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Telebrands Corp. v. 1Byone Products Inc.

United States District Court, D. Delaware

August 3, 2018

TELEBRANDS CORP., Plaintiff,
v.
1BYONE PRODUCTS, INC., Defendant. 1BYONE PRODUCTS, INC., Counterclaimant,
v.
TELEBRANDS CORP., Counter-defendant.

          MEMORANDUM OPINION

          SHERRY R. FALLON, UNITED STATES MAGISTRATE JUDGE.

          I. INTRODUCTION

         Presently before the court in this patent infringement action is plaintiff Telebrands Corp.'s ("Telebrands") motion pursuant to Fed.R.Civ.P. 12(f), to strike the affirmative defense of inequitable conduct asserted by defendant 1byOne Products, Inc. ("1byOne"). Telebrands moves to strike the affirmative defense because it fails to satisfy the heightened pleading standard of Fed.R.Civ.P. 9(b). (D.I. 27) For the following reasons, Telebrands' motion to strike is GRANTED.

         II. BACKGROUND

         Telebrands owns United States Patent Nos. 9, 546, 775 and 9, 562, 673 (collectively, the "Asserted Patents"), which are entitled "Decorative Lighting Apparatus Having Two Laser Light Sources" and "Decorative Lighting Apparatus Having an Attenuation Assembly," respectively, and are decorative lighting for houses and other buildings that use a laser to project moving colored lights. (D.I. 1 at ¶¶ 8-9, 11-12) Telebrands markets and sells the products under the trademark STAR SHOWER®. (D.I. 1 at ¶ 8) 1byOne sells the "1byOne Outdoor Laser Lights for Christmas" and "1byOne Magical Laser Light with Green Christmas and Red Star Patterns" (collectively, the "Accused Products") under the "Garden Laser Light Motion brand," which are also laser decorative lighting products. (D.I. 1 at ¶ 15)

         On July 21, 2017, Telebrands filed a complaint against 1byOne for patent infringement. (D.I. 1) On August 15, 2017, 1byOne responded to the complaint by filing a motion to dismiss for failure to state a claim. (D.I. 9) However, on November 11, 2017, before the court rendered a decision on the motion to dismiss, 1byOne filed an answer and a counterclaim. (D.I. 16) Consequently, the court denied 1byOne's motion to dismiss as moot on November 21, 2017. (D.I. 21)

         On December 11, 2017, 1byOne amended its answer and counterclaim to include an affirmative defense of inequitable conduct, asserting that "[n]o recovery can be obtained by [Telebrands] for Patent Infringement because each and every claim of the asserted patents is invalid and/or unenforceable due to [Telebrands'] inequitable conduct committed to obtain the [A]sserted Patent[s], at least for the reasons detailed in [1byOne]'s [c]ounterclaim." (D.I. 25 at ¶ 49) In its counterclaim for inequitable conduct, 1byOne alleges the Asserted Patents are invalid because Telebrands did not cite certain material prior art references and patent publications to the United States Patent and Trademark Office ("PTO") during prosecution of the Asserted Patents, and also because 1byOne began selling the Accused Product in September 2013, two years before the Asserted Patents' priority date of December 3, 2015. (D.I. 25 at ¶¶ 12-13) On January 5, 2018, Telebrands filed an answer to 1byOne's counterclaims, and simultaneously moved to strike 1byOne's eleventh affirmative defense of inequitable conduct. (D.I. 26; D.I. 27)

         III. LEGAL STANDARD

         Rule 12(f) permits "[t]he court [to] strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed.R.Civ.P. 12(f). "When ruling on a motion to strike, the [c]ourt must construe all facts in favor of the nonmoving party and deny the motion if the defense is sufficient under the law. Further, a court should not grant a motion to strike a defense unless the insufficiency of the defense is clearly apparent." Symbol Techs., Inc. v. Aruba Networks, Inc., 609 F.Supp.2d 353, 356 (D. Del. 2009) (citations and internal quotation marks omitted). "As a general matter, motions to strike under Rule 12(f) are disfavored." Fesnak & Assocs., LLP v. U.S. Bank Nat'l Ass'n, 722 F.Supp.2d 496, 502 (D. Del. 2010).

         IV. DISCUSSION

         Telebrands' motion to strike is granted because 1byOne's affirmative defense for inequitable conduct fails to meet the pleading standard under Rule 9(b).[1] Rule 9(b) requires a party, when "alleging fraud or mistake, ... [to] state with particularity the circumstances constituting fraud or mistake," although, "intent [and] knowledge . . . may be alleged generally." Fed.R.Civ.P. 9(b). When a party claims a patent is unenforceable, and the claim is "premised upon inequitable conduct, [it] is a claim sounding in fraud." Senju Pharm. Co. v. Apotex, Inc., 921 F.Supp.2d 297, 305 (D. Del. 2013). '"[I]nequitable conduct, while a broader concept than fraud, must be pled with particularity' under Rule 9(b)." Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1326 (Fed. Cir. 2009) (quoting Ferguson Beauregard/Logic Controls, Division of Dover Resources, Inc. v. Mega Sys., LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003)). To plead 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 [Patent and Trademark Office ('PTO')]." Senju Pharm. Co., 921 F.Supp.2d at 306 (quoting Exergen Corp., 575 F.3d at 1328-29); see Int'l Bus. Mack Corp. v. Priceline Grp, Inc., C.A. No. 15-137-LPS-CJB, 2017 WL 1349175, at *4-5 (D. Del. Apr. 10, 2017). In addition,

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 the PTO.

Senju Pharm. Co., 921 F.Supp.2d at 306 (quoting Exergen Corp., 575 F.3d at 1328-29).

         Telebrands argues the court should grant the motion to strike because 1byOne has not met the heightened pleading requirements of Rule 9(b) by identifying the "who, what, when, where, and how," and "has not pled any facts to support a finding of but for materiality or to support an intent to deceive the PTO." (D.I. 28 at 7-8) In response, 1byOne argues Telebrands based its contentions on the standard of proving inequitable conduct rather than the standard of pleading inequitable conduct. (D.I. 29 at 4) 1byOne directs the court to its incorporation by ...


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