EAGLE VIEW TECHNOLOGIES, INC. et al v. XACTWARE SOLUTIONS, INC. et al

Filing 432

MEMORANDUM OPINION AND ORDER denying Defendants' 374 Motion to Amend. Signed by Magistrate Judge Joel Schneider on 5/31/2018. (dmr)

[Doc. No. 374]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
EAGLE VIEW TECHNOLOGIES, INC.,
et al.,
Civil No. 15-7025 (RBK/JS)

Plaintiffs,
v.
XACTWARE SOLUTIONS, INC. et
al.,
Defendants.

MEMORANDUM OPINION AND ORDER
This matter is before the Court on defendants’ “Motion for
Leave to Amend Defendants’ Second Amended Answer, Affirmative
Defenses,

Counterclaims,

and

Jury

Demand.”

[Doc.

No.

374].

Defendants seek to amend their answer to add: (1) a Fourteenth
Affirmative
‘376

and

Defense
‘737

that

patents

plaintiffs’
are

‘152,

invalid

for

‘840,

‘770,

‘454,

“mis-joinder

of

inventors”; (2) a Fifteenth Affirmative Defense that the patents
are “unenforceable due to inequitable conduct”; (3) a Sixteenth
Affirmative Defense that all necessary parties have not been
joined;

(4)

Count

XVI

to

their

counterclaim

seeking

a

declaratory judgment that the patents are invalid for incorrect
inventorship; and (5) Count XVII to their counterclaim seeking a
declaratory judgment of unenforceability (inequitable conduct)

1

as to the patents. 1 The Court received plaintiffs’ opposition
[Doc. No. 401], defendants’ reply [Doc. No. 407], and held oral
argument. For the reasons to be discussed, defendants’ Motion to
Amend is denied. 2
Background
This

is

a

bitter

patent

dispute

between

business

competitors that was filed on September 23, 2015. The patents at
issue are generally directed to software technology for imaging,
modeling and rendering aerial rooftop measurements and reports.
Plaintiffs are the owners of the patents at issue. Defendant
Xactware

Solutions

is

a

subsidiary

of

defendant

Verisk

Analytics, and provides online tools and systems for determining
replacement-cost

calculations

for

damaged

buildings

and

construction estimates. The amended complaint alleges defendants
infringe seven patents: ‘436, ‘840, ‘152, ‘770, ‘454, ‘376 and
‘737. The ‘436 patent was filed on October 16, 2008 and names
Christopher Pershing and David P. Carlson as co-inventors. The
other six patents at issue name Pershing as the sole inventor.

1

See Defendants’ Proposed Amended Pleading, Doc. No. 376-2.
This is defendants’ second attempt to assert an inequitable
conduct defense. On March 28, 2018, the Honorable Robert B.
Kugler granted plaintiffs’ motions to dismiss and strike
defendants’ inequitable conduct counterclaim and affirmative
defense. See 2018 U.S. Dist. LEXIS 51192. Defendants alleged
plaintiffs’ prosecution attorneys deliberately withheld relevant
information regarding the prosecution of the ‘061 Kennedy patent
that was relevant to the patentability of the ‘436 patent.
Although the dismissal was without prejudice, defendants did not
move to amend the dismissed counterclaim and defense.
2

2

Defendants’ proposed amendments essentially raise two new
defenses. One, defendants claim Carlson was improperly omitted
as an inventor on the six patents at issue thus rendering the
patents invalid. 3 Two, defendants engaged in inequitable conduct
by providing incorrect inventorship information to the Patent
Office with an intent to deceive the Patent Office.
The procedural history of the case is instructive. After
the December 9, 2015 Fed. R. Civ. P. 16 scheduling conference,
the Court’s first Scheduling Order mirrored the deadlines in the
Local

Patent

Rules.

The

first

deadline

to

amend

pleadings,

including amendments to add claims as to inequitable conduct,
was set for September 6, 2016. See December 10, 2015 Order, Doc.
No. 38. At the parties’ request the amendment deadline was later
extended to February 28, 2017, May 12, 2017, May 15, 2017 and
eventually to May 16, 2017. See Doc. Nos. 148, 163, 224, 226 and
228. Defendants filed the present motion to amend on February 9,
2018, approximately nine (9) months after the last deadline to
move to amend pleadings, and seventeen (17) months after the
first deadline to amend pleadings was set. The Markman Opinion
and Order were filed on December 5, 2017. [Doc. No. 332].
Recognizing that their motion is late, defendants attempt
to explain away their delay by arguing they filed their motion
“as soon as it had sufficient evidence to support all of its

3

Pershing was listed as the sole inventor on the patents.
3

allegations.” Defendants’ Memorandum in Support of Motion at 2
(“Defts.’ Memo.”), Doc. No. 375. Carlson and Pershing founded
Eagle

View.

Carlson

was

deposed

on

September

28,

2017

and

Pershing was deposed on November 7 and 8, 2017. After Pershing
was

deposed,

defendants

served

plaintiffs

with

supplemental

interrogatories asking plaintiffs to describe the contributions
of Carlson. Plaintiffs answered the interrogatories on December
21, 2017 and supplemented the response on January 21, 2018. 4
As to their new inventorship defense, defendants aver that
Pershing

and

Carlson

testified

at

deposition

that

Carlson

contributed to conception of the roof estimate reports recited
in

the

claims

Counterclaim
Pershing
patent,

and

of

the

(“PAC”)
Carlson

defendants

‘436

patent.

¶122,

Doc.

No.

are

listed

as

emphasize

only

See

Proposed

Amended

376-1.

However,

although

co-inventors

Pershing

is

on

the

listed

as

‘436
the

inventor on the six patents at issue even though plaintiffs’
patents

contain

limitations.

nearly

Defendants

identical
argue

roof

Carlson

estimate

should,

report

therefore,

be

listed as a co-inventor on the six patents.
The

background

of

defendants’

new

inequitable

conduct

defense is more involved. In February 2016 plaintiffs produced
portions of Thornberry deposition transcripts from a patent suit

4

On January 26, 2018 [Doc. No. 363], the Court denied
defendants’ application that plaintiffs be Ordered to supplement
their response to interrogatory 22.
4

Eagle View filed against Aerialogics in 2012. Dale and Chris
Thornberry

worked

for

Thornberry

Consulting,

a

company

that

developed a program that competed with Eagle View. Defendants
contend that in November 2009, after Carlson left Eagle View in
early 2009, he explored employment with Eagle View’s competitor,
Aerialogics.

The

Thornberrys’

deposition

testimony

confirmed

this fact. Defendants argue because Carlson did not assign his
rights in the ‘904 Provisional to Eagle View, and because he
could transfer this interest to any competitor, this gave Eagle
View, Pershing and Eagle View’s attorneys an incentive not to
identify Carlson as a co-inventor on the six patents at issue.
Although

portions

of

the

Thornberrys’

transcripts

were

produced as early as February 2016, defendants did not follow up
and request a full copy of the transcripts until November 21,
2017 (Defts.’ Memo. at 18-19), which was produced on December
20,

2017.

produced

Id.
on

at

20.

January

The
25,

exhibits
2018.

to

Id.

the

deposition

Defendants

argue

were
the

transcripts “revealed an entirely new and important fact,” i.e.,
that

Eagle

Thornberrys

View

knew

shortly

about
after

Carlson’s
the

conversation

conversation

with

occurred.

the
Id.

According to defendants, this shows plaintiffs were “concerned
about

Mr.

Carlson’s

career

path

after

Eagle

View”

and,

therefore, plaintiffs “had reason to prefer Mr. Carlson not be
included as an inventor on the remaining patents.” Id. at 21. In
5

addition,
Carlson

defendants

as

a

surmise

co-inventor

on

that
the

plaintiffs

six

patents

did

not

because

name

he

had

knowledge of prior art plaintiffs did not want to disclose.
In opposition to defendants’ motion, plaintiffs argue the
motion was filed late and will prejudice them if granted. In
addition,

plaintiffs

inequitable

conduct

argue

claims

defendants’

are

futile.

inventorship

Plaintiffs

also

and
argue

defendants’ proposed amendment does not sufficiently plead facts
to

support

their

inequitable

conduct

claim.

In

particular,

plaintiffs argue defendants have not pleaded sufficient facts to
show plaintiffs intended to deceive the Patent Office.
Discussion
1.

Leave to Amend

Pursuant to Fed. R. Civ. P. 15(a)(2), courts “should freely
give leave [to amend pleadings] when justice so requires.” A
court should allow a party to amend its pleading so long as
there is no undue delay, bad faith or dilatory motive on the
part of the movant, repeated failure to cure deficiencies, undue
prejudice or futility of the amendment. See Shane v. Fauver, 213
F.3d 113, 115 (3d Cir. 2000). Despite this liberal standard for
permitting amendments, a motion to amend is committed to the
“sound

discretion

of

the

district

court.”

Cureton

v.

Collegiate Athletic Ass'n, 252 F.3d 267, 272 (3d Cir. 2001).

6

Nat'l

While “mere passage of time does not require that a motion
to amend a complaint be denied on grounds of delay ... at some
point, the delay will become ‘undue,’ placing an unwarranted
burden on the court, or will become ‘prejudicial,’ placing an
unfair burden on the opposing party.” Id. at 283 (quoting Adams
v. Gould Inc., 739 F.2d 858, 868 (3d Cir. 1984)). Delay is
“undue” if plaintiff had previous opportunities to amend. In re
Caterpillar Inc., 67 F. Supp. 3d 663, 668 (D.N.J. 2014) (citing
Estate of Oliva ex rel. McHugh v. New Jersey, 604 F.3d 788, 803
(3d Cir. 2010)). Therefore, the issue of undue delay requires
courts

to

“focus

on

the

movant’s

reasons

for

not

amending

sooner.” CMR D.N. Corp. v. City of Philadelphia, 703 F.3d 612,
629

(3d

Cir.

2013)

(explaining

that

the

Third

Circuit

has

“refused to overturn denials of motions for leave to amend where
the

moving

party

offered

no

cogent

reason

for

the

delay

in

seeking the amendment”).
In assessing futility, the District Court applies the same
standard of legal sufficiency as applies under Rule 12(b)(6).
Travelers Indemnity Co. v. Dammann & Co., Inc., 594 F.3d 238,
243 (3d Cir. 2010) (citation omitted). Accordingly, the Court
must accept as true all well-pleaded factual allegations and
must determine whether the facts as alleged raise a facially
plausible claim on the grounds asserted. Warren Gen. Hosp. v.
Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011). A complaint need not
7

provide

detailed

sufficient

to

factual

show

a

allegations

plausible

cause

but

must

of

provide

action.

facts

Ashcroft

v.

Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 570 (2007)).
2.
In

Good Cause, Excusable Neglect and Undue Delay
addition

to

the

requirements

under

Rule

15(a),

Rule

16(b) regarding scheduling orders must also be satisfied. There
is no dispute defendants’ motion to amend filed on February 9,
2018

was

filed

after

the

May

17,

2017

deadline

to

amend

pleadings. Nonetheless, although late, the late filing is not
necessarily fatal to defendants. Pursuant to Rule 16(b)(4), a
Scheduling Order may be modified for good cause. Pursuant to
Rule 6(b)(1)(B), the court may extend a deadline for good cause
“after the time has expired if the party failed to act because
of excusable neglect.” Since defendants’ motion was filed after
May 17, 2017, defendants must meet the good cause and excusable
neglect standards to be granted.
Good

cause

requires

that

a

party

demonstrate

that

an

existing schedule cannot be met despite the diligence of the
party seeking the extension. See Rule 16, Advisory Committee
Note on Subdivision (b). The determination of good cause depends
upon the diligence of the moving party. Spring Creek Holding Co.
v. Keith, C.A. No. 02376, 2006 WL 2403958, at *3 (D.N.J. Aug.
18, 2006).
8

In determining whether a party has demonstrated excusable
neglect the Court must consider the following factors:
1) whether the inadvertence reflected professional
incompetence such as ignorance of rules of procedure,
2) whether an asserted inadvertence reflects an easily
manufactured excuse incapable of verification by the
court, 3) counsel’s failure to provide for a readily
foreseeable
consequence,
4)
a
complete
lack
of
diligence or 5) whether the inadvertence resulted
despite counsel’s substantial good faith efforts
towards compliance.
Dominic v. Hess Oil V.I. Corp., 841 F.2d 513, 517 (3d Cir.
1988).

The

Supreme

Court

has

explained

that

the

“excusable

neglect” inquiry is “at bottom an equitable one, taking account
of all relevant circumstances surrounding the party’s omission,”
including, “the danger of prejudice to the [other party], the
length

of

the

delay

and

its

potential

impact

on

judicial

proceedings, the reason for the delay, including whether it was
within the reasonable control of the movant, and whether the
movant acted in good faith.” Pioneer Inv. Serv. Co. v. Brunswick
Assoc. Ltd. Partnership, 507 U.S. 380, 395 (1993).
For the reasons to be discussed, the Court finds defendants
have not shown good cause or excusable neglect to excuse their
late filing. The Court also finds defendants’ motion was unduly
delayed. Therefore, defendants’ motion will be denied.
As already noted, defendants’ motion was filed nine months
after the last deadline to amend pleadings. Not only is this
fact significant, but the motion was filed almost 2½ years after
9

the

case

was

filed

and

was

made

returnable

after

the

fact

discovery deadline expired. In addition, this Opinion and Order
is being filed after the deadline passed for the service of
expert reports. 5
Defendants argue they were diligent because they allegedly
filed their motion as soon as they learned of the information to
support their inventorship and inequitable conduct defenses. The
record does not support defendants’ argument. As to defendants’
inventorship claim, they were on notice of the defense no later
than

after

Carlson

was

deposed

on

September

28,

2017.

Nonetheless, defendants waited over four months to file their
motion to amend.
In addition, defendants’ proposed amended pleading relies
almost exclusively on the depositions of Carlson and Pershing.
(“[I]nventor
relative

testimony

contributions

was
of

critical
the

two

to

understanding

inventors[.]”

the

Defendants’

Reply (“Defts.’ Reply”) at 2, Doc. No. 407). Defendants do not
give a valid reason why they waited until September 28, 2017 to
depose Carlson and November 7 and 8, 2017 to depose Pershing.
These inventors were key witnesses whose depositions should not
have been saved for the tail end of discovery. Sophisticated
parties

and

attorneys

should

have

5

anticipated

the

inventors’

See January 26, 2018 Order, Doc. No. 364, setting an April 6,
2018 deadline for expert reports for parties with the burden of
proof on an issue and a May 4, 2018 deadline for responsive
expert reports.
10

testimony might lead to necessary follow up discovery. This must
be taken into account when scheduling depositions.
Two
decision

facts
finding

are

particularly

that

defendants’

significant
motion

was

to

the

unduly

Court’s
delayed.

One, the first scheduling order in the case deliberately set an
extended time for the parties to move to amend pleadings. The
Rule 16 Conference was held on December 9, 2016 and the deadline
to amend pleadings was set nine months later—September 6, 2016.
An extended deadline was given to assure that defendants had
sufficient

time

to

conduct

discovery

that

might

lead

to

potential counterclaims. Defense counsel stated as follows when
he

was

questioned

about

why

defendants

proposed

an

extended

amendment deadline:
THE COURT: Motions to amend or add parties, September
6th. Why so late?
MR. CHRISTIE: I think we want it to be later rather
and earlier in order to make sure we had enough
discovery to flesh out any potential counterclaims
that we might bring. Well, currently, we have
referring
to
noninfringement
and
invalidity,
declaratory judgment counterclaims, but we envision
that there may be others that discovery would prove
are warranted.
THE COURT: Inequitable conduct?
MR. CHRISTIE: Potentially, Judge. Yes.
THE COURT: Do you have reason to believe that might
happen? I might, are you just –
MR. CHRISTIE: No. I’m not really speculating. We have
certain theories that include inequitable conduct
11

which we’re hoping that discovery will flesh out, and
we’ll have the basis for properly alleging.
Transcript of December 9, 2015 Rule 16 Conference at 29:19 to
30:10, Doc. No. 431. Despite the fact the Court accommodated
defendants by setting an extended amendment deadline, defendants
filed their motion to amend seventeen months after the deadline.
This evidences defendants’ undue delay.
In addition, as early as November 30, 3016, the Court told
the parties they should start taking fact depositions regarding
potential inequitable conduct claims. See Transcript of November
30,

2016

Oral

Defendants
Carlson

Argument

ignored

and

the

Pershing

at

100:8

Court’s
until

to

101:6,

direction

months

and

later.

By

Doc.
did
the

No.
not

151.
depose

time

the

depositions were taken, the deadline to amend pleadings long
passed. Parties must accept the risk and consequences if they
save key depositions for after the deadline to amend pleadings
passes. See Pfizer Inc. v. Sandoz Inc., C.A. No. 12-654-GMS/MPT,
2013 WL 5934635 (D. Del. Nov. 4, 2013)(denying as unduly delayed
defendants’ motion to amend to add inequitable conduct defense
filed six months from the deadline to amend and after the close
of fact discovery); Carrier Corporation v. Goodman Global, Inc.,
49 F. Supp. 3d 430 (D. Del. 2014)(denying motion to amend to add
inequitable conduct defense filed ten months after the deadline
to amend and two months after the close of fact discovery).

12

Defendants argue they diligently sought to depose Pershing.
Defendants are mistaken. Defendants first contacted plaintiffs
about deposing Pershing in February 2017. However, they did not
follow up

on

the

request

until

August

2017.

See Defendants’

Reply (“Defts.’ Reply”) Exhibits A, B, and C, Doc. No. 407. This
hardly shows diligence. 6
Defendants argue they could not file their motion as to
their inequitable conduct claim until they received the complete
Thornberry
exhibits
statement,

deposition
on

January
defendants

testimony
25,

2018.

on

provide

December

Other
no

than

evidence

20,
their

to

2017,

and

conclusory

support

their

argument. The first set of Thornberry transcripts were produced
in February 2016. Defendants do not explain what they learned in
the full transcript and exhibits that they did not already know
in February 2016. Defendants also do not explain why they waited
“over 20 months after the production of the transcripts and over
six months after the extended amended pleading deadline, to seek
the full transcripts.” Plaintiffs’ Opposition (“Pltfs.’ Opp.”)
at 18, Doc. No. 401. Further, defendants do not explain why they
waited to file their inventorship claim when they had notice of
the claim no later than when Carlson was deposed in September
2017. In addition, if the Thornberrys’ transcripts and exhibits

6

No evidence exists to support the notion that plaintiffs
strategized to deliberately delay the depositions of Carlson and
Pershing to prejudice defendants.
13

were as important as defendants’ claim, defendants could have
and should have contacted the Court long ago about any problems
they were having regarding obtaining the information. Throughout
the

course

of

the

case

defendants

have

not

been

shy

about

bringing discovery disputes to the Court’s attention. Defendants
did not raise with the Court any problems about scheduling the
depositions of Carlson and Pershing. Nor did defendants raise
any issue about the Thornberry transcripts or exhibits. It is
too

late

to

rely

on

plaintiffs’

alleged

transgressions

when

defendants did not take diligent steps to request discovery they
supposedly needed to support their defenses.
Defendants’ lack of diligence is also demonstrated by the
fact that long before they filed their motion on February 8,
2018, they could have and should have asked for an extension of
the May 15, 2017 deadline to amend pleadings. See Stallings ex
rel.

Estate

of

Stallings

v.

IBM

Corp.,

C.A.

No.

08-3121

(RBK/JS), 2009 WL 2905471, at *16 (D.N.J. Sept. 8, 2009)(denying
late motion to amend where plaintiffs could have moved for an
extension of the amendment deadline, which was not done and not
explained); Assadourian v. Harb, C.A. No. 06-896 (JAG), 2008 WL
4056361, at *4 (D.N.J. Aug. 28, 2008)(denying plaintiff’s motion
to

amend

because,

in

part,

plaintiff

did

not

move

for

an

extension of time to file an amended pleading). Thus, not only
did defendants unduly delay taking the depositions of Carlson
14

and Pershing, but after taking Carlson’s deposition and being on
notice

of

their

potential

inventorship

defense,

they

delayed

filing their motion to amend. In addition, defendants did not
seek Court relief for allegedly delayed discovery, nor did they
seek to extend the Court Ordered deadline to amend pleadings.
The
nothing

Court

rejects

Defendants

defendants’

could

do

to

argument:

raise

[their

“[t]here
new]

was

defenses

earlier, no way to know what relevant, discoverable information
Plaintiff had failed to turn over, and no way to foresee the
startling testimony of the inventors.” Defts.’ Reply at 2. To
the contrary, defendants did not have to wait until the tail end
of the case to depose Carlson and Pershing, they could have
heeded the Court’s direction to take early fact depositions as
to inequitable conduct issues, they could have asked to extend
the deadline to amend pleadings, if genuinely needed they could
have

followed

transcripts
Carlson’s

up

and

earlier
exhibits,

inventorship

to

request

they

the

could

testimony

Thornberry

have

complete

followed

immediately

after

up
he

on
was

deposed, and they could have timely filed their motion to amend
so that it was not returnable after the fact discovery deadline.
The

Court

rejects

defendants’

excuse

they

were

stymied

by

plaintiffs’ delay as to the Thornberry transcripts and exhibits
and

the

inventors’

depositions.

As

noted,

defendants

never

brought these issues to the Court’s attention even though they
15

regularly raised discovery disputes throughout the course of the
case. Given defendants’ habit of raising discovery disputes with
the Court, if plaintiffs were as obstructive as defendants now
claim them to be, defendants most assuredly would have raised
the issue with the Court. In other words, the Court would not
have

heard

about

plaintiffs’

alleged

foot-dragging

until

defendants had to justify their late motion to amend. In sum,
therefore, the Court finds that defendants’ motion to amend was
unduly

delayed,

and

defendants

cannot

show

good

cause

or

excusable neglect for their late filing. Therefore, defendants’
motion to amend will be denied.
3.

Prejudice

Defendants’ undue delay, and their failure to show good
cause or excusable neglect to explain their late filing, is not
the only reason defendants’ motion is denied. Plaintiffs will be
materially prejudiced if defendants’ motion is granted. From the
outset of the case plaintiffs have pointed out defendants are
fierce competitors and plaintiffs are losing business on account
of

defendants’

granted,

it

alleged

will

infractions.

inevitably

lead

to

If
a

defendants’
further

motion

delay

in

is
the

resolution of the case. This is an appropriate basis upon which
to deny defendants’ motion. See BTG International Limited v.
Actavis Laboratories FL, Inc., C.A. No. 15-5909 (KM), 2017 WL
529446 (D.N.J. Feb. 8, 2017)(denying plaintiff’s motion to amend
16

complaint on ground, inter alia, the amendment would “needlessly
strain

an

already

tight

schedule

and

significantly

delay

resolution” of the case). Further, defendants’ amendments may
result in additional discovery and delay of an already old case.
Stallings, 2209 WL 2905471, at *17. (“Prejudice may … result
where the amendment will require re-opening of discovery, which
would delay resolution of the matter, or would unnecessarily
increase the cost of litigation”).
The Court credits plaintiffs’ argument that they need time
to conduct an investigation and additional discovery to rebut
defendants’ new inventorship and inequitable conduct defenses. 7
This is especially true since defendants will not commit that
their trial evidence will be limited to just the statements in
their

proposed

amendment.

Transcript

of

April

2,

2018

Oral

Argument at 41:15 to 42:4, Doc. No. 423. The Court also credits
plaintiffs’
testimony

to

assertion
rebut

that

they

defendants’

may
new

need

to

defenses.

retain

expert

Plaintiffs

are

prejudiced because of their compressed time frame for developing
a

response

to

defendants’

new

allegations

prior

to

trial.

Pfizer, Inc., 2013 WL 5934635, at *5. “[C]ertain prejudice to

7Similar

to the amendment deadline, the deadline to complete fact
discovery has also been extended numerous times. The original
December 1, 2016 deadline was extended to May 30, 2017,
September 15, 2017, October 23, 2017, December 28, 2017, January
31, 2018, and February 28, 2018. See Doc. Nos. 38, 163, 224,
285, 302, 344, 364. Defendants cannot be heard to argue they
have not had an adequate opportunity to complete discovery.
17

plaintiff[s]

is

Corporation,

49

inherent
F.

Supp.

on
3d

[such
at

a]

433

timeline.”

(citation

Carrier

omitted).

In

addition, granting defendants’ motion at this late stage of the
case and reopening liability discovery on a new defense theory
would place an unwarranted burden on the Court and prejudice
plaintiff. Id.; see also In re Caterpillar Inc., 67 F. Supp. 3d
663, 668 (D.N.J.

2014)(explaining

that

“[[p]rejudice

involves

the irretrievable loss of evidence, the dimming of witnesses’
memories, or the excessive irremediable burdens or costs imposed
on the non-moving party if an amendment is granted”).
4.

Futility

For

the

sake

of

completeness

the

Court

will

address

plaintiffs’ futility arguments.
(a) Inventorship
As

to

defendants’

new

inventorship

defense,

plaintiffs

claim the defense is futile for three reasons: (1) defendants
cannot meet the good cause standard under L. Pat. R.3.7 which is
necessary to amend their invalidity contentions, (2) defendants’
new

invalidity

counterclaim

fails

to

allege

sufficient

facts

establishing Carlson actually contributed to any claims in the
six patents at issue, and (3) even if Carlson should have been
named as an inventor, the Court can correct inventorship in the
course of the case.

18

The

Court

does

not

need

much

time

to

deny

plaintiffs’

futility arguments as to defendants’ inventorship defense. One,
it is premature to decide if defendants’ will meet the good
cause standard to amend invalidity claims pursuant to L. Pat. R.
3.7. That motion and record is not before the Court. Two, fact
questions

exist

as

to

whether

defendants

have

sufficiently

alleged Carlson actually contributed to any claims in the six
patents. See PAC ¶¶115-154. Three, at this time, and in the
present

context,

it

is

not

completely

beyond

doubt

that

inventorship can be corrected. Plaintiffs argue “[t]here is no
possibility

that

Plaintiffs

would

be

unable

to

correct

inventorship under §256.” Pltfs.’ Opp. at 26. Since defendants’
dispute

plaintiffs’

argument,

at

this

time

the

Court

is

not

prepared to accept plaintiffs’ argument that they are right and
defendants are wrong.
(b)
As

to

Inequitable Conduct

defendants’

inequitable

conduct

claim,

plaintiffs

argue the claim is futile because defendants have not pleaded
with

particularity

sufficient

facts

so

that

a

court

may

reasonably infer plaintiffs acted with the specific intent to
deceive the PTO by withholding relevant information. Defendants
argue plaintiffs intended to deceive the PTO by not including
Carlson

as

a

named

inventor

on

the

six

patents

at

issue.

Defendants argue that since Carlson did not assign his rights in
19

the

‘904

interest

Provisional
to

According

to

Eagle

plaintiffs’

to

View,

he

competitors.

defendants,

this

could

transfer

Defts.’

created

Memo.

his
17.

incentive

an

at

for

plaintiffs to deceive the PTO because plaintiffs knew Carlson
was speaking with plaintiffs’ competitors. Defendants argue:
If Mr. Carlson were properly named as an inventor on
the six asserted patents, he would be free to license
the patents to another company or practice the patents
himself. Whether or not Mr. Carlson in fact sought to
pursue these rights, Mr. Pershing and Eagle View had
reason to be concerned that he might, and therefore
had reason to prefer Mr. Carlson not be included as an
inventor on the remaining six patents.
Id. at 21.
For the same reasons Judge Kugler deemed defendants’ prior
inequitable conduct claim futile, the Court finds defendants’
new

claim

to

be

sufficient

facts

intent

deceive

to

deficient.

to

show
the

Defendants

plaintiffs

PTO.

The

acted

mere

have

not

pleaded

with

the

specific

possibility

of

legal

misconduct is insufficient. 2018 U.S. Dist. LEXIS 51192, at *6.
Defendants fact allegations “must suggest the deliberate nature
of the fraud on the PTO.” Id. at *8. Specifically, defendants
offer no evidence of plaintiffs’ scienter. Defendants have not
pleaded facts, for example, that plaintiffs or their attorneys
thought or believed Carlson was an inventor of the six patents.
Nor are there pleaded facts directly showing plaintiffs intended
to

deceive

the

PTO.

In

addition,

there

are

no

facts

that

plaintiffs were concerned that the prior art defendants cite to
20

was

material.

Nor

do

defendants

aver

that

plaintiffs

were

concerned Carlson was speaking with plaintiffs’ competitors. In
short, no facts have been pleaded to show deceptive intent on
the

part

of

plaintiffs.

circumstantial

facts

and

Instead,

defendants

merely

ask

Court

draw

the

to

plead
general

inferences from those facts. Thus, defendants new inequitable
conduct
Court

claim

is

based

aware

on

that

improper

if

this

inventorship

were

the

sole

is

futile.

basis

to

The
deny

defendants’ motion, the motion would be denied without prejudice
to leave to amend. Since defendants’ motion is denied on other
grounds,

their

motion

Further,

defendants’

to

amend

affirmative

is

denied

defense

with

raising

prejudice.
inequitable

conduct is denied for the same reasons Judge Kugler previously
expressed, i.e., the deficiencies in the defense are clearly
apparent. 2018 U.S. Dist. LEXIS 51192, at *24.

21

Conclusion
For all the foregoing reasons, defendants’ Motion for Leave
to Amend is DENIED.
ORDER
Accordingly, it is hereby ORDERED this 31st day of May,
2018, that defendants’ Motion for Leave to Amend is DENIED.

s/Joel Schneider
JOEL SCHNEIDER
United States Magistrate Judge
Dated: May 31, 2018

22