KPR U.S., LLC v. Lifesync Corp.

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KPR U.S., LLC and CARDINAL HEALTH 200, LLC, Plaintiffs, v. LIFESYNC CORPORATION, et al., Defendants.

ADVANTAGE MEDICAL ELECTRONICS, LLC, Counter-Plaintiff, v. KPR U.S., LLC and CARDINAL HEALTH 200, LLC, Counter-Defendants.

No. 22-CV-60468-RAR

United States District Court, S.D. Florida

August 27, 2023

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION TO DISMISS COUNTERCLAIMS AND STRIKE AFFIRMATIVE DEFENSES

RODOLFO Al. RUIZ II UNITED STATES DISTRICT JUDGE

THIS CAUSE comes before the Court on Plaintiffs' Motion to Dismiss Counterclaims and to Strike Defenses and Incorporated Memorandum of Law (“Mot.”). [ECF No 115]. Plaintiffs KPR U.S., LLC (“KPR”) and Cardinal Health 200, LLC (“Cardinal”) ask the Court to dismiss Counts V, VI, VII, and XIV of Defendant Advantage Medical Electronics, LLC d/b/a Advantage Medical Cables' (“AMC”) Second Amended Affirmative Defenses and Second Amended Counterclaims (“Second Am. Countercl.”) [ECF No. 97]. See Mot. at 7-19. Plaintiffs also move to strike the Fourth, Fifth, Seventh, Eighth, and Twelfth Affirmative Defenses which are asserted by all three Defendants. See id. at 19-23. Defendants filed a Response (“Resp.”)

[ECF No. 120], and Plaintiffs filed a Reply to the Response (“Reply”) [ECF No. 128]. After careful review of the relevant pleadings and the governing law, it is

ORDERED AND ADJUDGED that Plaintiffs' Motion, [ECF No. 115], is GRANTED in part and DENIED in part.

BACKGROUND

This patent case concerns the alleged infringement of two patents: United States Patent 8,038,484 (“‘484 Patent”) and United States Patent 8,795,004 (“‘004 Patent”). See Second Amended Complaint (“Second Am. Compl.”) [ECF No. 96] ¶ 1. Both Patents concern electrocardiogram (“ECG”) electrode lead wire connectors which were designed to “provide[ ] improved electrical and mechanical coupling of the ECG electrode press stud to the lead wire, provide[ ] enhanced ergonomics to the clinician, and may alleviate patient discomfort associated with the attachment and removal of ECG leads.” ‘484 Patent [ECF No. 96-1] at 2; ‘004 Patent [ECF No. 96-6] at 2. Plaintiff KPR has owned “all right[s], title, and interest[s]” in both Patents since July 28, 2017, and Plaintiff Cardinal is the exclusive licensee of both Patents. See Second Am. Compl. ¶¶ 20-21, 50-51. As relevant to the instant Motion, Plaintiffs accuse AMC and its related entity, Defendant LifeSync Corporation, of directly infringing on both Patents by “making, using, selling, offering to sell, and/or importing [ECG] lead wires having closed-end electrode connectors[.]” Id. ¶¶ 23, 53. Plaintiffs also accuse Defendant 3M of advertising and selling AMC and LifeSync's ECG lead wires which allegedly infringe on Plaintiffs' patents. See id. ¶¶ 83-85, 109-11.

Defendant AMC has responded with its own set of counterclaims against Plaintiffs. To summarize the counterclaims at issue, AMC asserts that (1) both the ‘484 Patent and the ‘004 Patent are unenforceable due to the inequitable conduct of the original patentee, Tyco Healthcare Group L.P. (“Tyco”) (Counts V and VI), see Second Am. Countercl. ¶¶ 38-40, 166-77; (2) Plaintiffs “engaged in the intentional mismarking of products . . . for the purpose of deceiving the public” (Count VII), id. ¶ 274; and (3) that U.S. Patent 8,152,571 (“‘571 Patent”), a third patent held by Plaintiffs, is unenforceable due to inequitable conduct of Tyco (Count XIV), see id. ¶¶ 310-16. All Defendants also rely on the affirmative defenses of estoppel, waiver, unenforceability, unclean hands, and implied license (among others) to excuse their alleged infringement. See id. at 4-6, 7-8, 10-11; see also Defendant 3M's Answer to Second Amended Complaint [ECF No. 105] at 74-76, 77-78, 80-81; Defendant LifeSync's Answer to Second Amended Complaint [ECF No. 106] at 80-82, 84, 86-87.^[1]

LEGAL STANDARD

I. Rule 12(b)(6) Motion to Dismiss

To survive a 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When reviewing a motion to dismiss pursuant to Rule 12(b)(6), a court must accept as true all factual allegations contained in the complaint, and the plaintiffs receive the benefit of all favorable inferences that can be drawn from the facts alleged. See Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir. 2012); Iqbal, 556 U.S. at 678. A dismissal for failure to state a claim under Rule 12(b)(6) is a “judgment on the merits” and is “presumed to operate as a dismissal with prejudice unless the district court specifies otherwise.” Eiber Radiology, Inc. v. Toshiba Am. Med. Sys., Inc., 673 Fed.Appx. 925, 929 (11th Cir. 2016) (citing Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 505 (2001)).

A court considering a 12(b)(6) motion is generally limited to the facts contained in the complaint and attached exhibits-but may also consider documents referred to in the complaint that are central to the claim and whose authenticity is undisputed. See Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 959 (11th Cir. 2009). While the court is required to accept as true all allegations contained in the complaint, courts “are not bound to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555; Iqbal, 556 U.S. at 678. “Dismissal pursuant to Rule 12(b)(6) is not appropriate unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Magluta v. Samples, 375 F.3d 1269, 1273 (11th Cir. 2004) (citation and quotation omitted). And “determining whether a complaint states a plausible claim for relief is a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Holland v. Carnival Corp., 50 F.4th 1088, 1093 (11th Cir. 2022) (alterations accepted) (quoting Iqbal, 556 U.S. at 679).

II. Motion to Strike Affirmative Defenses

“An affirmative defense is one that admits to the complaint, but avoids liability, wholly or partly, by new allegations of excuse, justification, or other negating matters.” Adams v. Jumpstart Wireless Corp., 294 F.R.D. 668, 671 (S.D. Fla. 2013) (citing Royal Palm Sav. Ass'n v. Pine Trace Corp., 716 F.Supp. 1416, 1420 (M.D. Fla. 1989)). “A defense which points out a defect in the plaintiff's prima facie case is not an affirmative defense.” In re Rawson Food Serv., 846 F.2d 1343, 1349 (11th Cir. 1988). Instead, “affirmative defense[s] raise[] matters extraneous to the plaintiff's prima facie case; as such, they are derived from the common law plea of confession and avoidance.” Id. (quoting Ford Motor Co. v. Transp. Indem. Co., 795 F.2d 538, 546 (6th Cir. 1986)). A party may file a motion to strike an affirmative defense under Rule 12(f) of the Federal Rules of Civil Procedure if the affirmative defense is “redundant, immaterial, impertinent, or scandalous.” FAST SRL v. Direct Connection Travel LLC, 330 F.R.D. 315, 317 (S.D. Fla. 2018) (quoting FED. R. CIV. P. 12(f)). However, as a general matter, motions to strike are “considered [] drastic remed[ies] and [are] often disfavored.” SEC v. 1 Global Cap. LLC, 331 F.R.D. 434, 437 (S.D. Fla. 2019).

Courts in this circuit “adhere to [two] different schools of thought[]” as it pertains to the proper pleading standard for affirmative defenses. See FAST SRL, 330 F.R.D. at 317. “Some courts have concluded that affirmative defenses are subject to the heightened pleading standard of Rule 8(a), as set forth in [Twombly and Iqbal],” whereas “[o]ther courts have held that affirmative defenses are subject to a less stringent standard under Rules 8(b) and 8(c), and that affirmative defenses need only provide fair notice of the nature of the defense and the grounds upon which it rests.” 1 Global Cap., 331 F.R.D. at 437 (internal quotation marks and citation omitted). This Court subscribes to the latter view.^[2] But no matter which standard the Court applies, affirmative defenses should generally only be stricken with prejudice if they are “insufficient as a matter of law.... Otherwise, district courts may strike the technically deficient affirmative defense without prejudice and grant the defendant leave to amend the defense.” Gomez, 411 F.Supp.3d at 1335.

ANALYSIS

I. Unenforceability of the Patents (Counts V, VI, XIV and Seventh and Eighth Affirmative Defenses)

The majority of Plaintiffs' Motion is dedicated to addressing the enforceability of the ‘484, ‘004, and ‘571 Patents. According to AMC, all three Patents are unenforceable due to inequitable conduct of the original patentee, Tyco, to disclose material “prior art” to the U.S. Patent and Trademark Office (“USPTO”) during the patent application process. See generally Second Am. Countercl. ¶¶ 33-37. As Defendants further explain in their Response, their position is that three Tyco patent attorneys who oversaw “separately or in combination” the submission of the USPTO applications that became the Patents -Winsor, Meagher, and Crowley-“intentionally withheld relevant and material prior art references” and “submitted numerous irrelevant and immaterial prior art references to the USPTO . . . to purposely bury the relevant and material prior art references from the patent examiner[.]” Resp. at 9. Plaintiffs argue that this Court should dismiss Counts V, VI, and XIV as “shotgun pleadings” and that Defendants have failed to plead the inequitable conduct counterclaims and affirmative defenses with the requisite particularity. See Mot. at 7, 14. The Court agrees with Plaintiff that Defendants have not surmounted the extremely high bar to show that the Patents are...