Moody v. Aqua Leisure International et al
Filing
53
MEMORANDUM OPINION granting in part, denying in part 49 MOTION to Dismiss 48 Amended Answer, Counterclaim.(Signed by Magistrate Judge Nancy K. Johnson) Parties notified.(sbutler, )
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
JAMES C. MOODY,
§
§
§
§
§
§
§
§
§
§
Plaintiff,
v.
AQUA LEISURE INTERNATIONAL,
et al.
Defendants.
CIVIL ACTION NO. H-10-1961
MEMORANDUM OPINION
Pending before the court1 is Plaintiff’s Motion to Dismiss and
Strike Defendants’ Pleadings (Doc. 49).
The court has considered
the motion, the response, all prior filings, and the applicable
law.
For the reasons set forth below, the court GRANTS IN PART AND
DENIES IN PART Plaintiff’s motion.
I.
Case Background
Plaintiff filed this action against one individual and five
businesses, alleging infringement of U.S. Patent No. 4,805,896 (the
“‘896”) entitled “Low Rise Water Ride,” for the development of
waterpark rides using Tubescape Technology as well as numerous
state law causes of action.2
Plaintiff brought suit in June 2010,
and Defendants Bad Schloss, Inc., NBGS International, Inc., Jeffrey
Wayne Henry, Water Ride Concepts, Inc., and Henry Schooley and
1
The parties consented to proceed before the undersigned magistrate
judge for all proceedings, including trial and final judgment, pursuant to 28
U.S.C. § 636(c) and Federal Rule of Civil Procedure 73. Docs. 37, 40-42.
2
See Doc. 1, Pl.’s Original Compl.
Associates (collectively “Defendants”)3 initially responded with a
motion to dismiss that was denied.4
Defendants
filed
an
answer
that
asserted
counterclaims and affirmative defenses.5
a
number
of
Plaintiff sought to
dismiss Defendants’ counterclaim for patent invalidity and/or
unenforceability
and
to
strike
their
affirmative
defenses
of
failure to state a claim, patent invalidity, prosecution history
estoppel, and estoppel based on various doctrines.6
The court
found that the pleading lacked factual support for all of the
challenged components except the defense of failure to state a
claim.7
Rather than granting Plaintiff’s motion to strike and
dismiss, though, the court granted his motion for a more definite
statement to correct the deficiencies.8
Defendants filed an amended pleading in July 2011, adding
several paragraphs to the invalidity counterclaim and to their
third, fifth, and sixth defenses (respectively patent invalidity,
3
One other defendant in this action, Aqua Leisure International,
answered separately, and Plaintiff has not challenged the sufficiency of its
answer. For purposes of this memorandum only, the term “Defendants” does not
refer to Aqua Leisure International.
4
See Doc. 1, Pl.’s Original Compl.; Doc. 18, Defs.’ Mot. to Dismiss;
Doc. 24, Memorandum Opinion and Order Dated Nov. 30, 2010.
5
See Doc. 27, Defs.’ Answer to Pl.’s Compl. & Affirmative Defenses &
Countercls.
6
See Doc. 28, Pl.’s Mot. to Dismiss.
7
See Doc. 44, Mem. Op. & Order Dated June 30, 2011.
8
See id.
2
prosecution
history
doctrines).9
estoppel,
and
estoppel
based
on
various
Plaintiff immediately challenged the sufficiency of
Defendants’ amended pleading on the same grounds asserted in its
original motion.10
Plaintiff contends that Defendants’ counterclaim should be
dismissed under Rule 12(b)(6) and their affirmative defenses should
be stricken under Federal Rule of Civil Procedure (“Rule”) 12(f).
The court reviews Defendants’ amended pleading to determine whether
it complies with the court’s order.
Pursuant
to
Rule
12(b)(6),
dismissal
of
an
action
is
appropriate whenever the pleading, on its face, fails to state a
claim upon which relief can be granted.
It need not contain
“detailed factual allegations” but must include sufficient facts to
indicate the plausibility of the claims asserted, raising the
“right to relief above the speculative level.”
Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007); see also Ashcroft v. Iqbal, 556
U.S. 662, 129 S.Ct. 1937, 1949 (2009). Plausibility means that the
factual content “allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.”
Iqbal,
129 S.Ct. at 1949.
According to Rule 8(a)(2), “[a] pleading that states a claim
for relief must contain . . . a short and plain statement of the
9
See Doc. 48, 1st Am. Ans. & Affirmative Defenses & Countercls.
10
See Doc. 49, Pl.’s Mot. to Dismiss & Strike Defs.’ Pleadings.
3
claim showing that the pleader is entitled to relief.”
The claim
must provide “fair notice of what the . . . claim is and the
grounds upon which it rests.”
Twombly, 550 U.S. at 555 (quoting
Conley v. Gibson, 355 U.S. 41, 47 (1957)).
In other words, the
pleading must include the factual and legal bases for the claim
asserted.
Rule 8(a) applies to counterclaims and affirmative
defenses.
See Fed. R. Civ. P. 8(a)(applying to any “pleading that
states a claim for relief”); Woodfield v. Bowman, 193 F.3d 354, 362
(5th Cir. 1999)(referring to the standard as “fair notice” for
affirmative defenses).
Rule 12(f) grants courts the authority to strike from any
pleading “an insufficient defense or any redundant, immaterial,
impertinent, or scandalous matter.”
Group,
Inc.
However,
“in
v.
Exnicios,
some
cases,
495
See also Cambridge Toxicology
F.3d
merely
169,
pleading
affirmative defense . . . may be sufficient.”
at 362.
(5th
178
the
Cir.
name
2007).
of
the
Woodfield, 193 F.3d
Although generally disfavored, motions to strike are
proper for defenses that, as a matter of law, are insufficient.
See Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards,
Inc., 677 F.2d 1045, 1057-58 (5th Cir. 1982).
The trial court may
use its discretion in deciding such motions.
See
Cambridge
Toxicology Group, Inc., 495 F.3d at 178.
Defendants’ counterclaim and third defense, as originally
pled, both asserted invalidity and/or unenforceability of the ‘896
4
“under one or more provisions of Title 35 of the United States Code
§§ 101, et seq., including at least one of §§ 102, 103, and 112.”11
When they amended, Defendants added no facts to the preliminary
paragraphs of its counterclaims.12 In the detailed paragraph on the
invalidity
claim
and
defense,
Defendants
repeated
the
same
assertion from their original pleading and named seven rides.13
The first two sections cited by Defendants address novelty and
obviousness, issues as to which other (pre-existing) water rides
could have an impact.
patentability),
matters).
103
See 35 U.S.C. §§ 102 (requiring novelty for
(precluding
patents
for
obvious
subject
Although Defendants did not detail precisely how the
named rides prove that the ‘896 either was not novel or was
obvious, they identified prior art14 that may call into question
patentability of the ‘896.
provide
Plaintiff
fair
The court finds this sufficient to
notice
as
to
their
counterclaim
and
affirmative defense of invalidity and/or unenforceability.
The third statutory section on which Defendants rely details
what information the patent must include in the specification. See
11
Doc. 27, Defs.’ Answer to Pl.’s Compl. & Affirmative Defenses &
Countercls., ¶¶ 62, 90.
12
Compare Doc. 27, Defs.’ Answer to Pl.’s Compl. & Affirmative Defenses
& Countercls., ¶¶ 66-89 with Doc. 48, 1st Am. Ans. & Affirmative Defenses &
Countercls., ¶¶ 77-100.
13
Doc. 48, 1st Am. Ans. & Affirmative Defenses & Countercls., ¶¶ 63,
102.
14
Defendants did not specifically refer to the named rides as prior
art, but, from the context, it is clear that was their intention. See id.
5
35 U.S.C. § 112.
Listing alleged prior art in no way alerts
Plaintiff to deficiencies in the specification of the ‘896. Merely
citing to the statutory requirements for a patent specification is,
therefore, insufficient as a matter of law.
This portion of
Defendants’ counterclaim should be dismissed, and the same portion
of their defense should be stricken.
Defendants’ fifth affirmative defense originally asserted
that Plaintiff “is estopped, by virtue of the prosecution record
made in the United States Patent and Trademark Office [(“USPTO”)]
during the pendency of the applications resulting in the [‘896]
patent . . . from construing any claim of those patents [sic] as
covering any of [Defendants’] products.”15
To this, Defendants
added that they had identified the relevant portions of the
prosecution
history
in
their
claim
construction
brief
and
incorporated the brief into their pleading.16
In their claim
construction
the
Plaintiff’s
brief,
Defendants
representations
to
did
the
discuss
USPTO
effect
regarding
of
intended
meanings of claim language, differences from prior art, and scope
of his invention.17
While the incorporation of the claim construction brief may
15
Doc. 27, Defs.’ Answer to Pl.’s Compl. & Affirmative Defenses &
Countercls., ¶ 64.
16
Doc. 48, 1st Am. Ans. & Affirmative Defenses & Countercls., ¶ 66.
17
See Doc. 32, Def. NBGS International, Inc.’s Claim Construction
Brief, pp. 8-11.
6
not be the most convenient method of providing the factual and
legal basis of Defendants’ prosecution history defense, it is more
than adequate to put Plaintiff on notice as to the nature of their
defense.
This defense should not be stricken.
The sixth defense is a collection of eleven doctrines.18
Originally, Defendants merely listed the doctrines of laches,
estoppel,
waiver,
failure
contract,
statute
of
of
consideration,
limitations,
unjust
license,
express
enrichment,
quantum
meruit, mistake, and payment and asserted that Plaintiff was
“estopped
from
asserting
[his]
claims”
by
these
doctrines.19
Defendants’ amended pleading explained further that, since prior to
2005, Plaintiff had been paid commissions on rides that fell
outside the scope of the parties’ agreement and that Plaintiff
accepted the payments without objection.20
The court makes no judgment on the merit of Defendants’
estoppel defense based on any of these defenses, but that is not
its job at the pleading stage. The additional facts in the amended
pleading are sufficient, as a matter of law, to notify Plaintiff of
the basis for each doctrine.
They should not be stricken.
Based on the foregoing, the court GRANTS Plaintiff’s motion as
to the defense and counterclaim for invalidity based on 35 U.S.C.
18
See Doc. 48, 1st Am. Ans. & Affirmative Defenses & Countercls., ¶ 67.
19
Doc. 27, Defs.’ Answer to Pl.’s Compl. & Affirmative Defenses &
Countercls., ¶ 65.
20
Doc. 48, 1st Am. Ans. & Affirmative Defenses & Countercls., ¶¶ 68-72.
7
§ 112 and DENIES the motion in all other respects.
SIGNED in Houston, Texas, this 9th
8
day of March, 2012.
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