Recticel Automobilesysteme GmbH et al v. Automotive Components Holdings, LLC

Filing 39

OPINION AND ORDER granting in part and denying in part 24 Motion to Dismiss. Signed by District Judge Sean F. Cox. (JHer)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
RECTICEL AUTOMOBILSYSTEME
GMBH, AND RECTICEL INTERIORS
NORTH AMERICA, INC.,
Case No. 2:10-cv-14097-SFC
HON. SEAN F. COX

PLAINTIFFS,
v.
AUTOMOTIVE COMPONENTS
HOLDINGS, LLC
DEFENDANT.

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS’
MOTION TO DISMISS DEFENDANT’S INEQUITABLE CONDUCT COUNTERCLAIM
AND STRIKE AFFIRMATIVE DEFENSES
Currently before the Court is Plaintiffs’ Motion to Dismiss Defendant=s Inequitable Conduct
Counterclaim and Strike Affirmative Defenses (Docket No. 24). The Court finds that the issues in
this motion have been adequately presented in the parties’ briefs and that oral argument would not
significantly aid the decisional process. See Local Rule 7.1(f)(2), U.S. District Court, Eastern
District of Michigan. The Court therefore Orders that the motion will be decided upon the briefs.
I.

INTRODUCTION
This is a patent infringement case. Defendant has filed a counterclaim for inequitable

conduct and pled affirmative defenses inter alia of inequitable conduct, estoppel, and laches.
This motion raises two issues.
The first issue the Court must address is whether Defendant has pled its inequitable conduct
counterclaim and affirmative defense with sufficient Aparticularity@ as required by the heightened
pleading standard of Rule 9(b) of the Federal Rules of Civil Procedure and the recent case of
Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009).
The second issue the Court must address is whether pleading requirements set forth in the
Supreme Court cases of Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal,
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129 S.Ct. 1937 (2009) apply to general affirmative defenses such as estoppel and laches.
For the reasons explained in this Opinion, the Court grants in part and denies in part
Plaintiffs’ motion. The Court grants Plaintiffs’ motion to dismiss Defendant’s counterclaim and
affirmative defense for inequitable conduct.

The Court denies Plaintiffs’ motion to strike

Defendant’s affirmative defenses of laches and estoppel.
II.

BACKGROUND ON THE INEQUITABLE CONDUCT DEFENSE
For at least the last decade, the Federal Circuit has been making it more difficult to plead the

inequitable conduct defense. Two recent cases on this point are 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 (May 25, 2011 Fed. Cir. 2011) (en banc).
In Exergen, the Federal Circuit increased the level of specificity with which an accused
infringer must plead inequitable conduct under the Aparticularity@ standard of Rule 9(b) of the
Federal Rules of Civil Procedure. Exergen will be discussed in more detail in later sections of this
Opinion.
To establish the defense of inequitable conduct, the challenger must prove by clear and
convincing evidence that an individual associated with the prosecution of a patent application or
maintenance of a patent (1) made an affirmative misrepresentation of material fact, failed to disclose
material information, or submitted false material information; and (2) intended to deceive the
USPTO. Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365 (Fed. Cir. 2008).
One change that Therasense made in the law of inequitable conduct is that it changed the
standard for establishing Amateriality@ of a misrepresentation or omission. Before Therasense, the
Federal Circuit generally used a Areasonable examiner@ standard for determining materiality (e.g.,
a prior art reference is material if there is a substantial likelihood that a reasonable examiner would
consider it important in deciding whether to allow the application to issue as a patent.). Id. at 1288.
In Therasense, the Federal Circuit adopted a Abut-for@ standard for materiality as the general rule.
AWhen an applicant fails to disclose prior art to the PTO, that prior art is but-for material if the PTO
would not have allowed a claim [to issue in a patent] had it been aware of the undisclosed prior art.
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Hence, in assessing the materiality of a withheld reference, the court must determine whether the
PTO would have allowed a claim had it been aware of the undisclosed prior art.@ Id. at 1291.1
As for the element of intent to deceive the USPTO, Therasense made clear that the accused
infringer must prove by clear and convincing evidence that the patentee made a Adeliberate decision@
to deceive the USPTO. Id. at 1290. Simply failing to submit material prior art does not constitute
inequitable conduct. Rather, the Aintent@ requirement means that the party asserting the inequitable
conduct defense must prove by clear and convincing evidence Athat the applicant knew of the
reference, knew that it was material, and made a deliberate decision to withhold it.@ Id. AProving
that the applicant knew of a reference, should have known of its materiality, and decided not to
submit it to the PTO does not prove specific intent to deceive.@ Id.
Because direct evidence of deceptive intent is rare, Therasense also reconfirmed that a
district court may infer intent from indirect and circumstantial evidence. AHowever, to meet the
clear and convincing evidence standard, the specific intent to deceive must be the single most
reasonable inference able to be drawn from the evidence. Indeed, the evidence must be sufficient
to require a showing of deceitful intent in light of all the circumstances. Hence, when there are
multiple reasonable inferences that may be drawn, intent to deceive cannot be found.@ Id. at 1290-91
(citation and quotations omitted).
ABecause the party alleging inequitable conduct bears the burden of proof, the patentee need
not offer any good faith explanation unless the accused infringer first proves a threshold level of
intent to deceive by clear and convincing evidence. The absence of a good faith explanation for
withholding a material reference does not, by itself, prove intent to deceive.@ Id. at 1291 (quotations

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There is one exception to this general rule of having to prove but-for materiality that is
not applicable to this case and that is where the patentee engaged in Aaffirmative egregious
misconduct.@ Id. AWhen the patentee has engaged in affirmative acts of egregious misconduct,
such as the filing of an unmistakably false affidavit, the misconduct is material.@ Id. However,
the Federal Circuit made clear that Aneither mere nondisclosure of prior art references to the PTO
nor failure to mention prior art references in an affidavit constitutes affirmative egregious
misconduct, claims of inequitable conduct that are based on such omissions require proof of butfor materiality.@ Id. at 1292-1293.
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and citations omitted).
III.

FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs Recticel Automobilsysteme GMBH and Recticel Interiors North America, Inc.

(collectively ARecticel@ or APlaintiffs) filed this patent infringement lawsuit against the Defendant
Automotive Components Holdings LLC (AACH@ or ADefendant@) on March 8, 2011. (Doc. No. 1.)
Recticel=s Complaint alleges that ACH has infringed U.S. Patent No. 6,071,619 (>619 Patent). The
‘619 Patent generally relates to making synthetic leather type materials for the interior of an
automobile such as a dash-board or door panel. The claims of the patent call for inserting two
Aelastomeric@ type materials into a mold to make the synthetic leather type material.
On May 10, 2010, ACH filed its AAnswer to Complaint, Affirmative Defenses, and
Counterclaims.@ (Doc. No. 23.) Relevant to the instant motion, ACH included a counterclaim and
affirmative defense alleging that the >619 Patent is unenforceable due to inequitable conduct
committed by Recticel in prosecuting the >619 Patent. Specifically, ACH alleges Recticel only
disclosed prior art Anon-paint elastomeric type applications and processes@ and did not disclose
Aprior art relating to paint-type [elastomeric] applications and processes.” (See, e.g., Countercl. &&
18-34.) ACH did not allege that Recticel knew of any particular prior art reference that anticipated
or rendered obvious any claim in the >619 Patent and deliberately chose not to disclose that prior art
reference to the USPTO.
The specific allegations of inequitable conduct in the Defendants= counterclaim have been
reprinted below:
COUNT III
INEQUITABLE CONDUCT
*

*

*

18.
The >619 Patent is unenforceable due to inequitable conduct by the
applicants and their attorneys in prosecuting the >619 Patent before the United States
Patent and Trademark Office (APTO@). Specifically, the >619 Patent is unenforceable
under the pleading requirements for inequitable conduct as set forth by the Federal
Circuit in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir. 2009).
19.
The applicants and their attorney/agent representatives at Sughrue,
Mion, Zinn, Macpeak & Seas, PLLC, including George S. Jones and Waddell A.
Biggart, failed to disclose prior art relating to paint-type applications and processes
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during the prosecution of the >619 Patent, thereby intentionally misleading the
Examiner into considering only non-paint, elastomeric type applications and
processes.
20.
During prosecution of the >619 Patent, the applicants and their
attorney/agent representatives only cited art regarding non-paint elastomeric type
applications and processes in the specification of the >619 Patent, failing to disclose
prior art relating to paint-type applications and processes. This is particularly
egregious in light of the Plaintiff=s Infringement Contentions which indicate that
Plaintiff considers paint-type applications and processes relevant to the >619 Patent.
21.
During prosecution of the >619 Patent the applicants and their
attorney/agent representatives only cited art regarding non-paint elastomeric type
applications and processes in the Information Disclosure Statement filed December
2, 1996, failing to disclose prior art relating to paint-type applications and processes.
This is particularly egregious in light of the Plaintiff=s Infringement Contentions
which indicate that Plaintiff considers paint-type applications and processes relevant
to the >619 Patent.
22.
The applicants and their attorney/agent representatives failed to
disclose prior art relating to paint-type applications and processes at any time during
prosecution of the >619 Patent.
23.
The applicants and their attorney/agent representatives failure to
disclose prior art relating to paint-type applications and processes is evident in the
prosecution history of the >619 Patent.
24.
During prosecution of the >619 Patent, the applicants and their
attorney/agent representatives intentionally misled the Examiner into only limiting
his search and his scope of prior art to only non-paint, elastomeric applications and
applications.
25. The applicants and/or their attorney/agent representatives intentionally
misled the Examiner into only considering non-paint type, elastomeric materials.
This is evidenced by the art cited by the Examiner during prosecution of the >619
Patent. For example, U.S. Patent No. 5,328,349 to Minke et al. relates to
Adistribution of the PVC powder capable of forming a gel takes place, which is
brought into contact with the hot mold . . . A Col.1, lines 40-45.
26. The applicants and/or their attorney/agent representatives intentionally
misled the Examiner into only considering non-paint type, elastomeric materials.
This is evidenced by the Non-Final Office Action issued on October 19, 1998, in
which the Examiner rejected certain claims over U.S. Patent No. 5,370,831 to Blair
et al., relating to Aproviding a stationary hot mold surface toward which are sprayed
casting material particles from a feed hopper, wherein particles melt to form a skin
. . .@
27. The applicants and their attorney/agent representatives intentionally
misled the Examiner into only considering non-paint type, elastomeric materials. In
the specification of the >619 Patent, applicants describe a two-part mold technique:
AAccording to the two-part mould technique, as disclosed in EP-A-0 386 818
of the present application, two differently coloured elastomeric materials are
sprayed onto the two mould parts and subsequently pressed together.@
(Column 1, lines 35-44).
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28. The applicants and their attorney/agent representatives intentionally
misled the Examiner into only considering non-paint type, elastomeric materials.
The EP-A-0 386 818 reference discloses the commercial need and use of elastomeric
materials having a thickness in the millimeter range:
ADue to the fact that in this way a very thin film, having a thickness in the
range of microns is thus formed, and in order to obtain a commercially
marketable product, care has to be taken that the reaction mixture in the
mould forms a sufficiently strong and dense skin . . .@ (Page 2, lines 17-20).
29. The applicants and their attorney/agent representatives intentionally
misled the Examiner into only considering non-paint type, elastomeric materials. In
the specification of the >619 Patent, applicants describe the elastomeric materials
used in the method:
AAs to the elastomeric materials used in the method according to the present
invention, reference is made in particular to the light-stable polyurethane
elastomeric materials disclosed in EP-A-0279246 of the present applicant.@
(Column 5, lines 20-25).
30. The applicants and their attorney/agent representatives intentionally
misled the Examiner into only considering non-paint type, elastomeric materials.
The EP-A-0379246 reference discloses a sufficiently thick, viscous elastomeric
material and distinguishes the material from paint:
AA sufficiently think and homogenous polyurethane layer can be applied to
a surface, . . . which is relatively viscous and gels quickly in order to prevent
the run off of the material . . . More particularly, it is important that a too
quick gelation does not occur during the spraying . . . sufficient flow of the
reactive mixture . . . somewhat in an analogous manner as it is the case with
paint.@ (Page 2, lines 10-20).
31. The applicants and their attorney/agent representatives intentionally
misled the Examiner into only considering non-paint type, elastomeric materials.
The specification of the >619 Patent further distinguishes paint from the elastomeric
materials in that it describes that:
AUsing lacquers to paint the different portions of the skins afterwards . . .@
(Column 1, lines 45-46).
32. The applicants and their attorney/agent representatives knew or should
have known of prior art relating to paint-type applications and processes, as
applicants are merchants in this field.
33.
Because applicants and their attorney/agent representatives clearly
consider paint-type applications and processes relevant to the >619 Patent, as is
evidenced by the Plaintiff=s Infringement Contentions, applicants and their
attorney/agent representatives should have disclosed this prior art to the PTO.
34. The applicants and their attorney/agent representatives withheld prior
art relating to the paint-type applications with the intent to deceive and mislead the
PTO from considering such art.

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Defendants= Counterclaim, Doc. No. 23 && 18-34.)
On April 25, 2011, Recticel filed the instant motion to dismiss. Recticel argues that ACH
has failed to set forth sufficient factual bases for its inequitable conduct counterclaim and affirmative
defense according to Exergen. Recticel also argues that ACH=s affirmative defenses of laches and
estoppel should be dismissed because ACH failed to plead the affirmative defenses according to the
pleading standard set forth by the Supreme Court in the cases of Twombly and Iqbal. ACH opposes
the motion.
IV.

LEGAL STANDARDS FOR PLEADING CAUSES OF ACTION
Rules 8(a) and 9 set forth the standards for pleading causes of action. Rule 8(a)(2) sets forth

the default general pleading standard, while Rule 9 sets forth the pleading standard for certain types
of special matters such as inequitable conduct.
Recently, the Supreme Court, in the cases of Twombly and Iqbal changed the standard for
pleading a cause of action under Rule 8(a)(2). Twombly and Iqbal establish a Plausibility@ pleading
standard for Rule 8(a)(2). Pursuant to Twombly and Iqbal, A[t]o survive a motion to dismiss [under
Rule 8(a)(2)], a complaint must contain sufficient factual matter, accepted as true, to state a claim to
relief that is plausible on its face.@ Iqbal, 129 S.Ct. at 1949. A court must treat all well-pleaded
factual allegations in the pleading as true. However, A[t]hreadbare recitals of elements of a cause of
action, supported by mere conclusory statements, do not suffice@ to withstand a motion to dismiss.
Id. (discussing the general pleading requirements of Rule 8(a)(2)). AWhile legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations. When there
are well-pleaded factual allegations, a court should assume their veracity and then determine whether
they plausibly give rise to an entitlement to relief.@ Id. at 1950.
Rule 9(b) sets forth the standard for pleading fraud and conditions of the mind such as
Aintent.@ Rule 9(b) states: AIn alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a
persons mind may be alleged generally.@
The Federal Circuit has held that Ainequitable conduct, while a broader concept than fraud,
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must be pled with particularity under Rule 9(b).@ Exergen, 575 F.3d at 1326. In Exergen, the Federal
Circuit articulated the standard for pleading inequitable conduct under Rule 9(b). Exergen created
new law.
According to Exergen, a pleading that simply avers the substantive elements of inequitable
conduct, without setting forth the particularized factual bases for the allegation, does not satisfy Rule
9(b). Id. at 1326-27. A pleading alleging inequitable conduct must Aidentify the specific who, what,
when, where, and how of the material misrepresentation or omission committed before the PTO.@
Id. at 1328. AMoreover, although >knowledge= and >intent= may be averred generally, 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.@ Id. at 1328-29. Specifically, the Federal
Circuit in Exergen summarized the standard for pleading inequitable conduct as follows:
In sum, to plead the Acircumstances@ of inequitable conduct with the
requisite Aparticularity@ under Rule 9(b), the pleading must identify the
specific who, what, when, where, and how of the material
misrepresentation or omission committed before the PTO. Moreover,
although Aknowledge@ and Aintent@ may be averred generally, 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 *1329 information with a
specific intent to deceive the PTO.FN5
FN5. 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. See Greenstone v. Cambex Corp., 975 F.2d 22,
26 (1st Cir.1992) (Breyer, C.J.) (declining to infer fraudulent intent
where Athe complaint makes clear that Cambex publicized its IBM
memory >trade-in= practice with a candor that seems inconsistent with
knowledge of illegality or fear of a lawsuit@), superseded by statute on
other grounds, Private Securities Litigation Reform Act of 1995,
Pub.L. No. 104-67, 109 Stat. 737. In contrast to the pleading stage, to
prevail on the merits, the accused infringer must prove both
materiality and intent by clear and convincing evidence. Whereas an
inference of deceptive intent must be reasonable and drawn from a
pleading's allegations of underlying fact to satisfy Rule 9(b), this
inference must be Athe single most reasonable inference able to be
drawn from the evidence to meet the clear and convincing standard.@
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Id. at 1328-29 (emphasis added) (some citations omitted).
V.

ANALYSIS
A.

INEQUITABLE CONDUCT COUNTERCLAIM

In its motion to dismiss, Recticel argues that ACH=s inequitable conduct counterclaim fails
to allege sufficient factual bases on the issues of materiality and intent as required by Exergen.
Accordingly, the Court will review ACH=s allegations of materiality and intent in light of both
Exergen and Therasense.
MATERIALITY
In order to plead a claim of inequitable conduct with Aparticularity,@ Exergen requires that Athe
pleading must identify the specific who, what, when, where, and how of the material
misrepresentation or omission committed before the PTO.@ Exergen, 575 F.3d at 1328.
The Court finds that ACH’s counterclaim does not sufficiently identify the “what”, “where”,
and “how” of the alleged material omission.
AThe What@ and AThe Where@ B According to Exergen, the inequitable conduct pleading must
identify the material misrepresentation or omission and where the material information is located.
Id. For example, if a patent applicant is alleged to have failed to disclose a piece of material prior
art to the USPTO, the inequitable conduct pleading must identify the prior art that was omitted, where
in the prior art the material information is located, and which claim limitations in the patent-in-suit
the material information is relevant to. Id. The Court finds that ACH did not adequately plead the
Awhat@ and Awhere@ of a material misrepresentation or omission. ACH’s counterclaim does not allege
that any specific prior art reference was intentionally withheld from the USPTO, nor does ACH’s
counterclaim explain where the particular material information is located within the prior art
reference. ACH simply alleges that Recticel Afailed to disclose to the USPTO all prior art related to
paint-type applications and processes.@ (Resp. Br. at pgs. 4-5, Dkt. No. 27.) Under the facts of this
case, the Court finds the factual allegations of the “what” and “where” in ACH’s counterclaim to be
insufficient. In order for the Court to assess the “but-for” standard for materiality set forth in
Therasense, a counterclaim will normally need to identify a specific prior art reference and where in
the prior art the material information is located.
9

AThe How@ B The inequitable conduct claim must explain how the USPTO would have used
this material information in assessing patentability.

Exergen, 575 F.3d at 1229-30.

In its

counterclaim, ACH did not allege any specific prior art reference was withheld from the USPTO, nor
did it explain why a prior art reference was Amaterial@ to the patentability of the >619 Patent as defined
by Therasense. In Therasense, the Federal Circuit changed the law and established a but-for standard
for materiality (i.e., that the USPTO would not have granted a claim in the patent-in-suit if the prior
art would have been brought to the USPTO=s attention). It appears that ACH attempted to plead its
inequitable conduct counterclaim under the former standard for materiality which was that
A[i]nformation is material when a reasonable [USPTO patent] examiner would consider it important
in deciding whether to allow the application to issue as a patent.@ Star Scientific, Inc. v. R.J. Reynolds
Tobacco Co., 537 F.3d 1357, 1367 (Fed. Cir. 2008). The but-for standard of Therasense is more
difficult to prove and ACH=s counterclaim does not contain sufficient factual allegations alleging how
the USPTO would have used the prior art reference in rejecting a claim in the patent application that
ultimately issued into the >619 Patent.
INTENT
Exergen instructs that Aalthough >knowledge= and >intent= may be averred generally, 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. AA 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. at 1329-30 n.5. In contrast to the trial stage of
a case where an accused infringer must establish intent to deceive the USPTO by clear and
convincing evidence, at the pleading stage, the accused infringer must only show a reasonable
inference of intent based on the allegations of underlying fact. Id.
In its response brief, ACH argues that paragraphs 32 through 34 of its counterclaim
adequately plead the Aintent@ element and satisfy Exergen.
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The Court finds that ACH has not pled facts that show a reasonable inference of deceptive
intent to mislead the USPTO. In fact, in paragraph 32 of its counterclaim, ACH only generally pleads
that Recticel Aknew or should have known@ of the undisclosed prior art paint-type applications and
processes without any factual support. The other allegations in ACH’s counterclaim do not state facts
that establish a reasonable inference that Recticel intentionally deceived the USPTO. Rather, ACH’s
counterclaim contains conclusory assertions of intent. These types of naked allegations of intent are
insufficient under Exergen. AA reasonable inference [of intent] is one that is plausible and that flows
logically from the facts alleged, including any objective indications of candor and good faith.@ Id.
at 1329-30 n.5. There is nothing in the well pleaded facts from which the Court could reasonably
infer that Recticel knew of a prior art reference, knew of its materiality, and withheld the prior art
reference with the intent to deceive the USPTO. Moreover, in Therasense, the Federal Circuit
recognized that it long ago rejected a Ashould have known@ standard for establishing Aintent.@
Therasense, 649 F.3d at 1290 (citing Kingsdown Med. Consultants, Ltd. v. Hollister, Inc., 863 F.2d
867, 876 (Fed. Cir. 1988). The Federal Circuit in Therasense also clearly held that A[p]roving that
the applicant knew of a reference, should have known of its materiality, and decided not to submit
it to PTO does not prove specific intent to deceive.@ Id.
B.

AFFIRMATIVE DEFENSES

In its Answer, ACH included affirmative defenses of inequitable conduct, estoppel, and
laches. ACH pled the affirmative defenses in conclusory fashion as follows:

5.

AFFIRMATIVE DEFENSES AND/OR SPECIAL DEFENSES
*
*
*
U.S. Patent No. 6,071,619 is unenforceable because of inequitable conduct
committed during prosecution of the ‘619 Patent.

6.

Plaintiffs’ Complaint, and each and every cause asserted herein, is barred, in
whole or in part, by the doctrine of estoppel.

7.

Plaintiffs’ Complaint, and each and every cause asserted therein, is barred,
in whole or part, by the doctrine of laches.

(Answer at p. 3, Dkt. No. 23.)
Recticel argues that these affirmative defenses should be dismissed or stricken for failing to
11

set forth any supporting facts.
As for ACH’s affirmative defense of inequitable conduct, Recticel argues that the defense
should be dismissed because inequitable conduct must be pled with particularity of Rule 9 as
discussed above. ACH relies on the factual allegations of inequitable conduct contained in its
counterclaim to support this affirmative defense.

Because the Court is dismissing ACH’s

counterclaim for inequitable conduct, the Court will also dismiss ACH’s affirmative defense for
inequitable conduct.
As for ACH’s affirmative defenses of laches and estoppel, Recticel argues that such
affirmative defenses must meet the pleading standards of Twombly and Iqbal. ACH argues that the
holdings of Twombly and Iqbal do not apply to affirmative defenses.
Accordingly, the issue before the Court is whether the pleading standards articulated by the
Supreme Court in Twombly and Iqbal apply to affirmative defenses. In a prior case, this Court held
that Twombly and Iqbal do not apply to affirmative defenses. See First Nat’l Ins. Co. v. Camps
Servs., Ltd., 2009 WL 22861 (E.D. Mich. 2009) (Cox, J.) Neither the Sixth Circuit nor Federal
Circuit have resolved the issue of whether the pleading standards of Twombly and Iqbal apply to
affirmative defenses. In light of this Court’s prior decision, the Court will deny Recticel’s motion
to strike ACH’s affirmative defenses of laches and estoppel.
VI.

CONCLUSION
For the reasons explained above, the Court hereby dismisses ACH’s counterclaim and

affirmative defense for inequitable conduct.

The Court denies Plaintiffs’ motion to strike

Defendant’s affirmative defenses of laches and estoppel.
The Court recognizes that the Federal Circuit decided Therasense after ACH filed its
inequitable conduct counterclaim and after ACH filed its response brief to the present motion. In
light of this change in the law, ACH may file a motion for leave to file a new inequitable conduct
counterclaim that meets the requirements of Exergen and Therasense. However, the Court cautions
ACH that it must plead specific facts in any new proposed counterclaim showing that Recticel knew
of a specific prior art reference, knew that it was material, and deliberately withheld the reference
12

with the intent to deceive the USPTO.

SO ORDERED

S/Sean F. Cox
Sean F. Cox
United States District Judge
Dated: November 3, 2011

I hereby certify that a copy of the foregoing document was served upon counsel of record on
November 3, 2011, by electronic and/or ordinary mail.
S/Jennifer Hernandez
Case Manager

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