Opinion
01 Civ. 2379 (JSM).
December 7, 2001.
MEMORANDUM OPINION AND ORDER
In response to Plaintiffs' patent infringement Complaint, Defendants filed an answer asserting various affirmative defenses and counterclaims. Plaintiffs have moved to dismiss certain of those claims and defenses. The motion is granted in part.
In essence, Defendants allege that Plaintiffs have filed patent infringement claims against Defendants and others which they know to be without merit in order to maintain a monopoly in the market for "chemiluminescent products." Defendants also allege that Plaintiffs have required as part of the settlement of these cases that Defendants agree to purchase from Plaintiffs all of their requirements of both patented and non-patented products.
Plaintiffs correctly argue that Defendants have not sufficiently alleged the relevant market. As Judge Schwartz noted in Carell v. Shubert Org., Inc., 104 F. Supp.2d 236, 264 (S.D.N.Y. 2000):
As a prerequisite to any antitrust claim, plaintiff must allege a relevant product market in which the anti-competitive effects of the challenged activity can be assessed.Id. (quoting Smith Johnson, Inc. v. Hedaya Home Fashions, Inc., No. 96 Civ. 5821, 1996 WL 737194, at *5 (S.D.N.Y. Dec. 26, 1996)) (internal quotations omitted).
See also United Magazine Co. v. Murdoch Magazines Distrib., Inc., 146 F. Supp.2d 385, 398 (S.D.N.Y. 2001) ("A relevant product market must include all reasonably interchangeable products.").
Defendants mere allegation in paragraph 74 that "Indeglow and Counterdefendants compete in the market for chemiluminescent products" fails to adequately identify the relevant product market. Thus claims 4 and 5 of the Counterclaims are dismissed without prejudice to Defendants' right to file an amended pleading within thirty days from the date of this order which better defines the relevant market and the market share of the various participants.
Defendants' amended pleading should also state with more specificity the damages which Defendants contend they suffered as a result of the antitrust violations. While the counterclaims do identify one instance in which a supplier refused to honor its contract with Indeglow because of threats from Counterdefendants and also allege that the practices complained of have restrained competition by preventing competitors from acquiring certain materials at lower cost, it does not indicate whether Indeglow claims damages with respect to any other contracts or was forced to pay higher cost as a result of the conduct at issue.
Plaintiffs' motion to dismiss Claims 3, 6 and 7 and the affirmative defense of inequitable conduct is denied.
The Court also declines to strike paragraphs 52 and 54 of the Answer at this time. Whether the conduct alleged in these paragraphs ever comes to the attention of the jury is a question to be decided after discovery is complete. However, at this stage Defendants are entitled to conduct discovery to determine whether Plaintiffs are carrying on conduct which they contended in the past violated the antitrust laws.
SO ORDERED.