CSP TECHNOLOGIES, INC. v. SUD-CHEMIE AG et al

Filing 85

ORDER ON DEFENDANTS' MOTION FOR LEAVE TO FILE A SECOND AMENDED AND UNITED ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS - Defendants' Motion 70 is denied. Signed by Magistrate Judge William G. Hussmann, Jr on 5/2/2012. (JLM)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
NEW ALBANY DIVISION
CSP TECHNOLOGIES, INC.,
Plaintiff,
v.
SÜD-CHEMIE AG, SÜD-CHEMIE, INC.,
and AIRSEC S.A.S.,
Defendants.

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4:11-cv-29-RLY-WGH

ORDER ON DEFENDANTS’ MOTION FOR LEAVE
TO FILE A SECOND AMENDED AND UNITED ANSWER,
AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS
This matter is before the Honorable William G. Hussmann, Jr., United
States Magistrate Judge, on Defendants’ Motion for Leave to File a Second
Amended and Unified Answer, Affirmative Defenses, and Counterclaims filed on
February 16, 2012. (Docket No. 70). Plaintiff’s response was filed on March 19,
2012. (Docket No. 73). Defendants’ reply brief was filed on April 23, 2012.
(Docket No. 81).
The Magistrate Judge, being duly advised, now DENIES the Defendants’
motion.
The issue before the Magistrate Judge is whether the Defendants should
be granted leave to file a second amended and unified answer, affirmative
defenses, and counterclaims to assert additional allegations in support of its
counterclaim of unenforceability of the asserted patent because of inequitable

conduct. Plaintiff objects to this motion on the grounds that the amendment
should be denied as futile. Although the Magistrate Judge recognizes that under
Federal Rule of Civil Procedure 15 leave to amend should generally be freely
given, in this case the Magistrate Judge believes that this motion for leave to
amend must be denied.
The United States Court of Appeals for the Federal Circuit has addressed
the frequent use of inequitable conduct claims in Exergen Corp. v. Wal-Mart
Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009), and Therasense, Inc. v. Becton,
Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011)(en banc). The Magistrate
Judge’s reading of these cases suggests that the pleading of inequitable conduct
must certainly approach that required under Federal Rule of Civil Procedure
9(b). This is because the routine pleading of such conduct into every case does
significantly expand the scope of relevancy which discovery must address and
increases the complexity, duration, and costs of patent infringement litigation.
In the context of inequitable conduct, the substantive elements that must
be pled with particularity include that: (1) “an individual associated with the
filing and prosecution of a patent application . . . failed to disclose material
information” to the Patent and Trademark Office (“PTO”); and (2) “the individual
did so with a specific intent to deceive the PTO.” Exergen, 575 F.3d at 1327 n.3.
Exergen goes on further to state that under such a claim, the defendant “must
identify the specific who, what, when, where, and how of the material
misrepresentation or omission committed before the PTO.” Id. at 1328. The

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case goes on to require considerable specificity, suggesting that to properly plead
“what” and “where,” a defendant must “identify which claims [of the patent], and
which limitations in those claims, the withheld references are relevant to, and
where in those references the material information is found.” Id. at 1329. It
should also be noted that in order to properly plead the second element of
inequitable conduct – i.e., the specific intent to deceive the PTO, allegations of
intent must be more than conclusory. See id. at 1328-29.
In focusing on the proposed Counterclaim III alleging inequitable conduct
(Proposed Amended Counterclaim ¶¶ 25-61), the inequitable conduct alleged in
this case is the failure to disclose: (1) that Süd-Chemie offered for sale a
particular product in the United States (Id. at ¶¶ 29-30); and (2) the existence of
a European patent which was published as an international publication (Id. at ¶
31).
The Magistrate Judge concludes that this motion should be denied
because Süd-Chemie has failed to plead with the requisite particularity that the
information withheld was not cumulative of the information already disclosed to
the PTO during the prosecution of the ’137 patent. Specifically, a close
examination of figures 1-3 of European Patent No. 0824480 and International
Publication No. WO 96/33108 reveals that they are identical to those figures
disclosed and incorporated by reference in U.S. Patent No. ’056. (See p. 5 of
Plaintiff’s response). Likewise, the failure to disclose the existence of the
particular HDI product is found to be cumulative when the underlying patents

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upon which the product was based (U.S. Patents ’937 and ’255) were disclosed.
The Magistrate Judge believes that the existence of a product or products based
upon prior patents is cumulative so long as the underlying patents supporting
the product have been disclosed to the PTO.
In addition, the Magistrate Judge believes that the allegations of intent
attributable to Robert Abrams (Proposed Amended Counterclaim ¶¶ 45-46) and
those of Berry Shindler (id. at ¶¶ 56-57) are conclusory statements and provide
no factual basis to infer that either of these specific individuals knew of specific
information in the withheld references that was material to the claims of the
patent.
The Magistrate Judge concludes that to amend the current Answer,
Affirmative Defenses, and Counterclaim to include inequitable conduct would be
futile in this case and would unduly delay prompt resolution of the other issues
before the court. While the motion itself cannot be said to be brought in bad
faith or in violation of Federal Rule of Civil Procedure 11, it simply does not meet
the heightened pleadings standards that the Federal Circuit has recently
required to prohibit each and every patent litigation case from evolving into an
inequitable conduct fight.
SO ORDERED.
__________________________
William G. Hussmann, Jr.
United States Magistrate Judge
Southern District of Indiana

Dated: May 2, 2012

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Electronic copies to:
Paul Henry Berghoff
MCDONNELL BOEHNEN HULBERT
& BERGHOFF
[e-mail]

Peter J. McAndrews
McANDREWS, HELD & MALLOY, LTD
[e-mail]
James R. Nuttall
MCANDREWS HELD & MALLOY
[e-mail]

Jan M. Carroll
BARNES & THORNBURG LLP
[e-mail]

Stephanie F. Samz
McANDREWS, HELD & MALLOY, LTD
[e-mail]

Paula S. Fritsch
McDONNELL BOEHNEN HULBERT
& BERGHOFF LLP
[e-mail]

John D. Smith
MCDONNELL BOEHNEN HULBERT
& BERGHOFF, LLP
[e-mail]

Abram B. Gregory
TAFT STETTINIUS & HOLLISTER LLP
[e-mail]

Sean M. Sullivan
McDONNELL BOEHNEN HULBERT
& BERGHOFF LLP
[e-mail]

Edward Wesley Harris III
TAFT STETTINIUS & HOLLISTER LLP
[e-mail]
George P. McAndrews
MCANDREWS HELD & MALLOY LTD
[e-mail]

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