The defendants in this patent infringement action filed several motions for leave to amend their answers to include various affirmative defenses, including: (1) the affirmative defense of patent misuse; (2) the affirmative defense of inequitable conduct; (3) a counterclaim for declaratory judgment of non-infringement; and (4) a counterclaim for declaratory judgment of invalidity. Plaintiff REC Software (“REC”) opposed the motions for leave to amend and asserted that the proposed amendments would be futile and the proposed counterclaims and affirmative defenses were duplicative.
REC argued that there was no basis for a defense or counterclaim of patent misuse because an affirmative defense or counterclaim of patent misuse may not be based on infringement or damages positions asserted in litigation. As the district court explained: patent misuse usually applies where a patentee seeks to impermissibly extend the monopoly grant of a patent. U.S. Philips Corp. v. Int‟l Trade Comm‟n, 424 F.3d 1179, 1184-85 (Fed. Cir. 2005). The Federal Circuit has held that certain activities constitute per se patent misuse, such as when a patentee attempts to extend the term of the patent by contractually requiring payment of post-expiration royalties. Virginia Panel Corp. v. MAC Panel Co., 133 F.3d 860, 869 (Fed. Cir. 1997). But other activities have been excluded from the doctrine of patent misuse. For example, Congress has declared that a patent owner may seek “to enforce his patent rights against infringement or contributory infringement” without being guilty of patent misuse or illegal extension of the patent right. 35 U.S.C. §271(d)(3).
The district court then analyzed the defendants’ allegations. “Defendants’ allegations that Plaintiff is seeking to impermissibly extend its patent term are based on Plaintiff‟s position in this litigation. (See Case No. 10-1425-MJP, Dkt. No. 62 at 2¬3); (see also Case No. 14-1025-MJP, Dkt. No. 61 at 2-3). Because the safe harbor provision at 15 U.S.C. §271(d)(3) protects Plaintiff from liability for patent misuse for asserting its rights in litigation, the Court DENIES Defendants‟ request for leave to amend their answers to include the affirmative defense of patent misuse and/or any counterclaims based on a theory of patent misuse.”
The district court also found that defendants did not allege sufficient facts to establish an inequitable conduct defense. “Because Defendants fail to allege with the requisite level of specificity facts that show it is plausible that Mr. Pickett sold and/or publicly used the claimed technology in the United States before the critical date and deliberately failed to disclose these facts to the PTO, the Court DENIES Defendants’ request for leave to amend their answers to include the affirmative defense of inequitable conduct and/or any counterclaims based on a theory of inequitable conduct.”
Finally, the district court denied the request to amend the answer to include a counterclaim for declaratory judgment of noninfringment and a counterclaim for declaratory judgment of invalidity. “The LG Defendants assert the affirmative defenses of invalidity and noninfringment in their answer. (Case No. 14-1053-MJP, Dkt. No. 29 at 4.) Because the proposed counterclaims incorporate by reference the LG Defendants’ factual allegations regarding inequitable conduct and because they are duplicative of the LG Defendants’ affirmative defenses, the Court DENIES the LG Defendants’ request for leave to amend their answer to include the proposed counterclaims.”
Rec Software USA, Inc. v. HTC America, Inc., Case No. C14-1025 MJP (W.D. Wash. March 25, 2015)
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.