Finisar Corporation v. Nistica, Inc.

Filing 167

ORDER GRANTING 152 DEFENDANT'S MOTION FOR LEAVE TO AMEND, GRANTING IN PART 142 PLAINTIFF'S MOTION TO DISMISS/STRIKE. Signed by Hon. Beth Labson Freeman on 3/20/2015. (blflc2, COURT STAFF) (Filed on 3/20/2015)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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FINISAR CORPORATION,
Plaintiff,

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v.
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NISTICA, INC.,
Defendant.

Case No. 13-cv-03345-BLF
ORDER GRANTING DEFENDANT’S
MOTION FOR LEAVE TO AMEND;
GRANTING IN PART PLAINTIFF’S
MOTION TO DISMISS/STRIKE
[Re: ECF 142, 152]

United States District Court
Northern District of California

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On March 19, 2015, the Court heard argument on defendant Nistica, Inc.’s Motion for

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Leave to File Third Amended Answer and Counterclaims, ECF 152, and plaintiff Finisar

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Corporation’s Motion to Dismiss and Strike counterclaims and affirmative defenses in

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Defendant’s Second Amended Answer, ECF 142.

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For the reasons stated on the record, Defendant’s motion for leave to amend is

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GRANTED. Defendant shall file the proposed Third Amended Answer and Counterclaims into

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the record by no later than March 25, 2015.

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Because Plaintiff acknowledges that it had ample opportunity to address the deficiencies in

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the proposed Third Amended Answer in the parties’ briefing on the present motions, the Court

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shall apply Plaintiff’s arguments in its motion to dismiss and strike to Defendant’s Third Amended

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Answer. For the reasons stated on the record, Plaintiff’s motion to dismiss and strike is

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GRANTED IN PART and DENIED IN PART as follows:

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1.

Plaintiff’s motion is GRANTED with respect to the counterclaims and affirmative

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defenses in the Second Amended Answer (“SAA”) that Defendant did not renew in the Third

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Amended Answer (“TAA”). These include: the SAA 13th and 14th counterclaims for breach of

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contract and the affirmative defenses of patent exhaustion (SAA 19th), mitigation of damages

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(SAA 23rd), justified conduct (SAA 24th), failure to state a claim (SAA 25th), and unjust

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enrichment (SAA 26th). These counterclaims are dismissed, and the affirmative defenses stricken,

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with prejudice.

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2.

Plaintiff’s motion is GRANTED IN PART and DENIED IN PART with respect to

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the affirmative defenses of license/implied license (TAA 18th), estoppel (TAA 19th), and

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release/waiver/covenant not to sue (TAA 20th). The Court finds implausible the theory that the

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2009 Settlement Agreement between Plaintiff and Defendant contemplated releasing claims based

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upon patents that the parties did not own at the time of the agreement. As such, the portions of

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these affirmative defenses that depend on a purported release of claims pertaining to the ’687,
’833, and ’740 Patents—which Plaintiff acquired from CiDRA Corporate Services years after the

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United States District Court
Northern District of California

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entry of the Settlement Agreement—are STRICKEN. Plaintiff’s motion is DENIED IN PART

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because the Court finds that Defendant may plausibly assert that the 2009 Settlement Agreement

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released claims with respect to the ’599 and ’980 Patents, to the extent that Defendant’s MEMS

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devices are accused of infringing those patents. Moreover, Defendant may assert equitable

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defenses based upon Plaintiff’s succession of interest to the ’687, ’833, and ’740 Patents that are

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not dependent on any release found in the 2009 Settlement Agreement.

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3.

Plaintiff’s motion is accordingly DENIED with respect to the affirmative defenses

of unclean hands (TAA 21st), laches (TAA 22nd), and equitable estoppel (TAA 23rd).

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Because the Court has ordered that a portion of Defendant’s affirmative defenses be

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stricken, Defendant shall have leave to file a Fourth Amended Answer that conforms to this order.

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The parties are ordered to meet and confer concerning this conformed pleading. To the extent the

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parties can reach a stipulation, the Fourth Amended Answer shall be filed by no later than April

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3, 2015. To the extent the parties cannot so stipulate, the Third Amended Answer, as modified by

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this order, shall be the operative pleading.

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IT IS SO ORDERED.
Dated: March 20, 2015
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BETH LABSON FREEMAN
United States District Judge
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