Patent Misuse Defense Against Non-practicing Entities Survives Motion to Strike: D. Delaware | Practical Law

Patent Misuse Defense Against Non-practicing Entities Survives Motion to Strike: D. Delaware | Practical Law

In Intellectual Ventures I LLC v. Symantec Corp, the US District Court for the District of Delaware refused to strike the accused infringer's patent misuse defense against non-practicing entities, finding that the defense implicated disputed facts and therefore could not be resolved at the pleading stage. 

Patent Misuse Defense Against Non-practicing Entities Survives Motion to Strike: D. Delaware

by Practical Law Intellectual Property & Technology
Published on 07 Oct 2014 • USA (National/Federal)
In Intellectual Ventures I LLC v. Symantec Corp, the US District Court for the District of Delaware refused to strike the accused infringer's patent misuse defense against non-practicing entities, finding that the defense implicated disputed facts and therefore could not be resolved at the pleading stage.
On September 24, 2014, the US District Court for the District of Delaware issued a decision in Intellectual Ventures I LLC v. Symantec Corp, denying a motion to strike a patent misuse defense asserted against two non-practicing entities (C.A. No. 13-440-LPA, (D. Del. Sept. 24, 2014)).
When Intellectual Ventures I LLC and Intellectual Ventures II LLC (collectively IV) sued Symantec Corp for patent infringement, Symantec asserted the affirmative defense of patent misuse in its answer and alleged that IV committed patent misuse by:
  • Tying the patents-in-suit with other irrelevant and unwanted patents in its licensing offers.
  • Collecting royalties from invalid patents and discouraging opposing parties from challenging validity by requiring package licenses for thousands of IV patents.
  • Creating and maintaining an unlawful monopoly in the market for patent portfolios concerning internet security and antivirus products.
Intellectual Ventures responded by filing two motions concerning the misuse defense:
  • A motion for judgment on the pleadings.
  • A motion for leave to file an early summary judgment motion.
As a threshold matter, the court agreed with Symantec that the motion for judgment on the pleadings should be viewed as a motion to strike under Federal Rule of Civil Procedure 12(f). The court noted that most courts in the US Court of Appeals for the Third Circuit do not require affirmative defenses (such as patent misuse) to satisfy the US Supreme Court's heightened pleading standards established in Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal (550 U.S. 544 (2007); 556 U.S. 662 (2009)). The court then found that Symantec's misuse defense satisfied Rule 12(f)'s more permissive pleading standard because it implicated several disputed fact issues, which the court cannot resolve at the pleading stage. The court also denied IV's request for leave to file an early summary judgment motion.
Accused infringers considering a patent misuse defense against infringement claims by a non-practicing entity should consult Symantec's answer and its allegations supporting the misuse defense (Answer, C.A. No. 13-440, (D. Del. May 9, 2013)).