Full opinion text
OPINION ORLOFSKY, District Judge. This case began as a relatively straightforward patent infringement dispute between two rain gutter manufacturers. Plaintiff, Waterloov Gutter Protection Co., Inc. (“Waterloov”), manufactures and sells a patented device that directs rain water into a roof gutter while preventing leaves and other debris from falling into and clogging the gutter. It alleges that Defendant Charles Knight (“Knight”), through his company, Absolute Gutter Protection, L.L.C. (“Absolute”), makes and markets a gutter essentially identical to Waterloov’s. The scope of the case broadened considerably, however, when Knight and Absolute (collectively “Defendants”) filed an answer with counterclaims. Four of these counterclaims allege wrongdoing not only on the part of Waterloov, but also by Wat-erloov’s attorneys. The first counterclaim alleges that Waterloov and its attorneys engaged in acts of unfair competition by sending letters to Absolute’s customers notifying them that they were infringing Waterloov’s patents by purchasing Absolute gutters. The other three counterclaims relate to a failed business venture involving Knight, Waterloov’s president and owner, Richard L. Kuhns (“Kuhns”), and one of Waterloov’s attorneys, Raymond R. Moser, Jr. (“Moser”). Knight alleges that Kuhns and Moser induced him to invest $16,000 in the start-up of Water-loov International Corporation (“WIC”), a company established to market Waterloov gutters in foreign countries, even though Kuhns and Moser knew that Waterloov gutters were ineligible for foreign patent protection. Based upon that scenario, the Defendants filed counterclaims for common law fraud, violations of the New Jersey Consumer Fraud Act, and attorney malpractice. Moser and Waterloov’s other attorneys, Charles Lee Thomason (“Tho-mason”), Emon J. Wall (‘Wall”), and the law firm of Thomason & Moser (collectively “Attorney Defendants”), have filed a motion for summary judgment on all four counterclaims. Two of the four counterclaims raise novel issues of law involving the application of a state-law litigation privilege in a federal question case and whether New Jersey’s Consumer Fraud Act governs the conduct of the Attorney Defendants in this case. Knight and Absolute’s unfair competition claim requires this Court to decide whether New Jersey’s litigation privilege, a state-law privilege, is preempted by federal law in a federal question case. Specifically, I must determine whether New Jersey’s “absolute litigation privilege” protects attorneys who send notices of patent infringement to third parties when federal law permits liability to be imposed for the transmittal of such demand letters on a showing of bad faith. Because the application of New Jersey’s “absolute litigation privilege” in this case does not conflict with a federal interest or undermine a federal right and given New Jersey’s strong policy interest in the privilege, I hold that the litigation privilege is not preempted under the circumstances of this case. As a result, Knight and Absolute cannot assert an unfair competition claim against the Attorney Defendants, based solely on the Attorney Defendants’ demand letters. Accordingly, I will grant the Attorney Defendants’ motion for summary judgment on the unfair competition claim. The Defendants’ New Jersey Consumer Fraud Act (“CFA”) claim requires the Court to address the applicability of the CFA to attorneys as well as investments in start-up companies. I find that under New Jersey law attorneys are not per se excluded from liability under the CFA. Rather, a determination of whether the CFA applies to any professional requires a weighing of various factors, including an evaluation of the applicable standards governing the conduct of the professional. I need not address whether the CFA applies to the attorneys in this case, however, because I conclude that the CFA is not applicable to investments in start-up companies. Consequently, I will grant the Attorney Defendants’ motion for summary judgment on the CFA claim. I will deny the Attorney Defendants’ motion for summary judgment on the common law fraud claim. I find that a genuine material question of fact exists as to whether Moser knew or should have known that Waterloov’s gutters are ineligible for foreign patent protection. I also find that a material question of fact exists as to whether Moser made any representations to Knight about foreign patent availability and whether Knight relied on any such representation. Finally, I will grant the Attorney Defendants’ motion for summary judgment on the attorney malpractice claim. Under New Jersey law, a party alleging attorney malpractice must provide expert witness testimony to establish the duty of care against which the attorney’s actions are to be measured. Because the Defendants have not provided sufficient expert testimony and because the standard of care applicable to this case is not so basic or obvious that expert testimony is unnecessary, the Attorney Defendants are entitled to summary judgment. I. Factual and Procedural History Some of the procedural and factual history of this case has already been recounted in this Court’s opinion in a related action. See Thomason v. Lehrer, 182 F.R.D. 121, 123-24 (D.N.J.1998). What follows below describes the facts and procedural history relevant only to the summary judgment motion currently before the Court. On May 16, 1997, Waterloov filed a Complaint alleging patent infringement by Absolute and Knight, Absolute’s owner. In particular! Waterloov alleged infringement of United States Patent No. 4,411,-110 (the “ 110 patent”), of which Water-loov is the exclusive licensee. See Compl. ¶¶ 7, 9-11 (dated May 15,1997). According to a Declaration submitted by Kuhns, Knight once sold Waterloov products as an authorized dealer and manufacturer representative. See Kuhns Decl. ¶ 7 (dated May 14, 1997). Knight terminated this relationship in a letter to Kuhns in 1996. See id. at ¶¶ 7-8. Kuhns alleges that Knight then went into business for himself, manufacturing, marketing and selling “Gutter ProTech,” a gutter Kuhns claims infringes the 110 patent. Id. at ¶¶ 5-6. Kuhns further accuses Knight of co-opting Nelson Sensenig (“Sensenig”), a onetime supplier of gutter components to Waterloov and a successful former Water-loov dealer, into an exclusive supplier-dealer relationship with Absolute. See id. at ¶¶ 9, 13, 15. Finally, Kuhns asserts that Knight lured Ray Vandergrift (“Vander-grift”), another former Waterloov dealer, into the Absolute stable. See id. at ¶¶ 18. Waterloov amended its Complaint on July 16, 1997, joining Sensenig and Van-dergrift as Defendants, et alia. See Am. Compl. ¶¶ 4, 6 (dated July 15, 1997). Waterloov noted in the Amended Complaint that it had sent letters, dated March 20, 1997, to Sensenig and Vandergrift, giving them notice of their infringement. See id. at ¶ 27. Absolute and Knight filed an Answer, Affirmative Defenses and Counterclaims in response, denying Waterloov’s allegations and asserting claims for declaratory relief. In Count I of their Answer, Affirmative Defenses and Counterclaims, they demanded that the ’110 patent be declared invalid and uninfringed. See Answer, Affirmative Defenses and Counterclaims Ct. I (dated July 29, 1997) (hereinafter “Answer I”). They also sought declaratory judgments that Patent Nos. 5,216,851 and 5,339,575 (“the ’851 patent” and “the ’575 patent”) were invalid, unenforceable, and uninfringed. See id. Cts. II — III. These patents relate to the same general technical area as the ’110 patent, rain gutter covers and roof line protectors. See id. at ¶ 60; Att’y Defs.’ Br. Supp. Summ. J. at 2 (filed Feb. 26,1999). Absolute and Knight also asserted Counterclaims against a number of parties who had not yet been joined to the action: Kuhns and the Attorney Defendants, Tho-mason, Moser, Wall, and Thomason & Moser (hereinafter collectively “Additional Counterclaim Defendants”). See id. at ¶¶ 46-51. Count IV of these Counterclaims accused Waterloov and the Attorney Defendants of unfair competition for having sent the above mentioned letters to Sensenig and Vandergrift, et alia, threatening enforcement of their rights in the ’575 and ’851 patents. See id. at ¶¶ 75-78. Waterloov filed a motion to sever and dismiss the claims asserted against the Additional Counterclaim Defendants, and in an Unpublished Opinion and Order, this Court granted the Plaintiffs Motion with respect to three of the Defendants’ nine Counterclaims, finding that because they were directed exclusively at the Additional Counterclaim Defendants and not at all at the Plaintiff, the Additional Counterclaim Defendants could not be properly joined pursuant to Rules 13(h), 19, and 20 of the Federal Rules of Civil Procedure. See Op. and Order (dated Mar. 31, 1997). These dismissed Counts alleged common law fraud, violations of the New Jersey Consumer Fraud Act, and legal malpractice. See Answer I Cts. VII-IX. They were predicated on the same factual allegations: Knight accused the Additional Counterclaim Defendants of inducing him to invest $16,000 in the start-up of WIC even though they knew or should have known that because Waterloov products had been sold to and used by the public prior to October 23, 1991, they would never be eligible for foreign patent protection. See id. at ¶¶ 89-101. The three Counterclaims were dismissed without prejudice. See Op. and Order. On April 3, 1998, Absolute and Knight amended their Answer, Affirmative Defenses and Counterclaims without leave of Court, asserting all of the same Counterclaims they had previously alleged but taking care to name Waterloov in all counts. See First Amended Answer, Affirmative Defenses and Counterclaims Cts. VII-IX (filed Apr. 3, 1998) (hereinafter “Answer II”). Absolute and Knight were plainly trying to overcome the Rule 13(h), 19, and 20 difficulties that triggered the dismissal of these. three Counterclaims just four days earlier. The Attorney Defendants filed an Answer to Absolute and Knight’s First Amended Answer on April 24, 1998. They demanded that Counts VII-IX be dismissed with prejudice for having been improperly interposed, but answered all other allegations and claims. See Answer to Counterclaim and Affirmative Defenses of Counterclaim Defendants Charles Lee Thomason, Raymond R. Moser, Jr., Emon J. Wall, and Thomason & Moser ¶ 5 (filed Apr. 24, 1998) (hereinafter “Answer to Counterclaim”). Despite having sent a letter to this Court giving notice of their intent to submit a dispositive motion, ostensibly to dismiss Counts VII-IX, see Letter of Charles Lee Thomason (dated Apr. 24, 1998), such a motion was never filed. On January 26, 1999, Waterloov filed a Second Amended Complaint, adding allegations that the Defendants, Sensenig, and Vandergrift, et alia, infringed the ’575 and ’851 patents in addition to the T10 patent. See Second Am. Compl. ¶¶ 2-10, 16-19 (dated Jan. 25, 1999). Allegations concerning the ’851 patent were voluntarily dismissed by Waterloov two weeks later. See Notice of Dismissal of Count III of Second Am. Compl. (dated Feb. 9, 1999). On February 22, 1999, after the Attorney Defendants had filed their papers in support of their motion for summary judgment, the Defendants filed an answer to Waterloov’s Second Amended Complaint. See Answer, Affirmative Defenses and Counterclaims (filed Feb. 22, 1999) (hereinafter “Answer III”). Answer III differed significantly from the Defendants’ predecessor answers. Specifically, Wall was omitted from all counts, Thomason was alleged to be vicariously and not personally liable on all Counts, and the law firm of Thomason & Moser was stricken from Counts VII-IX (although they remained named in Count IV on a theory of vicarious liability) and the law firm of Tho-mason & Spalding was substituted in its stead. Compare Answers I and II ¶¶ 75-78, 88-101 with Answer III ¶¶ 174-180, 190-207. Counts IV and VII-IX of Defendants’ Counterclaims are the subject of the Attorney Defendants’ pending motion for summary judgment. II. Preliminary Matters A. Jurisdiction (1) Count TV: Unfair Competition This Court has original jurisdiction over Counterclaim IV. “The district courts shall have original jurisdiction of any civil action asserting a claim of unfair competition when joined with a substantial and related claim under the ... patent ... laws.” 28 U.S.C. § 1338(b) (1994). A patent claim is “substantial” if, on the basis of the pleadings, it is not frivolous or lacking in substance. See Paine, Webber, Jackson & Curtis, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 564 F.Supp. 1358, 1373 (D.Del.1983); General Foods Corp. v. Struthers Scientific & International Corp., 297 F.Supp. 271, 274 (D.Del.1969); Jenn-Air Products, Co. v. Penn Ventilator, 283 F.Supp. 591, 595 (E.D.Pa.1968). A patent claim is “related” if it is derived from a common nucleus of operative fact. See General Foods Corp., 297 F.Supp. at 275. The term “related” is to be interpreted broadly. See Paine, Webber, Jackson & Curtis, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 587 F.Supp. 1112, 1114 (D.Del.1984). There is no question that Defendants Absolute and Knight have alleged a substantial patent claim. Counts II and III of their Answer allege that the ’851 and ’575 patents are invalid, unenforceable and not infringed and have been filed in response to Waterloov’s infringement suit concerning the same patents. Count IV is, moreover, related to Counts II and III. Count IV alleges unfair competition on the ground that letters sent by the Attorney Defendants to Sensenig’s and Vandergrift’s customers threatening enforcement of the ’851 and ’575 patents had no purpose but to “disrupt and interfere with Absolute’s business and to gain an unfair economic advantage for Waterloov.” Answer II ¶ 76. Count IV is related to Counts II and III because the validity and enforceablity of the ’851 and ’575 patents will be critical in determining whether the Attorney Defendants’ letters were sent solely to secure an unfair competitive advantage over Absolute. Count IV, in other words, arises out of a common nucleus of operative fact; the validity and enforceability of the ’851 and ’575 patents. Thus, jurisdiction over Count IV may be properly exercised under 28 U.S.C. § 1338(b). (2) Counterclaims VII-IX: Common Law Fraud, New Jersey Consumer Fraud Act Violations, Attorney Malpractice This Court may also exercise jurisdiction over Counts VII-IX, although on a different ground. Jurisdiction cannot be predicated upon 28 U.S.C. § 1338(b) as Defendants argue, see Answer III ¶ 151, because Counts VII-IX do not constitute claims of unfair competition. Counts VII-IX accuse the Attorney Defendants of common law fraud, violations of the New Jersey Consumer Fraud Act, and negligence. The essence of each of these claims is that Waterloov and the Additional Counterclaim Defendants induced the Defendants to invest in and become part owners of an international start-up company, Waterloov International Corporation (“WIC”), established to market Waterloov products abroad even though they knew or should have known that it would be impossible to secure foreign patent protection. It is difficult to see how these claims fit within the rubric of unfair competition. Courts have characterized many different types of claims as claims of unfair competition. See, e.g., O’Brien v. Westinghon.se Elec. Corp., 293 F.2d 1 (3rd Cir.1961) (accusation charging the misappropriation of trade secrets treated as a claim for unfair competition); Hook v. Hook & Ackerman, Inc., 233 F.2d 180 (3rd. Cir.1956) (copying the appearance of another’s patented product construed to be a claim for unfair competition); General Foods Corp. v. Struthers Scientific & International Corp., 297 F.Supp. 271 (D.Del.1969) (allegations that defendant wrongfully appropriated information from the plaintiff and used that information to secure two patents characterized as claims for unfair competition); Trio Process Corp. v. L. Goldstein’s Sons, Inc., 250 F.Supp. 926 (E.D.Pa.1966) (false statements by defendant that plaintiffs invention was his own formed basis for unfair competition claim). Nonetheless, there is scant evidence that courts are willing to characterize claims essentially alleging fraud as claims for unfair competition. Jurisdiction must be found elsewhere, and given that diversity jurisdiction does not exist between the parties and that Counts VII-IX do not raise federal questions, 28 U.S.C. § 1367 is the only potential basis for jurisdiction. Before this Court can determine whether supplemental jurisdiction applies to Counts VII-IX, however, it must first address the pivotal question of whether Counts VII-IX should be characterized as compulsory or permissive counterclaims. As the Third Circuit has indicated: It is stated frequently that the determination of ancillary jurisdiction of a counterclaim in federal court must turn on whether the counterclaim is compulsory within the meaning of Rule 13(a).... What is meant is that the issue of the existence of ancillary jurisdiction and the issue as to whether a counterclaim is compulsory are to be answered by the same test. It is not a coincidence that the same considerations that determine whether a counterclaim is compulsory decide also whether the court has ancillary jurisdiction to adjudicate it. The tests are the same because Rule 13(a) and the doctrine of ancillary jurisdiction are designed to abolish the same evil, viz., piecemeal litigation in the federal courts. Great Lakes Rubber Corp. v. Herbert Cooper Co., 286 F.2d 631, 633-34 (3rd Cir.1961); see also Phillips Petroleum Co. v. United States Steel Corp., 566 F.Supp. 1093, 1096-97 (D.Del.1983). A counterclaim is compulsory if “it arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim.” Fed.R.Civ.P. 13(a). Courts have held that the Rule 13 standard is satisfied when a “logical relationship” can be established between a counterclaim and one of the claims brought by the opposing party. Great Lakes Rubber Corp., 286 F.2d at 634. Several factors should be considered in evaluating whether a logical relationship exists, including whether separate trials of the different claims would involve a substantial duplication of effort and time and whether the claims and counterclaims involve many of the same factual and legal issues or factual and legal issues that are offshoots of the same basic controversy. See id.; see also Xerox Corp. v. SCM Corp., 576 F.2d 1057, 1059-60 (3rd Cir.1978). “ ‘Transaction or occurrence’ should be interpreted broadly; it is unnecessary that the facts be from the same time or that exactly the same facts will resolve the issues in the complaint and the counterclaim.” Centennial School District v. Independence Blue Cross, 885 F.Supp. 683, 685 (E.D.Pa.1994); see also Metallgesellschaft AG v. Foster Wheeler Energy Corp., 143 F.R.D. 553, 558 (D.Del.1992). Finally, the “logical relation” inquiry is a fact-intensive, case-specific one, resisting the categorization of different couplings of claims and counterclaims as necessarily compulsory or permissive, see Xerox Corp., 576 F.2d at 1060, although “[a]ny counterclaim involving the same patent as involved in the original action usually is considered to arise from the same transaction as the main claim.” 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1410, at 73 (2nd ed.1990). This Court is satisfied that Counts VII-IX are compulsory counterclaims. In Count II of its Second Amended Complaint, Waterloov asserts that the ’575 patent is valid and has been infringed by the Defendants. The Defendants counter that they have not infringed the ’575 patent because the ’575 patent is invalid. They claim that gutters embodying the ’575 patent were advertised and sold to the public more than a year before Waterloov filed an application for United States patent protection — a fact that, if true, would render the patent invalid for failing to meet the novelty requirements of United States patent law. See 35 U.S.C. § 102 (1994). Central to a determination of the validity of the ’575 patent is an assessment of when, if at all, gutters embodying the ’575 patent were put to an invalidating public use. While it is true that Counts VII-IX of Defendants’ counterclaims raise a substantial number of factual and legal issues quite distinct from those raised by Water-loov in its Second Amended Complaint, i.e., Waterloov’s Complaint does not mention WIC at all, it is also true that these Counts raise “novelty” issues concerning the ’575 patent: Defendants Absolute and Knight allege that foreign patents could never have been obtained for Waterloov gutters because gutters embodying the ’575 patent were advertised and sold to the public before Waterloov filed for United States patent protection' — -a violation of foreign novelty requirements. Central to a determination of the eligibility of Water-loov gutters for foreign patent protection will be an examination of precisely when gutters embodying the ’575 patent were first in public use in the United States. Thus, the same central factual question is raised by both the Plaintiffs claim and the Defendants’ counterclaims: When was the invention embodying the ’575 patent first used publicly, sold publicly, or described in a printed publication? Consequently, both the Plaintiff’s claims and the Defendants’ counterclaims are logically related in that they have in common a critical factual question the resolution of which in one litigation saves this Court and the parties from the needless duplication of effort and time in a second lawsuit. A decision to label a counterclaim as compulsory is a decision to exercise supplemental jurisdiction over that counterclaim pursuant to 28 U.S.C. § 1367. The only question that remains, then, is whether, the Defendants, given their amendment to their counterclaims, have properly joined the Attorney Defendants. I conclude they have. Rule 13 permits persons not made parties in an original action to be joined for the purposes of a counterclaim if they meet the requirements set forth in Rules 19 and 20. See Fed.R.Civ.P. 13(h). Rule 20 states that parties may be joined as defendants “if there is asserted against them ... any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact in common to all defendants will arise in the action.” Fed.R.Civ.P. 20(a). Courts have interpreted Rule 20(a) to establish a two-part test and require both parts to be met for joinder to be permitted: First, claims brought against defendants to be joined must stem from the same transaction or occurrence, and, second, they must share a common question of law or fact. See Morris v. Paul Revere Insurance Group, 986 F.Supp. 872, 885-86 (D.N.J.1997); Dougherty v. Mieczkowski, 661 F.Supp. 267, 277-78 (D.Del.1987); Mesa Computer Utilities, Inc. v. Western Union Computer Utilities, Inc., 67 F.R.D. 634, 636 (D.Del.1975). Courts have held that the first prong of this test requires an inquiry identical to the “logical relation” inquiry under Rule 13(a). See Dougherty, 661 F.Supp. at 278; King v. Pepsi Cola Metropolitan Bottling Co., 86 F.R.D. 4, 5-6 (E.D.Pa.1979). Counts VII-IX easily satisfy these joinder requirements. The Defendants are seeking relief against the Attorney Defendants on the same basis they are seeking relief against Waterloov. They claim that the Attorney Defendants, like Waterloov, either knew or should have known that the inventions produced from the ’575 patent had been publicly disclosed in a way that would prevent WIC from ever obtaining foreign patents for the Wat-erloov gutter protection system. Because identical transactions, questions of law, and questions of fact are at issue for all of the Additional Counterclaim Defendants, joinder of the Attorney Defendants is proper. B. The Defendants’ Amendment of Their Answer, Affirmative Defenses, and Counterclaims Counsel for the Attorney Defendants contends that the Defendants amended their answer and counterclaims improperly because they did not first seek leave of court. See Answer to Countercl. ¶ 5; Att’y Defs.’ Br. Supp. Summ. J. at 1. The Defendants respond by characterizing their initial omission of Waterloov from their counterclaims as a mere “clerical error.” Defs.’ Mem. Opp’n Summ. J. at 2 (filed Feb. 26,1998). The Defendants’ amendment was permissible. “A party may amend the party’s pleading once as a matter of course at any time before a responsive pleading is served.... Otherwise a party may amend the party’s pleading only by leave of court or by written consent of the adverse party.” Fed.R.Civ.P. 15(a). A motion to dismiss is not a responsive pleading within the meaning of Rule 15. See Hewlett-Packard Co. v. Arch Assoc. Corp., 172 F.R.D. 151, 153 (E.D.Pa.1997) (citing Fed. R.Civ.P. 7(a)); Schnabel v. Bldg. & Construction Trades Council of Phila., 563 F.Supp. 1030, 1035 (E.D.Pa.1983). Courts have held generally that a party may amend its pleading without seeking leave of court after the pleading has been dismissed, as long as the amendment is made within a reasonable time and no responsive pleading has been served. See id. (citing 6 Charles A. Wright, Arthur R. Miller & Mary Kay Kane, supra, § 1483 & n. 19 (1990) (citing cases)). In Hewlett-Packard, three defendants, described collectively in the opinion as the “Jewell Defendants,” filed an answer with counterclaims in response to a complaint by Plaintiff Hewlett-Packard (“HP”). See id. at 152. The court dismissed the Jewell Defendants’ counterclaims without prejudice. See id. Fifteen months after their counterclaims had been dismissed and after a long and contentious discovery process, the Jewell Defendants filed an amended answer with counterclaims without seeking leave of court. See id. The counterclaims were “essentially the same” as those filed initially, except that they added an additional counterclaim under the Robinson-Patman Act and omitted two others. Id. HP immediately filed a motion to dismiss or strike the amended answer and counterclaims. See id. at 153. The court held that the Jewell Defendants should have sought leave of court because 15 months had passed between the dismissal of their original counterclaims and the filing of their amended counterclaims. See id. Finding that Rule 15 “requires parties to litigate their cases diligently and serves the interest of finality,” the court ruled that it would have undermined these interests to have permitted an amendment as a matter of course under those circumstances. See id. The circumstances in Hewlett-Packard are strikingly similar to the circumstances in this case, with a notable exception, which compels me to reach a different conclusion. Here, as in Hewlett-Packard, the Defendants filed a counterclaim that was dismissed without prejudice and later sought to amend their answer by re-alleging “essentially the same” counterclaims without seeking leave of court. Moreover, the amendments in both cases were made before a responsive pleading had been made. In the instant case, however, the Defendants filed their amended counterclaims within days of the Court’s dismissal. Consequently, there is no risk that the interests in diligent litigation and finality outlined in Hewlett-Packard would be sacrificed if, in this case, Defendants’ amended answer and counterclaims were found to be permissible pursuant to Rule 15(a). Nor have the Additional Counterclaim Defendants in this case faced the degree of prejudice HP would have faced had the amended counterclaims been permitted in that case. Had the Jewell Defendants’ amendment been allowed, HP would have had to complete months more of discovery. See id. at 154-55. In this case, the Additional Counterclaim Defendants were served with the amended counterclaims shortly after having briefed the question of whether the original counterclaims should have been dismissed. They had the opportunity to avoid the additional discovery they had to perform. They could have filed a motion to dismiss, however, they never did so. Rather, they waited until this motion for summary judgment was filed months later to raise the issue. Accordingly, I find that the Defendants’ April 3, 1998, amended answer with counterclaims was proper even if filed without leave of court. C. Defendants’ Final Answer, Affirmative Defenses and Counterclaims (Answer III) The final matter this Court must consider before turning to the merits of Defendants’ motion for summary judgment concerns the variances that exist between the Defendants’ Answer III and their predecessor answers. The Attorney Defendants contend that Defendants’ Answer III amounts to a voluntary dismissal of all Counts against Thomason and Wall personally and of Counts VII-IX against the law firm of Thomason & Moser. See Att’y Defs.’ Reply Br. at 1-2 (filed Feb. 26, 1999). They would like to reserve the right to address the Court by separate motion as to the terms and conditions of the dismissal of these claims. See id. If Defendants Knight and Absolute had moved for a voluntary dismissal pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure, it would be well within the discretion of this Court to grant such a dismissal. Except where a plaintiff has filed a notice of dismissal prior to an answer or motion for summary judgment or where all parties have entered into stipulation of dismissal, “an action shall not be dismissed at the plaintiffs instance save upon order of the court and upon such terms and conditions as the court deems proper.” Fed.R.Civ.P. 41(a)(l)-(2). “The purpose of this rule is to prevent voluntary dismissals that would prejudice opposing parties,” Pennsylvania Food Merchants Ass’n v. O. Houstoun, 999 F.Supp. 611, 618 (M.D.Pa.1998), and courts have generally followed the principle that dismissal should be allowed unless defendant will suffer some plain legal prejudice. See United States v. Eighteen Various Firearms, 148 F.R.D. 530, 531 (E.D.Pa.1993) (stating that threat of a second lawsuit is not such a prejudice). The Defendants in this case have not filed a motion to dismiss, however, and have indicated no desire to do so. In their brief they construe any differences between Answer III and predeees-sor answers as mere rewordings, meant “to clarify certain issues and to make changes to reflect information that has been learned through discovery since the Counterclaims were first imposed.” See Defs.’ Mem. Opp’n Summ. J. at 2-3. Admittedly, where a pleading rewords a party right out of an action — as is the case with Wall — the line between “clarification” and “dismissal” becomes a fine one. Nonetheless, I shall not construe the variances between Defendants’ final and predecessor answers as a dismissal, especially where both parties have litigated the merits of the underlying claims extensively, the Court is able to render decisions on the merits, and neither party has briefed the question of what terms of dismissal should be imposed if the Court were to dismiss the claims and/or parties. This being said, however, summary judgment is granted in favor of Wall as to all claims because the Defendants have not opposed the Attorney Defendants’ motion for summary judgnent as it relates to him. When a motion for summary judgment is made and supported ... an adverse party may not rest upon the mere allegations or denials of the adverse party’s pleading, but the adverse party’s response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. Fed.R.Civ.P. 56(e). The same is true for Thomason, at least to the extent to which he has been sued “personally,” because he still appears to be subject to liability on a theory of respondeat superior on all claims. The law firm of Thomason & Moser has been replaced by the law firm of Thoma-son & Spalding on all Counts but Count IV. It appears that at the time the facts relevant to Counts VII-IX occurred Tho-mason & Moser was not the firm that represented Waterloov. On Counts VII-IX, then, this Court shall grant summary judgment as these claims pertain to Tho-mason & Moser. Having addressed these preliminary matters, I will now consider the merits of the Attorney Defendants’ motion for summary judgment. III. LEGAL STANDARD FOR SUMMARY JUDGMENT “On a motion for summary judgment, the court must determine whether the evidence shows that ‘there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.’ ” Abraham, v. Raso, 183 F.3d 279, 285 (3d Cir.1999) (citing Fed.R.Civ.P. 56(c)). “Any factual dispute invoked by the nonmoving party to resist summary judgment must be both material in the sense of bearing on an essential element of the plaintiffs claim and genuine in the sense that a reasonable jury could find in favor of the nonmoving party.” Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). In opposing summary judgment, a party “must do more than simply show that there is some metaphysical doubt as to material facts,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), but a court should not prevent a case from reaching a jury simply because the court favors one of several reasonable views of the evidence. Abraham, 183 F.3d at 285. “[T]he judge’s function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249, 106 S.Ct. 2505; see also Abraham, 183 F.3d at 285. “Thus, while the nonmoving party must present enough evidence to demonstrate a dispute is genuine, all inferences in interpreting the evidence presented by the parties should be drawn in favor of the nonmoving party.” Abraham, 183 F.3d at 285 (citing Boyle v. County of Allegheny Pa., 139 F.3d 386, 393 (3d Cir.1998)). “Cases that turn crucially on the credibility of witnesses’ testimony in particular should not be resolved on summary judgment.” Id. If the nonmoving party fails to oppose the motion by written objection, memorandum, affidavits and other evidence, the Court “will accept as true all material facts set forth by the moving party with appropriate record support.” Anchorage Assocs. v. Virgin Islands Bd. of Tax Rev., 922 F.2d 168, 175 (3d Cir.1990) (quoting Jaroma v. Massey, 873 F.2d 17, 21 (1st Cir.1989)). Even where the non-moving party has failed to establish a triable issue of fact, summary judgment will not be granted unless “appropriate.” Fed. R.Civ.P. 56(e); see Anchorage Assocs., 922 F.2d at 175. Rule 56(e) of the Federal Rules of Civil Procedure requires that the case be evaluated on its merits, with summary judgment being granted for the mov-ants only if they are entitled to a judgment as a matter of law. See Anchorage Assocs., 922 F.2d at 175. IV. DISCUSSION A. Count IV: Unfair Competition Defendants Absolute and Knight allege that the Attorney Defendants engaged in acts of unfair competition by sending letters to Sensenig and Vandergrift alleging infringement of the ’851 and ’575 patents. The Attorney Defendants seek summary judgment, offering three arguments: (1) The letters were sent in good faith and within the Plaintiffs rights under the patent laws; (2) Absolute incurred no damage as a result of the transmittal of the letters; and (3) the letters cannot form the basis of an unfair competition claim because they are protected under New Jersey’s “absolute litigation privilege.” See Att’y Defs.’ Br. Supp. Summ. J. at 20-29 (filed Feb. 26, 1999). For the reasons that follow, I conclude that the Attorney Defendants are entitled to summary judgment on the ground that New Jersey’s “absolute litigation privilege” is applicable to the letters sent by the Attorney Defendants to Absolute’s customers. This Court is satisfied both that it has the power to apply the litigation privilege to Absolute’s unfair competition claim and that, once applied, the privilege insulates the Attorney Defendants from liability for any claim of unfair competition. Without these letters — the core of Count IV’s allegations — no factual dispute remains, and the Attorney Defendants are entitled to judgment as a matter of law. This Court’s power to apply a state-law privilege to a pendent state-law counterclaim in a federal question case derives from the evidentiary rules governing federal civil cases. Rule 501 of the Federal Rules of Evidence provides in relevant part: [T]he privilege of a witness, person, government, State, or political subdivision thereof shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience. However, in civil actions and proceedings, with respect to an element of a claim or defense as to which State law supplies the rule of decision, the privilege of a witness, person, government, State, or political subdivision thereof shall be determined in accordance with State law. Fed.R.Evid. 501 (emphasis added). It cannot be disputed that Absolute and Knight’s claim for unfair competition is a state-law claim to which state law supplies the rule of decision. See Dynamic Instrument Corp. v. Fedtro, Inc., 266 F.Supp. 848, 851 (E.D.N.Y.1967) (holding that when allegations of patent infringement are made in bad faith a tort law claim arises “under state law but not patent law”); see also Trio Process Corp., 250 F.Supp. at 928 (characterizing claim against defendant for making false allegations of patent infringement as a “nonfed-eral” claim). Consequently, this Court has the power to determine any privilege the Attorney Defendants might assert against this claim in accordance with New Jersey law. While this conclusion may seem obvious, decisions concerning the application of privileges are not generally so simple. Indeed, a great deal of confusion surrounds the application of state-law privileges in cases arising under a District Court’s federal question jurisdiction. See Jack B. Weinstein & Margaret A. Berger, 3 Weinstein’s Federal Evidence §§ 501.02[2][b]-[c] (Joseph M. McLaughlin, ed., Matthew Bender 2 ed.1997). Courts have approached the application of state-law privileges in such cases differently, with many courts asserting a preference against the application of state-law privileges. See, e.g., Harding v. Dana Transport, Inc., 914 F.Supp. 1084 (D.N.J.1996) (Rosen, Maj. J.) (stating that federal privilege law applies in cases with both federal and state claims); Woods v. New Jersey Dep’t of Educ., 858 F.Supp. 51, 54-55 (D.N.J.1993) (Kugler, Mag. J.) (applying federal common law in construing attorney-client privilege); Robinson v. Magovern, 83 F.R.D. 79, 84-85 (W.D.Pa.1979) (invoking policy of Rule 501 that, in non-diversity cases involving both federal and state law claims, federal privilege law will generally apply to both); Steffes v. Stepan Co., 144 F.3d 1070, 1074-75 (7th Cir.1998) (refusing to apply Illinois “absolute litigation privilege” in federal question case); Auersperg v. Bulow, 811 F.2d 136, 141 (2nd Cir.1987) (“[Cjourts have consistently held that the asserted privileges are governed by the principles of federal law”); PPM America, Inc. v. Marriott Corp., 152 F.R.D. 32, 34 (S.D.N.Y.1993) (“When cases involve both federal and state claims, asserted privileges are governed by the principles of federal law”). These cases, which contain broad statements about the applicability of federal privilege law, are distinguishable from this case. For example, in many of these cases, the decision not to apply state privilege law is made because there is a competing federal privilege law that can be applied. See, e.g., Harding, 914 F.Supp. at 1090, 1097 (applying federal attorney-client and work product privileges); Auersperg, 811 F.2d at 141 (applying federal journalist privilege law). In others, the evidence for which the privilege is asserted is relevant to both the state law and federal law claims. See, e.g., Robinson, 83 F.R.D. at 84-85 (holding that privilege in issue was relevant to both antitrust claim and pendent state claim). In still others, there is no state-law privilege to be applied, see, e.g., PPM America, Inc., 152 F.R.D. at 34 (ruling that New York statutory law does not create a state journalist privilege to compete with the federal journalist privilege), or there is only a federal claim. See, e.g., Woods, 858 F.Supp. at 54-55 (stating that only claims under § 1983 and the Individuals with Disabilities Education Act were in issue). Finally, in some cases the state-law privilege is not applied because there is a danger that its application would seriously undermine a federal cause of action or interest. See, e.g., Steffes, 144 F.3d at 1074-75. Here, however, there is no competing “federal litigation privilege.” Nor is the litigation privilege in issue here relevant to the merits of the underlying federal claims: While the letters sent to Absolute’s customers could be used to substantiate an unfair competition claim, they offer no proof of the validity, enforceability or the noninfringement of the ’110 or ’575 patents. And, most significantly, the application of New Jersey’s litigation privilege here will not undermine a federal cause of action or interest. This last point merits some discussion because it goes to the heart of the Defendants’ chief argument against the application of New Jersey’s litigation privilege. The Defendants contend that patent holders who want to protect their patent rights by sending notices of infringement to members of the trade must do so in good faith. There is support in the case law for this position. See, e.g., Surgical Supply Service, Inc., 206 F.Supp. at 571; Shamay Hosiery Mills, Inc., 109 F.Supp. at 959; Dynamic Instrument Corp., 266 F.Supp. at 851. Defendants further argue that Counterclaim Defendants’ notices of infringement were sent in bad faith. Enter New Jersey’s litigation privilege. This privilege would thwart the bad-faith line of argument because, if applicable, it would foreclose any inquiry into the intent of the Attorney Defendants. Consistent with all absolute privileges, it protects “the bad as well as the good,” Peterson v. Ballard, 292 N.J.Super. 575, 590, 679 A.2d 657, 664 (App.Div.l996)(citing Hawkins v. Harris, 141 N.J. 207, 213, 661 A.2d 284, 287 (1995)), and immunizes those whose statements are protected from an examination of their motives, morals, and intent. Consequently, the Defendants make a preemption argument, hoping to convince this Court that federal law requiring good faith trumps New Jersey’s absolute litigation privilege. This argument fails precisely because the application of New Jersey’s litigation privilege does not undermine any federal interest. Defendants find support for their position in language found in Mikohn Gaming Corp. v. Acres Gaming, Inc., 165 F.3d 891, 896 (Fed.Cir.1998), which states that “the propriety of [a patentee’s] actions in giving notice of its patent rights is governed by federal statute and precedent and is not a matter of state tort law.” In Mikohn Gaming Corp., the Federal Circuit was reviewing a District Court decision granting a preliminary injunction against a patent holder with the effect of preventing the patent holder from informing the trade of another’s infringement. See id. at 893-94. The party seeking the preliminary injunction, Mikohn Gaming Corp., also alleged violations of various state tort laws, including interference with existing and prospective business relations. See id. Putting aside the different procedural posture of that case and that the Federal Circuit’s opinion contained language indicating that its holding was limited to that procedural setting, see id. at 898, the Federal Circuit confined its holding to cases where there is a conflict between federal and state law concerning the propriety of notice letters: “To the extent that conflict arises in the interaction between state commercial law and federal patent law, federal law must be applied.” Id. at 896 (emphasis added). Just such a conflict existed in Mikohn Gaming Corp. The federal law, the court reasoned, required that the propriety of a notice letter be reviewed under a good faith standard while state tort law in Nevada allowed the District Court to enjoin the patent holder’s notification to the trade on a much lesser showing. See id. at 895-97. The court held that where state law impinged upon the patent holder’s federal right to protect its patent rights in good faith, the federal law’s good faith standard trumped. See id. There is no such conflict in this case. As the Attorney Defendants point out, see Att’y Defs.’ Br. Supp. Summ. J. at 21, patent holders have an undisputed right to notify the trade that their patent rights are being infringed and that they intend to protect those rights. See Surgical Supply Service, Inc. v. Adler, 206 F.Supp. 564, 571 (E.D.Pa.1962); Sharnay Hosiery Mills, Inc. v. Sanson Hosiery Mills, Inc., 109 F.Supp. 956, 959 (E.D.Pa.1951); Dynamic Instrument Corp., 266 F.Supp. at 851. Indeed, notice is even a perquisite to obtaining damages for patent infringement. See 35 U.S.C. § 287 (1994). This is the federal interest the Federal Circuit sought to protect in Mikohn Gaming Corp. Far from emasculating the protections afforded patent holders, the application of New Jersey’s “absolute litigation privilege” only serves this interest, for even a showing of bad faith by a state tort law claimant will not subject a notice-giver to liability under the privilege. If anything, New Jersey’s litigation privilege enhances patent-holder rights. The Seventh Circuit’s decision in Steffes speaks to the relation between federal interests and the application of “absolute litigation privileges” in much the same terms. Steffes had sued her employer under Title VII and the Americans with Disabilities Act contending she had been for fired because of her gender and disability. See Steffes, 144 F.3d at 1073-74. The employer retaliated by informing Steffes’s subsequent employer about the suit and the disability. See id. The court concluded that applying Illinois’ “absolute litigation privilege” to the comments made by Steffes’s former employer would effectively prevent Steffes from bringing a claim for retaliation, which is statutorily provided for by both Title VII and the ADA. See id. at 1075. Unlike the Steffes case, the application of New Jersey’s litigation privilege in this ease would not threaten a federal interest or federally provided-for right: it would amplify it. In the end, the application of New Jersey’s “absolute litigation privilege” to the facts of this case just makes sense. New Jersey has over time developed an extremely protective “absolute litigation privilege,” reflecting the state’s policy interest that “persons [engaged in litigation] ... be allowed to speak and write freely without the restraint or fear of an ensuing action.” Peterson, 292 N.J.Super. at 590, 679 A.2d at 664 (citing Hawkins, 141 N.J. at 213, 661 A.2d at 288). Traditionally, this privilege has been applied first and foremost to protect statements made by attorneys. See Hawkins, 141 N.J. at 213-15, 661 A.2d at 287-88. The Defendants, alleging a state-law claim, are attempting to avoid the application of a state-law privilege even though they would have been subject to that privilege had they brought their claim in state court. Federally protected rights will not suffer by the application of the privilege in this case. Surely in a case like this a court may apply a state-law privilege. See Baravati v. Josephthal, Lyon & Ross, Inc., 28 F.3d 704, 707 (7th Cir.1994) (applying state absolute privilege for defamation in case arising entirely under federal jurisdiction where state law issue was substantially in dispute); Niagara Mohawk Power Corp. v. Megan-Racine Associates, Inc., (In re Megan-Racine Associates, Inc.), 189 B.R. 562, 569 (Bankr. N.D.N.Y.1995) (holding that Rule 501 dictates repair to state privilege law on state claims resolved in federal bankruptcy courts); Hartsell v. Duplex Products, Inc., 895 F.Supp. 100, 101-03 (W.D.N.C.1995) (holding that state privilege law applies to both state and federal claims after balancing state and federal interests (citing United States v. Cartledge, 928 F.2d 93 (4th Cir.1991))). Having decided that this Court has the power to apply New Jersey’s litigation privilege, I must determine whether the application of the privilege ought to inoculate the Attorney Defendants against liability for the letters they sent to Sensenig and Vandergrift. This Court previously discussed the scope and requirements of New Jersey’s litigation privilege extensively in Thomason v. Lehrer, 183 F.R.D. 161 (D.N.J.1998): New Jersey has recognized the litigation privilege as the backbone to an effective and smoothly operating judicial system. The litigation privilege is firmly established in New Jersey case law. The privilege protects, as absolutely immune from liability, statements by attorneys made in the course of judicial or quasi-judicial proceedings. Originally applied in defamation cases, the litigation privilege has been expanded to encompass both common-law and statutory causes of action for tortious conduct.... [The New Jersey Supreme] Court has written [that i]f the policy, which in defamation actions affords an absolute privilege or immunity to statements made in judicial or quasi-judicial proceedings is really to mean anything then we must not permit its circumvention by affording an almost equally unrestricted action under a different label.... The protections of the litigation privilege apply to any communication satisfying the following four requirements: the communication must have been (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action. Id. at 166-67 (citations, internal quotations and alterations omitted, emphasis added). This privilege has also been extended to the pre-litigation context, provided that the statements to be protected are made in contemplation of litigation. See Peterson, 679 A.2d at 660, 664 (citing Hawkins, 141 N.J. at 216-22, 661 A.2d at 289-92). More specifically, pre-litigation protection has been given to “demand letters.” Kanengiser v. Kanengiser, 248 N.J.Super. 318, 331-32, 590 A.2d 1223, 1230 (Law Div. 1991) (holding that a letter sent by an attorney demanding the payment of money owed and informing a party that his client intended to pursue arbitration was protected by New Jersey’s litigation privilege). In extending the litigation privilege to demand letters, New Jersey has joined other jurisdictions. See, e.g., Pinto v. Internationale Set, 650 F.Supp. 306, 308-09 (D.Minn.1986) (Minnesota law); Lerette v. Dean Witter Organization, Inc., 60 Cal. App.3d 573, 131 Cal.Rptr. 592, 594-95 (1976). The Kanengiser court cited Lerette in support of this extension of the privilege: [As a]ny competent attorney is aware, access to the courts is not an end in itself but only one means to achieve satisfaction for a client. If this can be obtained without resort to the courts— even without the filing of a lawsuit — it is incumbent upon the attorney to pursue such a course of action first. It is equally well established legal practice to communicate promptly with a potential adversary, setting out the claims made upon him, urging settlement, and warning of the alternative of judicial action. [Defendant’s] letter is a typical example of such a missive. Kanengiser, 248 N.J.Super. at 335, 590 A.2d at 1232 (citing Lerette, 131 Cal.Rptr. at 597) (citations omitted). Whether a defendant is entitled to the privilege is a question of law. See Hawkins, 141 N.J. at 216, 661 A.2d at 289. The Attorney Defendants are entitled to the protection of the privilege in this case. The letters they sent were nothing more than demand letters, alleging infringement, requesting that the infringement cease, and inviting cooperation and resolution of any disputes before resort to formal suit. Such letters are within the ambit of the privilege if they are sent to achieve the objects of litigation and if they have some logical relation to the litigation. See id. at 217-19, 661 A.2d at 290. In the Supreme Court of California’s Silberg opinion — the decision from which New Jersey borrows much of its litigation privilege law — the court observed that these two requirements can really be folded into one, essentially requiring that the communication “not be extraneous to the action.” Silberg v. Anderson, 50 Cal.3d 205, 266 Cal.Rptr. 638, 647, 786 P.2d 365 (1990). The Defendants contend that the two letters in this case fall short of this threshold for three reasons: First, Waterloov’s suit, even though filed within two months of sending the letters and although making reference to the ’575 and ’851 patents, at first only alleged infringement of the ’110 patent; second, the parties to whom the letters were directed were not named as defendants until approximately four months after the letters were sent; finally, the infringement of the ’575 and ’871 patents was not finally pled until over a year- and-a-half after the initial pleadings were filed. See Defs.’ Mem. Opp’n Summ. J. at 12-15,17-18 (filed Feb. 26,1999). I am satisfied that these facts are not sufficient to render the letters “extraneous to the action.” There is virtually no case law in New Jersey providing guidance about the circumstances in which a finding could be made that a demand letter was “extraneous.” Looking to California law, as New Jersey courts often have on issues of litigation privilege, the California Court of Appeals recently held that a demand letter that never developed into a complaint could be protected by the litigation privilege. See Aronson v. Kinsella, 58 Cal.App.4th 254, 68 Cal.Rptr.2d 305, 308-09, 316 (1997). The court ruled that the privilege could be asserted where eight months had passed since the writing of the letter and the party to whom the letter was sent sued first. See id. In this case the Attorney Defendants did file a suit, the parties who were the target of the letters were made parties to the suit within four months of the transmittal of the letters, and the subject matter of the suit was substantially the same as the subject matter of the demand letters. It is true that the Plaintiffs complaint at first alleged infringement only of the 110 patent, but this Court can see no reason why a party who sends a demand letter threatening suit on several grounds cannot later decide to limit the scope of the suit — much as a party who files a complaint can later dismiss one or more of the counts alleged, perhaps after discovery demonstrates the need to do so. Indeed, one of the aspirations of privileging demand letters is the resolution of disputes prior to litigation, which, if realized, would mean that suits would frequently be smaller in scope than demand letters might at first indicate. I see no reason to bind a party to all of the terms of its demand letter. And while this Court has no way of divining what amount of time, if any, would render a demand letter “extraneous,” I conclude that in the circumstances of this case Plaintiffs suits against Sensing and Van-dergrift were brought sufficiently close in time to the transmittal of the letters such that the letters and the action did not mystically become unrelated. In short, I find that the demand letters sent by the Attorney Defendants are consistent with the policies that support the extension of New Jersey’s absolute litigation privilege to demand letters: the prompt acknowledgement and resolution of disputes. And, consistent with the overarching policies of the privilege, these letters are just the type of “opening salvo” that should be protected if parties who have been wronged are not to be chilled into inaction by their attorney’s fear of personal liability. Accordingly, I shall grant summary judgment to the Attorney Defendants on the unfair competition claim. The letters sent by the Attorney Defendants cannot be used against them, and without these letters — their only evidence — the Defendants, as a matter of law, cannot make out a claim for unfair competition. B. Counts VII-IX The allegations in Counts VII-IX of the Defendants’ Answer, Affirmative Defenses and Counterclaims require the Court to turn to a set of facts different from those just considered. Defendant Knight alleges that Moser induced him to invest $16,000 in the start up of Waterloov International Corporation, a company established to market Waterloov products abroad, even though he knew or should have known that Waterloov would be unable to obtain foreign patent protection. The claims stemming from this set of facts will be discussed in turn. (I) Count VII: Common Law Fraud A review of the summary judgment record persuades me that Defendants’ common law fraud counterclaim should not be dismissed. To prevail on a claim of common law fraud under New Jersey law, a party must show that: (1) the defendant made a material misrepresentation of a present or past fact; (2) the defendant had knowledge of or belief in its falsity; (3) the defendant intended the claimant rely on it; (4) the claimant reasonably relied on it; and (5) damage resulted. See Gennari, 148 N.J. 582, 610, 691 A.2d 350, 367 (1997). A plaintiff must establish a claim of fraud by clear and convincing evidence. See New Jersey Econ. Dev. Author, v. Pavonia Restaurant, Inc., 319 N.J.Super. 435, 445, 725 A.2d 1133, 1139 (App.Div.1998). (a) Material Misrepresentation To prove that Moser made misrepresentations about the availability of foreign patents, Knight must first show that international patent protection was in fact unavailable and then that Moser communicated contrary information to him. A review of the record indicates that whether or not foreign patent protection was available at the time Knight invested in WIC remains an open question. Kuhns admits in deposition testimony that Water-loov’s gutters were first in public use in December 1990. See Defs.’ Mem. Opp’n Summ. J„ Ex. 1 (filed Feb. 26, 1999). He also concedes, on the basis of information he claims has been supplied to him by Moser during the pendency of this litigation, that because his gutters were in public use before United States patent protection was filed for on October 23, 1991, his gutters are ineligible for patent protection in most foreign countries. See id. As further proof that Waterloov products were in public use prior to October 23, 1991, and that, as a result, foreign patent protection was unavailable, Knight introduces correspondence exchanged between the Patent and Trademark Office (“PTO”) and Moser. The PTO informed Moser and Kuhns in June 1993 that they could not receive patent protection for Waterloov gutters because a patent (the “Carey ’620 patent”) had already issued in March 1992 for the same invention. See id., Ex. 5. To overcome the PTO’s rejection, Moser argued that the gutters for which he was seeking patents were not anticipated by the Carey ’620 patent because they had been reduced to practice and were in public use as early as 1990 — well before the an application had been filed for the Carey ’620 patent. See id. Moser submitted an affidavit by Kuhns attesting to this fact and a Waterloov brochure, copyrighted in 1990, showing Waterloov gutters installed and displayed on homes. See id. Moser’s showing resulted in the withdrawal of the PTO’s rejection. See id. Moser’s submission to the PTO now