the PTO).
As such, the Court denies leave to amend to include the
affirmative defense of unclean hands with respect to the ’275
patent

but

grants

leave

to

amend

to

include

the

affirmative

defense of unclean hands with respect to the ’966 patent.
IV.
For

the

reasons

CONCLUSION

stated

herein,

granted in part and denied in part.

Defendants’

Motion

is

Defendants may amend the

Answer to include the proposed allegations, counterclaims, and
inequitable

conduct

affirmative

defense

- 47 -

relating

to

the

’966

patent, except for those implicating the misrepresentation of
’966

patent

patent.
respect

The

claims

to

and

Court
the

non-disclosure

denies
proposed

as

futile

of

the

’676

Defendants’

allegations,

prior

art

Motion

with

counterclaims,

and

affirmative defenses concerning the ’275 patent.

The Court also

denies as futile leave to amend to include the proposed patent
misuse affirmative defense.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court

Dated: March 22, 2017

- 48 -