By Eric Schweibenz
On December 20, 2011, ALJ Robert K. Rogers, Jr. issued Order No. 10 (i) Granting-In-Part and Denying-In-Part Complainant Openwave Systems, Inc.’s Motion To Strike Apple, Inc.’s Inadequately Pleaded Affirmative Defenses, and (ii) Granting Respondent Apple, Inc.’s Unopposed Motion For Leave to Amend Its Response to the Complaint (Eighth Affirmative Defense) in Certain Devices for Mobile Data Communication (Inv. No. 337-TA-809). 

The investigation is based on a complaint filed by Openwave Systems, Inc. (“Openwave”) of Redwood City, California alleging violation of Section 337 in the importation into the U.S. and sale of certain allegedly infringing devices for mobile data communication.  See our September 1, 2011 post for more details.

According to the Order, Openwave argued that Apple, Inc.’s (“Apple”) First, Second, Third, Eighth, Ninth, and Tenth Affirmative Defenses are inadequately pled.  Specifically, Openwave asserted that Apple’s factual support for each of these defenses is insufficient to meet the requirements of Commission Rule 210.13(b) or the heightened pleading standard of Rule 9(b) of the Federal Rules of Civil Procedure.

Apple and the Commission Investigative Staff (“OUII”) opposed the motion.  Apple argued that Openwave’s motion was premature because (i) the investigation is in its early stages and Apple has not had the opportunity to conduct discovery, and (ii) Openwave did not meet and confer in good faith before filing the motion as required under Ground Rule 3.2.  OUII argued that specificity is not required at this stage to support most affirmative defenses.  However, OUII did assert that Apple failed to sufficiently plead patent misuse, inequitable conduct, express license, patent exhaustion, and first sale, but that Apple should be allowed to supplement before these defenses are stricken.

In the Order, ALJ Rogers emphasized that Commission Rule 210.13(b) provides that affirmative defenses shall be pleaded with “as much specificity as possible in the response.”  ALJ Rogers also explained that the heightened pleading standard required by Rule 9(b) of the Federal Rules of Civil Procedure applies to affirmative defenses of inequitable conduct.  Before analyzing the pleadings of the affirmative defenses, ALJ Rogers determined that Openwave had complied with the meet and confer requirements of Ground Rule 3.2, despite Apple’s contentions that it was still evaluating the information in Openwave’s letter regarding the motion to be filed.

ALJ Rogers further determined that Apple’s First Affirmative Defense of Non-Infringement and Second Affirmative Defense of Invalidity should not be stricken.  ALJ Rogers noted that Openwave “fails to cite any decision in which a court or the Commission struck a non-infringement or validity defense from the pleadings” and reiterated that the Rule 210.13(b) “encourages, but does not require, respondents to include…a showing of non-coverage…and/or a showing of how any prior art renders each asserted claim invalid.” 

In relation to Apple’s Third Affirmative Defense, alleging that Openwave should be denied relief under the doctrines of patent misuse, estoppel, acquiescence, waiver, or unclean hands, ALJ Rogers held that the motion to strike the affirmative defenses (except patent misuse) should be denied because “Openwave has not shown that Apple could have provided more specific pleadings.”  However, ALJ Rogers agreed with Openwave and OUII that Apple had not set forth facts sufficient to support a finding of patent misuse.

ALJ Rogers agreed with Openwave (and Apple) that Apple’s Eighth Affirmative Defense of Inequitable Conduct failed to name the specific individual involved in the alleged inequitable conduct, failed to allege facts supporting that anyone knew of the alleged inequitable conduct, and failed to identify which claims the allegedly withheld references were relevant to, and thus, held this defense to be inadequately pled.  However, ALJ Rogers determined that Apple’s unopposed motion to amend its response to supplement the missing facts from its Eighth Affirmative Defense should be granted, and thus the Eighth Affirmative Defense would not be stricken.

Lastly, ALJ Rogers determined that the language of Apple’s Ninth and Tenth Affirmative defenses (express or implied license and patent exhaustion/first sale, respectively) was improper boilerplate language and these defenses should be stricken.  ALJ Rogers stated “while I appreciate that certain facts in this investigation will almost exclusively be in the hands of Openwave, Apple has failed to identify any particularized information which led it make the allegations in its Ninth and Tenth Affirmative Defenses.”