Opinion
Civil No. 1:01CV01130
September 20, 2002
MEMORANDUM OPINTON
On December 21, 2001, Point DX Inc. ("Plaintiff") filed this action against Voxar Limited ("Defendant") alleging patent infringement in violation of 35 U.S.C. § 271 et seq. Defendant asserts as an affirmative defense and counterclaim that the patents in suit are unenforceable because they were obtained through fraud and inequitable conduct.
This matter is before the court on Plaintiff's motion to strike as insufficient or, in the alternative, to dismiss, pursuant to Federal Rules of Civil Procedure 12(f) and 12(b)(6), Defendant's allegations of fraud and inequitable conduct. For the following reasons, the court will grant Plaintiff's motion to dismiss without prejudice and allow Defendant twenty (20) days to file an amended answer and counterclaim.
FACTS
Plaintiff is the exclusive licensee of several patents that relate to the methods and systems for conducting computer-assisted three-dimensional visualization of internal organs. Defendant is a manufacturer of medical imaging software products and has developed custom imaging software packages for original equipment manufacturers. Plaintiff alleges that Defendant's medical imaging software products infringe one or more claims of its four patents.
In its answer, Defendant denies that its products infringe any valid patent. Furthermore, Defendant includes as an affirmative defense and counterclaim that the patents in suit were obtained as a result of fraud and inequitable conduct. Defendant alleges that Plaintiff failed to disclose material information and made material misstatements to the United States Patent and Trademark Office ("PTO"). On May 23, 2002, Plaintiff filed a motion to strike or dismiss Defendant's allegations of fraud and inequitable conduct, arguing that Defendant failed to plead these allegations with particularity in violation of Federal Rule of Civil Procedure 9(b).
DISCUSSION
Federal Rule of Civil Procedure 9(b) provides that "[i]n all averments of fraud . . . the circumstances constituting fraud . . . shall be stated with particularity." Fed.R.Civ.P. 9(b). Like an allegation of fraud, an allegation of inequitable conduct before the PTO is subject to the enhanced pleading requirements of Rule 9(b). See Rhone-Poulenc Agro S.A. v. Monsanta Co., 73 F. Supp.2d 537, 538 (M.D.N.C. 1999); Wicker Group v. Standard Register Co. Inc., 33 U.S.P.Q.2d 1678, 1679 (E.D. Va. 1994). Any pleading invoking the doctrine of inequitable conduct must plead the "`time, place, and contents of the alleged fraudulent misrepresentation, as well as the identity of the person making the misrepresentation and what was obtained thereby.'" Rhone-Poulenc, 73 F. Supp.2d at 539 (quotingBreeden v. Richmond Cmty. Coll., 171 F.R.D. 189, 195 (M.D.N.C. 1997)). This mandate is intended to give parties against whom a charge of inequitable conduct is made "specific notice of the particular statements or omissions" constituting the inequitable conduct, which thereby ensures that they have sufficient information to formulate an appropriate response. Id.; see also Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999) (stating purposes of Rule 9(b)).
Plaintiff asserts that Defendant's answer and counterclaim fails to give any specifics concerning what material information was withheld and what material misstatements were made to the PTO. Defendant's sixth affirmative defense reads:
The `762 Patent, the `162 Patent, the `366 Patent and the `319 Patent are unenforceable as they were obtained as a result of fraud and inequitable conduct arising from failures to disclose material information and the making of material misstatements to the United States Patent and Trademark Office (`PTO'), with the intent to deceive; including, without limitation, intentionally misleading and making material misrepresentations to the PTO in obtaining the `762 Patent, the `162 Patent, the `366 Patent and the `319 Patent by failing to disclose material prior art.
(Def.'s Answer and Countercl. at 7.) Paragraph 10 of Defendant's counterclaim essentially makes the same allegations as those stated in the sixth affirmative defense. Plaintiff argues that the only indication of what material information was not disclosed is the vague reference to some unidentified "material prior art."
Defendant contends that it has satisfied the particularity requirement of Rule 9(b). It argues that Plaintiff has ignored other paragraphs in its answer and counterclaim that provide additional information. Specifically, Defendant points to its second affirmative defense, which states in relevant part:
[I]f the claims of the patent are interpreted in a manner that results in the claims encompassing the Voxar medical imaging products, then the claims also encompass the relevant prior art, which includes but is not limited to prior art in the areas of volume rendering, three-dimensional walk-through animation of human organs. `fly-through' and center line calculation and, therefore, are invalid.
(Def.'s Answer and Countercl. at 6) (emphasis added). Defendant argues that the inclusion of the prior art subject areas is specific enough to provide Plaintiff with adequate notice of the relevant prior art. The court disagrees.
Defendant's answer and counterclaim, even when viewed in its entirety, fails to provide the specificity required when pleading inequitable conduct. Defendant's reference to the prior art in the areas of volume rendering, walk-through animation, "fly-through," and center line calculation do not provide specific notice of the particular statements or omissions constituting the inequitable conduct. In fact, as Plaintiff correctly observes, many references identified and disclosed on the face of the subject patents could be characterized consistent with these subject areas. As such, Plaintiff is provided little guidance as to the specific prior art Defendant alleges it intentionally withheld.
In addition to a claim that Plaintiff failed to disclose relevant prior art, Defendant claims Plaintiff made material misstatements. Yet Defendant's answer and counterclaim is silent as to any circumstances related to this charge. Defendant does not identify who made the misstatements or what the misstatements were. Plaintiff is provided essentially no guidance on this claim and it cannot fairly be said that Plaintiff has enough information to formulate an appropriate response. Accordingly, Plaintiff's motion to dismiss the sixth affirmative defense and Paragraph 10 of Defendant's answer and counterclaim will be granted.
Defendant requests, in the alternative, leave to amend its answer and counterclaim. Federal Rule of Civil Procedure 15(a) provides that leave to amend "shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). Only when leave to amend is sought in bad faith or with a dilatory motive should it be denied. Foman v. Davis, 371 U.S. 178 (1962). Defendant's request for leave to amend does not appear to be made in bad faith or with the intent to cause delay. Therefore, Defendant will be granted leave to amend, with greater particularity as required by Rule 9(b), its answer and counterclaim.
CONCLUSION
For the reasons set forth in this opinion, Plaintiff's motion to dismiss Defendant's sixth affirmative defense and Paragraph 10 of Defendant's counterclaim will be granted. Defendant's request for leave to amend its answer and counterclaim also will be granted. Defendant shall file its amended answer and counterclaim within twenty (20) days of the date of this order.
An order in accordance with this memorandum opinion shall be entered contemporaneously herewith.