HYPERPHRASE TECHNOLOGIES, LLC v. GOOGLE INC.

Filing 15

ORDER DENYING PLTFS. MOTION TO DISMISS AND STRIKE INEQUITABLE CONDUCT COUNTERCLAIM AND DEFENSE.

HYPERPHRASE TECHNOLOGIES, LLC v. GOOGLE INC.

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Case: 3:06-cv-00199-jcs

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Filed: 09/07/2006

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IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WISCONSIN HYPERPHRASE TECHNOLOGIES, LLC and HYPERPHASE INC. Plaintiffs, v. GOOGLE INC., Defendant. Plaintiffs Hyperphrase Technologies. LLC and Hyperphrase, Inc. commenced this patent infringement action alleging that defendant Google, Inc.'s Google Tool Bar and Google Ads products infringe their United States Patents Nos. 5,903,899, 6,434,567, 6,507,837 and 6,516,321 (collectively "Hyperphrase patents"). is based on 28 U.S.C. 1338. Jurisdiction MEMORANDUM AND ORDER 06-C-199-S

The matter is presently before the

Court on plaintiffs' motion to dismiss and strike defendant's inequitable conduct counterclaim and affirmative defense. The

following is a summary of defendant's relevant inequitable conduct allegations.

FACTS Carlos de la Huerga and William Craig are jointly named inventors on the `899 patent. De la Huerga is the sole named Prior to the

inventor on the remaining Hyperphrase patents.

earliest priority date of the Hyperphrase patents de la Huerga and

Dockets.Justia.com

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Craig knew that employees at Marquette Electronics had developed a hospital information database system known as MUSE and knew the details of the MUSE system. The MUSE technology resulted in or The

contributed to the conception of the Hyperphrase patents.

Hyperphrase patents were derived from work done by Marquette employees in developing the MUSE system. withheld information on the De la Huerga and Craig of the Marquette

contributions

employees and products from the patent examiner. Craig also made significant contributions to the subject matter claimed in the `298, `567 and `321 patents. knowingly failed to inform the patent office De la Huerga of Craig's

contributions to the inventions and failed to disclose relevant prior art developed by Craig because he did not want to share the patent rights with Craig.

MEMORANDUM Plaintiffs move to dismiss the inequitable conduct

counterclaim on the basis that defendant has failed to allege the essential elements of the claim and has failed to allege them with the particularity required by Rule 9(b), Fed. R Civ. P. maintains challenge. A counterclaim should be dismissed for failure to state a claim only if it appears beyond a reasonable doubt that the that the allegations are adequate to Defendant the

survive

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defendant can prove no set of facts in support of the claim which would entitle the defendant to relief. 41, 45-46 (1957). 12(b)(6) a claim Conley v. Gibson, 355 U.S.

In order to survive a challenge under Rule "must contain either direct or inferential

allegations respecting all the material elements necessary to sustain recovery under some viable legal theory." Car Carriers,

Inc. v. Ford Motor Co., 745 F. 2d 1101, 1106 (7th Cir. 1984). In order to state a claim for inequitable conduct for failing to disclose information to the patent office the claimant must allege: (1) that the undisclosed information was material and (2) that the patentee acted with intent to deceive. Modine Mfg. CO. v. A patentee's

Allen Group, Inc., 917 F.2d 538, 541 (Fed Cir. 1990).

failure to disclose his own prior art inventions and failure to name co-inventors can constitute inequitable conduct. 42. Id. at 541-

Rule 9(b) pleading requirements apply to inequitable conduct

allegations. Ferguson Beauregard/Logic Controls, Division of Dover Resources, Inc. v. Mega Systems, LLC, 350 F.3d 1327, 1342-43 (Fed. Cir. 2003). The allegations of the complaint are sufficient to survive a motion to dismiss. Defendant alleges in considerable detail the the circumstances under which it of Craig's contribution to the

alleged undisclosed prior art, was developed and the nature

development.

Defendant also alleges the patentee's motivation for Of course,

failing to disclose the prior art and the co-inventor.

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allegations of intent may be made generally even under Rule 9(b) standards. If these allegations prove true, defendant may be able

to establish inequitable conduct. The majority of plaintiff's argument consists of the

recitation of facts entirely outside the pleadings which tend to disprove the truth of the allegations. These arguments may entitle plaintiff to prevail on summary judgment or at trial but are not an appropriate basis to dismiss the counterclaim. Plaintiffs describe the numerous facts introduced in their briefs as offered for "context" rather than to disprove the truth of the allegations. However, unless those facts are considered for their truth there is no basis to grant the motion. For example, plaintiffs assert that there is no inventorship dispute between de la Huerga and Craig and that this tends to show that Craig is not in fact a co-inventor. The existence of an

inventorship dispute is not an element of the claim which defendant must affirmatively allege. Certainly Craig's disavowal of

inventorship, properly established on summary judgment would tend to disprove the truth of the allegation that Craig was a coinventor, but it cannot be the basis to dismiss the claim under Rule 12(b). Similarly, plaintiff argues that the MUSE system is a

category of products rather than a single prior art reference. While the nature of the Muse system and its components are facts which will surely be the subject of discovery and argument on the

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factual merits of he claim they are not properly considered on the motion to dismiss. The allegations are sufficient to put

plaintiffs on notice of the components of the MUSE system which defendant asserts was improperly undisclosed prior art. Defendant's counterclaim sufficiently alleges the elements of non-disclosure of material information with intent to deceive the patent office. Plaintiffs' motion is denied.

ORDER IT IS ORDERED that plaintiffs' motion to dismiss and strike the inequitable conduct counterclaim and defense is DENIED. Entered this 7th day of September, 2006. BY THE COURT: S/ JOHN C. SHABAZ District Judge