Clayton Corporation v. Momentive Performance Materials, Inc. et al

Filing 62

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Defendants motion for leave to amend their counterclaim by adding a claim for tortious interference with a business relationship is GRANTED. (Doc. No. 51.) IT IS FURTHER ORDERED that the Clerk of the Cou rt shall detach the proposed amended counterclaim attached to Defendants motion (Doc. No. 51-1) and file it as the Answer and First Amended Counterclaim herein. re: 51 MOTION for Leave to Amend Counterclaims filed by Lindal North America, Inc., Altachem NV. Signed by District Judge Audrey G. Fleissig on 7/15/13. (JWJ)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
CLAYTON CORPORATION,
Plaintiff,
v.
MOMENTIVE PERFORMANCE,
MATERIALS, INC., et. al.,
Defendants.

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Case No. 4:12CV1349 AGF

MEMORANDUM AND ORDER

This patent infringement case is before the Court on the motion of Defendants
Lindal North America, Inc. and Altachem NV (collectively, “Defendants”) to amend their
counterclaim to add a count for tortious interference with a business expectancy.1
Plaintiff Clayton Corporation opposes the motion, asserting that the claim is futile
because Defendant will be unable to prove the claim, and both parties have filed briefs in
support of their positions. For the reasons set forth below the Court will grant
Defendants’ motion for leave to amend.
Arguments of the Parties
Plaintiff opposes the motion asserting that the claim is futile because Defendants
will be unable, as ultimately required, to demonstrate by clear and convincing evidence
that Plaintiff’s complaint is objectively baseless and that it acted in bad faith by asserting
its rights under the patent.
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On October 4, 2012, Defendants filed their original counterclaims, seeking a
declaratory judgment of non-infringement and invalidity. (Doc. No. 19.) Defendants’
amended counterclaim also includes these two counts.

Defendants respond, in essence, that Plaintiff conflates the issues of proof and
pleading and contend that the proposed counterclaim for tortious interference is properly
pleaded. Defendants further assert that the question of whether they can prove that claim
by clear and convincing evidence is premature and not presented by a motion for leave to
amend.
Applicable Law
Under Federal Rule of Civil Procedure 15(a)(2) after an answer has been filed a
party may only amend its pleadings with leave of court. Rule 15 is broadly construed to
allow amendments, but the denial of leave to amend may be justified if the amendment
would be futile. Foman v. Davis, 371 U.S. 178, 182 (1962); see also Geier v. Missouri
Ethics Comm’n, 715 F.3d 674, 678 (8th Cir. 2013). A proposed amendment is properly
denied as futile if the allegations will not withstand a motion to dismiss under Rule
12(b)(6). Cornelia I. Crowell GST Trust v. Possis Med., Inc., 519 F.3d 778, 781-82 (8th
Cir. 2008).
In ruling on a motion to dismiss under Rule 12(b)(6), the Court accepts all factual
allegations as true and draws all reasonable inferences in favor of the nonmoving party
even if it appears that “actual proof of those facts is improbable.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 556 (2007). The “complaint must contain sufficient factual
matter, [which if] accepted as true . . . ‘state[s] a claim to relief’” that is more than
speculative and is “‘plausible on its face.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949
(2009) (quoting Twombly, 550 U.S. at 570); see also Schaaf v. Residential Funding
Corp., 517 F.3d 544, 549 (8th Cir. 2008). This obligation requires a plaintiff to plead
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“more than labels and conclusions, and a formulaic recitation of the elements of a cause
of action will not do.” Twombly, 550 U.S. at 555. Nonetheless, this standard does not
implicate the burden of proof applicable to the legal claim and “simply calls for enough
facts to raise a reasonable expectation that discovery will reveal evidence of [the claim].”
Id. at 556.
With respect to the pleading requirements applicable to the proposed claim for
tortious interference with a business expectancy, “[f]ederal patent law preempts state law
tort liability” for a patent owner’s good faith enforcement of its patent rights, but permits
such claims “based on a showing of ‘bad faith’ action in asserting infringement.”
Matthews Intern. Corp. v. Biosafe , 695 F.3d 1322,1332 (Fed. Cir. 2012) (internal
quotations omitted). “[B]ad faith must be alleged and ultimately proven, even if bad faith
is not otherwise an element of the tort claim.” Zenith Elec.s Corp. v. Exzec, Inc., 182
F.3d 1340, 1355 (Fed. Cir. 1999). In addition, the “bad faith” requirement has both
objective and subjective components which must be proved by clear and convincing
evidence. See Dominant Semiconductors SDN BHD. v. Osram GMBH, 524 F.3d 1254,
1260 (Fed. Cir. 2008); Globetrotter Software, Inc. v. Elan Computer Group, Inc., 362
F.3d 1367, 1374-75 & n.8. (Fed. Cir. 2004); Golan v. Pingel Enter., Inc., 310 F.3d 1360,
1371 (Fed. Cir. 2002).
Discussion
Upon consideration of the proposed counterclaim, the relevant case law, and the
arguments of the parties, the Court is satisfied that the motion for leave to amend should

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be granted. Defendants have adequately pled both bad faith2 and the elements of a claim
for tortious interference with a business expectancy.3 Specifically, Defendants allege that
at the time Plaintiff filed suit for infringement Plaintiff was aware of certain
characteristics of Defendants’ products that render them non-infringing. See Doc. No.
51-1, Count III at ¶¶ 18-25. Defendants assert that Plaintiff filed suit knowing that its
claim was frivolous and did so only to interfere with Defendants’ business and client
relationships. Id. Defendants also allege that this action was without justification
because, due to the noted characteristics, Plaintiff was aware that Defendants’ product
does not infringe its patent, yet represented the contrary to others in the market. Id.
Defendants further allege that Plaintiff’s actions have resulted in the loss of business and
rupture of relationships with established clients. Id. These allegations are not merely
conclusory or formulaic and are supported by factual allegations regarding Plaintiff’s
knowledge, Defendants’ clients, and the nature of the parties’ products sufficient to state
a plausible claim for relief. See Zenith, 182 F.3d at 1354 (bad faith); Western Blue Print
2

Exactly what constitutes bad faith remains to be determined
on a case by case basis. Obviously, if the patentee knows that the
patent is invalid, unenforceable, or not infringed, yet represents . . .
that a competitor is infringing the patent, a clear case of bad faith
representation is made out.

Zenith, 182 F.3d at 1354.
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Under Missouri law to prove a claim for tortious interference with a business
expectancy, the plaintiff must demonstrate: (1) a contract or a valid business expectancy;
(2) defendant's knowledge of the contract or relationship; (3) intentional interference by
the defendant inducing or causing a breach of the contract or relationship; (4) absence of
justification; and (5) damages resulting from defendant’s conduct. Western Blue Print
Co., LLC v. Roberts, 367 S.W.3d 7, 19 (Mo. 2012); Healthcare Serv. of the Ozarks, Inc.
v. Copeland, 198 S.W.3d 604, 614 (Mo. 2006).
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Co., LLC v. Roberts, 367 S.W.3d 7, 19 (Mo. 2012) (tortious interference). Whether, after
discovery, Defendants will be able to prove such allegations by clear and convincing
evidence is not the question before the Court at this time, and Plaintiff’s contentions that
Defendants cannot do so from a factual standpoint are not a valid basis for denial of leave
to amend.
Accordingly,
IT IS HEREBY ORDERED that Defendants’ motion for leave to amend their
counterclaim by adding a claim for tortious interference with a business relationship is
GRANTED. (Doc. No. 51.)
IT IS FURTHER ORDERED that the Clerk of the Court shall detach the
proposed amended counterclaim attached to Defendants’ motion (Doc. No. 51-1) and file
it as the Answer and First Amended Counterclaim herein.

AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 15th day of July, 2013.

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