Affirmative Defenses

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Trading Techs. Int’l., Inc. v. BCG Partners, Inc., No. 10 C 715 (Consolidated), Slip Op. (N.D. Ill. Sep. 2, 2011) (Kendall, J.).
Judge Kendall granted defendants’ motion to strike references to settlement discussions in plaintiff Trading Technologies (“TT”) complaints, and denied the parties’ various motions to dismiss each others pleadings in their patent cases involving trading software. TT used various of its settlement documents to allege certain defendants’ actual knowledge of both TT’s patents and defendants’ alleged infringement of those patents. TT acknowledged that the documents were settlement documents. The Court noted that TT could not waive FRE 408 even for its own documents and held that TT’s attempted use was improper pursuant to FRE 408. TT used the documents to prove two elements of liability for indirect infringement – knowledge of the patents and the alleged infringement. The Court, therefore, struck all references to the documents pursuant to Fed. R. Civ. P. 12(b). The Court denied defendants’ motions to dismiss TT’s indirect infringement claims. Even after striking the settlement documents, TT pled sufficient facts:
• TT made a general allegation of knowledge which was not alone sufficient, but was adequately supported.
• TT alleged that each defendant competed with TT. It was “not a stretch” to presume that TT’s competitors would be watching TT’s patents.
• TT alleged that defendants were aware of the patents through various suits. The Court voted conflicting case law regarding whether these suits could create notice.
• TT denied that defendants encouraged infringement by advertising allegedly infringing products and encouraging them to infringe by using the software products.
The Court denied TT’s motion to strike defendants’ noninfringement and invalidity affirmative defenses and then related counterclaims calling the motions a “waste of time”:
• The defendants’ bare-bones affirmative defenses were consistent with standard patent litigation practice and put TT on notice.
• The defenses were also consistent with the Local Patent Rules which require more detailed allegations early in discovery. See LPR 2.3.
• TT’s affirmative defenses as to one defendant were “really identical” to those TT sought to strike.
• Defendant had a right to maintain their declaratory judgment counterclaim for findings of noninfringement and invalidity.
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Continue Reading Trading Technologies: Party Cannot Waive FRE 408 Protection As to its Communications

Estwing Manufacturing Co. v. CTT Tools, Inc., No. 11 C 2139, Slip Op. (N.D. Ill. May 18, 2011) (Shadur, Sen. J.).
Judge Shadur entered this order sua sponte to address deficiencies in defendant CTT’s answer, affirmative defenses and counterclaims in this Lanham Act case, as he often does. First, CTT denied plaintiff Estwing’s claims for which CTT lacked information or belief. But the Court noted that denying a statement for which one lacks information or belief was “oxymoronic.” The Court, therefore, struck the denials.
The Court also struck, with leave to replead, each of CTT’s affirmative defenses that were mere recitations of a legal principle and did not put Estwing or the Court on notice of the defense, as well as those defenses which did not accept the truth of Estwing’s allegations.
Finally, the Court also struck CTT’s counterclaims with leave to replead those that were not simply the “flip side” of Estwing’s complaint, which “add nothing to the mix.” For example, the Court suggested that CTT’s counterclaim for cancellation of Estwing’s mark might be replead, while declaratory judgment claims for noninfringement and invalidity should not be. Finally, the Court ordered that CTT should not be charged for its counsel’s efforts in revising the papers, and counsel should send a letter to that effect to CTT, copying the Court.
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Continue Reading Denying Statements for Which Defendant Lacks Information or Belief is “Oxymoronic”

Trading Techs. Int’l., Inc. v. CQG, Inc., No. 10 C 718, Slip Op. (N.D. Ill. Aug. 12, 2010) (Shadur, Sen. J.).
Judge Shadur sua sponte struck defendants’ answer and counterclaim with leave to file an amended answer and counterclaim based upon a variety of pleading deficiencies. First, the Court struck statements that the patents-in-suit “speak for [themselves]” and related answers citing State Farm Mut. Auto Ins. Co. v. Riley, 199 F.R.D. 276, 279 (N.D. Ill. 2001). But the Court granted CQG leave to replead those answers.
The Court also struck several affirmative defenses. CQG’s Fed. R. Civ. P. 12(b)(6) defense was struck because it was not an affirmative defense. And no leave to replead was granted because when plaintiff Trading Technologies’ (“TT”) allegations were accepted as true CQG’s defense was “simply dead wrong.” The Court also struck various affirmative defenses that were only “skeletal recitals” of legal doctrines, with leave to replead if CQG could. Finally, the Court struck CQG’s noninfringement defense because denials in the answer already brought infringement into issue.
The Court also struck CQG’s counterclaim with leave to replead for failure to meet the Twombly/Iqbal pleading standards. Finally, the Court ordered that CGQ’s counsel should not charge CQG for preparing CGQ’s amended answer and counterclaim and should send CQG a copy of the Court’s Order.
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Continue Reading Answer and Counterclaims Struck Sua Sponte

Simonian v. Merck & Co., Inc., No. 10 C 1297, Slip Op. (N.D. Ill. Jul. 16, 2010) (Shadur, Sen. J.).
Judge Shadur sua sponte struck portions of defendants’ answer to plaintiff’s false patent marking case. First, the Court struck denials that followed defendants’ statements that they lacked information and belief. While a lack of information and belief acts as a denial, denying allegations as to which you cannot form a belief is “oxymoronic.”
Second, the Court struck defendants’ improper affirmative defenses. Several of defendants’ affirmative defenses were improper because they had already been brought into issue by denying allegations in the complaint. The Court also struck defendants’ Fed. R. Civ. P. 12(b)(6) affirmative defense with leave to promptly file a “properly supported” motion to dismiss.
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Continue Reading Court Sua Sponte Dismissed Affirmative Defense

Shop-Vac Corp. v. Alton Indus. Ltd Group, No. 10 C 1066, Slip Op. (N.D. Ill. Jun. 7, 2010) (Shadur, J.).
Judge Shadur sua sponte dismissed several of plaintiff Shop-Vac’s affirmative defenses in response to defendant Alton’s counterclaims as inappropriate, citing the Court’s decision in State Farm Mut. Auto Ins. Co. v. Riley, 199 F.R.D. 276 (N.D. Ill. 2001). The Court dismissed one affirmative defense which was the equivalent of a Fed. R. Civ. P. 12(b)(6) challenge to the sufficiency of Alton’s counterclaims.
The Court also dismissed two affirmative defenses that were proper pursuant to Fed. R. Civ. P. 8(c), but were not pled with sufficient facts. Shop-Vac was given leave to reassert them with additional supporting facts. The Court also dismissed two affirmative defenses that contradicted allegations in the counterclaim. Shop-Vac put those issues in contention by denying the facts.
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Continue Reading Court Sua Sponte Dismisses Improperly Pled Affirmative Defenses

Sloan Valve Co. v. Zurn Indus., Inc., No. 10 C 204, Slip Op. (N.D. Ill. May 4, 2010) (St. Eve, J.).
Judge St. Eve granted in part plaintiff/counter-defendant Sloan’s Fed. R. Civ. P. 12 motions in the patent infringement case involving a flush valve handle assembly. The Court dismissed defendant/counter-plaintiff’s (collectively “Zurn”) invalidity and noninfringement counterclaims to the extent they challenged patent claims other than those identified as allegedly infringed in Sloan’s complaint. The Court could have exercised jurisdiction over the counterclaims if Zurn had met the MedImmune standard independently for each of Sloan’s unasserted claims, but Zurn did not.
The Court denied Sloan’s Fed. R. Civ. P. 12(b)(6) motion to dismiss Zurn’s inequitable conduct counterclaim. Zurn met the materiality standard by pleading that Sloan should have known that admissions made in a prior, related reexamination proceeding were relevant to the Examiner in the later application.
The Court dismissed Zurn’s estoppel and misuse affirmative defenses. Each were pled in a single sentence and without particularized facts.
The Court also dismissed Zurn’s lack of actual notice affirmative defense. Zurn also denied Sloan’s actual notice allegation in its answer. Because actual notice was denied in the answer, it was not a proper affirmative defense. Finally, the Court dismissed Zurn’s noninfringement and exceptional case affirmative defenses. Neither was a proper affirmative defense.
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Continue Reading Declaratory Judgment Claim Dismissed as to Unasserted Patent Claims

Para Gear Equip. v. Square One Parachute, Inc., No. 04 C 601, Min. Order (N.D. Ill. Sep. 2, 2008) (Brown, Mag. J.)
Judge Brown granted defendants-counterplaintiffs Square One Parachute’s (“SOP”) motion for summary judgment that plaintiff-counterdefendant Para Gear (“Para”) infringed SOP’s design patent based solely upon Para’s failure to plead noninfringement as an affirmative defense. Originally, Para filed this case seeking a declaratory judgment of noninfringement and SOP counterclaimed for infringement. But Para later voluntarily dismissed its claim with prejudice.
When Para answered SOP’s counterclaim, it did not plead noninfringement as an affirmative defense. The Court held that Para’s declaratory judgment noninfringement claim was a sufficient affirmative statement of Para’s defense. But once Para dismissed its claim, Para’s pleadings did not support a noninfringement defense. It was not enough that Para’s answer denied infringement, an affirmative statement of the defense was required. And while Para had not sought to amend its papers to support its defense, the Court would not have granted leave to amend four years into the case.
Practice Tip: Always ask, at least in the alternative, for leave to amend when accused of pleading deficiencies. Even though it would not have worked here, it rarely hurts to ask.
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Continue Reading Infringement Found Because Defendant Did Not Affirmatively Plead Noninfringement

Biopolymer Eng’ing, Inc. v. Biorigin, No. O7 C 4234, 2008 WL 927984 (N.D. Ill. Apr. 4, 2008) (Shadur, J.).
Judge Shadur, on the Court’s own motion, struck the portions of defendant Biorigin’s Answer that denied plaintiff’s claims because plaintiff misspelled Biorigin – spelling it “Biorgin” instead of “Biorigin.” The Court noted that a denial based upon misspelling was an argument “only a patent lawyer could love.” And the Court explained that, despite plaintiff’s misspelling, Biorigin understood that it was the intended target of plaintiff’s complaint.
The Court also struck Biorigin’s lack of personal jurisdiction, insufficient service and insufficient process affirmative defenses. The Court held that by filing a counterclaim, Biorigin affirmatively invoked the Court’s jurisdiction, forfeiting these affirmative defenses.
As to Biorigin’s lack of standing affirmative defense, the Court noted that it was pled on information and belief and required that Biorigin, should it find facts to support its defense, file a motion with such facts as quickly as possible because standing should be addressed as early as possible.
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Continue Reading Denial by Spelling Error: “Argument Only a Patent Lawyer Could Love”

Nutrinova Nutrition Specialties & Food Ingredients GmbH v. Viachem, No. 07 C 4232, Min. Order (N.D. Ill. Nov. 27, 2007) (St. Eve, J.).
Judge St. Eve granted in part plaintiff’s Fed. R. Civ. P. 12(e) motion for a more definite statement regarding defendant The Ingredient House’s (“TIH”) affirmative defenses and counterclaim. The Court ordered TIH to amend its patent misuse affirmative defense to provide factual allegations outlining the alleged misuse. TIH’s original defense simply stated that plaintiff’s claims were “barred by patent misuse.” The Court also ordered TIH to amend “incongruous statements” in its pleading that appeared to be clerical errors.
The Court denied plaintiff’s motion as to TIH’s defamation counterclaim. TIH was not required to plead which state’s law governed TIH’s defamation claim.
Practice Tip: Defendants frequently plead affirmative defenses with an unsupported statement of the defense. The better practice, and the one that avoids Rule 12(e) motions, is to plead at least the basic facts underlying the defense.
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Continue Reading Parties Must Plead Facts for Affirmative Defenses