Allied Machine & Engineering Corporation v. Competitive Carbide, Inc.
Filing
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Opinion and Order. Plaintiff's Motion for Voluntary Dismissal with prejudice (Related doc # 81 ) is granted. Defendant's Motion to Vacate Stay Pending Reexamination of the '616 Patent and for Leave to Proceed with Counterclaim (Related doc #'s 82 , 84 ) is denied. Judge Christopher A. Boyko on 2/15/2018. (H,CM)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
ALLIED MACHINE & ENGINEERING )
CORPORATION,
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Plaintiff,
)
)
vs.
)
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COMPETITIVE CARBIDE, INC.,
)
)
Defendant.
)
CASE NO. 1:11CV2712
JUDGE CHRISTOPHER A. BOYKO
OPINION AND ORDER
CHRISTOPHER A. BOYKO, J.:
This matter comes before the Court upon the Motion (ECF DKT #81) of Plaintiff
Allied Machine & Engineering Corporation (“Allied”) for Voluntary Dismissal and the
Motion (ECF DKT #82) of Defendant Competitive Carbide, Inc. (“Competitive”) to Vacate
Stay Pending Reexamination of the ‘616 Patent and for Leave to Proceed with its
Counterclaim. For the following reasons, the Plaintiff’s Motion to Dismiss the abovecaptioned action with prejudice is granted and Defendant’s Motion to Vacate the Stay and
Proceed with the Counterclaim is denied.
I. BACKGROUND
On December 14, 2011, Allied filed its Complaint for Patent Infringement. Allied
alleges it is the owner by assignment of U.S. Patent No. 7,942,616 (‘616 Patent), issued on
May 17, 2011, to the inventors, Joseph P. Nuzzi and Rolf H. Kraemer, and entitled Drilling
Tool and Method for Producing Port Seals. Further, Allied alleges Competitive made, used,
sold, offered for sale, and/or imported into the United States drill tools, under the name
“Helmet Head,” that infringe upon one or more claims of the ‘616 patent. Specifically, Allied
asserts Claims 1, 2, 4, 7, 9, and 11 through 20 of the ‘616 patent. On January 27, 2012,
Competitive filed its Answer and Counterclaim for Declaratory Judgment of Invalidity and
Unenforceability of the ‘616 patent. Specifically, Competitive’s Counterclaim alleges:
44. The Defendant further asserts that the claims of invention as set forth in
the ‘616 patent are invalid by reason of inequitable conduct before the United
States Patent and Trademark Office by Plaintiff . . . in violation of 37 CFR (at)
Section 1.56 of the United States Patent Rules.
45. As a result of the foregoing conduct, facts, and events, the Defendants
[sic] seek declaratory judgment by this Court that the subject United States
Patent 7,942,616 is invalid and unenforceable under 35 USC 102(b) and 35
CFR 1.56.
On September 15, 2012, a third party filed a request with the Patent Office for ex parte
reexamination of the ‘616 patent. On December 3, 2012, the Patent Office granted the
request and initiated reexamination. On May 7, 2013, Allied moved to stay the litigation
pending the outcome of the reexamination. (ECF DKT #65). On October 8, 2013, the Court
granted Allied’s Motion and stayed the litigation pending the completion of the
reexamination. (ECF DKT #69).
In the reexamination, the Patent Office determined that all of the claims of the ‘616
patent were unpatentable over the newly discovered prior art. Allied appealed that decision to
the Patent Trial and Appeal Board (“PTAB”), which affirmed the decision of the Patent
Office. (ECF DKT #81, Ex. 1). Allied sought rehearing by the PTAB, which was finally
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denied on September 2, 2016. On November 9, 2016, Allied filed its notice of appeal
to the U.S. Court of Appeals for the Federal Circuit. (ECF DKT #81, Ex. 2). On February
16, 2017, Allied filed an unopposed motion for voluntary dismissal of its appeal. (ECF DKT
#81, Ex. 3). On February 16, 2017, the Federal Circuit dismissed Allied’s appeal, making
final the Patent Office’s decision that all of the claims of the ‘616 patent are unpatentable.
(ECF DKT #81, Ex. 4).
On February 16, 2017, Allied filed the instant Motion for Voluntary Dismissal; and on
February 23, 2017, Competitive filed its Motion to Vacate Stay and Proceed. Competitive
asks the Court to find inequitable conduct by Allied before the Patent Office and to determine
Competitive’s reasonable damages and compensation.
In order to clarify the parties’ positions and the applicable law, the Court ordered
cross-briefs focused on the viability of the Inequitable Conduct Counterclaims under 37 CFR
§ 1.56 and on whether any remedy is available in light of the final Patent Office decision that
all of the claims of the ‘616 patent are unpatentable and therefore, unenforceable. (ECF DKT
#86).
II. LAW AND ANALYSIS
37 CFR § 1.56 - Duty to disclose information material to patentability
37 CFR § 1.56 reads in pertinent part: “Each individual associated with the filing and
prosecution of a patent application has a duty of candor and good faith in dealing with the
Office, which includes a duty to disclose to the Office all information known to that
individual to be material to patentability . . .[N]o patent will be granted on an application in
connection with which fraud on the Office was practiced or attempted or the duty of
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disclosure was violated through bad faith or intentional misconduct.”
“Inequitable conduct is an equitable defense to a patent infringement case that, if
proved, bars enforcement of a patent.” Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d
1276, 1285 (Fed.Cir. 2011). The remedy for inequitable conduct is the “unenforceability of
the entire patent.” Id. at 1287. (Emphasis added). “The concept of inequitable conduct in a
patent procurement derives from the equitable doctrine of unclean hands: that a person who
obtains a patent by intentionally misleading the PTO cannot enforce the patent.” Gen. Electro
Musical Corp. v. Samick Music Corp., 19 F.3d 1405, 1408 (Fed.Cir. 1994). “Perhaps most
importantly, the remedy for inequitable conduct is the “atomic bomb” of patent law.”
Therasense, 649 F.3d at1288, citing Aventis Pharma S.A. v. Amphastar Pharm., Inc., 525 F.3d
1334, 1349 (Fed.Cir. 2008) (Rader, J., dissenting).
There is no dispute in the instant case that Allied’s ‘616 patent was declared invalid
and unenforceable by the final decision of the Patent Office. Competitive’s only available
remedy on its Inequitable Conduct Counterclaim has been satisfied. The Court finds,
therefore, that Competitive’s Counterclaim is moot and cannot remain for independent
adjudication under Fed.R.Civ.P. 41(a)(2).
In its briefing, Competitive asserts that it is entitled to attorney’s fees and expenses for
Allied’s violation of 37 CFR § 1.56 and 35 U.S.C. § 285. Neither in the parties’ cited
authorities nor in the Court’s independent research has the Court been able to find authority
for monetary recovery for inequitable conduct. Moreover, nowhere in Competitive’s Answer
and Counterclaims is there an allegation that this is an exceptional case under 35 U.S.C.
§ 285. Rather, in the concluding paragraph of Competitive’s Prayer, it simply states: “For
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any other such relief that is therefore provided for by law or equity, and reasonable attorney’s
fees, expenses, and the costs of this action.” This one sentence is patently insufficient to
warrant exceptional relief. The Court declines to find a legitimate claim for fees and
expenses.
III. CONCLUSION
For these reasons, the Motion (ECF DKT #81) of Plaintiff Allied Machine &
Engineering Corporation (“Allied”) for Voluntary Dismissal with prejudice is granted. The
Motion (ECF DKT #82) of Defendant Competitive Carbide, Inc. (“Competitive”) to Vacate
Stay Pending Reexamination of the ‘616 Patent and for Leave to Proceed with its
Counterclaim is denied.
IT IS SO ORDERED.
s/ Christopher A. Boyko
CHRISTOPHER A. BOYKO
United States District Judge
Dated: February 15, 2018
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