Horizon Global Ams., Inc. v. N. Stamping, Inc.

549 F.Supp.3d 730

HORIZON GLOBAL AMERICAS, INC., Plaintiff,

v.NORTHERN STAMPING, INC., Defendant.

Case No. 1:20-CV-00310

United States District Court, N.D. Ohio, Eastern Division.

Signed July 14, 2021

Andrew D. Gordon-Seifert, Matthew J. Cavanagh, David B. Cupar, McDonald Hopkins, Cleveland, OH, for Plaintiff.

David A. Bernstein, Jay R. Campbell, Tucker Ellis, Cleveland, OH, Dennis J. Abdelnour, Ron N. Sklar, Honigman, Chicago, IL, Scott D. Barnett, Honigman, Bloomfield Hills, MI, for Defendant.

MEMORANDUM OF OPINION AND ORDER

PAMELA A. BARKER, UNITED STATES DISTRICT JUDGE

This matter comes before the Court upon the Motion to Dismiss Amended Inequitable Conduct Counterclaim V and Strike Affirmative Defense #8 ("Motion") of Plaintiff/Counter-Defendant Horizon Global Americas, Inc. ("Horizon"). (Doc. No. 35.) Defendant/Counter-Claimant Northern Stamping, Inc. ("NSI") filed a brief in opposition to Horizon's Motion on December 23, 2020, to which Horizon replied on January 6, 2021. (Doc. Nos. 36, 37.) For the following reasons, Horizon's Motion (Doc. No. 35) is GRANTED.

I. Background

a. Factual Allegations

Horizon is a manufacturer of towing and trailering equipment. (Doc. No. 16 at ¶ 9.) On December 5, 2017, Horizon obtained a patent— U.S. Patent No. 9,834,050 (the "’050 Patent") —for an underbed hitch mounting system that allows a hitch to be attached to a truck without having to install rails on top of the truck bed. (Id. at ¶¶ 1, 12-15.)

During prosecution of the ’050 patent, Horizon received an Office Action from the U.S. Patent and Trademark Office ("PTO") rejecting its claims as being anticipated by a patent and patent application by Ford (the "Ford Patents"). (Doc. No. 25, Amended Counterclaims, at ¶ 21; Doc. No. 35-2.) In order to overcome this rejection, Horizon submitted a response to the PTO that included a declaration from one of its employees, Eric Stanifer ("Stanifer"), stating that he and his coinventor conceived of the invention before the earliest priority date of the Ford Patents. (Doc. No. 25, Amended Counterclaims, at ¶ 21.) Specifically, Stanifer's declaration provided, in relevant part:

3. The invention described and claimed in the present application was conceived by my fellow inventor and me prior to the effective date of ‘122 Withers of May 30, 2008 and ‘968 Withers of June 23, 2009, and diligently worked on and reduced to practice following conception, as evidenced by the following facts, which are of my own knowledge:

4. Attached hereto as Exhibit A are drawings that I along with my follow inventor prepared and completed on May 8, 2008. The drawings of Exhibit A demonstrate our conception of the claimed subject matter before the effective date of the ‘122 Withers of May 30, 2008 and the ‘968 Withers of June 23, 2009. The drawings attached as Exhibit A were created as I and my fellow inventor refined the invention to create a manufacturable version. Therefore, I and my fellow inventor as the inventors of the present application conceived of the invention prior to May 30, 2008 and June 23, 2009.

(Doc. No. 18-1 at ¶¶ 3-4 (emphasis added).)

Exhibit A to Stanifer's declaration contains two drawings. (Id. at 5.) One of the drawings is a sketch of the complete underbed hitch mounting system, and one of the drawings appears to be a side view of one of the parts of the system. (Id. ) According to NSI, these conception drawings do not show "receiving members" on the underbed hitch mounting system even though receiving members are claimed as a necessary element of the ’050 Patent. (Doc. No. 25, Amended Counterclaims, at ¶¶ 24-26.)¹ More specifically, the claims of Horizon's ’050 patent all require "a pair of receiving members attached with said at least one tubular member, said receiving members configured to engage an accessory member." (Id. at ¶ 24.) Based on the lack of receiving members in the conception drawings, NSI asserts that Stanifer's statement in his declaration that the drawings demonstrate that he invented the underbed hitch mounting system prior to the Ford Patents was false. (Id. at ¶¶ 20-32.) Nonetheless, after receiving Stanifer's declaration, the PTO examiner issued a Notice of Allowability for the application, and Horizon obtained the ’050 Patent. (Doc. No. 16 at ¶ 15; Doc. No. 35-4.)

Based on the representations made by Stanifer during the prosecution of the ’050 Patent, the Ford Patents were not considered to be prior art during Horizon's later prosecution of another patent related to the underbed hitch mounting system that also included receiving members as a necessary element, specifically U.S. Patent No. 10,589,585 (the "’585 Patent"). (Doc. No. 25, Amended Counterclaims, at ¶ 28.) Neither Stanifer nor any other Horizon employee corrected the alleged misrepresentation regarding what the conception drawings portrayed while obtaining the ’585 patent. (Id. ) The ’585 Patent was issued to Horizon on March 17, 2020. (Doc. No. 16 at ¶ 19.)

b. Procedural History

On August 20, 2020, Horizon filed a First Amended Complaint, alleging that NSI has infringed both the ’050 Patent and the ’585 Patent. (Doc. No. 16.) On October 22, 2020, NSI filed an Answer to Horizon's First Amended Complaint and Amended Counterclaims. (Doc. No. 25.) In its Answer and Amended Counterclaims, NSI sets forth both an affirmative defense—Affirmative Defense #8—and counterclaim—Counterclaim V—alleging that Horizon's patents are unenforceable as a result of its inequitable conduct based on Stanifer's alleged misrepresentation in his declaration in support of Horizon's application for the ’050 Patent. (Doc. No. 25, Affirmative Defenses, at ¶ 8; id. , Amended Counterclaims, at ¶¶ 19-32.)

In response, on November 25, 2020, Horizon filed a Motion to Dismiss Amended Inequitable Conduct Counterclaim V and Strike Affirmative Defense #8. (Doc. No. 35.) In its Motion, Horizon seeks to dismiss NSI's inequitable conduct counterclaim for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6), as well as to strike NSI's corresponding affirmative defense pursuant to Fed. R. Civ. P. 12(f). (Id. ) NSI filed a brief in opposition to Horizon's Motion on December 23, 2020, to which Horizon replied on January 6, 2021. (Doc. Nos. 36, 37.) Subsequently, on March 17, 2021, the parties moved for a ninety-day stay of the case in order to engage in mediation, which the Court granted the following day. (Doc. No. 39.) Following the stay period, the parties informed the Court that they were unable to resolve the case through settlement negotiations, and the case was reopened on June 17, 2021. (Doc. No. 44.) As such, Horizon's Motion is ripe for adjudication.

II. Motion to Dismiss

a. Standard of Review

Under Rule 12(b)(6), the Court accepts the plaintiff's factual allegations as true and construes the complaint in the light most favorable to the plaintiff. See Gunasekera v. Irwin , 551 F.3d 461, 466 (6th Cir. 2009). In order to survive a motion to dismiss under this Rule, "a complaint must contain (1) ‘enough facts to state a claim to relief that is plausible,’ (2) more than ‘a formulaic recitation of a cause of action's elements,’ and (3) allegations that suggest a ‘right to relief above a speculative level.’ " Tackett v. M & G Polymers, USA, LLC , 561 F.3d 478, 488 (6th Cir. 2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555-56, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

The measure of a Rule 12(b)(6) challenge—whether the complaint raises a right to relief above the speculative level—"does not ‘require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face.’ " Bassett v. Nat'l Collegiate Athletic Ass'n , 528 F.3d 426, 430 (6th Cir. 2008) (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Deciding whether a complaint states a claim for relief that is plausible is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679, 129 S.Ct. 1937.

Consequently, examination of a complaint for a plausible claim for relief is undertaken in conjunction with the "well-established principle that ‘ Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." Specific facts are not necessary; the statement need only "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." ’ " Gunasekera , 551 F.3d at 466 (quoting Erickson v. Pardus , 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) ). Nonetheless, while " Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era ... it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Iqbal , 556 U.S. at 678-79, 129 S.Ct. 1937.

b. Analysis

In its Motion, Horizon argues that NSI's inequitable conduct counterclaim should be dismissed for several reasons. First, Horizon asserts that Stanifer's declaration does not contain a false statement, as the drawings attached to his declaration do show the allegedly missing receiving members. (Doc. No. 35-1 at 8-10; Doc. No. 37 at 3-5.) Although Horizon admits that Stanifer's drawings are not as clear as the professionally generated figures in the ’050 Patent, Horizon contends that certain layered circles in the sketch of the underbed hitch mounting system represent receiving members. (Doc. No. 37 at 3-5.) Horizon also argues that its interpretation of the drawings is confirmed by the fact that the PTO examiner, who is presumed to have properly done his job, reviewed the drawings and agreed that they supported the issuance of the patent. (Id. at 4-5.) Second,...