United States District Court, W.D. Wisconsin
OPINION & ORDER
D. PETERSON District Judge
Oxbo International Corporation initiated this patent suit
against defendant H&S Manufacturing Company, Inc.,
alleging infringement of four of its patents. H&S
counterclaimed, alleging non-infringement and invalidity.
January 29, 2016, the court granted H&S leave to amend
its answer and counterclaim, Dkt. 21, and several weeks
later, the court granted a second motion to amend, Dkt. 27.
H&S’s amended counterclaim added state law claims
for tortious interference with prospective contract and
common law unfair competition against Oxbo and a newly joined
third party, Kuhn North America, Inc.
Oxbo and Kuhn have moved to dismiss H&S’s tort
counterclaims (amended counterclaims IX and X), pursuant to
Federal Rule of Civil Procedure 12(b)(6). Dkt. 34. Kuhn has
separately moved for Rule 11 sanctions against H&S, for
making false, unfounded allegations in its amended
counterclaim. Dkt. 67. The court will grant the motion to
dismiss and deny the motion for sanctions.
court draws the following facts from the parties’
pleadings, Dkt. 1 and Dkt. 28, construing the allegations
“in the light most favorable to [H&S], accepting as
true all well-pleaded facts alleged, and drawing all possible
inferences in [its] favor.” Tamayo v.
Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).
designs, manufactures, and distributes agricultural
equipment, including windrow mergers, which merge cut crops
into rows for harvesting and baling. H&S manufactures,
sells, and imports windrow mergers and other agricultural
equipment, including its “Tri-Flex” triple head
merger. Oxbo contends that two Tri-Flex merger models
(TFM2130/3 and TFM2125/3) infringe its ’929 patent,
’739 patent, ’052 patent, and ’488 patent.
owns a fifth patent that is only indirectly at issue in this
case, U.S. Patent No. 8, 402, 730, titled Multi-Axis Floating
Merger Suspension. Pursuant to a 2014 cross licensing
contract, Kuhn is an exclusive licensee to the Oxbo patents,
and Oxbo is an exclusive licensee to the Kuhn patent. Under
the cross license, Oxbo and Kuhn have agreed to notify one
another whenever a third party infringes their respective
patents, and they have agreed to discuss how to proceed and
whether to pursue the third party jointly.
2014, H&S had its agent, BDO Capital Advisors, LLC (not a
party to this case), look into whether anyone would be
interested in purchasing H&S. Oxbo was among the
companies that received information about the proposed sale;
Bob Snape, president of BDO Capital Advisors, passed
information along to Oxbo executive Gary Stich. Oxbo received
a one-page document titled “Project Hay” and a
mutual nondisclosure agreement. Although the documents did
not explicitly indicate that the information was about
H&S, the documents included a list of products that
H&S manufactures, a description of the business, and
operating statistics. H&S alleges that, “[o]n
information and belief, given the extent of the disclosure in
the H&S Sale Sheet, Oxbo was aware that the company for
sale was H&S.” Dkt. 28, at 9. In spring 2015, Stich
informed H&S’s president, Chris Heikenen, that he
knew that H&S had been for sale for several months.
2015, Oxbo filed this suit against H&S, alleging
infringement of the ’929 patent, ’739 patent,
’052 patent, and ’488 patent. Around that same
time, Kuhn sent H&S letters accusing it of infringing the
’730 patent; Kuhn did not file suit. H&S alleges
that Oxbo and Kuhn agreed to jointly enforce their patents
against H&S, despite the fact that they knew that H&S
was engaged in negotiations to sell its business. H&S
counterclaimed, alleging non-infringement, invalidity, and
state law claims for tortious interference with prospective
contract (i.e., the proposed sale of its business) and unfair
Motion to dismiss
count IX of H&S’s amended counterclaim, H&S
alleges that Oxbo and Kuhn purposefully interfered with its
prospective contractual relationship with a third-party
purchaser, by asserting infringement claims in bad faith. In
count X, H&S alleges that the interference constitutes
unfair competition under Wisconsin law. Oxbo and Kuhn have
moved to dismiss amended counterclaims IX and X because: (1)
they are entitled to Noerr-Pennington immunity; or,
in the alternative, (2) H&S has failed to state a claim
upon which relief can be granted.
The Noerr-Penn ...