Horizon Global Americas, Inc. v. Northern Stamping, Inc.
Memorandum Opinion and Order: For the reasons set forth in this order, Plaintiff's Motion to Dismiss Amended Inequitable Conduct Counterclaim V and Strike Affirmative Defense #8 (Doc. No. 35 ) is GRANTED. Judge Pamela A. Barker on 7/14/2021.(P,K)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
HORIZON GLOBAL AMERICAS, INC.,
NORTHERN STAMPING, INC.,
CASE NO. 1:20-CV-00310
JUDGE PAMELA A. BARKER
MEMORANDUM OF OPINION AND
This matter comes before the Court upon the Motion to Dismiss Amended Inequitable
Conduct Counterclaim V and Strike Affirmative Defense #8 (“Motion”) of Plaintiff/CounterDefendant Horizon Global Americas, Inc. (“Horizon”). (Doc. No. 35.) Defendant/Counter-Claimant
Northern Stamping, Inc. (“NSI”) filed a brief in opposition to Horizon’s Motion on December 23,
2020, to which Horizon replied on January 6, 2021. (Doc. Nos. 36, 37.) For the following reasons,
Horizon’s Motion (Doc. No. 35) is GRANTED.
a. Factual Allegations
Horizon is a manufacturer of towing and trailering equipment. (Doc. No. 16 at ¶ 9.) On
December 5, 2017, Horizon obtained a patent—U.S. Patent No. 9,834,050 (the “’050 Patent”)—for
an underbed hitch mounting system that allows a hitch to be attached to a truck without having to
install rails on top of the truck bed. (Id. at ¶¶ 1, 12-15.)
During prosecution of the ’050 patent, Horizon received an Office Action from the U.S. Patent
and Trademark Office (“PTO”) rejecting its claims as being anticipated by a patent and patent
application by Ford (the “Ford Patents”). (Doc. No. 25, Amended Counterclaims, at ¶ 21; Doc. No.
35-2.) In order to overcome this rejection, Horizon submitted a response to the PTO that included a
declaration from one of its employees, Eric Stanifer (“Stanifer”), stating that he and his coinventor
conceived of the invention before the earliest priority date of the Ford Patents. (Doc. No. 25,
Amended Counterclaims, at ¶ 21.) Specifically, Stanifer’s declaration provided, in relevant part:
3. The invention described and claimed in the present application was conceived by my
fellow inventor and me prior to the effective date of ‘122 Withers of May 30, 2008
and ‘968 Withers of June 23, 2009, and diligently worked on and reduced to practice
following conception, as evidenced by the following facts, which are of my own
4. Attached hereto as Exhibit A are drawings that I along with my follow inventor
prepared and completed on May 8, 2008. The drawings of Exhibit A demonstrate our
conception of the claimed subject matter before the effective date of the ‘122 Withers
of May 30, 2008 and the ‘968 Withers of June 23, 2009. The drawings attached as
Exhibit A were created as I and my fellow inventor refined the invention to create a
manufacturable version. Therefore, I and my fellow inventor as the inventors of the
present application conceived of the invention prior to May 30, 2008 and June 23,
(Doc. No. 18-1 at ¶¶ 3-4 (emphasis added).)
Exhibit A to Stanifer’s declaration contains two drawings. (Id. at 5.) One of the drawings is
a sketch of the complete underbed hitch mounting system, and one of the drawings appears to be a
side view of one of the parts of the system. (Id.) According to NSI, these conception drawings do
not show “receiving members” on the underbed hitch mounting system even though receiving
members are claimed as a necessary element of the ’050 Patent.
(Doc. No. 25, Amended
Counterclaims, at ¶¶ 24-26.) 1 More specifically, the claims of Horizon’s ’050 patent all require “a
In its Amended Counterclaims, NSI attempts to support its contention that the conception drawings do not contain
receiving members based on an alleged comparison of the conception drawings to a separate provisional application by
Horizon. (See Doc. No. 25, Amended Counterclaims, at ¶¶ 21-26.) NSI appears to have abandoned this argument in its
opposition to Horizon’s Motion, and the Court therefore need not address Horizon’s arguments regarding the provisional
pair of receiving members attached with said at least one tubular member, said receiving members
configured to engage an accessory member.” (Id. at ¶ 24.) Based on the lack of receiving members
in the conception drawings, NSI asserts that Stanifer’s statement in his declaration that the drawings
demonstrate that he invented the underbed hitch mounting system prior to the Ford Patents was false.
(Id. at ¶¶ 20-32.) Nonetheless, after receiving Stanifer’s declaration, the PTO examiner issued a
Notice of Allowability for the application, and Horizon obtained the ’050 Patent. (Doc. No. 16 at ¶
15; Doc. No. 35-4.)
Based on the representations made by Stanifer during the prosecution of the ’050 Patent, the
Ford Patents were not considered to be prior art during Horizon’s later prosecution of another patent
related to the underbed hitch mounting system that also included receiving members as a necessary
element, specifically U.S. Patent No. 10,589,585 (the “’585 Patent”). (Doc. No. 25, Amended
Counterclaims, at ¶ 28.) Neither Stanifer nor any other Horizon employee corrected the alleged
misrepresentation regarding what the conception drawings portrayed while obtaining the ‘585 patent.
(Id.) The ’585 Patent was issued to Horizon on March 17, 2020. (Doc. No. 16 at ¶ 19.)
b. Procedural History
On August 20, 2020, Horizon filed a First Amended Complaint, alleging that NSI has
infringed both the ’050 Patent and the ’585 Patent. (Doc. No. 16.) On October 22, 2020, NSI filed
an Answer to Horizon’s First Amended Complaint and Amended Counterclaims. (Doc. No. 25.) In
its Answer and Amended Counterclaims, NSI sets forth both an affirmative defense—Affirmative
Defense #8—and counterclaim—Counterclaim V—alleging that Horizon’s patents are unenforceable
as a result of its inequitable conduct based on Stanifer’s alleged misrepresentation in his declaration
in support of Horizon’s application for the ’050 Patent. (Doc. No. 25, Affirmative Defenses, at ¶ 8;
id., Amended Counterclaims, at ¶¶ 19-32.)
In response, on November 25, 2020, Horizon filed a Motion to Dismiss Amended Inequitable
Conduct Counterclaim V and Strike Affirmative Defense #8. (Doc. No. 35.) In its Motion, Horizon
seeks to dismiss NSI’s inequitable conduct counterclaim for failure to state a claim pursuant to Fed.
R. Civ. P. 12(b)(6), as well as to strike NSI’s corresponding affirmative defense pursuant to Fed. R.
Civ. P. 12(f). (Id.) NSI filed a brief in opposition to Horizon’s Motion on December 23, 2020, to
which Horizon replied on January 6, 2021. (Doc. Nos. 36, 37.) Subsequently, on March 17, 2021,
the parties moved for a ninety-day stay of the case in order to engage in mediation, which the Court
granted the following day. (Doc. No. 39.) Following the stay period, the parties informed the Court
that they were unable to resolve the case through settlement negotiations, and the case was reopened
on June 17, 2021. (Doc. No. 44.) As such, Horizon’s Motion is ripe for adjudication.
Motion to Dismiss
a. Standard of Review
Under Rule 12(b)(6), the Court accepts the plaintiff’s factual allegations as true and construes
the complaint in the light most favorable to the plaintiff. See Gunasekara v. Irwin, 551 F.3d 461, 466
(6th Cir. 2009). In order to survive a motion to dismiss under this Rule, “a complaint must contain
(1) ‘enough facts to state a claim to relief that is plausible,’ (2) more than ‘a formulaic recitation of a
cause of action’s elements,’ and (3) allegations that suggest a ‘right to relief above a speculative
level.’” Tackett v. M & G Polymers, USA, LLC, 561 F.3d 478, 488 (6th Cir. 2009) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555-56, 570 (2007)).
The measure of a Rule 12(b)(6) challenge—whether the complaint raises a right to relief
above the speculative level—“does not ‘require heightened fact pleading of specifics, but only enough
facts to state a claim to relief that is plausible on its face.’” Bassett v. Nat’l Collegiate Athletic Ass’n,
528 F.3d 426, 430 (6th Cir. 2008) (quoting Twombly, 550 U.S. at 570). “A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). Deciding whether a complaint states a claim for relief that is plausible is a “contextspecific task that requires the reviewing court to draw on its judicial experience and common sense.”
Id. at 679.
Consequently, examination of a complaint for a plausible claim for relief is undertaken in
conjunction with the “well-established principle that ‘Federal Rule of Civil Procedure 8(a)(2) requires
only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Specific
facts are not necessary; the statement need only “give the defendant fair notice of what the . . . claim
is and the grounds upon which it rests.”’” Gunasekera, 551 F.3d at 466 (quoting Erickson v. Pardus,
551 U.S. 89, 93 (2007)). Nonetheless, while “Rule 8 marks a notable and generous departure from
the hyper-technical, code-pleading regime of a prior era . . . it does not unlock the doors of discovery
for a plaintiff armed with nothing more than conclusions.” Iqbal, 556 U.S. at 678-79.
In its Motion, Horizon argues that NSI’s inequitable conduct counterclaim should be
dismissed for several reasons. First, Horizon asserts that Stanifer’s declaration does not contain a
false statement, as the drawings attached to his declaration do show the allegedly missing receiving
members. (Doc. No. 35-1 at 8-10; Doc. No. 37 at 3-5.) Although Horizon admits that Stanifer’s
drawings are not as clear as the professionally generated figures in the ’050 Patent, Horizon contends
that certain layered circles in the sketch of the underbed hitch mounting system represent receiving
members. (Doc. No. 37 at 3-5.) Horizon also argues that its interpretation of the drawings is
confirmed by the fact that the PTO examiner, who is presumed to have properly done his job,
reviewed the drawings and agreed that they supported the issuance of the patent. (Id. at 4-5.) Second,
Horizon asserts that because Stanifer did not make any false statement, NSI cannot show that he had
the requisite intent to deceive the PTO. (Doc. No. 35-1 at 10-11.) Further, Horizon contends that
even if the Court agrees with NSI that the conception drawings do not include receiving members,
NSI’s allegations do not support a finding of an intent to deceive by Stanifer. (Id. at 11.) 2 In response,
NSI contends that Stanifer’s drawings do not include a depiction of the receiving members, that
Stanifer’s declaration stating that the drawings support his conception of all of the elements of the
underbed hitch mounting system is therefore false, and that Stanifer’s intent to deceive the PTO can
be inferred from the submission of this false statement that was necessary to obtain the ’050 Patent.
(Doc. No. 36 at 7-8.) 3 Upon review of the parties’ arguments, the Court finds that dismissal of NSI’s
In support of its Motion, Horizon also relies on several documents it produced to NSI pursuant to Local Patent Rule 3.2
that Horizon asserts demonstrate that Stanifer and his co-inventor conceived of the allegedly missing receiving members
well before the May 8, 2008 date provided in his declaration and, therefore, there was conception before the priority dates
of the Ford Patents. (Doc. No. 35-1 at 11-12.) However, the Court may not consider these documents. “When a court is
presented with a Rule 12(b)(6) motion, it may consider the Complaint and any exhibits attached thereto, public records,
items appearing in the record of the case and exhibits attached to defendant’s motion to dismiss so long as they are referred
to in the Complaint and are central to the claims contained therein.” Bassett, 528 F.3d at 430. Horizon has not shown
that these documents were central to or referenced in NSI’s Amended Counterclaims, and the Court cannot consider them
merely because they were produced in discovery prior to the filing of NSI’s Amended Counterclaims.
In NSI’s opposition to Horizon’s Motion, NSI also asserts that Stanifer falsely claimed that he invented the underbed
hitch mounting system independent of Ford, even though it is inconceivable that Stanifer was not working with Ford
given the similarities between the drawings and the Ford Patents. (Doc. No. 36 at 5.) To the extent that NSI relies on
this additional allegedly false statement in support of its inequitable conduct counterclaim, the Court will not consider it,
as NSI failed to set forth any allegations regarding this theory of Ford’s alleged joint inventorship in its Amended
Counterclaims. See Bates v. Green Farms Condo. Ass'n, 958 F.3d 470, 483 (6th Cir. 2020) (holding parties “cannot . . .
amend their complaint in an opposition brief or ask the court to consider new allegations (or evidence) not contained in
inequitable conduct counterclaim is appropriate, as NSI has failed to allege sufficient facts to support
a reasonable inference that Stanifer specifically intended to deceive the PTO. 4
“‘[I]nequitable conduct, while a broader concept than fraud, must be pled with particularity’
under Rule 9(b).” Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1326 (Fed. Cir. 2009)
(quoting Ferguson Beauregard/Logic Controls, Div. of Dover Resources, Inc. v. Mega Sys., LLC,
350 F.3d 1327, 1344 (Fed. Cir. 2003)). Thus, “[a] pleading that simply avers the substantive elements
of inequitable conduct, without setting forth the particularized factual bases for the allegation,” is
insufficient. Id. at 1326-27.
“The substantive elements of inequitable conduct are: (1) an individual associated with the
filing and prosecution of a patent application made an affirmative misrepresentation of a material
fact, failed to disclose material information, or submitted false material information; and (2) the
individual did so with a specific intent to deceive the PTO.” Id. at 1327 n.3. With respect to the
second element, “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. 5 “Because direct evidence
of deceptive intent is rare, a district court may infer intent from indirect and circumstantial evidence.”
Therefore, the Court need not address Horizon’s other arguments in support of dismissal.
Horizon asserts that to establish an inequitable conduct claim, the intent to deceive must be “the single most reasonable
inference able to be drawn from the evidence.” (Doc. No. 35-1 at 10.) However, that standard does not apply at the
pleadings stage. See Exergen, 575 F.3d at 1329 n.5; ZAGG Intellectual Prop. Holding Co. v. XO Skins, LLC, No. 2:10CV-1257-TC, 2012 WL 896352, at *5 (D. Utah Mar. 15, 2012) (“[S]uch a standard applies only when the court is
evaluating the claim on the merits under the clear and convincing standard.”).
Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276, 1290 (Fed. Cir. 2011). However, the
Court also may take into account “any objective indications of candor and good faith.” Exergen, 575
F.3d at 1329 n.5.
In this case, NSI asserts that Stanifer made a materially false statement to the PTO by
indicating in his declaration that “[t]he drawings of Exhibit A demonstrate our conception of the
claimed subject matter before the effective date of the [Ford patents].” (Doc. No. 36 at 7.) According
to NSI, this statement is false because the drawings do not demonstrate the conception of all of the
elements of the underbed hitch mounting system because they do not include a depiction of the
receiving members. (Id.) However, even assuming, arguendo, that the drawings do not display the
receiving members and that Stanifer’s declaration therefore contains a false statement, the Court finds
NSI’s allegations fail to state a claim for inequitable conduct.
Specifically, NSI’s allegations are insufficient to enable the Court to reasonably infer that
Stanifer submitted this false statement with the specific intent to deceive the PTO. NSI argues that
because Stanifer should have known that the drawings did not show conception of the underbed hitch
mounting system, the logical inference is that Stanifer’s false statement was made to deceive the PTO
into allowing the Horizon patents. (Id. at 8.) Without additional supporting allegations, the Court
does not agree that this inference is reasonable. First, as Horizon points out, NSI does not allege that
Stanifer and his coinventor did not actually conceive of the receiving members prior to the filing
dates for the Ford Patents or that they lacked other proof of their conception besides the drawings
attached to Stanifer’s declaration. (Doc. No. 35-1 at 11.) If Stanifer and his coinventor did, in fact,
conceive of the receiving members prior to the Ford patents and had additional proof of that
conception, it is not reasonable to infer that Stanifer would have nonetheless intentionally submitted
inadequate drawings in order to deceive the PTO examiner. The lack of such allegations undermines
Further, Stanifer’s allegedly false representation to the PTO examiner was in the form of a
single statement in his declaration regarding what the attached drawings depicted that was easily
verifiable by the examiner. Indeed, all the examiner had to do was review the two conception
drawings to determine whether they supported Stanifer’s claimed conception of the underbed hitch
mounting system. It is not plausible to infer that Stanifer intended to deceive the PTO examiner when
he presented everything in plain sight for the examiner to review. See Medline Indus., Inc. v. C.R.
Bard, Inc., No. 17 C 7216, 2018 WL 4333629, at *5 (N.D. Ill. Sept. 11, 2018) (finding no intent to
deceive where a statement to the examiner inaccurately described certain figures when those figures
were provided to the examiner).
Therefore, the Court finds NSI’s allegations inadequate with respect to Stanifer’s specific
intent to deceive the PTO in his declaration in support of the ’050 Patent. NSI’s inequitable conduct
counterclaim with respect to the ’585 Patent is based on this same conduct. (See Doc. No. 25,
Amended Counterclaims, at ¶ 28.) Therefore, NSI’s inequitable conduct counterclaim against the
’585 patent fails for the same reason. Accordingly, the Court grants Horizon’s Motion to dismiss
NSI’s inequitable conduct counterclaim.
Motion to Strike
Horizon also moves to strike NSI’s affirmative defense, which is based on the same alleged
inequitable conduct, pursuant to Fed. R. Civ. P. 12(f). (Doc. No. 35-1 at 13.) Both parties agree that
NSI’s counterclaim and affirmative defense for inequitable conduct rise or fall together. (Id.; Doc.
No. 36 at 10.) Indeed, courts have so held. Medline Indus., Inc. v. C.R. Bard, Inc., No. 16-cv-3529,
2016 WL 5871501, at *3 (N.D. Ill. Oct. 7, 2016) (“[I]nequitable conduct counterclaims and
affirmative defenses of inequitable conduct rise or fall together.”); Senju Pharm. Co., Ltd. v. Apotex,
Inc., 921 F. Supp. 2d 297, 306 (D. Del. 2013) (“Apotex’s counterclaim and affirmative defense for
inequitable conduct rise or fall together.”). As a result, because NSI’s counterclaim is not adequately
pled, the Court also strikes NSI’s affirmative defense of inequitable conduct.
For the reasons set forth above, Horizon’s Motion (Doc. No. 35) is GRANTED.
IT IS SO ORDERED.
s/Pamela A. Barker
PAMELA A. BARKER
U. S. DISTRICT JUDGE
Date: July 14, 2021
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?