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September 29, 2004.

Solaia Technology LLC, Plaintiff,
Arvinmeritor, Inc., Defendant. v. Rockwell Automation Inc., Third-Party Defendant-Cross-Claim Plaintiff. v. Solaia Technology LLC, Cross-Claim Defendant-Counterclaim-Plaintiff v. Rockwell Automation Inc., Counterclaim-Defendant.

The opinion of the court was delivered by: MARK FILIP, District Judge


Counterclaim plaintiff Solaia Technology LLC ("Solaia") moves for summary judgment on Rockwell Automation Inc.'s ("Rockwell") "patent misuse claim (and affirmative defense)" ("Motion"). For the reasons set forth below, Solaia's Motion is denied without prejudice. I. Factual Background

The history of litigation between the parties (before this Court and others) is long and complicated, and the Court will not summarize all of it here. Instead, the Court will recount only those facts immediately germane to the disposition of this Motion.

  In July 2002, Solaia initiated this suit against ArvinMeritor, Inc. ("ArvinMeritor") and fifteen other large industrial corporations. (See Compl. (D.E. 1).)*fn1 In its suit, Solaia alleged that the defendants infringed claims 11 and 12 of Solaia's '318 patent, which claims a type of "control system [and] processes for industrial automation in manufacturing facilities. . . ." (Id. ¶ 22.) ArvinMeritor (and at least some of the other defendants) allegedly utilize Rockwell-manufactured industrial automation products that, Solaia alleges, infringe the '318 patent. (See Third-Party Pl. ArvinMeritor, Inc.'s Third-Party Compl. (D.E. 131) ¶¶ 11, 25; Answer of Third-Party Def. Rockwell to Third-Party Pl. ArvinMeritor, Inc.'s Third-Party Compl. (D.E. 167) ¶¶ 9-11.) ArvinMeritor and other defendants filed complaints for indemnification against Rockwell, which brought Rockwell into this litigation. (See, e.g., D.E. 131.)

  Rockwell thereafter asserted cross-claims against Solaia, seeking a declaratory judgment that, inter alia, Solaia's alleged claims regarding the '318 patent are "invalid and/or unenforceable under 35 U.S.C. §§ 1 et seq." (D.E. 167 ¶ 59.) To the extent that Rockwell offered any specificity for this expansive allegation (Title 35 of the United States Code is the statutory corpus of federal patent law), Rockwell offered specifics that had nothing to do with patent misuse as identified in Solaia's Motion. For example, Rockwell averred that there was a prior art patent (id. ¶¶ 54-55), that Solaia's claims under the '318 patent were "anticipated under 35 U.S.C. § 102 or made obvious under 35 U.S.C. § 103" by the prior patent (id. ¶ 56), that Solaia's claims under the '318 patent were "invalid for lack of an enabling disclosure" (id. ¶ 57), as well as other averments such as that the '318 patent violated what Rockwell describes as the "best mode and other statutory prerequisites of 35 U.S.C. § 112." (Rockwell's Mem. in Opp'n to Solaia's Mot. for Summ. J. on Rockwell's Unenforceability Claim and Affirm. Defense (D.E. 517) at 3 (discussing D.E. 167 ¶¶ 57-58).)*fn2 These issues contrast with the "patent misuse" that is the subject of Solaia's Motion, which relates to whether Solaia has initiated objectively baseless patent litigation against Solaia's customers. (This "objectively baseless litigation" issue appears to be one part of what appears to be much broader litigation pending in federal court in Milwaukee, Wisconsin, in which there is a Wisconsin state statutory claim, various Wisconsin common law claims, federal antitrust claims, and defamation claims, as well as other defendants and parties besides Rockwell and Solaia.)*fn3

  Solaia eventually counterclaimed in the instant case against Rockwell, alleging that Rockwell had infringed Solaia's '318 patent. (Solaia's Reply to Rockwell's Cross-cl. for Declaratory J. and Solaia's Compulsory Countercl. (D.E. 360).) In answering Solaia's counterclaim of infringement ("Answer"), Rockwell asserted several affirmative defenses, including, inter alia, non-infringement, judicial estoppel, equitable estoppel, and res judicata. (D.E. 369 at 2-3.) Another of the six affirmative defenses averred that Solaia's claims related to "the '318 patent are invalid and/or unenforceable for failure to meet the requirements of the patent laws under 35 U.S.C. § 1 et seq." (Id. at 2.) Not one word of this Answer, and not one word of either Rockwell's original or amended cross-claims (D.E. 167, 288), alludes to the initiation of objectively baseless litigation that is the subject of Solaia's Motion for summary judgment here.

  The subject of Solaia's Motion is a now-withdrawn theory of patent misuse that Rockwell once put forth in a supplemental response to one of many interrogatories propounded by Solaia, which Rockwell thereafter withdrew by amendment to the interrogatory response before Solaia filed its Motion. More specifically, Solaia initially propounded an interrogatory which requested Rockwell to "[i]dentify and describe in detail the factual bases for Rockwell's claim that the claims of the '318 patent are unenforceable." (Solaia's Statement of Material Facts (D.E. 499), Ex. A at 2.) In addition to making a procedural objection, Rockwell responded in May 2003 by setting forth a theory that the prior owner of the '318 patent participated in an industry standards-setting process, and that the prior owner failed to disclose his ownership of the '318 patent and otherwise engaged in inappropriate conduct during the standards-setting process. (Index of Exs. to Rockwell's Mem. in Opp'n to Solaia's Mot. for Summ. J. (D.E. 519), Ex. 5 at 16.) The apparent upshot of this defense, at least according to Rockwell, would have Solaia, the current owner of the '318 patent, precluded from claiming infringement relating to the use of products that the former owner of the '318 patent encouraged and worked to establish as appropriate industry practice.

  Rockwell later supplemented its interrogatory response to add the theory that "[t]he '318 patent is unenforceable due to patent misuse." (D.E. 499, Ex. A. at 3.) In Rockwell's approximately one-page long supplemental interrogatory response, Rockwell asserted that "[t]he patent owner has engaged in patent misuse by instituting objectively baseless litigation regarding the '318 patent and by conducting litigation regarding the '318 patent in bad faith." (Id. at 4.) Thus, Rockwell's patent misuse theories emerged for the first time in one supplemental response to one of Solaia's interrogatories.

  On December 11, 2003, Rockwell again supplemented its response to Solaia's interrogatory in question. Rockwell explained that it withdrew "its affirmative defense of the unenforceability of the '318 patent due to patent misuse." (Id., Ex. K at 2.) Rockwell stated that "[a]lthough there is ample evidence supporting this defense, Rockwell withdraws this defense to streamline the patent litigation and limit competition issues to the ongoing antitrust litigation pending in Wisconsin. . . ." (Id.) (As stated, this Wisconsin litigation is pending in federal court in Milwaukee, and it appears to relate to various issues and claims under Wisconsin law as well as federal law, one of which issues is the "objectively baseless litigation" contention.)

  The next day, December 12, 2003, Solaia filed the present Motion for summary judgment. The Motion relates to the "objectively baseless litigation" contention of Rockwell that was withdrawn even before the Motion was filed. Solaia contends that it is entitled to summary judgment against the "objectively baseless litigation" contention, which, Solaia argues, Rockwell cannot simply withdraw. (See, e.g., Solaia's Reply Mem. in Supp. of Its Mot. for Summ. J. (D.E. 534) at 2.) Rockwell challenges the factual and procedural foundations for Solaia's Motion, and also asserts that it is substantively meritless.

  II. Discussion

  Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R. Civ. P. 56(c). Summary judgment may be granted when no reasonable jury could return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether there is a genuine issue of material fact, the evidence must be viewed in the light most favorable to the party opposing the motion, and any doubts regarding the evidence must be resolved in favor of the nonmoving party. Foley v. City of Lafayette, 359 F.3d 925, 928 (7th Cir. 2004).

  Solaia makes several arguments in support of its motion for summary judgment. Of most relevance, Solaia first contends that Rockwell "realizes its misuse-unenforceability claim is wholly without merit and wants to avoid adjudication of that claim." (Solaia's Mot. for Summ. J. (D.E. 498) at 11.) In this regard, Solaia further argues that Rockwell cannot at this stage of the litigation simply withdraw its patent misuse claim and asserts that the "patent misuse claim" should be dismissed with prejudice under Fed.R. Civ. P. 41. (Id. at 11-12.) Solaia also contends that a proper analysis of the patent claim construction issues precludes Rockwell's ability to assert a patent misuse claim, at least in part because of a prior claims construction ruling in a case involving Judge Holderman, Solaia Technology LLC v. Jefferson Smurfit Corp., No. 01-6641 (N.D. Ill. filed Aug. 27, 2001).

  Rockwell responds that, because it voluntarily withdrew the patent misuse issue from the case, Solaia's motion should be denied as moot or deferred until resolution of the parties' cross motions for summary judgment of noninfringement and infringement. (D.E. 517 at 8 & n. 6.) Rockwell also argues in the alternative that, if the Court reaches the merits, Solaia's ...

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