United States District Court, D. Kansas
MEMORANDUM AND ORDER
ERIC F. MELGREN, District Judge.
Plaintiff ConAgra Foods Food Ingredients Company, Inc. ("ConAgra") filed this suit alleging that Defendant Archer-Daniels-Midland Company ("ADM") is infringing its 172, 360 and 298 Patents. In its Answer, ADM brings seven counterclaims against ConAgra, including one for "Declaratory Judgment of Unenforceability of the 172 Patent and All Patents Claiming Priority to the 172 Patent, Including the 360 Patent and the 298 Patent." ADM contends that ConAgra's 172, 360 and 298 Patents are unenforceable under a theory of inequitable conduct before the United States Patent and Trademark Office ("PTO"). ConAgra now moves to dismiss this counterclaim on the basis that it does not state a claim for relief. For the reasons set forth below, the Court grants ConAgra's motion to dismiss.
ConAgra and ADM are competing manufacturers in the field of agriculture that sell wheat flour to customers who use the flour to manufacture products sold to consumers. ConAgra filed this lawsuit on March 21, 2012, alleging that ADM is infringing its U.S. Patent No. 8, 017, 172 (the "172 Patent"). At the time ConAgra filed its Complaint, it was also prosecuting two continuation applications to the 172 Patent before the PTO. The first continuation application issued as U.S. Patent No. 8, 252, 360 (the "360 Patent") on August 28, 2012. Two days later, ConAgra filed a First Amended Complaint adding a claim for infringement of the 360 Patent. On March 26, 2013, the PTO issued the second continuation application as U.S. Patent No. 8, 404, 298 (the "298 Patent"). ConAgra filed its Second Amended Complaint on April 10, 2013, asserting infringement of all three patents, i.e., the 172, 360, and 298 Patents.
In its Answer to ConAgra's Second Amended Complaint, ADM asserts seven affirmative defenses and brings seven counterclaims against ConAgra. ADM's seventh counterclaim seeks a declaratory judgment that the 172 Patent, and all patents claiming priority to the 172 Patent, including the '360 and 298 Patents, are unenforceable due to inequitable conduct before the PTO. ADM generally asserts that during the prosecution of the 172 Patent's application, ConAgra failed to inform the PTO of material information and prior art that were known to at least the 172 Patent's co-inventor, Elizabeth Arndt, and were withheld from the PTO with the intent to deceive the PTO into granting the 172 Patent and its progeny.
Specifically, ADM asserts that during the prosecution of the 172 Patent, the PTO rejected claims that ultimately issued as claims 1 and 35 of the 172 Patent on the basis that they were unpatentable in light of a Canadian patent application owned by ConAgra (hereafter referred to as "Chigurupati I"). Chigurupati I disclosed a whole wheat flour wherein 100% of the flour particles were smaller than 150 micrometers. ADM alleges that to overcome the PTO's rejections, the inventors of the 172 Patent submitted declarations stating that the flour disclosed in Chigurupati I would not qualify as a whole wheat flour under federal regulations to persons of skill in the art.
ADM further alleges that Arndt was aware of two articles, one published by Kay Behall et al. and one published by Judith Hallfrisch et al. (the "Behall and Hallfrisch articles"), that disclose a whole wheat flour wherein 100% of its particles were smaller than 150 micrometers and that the flour disclosed in these articles was considered a whole wheat flour by persons of skill in the art. According to ADM, Arndt did not disclose these articles to the PTO and misrepresented the existence of a whole wheat flour where in 100% of its particles were smaller than 150 micrometers to the PTO during the prosecution of the 172, 360, and 298 Patents. ADM alleges that the whole wheat flour disclosed in the Behall and Hallfrisch articles is material to the patentability of the 172, 360, and 298 Patents and invalidates at least one of the asserted claims of those patents.
ConAgra now moves to dismiss ADM's inequitable conduct counterclaim on the basis that it does not state a claim for relief. ConAgra contends that ADM's counterclaim does not satisfy the heightened pleading requirements under Federal Rule of Civil Procedure 9(b) required for an inequitable conduct claim.
"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.'" "[T]he mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims." "The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted."
Because inequitable conduct sounds in fraud, to survive a motion to dismiss, the accused infringer must satisfy the heightened pleading standard of Federal Rule of Civil Procedure 9(b). Rule 9(b) requires that "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Therefore, "[a] pleading that simply avers the substantive elements of inequitable conduct, without setting forth the particularized factual bases for the allegation, does not satisfy Rule 9(b)."
Whether an accused infringer has satisfied the heightened pleading standard of Rule 9(b) in pleading inequitable conduct is governed by Federal Circuit law because it bears on an issue unique to patent law. The Federal Circuit has held that to plead inequitable conduct, the accused infringer must allege that: (1) "the applicant misrepresented or omitted material information" (2) "with the specific intent to deceive the PTO." To satisfy the heightened pleading requirement of Rule 9(b), the accused infringer must identify "the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO." "[K]nowledge' and intent' may be averred generally." However, "a pleading of inequitable conduct under rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO."
ConAgra seeks to dismiss ADM's inequitable conduct counterclaim on two bases. First, ConAgra argues that the counterclaim does not satisfy the "who, " "what, " "why, " and "how" elements of pleading an inequitable conduct counterclaim under Rule 9(b). Second, ConAgra asserts that the counterclaim does not plead sufficient facts to infer that any alleged misconduct was performed with the specific intent to deceive the PTO. As explained below, the Court finds that ADM's counterclaim fails to sufficiently ...