Tannerite Sports, LLC et al v. Jerent Enterprises, LLC

Filing 71

OPINION AND ORDER: Plaintiffs' motion to dismiss defendant's counterclaims and affirmative defenses, is GRANTED in part and DENIED in part. See formal OPINION AND ORDER. Signed on 5/2/2016 by Judge Ann L. Aiken. (rh)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
EUGENE DIVISION

TANNERITE SPORTS, LLC and
DANIEL TANNER,
Plaintiffs,
v.
JERENT ENTERPRISES, LLC, dba
SONIC BOOM EXPLODING TARGETS,
Defendant.

Andrea D. Coit
Harrang Long Gary Rudnick, PC
360 East 10th Ave., Suite 300
Eugene, OR 97401
Kevin M. Drucker (pro hac vice)
David L. Cargille (pro hac vice)
Mendelsohn, Drucker, & Dunleavy, PC
1500 John F. Kennedy Blvd., Suite 312
Philadelphia, PA 19102
Attorneys for Plaintiffs.
Joshua M. Wolf
Wolf Legal, LLC
17390 SW Rose Petal Lane #206
Beaverton, OR 97003

Page 1 - OPINION AND ORDER

Case No. 6:15-cv-00180-AA
OPINION AND ORDER

Michael T. Hilgers (pro hac vice)
Mary Ann Novak (pro hac vice)
Gober Hilgers, PLLC
14301 FNB Parkways, Suite 100
Omaha, NE 68154
Attorneys for Defendant.
AIKEN, Judge:
Plaintiffs Tannerite Sports, LLC and Daniel Tanner move to
dismiss

the

Second

Amended

Answer,

Affirmative

Defenses,

and

Counterclaims of defendant Jerent Enterprises, LLC, dba Sonic Boom
Exploding Targets pursuant to Fed. R. Civ.
reasons that follow,

plaintiffs'

P.

12(b) (6).

For the

motion is GRANTED in part and

DENIED in part.
BACKGROUND

This

matter

commenced

when

plaintiffs

filed

a

complaint

against defendant alleging patent infringement of their "Tanneri te"
brand

binary

targets

under

the

Patent

Act,

35

U.S. C.

271.

§

Plaintiffs' patented binary exploding targets are touted as safe to
transport and store because the reactive chemicals (an oxidizer and
a

catalyst)

are packaged in separate containers which are

not

combined until shortly before use. However, even when mixed,

the

chemicals do not react with each other unless impacted with the
kinetic

force of a

center-fire rifle

round.

Because the

rifle

targets explode on impact creating a loud boom and "smoke," they
are said to be popular at shooting ranges.
Following plaintiffs' First Amended Complaint, defendant filed
an Answer,

Affirmative Defenses,

Page 2 - OPINION AND ORDER

and Counterclaims on April 14,

2015

(doc. 20). Thereafter, on July 17, 2015, defendant filed an

Amended Answer including affirmative defenses and counterclaims
(doc.

29).

In

response,

plaintiffs

filed

a

Motion

to

Dismiss

defendant's counterclaims on August 10, 2015 (doc. 32). The Court
granted in part and denied in part plaintiff's motion by Opinion
and

Order

of

October

subsequently moved

6,

for

2015

leave

to

("O&O")
file

a

(doc.

41).

Defendant

Second Amended Answer

including Affirmative Defenses and Counterclaims, which plaintiffs
opposed (docs. 45 & 47). On December 18, 2015, the Court granted
defendant

leave

to

file

a

Second

Amended

Answer

(doc.

54).

Defendant's Second Amended Answer, including affirmative defenses
and counterclaims, was filed on December 25, 2015 ("Def.' s Sec. Am.
Ans.")

(doc. 55).

Plaintiffs now move for dismissal for failure to state a claim
("Pls.' Mot.")

(doc. 56).
STANDARD OF REVIEW

"Where a counterclaim 'fail (s)

to state a claim upon which

relief can be granted,' it must be dismissed." Unum Life Ins. Co.
of Am.

v.

Martin,

2013

WL

3995005,

*2

(D.

Or.

Aug.

1,

2013)

(quoting Fed. R. Civ. P. 12(b) (6)). To survive a motion to dismiss,
a counterclaim must allege "enough facts to state a claim to relief
that is plausible on its face." Bell Atl. v. Twombly, 550 U.S. 544,
570

(2007);

Ashcroft v.

Igbal,

556 U.S.

662,

129

(2009).

The

counterclaims are liberally construed in favor of the counter-

Page 3 - OPINION AND ORDER

claimant and its allegations are taken as true. Rosen v. Walters,
719 F.2d 1422, 1424 (9th Cir. 1983). Bare assertions, however, that
amount

to

nothing

more

than

a

"formulaic

recitation

of

the

elements" of a claim "are conclusory and not entitled to be assumed
true." Igbal, 556 U.S. at 681. Rather, to state a plausible claim
for relief, the counterclaim "must contain sufficient allegations
of underlying facts" to support its legal conclusions. Starr v.
Baca, 652 F.3d 1202, 1216 (9th Cir. 2011), cert. denied, 132 S.Ct.
2101

(2012) .
DISCUSSION

Plaintiffs

contend:

(1)

the

instant

motion

to

dismiss

defendant's counterclaims is not precluded by the Court's O&O;

(2)

defendant's counterclaims should be dismissed for failure to state
a

claim;

and

(3)

defendant's

affirmative defenses

are

legally

insufficient and should be dismissed. 1 Defendant opposes each of
plaintiffs' contentions.
I. Validity of Plaintiffs' Instant Motion
A. Direct and Indirect Non-Infringement
Defendant originally presented two distinct non-infringement
counterclaims; one regarding direct non-infringement, and another
regarding indirect non-infringement. Def.'s Am. Ans.

1

~~

80, 105-109

Plaintiffs' motion does not contain any argument or request
to dismiss defendant's Second Amended Answer, despite the
motion's title. Accordingly, the Court does not rule on the
provisions comprising defendant's Second Amended Answer. See
Def.'s Sec. Am. Ans. ~~ 1-43.
Page 4 - OPINION AND ORDER

(doc.

29).

The Court's October 6,

2015 Order denied plaintiffs'

motion to dismiss the direct non-infringement claim, and granted
plaintiffs' motion to dismiss the indirect non-infringement claim.
Currently before the court is Def.'s Sec. Am. Ans., which includes
an

amended

non-infringement

counterclaim

which

no

longer

distinguishes between direct and indirect non-infringement. See id.
'[ 80

(patents "are not infringed"),

inf ringed .

'[ 107

("[defendant]

has not

[and] does not infringe" the patents-in-suit) .

Plaintiffs request the Court to determine

whether the

(1)

Court's opinion granting defendant leave to amend precludes the
current

motion;

defendant's

(2)

direct

whether

the

non-infringement

Court's

ruling

counterclaim

regarding
is

valid

notwithstanding the abrogation of Fed. R. Civ. P. 84 and Form 18;
and (3) whether the Court should limit, clarify, or require further
amendment

of

defendant's

Defenses.

Pls.'

instant Counterclaims

and Affirmative

Reply Memorandum in Support of Mot.

to Dismiss

Def.' s Sec. Am. Ans., Defenses, and Counterclaims (''Pls.' Reply")
(doc.

58)

1. Defendant responds that its instant counterclaims

refer only to direct non-infringement; thus, plaintiffs' motion is
redundant in requesting dismissal of defendant's

indirect non-

infringement counterclaim. Def. Jerent Enterprises, LLC's Response
to Pls.'

Mot.

to Dismiss Def.' s

Counterclaims

("Def.' s

Resp.")

(doc. 57) 30-31.
Turning to plaintiffs' third contention first,

Page 5 - OPINION AND ORDER

the Court is

satisfied

by

defendant's

representation

that

its

counterclaims strictly involve direct non-infringement,

current
because

defendant has abandoned its prior request for declaratory relief
relative to indirect non-infringement. See Def.'s Resp. 31 ("[t)he
counterclaim

pertains

to

direct

[non)

infringement") .

Nonetheless, in the interest of clarity, defendants must make the
two-word clarification it proposes by attaching the

"directly"

modifier to the term "infringe[d)" in its counterclaim.
B. Abrogation of Fed. R. Civ. P. 84 and Form 18
The next issue is whether the Court's denial of plaintiffs 1
motion to dismiss defendant's direct non-infringement counterclaim
stands, notwithstanding intervening changes to the Federal Rules of
Civil

Procedure

("Rules") .

The

amended

Rules

took

effect

on

December 1, 2015. H.R. Doc. No. 114-33, at *2 (2015). The relevant
change removed Rule 84,

including its appendix,

which contained

Form 18. As discussed in the Court's prior O&O, Form 18 provided a
model complaint for asserting claims of direct patent infringement
which required a less detailed pleading than that contemplated in
Twombly and Igbal. Noting the Ninth Circuit had not addressed which
pleading

standard

applied

to

infringement

claims,

the

Court

followed courts in the Eastern and Northern districts of California
and applied the minimal pleading requirements of Form 18. See O&O
at

*5-6;

Aubin

Indus.,

Inc.

v.

Caster

Concepts,

Inc.,2015

WL

3914000, *3-5 (E.D. Cal. June 25, 2015); PageMelding, Inc. v. ESPN,

Page 6 - OPINION AND ORDER

Inc., 2012 WL 3877686, *2 (N.D. Cal. Sept. 6, 2012) . 2 Accordingly,
the Court found defendant's direct non-infringement claim met the
legal threshold. O&O at *6-7.
Plaintiffs argue that with the removal of Form 18 from the
Rules,

both direct and indirect non-infringement claims are now

subject to the heightened pleading standards described in Twombly

2

The court acknowledges and agrees with plaintiffs'
discussion regarding the United States Court of Appeals for the
Federal Circuit's exclusive jurisdiction over appeals arising
from district court patent cases. See Pls.' Reply 11-12; 28
U.S.C. § 1295. As plaintiffs accurately observe, although the
Federal Circuit has long abdicated its jurisdiction over "purely
procedural" issues, the regional circuit courts are
jurisdictionally barred from hearing "purely procedural" patent
issues based on the aforementioned exclusive jurisdiction of the
Federal Circuit. Accordingly, the regional circuit courts cannot
rule on procedural patent appeals, resulting in discontinuity in
pleading standards across districts. See id.
However, plaintiffs also assert, "many practitioners
believed that the removal of Form 18 would result in a uniform
Igbal/Twombly standard in all courts, and the initial cases that
ruled on the new civil-procedure rules agreed." Pls.' Reply 12.
Plaintiffs cite two cases; however, those cases do not fully
support plaintiffs' assertion.
In In re CTP Innovations, LLC., U.S. Dist. LEXIS 135060 (D.
Md. Oct. 2, 2015), there is no discussion of the effect of the
abrogation of Rule 84 or Form 18. Instead, the only reference to
abrogation in the case is located in footnotes 5 and 6, which
merely state that Form 18 will be abrogated on December 1, 2015.
Contrary to plaintiffs' averment, the court neither ruled on, nor
expressed any opinion of, the abrogation.
Similarly, the court in Mayne Pharma Int'l Pty Ltd. v. Merck
& Co., Inc., U.S. Dist. LEXIS 162912 (D.Del. Dec. 3, 2015) did
not rule on the effect of the amended Rules. Rather, the court
noted the imminent abrogation of Rule 84 and Form 18, explaining
that subsequent direct infringement suits would be subject to the
pleading standards of Twombly and Igbal. However, absent argument
from defendant regarding retroactivity, the court declined to
further address the issue. See Mayne Pharma at *3 n.1.
Page 7 - OPINION AND ORDER

and Igbal. Accordingly, argue plaintiffs, this Court should apply
the new Rules retroactively and require defendant to meet the more
stringent pleading threshold.
Defendant

disputes

plaintiffs'

arguments

on

two

grounds.

First, defendant asserts the rule change did not alter the pleading
requirements for direct infringement, and so also did not change
the requirements for direct non-infringement. In support, defendant
invokes the Advisory Committee note associated with the abrogation
notice, which states,

~[t]he

abrogation of Rule 84 does not alter

existing pleading standards or otherwise change the requirements of
Civil Rule 8." Fed. R. Civ. P. 84

(2015 Advisory Committee Note).

However, this Court has already addressed the issue in its October
order

-

to

the

extent

there

is

Twombly/Igbal pleading standards,

conflict

between

Form 18

and

Form 18 controls. See, e.g. K-

Tech Telecommunications, Inc. v. Time Warner Cable, Inc., 714 F.3d
1277, 1283-84 (Fed. Cir. 2013)

(citations omitted); O&O at *5-6. In

other words, while it is possible the Form 18 pleading template may
provide

sufficient

information

to

satisfy

Twombly/Igbal,

information may not necessarily be sufficient,

such

depending on the

particular facts. R+L Carriers, Inc. v. DriverTech LLC (In re Bill
of Lading Transmission and Processing Sys. Patent Litig.), 681 F.3d
1323, 1334 n.6

(Fed. Cir. 2012)

(citing Twombly, 550 U.S. at 564

n.10). In any case, if the two standards were actually equivalent,
as defendant now argues, presumably defendant would be indifferent

Page 8 - OPINION AND ORDER

to

plaintiffs'

Regardless,

assertion

the

the salient fact

Twombly/Igbal

standard

applies.

is Twombly/Igbal dictates direct-

infringement pleading standards as of December 1, 2015.
Defendant argues the Form 18 pleading standard should apply
despite its abrogation,
rule on the issue,
2016 WL 199417,

citing one of the few cases to directly

Hologram USA,

*2 n.1

Inc. v.

(D. Nev. Jan.

Pulse Evolution Corp.,

15, 2016). The Holgram USA

court, following K-Tech and the Advisory Committee note, determined
it would follow the "previously existing standards in ruling" and
therefore used Form 18. Id.
However, the Court is not persuaded to follow Hologram USA for
several

reasons.

First,

the

Court

is

unsatisfied

with

the

abbreviated legal analysis set forth in the case. The Hologram USA
court essentially followed K-Tech in order to restate the pleading
elements that Form 18 formerly provided. See Hologram USA, 2016 WL
199417 at *3.

The Hologram USA court justified its decision by

invoking the aforementioned Advisory Committee note briefly in a
footnote. Id. at *2 n.3. However, the Hologram USA court seems to
have overlooked the import of a critical point:
Twombly and its progeny addressed the civil
pleading standards in a variety of civil
contexts,
none
of
which
addressed
the
sufficiency of a complaint alleging patent
infringement or causes of action for which
there is a sample complaint in the Appendix of
Forms to the [Rules] .
Id.

at *2

(citing R+L Carriers,

Page 9 - OPINION AND ORDER

681 F.3d at 1333-34)

(internal

brackets and quotation marks omitted). With the abrogation of Form
18,

so too went the patent infringement exception to the civil

pleading requirements set forth in Twombly and Igbal. As plaintiffs
observe, a form that no longer exists can no longer control. Pls.'
Reply 10.
The court is also inclined not to follow Hologram USA for
policy reasons. Consistent adjudication is a primary concern not
only

in

applying

the

law

in

a

uniform

manner,

but

also

in

accurately apprising parties to patent suits of the relevant legal
standards.

As

discussed supra,

the

circuit courts

do not have

jurisdiction to review "purely procedural" questions in patent law,
while the Federal Circuit has thus far opted to apply "circuit
law"; that is, apply the Form 18 standard
claims,

to direct infringement

and the Twombly/Igbal standard to indirect infringement

claims. See, e.g., K-Tech, 714 F.3d at 1283. If the Court were to
follow Hologram USA as defendant requests,

there would be scant

legal justification for the ruling, as invoking a nonexistent form
is tenuous jurisprudence at best. After all, if the Court follows
Form 18 now, should the court then continue the apply it in future
patent cases? If not, when should a line be drawn?
Assuming the Court applied Form 18 in the instant case, nearly
four months after it was stricken from the Rules, it is unlikely
the

heretofore

inconsistent application

pleading requirements would be resolved.

Page 10 - OPINION AND ORDER

of direct
Rather,

infringement

this Court and

others in this district (and elsewhere) would continue to grapple
with which standard to apply.
this

issue

arises,

the

The farther from December 1, 2015

weaker

the

argument

for

utilizing

the

defunct form.
Continuing to use Form 18 post-abrogation only perpetuates the
creation of inconsistent case

law.

continuing

essentially

uncertainty

Twombly/Igbal standard,

would

As

plaintiffs
create

observe,
a

de

the

facto

as canny litigants would be obliged to

fashion pleadings sufficient to meet both standards. Moreover, the
Court

notes that it is not bound by the

District of Nevada's

holding in Hologram USA. Therefore, the Court finds that applying
a

uniform

pleading

standard

to

both

direct

and

indirect

infringement claims is the best, most consistent approach.
Defendant

argues

that

by

asking

the

Court

to

shift

the

pleading standard after litigation has commenced, plaintiffs are
unfairly gaming the system. Def.'s Resp. 32. In support, defendant
notes the Supreme Court's Order accompanying the transmittal of the
amended Rules, which states the amendments "shall take effect on
December 1,

2015,

and shall govern in all proceedings in civil

cases thereafter commenced and,

insofar as just and practicable,

all proceedings then pending." Def.'s Resp. 33. While carving out
a narrow "unjust and/or not-practicable" exception to the general
rule,

however,

the

Supreme

Court's

Order

is

more

amenable

to

plaintiffs' position, as it sets forth the general rule that any

Page 11 - OPINION AND ORDER

pending

litigation

should

the

adopt

amendments

whenever

practicable.
Defendant contends, however, that should the Court decide to
apply the amended Rules in the instant case,

it would "work an

injustice." Fed. R. Civ. P. 86(a) (2) (B). Defendant identifies two
such

injustices.

First,

applying the Twombly/Igbal standard is

unfair because defendant's request for leave and proposed amendment
was

filed before

the

new Rules

took effect.

Def.' s

Resp.

33.

Al though the amended complaint relates back to the date of the
original pleading pursuant to Fed.
fact

is not disposi tive.

R.

Civ.

P.

15 (c) (1) (B),

that

The rationale behind Rule 15 is

fair

apprisal of the relevant rules.
Here,

there is

no question defendant was

apprised of the

inadequacy of its original direct non-infringement counterclaim.
The

Court

previously

admonished:

"defendant's

pleading

barely

satisfied Form 18 standards . . . [the Court) encourages defendant,
should it seek to amend, to plead clear and particularized facts
within the individual counterclaim sections." O&O at *6-7 n. 3.
However, rather than provide the additional detail, defendant again
submitted a

non-infringement counterclaim absent the clear and

particularized facts requested. See Def.'s Sec. Am. Ans.

~~

105,

107.
Thus, given defendant knew (or should have known) about the
imminent amendments

to the Rules,

Page 12 - OPINION AND ORDER

and given

the Court's prior

request to include particularized facts in any amended answer, the
Court

finds

abandoning

the

Form

18 pleading

standard at

this

juncture is not unjust, unfair, or unexpected.
Finally,
pleading

defendant

standard

to

argues
the

it

is

unjust

non-infringement

to

apply

the

counterclaim

new

while

allowing the plaintiffs to plead the original infringement claim
according to Form 18. Def.'s Resp. 33. However, this argument is
unavailing, as defendant has neither alleged plaintiffs failed to
state a claim for direct or indirect infringement,

nor has the

Court ruled whether plaintiffs' pleadings are legally sufficient.
Should the court affirm the legitimacy of defendant's pleadings on
this basis, the Court would therefore implicitly rule plaintiffs'
allegations necessarily satisfy Rule 12 (b) (6). By so doing,

the

Court could find itself in a difficult position should defendant
move to dismiss plaintiffs infringement claims for failure to state
a claim.
Accordingly,
longer

on

the

for all the foregoing reasons,

table;

pleading standard to

the
all

Court

will

apply

subsequent pleadings

the
in

Form 18 is no
Twombly/Iqbal
this

matter,

inclusive.
II. Defendant's Counterclaims
A. Non-Infringement

Plaintiffs
counterclaim

seek dismissal

pursuant

to

Page 13 - OPINION AND ORDER

Rule

of

defendant's

12(b) (6).

As

non-infringement
explained

supra,

defendant's
identical

instant
to

non-infringement

defendant's

previous

counterclaim
indirect

is

nearly

non-infringement

counterclaim which the Court dismissed. Defendant concedes as much,
"the

stating,

changes

[defendant's)

to

non-infringement

counterclaim were modest and limited to paragraphs 105 and 107[.)"
Def.'s Resp. 30. In light of the abrogation of Rule 84 and Form 18,
abandoning

any

distinction

between

direct

and

indirect

non-

infringement does not conform defendant's previously insufficient
pleadings to the requirements set forth in Twombly and Igbal.
As

before,

sufficient facts

the

Court

finds

defendant

that when taken as true,

has

not

support a

alleged

reasonable

inference defendant did not sell or offer to sell a product that
had no substantial non-infringing use. Defendant's non-infringement
counterclaim again leaves the Court to guess which facts support
its claim for relief, as detailed factual allegations remain absent
from the pleading.
plaintiffs'

motion

See Def.'s Sec. Am. Ans.
to

dismiss

~~

defendant's

105,

107. Thus,

non-infringement

counterclaim is granted.
B. Invalidity

Plaintiffs argue defendant's counterclaims of invalidity under
35 U.S.C. §§ 102, 103, and 112 should be dismissed for failure to
state a claim upon which relief can be granted.

Fed. R. Civ.

P.

12(b) (6). For the following reasons, plaintiffs' motion is denied.
1. 35 U.S.C.

§

102 - Novelty

Page 14 - OPINION AND ORDER

Defendant

contends

invalid under 35 U.S.C.

plaintiffs'

'386

and

'440

102. Def.'s Sec. Am. Ans.

§

patents
~~

are

109-121.

Section 102 requires novelty as a condition of patentability, and
therefore precludes patent protection for

an "invention

patented or described in a printed publication
use or on sale .
[patent)

. more than one year prior to the date of the

application[.)"

Invents Act)) .

. or in public

35

U.S.C.

§

102(b)

(pre-AIA

[America

Defendant alleges plaintiffs made public use of

and/or placed on sale the Patents-In-Suit more than one year prior
to the relevant effective application dates. Def.'s Sec. Am. Ans.
~

113; Def.'s Resp. 7. Specifically, defendant alleges plaintiff

Daniel Tanner
[ "Tanneri te

["Tanner")

LLC")

and/or plaintiff Tannerite Sports

"developed,

used,

and

sold

a

exploding target known as Tannerite[,)" 3 before August 20,

LLC

binary
2000.

Def. ' s Resp. 7 .
Plaintiffs contend defendant's amended counterclaim should be
dismissed

for

the

same

reason

the

initial

counterclaim

was

dismissed: lack of a sufficient factual basis. Pl.'s Mot. 10; O&O
at *8-9.

Previously,

the Court ruled defendant failed to plead

3

The term "binary" refers to the characteristic of the
Patents-In-Suit of storing two chemicals, an oxidizer and a
catalyst, in two separate containers for safe storage and
transportation, which, when combined by a user, produces a
mixture that will explode when impacted by a center-fire rifle
round. Thus, a binary target may also be referred to as a "usermixed target," but not a "premixed" target, because a "premixed"
target is not packaged in separate containers. See Pl.'s Mot. 11
n.4.
Page 15 - OPINION AND ORDER

facts sufficient to support more than a "mere possibility that the
'binary' targets were offered for sale prior to August 1, 2000."
O&O at *9. Essentially, the Court determined defendant failed to
plead

facts

advertisement
binary

sufficient
in

to

Shotgun

(use-mixed),

plausibly

News

conclude

advertised

a

June

plaintiffs'

2000

patented

rather than non-binary (premixed), exploding

targets. Id. at *8; see also, Def.'s Sec. Am. Ans., Ex. D (Shotgun

News, July 19, 2000 at *126) . The Court also determined defendant
failed

to plead

facts

sufficient

to

link

the

patented binary

exploding targets to the "Tannerite" trademark application filed in
1996. See Def.'s Sec. Am. Ans., Ex. C. The Court finds defendant
has

now

alleged

possibility

and

sufficient

facts

plausibility"

in

to

bridge

the

asserting

gap

its

"between

invalidity

counterclaims. See Igbal, 556 U.S. at 678.
As a threshold matter, the parties agree both Patents-In-Suit
are reissues of the '366 patent, and both rely on the '366 patent's
effective filing date of August 20, 2001. Def.'s First Am. Answer
~

91;

Pls.' Answer to Am. Counterclaims 2. The primary issue is

plaintiffs' contention that it publicly used and/or sold non-binary
exploding

targets

prior

to

2001,

whereas

its

patented

binary

exploding targets were not publicly used and/or sold until less
than one year prior to the effective filing date.
Attached to plaintiffs' Reply is Exhibit A, a declaration by
Mr. Tanner. ("Tanner Deel.") , which includes a copy of his response
to an office action of the United States
Page 16 - OPINION AND ORDER

Patent and Trademark

Office ("PTO") regarding the Patents-In-Suit. See Tanner Deel. The
exhibit contains a number of documents which,

if taken at face

value, suggest plaintiffs' patented binary exploding targets were
in public use and/or for sale prior to August 20, 2000. However, in
each instance, Mr. Tanner avers he was either engaging in "puffery"
in

order

to

market

his

product,

or

that

his

references

to

"Tannerite" and/or "targets" refer to a different non-binary, premixed exploding target product.
For example,

Mr.

Tanner explains,

"I completely made up a

story of how I sold my first binary targets to a cop out of state
'over a

decade ago.'

time." Id.
puffery,

'![

But I

did not have binary targets at the

9. Mr. Tanner maintains his story was an example of

made so "people would be less likely to have concerns

about my invention if they thought that the product was on the
market for a long time." Id.

7. The Tanner Declaration contains

'![

a number of other examples of alleged puffery, including statements
made

to

a

newspaper,

advertisements,

potential clients. See id.

'!['![

and

various

emails

to

8, 9, 10, 12, 13, 15.

In one notable example, in a response to a motion to dismiss
concerning another case in this very district, Mr. Tanner stated,
"the target cannot cause fires,
for 20 years." Id.

'![

14.

and has a record of not doing so

Tanner infers this September 25,

2014

statement relates to his "old premixed targets, the predecessors to
my binary targets[.]" Id. However, the Court takes judicial notice
of the original complaint in the case, wherein Mr. Tanner described
Page 17 - OPINION AND ORDER

his

product

as

a

"target

device

[which)

contains

two

inert

substances that when mixed by the user, enables the device to break
apart with a loud sound,

and expel a cloud of water vapor

when the target is struck by a rifle bullet." See Daniel J. Tanner
v. Vicki Hightower, et al., Case No. 6:14-cv-01035-TC,

Complaint~

2 (doc. 1). Thus, Mr. Tanner's complaint appears to describe binary
targets, rather than any predecessor premixed target. As such, one
could infer Mr.

Tanner either was misrepresenting the length of

time his binary targets had been in use to the federal district
court in his 2014 complaint, or that he is now misrepresenting the
type of target discussed in the case to the PTO.
Defendant now pleads a number of facts which cast doubt on
plaintiffs'
News.

contentions

regarding

the

advertisement

in

Shotgun

First, defendant has proffered a March 2001 version of Mr.

Tanner's prior business homepage, www.skylightexplosives.com. See
Def.'s Reply to Pls.' Opposition to Mot. For Leave to File Sec. Am.
Ans., Exs. 1, 2 (doc. 52). The website advertises, "New! Tannerite
Exploding Targets! Featured in Shotgun News

(CLICK HERE!)." Id.,

Ex. 2. The accompanying hyperlink connects to another page, which
includes

the

heading:

"PRODUCT

DESCRIPTION:

"NEW!!!
Binary

EXPLODING
Exploding

TARGETS,"
Targets.'"

and
The

exploding targets are advertised at the same price,

also,
binary

"$8. 50 per

unit," as the targets in the Shotgun News advertisement.

Id. As

such, plaintiffs early website uses language similar to that in the
Shotgun News advertisement,

Page 18 - OPINION AND ORDER

offers the same price,

and directly

links the advertisement to selling binary exploding targets. These
connections

suggest the Shotgun News advertisement referred to

binary exploding targets, at least in part. Accordingly, that the
Shotgun News advertisement referred to binary exploding targets is

at least plausible.
Mr. Tanner contends the advertisement "was clearly for premixed targets that I was selling at the time." Tanner Deel. 'II 17.
Mr. Tanner explains the targets were advertised as "restricted for
sale

to

'Federal

firearms

dealers

(FFL)

holders

ONLY.'"

Id.

Additionally, Mr. Tanner notes the advertisement states "SOLD TO
FEDERAL EXPLOSIVES LICENSE/HOLDERS AND L.E. DEPARTMENTS ONLY." Id.
Mr.

Tanner

further

explains

that

the

federal

Explosive

Safety

Commission may enforce special requirements for selling explosives,
in contrast to binary targets.

Id. As such, Mr. Tanner asks the

Court to infer the targets he was selling in the advertisement were
the premixed, as opposed to binary, variety.
However, federal firearms licences ("FFLs") are not the same
as federal explosives licenses ("FELs") . Defendant explains,
[the] only reference to a federal explosives
license is at the very bottom and follows a
listing of other products . . . including "all
types of high explosives from construction
powder
to
law
enforcement
specialty
explosives" - products that presumably would
require an explosives license. When talking
about
the
exploding
rifle
targets,
by
contrast, the advertisement states only that
these must be sold to Federal firearms
dealers/FFL holders, which is not an explosive
license.
Page 19 - OPINION AND ORDER

Def.'s

Resp.

14

(citing Tanner

'!I

Deel.

17)

(bold and

italics

omitted} . Indeed, the advertisement begins with, "Skylight Company
introduces

Tannerite Exploding Rifle

Targets.

Must be

sold to

Federal firearms dealers/FFL holders ONLY with a few exceptions."
In contrast, the bottom of the advertisement states, "We also offer
all

types

of

high

explosives

from

construction

powder

to

law

enforcement specialty explosives." The subsequent line reads: "SOLD
TO FEDERAL EXPLOSIVES LICENSE/HOLDERS AND L.E. DEPARTMENTS ONLY."
Thus, the advertisement appears to suggest, or at least allows the
inference, the exploding targets could be sold to federal firearms
license holders

(presumably firearms dealers},

but in order to

purchase a different product consisting of "high explosives," one
would need a higher-level federal explosives license (presumably
explosives dealers} . As the parties agree the binary target is
distinguished from a premixed target because the former is not
deemed

an

explosive

under

the

law

and

therefore

more

widely

marketable, it therefore stands to reason the targets the Shotgun
News advertisement refers to are binary.

Defendant provides further support for its position, based on
other language in the advertisement.

Defendant highlights text

purported to be from "distributors and users" of the exploding
targets,

including the following:

"I started selling them by the

case out of my retail gun store once word caught on." Defendant
maintains the premixed exploding targets would not be sold out of
a retail gun store, as a customer not in possession of a federal
Page 20 - OPINION AND ORDER

explosives

license

could

not

lawfully

purchase

the

premixed

explosive or transport it out of the store. Def.'s Resp. 14. 4
In the October O&O, the Court stated, "viewing the facts in
the light most favorable to defendant,
the

the Court is persuaded by

reasonable explanation that the June 2000 advertisement in

"Shotgun

News"

referred

to

premixed

targets,

rather

than

the

binary, user-mixed targets at issue in this case." O&O at *14.
However, in light of the additional facts presented by defendant
regarding various aspects of the advertisement,

which the court

assumes are true for the purposes of this motion, and also in light
of the numerous instances of puffery plaintiffs have disclosed in
their reply brief, the court now believes its previous finding was
premature.
Viewing

the

new

facts

in

the

light

most

favorable

to

defendant, the Court can no longer confidently conclude the Shotgun
News advertisement referred to premixed targets. Rather, defendant

has provided a plausible argument that the advertisement at issue
refers,

at

least

plaintiffs concede,

in

part,

to

binary

exploding

targets.

As

"[a)t most, Mr. Tanner's Declaration and its

attachments might be construed to create a question of fact as to
4

Other factual allegations further support the inference
that plaintiffs' binary targets were in public use and/or for
sale prior to August 2000. See Def.'s Sec. Am. Ans. ~~ 115, 116,
119, 120. Additionally, defendant's contentions regarding
inferences of pre-patent application use and/or sale of binary
targets in plaintiffs' trademark application are also plausible
in light of the new facts. See Def.'s Sec. Am. Ans. ~~ 94, 116;
id., Ex. C; Def.'s Resp. 12.
Page 21 - OPINION AND ORDER

the first sale of the patented invention, which would be relevant
to the validity of the patents at issue." Pls.' Reply 7. Indeed.
In their original motion, plaintiffs argued defendant had not
presented additional facts sufficient to disturb the court's prior
finding regarding the relevancy of the Shotgun News advertisement.
Pls.' Reply 10. Following the presentation of the new facts by the
parties,

plaintiffs do not provide any substantive rebuttal to

defendant's

invalidity

counterclaim.

See

Pls.'

Reply.

Rather,

plaintiffs request the Court explicitly review Def.'s Sec. Am. Ans.
for compliance with Rules 8, 9, and 12. Pls.' Reply 3.
Defendant's amended counterclaim for invalidity clearly states
a plausible claim for relief. The allegations therein constitute
more

than

a

bare

recitation

of

the

legal

elements.

Rather,

defendant's pleadings allow a plausible inference that plaintiffs
are liable for the alleged misconduct. Twombly,

550 U.S. at 570;

Igbal, 556 U.S. at 663-64. As such, plaintiffs' motion to dismiss
defendant's counterclaim for invalidity under 35 U.S.C.

§

102 is

denied.
2. 35 U.S.C. § 103 - Obviousness

A patent

claim

is

invalid under

35

U.S. C.

§

103

if

the

differences between the claimed invention and the prior art are
such that the claimed invention as a whole would have been obvious
before the effective filing date, to a person of ordinary skill in
the relevant art.
answer,

which was

35 U.S.C.

§

103.

Defendant's original amended

rejected by the October O&O,

Page 22 - OPINION AND ORDER

merely alleged

plaintiffs failed to satisfy "one or more
Title 35,

including

First Am. Ans.

~

Section 102,

.

. requirements of

103 and/or 112." Def.'s

112; see also, O&O at *9-10. Def .'s Sec. Am. Ans.

is much more specific,

as it sets forth at least six specific

examples of alleged violations of§ 103. See Def.'s Sec. Am. Ans.
~

123.
Portions of defendant's factual allegations regarding § 103

mirror those set forth in the discussion of defendant's § 102
allegations

above.

portion

the

of

This

alleged

is

understandable,

prior

art

is

however,

the

because

"Tanneri te"

a

binary

exploding targets alleged to be in public use and/or for sale more
than a year prior to plaintiffs' patent application. Def.'s Sec.
Am. Ans.

~

123. Other alleged prior art includes an article and a

number of other patented inventions. See id.

]~

124-28. Plaintiffs

acknowledge defendant has provided significantly more detail in the
instant

counterclaim,

but

nonetheless

argue

~

129

should

be

dismissed because its scope is too broad. Pls.' Mot. 15.
Defendant, in ] 129, alleges:
Other combinations of the above-cited prior
art would likewise render one or more claims
of the Patents-In-Suit invalid .
[s]uch
combinations include by way of example and
without limitation: U.S. Patent No. 4,498,677
(Dapkus) in view of one of the other listed
references teaching binary explosives; and the
art discussed in either paragraphs 127 or 128
in further view of either the "Ammonal"
article or Mr. Tanner's prior use and sales
[of] Tannerite.
Def.'s Sec. Am. Ans.

~

129. Plaintiffs argue the text "other prior

Page 23 - OPINION AND ORDER

art" renders the paragraph effectively impossible to respond to
based on the sheer number of possible combinations of the prior art
and the numerous individual claims in the relevant patents. Pls.'
Mot. 15-16; Pls.' Reply 9. However, there is no reference to "other
prior art" in 'J[ 129. The closest verbiage the paragraph presents is
"other combinations of
references."

Def.' s

the

Sec.

above-cited art,"

Am.

Ans.

'J[

129.

or

"other

As such,

listed

plaintiffs'

argument that the "other prior art" in 'J[ 129 makes a

response

"impossible," lacks merit. See Pls.' Mot. 17.
Because defendant has limited the scope of the allegation to
"the above-cited prior art" and/or "other listed references," the
Court is satisfied the allegation is not so open-ended as to allow
defendant to continually add heretofore unidentified prior art to
its claim without properly amending the claim. See Pls.' Reply 9.
Indeed,

other courts have

found substantially similar language

valid. See Helfrech Patent Licensing, LLC v. J.C. Penny Corp., 2012
WL 3776892, at *1, *3 (N. D. Ill. Aug. 28, 2012);

Cryolife v. C.R.

Bard,

Mar.

Inc.,

2015

WL 1069397,

at

*4

(D.

Del.

10,

2015).

Further, defendant has provided to plaintiffs a lengthy list of
invalidity

contentions

and

analysis

pursuant

to

the

mutually

agreed-upon Patent Local Rules of the U.S. District Court for the
Northern District of California. For all of the foregoing reasons,
plaintiffs' request to strike 'J[ 129 is denied.
3. 35

Under

u.s.c.
'J[

112,

§ 112 - Specification

patent

Page 24 - OPINION AND ORDER

applications

must

include

a

written

description of the invention as well as a detailed description of
the manner,

process, and eventual use of it,

such that a person

skilled in the particular art would recognize the inventor was in
possession of the invention. 35 U.S.C.
T-Mobile
Defendant

USA,

Inc.,

alleges

522

the

F.3d

§

1299,

112; PowerOasis, Inc. v.
1306

Patents-In-Suit

are

(Fed.
invalid

Cir.
due

2008).
to

an

insufficient description of the method of transporting plaintiffs'
exploding targets in the original August 20, 2001 application.
Specifically,

defendant alleges each of the claims of the

Patents-In-Suit include information which was later added in an
October 17, 2002 continuation-in-part. Def .'s Sec. Am. Ans.

~

132.

Defendant explains the additional information described the element
of

transporting

the

two

component

chemicals

of

plaintiffs'

exploding targets in separate containers. Id. Therefore, defendant
argues, the relevant filing date of the Patents-In-Suit should be
October 17, 2002 rather than August 20, 2001. Def.'s Resp. 20-21;
see PowerOasis,

522 F.3d at 1306

("Entitlement to a filing date

does not extend to subject matter which is not disclosed, but would
be obvious over what is expressly disclosed.")

(citations omitted) .

Plaintiffs contend the transportation of the exploding target
containers is not material "new matter" sufficient to affect the
priority date.

Plaintiffs argue,

"implicit in a

'target'

idea of taking the target to a safe place to shoot it .

is the
the

whole reason for the invention was to enable safe transportation."
Pls.' Mot.

18. However,

the additional information added to the

Page 25 - OPINION AND ORDER

Patents-In-Suit does not refer only to the transportation of the
invention, but also the use of the targets. While "target" presumes
it will be shot, the August 21, 2001 application description does
not specify that the "targets and catalyst" are to be mixed and
then activated by a rifle round at a shooting range. Rather,
only "use" described is:
Def.'s

Sec.

provided

Am.

Ans.,

sufficient

the

"[s) hipped via UPS from our factory."
Ex.

facts

H,
such

*3.

Accordingly,

that

its

§

112

defendant
allegation

has
is

plausible.
Moreover, because the priority date is also an element of the
invalidity claims under§§ 102 & 103, defendant's allegation that
it is entitled to a declaration of invalidity "either alone or in
light of § 112" is a valid pleading. See Def.' s Sec. Am. Ans. 'll
134.
In sum, plaintiffs' motion to dismiss defendant's invalidity
counterclaims is denied.
C.

Inequitable Conduct

Defendant's final counterclaim alleges inequitable conduct.
Similar allegations were outlined in the previous counterclaim,
which the Court dismissed pursuant to plaintiffs'

Rule 12 (b) (6)

motion. See O&O, *10-15. Defendant alleges Mr. Tanner intentionally
failed to disclose to the PTO relevant information regarding the
prior use of his invention. Def.'s Sec. Am. Ans. 'll 138. Plaintiffs
contend

the

court

should

dismiss

the

counterclaim,

asserting

defendant's counterclaim is based merely on failure to disclose,
Page 26 - OPINION AND ORDER

because defendant has not plead sufficient facts to establish a
reasonable inference of intent to deceive. Pls.' Mot. 18-27; Pls.'
Reply 5-6.
As the Court explained in the prior Order, inequitable conduct
is an equitable defense which has

the potential to render all

claims to a patent unenforceable. See Therasense, Inc. V. Becton,
Dickinson, & Co.,
are

two

649 F.3d 1276, 1285-88

elements

to

an

inequitable

(Fed. Cir. 2011). There

conduct

claim:

"(l)

an

individual associated with the filing and prosecution of a patent
application made an affirmative misrepresentation of 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." Exergen Corp. v. Walmart Stores, Inc.,
575

F.3d 1312,

1327 n.3

(Fed.

Cir.

2009)

(citations omitted).

Similarly, in order to adequately plead inequitable conduct under
Fed. R. Civ. P.
the

"who,

9 (b), a litigant must:

what,

misrepresentation

when,
or

where,

omission;

(1)

and
and

specifically identify

how"

(2)

of

the

include

material
sufficient

underlying facts from which a court may reasonably infer that a
specific individual had

(a)

"knowledge of the withheld material

information or of the falsity of the material misrepresentation;
and (b) specific intent to deceive the PTO." See id. at 1327.
The additional facts presented by the parties have altered the
landscape of this matter,
conduct

claim

plausible.

Page 27 - OPINION AND ORDER

and have made plaintiffs'
As

explained

above,

when

inequitable
construed

liberally in favor of defendant,

a number of factual allegations

support the inference plaintiffs were using, selling, or offering
to sell binary exploding targets more than one year prior to August
20, 2001. 5
Defendant has now also provided sufficient facts to support
the

who,

what,

when,

where,

and

how

of

the

alleged

material

misrepresentation and/or omissions. The "who" in this case is Mr.
Tanner. Def.'s Sec. Am. Ans.

~

138. Defendant has further alleged

the "what, when, where, and how," asserting Mr. Tanner failed to
disclose prior use and/or sale of pre-mixed and/or binary targets
that explode when shot with a center-fire rifle during processing
of his patent application and its subsequent appeal. Id.

~~

96-101,

151-56. Defendant has further alleged Mr. Tanner's omission would
have constituted an on-sale bar to claims 23 and 25 of the

'386

patent and claims 23 and 25 of the '440 patent, but for his failure
to disclose and/or misrepresentations to the PTO. Id.
147;

see 35 U.S.C. § 102(b); see also,

~~

144, 146,

Star Envirotech,

Inc.

v.

Redline Detection, LLC, 2015 WL 4744394 (C. D. Cal. Jan. 29, 2015).
Additionally, the new facts permit a reasonable inference that
Mr. Tanner's omission and/or misrepresentations were made with the
5

Examples include, but are not necessarily limited to: (1)
a September 28, 2007 email sent to a journalist indicating sale
of a binary target "over a decade before"; an May 13, 2001 email
with similar assertions; and an archived website from January 8,
2011 indicating plaintiffs' targets were first shipped "in the
90' s." Tanner Deel. ~~ 8-13. Again, al though plaintiffs attribute
the instances to puffery and/or a pre-mixed explosive target,
defendant's contrary allegations are nonetheless plausible.
Page 28 - OPINION AND ORDER

requisite scienter. •[E)vidence of a knowing failure to disclose
sales that bear all the earmarks of commercialization reasonably
supports an inference that the

inventor's attorney intended to

mislead the PTO." Paragon Podiatry Lab., Inc. v. KLM Labs., Inc.,
984 F.2d 1182, 1193 (Fed. Cir. 1993). Here, assuming for purposes
of this motion that Mr.

Tanner publicly used and/or sold binary

exploding targets one year before the effective filing date,
inherently had personal knowledge of the prior art,

he

because at

least some of the prior art included his proposed patent. Thus,
insofar as the plaintiffs failed to disclose prior use or sale of
Tannerite

(in

binary

and/or

non-binary

form),

the

requisite

scienter may be reasonably inferred.
Further, Mr. Tanner's duty of candor before the PTO would have
required him to disclose the prior use of any Tannerite-formula
center-fire rifle-activated exploding target when asked by the
patent examiner whether he was aware of other prior use or sales.
Instead,

Mr.

Tanner

(presumably through his attorney),

told the

patent examiner he was unaware of any competitor selling exploding
targets

prior

to

the

effective

filing

date

of

the

original

application having the features of the present claim. Def.'s Sec.
Am. Ans.

~~

references

97, 98. Mr. Tanner also indicated he was unaware of any
available

prior

to

October

17,

2002

which

teach

explodable targets and would be material to the patentability of
his claims. Id. Moreover, on appeal, Mr. Tanner indicated he was
not aware of any prior art teaching center-fire rifle-activated
Page 29 - OPINION AND ORDER

targets, which would arguably apply to either pre-mixed or binary
targets.

~~

100, 101.

Although

plaintiffs

maintain

Mr.

Tanner's

replies

were

technically accurate assuming he was aware of no "competitors"
other

than

his

own product,

the

relevant

statute hinges

on

a

prospective invention's general "patentability," rather than the
narrower category of "known competition." Mr. Tanner arguably knew
the binary exploding target patent was affected by his own prior
use and/or sale of any form of Tannerite. Both Mr. Tanner and his
attorney had the duty to provide such disclosure. See 37 C.F.R.
1.56(a)

("Each

individual

associated

with

the

filing

§

and

prosecution of a patent application has a duty to disclose to the
Office all information know to that individual to be material to
patentability . . . [t]he duty to disclose information exists with
respect to each pending claim . . . . "); see also, Def.' s Sec. Am.
Ans.
use

~~

153-55. Assuming defendant's allegations regarding prior

and/or

sale

are

true,

intentional

non-disclosure

and/or

misrepresentation is a reasonable inference.
Plaintiffs implore the

court to exercise its gate-keeping

function and exclude the instant inequitable conduct counterclaim
in order to avoid the corollary problems it can cause. Id. at 20.
Indeed, as the court previously noted, inequitable conduct claims
are disfavored because, if proven, they can potentially nullify the
enforceability of an entire patent, rather than resulting only in
dismissal

of a

suit.

Therasense,

Page 30 - OPINION AND ORDER

64 9 F. 3d at 1287.

Plaintiffs

further explain that inequitable conduct claims arose

from the

doctrine of unclean hands, which involved particularly egregious
activity

such

as

"bribery,

double-perjury,

and

tampering with

evidence." Pls.' Reply 8 (citing Therasense, 649 F.3d at 1285).
Because inequitable conduct claims target the most egregious
conduct and carry the greatest consequences, proving an inequitable
conduct claim is very high bar. Accordingly, plaintiffs cite both
Therasense and this court's October O&O for the proposition that an
inequitable

conduct

claim must be

"the

single most

inference able to be drawn from the evidence

reasonable

the evidence

must be sufficient to require a finding of deceitful intent in the
light of all the circumstances." Id. at 1290-91; O&O at *15; see
Pls.' Reply 6. Although the inequitable conduct cause of action is
disfavored for a

number of reasons,

it nevertheless

remains

a

recognized cause of action. As such, although the bar may be high,
it must still be able to be pleaded.
The
Court's

Court

cannot

prior assertion

fault
that

plaintiffs

for

latching

onto

inequitable conduct must be

the
"the

single most reasonable inference to explain the non-disclosure" in
order to prevail. 6 However, the Court must now clarify that "the
single most reasonable inference" refers to defendant's burden for

6

See Pls.' Reply 6 (".
. counterclaims still fail to
establish, as the single most reasonable inference .
.")
Page 31 - OPINION AND ORDER

proving its case, rather than prevailing at the pleading stage. 7 As
one court aptly explains, "[Therasense) discusses the standard for
proving an inequitable conduct claim. At the pleading stage,

[the

defendant) need only plead 'sufficient allegations of underlying
facts

from

which

a

court may

reasonably

infer'

that

specific

individuals had the intent to deceive." Cypress Semiconductor v.
GSI Tech., Inc., available at 2014 WL 988915 (N. D. Cal. March 10,
2014)
Co.

(quoting Exergen, 575 F.3d at 1328-29). See also Delano Farms

v.

Cal.

Table Grape Comm'n,

655 F.3d 1337,

1350

(Fed.

Cir.

2011); Mentor Graphics v. EVE-USA, Inc., 13 F. Supp. 3d 1116, 1125
(D.

Or. April 9,

inequitable
Farms) .

2014)

conduct

Accordingly,

(recognizing inconsistent application of

pleading
the

requirements

Court

now

and

follows

adopting

the

Delano

well-reasoned

analysis set forth by Judge Mosman in Mentor Graphics.
As

discussed

above,

defendant

has

provided

sufficient

allegations of the underlying facts, that viewed in the light most
favorable to defendant, allow the reasonable inference Mr. Tanner
(1) knew of the withheld material information and/or falsity of the
7

The Court anticipates plaintiffs may wish to invoke the
"law of the case" regarding the pleading standard for inequitable
conduct based on the previous order. The option is not viable for
two reasons. First, the October O&O granting plaintiffs' motion
to dismiss the inequitable conduct claim was not premised on the
passage above. Rather, the court's decision was predominantly
based on the lack of facts linking the Shotgun News advertisement
to binary exploding targets. As discussed at length above,
defendant has remedied that issue. Second, the law of the case
may not apply in circumstances where, as here, the previous
disposition was clearly erroneous and would work a manifest
injustice. Jeffries v. Wood, 75 F.3d 491, 493 (9th Cir. 1996).
Page 32 - OPINION AND ORDER

material

misrepresentation,

and

(2)

withheld

such

information

intentionally to deceive the PTO. Def.'s Sec. Am. Ans.
139-161.

Thus,

defendant

has

adequately

pleaded

~~

96-101,

inequitable

conduct. Plaintiffs' motion is denied.
III. Defendant's Affirmative Defenses
Plaintiffs

argue defendant's

affirmative defenses

of

non-

infringement,

invalidity, and estoppel are insufficient and must

therefore

dismissed.

be

The

Ninth

Circuit

has

yet

to

address

whether the Twombly/Igbal standard applies to affirmative defenses,
and cases within the circuit are split. Recently, Judges Acosta and
Simon examined the issue and articulated the following rationale:
An answer must "state in short and plain
terms" the defenses to each claim asserted
against
defendant
in
order
to
provide
plaintiffs with fair notice of the defense(s),
Fed. R. Civ. P. 8 (b) (1) (A). Under Federal Rule
of Civil Procedure 8(c),
an "affirmative
defense is a defense that does not negate the
elements of the plaintiff's claim, but instead
precludes liability even if all of the
elements of the plaintiffs claim are proven."
Barnes
v.
AT
&
T
Pension
Benefit
Plan-Nonbargained Program, 718 F. Supp. 2d
1167, 1171-72 (N. D. Cal. 2010) (citation and
quotations omitted) . An insufficiently pleaded
defense fails to comply with Rule 8 pleading
requirements by not providing "plaintiff
[with] fair notice of the nature of the
defense" and the grounds upon which it rests.
Wyshak v. City Nat'l Bank, 607 F.2d 824, 827
(9th Cir. 1979)
Rule 12(f) provides that a court may, on
its own or on a motion, "strike from a
pleading an insufficient defense or any
redundant,
immaterial,
impertinent,
or
scandalous matter." Fed. R. Civ. P. 12(f). A
defense may be insufficient "as a matter of
Page 33 - OPINION AND ORDER

pleading or as a matter of substance."
Security People, Inc. v. Classic Woodworking,
LLC, 2005 WL 645592, at *1 (N. D. Cal. Mar. 4,
2005). "A showing of prejudice is not required
to strike an 'insufficient' portion of the
pleading as opposed to 'redundant, immaterial,
impertinent, or scandalous matter' under Rule
12(f) ." Bottoni v. Sallie Mae, Inc., 2011 WL
3678878, at *2 (N. D. Cal. Aug. 22, 2011).
Hayden v. U.S., - F. Supp. 3d -, 2015 WL 350665, at *6 (D. Or. Jan.
26, 2015).
While the Court generally agrees with the standard set forth
above,

the

Court

nonetheless

finds

it

unnecessary

to

require

defendant to once again recite each of its factual allegations
regarding non-infringement,
estoppel

(inequitable

invalidity,

conduct),

as

and prosecution history
they

are

contained

and

ascertainable in the same document. There can be little doubt that
given the extensive pleadings and briefing that plaintiffs are well
aware of the nature of defendant's defenses and the grounds upon
which

they

pleadings

rest.
have

Indeed,
noted

other

that

courts

where

evaluating

the

patent-case

heightened

pleading

requirements of Rule 9(b) apply to both a defendant's counterclaim
and affirmative defenses, the counterclaim and affirmative defense
"rise or fall together. " 8 See Sen ju Pharm.

8

Co.,

Ltd. v. Apotex,

The Senju court allowed a defendant's inequitable conduct
claim and affirmative defense to "rise and fall together," but
ruled the invalidity claims were subject to a different standard,
as they were properly plead pursuant to Form 18, while the
affirmative defense was subject to the heightened pleading
standard and therefore "fell." Because this court finds the
invalidity counterclaim meets the heightened pleading standard,
Page 34 - OPINION AND ORDER

Inc.,

921 F. Supp. 2d 297, 306 (D. Del. Feb. 6, 2013)

(citations

omitted).
Because

the

Court

grants

plaintiffs'

motion

to

dismiss

defendant's non-infringement counterclaims for failure to satisfy
the

pleading

standard

under

Twombly/Igbal,

it

follows

that

defendant's non-infringement affirmative defense, which includes
fewer assertions of fact than the counterclaim, necessarily does
not meet the Twombly/Igbal standard. Accordingly, plaintiffs motion
to dismiss

defendant's

non-infringement

affirmative defense

is

granted.
Similarly, as the Court has concluded defendant's invalidity
counterclaim meets the requisite pleading requirements, the Court
will

allow defendant's

Second Affirmative

Defense

to

stand as

pleaded, as the bases for the defense are identical to the bases
for

the

plausible

ascertainable

in

invalidity

counterclaim,

defendant's

pleadings.

and

are

readily

Plaintiffs

are

unequivocally on notice of defendant's invalidity defense and the
grounds upon which it rests.
Defendant's

Third Affirmative

Defense

is

that defendant's

claims "are barred by the doctrine of estoppel, including, but not
limited to, the doctrine of prosecution history estoppel" arising

however, it stands to reason that the affirmative defense also
"rises," as both involve virtually identical allegations of fact.
Therefore, with the abrogation of Form 18, the reasoning in Senju
applies equally to counterclaims and affirmative defenses of both
invalidity and inequitable conduct claims.
Page 35 - OPINION AND ORDER

from plaintiffs' conduct before the PTO. Def.'s Sec. Am.
Plaintiffs
distinct

argue

the

issues:

Third

the

Affirmative

doctrines

of

Defense

Ans.~

76.

contains
estoppel

equitable

two
and

prosecution history estoppel. Pls.' Mot. 29. Defendant's response,
however,

addresses

estoppel.

Def.'s

only
Resp.

the

doctrine

34-35.

of

prosecution

Accordingly,

the

history

court

finds

defendant's Third Affirmative Defense refers only to prosecution
history estoppel, and requires defendant to narrow the scope of the
affirmative
defendant

defense

wishes

to

pleading
assert

a

accordingly.
distinct

Alternatively,

affirmative

defense

if
of

estoppel, it may do so, though the court advises defendant to do so
with adequate specificity.
The Federal Circuit applies prosecution history estoppel when
"an applicant during patent prosecution narrows a claim to avoid
prior art, or otherwise to address a specific concern .

. that

arguably

matter

would

unpatentable

have

rendered

the

claimed

subject

[e]stoppel then bars the applicant from later

invoking the doctrine of equivalents to recapture the surrendered
ground." EMD Millipore Corp.

v.

AllPure Techs.,

Inc.,

768 F.3d

1196, 1203 (Fed. Cir. 2014) (internal citations and quotation marks
omitted). Plaintiffs argue defendant's affirmative defense fails
because it does not identify the relevant narrowed claims. Pls.'
Mot. 31. However, as defendant asserts, and plaintiffs do not deny,
plaintiffs amended every independent claim of the Patents-In-Suit

Page 36 - OPINION AND ORDER

in order to add that the targets detonate only when impacted by a
center-fire rifle round.
Further, plaintiffs have raised the doctrine of equivalents in
their infringement claims. See Pls.' First Am. Compl.

~~

51,

64.

Prosecution history estoppel is a recognized affirmative defense
for parties accused of

infringement under a

patent's

range

of

equivalence, as opposed to "literal" infringement. See Deep9 Corp.
v. Barnes & Noble,
Mar.

28,

2011)

counterclaims

Inc., 772 F. Supp. 2d 1349, 1351 (W. D. Wash.
(citations

asserted

omitted) .

and

their

Again,

based

corresponding

on

the

affirmative

defenses, plaintiffs cannot legitimately contend they lack notice.
The third affirmative defense is adequate as pleaded.
Defendant's Fourth Affirmative Defense is plaintiffs' request
for injunctive relief is barred because plaintiffs have an adequate
remedy in the form of damages.

Plaintiffs contend the pleading

fails because injunctions are typically granted after a finding of
infringement. Essentially, plaintiffs dispute whether damages are
an adequate remedy. Clearly plaintiffs have notice that defendant
plans

to

argue

its

proposed

remedy

is

adequate.

Plaintiffs'

argument is not persuasive.
Defendant's

Fifth

Affirmative

Defense

is

the

plaintiffs'

claims are statutorily limited under 35 U.S.C. §§ 286 and/or 287.
Plaintiffs argue Fed. R. Civ. P. 8(c) does not mandate the defense
be pleaded, and further argues that the limitation on damages the

Page 37 - OPINION AND ORDER

statutes set forth are not proper affirmative defenses. At this
juncture,

neither party has presented a

persuasive explanation

regarding why the defense should stand or be stricken. As such, the
Court exercises its discretion to allow the defense to remain until
such time as it is convinced otherwise.
Defendant's

Sixth Affirmative

Defense

is

that plaintiffs'

claims are barred by intervening rights under 35 U.S.C.

§§

252 and

307. Plaintiffs argue section 307 relates only to patents that have
been

subject

to

reexamination

and

therefore

does

not

Defendant appears to abandon its contention relative to

§

apply.
307 in

its response. Accordingly,

the portion of the Sixth Affirmative

Defense regarding 35 U.S.C.

§

Plaintiffs agree

307 is stricken.

section 252

generally applies,

but argue

defendant failed to show defendant made and offered to sell its
allegedly infringing products prior to the date the first of the
Patents-At-Issue were reissued.

Pls.'

Mot.

33.

There is little

doubt plaintiffs are aware of production and sales of defendant's
products before July 2013. Accordingly, the court will allow this
aspect of the Sixth Affirmative Defense to stand, with the caveat
that defendant add the relevant facts to its Sixth Affirmative
Defense.
CONCLUSION

For the reasons set forth above, plaintiffs' motion to dismiss
defendant's counterclaims and affirmative defenses, is GRANTED in

Page 38 - OPINION AND ORDER

part and DENIED in part.
Plaintiffs'

motion

to

dismiss

defendant's

counterclaim (Def.'s Sec. Am. Ans.

~

Defense

Plaintiffs'

(Id.

defendant's

~

74)

is

GRANTED.

invalidity

Affirmative Defense

80) and the First Affirmative

counterclaim

(Id.

~

75)

infringement

(Id.

motion
~

to

dismiss

81)

and

Second

is DENIED. Plaintiffs' motion to

dismiss defendant's inequitable conduct counterclaim (Id.
Third Affirmative Defense (Id.

~

~

82) and

76) is DENIED. Plaintiff's motion

to dismiss the Fourth Affirmative Defense is DENIED. Plaintiff's
motion

to

dismiss

the

Fifth

Affirmative

Defense

is

DENIED.

Plaintiff's motion to dismiss the Sixth Affirmative Defense is
GRANTED in regard to 35 U.S.C.

u.s.c.
IT

§

§

307, and DENIED in regard to 35

252.

rs so

DATED

ORDERED .

. 111.b day

thisc:>\~-

of May 2016.

Ann Aiken
United States District Judge

Page 39 - OPINION AND ORDER