Kenall Mfg. Co. v. Cooper Lighting, LLC, No. 17 C 4575, Slip Op. (N.D. Ill. Dec. 10, 2018) (Feinerman, J.).

Judge Feinerman granted in part plaintiff  Kenall’s Fed. R. Civ. P. 12(f) motion to strike defendants’ (collectively “Cooper”) affirmative defenses and denied Kenall’s Fed. R. Civ. P. 12(c) motion for partial judgment on the pleadings as to liability in this patent and breach of contract case regarding modular light fixtures.

After Kenall filed a first patent infringement suit, the parties settled their dispute in which Kenall waived its infringement claims for products manufactured and sold before the agreement’s effective date. Cooper also received a license to manufacture and sell such products in exchange for:

  1. an upfront fee;
  2. quarterly royalty payments;
  3. a marking requirement; and
  4. a no challenge clause.

Kenall claims breach alleging that Cooper failed to mark certain products, stopped making quarterly payments and failing to redesign certain Subject Single Products as required by the agreement. Cooper acknowledges accidentally selling certain existing products without proper marking and that it sold certain Subject Single Products, until it was made aware of the issues. Cooper also claims it sought to make royalty payments, but that Kenall refused to accept them.

As to the motion for partial judgment on the pleadings, the Court noted that it raised an unsettled issue – whether partial judgment on the pleadings was proper. This was not an instance of partial judgment as to one or more, but not all, claims. Kenall sought judgment as to certain elements of a claim – liability – but not all elements – damages. In contrast to Rule 56, which specifically authorizes partial summary judgment, Rule 12(c) was silent as to partial judgment. That differentiation between the Federal Rules counseled strongly against allowing partial judgment on a Rule 12(c) claim. Furthermore, Rule 12(c)’s use of the term “judgment” reinforced the determination that it was not intended to allow judgment on portions of a claim. Rule 54 defines judgment as a decree or order “from which an appeal lies.” But a partial determination of a claim would be non-final and not be appealable. The Court also noted that a Rule 12(c) motion directed to an entire single claim, but not all claims, may be permissible, as reasoned by several other courts. The Court, therefore, denied the motion for partial judgment on the pleadings.

As to the motion to strike Cooper’s affirmative defenses, the Court held as follows:

  • Because the Court had already limited Kenall’s infringement claims to Cooper’s Subject Single Products and because Cooper did not dispute that the patents in suit were covered by the agreement, the Court struck Cooper’s noninfringement contentions based upon the agreement’s no challenge clause. It was “natural” that a no challenge clause would bar future litigation over whether a defendant’s products infringed a plaintiff’s patents.
  • Cooper’s invalidity defense were barred for the same reasons as its noninfringement defenses. In fact, it is even more common for a no challenge clause to limit the ability to challenge validity.
  • Cooper’s failure to state a claim affirmative defense was stricken because it was not an affirmative defense.
  • Cooper’s laches defense was stricken because Cooper failed to address Kenall’s argument that Cooper did not plead the elements of laches or put Kenall on sufficient notice of Cooper’s claim.
  • Cooper’s unclean hands defense survived because Kenall did not dispute all grounds for Cooper’s defense, the argument was waived.
  • Cooper’s equitable estoppel defense failed because Cooper could not have been reasonably relying on the parties’ agreement in order to breach the agreement.
  • Cooper’s waiver defense survived because Kenall offered no support proving that its seven year delay in bringing suit could not support a waiver defense.
  • Because Kenall is attempting to enforce, not void, the parties’ agreement, Cooper’s ratification defense failed.
  • Cooper’s recoupment / setoff defense was stricken because those defenses were intended to off-set a defendant’s claims for loss against plaintiff’s claims, not to account for partial payment pursuant to a contract.
  • Cooper’s mitigation defense survived because Kenall did not offer any argument or support for the proposition that Kenall’s seven year delay in identifying Cooper’s alleged breaches could not support a mitigation defense.
  • Cooper’s statute of limitations defense was stricken because it sought to limit damages to those after a date more than six years before the suit was filed, but patent infringement claims were limited to six years prior to filing.
  • Cooper’s license defense was stricken because the Court already ruled that sales after April 1, 2008, were unlicensed.
  • Cooper’s intervening rights defense was stricken because it failed to respond to Kenall’s argument that an intervening rights defense tie specific patent claims to specific products.