On July 28, 2011, Chief ALJ Paul J. Luckern issued the public version of Order No. 32 (dated December 9, 2010) in Certain Integrated Circuits, Chipsets, and Products Containing Same Including Televisions, Media Players, and Cameras (Inv. No. 337-TA-709).
In the Order, ALJ Luckern ruled on a motion filed by Complainant Freescale Semiconductor, Inc. (“Freescale”) to strike certain affirmative defenses raised by Respondents Panasonic Corporation, Panasonic Corporation of North America, Funai Corporation, Inc., Funai Electric Co., Ltd., Victor Company of Japan, Limited, JVC Americas Corp., Best Buy Co., Inc., Best Buy Stores, L.P., B & H Foto & Electronics Corp., Huppin’s Hi-Fi Photo & Video, Inc., Buy.com Inc., QVC, Inc., Crutchfield Corporation, Wal-Mart Stores, Inc., and Computer Nerds International, Inc. (collectively, the “Respondents”). These affirmative defenses related to Respondents’ allegations of (i) inequitable conduct relating to U.S. Patent Nos. 5,467,455 (the ‘455 patent) and 7,199,306 (the ‘306 patent), (ii) unclean hands, and (iii) patent misuse.
As a threshold matter, ALJ Luckern addressed the controlling legal standard for pleading unenforceability defenses at the ITC. Freescale argued that the Federal Circuit’s 2009 Exergen decision sets the standard for pleading an unenforceability defense at the ITC. Respondents and the Commission Investigative Staff (“OUII”) argued that Commission Rule 210.13(b) governs the pleading of affirmative defenses at the ITC.
According to the Order, ALJ Luckern determined that the “Exergen decision arose out of district court litigation and is based on the requirements of Federal Rule of Civil Procedure 9(b), not the Commission Rules…[and thus] [a]lthough the Federal Rules of Civil Procedure may serve as guidelines in Commission proceedings, such guidance is unnecessary with respect to pleading the affirmative defense of patent unenforceability because Commission Rule 210.13(b) specifically addresses that issue.”
Freescale moved to strike Respondents’ allegations that the ‘455 patent is unenforceable due to inequitable conduct for failure to disclose certain prior art during prosecution. According to the Order, ALJ Luckern determined, inter alia, that Respondents’ defensive pleadings relating to the ‘455 patent contained sufficiently specific factual allegations since these pleadings: (1) specifically identified the prior art that was allegedly withheld from the PTO examiner, (2) contained a copy of the prior art at issue, (3) identified the allegedly misleading statements made during prosecution, and (4) identified a narrow group of individuals alleged to have engaged in the misconduct (i.e., “the named inventors, their attorneys, and/or their assigns.”). ALJ Luckern further noted that Freescale’s failed to meet its burden to show that the Respondents could have provided more specific pleadings. Lastly, ALJ Luckern determined that Freescale’s other arguments raised in support of its motion to strike involved underlying determinations of fact that could not be determined without further developing the factual record.
Freescale also moved to strike Respondents’ allegations that the ‘306 patent is unenforceable due to inequitable conduct. According to the Order, these allegations related to the chain of applications that led to the ‘306 patent and whether certain persons involved in the prosecution of these applications intentionally withheld prior art references from the PTO.
According to the Order, ALJ Luckern determined that Freescale failed to meet its burden to show that the Respondents could have provided more specific pleadings. ALJ Luckern also determined that Freescale’s other arguments raised in support of its motion to strike involved underlying determinations of fact that could not be determined without further developing the factual record.
Freescale further argued that Respondents’ pleadings only contained a boilerplate recitation of an unclean hands defense. Respondents responded that their unclean hands defense was pleaded sufficiently because it was based on their detailed pleadings of inequitable conduct. According to the Order, ALJ Luckern determined that Respondents needed to “amend their pleadings with as much specificity as possible if they want to continue to pursue this defense.”
In addition, Freescale argued that Respondents’ pleadings only contained a boilerplate recitation of a patent misuse defense. Respondents responded by withdrawing this defense.
Accordingly, ALJ Luckern granted-in-part and denied-in-part Freescale’s motion to strike.