United States District Court, S.D. New York
Radiancy, Inc., Plaintiff: Baldassare Vinti, Benjamin Moses
Rattner, LEAD ATTORNEYS, Steven Michael Kayman, Victoria L.
Loughery, Proskauer Rose LLP (NY), New York, NY.
Viatek Consumer Products Group, Inc., Defendant: Anthony H.
Handal, HANDAL & MOROFSKY, LLC, New York, NY.
Viatek Consumer Products Group, Inc., Counter Claimant:
Anthony H. Handal, HANDAL & MOROFSKY, LLC, New York, NY.
Radiancy, Inc., Counter Defendant: Baldassare Vinti, LEAD
ATTORNEY, Steven Michael Kayman, Victoria L. Loughery,
Proskauer Rose LLP (NY), New York, NY.
OPINION AND ORDER
S. ROMÁN, United States District Judge.
(" Plaintiff" ) commenced this action against
Viatek (" Defendant" and " Counterclaim
Plaintiff" ) under 35 U.S.C. § § 271 and 281
for patent infringement and pursuant to 15 U.S.C. §
1125(a) for false advertising, trade dress infringement,
trademark infringement, and unfair competition. In defense,
Defendant asserted twenty-one Affirmative Defenses and seven
Counterclaims against Radiancy and its parent company,
PhotoMedex, Inc. (together, " Counterclaim
Defendants" ). Before the Court is Counterclaim
Defendants' motion to strike Affirmative Defenses six,
seven, and twenty-one pursuant to Fed.R.Civ.P. 9(b) and
12(f), dismiss PhotoMedex, Inc. from this action pursuant to
Fed.R.Civ.P. 12(b)(5) and (6), and dismiss the Second
Counterclaim pursuant to Rule 12(b)(1), the Third
Counterclaim pursuant to Rule 9(b) and 12(b)(6), and the
Fourth and Fifth Counterclaims pursuant to Rule 12(b)(6).
This opinion amends the opinion previously issued by this
Court on March 28, 2014, Docket No. 113. For the following
reasons, Counterclaim Defendant's motion is granted in
part and denied in part.
is a Delaware company specializing in skincare products,
specifically light and heat-based skincare equipment for
professionals and household consumers. Amend. Compl. ¶
2. Plaintiff obtained U.S. Patent No. 7,170,034 (" the
'034 Patent" ) from the United States Patent and
Trademark Office (" USPTO" ) for its product
no!no!® Hair, which is a handheld device that uses heat
to remove hair. Id. at ¶ 4 & Ex. 1. The
'034 Patent is entitled " PULSED ELECTRIC
SHAVER" and was granted on January 30, 2007.
Id. In addition to the '034 Patent, Plaintiff is
also the owner of Patent No. 6,825,445 (" the '445
Patent" ), entitled " REAL ELECTRIC SHAVER."
Counterclaim ¶ 8 & Ex. B. On December 13, 2011
PhotoMedex, Inc. and Radiancy effectuated a reverse merger
whereby Radiancy became a wholly-owned subsidiary of
PhotoMedex. Counterclaim ¶ 2; Douglass Dec. Ex. K.
Following the merger, the pre-merger shareholders of
PhotoMedex owned approximately 20% of the outstanding common
stock in PhotoMedex and its subsidiaries while the pre-merger
shareholders of owned approximately 80% of the outstanding
common stock of PhotoMedex and its subsidiaries. Douglass
Dec. Ex. K. Defendant is a Florida corporation that develops,
manufacturers, and markets home goods and personal care
products, including hair removal devices, personal fans,
flashlights, beauty products, dental products, kitchen
supplies, and cleaning products. Counterclaim ¶ 1.
manufacturers and sells the Pearl[TM] Hair Remover, the
allegedly infringing product. Amend. Compl. ¶ 5.
Defendant also manufacturers the Samba[TM], a hot wire hair
removal device that does not use a pulsed heating source.
Counterclaim ¶ 32. The Samba was first sold on August
27, 2013 by ShopNBC, one of Defendant's customers.
Id. Plaintiff alleges that in Defendant's
advertising of its hair removal products, Defendant uses
false and misleading information to confuse consumers,
including directly lifting photographs and videos from
Plaintiff's advertising materials and using them to
promote the Pearl Hair Remover. Id. at ¶ ¶
first confronted Defendant about the alleged patent
infringement in a letter sent on April 27, 2012. Ratner Dec.
Ex. G. In that letter, Plaintiff stated that it believed
Defendant was infringing both the '034 Patent and the
'445 Patent. Id. Subsequent exchanges between
the parties show that Viatek contested Radiany's
assertion of infringement and that Radiancy did not change
its original position.
brought suit against Defendant alleging violations of 35
U.S.C. § § 271 and 281, based on belief that
Defendant " markets, distributes, advertises, uses,
offers for sale, sells and imports into the United States the
Pearl Hair Remover, which infringes the '034
Patent." Amended Complaint (" Amend. Compl." )
¶ 5. Plaintiff's Amended Complaint also claims that
Defendant violated Section 43(a) of the Latham Act (15 U.S.C.
§ 1125(a)) by engaging in false advertising, trade dress
infringement, trademark infringement, and unfair competition.
the filing of this action on June 3, 2013, Plaintiff filed an
Amended Complaint on June 24, 2013, in which it added claims
for false advertising, trade dress infringement, and unfair
competition to its claims of patent infringement. Viatek
filed an Answer and Counterclaims on September 23, 2013.
Dock. No. 22. An Amended Answer with Counterclaims was filed
on September 29, 2013. Dock. No. 24. Viatek filed a Second
Amended Answer and Counterclaims on October 1, 2013. Dock.
No. 26. In its Second Amended Answer and Counterclaim ("
Sec. Amend. Ans. & Counterclaims" ), Viatek asserts
twenty-one affirmative defenses and seven counterclaims
against Counterclaim Defendants. The present motion to strike
addresses three affirmative defenses (the Sixth, for
inequitable conduct, the Seventh, for violation of the best
mode requirement, and the Twenty-First, for unclean hands)
and four counterclaims (the Second, for declaratory judgment
of noninfringment and invalidity of the '445 patent, the
Third, for violation of Section 2 of the Sherman Act, the
Fourth, for unfair competition, and the Fifth, for tortious
interference), and seeks to dismiss PhotoMedex, Inc. from the
Motion to Strike Affirmative Defenses
The court may strike from a pleading an insufficient defense
or any redundant, immaterial, impertinent, or scandalous
matter." Fed.R.Civ.P. 12(f). In order to prevail on a
motion to strike affirmative defenses under Fed.R.Civ.P.
12(f), plaintiff must satisfy the following three-part test:
" (1) there must be no question of fact that might allow
the defense to succeed; (2) there must be no substantial
question of law that might allow the defense to succeed; and
(3) the plaintiff must be prejudiced by the inclusion of the
defense." Coach, Inc. v. Kmart Corps., 756
F.Supp.2d 421, 425 (S.D.N.Y. 2010) (citation omitted). "
In assessing the sufficiency of an affirmative defense, the
Court 'should construe the pleadings liberally to give
the defendant a full opportunity to support its claims at
trial, after full discovery has been made.'"
Cartier Int'l AG v. Motion in Time, Inc., No. 12
Civ. 8216(JMF), 2013 WL 1386975, at *3 (S.D.N.Y. 2013)
(quoting Coach, Inc., 756 F.Supp.2d at 425). "
Increased time and expense of trial may constitute sufficient
prejudice to warrant striking an affirmative defense."
Coach, Inc., 756 F.Supp.2d at 426.
Motion to Dismiss Counterclaim
A motion to dismiss a counterclaim is evaluated under the
same standard as a motion to dismiss a complaint."
Revonate Mfg., LLC v. Acer Am. Corp., No. 12 Civ.
6017(KBF), 2013 WL 342922, at *2 (S.D.N.Y. Jan. 18, 2013)
(citation omitted). On a motion to dismiss under Fed.R.Civ.P.
12(b)(6), dismissal is proper unless the complaint "
contain[s] sufficient factual matter, accepted as true, to
'state a claim to relief that is plausible on its
face.'" Ashcroft v. Iqbal, 556 U.S. 662,
678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell
A. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955,
167 L.Ed.2d 929 (2007)). " A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged."
Iqbal, 556 U.S. at 678. " Although for the
purposes of a motion to dismiss [a court] must take all of
the factual allegations in the complaint as true, [it is]
'not bound to accept as true a legal conclusion couched
as a factual allegation.'" Id. (quoting
Twombly, 550 U.S. at 555).
there are well-pleaded factual allegations in the complaint,
" a court should assume their veracity and then
determine whether they plausibly give rise to an entitlement
to relief." Iqbal, 556 U.S. at 679. It is not
necessary for the complaint to assert " detailed factual
allegations," but must allege " more than labels
and conclusions." Twombly, 550 U.S. at 555.
" [A] formulaic recitation of the elements of a cause of
action will not do." Id. The facts in the
complaint " must be enough to raise a right to relief
above the speculative level on the assumption that all the
allegations in the complaint are true." Id.
Ultimately, determining whether a complaint states a facially
plausible claim upon which relief may be granted is " a
context-specific task that requires the reviewing court to
draw on its judicial experience and common sense."
United States Court of Appeals for the Federal Circuit has
" exclusive jurisdiction of an appeal from a final
decision of a district court of the United States ... in any
civil action arising under, or in any civil action in which a
party has asserted a compulsory counterclaim arising under,
any Act of Congress relating to patents." 28 U.S.C.
§ 1295(a)(1). Based on the Federal Circuit's
jurisdiction, a " district court must . . . follow
Federal Circuit precedent in a case arising under the patent
laws." Foster v. Hallco Mfg. Co., Inc., 947
F.2d 469, 475 (Fed. Cir. 1991). A case " aris[es] under
the patent laws" if the complaint establishes that
" plaintiff's right to relief necessarily depends on
resolution of a substantial question of federal patent law,
in that patent law is a necessary element of one of the
well-pleaded claims." Christianson v. Colt Indus.
Operating Corp., 486 U.S. 800, 809, 108 S.Ct. 2166, 100
L.Ed.2d 811 (1988). If a plaintiff presents a claim "
supported by alternative theories in the complaint,"
that claim does not depend on patent law and accordingly
Federal Circuit precedent is not controlling. Id. at
810. " In other words, an antitrust claim only gives
rise to Federal Circuit jurisdiction and only necessitates
the application of Federal Circuit law, if 'patent law is
essential to each of [the] theories" of liability under
the antitrust claims alleged in the complaint.'"
In re Lipitor Antitrust Litigation, Master Docket
No. 3:12-cv-2389 (PGS), 2013 WL 4780496, at *14 (D.N.J. Sept.
5, 2013) (quoting Christianson, 486 U.S. at 809).
PhotoMedex Should be Dismissed From this Action
Fed.R.Civ.P. 12(b)(5), a defendant may move to dismiss on the
basis that service of process was improper. Fed.R.Civ.P.
12(b)(5). Without proper service, the court lacks personal
jurisdiction over the defendant. Under New York law, a
corporation may be served by personal service on a director,
officer, managing or general agent, or cashier or assistant
cashier, or any other agent authorized by law to accept
service. N.Y. C.P.L.R. § 311(a)(1); Fed.R.Civ.P.
New York Courts have consistently held that service of
process on one corporation does not confer jurisdiction over
another, even where one corporation may wholly own another,
or where they may share the same principals."
McKibben v. Credit Lyonnais, No. 98 Civ. 3358 LAP,
1999 WL 604883, at *3 (S.D.N.Y. Aug. 10, 1999) (internal
quotation and citation omitted). " The standards set in
Rule 4(d) for service on individuals and corporations are to
be liberally construed, to further the purpose of finding
personal jurisdiction in cases in which the party has
received actual notice." Grammenos v. Lemos,
457 F.2d 1067, 1070 (2d Cir. 1972). " But there must be
compliance with the terms of the rule, and absent waiver,
incomplete or improper service will lead the court to dismiss
the action unless it appears that proper service may still be
Viatek filed its Counterclaims, PhotoMedex, Inc. was not a
party to this action. As such, Viatek was required to serve
PhotoMedex, Inc. in accordance with New York law. Viatek
served PhotoMedex by electronically serving a copy of the
Answer and Counterclaims on Radiancy's counsel. Sec.
Amend. Ans. & Counterclaims p. 54. This is not proper service
on PhotoMedex. In order to effectuate proper service, Viatek
needed to serve PhotoMedex, Inc., a company, pursuant to
C.P.L.R. § 311. There was no personal service made on
PhotoMedex's directors, officers, or agents, and
Radiancy's counsel was not authorized to accept service
on behalf of PhotoMedex. Even if Viatek were given leave to
properly effectuate service, such service would be futile
because Viatek does not satisfy the standard under Delaware
law for piercing the corporate veil and holding PhotoMedex
liable for Radiancy's harms.
Piercing the Corporate Veil
order to hold PhotoMedex liable for Radiancy's actions,
Viatek must seek to pierce the Radiancy's corporate veil.
" It is a general principle of corporate law deeply
'ingrained in our economic and legal systems' that a
parent corporation (so-called because of control through
ownership of another corporation's stock) is not liable
for the acts of its subsidiaries." U.S. v.
Bestfoods, 524 U.S. 51, 61, 118 S.Ct. 1876, 141 L.Ed.2d
43 (1998). It is equally ingrained, however, that in certain
circumstances, " the corporate veil may be pierced and
the shareholder held liable for the corporation's conduct
. . . ." Id at 62.
New York's choice of law rules provide that 'the law
of the state of incorporation determines when the corporate
form will be disregarded and liability will be imposed on
shareholders.'" Taizhou Zhongneng Import and
Export Co. v. Koutsobinas, 509 Fed.Appx. 54, 56 n. 2 (2d
Cir. 2013) (quoting Fletcher v. Atex, 68 F.3d 1451,
1456 (2d Cir. 1995)). Radiancy is incorporated in Delaware,
thus, the Court must apply Delaware law to determine whether
to pierce the corporate veil.
To pierce a corporate veil under Delaware law, a plaintiff
must show that the individual has 'complete domination
and control' over the entity such that it 'no longer
ha[s] legal or independent significance of [its]
own.'" Carotek, Inc. v. Kobayashi Ventures,
LLC, 875 F.Supp.2d 313, 350 (S.D.N.Y. 2012) (quoting
Wallace ex rel. Cencom Cable Income Partners II, L.P. v.
Wood, 752 A.2d 1175, 1183 (Del. Ch. 1999)). The alter
ego theory, under which Counterclaim Plaintiff proceeds, is a
subset of the general corporate veil piercing theory and
" 'requires that the corporate structure cause fraud
or similar injustice.' Effectively, the corporation must
be a sham and exist for no other ...