Theta IP, LLC v. Samsung Electronics Co., Ltd. et al
ORDER GRANTING 70 Motion to Dismiss ; Samsungs equitable conduct counterclaim and affirmative defense are DISMISSED WITHOUT PREJUDICE. Signed by Judge Alan D Albright. (lad)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
THETA IP, LLC.,
SAMSUNG ELECTRONICS CO.,
LTD., AND SAMSUNG
ELECTRONICS AMERICA, INC.,
CIVIL ACTION: WA:20-CV-00160-ADA
ORDER GRANTING PLAINTIFF’S MOTION TO DISMISS
Came on for consideration this date is Plaintiff Theta IP’s (“Theta”) Motion to Dismiss
Defendant Samsung’s inequitable conduct counterclaim and affirmative defense. ECF No. 70.
Samsung and Theta filed respective responsive briefings. ECF No. 74; ECF No. 77. After careful
consideration of the above briefings, the Court GRANTS Plaintiff’s Motion.
In March of 2016, Theta submitted the patent application for the ‘926 Patent. ECF 74, p.
2. On November 21, 2019, Theta submitted a Request for Certificate of Correction Due to
Applicant’s Mistake (the “Request”) under 37 CFR § 1.323. Id. at p. 2. The Request sought to
change a word in element (iv) of Claim 1 from “increase” to “decrease.” Id. Under 35 U.S.C. §
255, correction requests must fall into one of three categories: clerical, typographical, or minor.
Here, Theta characterized the change as “minor” and that “the mistakes [sic] occurred in good faith
and that the corrections [sic] do not involve changes that would constitute new matter or require
reexamination....” Id. at p. 3. On December 31, 2019, the USPTO issued the Certificate of
Defendant-Samsung filed their Amended Answer and Counterclaim on April 2, 2021. ECF
No. 65. That pleading added an inequitable conduct counterclaim (¶¶ 241-43) and an inequitable
conduct affirmative defense (¶¶ 168-178). Id. Samsung’s pleadings contain allegations which
include an assertion stating, “On information and belief, Theta IP knew that changing a word to
its opposite was not a minor correction.” Id. at ¶¶ 175-176. As to Theta’s alleged deceitful intent,
Samsung only alleges “[o]n information and belief, Theta IP knew that the correction was not
correctable under 35 U.S.C. § 255 and misrepresented the nature of the correction with a specific
intent to deceive the USPTO into issuing the improper certification of correction.” Id. at ¶177.
“Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a ‘short and plain
statement of the claim showing that the pleader is entitled to relief.’” Ashcroft v. Iqbal, 556 U.S.
662, 677–78 (2009). The purpose of pleadings is to “give the defendant fair notice of what
the...claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
555 (2007). “To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft, 556 U.S. at 678
(citing Twombly, 550 U.S. at 570). Inequitable conduct allegations must satisfy a heightened
pleading requirement such that each element “must be pled with particularity” under Rule 9(b).
Ferguson Beauregard/Logic Controls, Div. of Dover Res., Inc. v. Mega Sys., LLC, 350 F.3d 1327,
1344 (Fed. Cir. 2003).
A pleading of inequitable conduct “must identify the specific who, what, when, where, and
how of the material misrepresentation or omission committed before the PTO.” Exergen Corp. v.
Wal-Mart Stores, Inc., 575 F.3d 1312, 1328 (Fed. Cir. 2009). The intent element must be pled with
“sufficient allegations of underlying facts from which a court may reasonably infer that a specific
individual (1) knew of . . . the falsity of the material misrepresentation, and (2) . . . misrepresented
this information with a specific intent to deceive the PTO.” Id. at 1328–29. Further, the elements
of knowledge and of deceitful intent must be “reasonable and drawn from a pleading’s allegations
of underlying fact.” Id. at n. 5.
Samsung has failed to allege information, taken as true, to which this Court can “reasonably
infer” that Theta “knew of . . . the falsity of the material misrepresentation” and “misrepresented
this information with a specific intent to deceive the PTO.” See Id. at 1328–29. Samsung’s
principal argument making such a reasonable inference here is that the Request made to the
USPTO “necessarily broadened the scope of the original claim” and that “[t]here is no room for
reasonable lawyers to argue” that it was not broadening. ECF No. 74, p. 6. Therefore, Samsung
argues, a reasonable inference can be drawn as to Theta’s intent to deceive the USPTO. Id.
Samsung also argues that Theta’s possible motivation for using the “minor correction”
process, rather than the more strenuous and time-consuming broadening reissue process, “would
have taken far too long to permit assertion of the patent in this litigation”—leaving Theta with a
narrow infringement window. Id. at p. 7. Samsung asks the Court to infer that Theta knew they
made a material misrepresentation because the “minor” correction was broadening (and no
reasonable person could argue otherwise), and because of this, the Request had to be made with
an intent to deceive. Such broad inferences cannot be made reasonably based on the allegations in
Samsung’s Complaint. See ECF No. 65, ¶¶ 168-178.
Samsung cites Weatherford, where that Court also considered and denied a motion to
dismiss an inequitable conduct claim. Weatherford Int’l, Inc. v. Halliburton Energy Servs., Inc.,
No. 2:09- CV-261-CE, 2011 WL 902243 *1 (E.D. Tex. Mar. 14, 2011). There, the correction
changed the word “inner” to “outer.” Id. However, in Weatherford, it was “undisputed” that the
corrected claim curing a “typographical” error was broadening. Id. at *2. Therefore, the
Weatherford Court’s decision was based on a different analysis of the claim correction, and the
inference of deceitful intent was reasonable where the correction was undisputedly broadening.
Here, the correction from “increase” to “decrease” was characterized as a “minor” change rather
than a typographical one. ECF No. 70. Further, the correction here is not undisputedly broadening
within the context of the patent—the USPTO disagreed with Samsung
The inference that Samsung asks the Court to make is not reasonable. Such an inference
would require the Court to assume the arguments Theta made in its Request were knowingly
misrepresented, and the USPTO was incorrect by finding that the correction did not alter the scope
of the Patent. The presumption of patent validity, and the burden of showing clear and convincing
evidence to defeat it, extends to Certificates of Correction. See, e.g., Superior Fireplace Co. v.
Majestic Prods. Co., 270 F.3d 1358, 1367 (Fed. Cir. 2001). Samsung’s main contention for the
USPTO’s alleged mistake is simply that “increase” was changed to its opposite— “decrease.” ECF
No. 74, ¶ While facts alleged in a pleading should are taken as true, “we ‘are not bound to accept
as true a legal conclusion couched as a factual allegation’” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (citation omitted). Further, Samsung’s only factual allegations to advance an “intent to
deceive” inference are based “upon information and belief.” ECF No. 65, ¶¶ 175-177. Samsung’s
“belief” stems from their legal conclusion that the correction was broadening. The Court cannot
find a reasonable inference based on that information.
The bare allegations made in Samsung’s complaint must be dismissed because a
heightened pleading standard applied to inequitable conduct claims. Since Samsung relies on the
same bare “upon information and belief” allegations for its inequitable conduct affirmative
defense, that claim also fails the heightened pleading standard. The circumstances alleged by
Samsung “do not plausibly suggest any deliberate decision to withhold a known material reference
or to make a knowingly false misrepresentation—a necessary predicate for inferring deceptive
intent.” Exergen, 575 F.3d at 1331 (quotations omitted).
It is therefore ORDERED that the Theta’s Motion Dismiss is GRANTED and Samsung’s
equitable conduct counterclaim and affirmative defense are DISMISSED WITHOUT
SIGNED this 7th day of June, 2021.
ALAN D ALBRIGHT
UNITED STATES DISTRICT JUDGE
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