Certusview Technologies, LLC v. S & N Locating Services, LLC et al

Filing 325

OPINION AND ORDER 256 Motion Re: Objections to Magistrate Judge's Ruling or Recommendation; granting in part and denying in part 260 Motion to Strike. The Court OVERRULES Plaintiff's objections, ECF No. 256, to the magistrat e judge's January 16, 2015 Order. The Court GRANTS IN PART and DENIES IN PART CertusView's Motion to Strike and in the Alternative Dismiss S&N's First Amended Answer and Counterclaims, ECF No. 260. The Court DIRECTS the Clerk of the Court to re-open this matter to allow Defendants to proceed with their inequitable conduct counterclaims. Signed by District Judge Mark S. Davis and filed on 5/22/15. Copies distributed to all parties 5/22/15. (ldab, )

UNITED
FOR THE

STATES DISTRICT COURT

EASTERN DISTRICT OF VIRGINIA

Norfolk Division

CERTUSVIEW TECHNOLOGIES,

LLC,

Plaintiff,
Civil Action No.
S&N LOCATING SERVICES,

2:13cv346

LLC,

and

S&N COMMUNICATIONS,

INC.,

Defendants.

OPINION AND ORDER

This matter is before the Court on CertusView Technologies,
LLC's

("Plaintiff")

magistrate

Rule

judge's

Communications,

72

objections,

January

Inc.,

16,

and

S&N

(collectively "Defendants" or "S&N")
and
the

counterclaims,
Alternative

Counterclaims

and
to

on

("Motion

to

S&N's

argument

is

unnecessary

No.

Order

Locating

256,

to

the

granting

S&N

Services,

LLC,

leave to amend their answer
Motion

First

Dismiss"),

examining the briefs and the record,

oral

2015

Plaintiff's

Dismiss

ECF

because

Strike

Amended

ECF

the

to

No.

and

Answer

260.

and

After

Court determines

the

facts

in

and

that

legal

contentions are adequately presented and oral argument would not
aid in the decisional process.
Loc.

R.

7(J).

Fed.

R.

Civ.

P.

78(b);

E.D.

Va.

I. FACTUAL AND PROCEDURAL BACKGROUND1

This

is

a

patent

following

five

patents:

patent"),

U.S.

Patent

infringement

Patent

No.

8,265,344
("the
and

v344

%341 patent"

'344

No.

8,340,359
("the

Patent

No.

8,4 07,001

("the

'359

patent"),

and,

patents,

U.S.

action

8,290,204

("the

U.S.

"the

("the

x204
U.S.

U.S.

Patent

collectively with the
patents-in-suit") .

Patent

No.

x204,
On

the

patent"),

'001

patent"),

and

involving

No.

8,532,341
v001,

May

x359,

29,

2013,

Plaintiff filed an action in this Court alleging that Defendants
"have

infringed,

and

continue

to

infringe,

under the doctrine of equivalents,"

suit "by making, using,

and

intentionally

more claims of the
No.

1.

On

complaint,

See Am.
23,

alleging

2013,

inducing

6,

Defendants

19,

2013,

23,

27,

filed

an

allegations of infringement.
On October 28,
pleadings,

seeking

2014,
to

of

the

others

[patents]

to

Compl. HU 14,

infringement

Compl. 1M 15,

four of the five patents-in-

claims

[patents]."

December

and/or

offering to sell, and/or selling devices

and/or services covered by the
actively

literally

Plaintiff

of

all

32,

moved

the

22,
an

one

26,

or

ECF

amended

patents-in-suit.

ECF No. 55.

Answer at 6-10,

invalidate

18,

filed

five

Answer

Defendants

infringe

and by

denying

On December
Plaintiff's

ECF No. 61.
for

asserted

judgment on
claims

of

the
the

1 The Court sets forth only those facts necessary to resolve the
instant motions.

For a more detailed factual and procedural history,

see Opinion and Order Part I, ECF No.

250.

patents-in-suit

because

they

subject matter under 35 U.S.C.
Pleadings,

ECF No.

for

to

leave

declaratory
File

First

attached

No.

amend

their

judgment
Am.

§ 101.

answer

Answer

the motion

amend,

In

&

to

amended answer

for

leave

to

amend on the basis of

to amend.

the

for

204.

Leave

Defs.'

motion

Mem.
Ex.

in

Supp.
A,

ECF

for. leave

should deny

futility because the

to

Defendants

Countercls.

Court

conduct

their memorandum

Defendants'

contended that

Defendants moved

Mot.

No.

to

Answer &

for J. on the

inequitable

Defs.'
ECF

patent-eligible

Mot.

2014,

assert

Countercls.,

opposition

Plaintiff

claim

Defs.'

counterclaims.

for Leave to File First Am.

204-1.

not

On November 10,

their proposed

support of
Mot.

197.

did

leave

to
to

inequitable conduct

counterclaims in the proposed amended answer did not satisfy the
heightened pleading standard of Federal Rule of Civil Procedure
9(b).

See

PL's Mem.

Opp'n Mot.

Answer & Countercls.

at 1,

ECF No.

On January 16,

2015,

the

for Leave

to

File

224.

Court—by Order of

the magistrate

judge co-assigned to this action—granted Defendants'
leave to amend.

Defendants
therefore,
and

had

Order at 2-3,

sufficiently

directed

ECF No.

pleaded

that granting Defendants

counterclaims

would

Defendants

January 23, 2015."

"to

not
file

Id. at 3.

be

248.

leave to

Amended

motion for

The Court held that

inequitable

futile.

the

First Am.

Id.

conduct

and,

amend their answer
at

Answer

2.
no

The
later

Court
than

On January

21,

2015,

the

Court

granted Defendants'

motion

for judgment on the pleadings and held that each of the asserted

claims of the patents-in-suit were invalid because they did not
claim patent-eligible subject matter.
95,

ECF No.

250.

On that same date,

See Opinion and Order at
the Court entered judgment

in favor of Defendants on Plaintiff's infringement claims.
No.

251.

On

January

Amended Answer.

ECF No.

On February 2,

judge's

23,

January

Defendants

filed

objections,

2015

Order.

Pi.'s

Objections

Plaintiff

contends

that

to

the

ECF No. 256.

In

the magistrate

erred by granting leave to amend because Defendants'
amendments

did

not

First

Plaintiff objected to the magistrate

Magistrate Judge's Order ("PL's Objections"),

its

their

253.

2015,

16,

2015,

ECF

sufficiently allege

an

inequitable

judge

proposed
conduct

claim upon which relief can be granted and, therefore, amendment

was futile.
dismiss

Id^ at 1.

Defendants'

On February 9,

inequitable

Mot. to Dismiss, ECF No. 260.

its

motion

to

dismiss,

2015, Plaintiff moved to

conduct

PL's

counterclaim.

As discussed further below,

Plaintiff

argues

that

in

Defendants

improperly filed their First Amended Answer because they did so
after

the

entry

sufficiency
responded

of

both

of

judgment

Defendants'
to

and

Plaintiff

pleading.

Plaintiff's

objections

challenges

Defendants
to

the

judge's ruling and to Plaintiff's motion to dismiss.

the

timely

magistrate
See Defs.'

Resp.
Mot.

Opp'n

PL's

to Dismiss,

Objections,

ECF No.

ECF No.

274.

268;

Accordingly,

Defs.'

Resp.

Opp'n

both matters are now

ripe for disposition.
II.

STANDARD

A.

Rule 72(a)

that

"[t]he

objections"

OF

Rule

REVIEW

72

of the Federal Rules of Civil Procedure provides

district
to

a

judge

in

magistrate

the

case

judge's

must

ruling

consider

on

timely

non-dispositive

matters and must "modify or set aside any part of the order that
is

clearly erroneous or is

72(a);

28

U.S.C.

§

636

contrary to

(b)(1)(A);

Christian Coal.,

178 F.R.D.

Thomas

Inc.

Cir.

E.

Hoar,

1990)).

erroneous'

A

v.

456,

when although

Fed.

459-60

Sara Lee

magistrate

see

is

Fed.

R.

Election

Civ.

Va.

1998)

900

F.2d

522,

"finding

evidence

to

P.

Comm'n v.

(E.D.

Corp.,

judge's

there

law."

is

(citing
525

(2d

'clearly

support

it,

the

reviewing court on the entire evidence is left with the definite
and

firm

conviction

States v.

is not
"the

U.S.

292

mistake

333 U.S.

firmly convinced that
judge's

Gen-X Strategies,

orders

a

Gypsum Co.,

magistrate

Indeed,

that

Inc.,

"altering
[is]

F.R.D.

a

order
222

has

been

364,

395

committed."

(1948).

such an error has
must

F.R.D.

be
299,

magistratfe]

United

If a court

occurred,

then

affirmed."

Giganti

304-05

Va.

[judge's]

(E.D.

v.

2004).

non-dispositive

'extremely difficult to justify.'"

Carlucci v. Han,

309,

12

312

(E.D.

Va.

2013)

(quoting

Charles

Alan

Wright & Arthur R.
§ 3069

(2d ed.

is

practical

no

contrary

to

Hartford,

Miller et al. , Federal Practice & Procedure

1997)).

law

However,

difference
standard

21 F. Supp.

between

and

a

3d 590,

(alterations, citations,

"[f]or questions of

de

594

review
novo

under

standard."

(E.D. Va.

2014)

complaint,

or

72(a)'s
Bruce

v.

(Cacheris, J.)

Rule 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6)
a

Rule

and internal quotation marks omitted).
B.

of

law there

a

claim

within

a

permits dismissal

complaint,

based

on

the

plaintiff's

"failure to state a claim upon which relief can be

granted."

Fed.

R.

Civ.

pursuant to Rule 12(b)(6)
8(a)(2),

which

requires

claim showing that

Civ.

P.

8(a)(2),

what the

12(b)(6).

A

motion

to

dismiss

must be read in conjunction with Rule
"a

short

the pleader is

so as

to

and

plain

statement

of

relief,"

Fed.

entitled to

"'give the defendant

the
R.

fair notice of

. . . claim is and the grounds upon which it rests,'"

Bell Atl. Corp. v.
Conley

P.

v.

original).

Gibson,

Twombly,
355

550 U.S.

U.S.

41,

544,
47

555

(2007)

(1957))

(quoting

(omission

in

The United States Supreme Court has interpreted the

pleading standard set forth in Rule 8 (a)

as requiring

that a

complaint include enough facts for the claim to be "plausible on
its

face"

and

thereby

"raise

a

right

to

relief

above

the

speculative level on the assumption that all the allegations in
the complaint are true

(even if doubtful in fact)."

Id. at 555,

570

(internal citations omitted).

is

"not

more

akin

than

Ashcroft
550

a

Iqbal,

at

the

'probability requirement, ' but
possibility"
556

556).

plausibility
allows

a

sheer

v.

U.S.

to

when

U.S.

In

the

court

The plausibility requirement

to

that

662,

other

678

defendant

(2009)

words,

plaintiff
draw

a

courts
under

a
of

a

court

714

K-Tech

F.3d

1277,

"'must

without

accept

as

true

in favor of the plaintiff.'"
Montgomery County,

435,

440

1282

a

motion

Inc.

Cir.

that

that
the

Id. at 663.
of

grant

(Fed.

content

laws

Telecomms.,

resolving

contained in the complaint'

du

to

the

facial

the

v.

regional

to

dismiss

Time

2013)

Warner

(citations

Because a Rule 12(b)(6) motion tests the sufficiency

complaint

E.I,

suit,

govern whether

12(b)(6).

Inc.,

omitted).

infringement

appeals

Rule

Cable,

of

patent

for

liable.

has

inference

defendant is liable for the misconduct alleged."
In

is

claim

factual

reasonable

asks

(quoting Twombly,

"[a]

pleads

the

it

and

the

a district

factual

allegations

Kensington Volunteer Fire Dep't v.

& Co. v.

2011)).

of

disputes,

'draw all reasonable inferences

684 F.3d 462,

Pont de Nemours

(4th Cir.

all

factual

467

(4th Cir.

2012)

Kolon Indus.,

Inc.,

Accordingly,

(quoting
637

F.3d

"'Rule 12(b)(6) does

not countenance . . . dismissals based on a judge's disbelief of
a complaint's

(quoting

factual allegations.'"

Neitzke

v.

Williams,

(omission in original).

490

Twombly,

U.S.

A complaint may

550 U.S.

319,

327

therefore

at

555

(1989))

survive a

motion to dismiss

"even if

remote and unlikely.'"
232,

236

it appears

Id.

(quoting Scheuer v. Rhodes,

In addition to
8(a),

Rule

establishes
R.

Civ.

416 U.S.

(1974)).
C.

Rule

'that a recovery is very

P.

the

general

of

9

pleading
9.

Rule 9(b)

the

pleading standard set

Federal

requirements

Subsection

(b)

Rules

for

of

Civil

forth

in

Procedure

"special matters."

Fed.

of Rule 9 addresses the pleading

requirements for "fraud or mistake" and "conditions of mind" and

provides that:

"(b)

In alleging fraud or mistake,

a party must

state with particularity the circumstances constituting fraud or
mistake.

Malice,

intent,

knowledge,

and

other

person's mind may be alleged generally."

conditions

of

a

Fed. R. Civ. P. 9(b).

The Court of

the

Appeals for the Federal Circuit has held that

defense

inequitable

of

particularity

under

Stores,

575

Inc.,

Rule

F.3d

conduct

9(b).

1312,

Mega Sys.,

LLC,

350

F.3d

Exergen

1326-27

Ferguson Beauregard/Logic Controls,
1327,

1344

must

(Fed.

Div.

be

pleaded

Corp.

v.

Cir.

2009)

of Dover Res.,

(Fed.

Cir.

2003)).

with

Wal-Mart
(citing
Inc.

v.

Federal

Circuit law governs whether a defendant has pleaded inequitable
conduct with sufficient particularity under Rule
1318

(citing Cent.

Cardiac Solutions,

Admixture
P.C.,

482

Pharmacy Servs.,
F.3d 1347,

1356

9(b).

Inc.
(Fed.

Id.

at

v.

Advanced

Cir.

2007)).

In applying the Rule 9 (b)
conduct,

standard to the defense of inequitable

the Federal Circuit has held:

to plead the "circumstances" of inequitable conduct
with the requisite "particularity" under Rule 9(b),
the pleading must identify the specific who,
what,
when, where, and how of the material misrepresentation
or

omission

committed

before

the

PTO.

Moreover,

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

Exergen,
" [a]

the

PTO.

575 F.3d at 1328-29

reasonable

inference

flows logically from the

2 Following
Becton,

is

one

that

facts alleged,

its decision

Dickinson & Co.,

(emphasis added).2
is

plausible

and

that

including any objective

in Exergen,

649 F.3d 1276

Furthermore,

(Fed.

in Therasense,
Cir.

2011),

Inc.

v.

the Federal

Circuit established a heightened standard for proving inequitable
conduct at the merits stage.
Under Therasense, in a case involving
non-disclosure,
"the accused infringer must prove by clear and
convincing evidence that the applicant knew of the reference, knew
that it

was material,

649 F.3d at 1290.

and made a deliberate decision to withhold it."

"Thus, a party alleging inequitable conduct must

show 'but-for materiality' and that the intent to deceive is 'the
single most reasonable inference' able to be drawn from the evidence."
W.L. Gore & Assocs., Inc. v. Medtronic, Inc., 850 F. Supp. 2d 630, 633

n.l

(E.D.

Therasense,

Va.
649

2012)
F.3d at

(Davis,

J.)

1290-91).

(emphasis

in

original)

Other courts have

(quoting

determined that

the heightened standard set forth in Therasense must be applied at the
pleading stage.
E.g., Pfizer, Inc. v. Teva Pharms. USA, Inc., 803 F.
Supp. 2d 409, 432 (E.D. Va. 2011) . However, the Court will apply the
standard set forth in Exergen, as interpreted in the Federal Circuit's
post-Therasense opinion in Delano Farms Co. v. Cal. Table Grape
Comm'n, 655 F.3d 1337 (Fed. Cir. 2011), to determine the sufficiency
of Defendants' pleading.
W.L. Gore, 850 F. Supp. 2d at 633 n.l; see
also, e.g., iLife Techs. Inc. v. Body Media, Inc., Civil
14-990, 2015 WL 1000193, at *2-3 (W.D. Pa. Mar. 6, 2015).

Action No.

indications

of

candor

and

good

faith."

III.

Id.

at

1329

n.5

DISCUSSION

(citation omitted).

A. Rule 72 Objections

The Court will begin by assessing Plaintiff's objections to
the

magistrate

Defendants

Federal

leave

Rule

pleadings.

of

judge's
to

January

amend

Civil

16,

their

2015

answer

Procedure

15

Order

and

governs

granting

counterclaims.

amendments

to

Under Federal Rule of Civil Procedure 15(a):

(1) A party may amend its pleading once as a matter of
course within: (A) 21 days after serving it, or (B) if
the pleading is one to which a responsive pleading is
required,
21 days after service of a responsive
pleading or 21 days after service of a motion under
Rule 12(b),

(e), or (f), whichever is earlier.

(2) In all other cases, a party may amend its pleading
only with the opposing party's written consent or the
court's leave. The court should freely give leave when
justice so requires. . . .

Fed. R. Civ. P. 15 (a) (1) -(2) .

The law of the Court of Appeals

for the Fourth Circuit governs whether to grant a motion for
leave to amend under Rule 15.

See Exergen,

575 F.3d at 1318

(citing Cent. Admixture, 482 F.3d at 1356).
As noted above,

the text of Federal Rule of Civil Procedure

15(a)(2) requires that the Court "freely give leave [to amend]
when justice so requires."

Fed.

R.

Civ.

P.

15(a)(2).

"This

liberal rule gives effect to the federal policy in favor of
resolving cases on their merits instead of disposing of them on

10

technicalities."
2006)

(en banc)

Laber v. Harvey, 438 F.3d 404, 426 (4th Cir.
(citations omitted).

However, "a district court

may deny leave to amend if the amendment 'would be prejudicial
to the opposing party, there has been bad faith on the part of
the moving party,

or the amendment would have been futile.'"

U.S.

ex rel. Nathan v. Takeda Pharm. N. Am.,

461

(4th

Cir.

Regarding
ground

futility,

of

Servicing,

LLC,

original)

dismiss."

1995)

frivolous

Allen,

States

"'[may]

proposed

(stating

426)).

denied on

amendment

is

the

clearly

Anand

v.

754 F.3d 195,

200

(4th Cir.

2014)

(alteration in

Thus,

amendments

a

F.3d 273,

rel.

be

at

face.'"

presents

ex

F.3d

its

Oroweat

could

not

legal

n.2

Ahumada

v.

that

court

a

Co.,

785

withstand

a

55 F.3d 910,

Loan

F.2d 503,

question."

(4th Cir.

NISH,

of

756

2001);

F.3d

appeals

motion

917

The "futility vel non of

purely
277

Foods

Ocwen

a court may deny leave to amend if

Perkins v. United States,

238

438

707 F.3d 451,

on

(citations omitted) .

amend

2014)

the

(quoting Johnson v.

proposed

Laber,

to amend

when

(4th Cir. 1986)).

"the

to

or

(quoting

leave

futility

insufficient

510

2013)

Inc.,

to

(4th Cir.

[a]

HCMF

motion

Corp.

v.

see also United

268,

reviews

724

de

(4th

novo

Cir.

the

denial of a motion for leave to amend on the basis of futility).
In this case,
magistrate
Defendants'

the crux of Plaintiff's

judge's
proposed

ruling

concerns

amended

answer
11

objections

to the

the

sufficiency

of

and

counterclaims.

the
In

Plaintiff's

view,

the

magistrate

judge

erred

by

granting

Defendants leave to amend their answer and counterclaims because

Defendants'

inequitable conduct counterclaim allegations do not

state a claim upon which relief can be granted and,

granting

leave

to amend

PL's Objections at 5.

to add

such claims

was

therefore,

futile.

See

In short, Plaintiff's objections turn on

whether Defendants have sufficiently pleaded inequitable conduct
in their amended answer and counterclaims

dismiss.

to survive a

motion to

And that is the same question presented in Plaintiff's

motion to dismiss Defendants'

inequitable conduct counterclaims,

albeit in a slightly different procedural posture.

Accordingly,

the success of Plaintiff's Rule 72 objections essentially rises
and

falls

with

dismiss:

if

conduct

with

magistrate

the

Court's

Defendants

analysis

have

particularity,

of

Plaintiff's

adequately
it

can

pleaded

hardly

be

judge should have denied Defendants

As discussed below,

motion

to

inequitable

said

that

leave to

the

amend.

Defendants pleaded sufficient factual matter

to state an inequitable conduct claim and to satisfy Rule 9(b)'s
particularity

requirements

Therefore,

the

Court

magistrate

judge's

under

OVERRULES

order

12

number

Plaintiff's

granting

their answer and counterclaims.

a

of

theories.

objections

Defendants

leave

to

to

the

amend

B.

As

noted

engaged

above,

in

art;

challenges

both
in,

Therefore,

have

inventorship;

(2)

the

alleged

conduct

and

allegations

Defendants

inequitable

misrepresenting

prior

Motion to Dismiss

(3)

by:

failing

misrepresenting

the

procedural

Defendants'
Court

amended

must

begin

art.

of,

answer

materially

disclose

prior

by

Plaintiff

(1)

to

propriety

that

Plaintiff

and

and

material

substantive

counterclaims.

addressing

Plaintiff's

procedural argument.

With

respect

to

procedure,

Plaintiff

contends

Court's entry of judgment in favor of Defendants,
2015,

that

on January 21,

barred any further amendment to the pleadings thereafter,

absent an order of the Court setting aside the judgment.
Mot.

to Dismiss

Court

was

the

at

4.

Accordingly,

should strike Defendants'

filed

favor.

subsequent

Id.

to

at 4-6.

the

First

in

view,

Amended Answer because

entry of

In response,

Plaintiff's

PL's

judgment

Defendants

the
it

in Defendants'

argue

that

the

Court granted them leave to file an amended answer prior to the

entry of judgment and,

therefore, the entry of judgment did not

bar

their

them

thereafter

from
in

filing

accordance

granting leave to amend.

with

amended
the

answer

date

set

and
forth

counterclaims
in

the

Order

Def.'s Resp. Opp'n Mot. to Dismiss at

8-9.

13

The point at which a court enters judgment is pivotal with
respect to such court's ability to grant a party leave to amend
its

pleadings.

The

Fourth

Circuit

has

established

that

"'a

post-judgment motion to amend is evaluated under the same legal
standard'-grounded

on

Rule

15(a)-'as

before judgment was entered.'"
BearingPoint,
Laber,

Inc.,

576

similar

However,

193

(4th Cir.

2009)

filed

(quoting

our regional court of appeals

has also noted an important caveat to such rule.
difference between a pre-

motion

Matrix Capital Mgmt. Fund, LP v.

F.3d 172,

438 F.3d at 428).

a

"There is one

and a post-judgment motion to amend:

the district court may not grant the post-judgment motion unless

the judgment is vacated pursuant to Rule 59(e)
P. 60(b)."
supra,

§

Laber,
1489

438 F.3d at 427;

(3d

ed.

2010).

or Fed.

R. Civ.

see also 6 Wright & Miller,
Consequently,

courts

must

distinguish between pre- and post-judgment motions to amend.

court may grant the latter only after first altering,

A

reopening,

or setting aside the judgment.
Here,

the Court's entry of judgment in Defendants'

favor in

Plaintiff's patent-infringement action,

on January 21, 2015,

not

First

bar

January

amend

Defendants
23,

their

2015

because

answer

unsurprisingly,

from

the

filing
the

prior
Fourth

to

their

Court

the

Circuit

Amended

Answer

on

leave

to

granted Defendants

entry

of

has

not

did

judgment.
considered

Perhaps
to

what

extent the entry of judgment limits a party's ability to file an
14

amended

pleading

in

accordance

granting leave to amend.
pre-

with

However,

and post-judgment motions

a

Court

the

concludes

for leave to

for leave to amend,

pleading,

the

In this case,

on November

10,

judgment

their

in

2014,

January 21, 2015.

the

amend,

rather than

See 438 F.3d at 427.

timing

of

a party's

motion

not the timing of the filing of the amended

determines

amendment.

that

order

Laber distinguished between

pre- and post-judgment amendment filings.
Thus,

pre-judgment

extent

which

a

judgment

bars

the

Defendants moved to amend their answer

well

favor

to

in advance

on

of

Plaintiff's

the

Court's

infringement

entry of

claims

Prior to the entry of judgment, Plaintiff had

a full opportunity to litigate, before the magistrate judge,
propriety of
to

Defendants'

the entry of

proposed amendments.

judgment,

Moreover,

the Court granted Defendants'

for leave to amend and expressly authorized Defendants
their amended answer "no later than January 23, 2015."
2-3,

ECF No.

on

24 8.

In short,

the

prior
motion

to

file

Order at

once the Court granted Defendants'

pre-judgment motion for leave to amend their answer to assert an
inequitable conduct counterclaim,

entered judgment on Plaintiff's

the mere

fact

infringement

that

the

Court

claims during the

period-provided by the Court's Order-for filing such amendments
did

not

alter

require

the

Defendants

judgment

3 At first blush,

to

before

move

the

filing

Court

their

to

set

amended

aside

or

answer.3

the permissibility of Defendants filing their
15

Accordingly,
entry of
answer

the

Court rejects

Plaintiff's

judgment barred Defendants

within

the

period

contention that

from

prescribed

filing

by

the

their amended

the

Court's

Order

granting Defendants leave to amend.

Having
procedural

considered,
challenge

and

to

ultimately

Defendants'

rejected,

First

Plaintiff's

Amended

Answer

and

First Amended Answer and Counterclaims after the entry of judgment in
their favor on Plaintiff's infringement claims may seem like a purely
scholastic issue.
After all, none of Plaintiff's infringement claims
remain

in

this

action

because

the

Court

has

held

that

the

asserted

claims of Plaintiff's patents are
invalid for failure to claim
patentable subject matter.
See generally Opinion and Order, ECF No.
250.
However, notwithstanding the favorable judgment on Plaintiff's
infringement claims, Defendants have a nontrivial reason to continue
to pursue their alleged inequitable conduct counterclaims.
Assuming,
arguendo,
that Defendants prevailed on their inequitable conduct
counterclaims, their remedies against Plaintiff far exceed the relief
they received in the Court's January 21, 2015 Opinion and Orderinvalidation of fifteen patent claims and the dismissal of Plaintiff's
action.
As the Federal Circuit succinctly has described:
[T] he remedy for inequitable conduct is the "atomic bomb"
of patent law. Unlike validity defenses, which are claim
specific, inequitable conduct regarding any single claim
renders
the
entire patent unenforceable.
Unlike
other
deficiencies,
inequitable
conduct
cannot
be
cured
by
reissue or reexamination. Moreover, the taint of a finding
of inequitable conduct can spread from a single patent to
render unenforceable other related patents and applications
in
the
same
technology
family.
Thus,
a
finding
of
inequitable conduct may endanger a substantial portion of a
company's patent portfolio.

A finding of inequitable conduct may also spawn antitrust
and unfair competition claims. Further, prevailing on a
claim
of
inequitable
conduct
often
makes
a
case
"exceptional,"
leading
potentially
to
an
award
of
attorneys'

fees

under

35

U.S.C.

§

285.

inequitable conduct may also prove the
exception to the attorney-client privilege.

A

finding

crime

or

of

fraud

Therasense, Inc. v. Beckton, Dickinson & Co.,
649 F.3d 1276,
1288-89 (Fed. Cir. 2011) (en banc) (internal citations omitted).

16

Counterclaims,

substantive

Court

challenge

inequitable
assess

the

conduct

the

to

now

the

to

each

which

subset

consider

sufficiency

allegations.

extent

particularity

must

of

Defendants'

the

Court

will

pleaded

with

Therefore,

Defendants

of

the

Plaintiff's

have

allegations

comprising

Defendants' alleged inequitable conduct counterclaims.
1. Inventorship
In

their

Defendants,

First

first,

Amended

Answer

by misrepresenting

the

suit.

More

Defendants

Farr

("Farr"),

patents—and

specifically,
Curtis

named

Joseph

misrepresented to

Farr was an
(2)

that

respect

inventors

the

inventorship of

the

the

(1)

("Chambers"),

of

'204,

and

'204,

the

the

'204,

Jeffrey

Steven

Nielsen

'341,

prosecuting

'341, and

and

Teja—as

'341

'359,

patents-inthat

and Trademark Office

Nielsen,
'204

allege

("Teja")—the

Patent

inventor of

the

inventorship of

Chambers

Teja

Chambers,
to

Counterclaims,

allege that Plaintiff engaged in inequitable

conduct

("Nielsen")-the

and

and

attorney-

("PTO")

'001 patents;

well

as

Farr

patents—misrepresented

'344, and

PTO by failing to name Greg Block ("Block")

'001

'341 patents

that

and
with
the

to the

as an inventor.

See

First Am. Answer & Countercls. 1MI 63, 65-66, 68.
a.

Farr

With respect to Farr's inventorship, Defendants allege that
Plaintiff

engaged

in

inequitable
17

conduct

when

Farr,

Chambers,

and Nielsen signed,

and Teja submitted,

that listed Farr as a named inventor of

patents,

even though Farr was not,

patents.

Id.

Ut

63-65.

declarations to the PTO
the

'204,

in fact,

and

'001

an inventor of

such

According

'341,

to

Defendants,

notwithstanding such declarations,
Farr

has

now

admitted

under

oath

that

he

was

not

involved in conception of the idea that became the eSketch product, which is Plaintiff's embodiment of the
asserted independent claims of the Patents-in-Suit,
including the independent claims of the '204, '341,
and '001 Patents.
Nor did Farr reduce the patented
invention to practice.
Chambers and Farr knew that
Farr did not have a substantial role in the conception
of [the] e-Sketch product or building a prototype of
the e-Sketch product.

Id.

H 66.4

Moreover,

Defendants allege

that Farr signed the

false declarations even though "Teja discussed with Farr whether
he should be named as an inventor or co-inventor on any patent

applications."

Id.

misrepresentations

Defendants

with

further

regard

inventorship

to

allege
are

that

any

material

because "inventorship is a critical requirement for obtaining a

patent."

Id. % 67.

and belief,

Finally, Defendants allege, on information

that "Farr's false statements regarding inventorship

were made with specific intent to deceive to the Patent Office,

as it is implausible for Farr to have believed himself to be an

4 The Court notes that Defendants allegations are, in part, based
on statements that Farr made during a deposition.
The Court has in no
way considered evidence outside of Defendants' First Amended Answer

and Counterclaims in resolving the instant motion.
Instead, the Court
simply has accepted the truth of Defendants' express allegations in
their amended answer regarding Farr's deposition statements.
18

inventor of particular subject matter,
involved in the conception thereof."

In

response,

Defendants'
'204,

Plaintiff

allegations

'341,

and

'001

inventor was material,
the

specific

Dismiss at

not

7-9.

alleged

Farr

was

intent

not

because

an

Farr was

patents,

deceive

sufficient

inventor

have

of

to

and

the claims of
Plaintiff

claim because
of

patents,

claims.

Second,

Farr

Farr was not

that

than

their

'341,

the

as

an

See id.

of

Mot.

assertion

and

that

'001

Farr

at

have

in
7-8.

not

that

not

claims of
rather

conception of

In other words,

stated a

on development of
the

have

was

the

the

to

patents

e-Sketch product,

involved

Defendants

rather

PL's

the embodiment of

inventorship hinges

the

of

that Defendants

alleged

'001 patents,

such patents.

asserts

the

See

contends

'204,

merely

the

than alleging that

of

inventor of

an

PTO.

support

the

development of

'341,

not

sufficiency

inclusion

the

Plaintiff

involved in the
'203,

the

the

and any misrepresentation was made with

to

Defendants

Id.

contests

that:

First,

facts

knowing that he was not

products

plausible
the claims

embodying

such

Plaintiff argues that Defendants have failed to

plead materiality because they have not adequately alleged that
the

inclusion of

misrepresentation
contends

that

Farr
to

as

the

Defendants

an

inventor

PTO.

Id.

have

at

failed

qualified
8-9.
to

as

Third,

plead

material
Plaintiff

intent

they have only done so "on information and belief."
19

a

because

Id. at 9.

The Court concludes that Defendants have adequately pleaded

inequitable conduct

regarding Farr's

'341, and '001 patents.

the

alleged

inventorship of

misrepresentations

that

'204,

Defendants have identified the "who" of

by

identifying

and Nielsen as the individuals that signed,
individual

the

submitted,

the

allegedly

Farr,

Chambers,

and Teja5 as the

false

declarations.

See Exergen, 575 F.3d at 1329; First Am. Answer & Countercls. UU
63-65.

Likewise,

Defendants

misrepresentations

specific dates

and

Teja

Exergen,

took

F.3d

identified

where

Chambers,

and

identifying,

place

at

the

Teja
in

misrepresentation:

the

they

Chambers,

alleged
1328.

false

have

alleged

alleged

the

that

the

See

Defendants

misrepresented

declaration,

the

declarations.6

information

allegedly

when

and Nielsen signed,

Similarly,

material

each

identified

because

upon which Farr,

submitted,
575

have

Farr,

is

specific

have

Nielsen,

found

by

alleged

Farr's statements that he was an original and

5 The Court must accept the truth of the allegations in the First
Amended Answer
and
Counterclaims,
even
those
regarding
alleged
misrepresentations by a member of the patent bar, regardless whether
the Court believes such allegations.
Twombly, 550 U.S. at 555

6 More specifically,

as to the

'204 patent,

Defendant alleges

that Farr signed a false declaration on April 10, 2009, Chambers and
Nielsen signed such declaration on April 9, 2009 and April 13, 2009,
respectively, and that Teja filed such declaration with the PTO on
April 20, 2009.
First Am. Answer H 63.
With respect to the '341
patent, Defendant alleges that Farr, Chambers, and Nielsen signed a
false

declaration that

Id. f 64.
Farr,
2007,

Teja

submitted to the

PTO on March

12,

2013.

Finally, regarding the '001 patent, Defendant alleges that

Chambers, and Nielsen signed a false declaration on March 12,
and that Teja filed such declaration with the PTO on December

16, 2009.

Id^ H 65.
20

first inventor of each patent.

First Am.

See Exergen,

Answer & Countercls.

UH 63-65.

because

the

inventorship

resolving

Court

reasonably

'204,

can

allegations—assumed

this

motion—that

the

PTO

the allegedly false

'341, and

infer

true

F.3d at 13 29;

And Defendants have

identified how a patent examiner would use

misrepresentation in assessing the

575

for

would

'001 patents

from
the

not

Defendants'
purposes

have

of

issued

the

patents with Farr as an inventor if it had known that Farr had
not contributed to such patents.

The

adequacy

of

See Exergen, 575 F.3d at 1330.

Defendants'

allegations

regarding

the

"what" of inequitable conduct based on Farr's inventorship is a

somewhat closer question.
with respect
Farr was

to Farr

is that the declarations

an inventor of

misrepresentations

The core of Defendants'

the

because

'204,

Farr

has

'341,

and

admitted

allegations

indicating that

'001 patents

that

he

were

was

not

involved in the conception of the idea that became the e-Sketch

product,

the

embodiment

such patents.

of

the

See First Am.

asserted

independent

claims

Answer & Countercls. H 66.

respect to inventorship, the Federal Circuit has noted:
Because conception is the touchstone of inventorship,
each joint inventor must generally contribute to the
conception of the invention. . . . As to the required
degree
of
recognized

contribution
to
conception,
that
[t]he
determination
of

we
have
whether a

person is a joint inventor is fact specific, and no
bright-line standard will suffice in every case. The
underlying principle from our case law is that a joint
inventor's contribution must be not insignificant in
21

of

With

quality,

when

that

contribution

is

measured

against

the dimension of the full invention.

Bard Peripheral Vascular,

F.3d

837,

845

(Fed.

Inc. v. W.L.

Cir.

2015)

Gore & Assocs.,

(alteration

in

(internal citations and quotation marks omitted).

Inc.,

776

original)

In addition,

"a co-inventor need not make a contribution to every claim of a

patent.

A

contribution

to

one

claim

is

enough.

Thus,

critical question for joint conception is who conceived,

the

as that

term is used in the patent law, the subject matter of the claims
at

issue."

1460

Ethicon,

(Fed.

Cir.

Inc. v. U.S.

1998)

Surgical Corp.,

(internal citations omitted).

The Court finds that Defendants'

"what"

of

sufficient

the
to

135 F.3d 1456,

alleged

survive

allegations regarding the

misrepresentations

Plaintiff's

motion

as

to

Farr

to dismiss.

are

Plaintiff

correctly notes that inventorship depends on the extent to which
Farr contributed to
'341,

and

'001

embodiment

of

the

conception of

patents—rather
such

claims-and

contributed to one claim of
inventor

thereof.

than

the

Farr's

that

claims of

contribution

Farr

each such patent

Admittedly,

Defendants

the

need

to

have

'204,
to

only

the
have

qualify as
not

an

expressly

alleged that Farr did not contribute to any single claim of the
'204,
that

'341,
Farr

and

'001 patents.

"admitted

conception of

the

under

However,

oath

that

idea that became the

22

Defendants have alleged
he

was

not

involved

e-Sketch product,

in

which

is

Plaintiff's embodiment of

the

Patents-in-Suit."

While

such allegation

Farr did not
'204,

First
is

contribute
and

'341,

the asserted independent claims of

Am.

not
to

Answer

&

equivalent

the

'001 patents,

Countercls.

to

an allegation

conception of
to

the

f

extent

66.
that

any claim of
that

the

the

e-Sketch

product is Plaintiff's embodiment of the claims of such patents,
if Farr was not involved in conceiving the idea that became such

product,

the

Court

reasonably

contribute to any claim of the
other

words,

the

Court

can

'204,

infer

that

he

did

'341, and '001 patents.

recognizes

the

distinction

not
In

between

contributing to one of a patent's claims and contributing to the
embodiment

of

a

allegation that

patent's

claims,

Farr did not

but

finds

contribute

that

even to

ultimately became the product embodying the '204,

patents'
that

independent

Farr

was

such patents'

not

claims

permits

sufficiently

claims

the

involved

Defendants'

the

'341, and '001

reasonable
in

the

idea that

inference

conception

to qualify as an inventor.7

of

Therefore,

7 It is worth noting that Defendants allege that "Block was the
'primary developer'
at
'the genesis' of what became the e-Sketch
product that Nielsen, Chambers, and Farr later sought to patent" and
that "Block was the 'architect' and 'responsible for the overall
design' of the project that Nielsen, Chambers, and Farr later sought

to patent."

First Am. Answer

& Countercls.

f 69

(emphasis added).

Those allegations permit the reasonable inference that Block and
others developed the e-Sketch product, and Nielsen, Chambers, and Farr

subsequently sought to patent the technology embodied therein, as
opposed to Nielsen, Chambers, and Farr developing the e-Sketch product
with a view,
from the
start,
towards obtaining patents on the
technology therein.
To the extent Defendants allege that Farr has
admitted that he was not involved in developing the e-Sketch product,
23

Defendants have

adequately alleged

and how of

alleged

the

the

inequitable

who,

what,

conduct

when,

relating

where,

to

Farr's

inventorship.
As

to

pleaded

Farr's

inventorship,

materiality

and

Defendants also have adequately

intent.

Contrary

to

Plaintiff's

assertion,

the Federal Circuit has held that misrepresentations

regarding

inventorship

Closures,
Cir.

Inc.

2010)

v.

(citations

Tools,

Inc.

2002);

PerSeptive

225

Rome

F.3d

v.

1315,

omitted);

1322

conduct

Plaintiff

with

the

cannot satisfy Rule 9 (b)
information

and

However,

this

in

2000).

1377

&

(Fed.
Rental

(Fed.

Cir.

Inc.,

Defendants'

element

Defendants

of

have

an
also

Farr misrepresented his

intent
as

Crew

Thus,

materiality

at a minimum,

that,

828

and Teja misrepresented

Furthermore,

to

a general

deceive

the

rule,

defendant

a

PTO.

by pleading deceptive intent solely on

belief.

case,

the

Magnetic

Pharmacia Biotech,

Nielsen,

specific

correctly notes

F.3d 817,

292 F.3d 1363,

Cir.

satisfies

Advanced

Casing

v.

Chambers,

claim.

607

Inc.

(Fed.

sufficiently pleaded that,
inventorship

See

Frank's

Ltd.,

Biosystems,

inventorship

inequitable

material.

Fastener Corp.,

PMR Techs.,

allegation that Farr,
Farr's

are

See

in

Exergen,

addition

to

575

F.3d

Defendants'

at

1330.

conclusory

the allegation that Nielsen, Chambers, and Farr sought to patent the
e-Sketch product subsequent to its development arguably renders even
more reasonable the inference that Farr did not contribute to any
claim of the '204, '341, and '001 patents.
24

allegations

that

"on

statements

regarding

intent

deceive,"

to

Defendants

allege

reasonably

infer

the

with

Farr

the

any

made

&

if

true,

intent

to

with

allow

his

deceive

attorney,

be

named

as

applications,"

Farr's
the

false

specific

Countercls.

misrepresented

should

patent

belief,

Answer

prosecuting

he

and
were

Am.

that,

specific

whether

inventor on

First

that

that

Farr

inventorship

facts

PTO with the

allegation

information

the

68,

Court

to

inventorship

to

such office.

"Teja[,]
an

id.

U

The

discussed

inventor

co-

permits

H 66,

or

the

Court to reasonably infer that Farr was aware of the requirement
that he
the

contribute

'204,

thereof.

'341,
When

to

and

the

conception of

'001

patents

combined with

the

to

at

least one

qualify

allegation

has admitted that he was not involved in

as

claim of

an

that

inventor

Farr himself

the conception of

the

idea that became the product embodying the asserted independent
claims of the patents-in-suit,

the allegation that Farr met with

Teja and specifically discussed whether Farr should be named as

an inventor permits the Court to reasonably infer that Farr had

the

specific

declarations

that

Defendants'
whether

'359,

he

intent

to

'344,

not named as

and

the

listed himself

allegations
should

deceive

be

that

listed

'359 patents,

as

PTO
an

met

as

named

see id.

an inventor on the
25

he

inventor.

Farr
a

when

signed

the

Furthermore,

with Teja and discussed
inventor

11 71,

'35 9 and

but

on

the

'204,

that Farr was

'344 patents,

see id.

at

26

n.l,

possessed
suggests

bolsters

the

the

specific

that

Farr

reasonableness

intent

to

of

inferring

deceive

reflected upon

the

the

PTO

quantum of

that

Farr

because

it

contribution

inventor and then consciously chose

necessary to qualify as an

to name himself as an inventor on some patents, but not others.8
In

short,

the

inequitable
Farr's

Court

conduct

finds

claim

inventorship.

that

Defendants

based

Thus,

on

the

have

stated

misrepresentations

Court

will

DENY

an

about

IN

PART

Plaintiff's motion as to such claim.9
b.

Defendants'

Block

allegations regarding Block's

inventorship are

essentially the converse of their allegations regarding Farr's
alleged

non-inventorship.

Defendants

allege

engaged in inequitable conduct when Nielsen,

that

Farr, Chambers,

Teja failed to disclose Block as an inventor of the

'344, and '341 patents.

First Am.

Plaintiff
and

'204, '359,

Answer & Countercls.

U 68.

8 In its motion to dismiss, numerous times, Plaintiff raises
arguments based on facts not present in Defendants' First Amended
Answer and Counterclaims.
For example, Plaintiff asserts that it
would

not

"have

made

sense

for

CertusView

to

'intend

to

deceive'

the

Patent Office about the inventorship status of Mr. Farr or Mr. Block"
because both were obligated to assign their rights to Plaintiff.
PL's Mot. to Dismiss at 9.
In attempting to rely on facts not
present
in
Defendants'
First
Amended Answer
and
Counterclaims,
Plaintiff ignores the standard of review applicable to its Rule
12(b)(6) motion.
Accordingly, the Court need not address any argument
Plaintiff

has

raised

based

on

facts

not

appearing

within

the

First

Amended Answer and Counterclaims.

9 The

Court notes

that,

ultimately,

to meet

their burden

of

proof, Defendants will have to present evidence to substantiate their
allegations of inequitable conduct.
At this juncture, however, the
Court concerns itself only with Defendants' allegations.
26

Defendants
manner

to

allege
the

that

Block

conception

Sketch product,"

"was

and

the

"contributed
reduction

to

in

a

practice

'primary developer'

at

of

the

Chambers,

Despite

the

e-Sketch

Chambers

such alleged participation
product,

failed to

Farr

failed

to

Defendants

in

the

allege

name Block

in declarations
'344, and

name

'359,

Block

in

fl
of

Nielsen

and

submitted during

'341 patents,

declarations

prosecution of the '204 and '341 patents.

Id.

development

that

'204,

prosecution of the

and

and "built the e-Sketch prototype

and wrote much of the code himself for the prototype."
69.

e-

'the genesis'

of what became the e-Sketch product that Nielsen,
Farr later sought to patent,"

significant

and that

submitted

during

See First Am.

Answer

& Countercls. H 71 & 26 n.l.

Moreover, according to Defendants,

"Nielsen,

were

Chambers,

identifying who

and

Farr

would be

actively

named as

involved

purported

inventors,

reviewing in advance written submissions to the
60.

Defendants

being

named

also

as

an

allege

that

inventor

"Teja

or

...

knew

[PTO]."

the

co-inventor,

and

in

Id. U

standard
and

in

for

discussed

inventorship with Farr,

Chambers,

and Nielsen in connection with

listing

inventors

on

them

as

'341 patents."
Plaintiff
allegation with

named

the

'204,

'359,

'344,

and

Id_;_ U 71.
challenges
respect

asserted regarding Farr.

to

the
Block

sufficiency
for

reasons

In particular,
27

of

Defendants'

similar

to

Plaintiff argues

those

that

Defendants'
of

the

allegations that Block contributed to the conception

e-Sketch

independent

product,

embodiment

failed
Mot.

to

allege

materiality

to Dismiss at

inventorship,

plausibly

an

misrepresentations

Farr,

lack

inequitable

the
who,

Nielsen,

of

Block's

Chambers,

Chambers,

'344 patents and
where,

when,

And,

like

the

inventorship,

alleged,

claim
As

have

based

on

with

the

the allegations

that

and Teja submitted

false

declarations

'204 and '341 patents,

and Teja did

so during

First Am.

prosecution

Answer & Countercls.

allegations,

that Block contributed to the

'341,

regarding

Defendants

inventorship.

the Court

'344,

in detail,

and
of

at

68-71.

Defendants'

conception of

least one of

and '359 patents.

that Block:

HU

See

the

e-

to reasonably infer that Block

contributed to the conception of
'204,

allegations

thereof,

Farr-inventorship

Sketch product permit

the

PL's

and how of an inequitable conduct claim.

III.B.La;

allegations

See

have

'359 patents are sufficient to satisfy the

supra Part

again

Defendants

intent.

conduct

to the PTO during prosecution of the
that

that

deceptive

alleged

regarding Farr's

Nielsen,

or

and

inequitable conduct

or

alleged

allegations

patents

not

7-9.

Like Defendants'

Farr's

'341

do

the

the

and

patents-in-suit,

of

reasonable inference that Block contributed to any claim of

'344,

the

the

the

'359,

of

is

permit

'204,

claims

which

"was the
28

Indeed,

the claims

of

Defendants have

'primary developer'

at

'the genesis'

Chambers,
the

of what became the e-Sketch product that Nielsen,

and Farr subsequently sought to patent,"

concept

'architect'

project

that
and

that

became

the

'responsible

Nielsen,

e-Sketch

for

the

Chambers,

product,"

overall

and

"'envisioned'

Farr

"was

design'

later

the

of

the

sought

to

patent," and "built the e-Sketch prototype and wrote much of the
code himself for the prototype."

U

69.

At

First Am. Answer & Countercls.

contributed

motion-to-dismiss

for

sufficient

the

the

to

the

Court
claims

to
of

stage,

such

reasonably
the

'204,

allegations

infer

'359,

that

'344,

are

Block

and

'341

patents and that Nielsen, Chambers, and Teja-as well as Farr, as
to the

'204 and '341 patents—misrepresented the inventorship of

such patents by failing to name Block as an inventor.
The

Court

also

concludes

that

Defendants

alleged materiality and deceptive intent.
stated

above,

inventorship
Closures,
Cir.

the
is

Inc.

v.

2010)

Furthermore,

alleged

Court

omitted);
finds

607

Block's
Magnetic

F.3d

supra

that

of

Advanced

e.g.,

Fastener Corp.,

(citations
the

See,

adequately

For the same reasons

misrepresentation

material.
Rome

have

817,

Part

Defendants

828

(Fed.

III.B.La.

have

alleged

sufficient factual matter to permit a reasonable inference that
Farr,

Nielsen,

inventorship,
as

an

Chambers,

and

Teja

by submitting declarations

inventor,

with

the

specific
29

misrepresented

that

intent

to

Block's

did not

list him

deceive

the

PTO.

Defendants have alleged

that Farr,

Chambers,

and Nielsen were

"actively involved ... in identifying who would be named as

purported inventors," First Am. Answer & Countercls.

t 60, and

that "Teja knew the standards for being named as an inventor or
co-inventor,
Nielsen

the

and discussed inventorship with Farr,

in

connection with

'204,

'359,

'344,

listing

and

'341

them

as

patents,"

Chambers,

named

and

inventors

id^ % 71.

on

Such

allegations permit the reasonable inference that Farr, Chambers,
Nielsen,
to

in

and Teja understood the standard for inventorship prior

filing

the

declarations

combination

contribution
'341,

with

to
and

'344,

allegations

the

the

regarding

inventorship.

allegations

conception of

of

the

Considered

Block's

embodiment

significant
of

the

'204,

'359 patents-the e-Sketch product-including the

that Block

"envisioned the

concept

that became

the

e-Sketch product" and "was the architect and responsible for the

overall design of

the project

later sought to patent,"
omitted),
Nielsen,

the
and

declarations

Therefore,

Court

id.

1)

69

reasonably can

Teja

omitted

with

a

the

that Nielsen,

Court

Block

specific

will

not

as

Chambers,

(internal
infer
a

intent

dismiss

that

named

to

and Farr

quotation marks
Farr,

Chambers,

inventor

deceive

Defendants'

in

the

the

PTO.

inequitable

conduct counterclaim based on Block's inventorship and will DENY
IN PART Plaintiff's motion as to such claim.

30

2. Failure to Disclose Prior Art

Second,

Defendants

allege

that

Plaintiff

engaged

in

inequitable conduct by failing to disclose material prior art
during

the

prosecution

specifically,
disclose

of

Defendants

the

following

the

allege

patents-in-suit.

that

material

Plaintiff

prior

art:

More

failed

(1)

the

"TelDig

Utility Suite product;" and (2) the "ESRI ArcPad software."
1111

82,

85.

allegations

The

with

Court

will

respect

to

consider,

each

item

However,

before turning to Defendants'

respect

to

TelDig

Systems,

product

and

ESRI's

ArcPad

Defendants'
searches

general

because

Software,

of

turn,

Id.

Defendants'

alleged

prior

art.

specific allegations with

Inc.'s

allegations

in

to

("TelDig")
the

Court

Utility
will

set

Suite
forth

regarding Plaintiff's prior art

such allegations pertain to both TelDig's

and

ESRI's alleged prior art.

Defendants allege that " [b]eginning in 2008 at the latest,

Dycom[—Plaintiff's
and

Teja

parent

embarked on

a

company—],

plan

to

Nielsen,

blanket

with patent applications."

Id. U 60.

in

engaged

April

company,

2008,

Plaintiff

Commercial

Strategy,

LLC,

Farr,

business

sector

According to Defendants,
a

"third-party

which is

in the business of

strategic

consulting

in

Id. H 75.

"As part of its engagement, Commercial Strategy was

of

and

consulting

providing

support

management

their

Chambers,

innovation

31

intellectual
and

growth

property

initiatives."

asked

to

do

a

study

and

prepare

a

report

on

the

prior

art

products and services that were material to the technology that
Dycom was working on, specifically the e-Sketch technology that
Nielsen,

Chambers,

and Farr later sought to patent and resulted

in the patents asserted in this case."
allege

that

Report"

("MIR").

objective

this

of

players)

of

to

study

interest
.

.

to
.'

the

H 76.

"Market

companies and

"[t]he

Defendants
Intelligence

H 76.

"The MIR stated that,

is

analyze

to

Dycom
each

for

companies

the

company

express

and

its

Id. H 77 (alteration in original).

Defendants,

MIR

identified

a

'[t]he

(industry
purpose

of

intellectual

Thus, according

'Target

List'

of

'a profile of each company from the Target List

that was found of
relevant

generated

See icL

this

understanding

property."

study

Id.

interest and

to Dycom objectives."

therefore
Id.

found

to be highly

Additionally,

Defendants

allege that the MIR "contained discussion of material prior art
specifically
[Plaintiff]

identified

the

representatives

of

and Farr,

in what would be

the [PTO],

as

sought to patent."

"[t]hroughout

Chambers,

...

Id.

prosecution
Dycom

and

of

highly

relevant

to

what

According to Defendants,

the

CertusView,

asserted

patents,

including

Nielsen,

were actively involved in the prosecution,

submitted to and what

would be

withheld from

. . . and in reviewing in advance written submissions

to the [PTO] ."

Id_^ H 60.
32

a. TelDig Utility Suite

Regarding

failure

to

disclose

material

prior

art,

Defendants first allege that Plaintiff's failure to disclose the

TelDig
In

Utility

addition

Defendants
"having

Suite

to

allege

product

the

general

that

the

technology

pursuing."

is

the

inequitable

allegations

set

relevant'

to

conduct.

forth

MIR identified TelDig as

'highly

Id. H 77.

discussion regarding
interest

constitutes

what

a

above,
company

Dycom

was

Therefore, the MIR included "a five-page
[TelDig]" and stated that

TelDig

Utility

Suite

similar to the eSketch concept."
according to Defendants,

Id.

"[o]f particular

product

U 79.

which

On

the MIR concluded that

appears

that basis,

" [a]t this

time

it does appear that TelDig is investing in solving problems that
Dycom is interested in."
More

specifically,

Id.
according

to

Defendants,

the

MIR's

discussion "ma[de] clear that TelDig's technology does more than

just ticket management."

Id. H 81.

Defendants allege that the

MIR stated that "TelDig Utility Suite 'has the unique capability
to receive sketches and maps,
them

out

with

process.'"

Id.

the

locate

edit them if necessary and send
ticket

in

a

totally

paperless

Moreover, Defendants allege the MIR also stated

that "in addition to ticket management, TelDig's technology has
wireless
storage

data

sharing,

capabilities."

mapping
Id.

and

Indeed,
33

GIS,

and

image

according

to

and

audio

Defendants,

"Nielsen,

Chambers,

much more

than

and Farr knew that the TelDig technology was

just

'ticket management

Defendants allege that
told by Nielsen,

software.'"

"Teja did not receive

Id.

the MIR,

Yet,

and was

Chambers and Farr that TelDig's technology was

merely 'ticket management software.'"

Id.

Defendants allege that "[d]espite the fact that Nielsen and
Chambers

were

aware

Suite product at

of

the

least as

materiality

of

early as July 22,

disclosed the TelDig Utility Suite product,
art, for that matter,

Patents-in-Suit."
prosecution of
the

to the

Id. H 82.

the

'204,

the

[PTO]

TelDig

2008,

they never

or any TelDig prior

during the prosecution of the

According to Defendants,

'001,

Utility

'359,

'344,

and

'341

"[d]uring
[p]atents,

[PTO] concluded that the cited prior art did not disclose at

least

a

this

digital

element

representation of

is

present

discussed in the MIR."
"[t]his

element

was

in

prior

art,

and

'359,

'344,

and

'341

found

had

the

physical

TelDig

Id. H 83.

not

cited

the

a

Utility

the

Under Exergen,

where,

and how"

of

575 F.3d at 1328.

issued."

Suite

examiners

examiners
known

of

about

in

product

any

other
'001,

the

MIR

and

the

the Patents-in-

Id.

Defendants must allege the "who,

the

but

[']204,

the

TelDig Utility Suite product disclosed therein,
Suit would not have

mark,

Thus, Defendants allege that

by

[p] atents

locate

alleged failure

to

disclose

what,

prior art.

Defendants have adequately alleged the
34

when,

"who"

of the alleged inequitable conduct by alleging that Nielsen and
Chambers failed to disclose the TelDig Utility Suite product to

the PTO.
"when"

Id. H 82.
of

Nielsen

the

and

Defendants have also adequately alleged the

alleged

Chambers

product as early as

such

alleged

Similarly,
material

found

were

prior

art

information

the

aware

to

conduct

of

the July 22,

Defendants

within

inequitable

PTO.

sufficiently

alleged

have

by

Utility

that
Suite

but never disclosed

See

id.

alleged

withheld

omission

alleging

TelDig

2008 MIR,

the

allegedly

the

by

from

the

HH

81-82.

"where"
PTO

identifying

the

can

the
be

TelDig

Utility Suite product and the allegedly material feature of such
product—the

"digital representation of

First Am. Answer & Countercls. H 83.
Decor Essentials Ltd.,

No.

*2

2014)

(S.D.N.Y.

Mar.

satisfied Rule
piece

of

prior

6,

12 Civ.

a

(finding

product,

failed to disclose to the PTO).
alleged

"'how'

withheld]
claims."

"the

an

examiner

information
Exergen,

cited

prior

representation of

in

See Keystone Global LLC v.

9077(DLC),

9(b)'s requirements,
art,

a physical locate mark,"

that

that

the

would

a physical

not

have

allegations

by specifying the

applicants

used

the

allegedly

[the

allegedly

patentability

of

the

Defendants allege that

disclose

locate mark,

35

at

And Defendants have adequately

assessing

did

factual

in part,

575 F.3d at 1329-30.

art

2014 WL 888336,

at
but

least
this

a

digital

element

is

present in the TelDig Utility Suite product,"10 First Am. Answer
&

Countercls.

H

83,

and

such

claim

limitations,

that are supposedly absent from the

Exergen,

575

F.3d

at

or

identifies

particular

record,"

limitations,

allegation

combination

1329-30,

"the

of

claim

information of

namely,

the

"digital

representation of a physical locate mark."11
However,

Defendants have failed to allege the "what" of the

inequitable conduct claim predicated on the nondisclosure of the

TelDig

Utility

requirement,

Suite

Defendants

product.
must

To

identify

satisfy
to

"which

the

"what"

claims,

and

10 Plaintiff contends that Defendants' allegation that a "digital
representation of a physical locate mark" was present in the TelDig
Utility Suite product "is simply a misrepresentation of the record"
because "the TelDig material does not say anything about a digital
representation of a physical locate mark."
PL's Mot. to Dismiss at
The Court notes that it must accept the truth of Defendants'
10.
allegations at this juncture.

11 Plaintiff contends that Defendants have failed to identify "how
an examiner would have used"
the TelDig Utility Suite product
information "in assessing the patentability of the claims" because
Defendants "have not allege[d] that TelDig anticipates, and mak[e] no
effort
to explain how an
examiner might
have used TelDig in
combination with other references to invalidate any claim."
PL's
Mot.

to Dismiss at

10.

In a nontechnical sense,

Plaintiff is correct

that explaining the specifics of how the TelDig Utility Suite product
would anticipate, or render obvious, the claims of the patents-in-suit
would identify how an examiner would use the information about the
TelDig Utility Suite product.
However,
the Federal Circuit has
equated
explaining
"'how'
an
examiner
would
have
used
[the]
information in assessing the patentability of
the
claims"
with
"identifying]
the particular claim limitations, or combination of
claim limitations, that are supposedly absent from the information of
record."

Exergen,

575 F.3d at 1329-30.

Defendants have done so here.

While a more in-depth explanation of the relationship between the
TelDig Utility Suite product, other prior art, and the claims of the
patents-in-suit might improve Defendants' allegations, the absence of
such an explanation is not fatal to Defendants' claim.
36

which

limitations

relevant."

in

those

Exergen,

575

claims,

F.3d at

the

withheld

132 9.

Here,

references

Defendants

are

have

failed to satisfy that requirement because they do not identify
any specific claims,

much less

any claim limitations,

to which

the TelDig Utility Suite product's "digital representation of a

physical locate mark"
Court

concludes

particularity
alleged

an

element is relevant.12

that

Defendants

inequitable

nondisclosure

of

conduct

the

because Defendants have not

have

failed

claim

TelDig

to

plead

predicated

Utility

Suite

sufficiently alleged the

the alleged inequitable conduct.13

the
with

on

the

product

"what"

of

The Court will GRANT IN PART

12 In the Court's Opinion and Order,
motion for judgment on
asserted claims of
the
eligible subject matter,

Accordingly,

ECF No. 250, on Defendants'

the pleadings,
in assessing whether the
patents-in-suit were directed to patentthe Court conducted an element-by-element

analysis

of the fifteen asserted claims.
Thus, the Court is well
aware that many of the claims of the patents-in-suit include a
"digital representation of a physical locate mark."
But Defendants
have

not

identified

Counterclaims.

such

claims

Therefore,

the

in

Court

their

must

First

Amended

conclude

that

Answer

and

Defendants'

allegations are deficient, even though the Court is aware that claims
of
the
patents-in-suit
include
as
a
limitation
the
digital
representation of a physical locate mark allegedly present in the
TelDig Utility Suite product.

13 The Court notes that, if Defendants had adequately alleged the
"what" of the inequitable conduct regarding the TelDig Utility Suite
product, Defendants' allegations permit the Court to reasonably infer
that Nielsen and Chambers did not disclose such product because they
had the specific intent to deceive the PTO.
This inference is
reasonable based on the allegations that: Nielsen and Chambers, along
with others, were part of a strategic plan to "blanket their business

sector with patent applications,"
Chambers
in-suit] ,

First Am. Answer U 60; Nielsen and

"were actively involved in the prosecution
in

what

would

be

submitted

to

and

what

[of the patentswould

be

withheld

from the [PTO], id. ; Plaintiff commissioned Commercial Strategy to
"prepare a report on prior art products and services that were
37

Plaintiff's motion to dismiss regarding the inequitable conduct
claim

predicated

on

the

alleged

nondisclosure

of

the

TelDig

Utility Suite product.
b.

Defendants
inequitable
software.

ESRI

next

conduct

ArcPad Software

allege

by

that

failing

Along with the

Plaintiff

to

disclose

regarding

ESRI"

and

stated

that

including the ArcPad software,

concept."
Defendants,

Id.

management,

MIR

GPS,

to

solving."

state[d]

that

utilization management,

be
Id.

Id.

ArcPad

set

forth above,

"nine-page discussion
[ESRI]

applications[,]

read very closely to the eSketch

ESRI's

wireless data sharing,

and audio storage."

appear

ESRI

H 84 (alterations in original).

"the

the following:

"many

in

the

general allegations

Defendants allege that the MIR included a

engaged

As alleged by

technology

included

data analysis,

mapping and GIS,

ticket

and image

The MIR also concluded that "ESRI does

investing

in

problems

Dycom

is

interested

in

(emphasis omitted).

material to the technology that Dycom was working on, specifically the
e-Sketch technology that Nielsen, Chambers, and Farr later sought to
patent and resulted in the patents asserted in this case," id. U 76;
the MIR created by Commercial Strategy discussed the TelDig Utility

Suite product and indicated that it contained more than just ticket
management software, id. U 81; and, notwithstanding, Nielsen and
Chambers
told Teja that
TelDig's
technology was
merely ticket
management software, id.
Based on those allegations, the Court can
reasonably infer that Nielsen and Chambers "(1) knew of the withheld
material

information

.

.

.

and

(2)

withheld

with a specific intent to deceive the PTO."
1328-29.

38

this

information

See Exergen,

.

.

.

575 F.3d at

Defendants

allege

and '344 [p]atents,

that

the

"[d]uring

[PTO]

prosecution

of

the

'204

concluded that the cited prior art

did not disclose at least a digital representation of a physical
locate

mark,

but

this

element

is

software discussed in the MIR."
to Defendants,

present

in

Id. H 90.

ESRI

ArcPad

Moreover, according

"[t]his element was not found by examiners in any

other cited prior art,

and had examiners of

[p]atents

the

known

about

disclosed therein,
issued."

the

the

'204

allege

that

MIR

and

and

the

'344

the

ESRI

[p] atents

'204

ArcPad

and

'344

software

would not

have

Id.

Defendants

Nielsen

and

Chambers

were

"put

on

express notice of the materiality of the ESRI ArcPad software to
that

which

Id.

H

85.

they

sought

However,

to

patent

according

as

to

early as

July

Defendants,

22,

2008."

Nielsen

and

Chambers did not disclose the ESRI ArcPad software or other ESRI

prior art to the PTO during prosecution of the '344 patent.
Furthermore,

Id.

Defendants allege that Nielsen and Chambers did not

disclose the ESRI ArcPad software or other ESRI prior art to the
PTO during the prosecution of the '204 patent, although they did
disclose the ESRI ArcPad software roughly two weeks prior to the
issuance of

the

'204 patent,

prosecution of the
Defendants,

but

only

in

connection with

'359 patent and another patent.

Plaintiff

also

disclosed

the

ESRI

during prosecution of the '001 and '341 patents.
39

the

According to

ArcPad

software

See id. U 88.

The

now-familiar

of Defendants'
claims

In

during

light

standard

governs

the

sufficiency

pleading with respect to the inequitable conduct

predicated

software

Exergen

of

on

the

the

the

nondisclosure

prosecution of

similarity

the

of

the

'204

between

ESRI

and

'344

Defendants'

the

inequitable
Suite

Court's

conduct

product

and

analysis

claim
the

with
ESRI

of

respect

an

inequitable

nondisclosure

of

the

conduct
ESRI

claim

ArcPad

the

is

when,

with

Utility

the

where,

respect

software.

alleged

TelDig

software

Defendants have adequately alleged the who,
of

ESRI ArcPad

Defendants'

to

ArcPad

patents.

allegations

regarding the TelDig Utility Suite product and the
software,

ArcPad

See

same.
and how

to

the

Exergen,

575

F.3d at 1328-30; First Am. Answer & Countercls. fU 82-90; supra
Part

III.B.l.

However,

Defendants have not

alleged the

because they have failed to identify the claims,

"what"

and limitations

within such claims, to which the ESRI ArcPad software's alleged
element of a digital representation of a physical locate mark is

relevant.
Court

is aware

reference
see

See Exergen 575 F.3d at 1329.

supra

that

a digital
note

particularity

an

claims

within

the

representation of

12—Defendants

inequitable

Accordingly-though the

have

'204 and

'344 patents

a physical

locate mark,

failed

conduct

to

claim

plead

based

with

on

nondisclosure of the ESRI ArcPad software during the prosecution

40

of the '204 and '344 patents.14
IN

PART

Plaintiff's

motion

Therefore, the Court will GRANT

to

dismiss

as

to

such

inequitable

conduct allegations.
3. Misrepresentation of Prior Art
In

the

allegations,
inequitable
because,

third

and

final

Defendants
conduct

subset

assert

during

the

of

that

inequitable

Plaintiff

prosecution of

the

conduct

engaged

in

'344 patent

"to overcome a rejection of all pending claims under 35

U.S.C. § 103(a),15 Nielsen, Chambers, and Teja misrepresented two
prior art references:

(1) U.S. Pub. No. 2007/0219722 ("Sawyer");

and (2) U.S.

2006/0077095

Pub.

No.

& Countercls. H 92.

12/366,050,

under 35 U.S.C.

Id. H 94.

First Am.

which

claims 1-26 of U.S.
ultimately

§ 103(a)

issued

Patent Application

as

based on [Sawyer]

the

In response to such office action,

ESRI

alleged

ArcPad

the

software,

"what"
the

with

First

respect

Amended

'344

in view of

to

patent,

[Tucker]."

"Defendants allege

14 For the same reasons stated supra note 13,
adequately

Answer

Defendants allege that, on October 6, 2011,

the examiner "reject[ed]
No.

("Tucker").

if Defendants had

nondisclosure

Answer

contains

of

the

sufficient

allegations for the Court reasonably to infer that Nielsen and
Chambers failed to disclose the ESRI ArcPad software during the
prosecution of the '204 and '344 patents because they possessed the
specific intent to deceive the PTO.

15 Section 103(a) governs non-obviousness and provides: "A patent
for a claimed invention may not be obtained, notwithstanding that the
claimed invention is not identically disclosed as set forth in section
102, 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 of the claimed invention to a
person having ordinary skill in the art to which the claimed invention
pertains. Patentability shall not be negated by the manner in which
the invention was made."

35 U.S.C.

§ 103(a).

41

that Teja, Nielsen, and Chambers made the following arguments to
the

PTO:

No new matter is added by the amendments herein.
In particular,
the amendments
to the independent
claims are based at least in part on moving language
previously recited in the preamble to the body of the
claims so as to clarify the recitation of a "locate
operation," which is completely absent from the cited
prior art references.

Further support for the claim amendments relating
to
a
locate
"ticket"
can
be
found
throughout
Applicant's specification as originally filed (e.g.,
see
paragraphs
[002],
[003],
[0023],
[0045]
and
[0046]). As with "locate operation," the concept of a
locate ticket including information identifying a dig
area to be excavated or disturbed during planned
excavation activities, as now recited in Applicant's
independent claims,
is completely absent from the
cited prior art references.

Accordingly,

the application as now presented is

believed to be in allowable condition.

Id. t 96 (emphasis in original).
"the

language

emphasis,

in

shown
the

in

bold

original

Defendants further allege that
above

filed with

is

shown

the

in

[PTO]"

and

allege

that

the

above-quoted

for

that

the

statement

of

"cited prior art references" are Tucker and Sawyer.
Defendants

bold,

id.

Chambers, Nielsen, and Teja, "including the language shown . . .
in bold for emphasis," in response to the October 6, 2011 office

action, was false.

Id^ H 97.

Specifically, Defendants allege

that "the concepts of a locate operation and a locate ticket are

clearly present in these prior art references."
of

such allegation,

Defendants

allege

that

id.

In support

Paragraph

44

of

Sawyer "clearly discloses the concepts of a locate operation and
42

locate

ticket"

and

Defendants

paragraph in Sawyer.

Id.

set

U 98.

forth

the

portion

of

such

Defendants also allege that

Tucker "clearly describes a locate operation,

for example in

claims 1 and 6," and Defendants set forth such claims in Tucker.
Id. H 99.

Defendants

allege

that

Chambers,

Nielsen,

and

Teja

made

additional false statements in another portion of their response

to the October 6,

2011 office action.

Chambers, Nielsen,

and Teja told the examiner that "... Tucker

is not concerned with locate

According to Defendants,

operations

to

identify

a

presence or absence of underground facilities within a specified

dig area in advance of planned excavation activities at the dig

area."

Id. U 100 (emphasis in original).

Likewise, Defendants

allege that Chambers, Nielsen, and Teja told the examiner that
"Sawyer

...

is

not

concerned

with

locate

operations

to

identify a presence or absence of underground facilities within
a specified dig area in advance of planned excavation activities

in the dig area."

Id. U 101 (emphasis in original).

According

to Defendants, those two statements regarding Tucker and Sawyer

were a "misrepresentation of the prior art" and "unmistakably
false."

Id^ HU 100-01.

Defendants allege that "Tucker is in

fact concerned with locate operations to identify the presence

or absence of underground facilities within a specified dig area
in advance of [] planned excavation activities in the dig area."
43

Id.
fact

1 100.

Likewise,

according to Defendants,

concerned with locate operations to

"Sawyer is in

identify the presence

or absence of underground facilities within a specified dig area

in advance of planned excavation activities in the dig area."
Id. U 101.

Defendants allege that
made

with

emphasis

incorrect,

from

the

intent

the

single

facts

to

to

deceive

the

most

alleged

is

the

that

Tucker

Page

and

'locate operation'

they

inference

were

Id.

U

were

that

is

made

with

106.

one

evidenced

of

the

references

.

by

blatantly

can be

specific

Nielsen,

the

fact

named inventors

.

and a 'locate ticket'

.,

the

are

drawn

Additionally,

"egregiousness of Teja,

Tucker,

Sawyer

and

they

[PTO]."

misrepresentations"

"according to

the

[PTO],
likely

Defendants allege that the

Chambers'

"[g]iven that these statements were

that,

on both

concepts

of

Defendants allege that

could have

that

actually

Teja,

Nielsen,

prosecution."
According

read

"Mr.

his

and

a

'clearly present'

in the cited Tucker and Sawyer prior art references."
103.

and

id.

H

Tucker does not know how one

patents

Chambers

and made

made

the

about

statements

them

during

Id.
to

Defendants,

allowed claims 1-26 of the

"[t]he

'344

examiner

would

not

have

[p] atent had he been aware of

these unmistakably false statements regarding the prior art."

Id. H 106.

Defendants allege that, although the examiner issued
44

another office action rejecting the claims of the '344 patent on

a

different

basis,

the

examiner

"accepted

as

true"

"the

unmistakably false statements regarding the Tucker and Sawyer

references."

Id^

Defendants assert that, after Teja responded

to the examiner's rejection of the claims on a different basis
than obviousness

in light of Sawyer and Tucker,

the examiner

found Teja's remarks to be persuasive and concluded that Tucker,
Sawyer,

and another reference

features

of

claims

Defendants allege,

regarding

or

were

claims."

newly

not

reach or
features."

added

suggest
Id.

the
Yet,

"[h]ad the examiner known that the statements

[Tucker]

response

the

"do

and

false,

[Sawyer]

have

pleaded

conduct claim based on
and

Sawyer

Defendants

during
have

examiner

the

stated

the

the

alleged

HH

92.

the

"who"

identifying claims
that,
obvious

following
based on

have
1-26

the

the

Tucker

of

the

respect

of

an

issued

inequitable

the

and

First Am.

45

Tucker
patent.

Tucker

and

Sawyer

rejection
Tucker,

prior

art.

Answer & Countercls.

'344 patent,

in view of

'344
to

the

and Teja as the persons

satisfied the "what"

examiner's

Sawyer

with

Chambers,

575 F.3d at 1328-29;

Defendants

have

particularity

prosecution

allegedly misrepresented

See Exergen,

not

action

alleged misrepresentation of

Sawyer by identifying Nielsen,
who

with

would

office

Id.

Defendants

the

in

requirement

and by
of

by

specifying

claims

Chambers,

1-26

as

Nielsen,

and

Teja

emphasized

operation'"

and

that

the

the

"concept

"recitation

of

a locate

ticket

of

a

'locate

including

information identifying a dig area to be excavated or disturbed

during planned excavation activities" rendered the claims of the
'344 patent "allowable."

See Exergen, 575 F.3d at 1329; First

Am.

111

Answer & Countercls.

have

sufficiently

94,

identified

96.

the

Additionally,

"what"

of

Defendants

the

alleged

inequitable conduct by identifying the specific allegedly false
statements regarding Tucker and Sawyer within Teja's response to
the

October

6,

Countercls.

2011

UU

96,

adequately pleaded
the

response

to

prosecution of

office

the

100-101.

"when"

the

action.

See

Likewise,

Defendants'

the

Am.

Answer

Defendants

October

6,

2011

'344 patent.

information

office

See Exergen,

that

action during
575 F.3d at

&

have

the inequitable conduct occurred:

And Defendants have identified "where"
references

First

in
the

1329.

in the Tucker and Sawyer
allegedly

renders

false

statements regarding Tucker and Sawyer can be found:

Paragraph 44 of Sawyer, First Am. Answer & Countercls. 1 98, and

claims 1 and 6 of Tucker,
1329.

Finally,

Defendants

id.

U 99.

have

See Exergen,

the

examiner

would have used the information that Chambers, Nielsen,

and Teja

allegedly misrepresented because

identified

they have

"how"

575 F.3d at

alleged

and Sawyer both described a locate operation,

Countercls.

H1J

98-99,

and

that
46

the

that Tucker

First Am. Answer &

examiner

considered

the

alleged

misrepresentations

regarding

Tucker

and

Sawyer

to

reevaluate the examiner's prior assessment that claims 1-26 were
obvious based on Sawyer in view of Tucker,
1111

Countercls.

94,106.

Therefore,

the

Court

Defendants have adequately alleged the who,
and

how

of

Plaintiff's

alleged

First Am.

Answer &

concludes

what,

inequitable

when,

that

where,

conduct

through

misrepresentation of Tucker and Sawyer.
The

Court

also

sufficient

facts

Tucker and

Sawyer was

surviving
examiner

the
had

to

finds

show

that

that

the

material,

instant

at

motion.16

rejected

claims

Defendants

misrepresentation
least

for

Defendants

1-26

have

of

the

the

regarding

purposes

allege

'344

that

patent

they were obvious based on Sawyer in view of Tucker.
Defendants

allege

responded to
Tucker

and

Id. H 94.

about

extent

to

which

and

because

such rejection by making misrepresentations
the

Nielsen,

the

then

and

Chambers,

of

Teja

Sawyer

that

alleged

such

references

disclosed the concepts of a locate operation and locate ticket.

Id.

HH

accepted

96,

98-99.

these

According

statements

as

to

true,

Defendants,
but

issued

"the

another

action rejecting the claims on a different basis."
Ultimately,

following

Teja's

16 The Court notes that,

response

to

the

examiner

Id. U 106.

second

to prevail on the merits,

office

office

rather than

simply plead their claim, Defendants must demonstrate, by clear and
convincing
evidence,
but-for
materiality
with
respect
to
any
misrepresentation regarding the Sawyer or Tucker references.
See
Therasense,

649 F.3d at 1291-92.
47

action,

the

references
reach

or

examiner
[Tucker],

suggest

features."
Tucker

found

and

[Sawyer]

the

Id.

features

that

in

the

"[t]he

and

combination of cited

[another

of

claims

all

Considering

Sawyer

concludes

that

the

First

Defendants

or

the

do not

newly

allegations

Amended

have

reference]

Answer,

added

regarding
the

sufficiently

Court

pleaded

materiality.17
Finally,

the

Court

finds

that

Defendants

have

pleaded

sufficient facts to allow the Court to reasonably infer that
Chambers, Nielsen, and Teja made the allegedly false statements
about Tucker and Sawyer with the specific intent to deceive the
PTO.

Defendants

have

alleged

that

Nielsen and

Chambers

were

"actively involved in prosecution, in what would be submitted to

and what would be withheld from the [PTO] . . . and in reviewing

17 The Court rejects Plaintiff's contention that Defendants have
failed to state a claim because "the allegations acknowledge on their
face that the patent examiner was already in possession of and had
reviewed the Tucker and Sawyer references," PL's Mot. to Dismiss at

12 •

§ee W.L. Gore, 850 F. Supp. 2d at 636.

Plaintiff's

contention

that

Defendants'

The Court also rejects

claim

fails

because

"the

allegedly incorrect statements were not accepted by the examiner, and
did not result in any claims being allowed." PL's Mot. to Dismiss at

12.

Defendants have expressly alleged that "the examiner accepted"

the statements regarding Tucker and Sawyer.
First Am. Answer U 106.
The Court cannot disregard Defendants' allegations in favor of a
factual assertion by Plaintiff.
See Kensington Volunteer Fire Dep't
v.

Montgomery County,

684

F.3d

462,

467

(4th Cir.

2012).

To

the

extent that Plaintiff attempts to attack the sufficiency of
Defendants' First Amended Answer and Counterclaims by relying on
documents in the prosecution history of the '344 patent, the Court
declines to consider such documents because they are not attached to
the First Amended Answer and Counterclaims, much less "integral to"
such pleading. Anand v. Ocwen Loan Servicing, LLC, 754 F.3d 195, 198
(4th Cir. 2014)

(citations omitted).
48

in advance written submissions to the

& Countercls.

First Am. Answer

Defendants allege that,

U 60.

[PTO]."

according to Mr.

Tucker, the concepts of a locate operation and locate ticket are

clearly present in Tucker and Sawyer.
Defendants allege that,
of the claims of
and Sawyer,
concept

the

Nielsen,

of

a

Id.

H 103.

However,

in response to the examiner's rejection

'344 patent as obvious in view of Tucker
Chambers,

locate

and Teja falsely stated that the

operation

and

locate

ticket

including

information identifying a dig area to be excavated or disturbed

during planned excavation activities were completely absent from
the prior art and that Tucker and Sawyer did not concern locate

operations.
Defendants,

bold,

Id.

UH

Chambers,

for emphasis."

94,

96,

98-101.

Indeed,

the purposes

of

to

Nielsen, and Teja made such statements "in

Id.

U 96.

Considering those allegations

in light of the other allegations in the
for

according

this

motion,

reasonably infer that Chambers,

the

First Amended Answer,

Court

Nielsen,

finds

that

it

can

and Teja knew of the

falsity of their statements with respect to Tucker and Sawyer
and

misrepresented

the

contents

of

specific intent to deceive the PTO.
DENY

IN

PART

Plaintiff's

motion

to

Tucker

and

Sawyer

with

a

Accordingly, the Court will
dismiss

as

to

Defendants'

inequitable conduct allegations based on misrepresentations of
the Tucker and Sawyer references.

49

C.

Although

the

Leave to Amend

parties

failed

to

raise

the

granted in part Plaintiff's motion to dismiss,

issue,

having

the Court must

consider whether to grant Defendants leave to amend their First
Amended

Answer

and

therein.

Courts

dismissal

for

(Fed.

Seigel,

ordinarily

failure

requirement.
1313

Counterclaims

to

to

grant
satisfy

correct

leave

to

Rule

the

amend

9(b)'s

See In re BP Lubricants USA Inc.,

Cir.

2011)

(citation omitted);

deficiencies

following

a

particularity
637 F.3d 1307,

see also Ostrzenski v.

177 F.3d 245, 252-53 (4th Cir. 1999)

(noting that courts

normally grant leave to amend following a dismissal under Rule
12(b)(6)).

In considering whether to grant leave to amend,

noted above,

"a district court may deny leave

as

to amend if the

amendment 'would be prejudicial to the opposing party, there has

been bad faith on the part of the moving party, or the amendment
would have been futile.'"

U.S.

ex rel.

N. Am. , Inc. , 707 F.3d 451, 461
v.

Harvey,

438

F.3d,

motion to dismiss,

should
without,

dismiss

404,

426

(4th Cir.

(4th Cir.

2013)

2006)).

Takeda Pharm.

(quoting Laber
Here,

in

its

Plaintiff did not indicate whether the Court

Defendants'

prejudice.

Nathan v.

However,

First

Amended

Answer

with,

or

there is no evidence of bad faith

on the part of Defendants, nor prejudice to Plaintiff should the

Court grant leave to amend.

Moreover, at this stage, the Court

cannot say that it would be futile to grant Defendants leave to
50

amend their allegations with respect to failure to disclose the

TelDig

Utility

Suite

product

and

the

ESRI

ArcPad

software

because it is possible that Defendants may be able to allege
additional

facts

requirement.

to

Thus,

satisfy

Rule

9(b)'s

particularity

the Court will dismiss such claims without

prejudice.
IV.

For

the

CONCLUSION

reasons

stated

Plaintiff's objections,

ECF No.

January 16, 2015 Order.
PART

CertusView's

Dismiss

260.

S&N's

to the

to

Amended

conduct

misrepresentation of

disclose

conduct

the

Strike

Answer

and

and

magistrate judge's

in

the

counterclaims

product

the

with

Defendants

leave

Amended Answer and Counterclaims

to

satisfy Rule

with

the

software.

TelDig
If

predicated

predicated

PREJUDICE

9(b)'s

ECF

No.

to Defendants'

such motion with respect

TelDig Utility Suite

PROVIDES

Alternative

Counterclaims,

counterclaims

software and DISMISSES WITHOUT
Court

OVERRULES

on

inventorship and misrepresentation of prior

The Court GRANTS

inequitable

of

Court

The Court DENIES such motion with respect

inequitable

art.

256,

the

The Court GRANTS IN PART and DENIES IN

Motion

First

above,

requirements

Utility
Defendants

Suite
fail

51

on

failure

the

ESRI

such claims.
to

allege

amend

and

adequately

to

to

ArcPad

However,

their

additional

respect

product
to

and

to Defendants'

First

facts

to

nondisclosure

the
amend

ESRI
such

ArcPad
claims

within twenty-one (21) days after the entry of this Opinion and
Order, the Court will dismiss such claims with prejudice.
Based on the Court's ruling on the instant motion and Rule

72

objections,

Defendants'

inequitable

remain pending in this matter.
has

entered

judgment

in

conduct

Accordingly,

Defendants'

counterclaims

although the Court

favor

on

Plaintiff's

infringement claims,

the Court DIRECTS the Clerk of the Court to

re-open

to

this

matter

allow

Defendants

to

proceed

with

their

inequitable conduct counterclaims.
The Clerk is REQUESTED
Order

to

IT

all

IS

SO

counsel

of

to

send a

copy of

this Opinion and

record.

ORDERED

/s
Mark
UNITED

Norfolk, Virginia

May 33. , 2015

52

STATES

S.

Davis

DISTRICT

JUDGE