Gree, Inc. v. Supercell Oy

          MEMORANDUM ORDER

          ROY S. PAYNE UNITED STATES MAGISTRATE JUDGE

         Plaintiff GREE, Inc. (“GREE”) filed a motion (“Motion”) to strike Defendant Supercell Oy's (“Supercell”) affirmative defense of invalidity (Dkt. No. 20), which is now before the Court.^[1]In this Motion, GREE asks the Court to find that Supercell is estopped under 35 U.S.C. § 325(e)(2) from raising the affirmative defense of invalidity of the patent-at-issue in this case. GREE argues that the estoppel statute should apply since Supercell previously filed a petition for post-grant review (“PGR”) of the same patent and that petition was denied by the Patent Trial and Appeal Board (“PTAB”) in a final written decision.

         I. BACKGROUND

         a. Case Background

         GREE is the owner by assignment of U.S. Patent No. 9, 597, 594 (the “'594 Patent”), which issued on March 21, 2017. (Dkt. No. 1, at 3). On November 7, 2017, Supercell filed a petition for post-grant review of the '594 Patent, solely raising the ground of patent ineligibility under 35 U.S.C. § 101 in its petition. (Dkt. No. 27, at 1).^[2] On January 2, 2019, the PTAB issued a final written decision, holding claims 1, 8, and 10-20 of the '594 Patent unpatentable, but finding that Supercell had not satisfied its burden of showing the claims were unpatentable under § 101 for claims 2-7 and 9 of the '594 Patent. (Dkt. No. 27, at 2).

         On February 28, 2019, GREE filed a Complaint (Dkt No. 1) against Supercell for patent infringement of the '594 Patent in the Eastern District of Texas. On May 16, 2019, Supercell filed its Answer to the Complaint, raising a series of defenses to GREE's claims, including the affirmative defense of invalidity as its third defense. (Dkt. No. 18, at 6). GREE now moves to strike Supercell's affirmative defense of invalidity as insufficient or improper under Fed.R.Civ.P. 12(f) due to the defense being statutorily estopped under 35 U.S.C. § 325(e)(2). Supercell argues it, as the former PGR petitioner, is not estopped in this action from advancing a ground for invalidity that it did not petition for in its PGR before the PTAB.

         b. PGR Background

         The Leahy-Smith America Invents Act (“AIA”), Pub. L. No. 112-29, 125 Stat. 284 (2011), created the PGR process in which the parties engaged. See Cuozzo Speed Techs., LLC v. Lee, 136 S.Ct. 2131, 2136-38 (2016). A party may petition for PGR “to cancel as unpatentable 1 or more claims of a patent on any ground . . . (relating to the invalidity of the patent or any claim).”^[3] 35 U.S.C. § 321(b). After receiving a petition, the PTAB must decide whether to institute PGR by determining whether “it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable.” § 324(a).

         After the PTAB issues a final decision, the PGR petitioner is estopped from arguing in a civil action that a “claim is invalid on any ground that the petitioner raised or reasonably could have raised during that post-grant review.” 35 U.S.C. § 325(e)(2) (emphasis added).

         II. STATEMENT OF LAW

         Under Federal Rule of Civil Procedure 12(f), the court may, on its own or on a motion made by a party, move to “strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). “Although motions to strike a defense are generally disfavored, a Rule 12(f) motion to dismiss a defense is proper when the defense is insufficient as a matter of law.” Twin Rivers Eng'g, Inc. v. Fieldpiece Instruments, Inc., 2016 WL 7042232, at *1 (E.D. Tex. Apr. 6, 2016) (quoting Kaiser Aluminum v. Chem. Sales, Inc., 677 F.2d 1045, 1057 (5th Cir. 1982)). To find that a defense is insufficient as a matter of law, the Court considers whether the defense is applicable to the instant case and whether the pleadings give plaintiff fair notice of the defense. See Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir. 1999). This standard prevents a plaintiff from being a victim of “unfair surprise.” Id. The Court possesses considerable discretion in ruling on a motion to strike. Fisher v. JPMorgan Chase Bank N.A., 2018 WL 5621861, at *2 (E.D. Tex. Oct. 30, 2018). However, if an affirmative defense raises either a question of fact or a question of law, the court must deny a motion to strike. Priester v. Long Beach Mortg. Co., 2018 WL 1833255, at *4 (E.D. Tex. Jan. 23, 2018) (citations omitted).

         III. ANALYSIS

         a. Current State of PTAB review

         GREE seeks to preclude Supercell from raising an affirmative defense of invalidity based on 35 U.S.C. § 325(e)(2), the PGR estoppel provision. Specifically, GREE argues that Supercell is estopped from asserting grounds not raised in Supercell's petition that ...