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SAFE BED TECHNOLOGIES COMPANY v. KCI USA

May 16, 2003

SAFE BED TECHNOLOGIES COMPANY, PLAINTIFF,
v.
KCI USA, INC., LOYOLA UNIVERSITY HEALTH SYSTEM, RUSH SYSTEM FOR HEALTH, SWEDISH COVENANT HOSPITAL AND SHERMAN HOSPITAL, DEFENDANTS.



The opinion of the court was delivered by: Martin C. Ashman, United States Magistrate Judge

MEMORANDUM OPINION AND ORDER

I. Introduction

This case comes before the Court on Plaintiff Safe Bed Technologies Company's ("Safe Bed") motion to strike Defendants KCI USA Inc., Loyola University Health System, Rush System for Health, Swedish Covenant Hospital and Sherman Hospital's (collectively referred to as "KCI") affirmative defense of inequitable conduct, and motion to strike KCI's affirmative defense of unclean hands, pursuant to Federal Rules of Civil Procedure 9(b) and 12(f). For the reasons set forth below, the Court denies the motion to strike the entire affirmative defense of inequitable conduct but strikes certain language including "patents owned," "such as," and "other material prior art" from the third affirmative defense. The Court grants the motion to strike the affirmative defense of unclean hands.

II. Background

On January 4, 2002, Safe Bed filed this action against KCI for patent infringement, asserting that KCI had, without Safe Bed's authorization, manufactured, used, leased and/or sold certain products that infringed Safe Bed's U.S. Patent 4,998,939 (the "`939 patent"). On February 12, 2002, KCI answered Safe Bed's complaint, asserted nine affirmative defenses, and filed a counterclaim. Later, Safe Bed moved to strike two of the affirmative defenses, and KCI asked for and was granted leave to amend its answer, affirmative defenses, and counterclaim. KCI filed its amended answer, affirmative defenses, and counterclaim on December 4, 2002. This motion to strike the third and fifth affirmative defenses followed. The facts, which we must take as true for purposes of this motion, are taken from Defendants' affirmative defenses.

James Potthast and Thomas Ring are patent attorneys and members of the Illinois bar. Potthast and Ring represented RWM Enterprises, Inc. ("RWM") from approximately 1982 through 1992, and drafted eight different patents relating to therapeutic hospital beds during this period. Potthast and Ring had no education or experience relating to therapeutic hospital bed technology prior to their representation of RWM. However, through their representation of RWM, Potthast and Ring learned sensitive and confidential business information in the therapeutic hospital bed area. Potthast and Ring also sat in on sessions with RWM where possible new inventions were discussed.

KCI alleges that Potthast and Ring used this confidential information in a deceitful and unethical manner to divest RWM of its intellectual property, including the invention contained in the `939 patent. KCI also alleges that Potthast and Ring failed to disclose material prior art to the U.S. Patent and Trademark Office ("PTO"), including U.S. Patent 4,769,584, and several commercially available therapeutic beds such as Roto Rest, PulmonAir, and Paragon Turn and Tilt. KCI further alleges that this withholding of material information was done intentionally, and constitutes an affirmative misrepresentation of material fact.

III. Legal Standard

Federal Rule of Civil Procedure 12(f) provides that the court may strike "any insufficient defense or any redundant immaterial, impertinent, or scandalous matter" from any pleading. Motions to strike an affirmative defense are treated under the same legal standard as motions to dismiss under Rule 12(b)(6). Bobbitt v. Victorian House, Inc., 532 F. Supp. 734, 737 (N.D.Ill. 1982). The court will strike an affirmative defense as legally insufficient if the plaintiff shows that the defendant could not possibly prove a set of facts under the affirmative defense that would defeat the complaint. Id. When considering a motion to strike, the court must take all well-pleaded facts as true, and must view all allegations in the light most favorable to the non-moving party. Ocean Atlantic Woodland Corp. v. DRH Cambridge Homes, Inc., No. 02 C 2523, 2003 WL 1720073, at *3 (N.D.Ill. Mar. 31, 2003).

Motions to strike under Rule 12(f) are generally not favored, and are usually denied unless the pleading's language is clearly prejudicial. Tektel, Inc. v. Maier, 813 F. Supp. 1331, 1334 (N.D.Ill. 1992) (citations omitted).

IV. Discussion

A. Defendants' Third Affirmative Defense, Inequitable Conduct

Federal Rule of Civil Procedure 9(b) is applicable to claims of inequitable conduct. Videojet Sys. Int'l, Inc. v. Inkjet, Inc., No. 95 C 7016, 1997 WL 124259, at *5 (N.D.Ill. Mar. 17, 1997); Systemation, Inc. v. Engel Indus., Inc., 183 F.R.D. 49, 51 (D.Mass. 1998) (collecting cases). Rule 9(b) states: "In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally." Public policy dictates that inequitable conduct be pled with the particularity required by Rule 9(b), as "the habit of charging inequitable conduct in almost every major patent case has become an absolute plague." Burlington Indus., Inc. v. Dayco Corp., 849 F.2d 1418, 1422 (Fed. Cir. 1988).

Rule 9(b) requires a high level of particularity, and this level has only partially been met by KCI's pleadings. For inequitable conduct to be adequately pled under Rule 9(b), a party must allege the "who, what, when and where" of the conduct, along with a general allegation of intent to deceive the PTO. Videojet Sys. Int'l, Inc. v. Eagle Inks, Inc., 14 F. Supp.2d 1046, 1049 (N.D.Ill. 1998). KCI alleges who (Safe Bed and the inventors of the `939 patent), what (failure to disclose U.S. Patent No. 4,769,584 and several material commercially available hospital beds), when (during the prosecution of the `939 patent), and where (before the U.S. PTO). KCI also included a general allegation of intent to withhold material information in order to mislead the PTO, in accordance with the requirements of Rule 9(b). See Sun-Flex Co. v. Softview Computer Prods. Corp., 750 F. Supp. 962, 963 (N.D.Ill. 1990) (holding that general allegation ...


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