Counterclaim and Defenses Dismissed; U.S. Patent Out of Suit Following Failure to Assert in Canada

Radiancy, Inc. v. Viatek Consumer Products Group, Inc.

Case Number: 7:13-cv-03767-NSR (Dkt. 117)

Judge Roman, in an amended opinion, dismissed counterclaim defendant PhotoMedex from the case, and dismissed defendant Viatek’s inequitable conduct defense, its best mode defense, and its request for declaratory judgment of non-infringement of one patent.

Viatek’s counterclaims alleged that PhotoMedex, Radiancy’s parent, is Radiancy’s alter ego and the real owner of the patent in suit. PhotoMedex won dismissal for two reasons. First, service of process on PhotoMedex was improper. CPLR § 311 required personal service on PhotoMedex, and so the electronic delivery of the counterclaims to Radiancy’s counsel was ineffective. Second, Viatek failed to pierce the corporate veil, as the court found that the counterclaim lacked factual allegations, and that Viatek’s attempt to provide facts in its opposition brief failed to repair this inadequacy.

The inequitable conduct counterclaim was booted because, the court said, the pleading alleged no more than the burying of a piece of prior art, and the “who, what, when, where, why, and how” of the alleged inequitable conduct were missing. As with Viatek’s attempt to pierce the corporate veil, the court said that it was insufficient for Viatek to try to repair its inadequate pleading with facts presented in its opposition brief. Viatek’s argument that the patent in suit was invalid due to a failure to teach the best mode was contrary to the America Invents Act’s revision of 35 USC § 282: “the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise enforceable.”

Radiancy succeeded in winning dismissal of Viatek’s declaratory judgment of non-infringement for U.S. Patent No. 6,825,445, a patent not originally in the suit, and one that Radiancy had accused Viatek of infringing during negotiations held in 2012. The court said that, “[s]ince the initial letters referencing the ‘445´ Patent - sent almost two years ago - there has been no conduct indicating that Radiancy believes Viatek is infringing the ‘445´ Patent.” Further, there was no evidence that Viatek was not pursuing its product development because of concern of infringing the ‘445´ patent. Finally, the court made the interesting observation that Radiancy had not asserted the ‘445´ patent against Viatek in a Canadian action. For these reasons, the court concluded that there was no controversy with regards to the ‘445´ patent, and dismissed it from the case.

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