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Judge Andrews Grants Motion to Dismiss Counterclaims for Unclean Hands and State Law Claims for Deceptive Trade Practices, Tortious Interference and Unfair Competition, But Denies Motion to Dismiss Lanham Act Counterclaim

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In Kimberly-Clark Worldwide, Inc. v. Cardinal Health 200, LLC, C.A. No. 11-1228-RGA (D. Del. July 27, 2012), Judge Andrews recently issued a memorandum order dismissing with prejudice defendant’s unclean hands counterclaim and dismissing without prejudice defendant’s state law counterclaims for deceptive trade practices, tortious interference and unfair competition, but denying plaintiffs’ motion to dismiss defendant’s Lanham Act counterclaim. Id. at 1. Plaintiffs filed suit against defendant for infringement of two patents relating to sterilization products and methods used to sterilize surgical instruments. In its answer to the complaint, defendant denied plaintiffs’ claims for patent infringement, asserting a number of affirmative defenses and counterclaims, including counterclaims for: (a) unclean hands; (b) unfair competition and false advertising under the Lanham Act; (c) deceptive trade practices; (d) tortious interference; and (e) common law unfair competition. Id. at 1. In response, plaintiffs moved to dismiss each of these counterclaims under Rule 12(b)(6) for failure to state a claim. The Court granted the motion in part and denied it in part. In granting the motion to dismiss defendant’s unclean hands counterclaim, the Court found that “unclean hands is more in the nature of an affirmative defense than a separate cause of action” and that is was not a “stand-alone” counterclaim. Id. at 2. In granting the motion to dismiss defendant’s counterclaim for deceptive trade practices, the Court found that the counterclaim was lacking because it failed to assert “at a minimum, a violation of a particular state’s deceptive trade practices act, including allegations of which subsection is violated.” Id. at 7. Similarly, with respect to dismissal of defendant’s state law counterclaims for tortious interference and common law unfair competition, relying on post-Twombly cases, the Court concluded that those counterclaims should be dismissed because they failed to identify a valid business relationship or expectancy and how plaintiffs’ conduct allegedly interfered with that business relationship or expectancy. Id. at 8. On the other hand, in denying the motion to dismiss defendant’s Lanham Act counterclaim, the Court concluded that defendant’s noninfringement allegations provided a “sufficiently detailed foundation for alleging that Plaintiffs’ statements of infringement are false” and that defendant’s allegations regarding sham litigation and whether certain statements are literally false were each issues of fact “best left for summary judgment or trial.” Id. at 4-5. Regarding certain oral statements and allegations that customers have been misled, the Court further concluded that those allegations had been sufficiently pled for purposes of surviving the motion to dismiss. Id. at 6-7.


Kimberly-Clark Worldwide, Inc. v. Cardinal Health 200, LLC, C.A. No. 11-1228-RGA (D. Del. July 27, 2012)

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