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Kimberly-Clark Worldwide, Inc v. First Quality Baby Products

February 17, 2012

KIMBERLY-CLARK WORLDWIDE, INC., PLAINTIFF
v.
FIRST QUALITY BABY PRODUCTS, LLC, FIRST QUALITY PRODUCTS, INC., FIRST QUALITY RETAIL SERVICES, LLC, FIRST QUALITY HYGIENIC, INC., DEFENDANTS AND COUNTERCLAIM PLAINTIFFS
v.
KIMBERLY-CLARK CORPORATION, KIMBERLY-CLARK WORLDWIDE, INC., KIMBERLY-CLARK GLOBAL SALES, LLC, COUNTERCLAIM DEFENDANTS



The opinion of the court was delivered by: William W. Caldwell United States District Judge

MEMORANDUM

I. Introduction

Presently before the court is a motion for partial summary judgment (Doc. 466) filed by Plaintiff Kimberly-Clark Worldwide Inc. ("KC"). Defendants First Quality Baby Products, LLC, First Quality Products, Inc., First Quality Retail Services, LLC, and First Quality Hygienic, Inc. (collectively "FQ") oppose this motion. KC seeks summary judgment on FQ's Counterclaim VIII, wherein FQ alleges that the Kuepper Patent, U.S. Patent No. 5,496,298, is unenforceable due to inequitable conduct. Specifically, FQ alleges that KC engaged in inequitable conduct by deliberately withholding information about the Roessler Patent during prosecution of the Kuepper Patent, and the Kuepper Patent is therefore unenforceable. KC argues that it is entitled to summary judgment on this claim, because no reasonable fact finder could find inequitable conduct.

After careful consideration, we will grant KC's motion.

II. Legal Standard

Rule 56(a) provides that summary judgment should be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). We will examine the motion under the well-established standard. See, e.g., Meditz v. City of Newark, 658 F.3d 364, 369 (3d Cir. 2011). "Once the moving party points to evidence demonstrating no issue of material fact exists, the non-moving party has the duty to set forth specific facts showing that a genuine issue of material fact exists and that a reasonable factfinder could rule in its favor." Id. (quoting Azur v. Chase Bank, USA, Nat'l Ass'n, 601 F.3d 212, 216 (3d Cir. 2010)). The court must credit the non-movant's evidence and draw "all justifiable inferences" in its favor. Id.

The pending motion requires us to analyze whether KC is entitled to judgment on FQ's counterclaim alleging inequitable conduct. As the Federal Circuit has noted, "[i]nequitable conduct is an equitable defense to patent infringement that, if proved, bars enforcement of a patent." Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011). In order to prevail on this counterclaim, FQ must prove two elements by clear and convincing evidence: (1) specific intent to deceive the Patent and Trademark Office ("PTO"), and (2) materiality. Id. at 1287.

With respect to the intent element, we note the following. FQ alleges inequitable conduct on the basis of nondisclosure of information. In a case of this nature, "clear and convincing evidence must show that the [patent] applicant made a deliberate decision to withhold a known material reference." Id. at 1290 (quoting Molins PLC v. Textron, Inc., 48 F.3d 1172, 1181 (Fed. Cir. 1995) (emphases added in Therasense)). FQ must prove, by clear and convincing evidence, that KC "knew of the reference, knew that it was material, and made a deliberate decision to withhold it." Id. Intent may be inferred from "indirect and circumstantial evidence[,]" but in order to satisfy the "clear and convincing" standard, "the specific intent to deceive must be 'the single most reasonable inference able to be drawn from the evidence.'" Id. (quoting Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed. Cir. 2008)). The evidence "must be sufficient to require a finding of deceitful intent in the light of all the circumstances." Id. (quoting Kingsdown Med. Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867, 873 (Fed. Cir. 1988) (emphasis added in Therasense)).

In assessing materiality, a but-for materiality standard generally applies. Id. at 1291-92. As an exception to this general rule, however, egregious misconduct is material per se. Id. at 1292-93. KC's pending motion does not require us to address the materiality element, however, because KC focuses solely on FQ's alleged inability to show intent to deceive the PTO.

III. Discussion

In the pending motion for summary judgment, KC contends that no reasonable fact finder could find inequitable conduct. FQ urges us to deny KC's motion for two reasons: first, because it is premature, and second, because a reasonable fact finder could conclude that inequitable conduct occurred. We will discuss these issues in turn.

A. Should KC's motion be denied or deferred pursuant to Rule 56(d)(1)? FQ's first argument asserts that essential facts are unavailable, and therefore, pursuant to Rule 56(d)(1) of the Federal Rules of Civil Procedure, we should defer considering the motion or deny it. The "essential facts" to which FQ refers is evidence relating to a secret arbitration proceeding between KC and Proctor & Gamble ("P&G"), which KC alleged to be privileged.*fn1 Not only was the Kuepper Patent one of the patents at issue in that proceeding, but also, P&G alleged in that proceeding that KC deliberately withheld information about the Roessler Patent during prosecution of the Kuepper Patent-an allegation essentially identical to FQ's claim of inequitable conduct.

FQ asserts that evidence concerning the arbitration "will likely provide a road map for additional discovery in this case" and will be "a treasure trove that will assist First Quality in preparing and presenting its inequitable conduct case." (Doc. 494 at 3). Information of this nature may assist FQ strategically, but we are not persuaded that it qualifies as "facts essential to justify [FQ's] opposition" to summary judgment, as set forth in Rule 56(d). Significantly, KC assures us that the only materials it withheld were materials created for purposes of the arbitration. According to KC, all underlying factual materials have been produced. In light of these circumstances, it seems doubtful that the arbitration materials FQ seeks would reveal new evidence as to whether KC engaged in inequitable conduct during the Kuepper Patent prosecution, which occurred years earlier.

FQ also mentions the value of reviewing certain witnesses' deposition testimony from the arbitration, when their memories were presumably fresher, because the arbitration occurred much earlier than the depositions that FQ took in this case. Specifically, FQ notes that Mr. Mielke, the attorney who prosecuted the Kuepper Patent, testified in connection with the arbitration. FQ assumes that Ms. Kuepper and Ms. Rasmussen, the inventors, testified as well. FQ argues that it should be able to compare and ...


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