Composite Resources Inc v. Recon Medical LLC

Filing 104

ORDER GRANTING ECF No. 75 Motion for Leave to Amend Complaint : Amended Complaint deadline: 9/14/2018. Signed by Magistrate Judge Cam Ferenbach on 9/7/2018. (Copies have been distributed pursuant to the NEF - DRM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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COMPOSITE RESOURCES, INC.,
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Plaintiff,
2:17-cv-01755-MMD-VCF
ORDER

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vs.
RECON MEDICAL, LLC,

MOTION FOR LEAVE TO AMEND COMPLAINT [ECF
NO. 75]

Defendant.

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Before the Court is Plaintiff Composite Resources’ Motion for Leave to Amend Complaint. (ECF
No. 75). For the reasons discussed below, the motion is granted.
BACKGROUND

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This case involves allegations that Defendant infringed on several patents held by Plaintiff. (ECF

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No. 9). As relevant to this motion, Plaintiff brought a claim for patent infringement related to the method

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of manufacturing tourniquets under 35 U.S.C. § 271. (Id. at 9-10). Plaintiff’s initial infringement

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contentions state the patent was infringed under 35 U.S.C. § 271(a)-(c). (ECF No. 91-5 at 4). 35 U.S.C.

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§ 271(a)-(c) apply to acts taken within the United States.

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The case has proceeded through some discovery and the parties’ exchange of infringement and

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non-infringement contentions. (ECF No. 79 at 4-6). The deadline to amend pleading was January 30,

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2018. (ECF No. 53). On February 16, 2018, Defendant filed a motion for summary judgment. (ECF No.

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72). Defendant asserted that the alleged tourniquets were manufactured entirely outside the United States,

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so there could be no violation of 35 U.S.C. § 271(a)-(c). (Id. at 10-12).

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On March 6, 2018, Plaintiff filed a motion to amend the complaint. (ECF No. 75). Plaintiff seeks

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to add a statement that, “with respect to Defendant’s retail sales of Defendant’s Tourniquets, there is no

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adequate remedy within the meaning of 35 U.S.C. § 271(g) on account of the importation or other use,

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offer to sell, or sale of Defendant’s Tourniquets.” (Id. at 3). In essence, this would allow Plaintiff to

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pursue its claim against Defendant under a different provision of 35 U.S.C. § 271 that expands its

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geographical scope outside of the United States. Plaintiff argues its delay in amending the complaint

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stems from Defendant’s failure to put Plaintiff on notice that the tourniquets were solely manufactured

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outside of the United States. (Id. at 5-8). In response, Defendant argues that Plaintiff was not diligent in

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meeting its burden to prove Defendant’s patent infringement. (ECF No. 79 at 10-15). Defendant

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specifically relies on four instances where Plaintiff allegedly could have learned that the tourniquets were

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made outside the United States, as discussed in more detail below. (Id. at 11).
ANALYSIS

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“[A] party may amend its pleading only with the opposing party's written consent or the court's

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leave. The court should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). Courts

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analyze “bad faith, undue delay, prejudice to the opposing party, and futility of amendment” in ruling on

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motions to amend. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). A scheduling

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order “may be modified only for good cause and with the judge's consent.” Fed. R. Civ. P. 16(b)(4). In

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addition, “[a] request made after the expiration of the specified period will not be granted unless the

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movant or attorney demonstrates that the failure to file the motion before the deadline expired was the

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result of excusable neglect.” LR IA 6-1.

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The only Federal Rule of Civil Procedure 15 factor discussed by the parties is undue delay. The

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parties’ arguments regarding undue delay under Federal Rule of Civil Procedure 15 overlap their

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arguments regarding good cause to amend the scheduling order under Federal Rule of Civil Procedure 16.

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The Court will address both Rules with a single analysis of the reasons for the timing of Plaintiff’s motion

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to amend.

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It is undisputed that Defendant did not expressly disclose that the tourniquets at issue were

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manufactured entirely outside the United States in this case until the motion for summary judgment. At

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this time, the Court does not find it necessary to address whether this assertion should have been made in

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Defendant’s non-infringement contentions. (See ECF No. 75 at 5; ECF No. 79 at 10-11). Nothing in the

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record indicates that Defendant made any disclosures under Federal Rule of Civil Procedure 26(a) to

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support its defense that the tourniquets were not manufactured within the United States. (See ECF No. 53

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at 2, giving a deadline for Rule 26(a) Initial Disclosures). Federal Rule of Civil Procedure 26(a) requires

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parties to provide the names and descriptions of witnesses and documents with discoverable information

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that the party “may use to support its claims or defenses.” Defendant has not cited any Rule 26(a)

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disclosure addressing the defense Defendant raised in its motion for summary judgment.

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Plaintiff filed its motion to amend less than a month after the motion for summary judgment was

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filed, which is not an undue delay. However, the Court must determine whether there were alternate

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sources whereby a diligent plaintiff should have learned that the tourniquets were not manufactured within

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the United States sometime prior to the motion for summary judgment. Defendant asserts there were four

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opportunities. (ECF No. 79 at 11).

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I.

Information on Amazon

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Defendant sells the tourniquets online through Amazon. (Id. at 6). Amazon has a feature allowing

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potential customers to ask questions. On May 25, 2016, an individual asked whether the product was

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made in the United States, and a manager for Defendant responded that it was not. (Id.). Plaintiff had

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access to the Amazon site on or before January 1, 2017, when a screenshot of the webpage was attached

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to the complaint. (ECF No. 1-5).

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The Court finds that a single question and answer on an Amazon webpage was not adequate to put

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Plaintiff on notice of where the tourniquets were manufactured. Though Plaintiff accessed the webpage

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containing the question and answer, the screenshot only shows the top of the webpage. Accessing the

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questions and answers on an Amazon page requires an extra click or a scroll down the page. There is no

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indication from Plaintiff’s screenshot that any relevant information would be included in the page’s

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question and answer section. In addition, Plaintiff cited the Amazon webpage in the complaint merely to

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show that the tourniquets were for sale in the United States, not to provide any information on where the

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tourniquets were manufactured. (ECF No. 1 at 5).

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II.

Non-Infringement Contentions

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Defendant provided its initial non-infringement contentions on October 26, 2017. (ECF No. 72-

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1). In the contentions, Defendant states, “The patented invention of the claims of the ‘807 Patent is the

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method of making a tourniquet. Under § 271(a), the only possible basis for infringement of these method

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claims would be the use of the claimed process to create a tourniquet. [Defendant] does not do this.”

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(ECF No. 79 at 5).

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The Court finds this non-infringement contention is too vague to put Plaintiff on notice that the

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tourniquets were not made in the United States. Defendant states that it does not do “this,” but “this”

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could refer to several different actions. There is no indication that “this” somehow refers to manufacturing

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within the United States.

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III.

Manufacturer Invoice

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“On November 6, 2017, and in response to [Plaintiff’s] requests for production, [Defendant]

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produced an invoice that identified one of [Defendant’s] manufacturers and made clear that this

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manufacturer was in China.” (ECF No. 79 at 5). By Defendant’s own admission, the invoice related to

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“one of” Defendant’s manufacturers. This is not adequate notice that all tourniquets at issue were made

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outside of the United States.

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IV.

Discovery Prior to Amendment Deadline

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Finally, Defendant argues that Plaintiff “did not avail itself of many of the tools of discovery

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available to it prior to the deadline for amending the pleadings. Specifically, [Plaintiff] did not serve on

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[Defendant] any discovery other than requests for production: [Plaintiff] did not serve any interrogatories

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or requests for admission.” (ECF No. 79 at 14-15).

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Plaintiff appears to have been diligent in discovery. Plaintiff obtained 538 pages of documents

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through discovery as of November 6, 2017. (Id. at 12). In addition, at the time that the deadline to amend

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pleadings passed, Plaintiff still had three months to conduct discovery. (ECF No. 53). There is no

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requirement that certain types of discovery be completed before the amendment deadline.

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The Court finds that, despite reasonable diligence, Plaintiff was not aware that the tourniquets at

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issue were manufactured entirely outside the United States until Defendant filed its motion for summary

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judgment. Plaintiff filed the motion to amend in a timely manner. There was no undue delay in this case

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and there is good cause to allow Plaintiff to amend the complaint outside of the time period specific in the

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Court’s scheduling order.

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Accordingly, and for good cause shown,

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IT IS HEREBY ORDERED that Plaintiff’s Motion for Leave to Amend Complaint (ECF No. 75)

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is GRANTED. Plaintiff shall have until September 14, 2018 to file its amended complaint.
DATED this 7th day of September, 2018.
_________________________
CAM FERENBACH
UNITED STATES MAGISTRATE JUDGE

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