Free Answer to Complaint - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE :
MULLER MARTINI CORP. and MULLER : MARTINI MAILROOM SYSTEMS, INC., : Plaintiffs/ Counterclaim Defendants, v. GOSS INTERNATIONAL AMERICAS, INC. and GOSS INTERNATIONAL CORPORATION, Defendants/ Counterclaim Plaintiffs/ Third-Party Plaintiffs, v. MÜLLER MARTINI HOLDING AG, MÜLLER MARTINI MARKETING AG, and GRAPHA HOLDING AG, Third-Party Defendants.

: : : : : : : : : : : : : : : : : : : :

C. A. No. 07-667-*** JURY TRIAL DEMANDED

DEFENDANTS' ANSWER, DEFENSES, COUNTERCLAIMS, AND THIRD-PARTY CLAIMS Goss International Americas, Inc. and Goss International Corporation (collectively, "Goss International"), by their attorneys, respond to the Complaint of Muller Martini Corp. and Muller Martini Mailroom Systems, Inc. as follows: 1. Goss International admits that the Complaint purports to state a cause of

action for patent infringement arising under the patent laws of the United States, that jurisdiction is vested in this Court pursuant to 28 U.S.C. § 1338(a) and that venue is proper in this District under 28 U.S.C. §§ 1391 and 1400(b).

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2. 3. 4.

Admitted. Admitted. Goss International admits that Goss International Americas, Inc. is a

corporation organized and existing under the laws of the State of Delaware with its principal place of business in Dover, New Hampshire. 5. 6. Admitted. Goss International admits that the document attached as Exhibit "A" to the

Complaint bears a U.S. Patent No. 6,175,775, shows a date of January 16, 2001 and is entitled "Method For Optimizing The Production Output Of An Apparatus Processing Flat Items." To the extent Exhibit "A" is a true and correct copy of U.S. Patent No. 6,175,775, the document speaks for itself. Goss International is without sufficient

knowledge or information to form a belief as to the truth or falsity of the remaining allegations contained in paragraph 6 of the Complaint and, therefore, denies them. 7. 8. Denied. Goss International admits that it had knowledge of the `775 patent. Goss

International denies the remaining allegations contained in paragraph 8 of the Complaint. 9. 10. Denied. Denied. DEFENSES For their Defenses, Goss International Americas, Inc. and Goss International Corporation (collectively, "Goss International") state as follows: First Defense Goss International has not infringed, directly or indirectly, literally, or by the doctrine of equivalents, any valid and enforceable claim of the `775 patent. Nor has Goss 2

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International contributed to infringement by others or actively induced others to infringe the `775 patent. Second Defense The `775 patent is invalid for failure to comply with one or more of the provisions of 35 U.S.C. §§ 101 et seq., including, but not limited to, sections 101, 102, 103, and/or 112. Third Defense The doctrine of Prosecution History Estoppel applies to preclude a finding of infringement under the Doctrine of Equivalents. Fourth Defense On information and belief, the equitable doctrines of laches, estoppel and/or acquiescence bar some or all of plaintiffs' claims for damages and other relief. Fifth Defense On information and belief, the `775 patent is unenforceable due to inequitable conduct before the United States Patent & Trademark Office by plaintiffs and their Swiss affiliates (collectively, the "Muller Martini Companies"). The facts supporting Goss International's Fifth Affirmative Defense are more fully set forth below in Count IV of Goss International's Counterclaim and Third-Party Claims. Sixth Defense On the basis of the proceedings in the United States Patent & Trademark Office during the prosecution of the application that matured into the `775 patent, and statements made by or on behalf of the patentees therein, plaintiffs are estopped from construing these patents to cover any product manufactured, used, offered for sale, and/or sold by Goss International.

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COUNTERCLAIMS AND THIRD-PARTY CLAIMS Defendants, Counterclaim Plaintiffs and Third-Party Plaintiffs Goss International Americas, Inc. and Goss International Corporation (collectively, "Goss International") plead the following counterclaims against Plaintiffs and Counterclaim Defendants Muller Martini Corp. and Muller Martini Mailroom Systems, Inc., and third party claims against Müller Martini Holding AG, Grapha Holding AG, and Müller Martini Marketing AG: The Parties 1. Goss International Americas, Inc. is a Delaware corporation with its

principal place of business in Dover, New Hampshire. 2. Goss International Corporation is a Delaware Corporation with its

principal place of business in Bolingbrook, Illinois. 3. Muller Martini Corp. ("Muller Martini") is a New York corporation with

its principal place of business in Hauppauge, New York. 4. Muller Martini Mailroom Systems, Inc. ("Mailroom Systems") is a

Delaware Corporation with its principal place of business in Allentown, Pennsylvania. 5. Müller Martini Holding AG ("MMH") is a company organized under the

laws of the country of Switzerland. 6. Müller Martini Marketing AG ("MM Marketing") is a company organized

under the laws of the Country of Switzerland. 7. Grapha Holding AG ("Grapha") is a company organized under the laws of

the country of Switzerland. 8. Muller Martini, Mailroom Systems, MMH, MM Marketing, and Grapha

(collectively the "Muller Martini Companies") are related entities within the Muller Martini family of companies. 4

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Jurisdiction And Venue 9. Goss International's Counterclaims and Third-Party Claims arise under the

Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201-02; the patent laws of the United States, 35 U.S.C. § 1 et seq.; and the antitrust laws of the United States, 15 U.S.C. §§ 2, 15. 10. Subject matter jurisdiction is proper in this Court pursuant to 28 U.S.C. §§

1338(a) and, 1367(a) and 2201-02. Venue is proper in this District pursuant to 28 U.S.C. §§ 1391 and 1400(b). 11. District. COUNT I - COUNTERCLAIM FOR DECLARATORY JUDGMENT OF NON-INFRINGEMENT (Against Muller Martini and Mailroom Systems) 12. Goss International repeats and realleges paragraphs 1-11 of its The Muller Martini Companies are subject to personal jurisdiction in this

Counterclaims and Third-Party Claims as if fully set forth herein. 13. An actual controversy exists between Goss International on the one hand,

and Muller Martini and Mailroom Systems on the other hand regarding infringement of U.S. Patent No. 6,175,775 (the "`775 patent") by virtue of the allegations made against Goss International in the Complaint. 14. Goss International has not infringed, directly or indirectly, literally, or by

the doctrine of equivalents, any valid and enforceable claim of the `775 patent. Nor has Goss International contributed to infringement by others or actively induced others to infringe the `775 patent. 15. Goss International is entitled to a judgment from this Court that the `775

patent is not infringed by Goss International. 5

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16.

This is an exceptional case entitling Goss International to an award of

attorneys' fees incurred in connection with this action pursuant to 35 U.S.C. § 285. COUNT II - COUNTERCLAIM FOR DECLARATORY JUDGMENT OF INVALIDITY (Against Muller Martini and Mailroom Systems) 17. Goss International repeats and realleges paragraphs 1-16 of its

Counterclaims and Third-Party Claims as if fully set forth herein. 18. An actual controversy exists between Goss International on the one hand,

and Muller Martini and Mailroom Systems on the other hand regarding the validity of the `775 patent by virtue of the allegations contained in the Complaint. 19. The `775 patent is invalid for failure to comply with one or more of the

provisions of 35 U.S.C. §§ 101 et seq., including, but not limited to, sections 101, 102, 103, and/or 112. 20. Goss International is entitled to a judgment from this Court that the `775

patent is invalid. 21. This is an exceptional case entitling Goss International to an award of

attorneys' fees incurred in connection with this action pursuant to 35 U.S.C. § 285. COUNT III - COUNTERCLAIM AND THIRD-PARTY CLAIMS FOR PATENT INFRINGEMENT (Against Muller Martini, Mailroom Systems, MMH, MM Marketing, and Grapha) 22. Goss International repeats and realleges paragraphs 1-21 of its Counterclaims and Third-Party Claims as if fully set forth herein. 23. On March 19, 1996, the United States Patent and Trademark Office duly

and lawfully issued U.S. Patent No. 5,499,803 (the "`803 patent") for a "Collator Without

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A Main Line Drive Shaft." A true and correct copy of the `803 patent is attached hereto at Exhibit "A." 24. Goss International is the owner, by assignment of the `803 patent. Goss

International owns all right, title, and interest in and has standing to sue for past and future infringement of the `803 patent. 25. Goss International has marked its products embodying the claims of the

`803 patent in accordance with 35 U.S.C. § 287. 26. The `803 patent is presumed to be valid pursuant to 35 U.S.C. § 282. The

`803 patent is, in fact, valid. 27. The Muller Martini Companies have infringed, directly and/or through

acts of contributory infringement or inducement, and continue to infringe, one or more claims of the `803 patent, in violation of 35 U.S.C. § 271 by making, using, selling, offering for sale, and/or importing into the United States products including the SLS 3000 and SLS 4000 inserters, covered by one or more claims of the `803 patent. The Muller Martini Companies have committed acts of infringement and/or inducement of infringement in this District. 28. Goss International has been irreparably damaged by the infringing acts of

the Muller Martini Companies and will continue to be irreparably damaged unless the Muller Martini Companies are enjoined from further acts of infringement. 29. Goss International is entitled to recover damages adequate to compensate

it for the Muller Martini Companies' acts of infringement.

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30.

On information and belief, the Muller Martini Companies' infringement This is also an

and inducement of infringement has been intentional and willful. exceptional case within the meaning of 35 U.S.C. § 285.

COUNT IV - COUNTERCLAIM FOR ATTEMPTED MONOPOLIZATION IN VIOLATION OF SECTION 2 OF THE SHERMAN ACT, 15 U.S.C. § 2 (Against Muller Martini and Mailroom Systems) 31. Goss International repeats and realleges paragraphs 1-30 of its

Counterclaims and Third-Party Claims as if fully set forth herein. 32. Muller Martini and Mailroom Systems (for this Count only, "the Muller

Martini Companies" includes only Muller Martini and Mailroom Systems) have asserted a claim of infringement of the `775 patent against Goss International in this lawsuit. 33. The patentee knowingly and intentionally procured the `775 patent

through fraud. To obtain the `775 patent, the patentee knowingly and willfully omitted and misrepresented material prior to the United States Patent & Trademark Office (the "PTO"). 34. When the patentee submitted and prosecuted the application that matured

into the `775 patent, it had a duty under 37 C.F.R. 1.56 to bring to the attention of the PTO any material prior art or other information cited or brought to its attention in any related foreign patent application. 35. The patentee violated the duty of disclosure under 37 C.F.R. 1.56 by

withholding from the PTO the material prior art reference: Beitz et al. "DUBBEL TASCHENBUCH FUER MASCHINENBAU" (Springer-Verlag, 15th Ed., 1995) (the "Dubbel prior art reference") that was cited in the European Patent Office in the patentee's counterpart prosecution of EP 0 749 927 B1 (the "`927 patent").

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36.

The patentee violated the duty of disclosure under 37 C.F.R. 1.56 by

withholding from the PTO the material prior art reference: G. Schmidt, GRUNDLAGEN DER REGELUNGSTECHNIK (Springer-Verlag 1982) (the "Schmidt prior art reference"), that was cited in the European Patent Office in the patentee counterpart prosecution of the `927 patent. 37. The patentee filed U.S. Application Serial No. 08/663,635 (the "`775

patent application") on June 14, 1996 and filed the `927 European application on June 17, 1996, both claiming the priority of CH 1825/95. 38. On November 14, 1997, the European Patent Office informed the patentee

that a third-party objection to the `927 application was filed citing the Dubbel prior art reference. 39. The patentee knew of the materiality and significance of the Dubbel prior

art reference no later than November 14, 2007. Despite a duty to do so, the patentee failed to submit the Dubbel prior art reference to the PTO for consideration within three months of first learning of it in the counterpart `927 European prosecution. 40. On June 6, 1998, the European Patent Office rejected certain claims of the

`927 application, based in part on the Dubbel prior art reference and based in part on the Schmidt prior art reference. 41. Thus, no later than June 8, 1998, the patentee was provided with further

evidence of the materiality of the Dubbel prior art reference. 42. In addition, no later than June 8, 1998, the patentee was provided with the

evidence of the materiality of the Schmidt prior art reference.

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43.

On June 29, 1998, the patentee filed a Continued Prosecution Application

with the PTO in the `775 patent application. 44. At this time, the patentee could have submitted the Dubbel prior art

reference and the Schmidt prior art reference to the PTO for consideration in accordance with 37 C.F.R. 1.97(b)(1). 45. Despite a duty to do so, the patentee failed to submit the Dubbel prior art

reference or the Schmidt prior reference to the PTO for consideration. 46. On December 7, 1998, the PTO issued a Non-Final Office Action against

the `775 patent application, rejecting the claims as invalid over the prior art. 47. On December 12, 1998, the patentee amended the `927 application before

the European Patent Office by, among other things, including the Dubbel prior art reference and the Schmidt prior art reference in order to overcome the rejection. 48. Thus, on December 12, 1998, the patentee acknowledged materiality of

the Dubbel prior art reference and the Schmidt prior art reference by adding a discussion of both prior art references to the `927 application. 49. On June 7, 1999, the patentee filed a response to the Non-Final Office

Action in the `775 patent application. 50. At this time, the patentee could have submitted the Dubbel prior art

reference and the Schmidt prior art reference to the PTO for consideration in accordance with 37 C.F.R. 1.97(c)(2). 51. Despite a duty to do so, the patentee again failed to submit the Dubbel

prior art reference and the Schmidt prior art reference to the PTO for consideration.

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52.

On August 20, 2000, the patentee received a Notice of Allowance

regarding the `775 patent application from the PTO, stating "The application . . . is allowed for issuance as a patent. Prosecution on the merits is closed." 53. At this time, the patentee could have submitted the Dubbel prior art

reference and the Schmidt prior art reference to the PTO for consideration in accordance with 37 C.F.R. 1.97(b)(1) and M.E.P. § 609, page 600-09 (7th Ed. 7/98) by filing either a Continued Prosecution Application or by filing a Continuation Application. 54. If a Continuation Prosecution Application or a Continuation Application

were filed along with an Information Disclosure Statement submitting the Dubbel prior art reference and the Schmidt prior art reference, prosecution on the merits would have been reopened and the `775 patent would have been subject to further examination and possible rejection by the Patent Examiner. 55. Despite a duty to do so, the patentee again failed to submit the Dubbel

prior art reference and the Schmidt prior art reference to the PTO. 56. Instead, on September 21, 2000, the patentee filed a Letter with the PTO,

requesting without any explanation that the Dubbel and Schmidt prior art references "be placed in the Patent and Trademark Office file," knowing that in accordance with 37 C.F.R. 1.97(i), the Dubbel and Schmidt prior art references would not be considered by the PTO. 57. The patentee did not provide either an English language translation of the

Dubbel and Schmidt prior art references or a concise explanation of the relevance of the Dubbel and Schmidt prior art references, as required by 37 C.F.R. 1.98(a)(3) and (c).

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58.

The patentee committed fraud on the PTO by not submitting the Dubbel

prior art reference and the Schmidt prior art reference for consideration by the Examiner. By requesting that the Dubbel and Schmidt prior art references simply "be placed in the file," rather than considered, the patentee evidenced both its knowledge of the materiality of the Dubbel and Schmidt prior references and its clear intent that the Examiner not consider the Dubbel and Schmidt prior art references, thus assuring that the `775 patent would proceed to grant without further review by the Examiner. 59. Further, by not submitting an English translation or concise explanation of

the relevance of the Dubbel prior art reference or the Schmidt prior art reference, the patentee evidenced its clear intention to foreclose any remaining possibility that the Examiner could review or consider the Dubbel or Schmidt prior art references and thus prevent the `775 patent from proceeding to grant. 60. The patentee knowingly and intentionally submitted the Dubbel prior art

reference and the Schmidt prior art reference to the PTO in such a way that would preclude any review or consideration by the PTO. 61. As a result of the patentee intentional and fraudulent conduct, the PTO

issued the `775 patent. 62. The relevant geographic market is the United States. The relevant product

market is the market for newspaper inserters for mid-to high-circulation applications with many inserts and many zones. 63. The Muller Martini Companies already possess substantial market power

in the relevant market in the United States, and there is a high likelihood and a dangerous probability that they will be successful in achieving and maintaining monopoly power in

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the United States if the `775 patent is enforced to the extent it is advocated in this suit to exclude Goss and others from the relevant market. 64. The Muller Martini Companies have attempted to achieve and maintain

monopoly power through unlawful and exclusionary means that were designed to defeat competition in violation of 15 U.S.C. § 2. These means include: (a) knowingly and fraudulently procuring the `775 patent, and (b) knowingly enforcing the fraudulently obtained `775 patent in the instant lawsuit for the purpose of preventing Goss's sales of collators. 65. Through such actions, the Muller Martini Companies attempted and

continue to attempt to monopolize the relevant market and have a likelihood of success of monopolizing that market in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2. 66. The Muller Martini Companies' exclusionary conduct substantially affects

the competitive conditions in the relevant market by attempting to exclude others from the market, thereby allowing the Muller Martini Companies to limit supply and extract monopoly prices. 67. Goss International has been injured as a direct result of the Muller Martini Goss therefore seeks recovery of damages

Companies' anticompetitive conduct.

pursuant to Section 4 of the Clayton Act, 15 U.S.C. § 15.

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PRAYER FOR RELIEF WHEREFORE, Goss International respectfully requests that this Honorable Court: A. Enter judgment dismissing with prejudice Muller Martini and Mailroom Systems' Complaint; Enter judgment that Goss International does not infringe any of the claims of the `775 patent; Enter judgment that the `775 patent is invalid; Enter judgment that the `775 patent is unenforceable due to inequitable conduct in front of the United States Patent & Trademark Office; Declare that this case is an exceptional case within the meaning of 35 U.S.C. § 285 and award Goss the costs of this action, including attorneys' fees; Enter an injunction against Muller Martini Mailroom Systems, Inc., Müller Martini Holding AG, Grapha Holding AG, and Müller Martini Marketing AG prohibiting further infringement, inducement, or contributory infringement of the `803 patent; Award damages adequate to compensate Goss International for the infringement that has occurred together with prejudgment interest from the date infringement of the `803 patent incurred; Award Goss International treble damages and all other damages permitted pursuant to 35 U.S.C §285; Award Goss the full measure of damages available under Section 4 of the Clayton Act, 15 U.S.C. § 15; and Award such other and further relief as justice may require. JURY DEMAND Goss International demands a trial by jury on all issues so triable.

B.

C. D.

E.

F.

G.

H.

I.

J.

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DATED: November 29, 2007

EDWARDS ANGELL PALMER & DODGE LLP

OF COUNSEL: William G. Schopf Bradley P. Nelson Todd H. Flaming Marcus D. Fruchter Lindsay Wilson Gowin SCHOPF & WEISS LLP One South Wacker Drive, 28th Floor Chicago, Illinois 60606 Phone: 312.701.9300

/s/ John L. Reed John L. Reed (I.D. No. 3023) Denise Seastone Kraft (I.D. No. 2778) Joseph B. Cicero (I.D. No. 4388) 919 North Market Street, 15th Floor Wilmington, Delaware 19801 302.777.7770

Attorneys for Defendants, Counterclaim Plaintiffs, and Third-Party Plaintiffs Goss International Americas, Inc. and Goss International Corporation

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