Case 1:10-cv-00600-SM Document 26 Filed 08/01/11 Page 1 of 7
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW HAMPSHIRE
`
`InvestmentSignals, LLC,
`Plaintiff
`v.
`Irrisoft, Inc.,
`Defendant
`
`Case No. 10-cv-600-SM
`Opinion No. 2011 DNH 124
`
`O R D E R
`
`The parties to this patent litigation are well-known to each
`other. For nearly a decade, InvestmentSignals has been asserting
`that Irrisoft infringes its patents, and both parties are
`intimately familiar with the two patents at issue here, the
`allegedly infringing products manufactured by Irrisoft, and
`Irrisoft’s defenses to the claimed infringement (i.e., non-
`infringement, invalidity, and non-enforceability). Because they
`have been at this for some time, each has made its views and
`legal positions quite clear to the other. See, e.g., Petition
`for Declaratory Judgment filed by Irrisoft in the United States
`District Court for the Central District of Utah (document no. 22-
`2), at 6-12.
`
`Given that history, it is odd that InvestmentSignals filed a
`motion that only a lawyer can love — one to dismiss all of
`Irrisoft’s counterclaims and affirmative defenses because they
`
`
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW HAMPSHIRE
`
`InvestmentSignals, LLC,
`Plaintiff
`v.
`Irrisoft, Inc.,
`Defendant
`
`Case No. 10-cv-600-SM
`Opinion No. 2011 DNH 124
`
`O R D E R
`
`The parties to this patent litigation are well-known to each
`other. For nearly a decade, InvestmentSignals has been asserting
`that Irrisoft infringes its patents, and both parties are
`intimately familiar with the two patents at issue here, the
`allegedly infringing products manufactured by Irrisoft, and
`Irrisoft’s defenses to the claimed infringement (i.e., non-
`infringement, invalidity, and non-enforceability). Because they
`have been at this for some time, each has made its views and
`legal positions quite clear to the other. See, e.g., Petition
`for Declaratory Judgment filed by Irrisoft in the United States
`District Court for the Central District of Utah (document no. 22-
`2), at 6-12.
`
`Given that history, it is odd that InvestmentSignals filed a
`motion that only a lawyer can love — one to dismiss all of
`Irrisoft’s counterclaims and affirmative defenses because they
`
`
`
`Case 1:10-cv-00600-SM Document 26 Filed 08/01/11 Page 2 of 7
`
`are “so conclusory that they do not provide InvestmentSignals
`fair notice as to the nature of their claims.” Plaintiff’s
`memorandum (document no. 19) at 1. It is odd, as well, because
`InvestmentSignals has pleaded its own patent infringement claims
`with no greater specificity than the challenged (and allegedly
`insufficient) counterclaims advanced by Irrisoft.
`InvestmentSignals must think different pleading standards apply
`to its claims than apply to Irrisoft’s counterclaims. In any
`event, InvestmentSignals’ motion is denied.
`
`Discussion
`Although captioned a “motion to dismiss,” InvestmentSignals’
`motion is actually broader than that. While InvestmentSignals
`does not use the applicable term, it actually seeks an order
`dismissing Irrisoft’s counter-claims, and striking its
`affirmative defense. The former is governed by Rule 12(b)(6) of
`the Federal Rules of Civil Procedure, while the latter is
`governed by Rule 12(f).1
`
`As an aside, the court notes that motions to strike
`1
`under Rule 12(f) are “disfavored” and rarely granted. See Boreri
`v. Fiat S.p.A., 763 F.2d 17, 23 (1st Cir. 1985). See generally
`5C Charles Alan Wright & Arthur R. Miller, Federal Practice &
`Procedure § 1381, at 421-22 (3d ed. 2004) (“Motions to strike a
`defense as insufficient are not favored by the federal courts
`because of their somewhat dilatory and often harassing character.
`Thus even when technically appropriate and well-founded, Rule
`12(f) motions often are not granted in the absence of a showing
`of prejudice to the moving party.”).
`2
`
`
`
`Case 1:10-cv-00600-SM Document 26 Filed 08/01/11 Page 3 of 7
`
`Additionally, the legal sufficiency of a counterclaim is
`measured by a different standard than that used to assess the
`sufficiency of an affirmative defense. Rule 8(a), which applies
`to claims, counterclaims, and cross-claims, requires “a short and
`plain statement of the claim showing that the pleader is entitled
`to relief.” Rule 8(c), on the other hand, merely requires a
`party to “affirmatively state any avoidance or affirmative
`defense.” See also Fed. R. Civ. P. App. Form 30 (stating that an
`affirmative defense is adequately pled if it simply asserts, for
`example, that “[t]he complaint fails to state a claim upon which
`relief can be granted.”).
`
`In short, and contrary to InvestmentSignals’ suggestion,
`the sufficiency of Irrisoft’s counterclaims is measured by one
`standard, while the sufficiency of its affirmative defenses is
`measured by a different standard.
`
`Irrisoft’s Counterclaims.
`A.
` Although this is a patent dispute, because InvestmentSignals’
`motion is procedural in character, it is governed by the law of
`the First Circuit, rather than the Federal Circuit. See McZeal
`v. Sprint Nextel Corp., 501 F.3d 1354, 1355-56 (Fed. Cir. 2007).
`The court of appeals for this circuit has yet to address the
`specific question posed by plaintiff’s motion: Whether the
`
`3
`
`
`
`Case 1:10-cv-00600-SM Document 26 Filed 08/01/11 Page 4 of 7
`
`Supreme Court’s recent opinions clarifying the pleading
`requirements imposed by Rule 8(a)2 have altered the traditionally
`accepted means of pleading patent claims and counterclaims? See
`generally Fed. R. Civ. P. App. Form 18 (setting forth the form
`for pleading a patent infringement claim). See also Fed. R. Civ.
`P. 84 (“The forms in the Appendix suffice under these rules and
`illustrate the simplicity and brevity that these rules
`contemplate.”). While several district courts have considered
`the question, there is a decided lack of agreement as to the
`correct answer. See, e.g., Tyco Fire Products, LP v. Victaulic
`Co., __ F. Supp. 2d __, 2011 WL 1399847 (E.D. Pa. April 12, 2011)
`(collecting cases).
`
`Having considered the issue, the court concludes that the
`better-reasoned view holds that as long as patent claims and
`counterclaims meet the minimal pleading standards modeled in Form
`18, they adequately state viable causes of action.
`
`This Court agrees with the Federal Circuit and those
`district courts that have held that a party alleging
`direct infringement need only comply with Form 18. A
`patentee “need only plead facts sufficient to place the
`alleged infringer on notice as to what he must defend.”
`McZeal, 501 F.3d at 1357. This Court additionally
`reasons that minimal pleading of direct infringement is
`sufficient because this Court requires the prompt
`filing of infringement contentions, which put the party
`
`See Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007);
`2
`Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009).
`4
`
`
`
`Case 1:10-cv-00600-SM Document 26 Filed 08/01/11 Page 5 of 7
`
`accused of infringement on detailed notice of the basis
`for the allegations against it. Correspondingly, the
`Court finds that a declaratory judgment claim of no
`direct infringement need only plead facts to put the
`patentee on notice and need not be subject to the
`heightened pleading standards of Twombly and Iqbal.
`With respect to invalidity counterclaims, the Court
`agrees with other district courts that it would be
`incongruous to require heightened pleading when the
`pleading standard for infringement does not require
`facts such as “why the accused products allegedly
`infringe” or “to specifically list the accused
`products.” Teirstein v. AGA Medical Corp., No.
`6:08–cv–14, 2009 WL 704138, *5 (E.D.Tex. Mar. 16,
`2009).
`
`Microsoft Corp. v. Phoenix Solutions, Inc., 741 F. Supp. 2d 1156,
`1159 (C.D. Cal. 2010). See also Pfizer Inc. v. Apotex Inc., 726
`F. Supp. 2d 921, 937-38 (2010).
`
`As noted at the outset, InvestmentSignals has pled its
`claims with no greater specificity than the challenged
`counterclaims advanced by Irrisoft. When confronted by a similar
`situation, the United States District Court for the District of
`New Jersey aptly noted:
`
`[Plaintiff’s] motion to dismiss [Defendant’s]
`counterclaims and motion to strike certain affirmative
`defenses for lack of factual information is without a
`sound foundation. [Defendant’s] language in its
`counterclaims and affirmative defenses mirrors the
`language [Plaintiff] employed in its own Complaint.
`There is no basis for this Court to, on the one hand,
`allow [Plaintiff] to plead as it has while, on the
`other hand, require [Defendant], inexplicably, to
`provide more detailed factual support for its
`counterclaims and defenses. The notion that
`5
`
`
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`Case 1:10-cv-00600-SM Document 26 Filed 08/01/11 Page 6 of 7
`
`[Defendant] must identify what theories of invalidity
`it intends to pursue, and the facts supporting such
`theories at this stage is not plausible.
`
`Elan Pharma Intern. Ltd. v. Lupin Ltd., 2010 WL 1372316, *5
`(D.N.J. March 31, 2010).
`
`Irrisoft’s Affirmative Defenses.
`B.
`Twombly, Iqbal, and the new “plausibility” requirement
`plainly provide the standard by which courts assess the
`sufficiency of claims and counterclaims (to the extent those
`opinions are not inconsistent with the forms set out in the
`appendix to the Federal Rules). But, with respect to affirmative
`defenses, Twombly and Iqbal simply do not apply. “An affirmative
`defense need not be plausible to survive; it must merely provide
`fair notice of the issue involved.” Tyco Fire Products, 2011 WL
`1399847 at *5-6 (collecting cases). See also N.H. Ins. Co. v.
`MarineMax of Ohio, Inc., 408 F. Supp. 2d 526, 529-30 (N.D. Ohio
`2006); Wireless Ink Corp. v. Facebook, Inc., __ F. Supp. 2d __,
`2011 WL 2089917 at *15 (S.D.N.Y. May 26, 2011). See generally
`Fed. R. Civ. P. App. Form 30 (“Answer Presenting Defenses Under
`Rule 12(b)(6)”).
`
`Conclusion
`Each of Irrisoft’s counterclaims is consistent with the
`pleading requirements embodied in Form 18 and contains a short
`6
`
`
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`Case 1:10-cv-00600-SM Document 26 Filed 08/01/11 Page 7 of 7
`
`and plain statement of why Irrisoft believes it is entitled to
`relief. See Fed. R. Civ. P. 8(a). Similarly, each of its
`affirmative defenses meets the requirements of Rule 8(c) and
`provides InvestmentSignals with adequate notice of what defense
`is being interposed. Accordingly, plaintiff’s motion to dismiss
`(document no. 18) is denied.
`
`SO ORDERED.
`
`____________________________
`Steven J. McAuliffe
`Chief Judge
`
`August 1, 2011
`cc: Steven M. Evans, Esq.
`Robert P. Greenspoon, Esq.
`Jonathan A. Lax, Esq.
`Brent P. Lorimer, Esq.
`Robert R. Lucic, Esq.
`Chad E. Nydegger, Esq.
`
`7
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