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Artemi Ltd. v. Safe-Strap Co., Inc.

United States District Court, Third Circuit

December 27, 2013

ARTEMI LTD., Plaintiff,
v.
SAFE-STRAP CO., INC., Defendant.

Joseph P. Lasala, Esq. McELROY, DEUTSCH, MULVANEY & CARPENTER, LLP, Morristown, New Jersey and George Pazuniak, Esq., PAZUNIAK LAW OFFICE, Wilmington, Delaware, Counsel for Plaintiff.

Eugene G. Reynolds, Esq., MULLEN & REYNOLDS, LLC Morris Plains, New Jersey, and Louis C. Dujmich, Esq., OSTRELENK FABER LLP, New York, New York, Counsel for Defendant.

OPINION

JOSEPH E. IRENAS, Senior District Judge.

This is a patent infringement suit.[1] Plaintiff Artemi's patented device is the Spacemaker, which is a hook with a strap attached. The Spacemaker is used to increase the number of clothes hangers that can be hung on a single rail. Defendant Safe-Strap designed and sells a similar product, the Hanger-Under, which Artemi asserts infringes its patent.

Presently before the Court is Plaintiff Artemi's Motion to Dismiss four of Defendant Safe-Strap's affirmative defenses and Safe-Strap's counterclaims. Safe-Strap opposes the Motion, and has also cross-moved to amend its Answer. Artemi mainly opposes the Motion to Amend, arguing that the proposed amendments do not cure the asserted deficiencies in the affirmative defenses and counterclaims.[2]

For the reasons stated herein, Artemi's Motion to Dismiss will be granted in part and denied in part, and Safe-Strap's Motion to Amend will be granted in part and denied in part.

I.

This Court has already written an opinion discussing the allegations of Artemi's Third Amended Complaint, see Aretmi, Ltd. v. Safe Strap Co., Inc., ___ F.Supp.2d ___, 2013 WL 2367874 (D.N.J. May 30, 2013). Those allegations are not directly relevant to the issues raised by the instant motions. Rather, Safe-Strap's affirmative defenses and counterclaims focus on Aretmi's alleged actions before the USPTO during the rexamination and reissue proceedings which resulted in the patent-in-suit, Reissue Patent 42, 568 (the "RE568 Patent").

Safe-Strap's theory of its case is that Artemi became aware of the Hanger-Under and then sought reexamination of the Spacemaker's patent with the express purpose of re-writing the patent claims to encompass the Hanger-Under. According to Safe-Strap, the reexamination and reissue proceedings were nothing but a set-up for this patent infringement suit, which Safe-Strap vehemently contends is frivolous. In support of its theory, Safe-Strap alleges the following.

Safe-Strap began selling its Hanger-Under in 2001. (Proposed Amended Answer, "PAA", ¶ 26) "Prior to any sales activity, " Safe-Strap inquired as to whether the Hanger-Under infringed Artemi's patent. (Id.) In an opinion dated February, 28, 2001, Safe-Strap's patent counsel "unequivocally found that Safe-Strap's design did not infringe the [] patent." (Id.) Also in 2001, Artemi allegedly became aware of the Hanger-Under. (PAA ¶ 25)

According to Safe-Strap, the Hanger-Under and the Spacemaker were different from the start. Both devices have two basic parts: a hook that resembles a coat hanger hook, and a strap that loops down from the hook. (See PAA ¶¶ 27-31) But the devices have two significant differences: (1) the Spacemaker's strap is adjustable (i.e., the loop can be made larger or smaller), whereas the Hanger-Under's strap is not adjustable; and (2) the Spacemaker's strap is connected to the hook through a circular ring, whereas the Hanger-Under's strap is connected to the hook through a rectangular slot. (PAA ¶¶ 27-28) Thus, according to Safe-Strap, Artemi knew all along that the Hanger-Under did not infringe the patent for the Spacemaker.

Artemi's knowledge notwithstanding, Safe-Strap alleges that on May 10, 2002, Artemi filed its Request for Reexamination with the USPTO "with an ulterior purpose of trying to rewrite and/or reinterpret the meaning of the patent claims... to try to cover" the Hanger-Under. (PAA ¶ 34) In other words, Safe-Strap asserts that Artemi filed its reexamination request to set the stage for the patent infringement suit that it would later file with this Court in 2003.

Safe-Strap further contends that Artemi was ultimately successful in its plan to rewrite the patent (although Safe-Strap still disputes that it has infringed even the re-written patent). Safe-Strap contends that, first, during reexamination Aretmi tried to change the meaning of the original patent claim 1 to effectively eliminate the difference between the Spacemaker's circular ring and the Hanger-Under's rectangular slot. (PAA ¶¶ 35-36) Claim 1, however, "was prosecuted to a final rejection." (PAA ¶ 37)

Undeterred, Artemi took a different approach. It filed a reissue application allegedly seeking to introduce an entirely new claim- claim 8- which would allegedly accomplish the same goal it tried to achieve during reexamination. (PAA ¶ 38) Specifically, Safe-Strap relies on the difference between the original language of the patent (the 455 patent) and the language of the reissued patent, RE568, to support its theory that Artemi rewrote its patent specifically to cover the Hanger-Under.

Claim 1 of 455 described the circular ring-portion of the Spacemaker this way: "a first part... in the form of a hook... the first part further having a ring spaced from the hook, the ring having a curved upper internal surface to facilitate carrying a plurality of garments by hand." (PAA ¶ 28; emphasis in PAA)

Claim 8 of RE568 describes the same part of the Spacemaker this way: "a first part... in the form of a hook... the first part further having a ring spaced from the hook, the ring having a curved upper internal surface located on an exterior of the ring and facing internally with respect to the ...


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