United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
STEPHEN R. CLARK UNITED STATES DISTRICT JUDGE
matter comes before the Court on Plaintiff ICON Health &
Fitness, Inc.'s Motion to Dismiss True Fitness
Technology, Inc.'s Patent Misuse Counterclaims . The
Court will deny ICON's motion.
March 21, 2018, ICON filed a complaint in this Court alleging
TRUE Fitness infringed one or more claims of two patents
owned by ICON, the ‘667 patent and the ‘281
patent. On January 10, 2019, ICON filed an amended complaint
removing the claim relating to the ‘667 patent and
alleging TRUE Fitness infringed one or more claims of
ICON's ‘281 patent, which covers a magnetic braking
system used in treadmills. TRUE Fitness filed an answer
denying it infringed ICON's patent and asserting twelve
defenses and a two-count counterclaim. In Count I of its
counterclaim, TRUE Fitness seeks a declaratory judgment
stating that ICON's ‘281 patent is invalid and
unenforceable. In Count II of its counterclaim, TRUE Fitness
seeks a declaratory judgment stating TRUE Fitness did not
infringe any valid and enforceable claim of the ‘281
patent. ICON filed the pending motion to dismiss asking the
Court to dismiss TRUE Fitness's counterclaims alleging
patent misuse, because ICON argues 35 U.S.C. § 271(d)(3)
bars the counterclaim.
Federal Rule of Civil Procedure (“FRCP”)
12(b)(6), a party may move to dismiss a claim for
“failure to state a claim upon which relief can be
granted.” The notice pleading standard of FRCP 8(a)(2)
requires a party to give “a short and plain statement
showing that the pleader is entitled to relief.” To
meet this standard and to survive a FRCP 12(b)(6) motion to
dismiss, “a [pleading] must contain sufficient factual
matter, accepted as true, to state a claim to relief that is
plausible on its face.” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (internal quotations and citation
omitted). This requirement of facial plausibility means the
factual content of the party's allegations must
“allow the court to draw the reasonable inference
that the defendant is liable for the misconduct
alleged.” Park Irmat Drug Corp. v. Express Scripts
Holding Co., 911 F.3d 505, 512 (8th Cir. 2018) (quoting
Iqbal, 556 U.S. at 678). The Court must grant all
reasonable inferences in favor of the nonmoving party.
Lustgraaf v. Behrens, 619 F.3d 867, 872-73 (8th Cir.
claim fails to allege one of the elements necessary to
recovery on a legal theory, that claim must be dismissed for
failure to state a claim upon which relief can be granted.
Crest Constr. II, Inc. v. Doe, 660 F.3d 346, 355
(8th Cir. 2011). Threadbare recitals of a cause of action,
supported by mere conclusory statements, do not suffice.
Iqbal, 556 U.S. at 678; Bell Atlantic v.
Twombly, 550 U.S. 544, 555 (2007). Although courts must
accept all factual allegations as true, they are not bound to
take as true a legal conclusion couched as a factual
allegation. Twombly, 550 U.S. at 555 (internal
quotations and citation omitted); Iqbal, 556 U.S. at
motion, ICON asserts 35 U.S.C. § 271(d)(3) bars TRUE
Fitness's counterclaim because TRUE Fitness did not
adequately plead that ICON filed this lawsuit in bad faith,
for an improper purpose, and with anticompetitive effect.
Count I of TRUE Fitness's counterclaim states the
‘281 patent is invalid for “failure to comply
with the requirements for patentability set forth in 35
U.S.C. §§ 101 et seq. and due to
Icon's patent misuse.” ECF No. 39, ¶ 11. Count
II alleges ICON's asserted claims “constitute
patent misuse and/or lack of sufficient pre-suit
investigation . . .” Id. at ¶ 16.
misuse, as defined by the Federal Circuit Court of Appeals,
is a “patentee's act of impermissibly broadening
the physical or temporal scope of the patent grant with
anticompetitive effect.” Princo Corp. v. Int'l
Trade Comm'n, 616 F.3d 1318, 1328 (Fed. Cir. 2010).
The Supreme Court established that a patentee may
“exploit its patent but may not ‘use it to
acquire a monopoly not embraced in the patent.'”
Id. at 1327 (quoting Transparent-Wrap Mach.
Corp. v. Stokes & Smith Co., 329 U.S. 637, 643
(1947)). Patent misuse is an affirmative, equitable defense
to a suit for patent infringement. Windsurfing Int'l,
Inc. v. AMF, Inc., 782 F.2d 995, 1001 (Fed. Cir. 1986);
U.S. Philips Corp. v. Int'l Trade Comm'n,
424 F.3d 1179, 1184 (Fed. Cir. 2005).
limited the scope of patent misuse in 35 U.S.C. §
271(d)(3), which states a patent owner otherwise entitled to
relief shall not be denied relief or found guilty of misuse
of the patent for seeking to enforce his patent rights
against infringement. Courts have held bringing a suit for
patent infringement may constitute patent misuse when the
suit is brought in bad faith with an improper purpose,
“in implementation of an illegal restraint of
trade.” Glaverbel Societe Anonyme v. Northlake
Mktg. & Supply, Inc., 45 F.3d 1550, 1558 (Fed. Cir.
1995); see also Chamberlain Grp., Inc. v.
Techtronic Indus. Co., No. 16 C 6097, 2017 WL 1101092 at
*15 (N.D. Ill. Mar. 22, 2017) (“the recent trend among
district courts is to allow such a defense to survive a
motion to dismiss so long as defendants can allege facts to
plead bad faith and improper purpose in bringing the
purpose is improper if its goal is not to win a favorable
judgment but to harass a competitor and deter others from
competition, by engaging the litigation process itself,
regardless of the outcome.” Glaverbel, 45 F.3d
at 1558. A lawsuit is brought in bad faith if it is
“objectively baseless in the sense that no reasonable
litigant could reasonably expect success on the
merits.” Chamberlain, 2017 WL 1101092 at *15
(citing Prof'l Real Estate Inv'rs, Inc. v.
Columbia Pictures Indus., Inc., 508 U.S. 49, 60 (1993);
see also Nalco Co. v. Turner Designs, Inc., Case No.
13-CV-02727 NC, 2014 WL 645365 at *10 (N.D. Cal. Feb. 19,
2014). Patents are presumed to be valid so a patent
infringement suit is presumed to be brought in good faith.
Atari Games Corp. v. Nintendo of Am., Inc., 897 F.2d
1572, 1577 (Fed. Cir. 2005).
of TRUE Fitness's counterclaim addresses patent misuse as
The claims of the ‘281 Patent are unenforceable as now
construed by Icon due to Icon's patent misuse in
attempting to assert the ‘281 Patent, which requires a
magnetic braking system, to cover all uses of any AC
induction motor ...