Pactool International Ltd v. Dewalt Industrial Tool Co et al, No. 3:2006cv05367 - Document 276 (W.D. Wash. 2011)
Court Description: ORDER denying 244 Motion for Summary Judgment. Signed by Judge Benjamin H. Settle. (MGC)
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Pactool International Ltd v. Dewalt Industrial Tool Co et al Doc. 276 1 2 3 4 5 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT TACOMA 6 7 8 PACTOOL INTERNATIONAL LTD., Plaintiff, 9 10 11 CASE NO. C06-5367BHS v. KETT TOOL COMPANY, INC., et al., Defendants. 12 13 ORDER DENYING PACTOOL’S MOTION FOR SUMMARY JUDGMENT AS TO CERTAIN OF DEFENDANTS’ AFFIRMATIVE DEFENSES 14 This matter comes before the Court on Plaintiff PacTool International Ltd.’s 15 (“PacTool”) motion for summary judgment as to certain of Defendants’ affirmative 16 defenses (Dkt. 244). The Court has reviewed the briefs filed in support of and in 17 opposition to the motion and the remainder of the file and hereby denies the motion for 18 the reasons stated herein. 19 20 I. PROCEDURAL HISTORY On June 29, 2006, PacTool filed a complaint against Defendant Kett Tool 21 Company, Inc. (“Kett”), alleging patent infringement. Dkt. 1. On April 8, 2010, PacTool 22 23 24 25 26 27 filed a First Amended Complaint (“FAC”) against Defendants Kett and H. Rowe Hoffman alleging patent infringement. Dkt. 63. On July 14, 2010, Kett answered the FAC and asserted ten affirmative defenses. Dkt. 95. On December 6, 2010, Elizabeth Tu Hoffman, as Executor of the Estate of H. Rowe Hoffman, (“Estate”) was substituted for H. Rowe Hoffman. Dkt. 121. On March 28 ORDER - 1 Dockets.Justia.com 1 21, 2011, the Estate answered the FAC and asserted twelve affirmative defenses. Dkt. 2 192. 3 On September 13, 2011, Pactool filed a motion for summary judgment as to certain 4 of Defendants’ affirmative defenses. Dkt. 244. On October 3, 2011, both defendants 5 responded. Dkts. 248 (Estate) & 251 (Kett). On October 7, 2011, Pactool replied. Dkt. 6 254. 7 8 II. DISCUSSION A. Standard 9 Summary judgment is proper only if the pleadings, the discovery and disclosure 10 11 12 13 14 materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The moving party is entitled to judgment as a matter of law when the nonmoving party fails to make a sufficient showing on an essential element of a claim in the case on which 15 the nonmoving party has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 323 16 (1986). There is no genuine issue of fact for trial where the record, taken as a whole, 17 could not lead a rational trier of fact to find for the nonmoving party. Matsushita Elec. 18 Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (nonmoving party must 19 present specific, significant probative evidence, not simply “some metaphysical doubt”). 20 See also Fed. R. Civ. P. 56(e). Conversely, a genuine dispute over a material fact exists if 21 there is sufficient evidence supporting the claimed factual dispute, requiring a judge or 22 jury to resolve the differing versions of the truth. Anderson v. Liberty Lobby, Inc., 477 23 U.S. 242, 253 (1986); T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d 24 25 26 626, 630 (9th Cir. 1987). The determination of the existence of a material fact is often a close question. The Court must consider the substantive evidentiary burden that the nonmoving party must 27 meet at trial -, e.g., a preponderance of the evidence in most civil cases. Anderson, 477 28 ORDER - 2 1 U.S. at 254; T.W. Elec. Serv., Inc., 809 F.2d at 630. The Court must resolve any factual 2 issues of controversy in favor of the nonmoving party only when the facts specifically 3 attested by that party contradict facts specifically attested by the moving party. The 4 nonmoving party may not merely state that it will discredit the moving party’s evidence at 5 trial, in the hopes that evidence can be developed at trial to support the claim. T.W. Elec. 6 7 8 Serv., Inc., 809 F.2d at 630 (relying on Anderson, 477 U.S. at 255). Conclusory, nonspecific statements in affidavits are not sufficient, and missing facts will not be presumed. Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888-89 (1990). 9 B. Pactool’s Motion 10 11 12 13 14 15 Pactool moves for summary judgment on both Defendants’ affirmative defense of invalidity and the Estate’s affirmative defenses of failure to state a claim, waiver, unclean hands, and implied license. Dkt. 244 at 3-4. 1. Invalidity A patent may be invalid if it is either anticipated or obvious. If “each and every 16 limitation is found either expressly or inherently in a single prior art reference,” then the 17 claim is invalid for anticipation. Sanofi–Synthelabo v. Apotex, Inc., 470 F.3d 1368, 1375 18 (Fed. Cir. 2006) (internal quotation marks omitted). A patent is invalid for obviousness 19 if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. 20 21 22 23 35 U.S.C. § 103(a) (2006). In this case, Pactool moves for summary judgment on Kett’s claim that the patents 24 in suit were anticipated. Dkt. 244 at 5. Pactool cites six prior art references that it claims 25 Kett has identified as “anticipatory” references. Id. Kett concedes that its claim for 26 anticipation is based on one prior art reference, which is U.S. Patent No. 5,901,447 issued 27 to Neil Dunning (“Dunning”). Dkt. 254 at 3. Kett argues that the other references 28 ORDER - 3 1 support its contention that the patents in suit are obvious in light of these references. Id. 2 Therefore, for the purposes of the instant motion, the Court will consider only whether 3 claims in the patents in suit are anticipated in light of Dunning. 4 5 6 7 8 Pactool argues that Dunning does not disclose two limitations that are contained in the patents in suit: (1) the guide surfaces being in a common plane, and (2) the disclosed gap distances. Dkt. 254 at 3-8. The Federal Circuit, however, has held that “[a]nticipation is a question of fact, including whether or not an element is inherent in the prior art.” Atlas Powder Co. v. Ireco, Inc., 190 F.3d 1342, 1346 (Fed. Cir. 1999). 9 Moreover, “the question whether a claim limitation is inherent in a prior art reference is a 10 11 12 13 14 factual issue on which evidence may be introduced.” In re Schreiber, 128 F.3d 1473, 1477 (Fed. Cir. 1997). Pactool fails to show that these issues are suitable for determinations as a matter of law. The Dunning reference creates material questions of fact regarding whether it 15 anticipates the subject matter, either expressly or inherently, in the patents in suit. 16 Therefore, the Court denies Pactool’s motion for summary judgment on Kett’s and the 17 Estate’s affirmative defense of invalidity due to anticipation. 18 2. 12(b)(6) 19 The Estate asserts the affirmative defense that at least one of Pactool’s causes of 20 action fails to state a claim upon which relief may be granted. Dkt. 192, ¶ 26. Pactool 21 argues that the Court should grant summary judgment on this defense. Dkt. 244 at 7. 22 Pactool first argues that 23 24 25 26 [t]he Estate has provided no evidence in support of this defense in response to discovery requests served by PacTool. To the extent this defense is understood by PacTool, it appears to be a Fed. R. Civ. P. 12(b) defense. The Estate has never moved to dismiss as to that defense. Id. (internal citation omitted). Pactool then contradicts its own argument by stating that 27 28 ORDER - 4 1 the Estate fully briefed the previous motion to dismiss for failure to state a claim and that 2 evidence is irrelevant for the issue of the sufficiency of a complaint. Dkt. 254 at 9-10. 3 The basis for Pactool’s motion on this issue is unclear. 4 5 6 7 8 The Estate argues that it may file a motion to dismiss for failure to state a claim at any time until trial has concluded. Dkt. 248 at 2-3 (citing Fed. R. Civ. P. 12(h)). The Court agrees. Therefore, the Court denies Pactool’s motion for summary judgment on the affirmative defense of failure to state a claim. 3. Waiver 9 The equitable defense of waiver rests on a showing that the patent holder, with full 10 11 12 13 14 15 knowledge of the material facts, intentionally relinquished its rights to enforce its patents, or that its conduct was so inconsistent with an intent to enforce its rights as to induce a reasonable belief that such right has been relinquished. See Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1028 (Fed. Cir. 2008). In this case, Pactool argues that the defense is frivolous and that the Estate has 16 failed to allege any facts demonstrating that Pactool effectively waived its patent rights. 17 Dkt. 254 at 10. The Estate, however, cites a letter currently in the record that creates a 18 material question of fact whether Pactool’s conduct was inconsistent with an intent to 19 enforce its rights. Dkt. 248 at 8 (citing Dkt. 160-2). The Court agrees with the Estate. 20 Therefore, the Court denies Pactool’s motion for summary judgment on the Estate’s 21 waiver defense. 22 4. 23 The Estate asserts the affirmative defenses of unclean hands and inequitable 24 25 26 Unclean Hands conduct. Pactool moves for summary judgment arguing that (1) the defenses are redundant and (2) “unclean hands, when applied to conduct before the Patent Office, is inequitable conduct.” Dkt. 254 at 10-11 (citation omitted; emphasis in original). Both of 27 Pactool’s arguments are without merit in light of the recent Federal Circuit case 28 ORDER - 5 1 Therasense, Inc. v. Becton, Dickinson and Co., 649 F.3d 1276 (Fed. Cir. 2011). In 2 Therasense, the court stated as follows: 3 4 5 6 7 8 9 10 11 unclean hands cases before the Supreme Court dealt with particularly egregious misconduct, including perjury, the manufacture of false evidence, and the suppression of evidence. Moreover, they all involved deliberately planned and carefully executed schemes to defraud not only the [Patent and Trademark Office (“PTO”)] but also the courts. As the inequitable conduct doctrine evolved from these unclean hands cases, it came to embrace a broader scope of misconduct, including not only egregious affirmative acts of misconduct intended to deceive both the PTO and the courts but also the mere nondisclosure of information to the PTO. Inequitable conduct also diverged from the doctrine of unclean hands by adopting a different and more potent remedy—unenforceability of the entire patent rather than mere dismissal of the instant suit. Id. at 1287 (internal citations and quotations omitted). First, it is clear that unclean hands and inequitable conduct are not redundant 12 defenses as the latter has “diverged” from the former. Second, there is no support for 13 Pactool’s proposition that allegations of misconduct in dealings with the PTO may only 14 support the defense of inequitable conduct. For example, failure to disclose perjury to the 15 16 17 PTO supports the defense of unclean hands and dismissal of the action. Precision Instrument Manufacturing Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 818-819 (1945). 18 Therefore, the Court denies Pactool’s motion for summary judgment on the 19 20 21 22 23 Estate’s affirmative defense of unclean hands. 5. Implied License “An implied license signifies a patentee’s waiver of the statutory right to exclude others from making, using, selling, offering to sell, or importing the patented invention.” 24 Winbond Elecs. Corp. v. ITC, 262 F.3d 1363, 1374 (Fed. Cir. 2001) (citing Wang Lab., 25 Inc. v. Mitsubishi Electronics Am., Inc., 103 F.3d 1571, 1580 (Fed. Cir. 1997)). The 26 Supreme Court has stated that: 27 any language used by the owner of the patent, or any conduct on his part exhibited to another from which that other may properly infer that the 28 ORDER - 6 1 2 3 4 owner consents to his use of the patent in making or using it, or selling it, upon which the other acts, constitutes a license and a defense to an action for a tort. De Forest Radio Tel. Co. v. United States, 273 U.S. 236, 241 (1927). In this case, the Estate has shown that there exists a material question of fact 5 whether Pactool’s conduct and business relationship with Kett and Mr. Hoffman could 6 give rise to an implied license. See, e.g., Dkt. 160-2. Therefore, the Court denies 7 Pactool’s motion for summary judgment on the Estate’s affirmative defense of implied 8 license. 9 10 11 12 III. ORDER Therefore, it is hereby ORDERED that Pactool’s motion for summary judgment as to certain of Defendants’ affirmative defenses (Dkt. 244) is DENIED. DATED this 7th day of November, 2011. 13 14 A 15 16 BENJAMIN H. SETTLE United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 ORDER - 7
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