Olaf Soot Design, LLC v. Daktronics, Inc., et al
Filing
176
OPINION re: 147 MOTION to Amend/Correct Complaint Pursuant to FRCP Rule 15 filed by Olaf Soot Design, LLC. Plaintiff's motion to amend its Complaint is granted. The parties will meet and confer with respect to any additional discovery necessary to the issue of willful infringement and theschedule for any further motions, including the presently scheduled motions in limine, and for trial. Any unresolved issues will be the subject of the pretrial conference scheduled for October 31, 2017, at noon, or at such adjourned date as the parties may agree upon. It is so ordered. (Signed by Judge Robert W. Sweet on 10/26/2017) (anc)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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OLAF SOOT DESIGN, LLC,
Plaintiff,
~ iv.
15
5024
(RWS)
- against OPIINION
DAKTRONICS, INC. and
DAKTRONICS HOIST, INC.,
Defendants.
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A P P E A R A N C E S:
Attorneys for Plaintiff
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1
TROUTMAN SANDERS LLP
875 Third Avenue
New York, NY 10022
By:
James M. Bollinger, Esq.
Timothy P. Heaton, Esq.
Phoenix S. Pak, Esq.
Katherine Harihar, Esq.
Attorneys for Defendants
BLANK ROME LLP
405 Lexington Ave
New York, NY 10174
By:
Kenneth L. Bressler, Esq.
BLANK ROME LLP
717 Texas Avenue, Suite 1400
Houston, TX 77002
By:
Russel T. Wong, Esq.
Linh Bui, Esq.
I
{
Sweet, D.J.
Plaintiff Olaf S66t Design, LLC ("OSD" or t l e "Plaintiff")
has moved for leave to amend its Complaint, pursl ant to Federal
Rule of Civil Procedure 15, to add a claim of w'llful
infringement and a prayer for relief of enhance
Defendants Daktronics,
damages against
Inc. and Daktronics Hoisti,
Inc.
("Daktronics" or the "Defendants"). For the rea J ons set forth
below, Plaintiff's motion is granted.
Prior Proceedings
On June 25 , 2015 , Plaintiff brought this action alleging
patent infringement as to U.S. Patent No. 6,520,485
("the '4 85
Patent"). Background detailing the alleged '4 85 Patent
infringements, this Court's claim constructions, and the denial
of Defendants' summary judgment motion can be
opinions of the Court. See Olaf Soot Design,
Inc., 220 F. Supp. 3d 458,
-
denied, No. 15 Civ. 5024
462
1
ound in prior
L~C
(S.D.N.Y. 2016)
(RWS), 2017 WL
17, 2 017) . Familiarity is assumed.
1
v . Daktronics,
J reconsideration
I
219161 ~
I
(S.D.N.Y. May
.
On September 13, 2017 , Plaintiff moved to a rI en d its
Complaint , which was heard and marked fully submitted on October
18, 2017.
Applicable Standard
Federal Rule of Civil Proc.edure 15 (a) prov J des that leave
to amend shall be "freely give[n]
. when justice so
requires ." Fed. R Ci v. P. 15 (a) (2) . "Generallf. '[a] district
.
court has discretion to deny leave for good reason, including
futility, bad faith, undue delay , or undue prej l dice to the
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3
200 (2d Cir. 2007)). Where, as here, a motion f~r leave to amend
is brought after the time period for amending p[eadings has
expired pursuant to a court's Scheduling Order , however, Rule
16(b)'s more stringent "good cause" standard, l hich is based on
the "diligence of the moving party," must be " 1 alanced against"
the most "lenient standard under Rule 15(a) . " ]d. at 334
-I
(quoting Grochowski v . Phoenix Constr., 318 F.]d 80 , 86 (2003));
see Fed . R. Civ. P . 16(b) (4)
.1
1
While the scheduling order in this case did not include a
specific deadline to amend pleadings , (see Dkt ~ No . 30), the
parties' Joint Discovery Plan set the date tha f parties could
amend pleadings no later than two weeks after f he Court's
2
I
Tension between the mandates of Rules 15 an b 16 has been
b
noted by courts in this circuit, and fulfilling 1 oth requires
considering, as relevant here, affording justice to a plaintiff,
a plaintiff's good cause and diligence in seeking the amendment ,
and potential prejudice to the defendant.
2
See
F~esh
Del Monte
I
Produce, Inc. v. Del Monte Foods, Inc., 304 F.R.D. 170, 176
(S.D.N . Y. 2014)
(analyzing the Second Circuit j lfdicial
landscape). No one factor is dispositive, and "a district court
has discretion to grant a motion to amend even t here the moving
-,
party has not shown diligence in complying with a deadline for
amendments in a Rule 16 scheduling order." Id.; see also Kassner
v . 2nd Ave. Deli., Inc., 496 F. 3d 229 , 244
(2d Cir . 2007)
("The
district court, in the exercise of its discreti b n under Rule
16(b), also may consider other relevant factors including, in
particular, whether allowing the amendment of J he pleading at
this stage of the litigation will prejudice
de ~endants.");
Castro v. City of N.Y., No. 06 Civ . 2253 (RER), 2010 WL 889865,
at *2
(E.D.N.Y. Mar. 6, 2010)
("[B]oth Rules s 1 ould be
decision regarding claim construction, resulti ~g in a deadline
of November 9, 2016. (See Dkt. Nos. 29 & 72.) The parties do not
appear to dispute this is the operative deadli ~ e .
2
Defendants neither argue nor have shown futility or bad
faith with respect to Plaintiff's instant motion or proposed
amendment. See, e.g., Fresh Del Monte Produce, / Inc., 304 F.R.D.
at 178.
I
3
considered simultaneously , wi th of course , the pla i ntiff's
diligence considered as the primary factor . ") .
Plaintiff ' s Moti on to Amend is Granted
I
Plaintiff seeks leave to amend its Complai J t to add a claim
for willful infringement . Both sides present arguments of some
I
merit .
In opposition, Defendants contend that Plaintiff's motion
is after the parties' agreed-to scheduling order, that because
Plaintiff did not act diligently in asserting its new claim good
cause has not been shown , and that Defendants wl 11 be prejudiced
by the amendment . Defendants point principally f o discovery
documents Plaintiff received back in March and June 2016 that
contained file histories of Defendants' prosecution of patents
Defendants had acquired from a third-party
com~any,
Hoffend (the
"Hoffend Patents") . Defendants note that the Hj ffend Patents'
prosecution documents cited the ' 485 Patent as a reference, that
Plaintiff has previously cited documents by Ho n fend referencing
I
the '485 Patent both to this Court and the
u.s J
I
Patent and Trade
Office ("USPTO"), and that Plaintiff failed to follow-up on
investigating file information publically avai+able on the
4
Hoffend Patents or asking questions about the Hoffend Patents to
Defendants' 30 (b) ( 6) witness . 3
Plaintiff respond that its motion is timely because
Plaintiff onl y recently acquired the factual support f o r its
willful infringement claim due to misleading an ~ delayed
discovery disclosures on the part of Defendants. According to
Plaintiff , the Hoffend Patents documents only indicate that
Hoffend, not Defendants , had knowledge of the
485 Patent , and
1
Plaintiff did not think it necessary to investigate further
after relying on Defendants' discovery responses that Defendants
first learned of the '485 Patent in the instant litigation and
had disclosed all relevant and responsive documents. Plaintiff
contends it was only after receiving later docur ent disclosures
from Defendants starting in June 2017, disclosu r es that
I
3
Defendants ' contention that Plaintiff had t n October 2016,
in a separate inter parties review ("IPR") proceeding, argued to
the USPTO that Defendants knew of the '485 Patent does not speak
to the issue here. (See Defs.' Mem . in Opp . ("Dlefs.' Opp.") at
1, 4 . ) The evidence presented there addressed Hoffend's
knowledge and infringement of the ' 485 Patent, /but the argument
by Plaintiff at that time was not that Defendants knew of the
'485 Patent prior to the instant action. The s J me holds for
Plaintiff ' s previous argument before this Cour ~ that "there is
strong evidence" that Defendants copied the '4 g 5 Patent, which
addressed Hoffend ' s knowledge of infringement, not Defendants'
themselves. (See Defs.' Opp . at 4 , 8 n . 7 . ) Insofar as Defendants
present Plaintiff ' s briefings to demonstrate Pl aintiff ' s access
to publically available files , however, that i ~ sue is addressed
I
below.
1
5
contained communications between Defendants and the USPTO, that
Plaintiff unearthed evidence of Defendants'
knowledge, making
Plaintiff's proposed claim actionable.
To a certain degree, Defendants' argument against
Plaintiff's diligence carries weight. Plaintiff received the
Hoffend Patents from Defendants in mid-2016 and those documents
referenced the '4 85 Patent .
(See, e.g., Declaration of Phoenix
S. Pak dated September 13, 2017
("Pak Deel."),
I
~ x.
22 at 3 . )
With knowledge of such documents, a litigator could have begun
investigating the prosecution history of those patents herself.
At the same time, Defendants '
representations during the
discovery pr oce ss could reasonably have led Plaintiff to
conclude additional fact-finding as to Defendants' patent
I
prosecution history and Plaintiff's willfulness claim would be
unnecessary-for example, when Defendants represented in mid-2016
I
that they had produced all documents responsive to Plaintiff's
discovery requests, including any documents related to
Defendants' patent applications and Defendants' prior knowledge
of the '485 Patent , representations which were proven incorrect
in the aftermath of a motion to compel granted in April 2017.
(See Pak Deel., Ex. 42; Dkt. No. 12 8 . ) Given thle circumstances,
Plaintiff filed the instant motion to amend wi d hin a few months
after receiving and reviewing relevant patent
6
~rosecution
file
histories from Defendants in June 2017 and, as such, the failing
to perform particular research or in not asking particular
questions of Defendants' 30(b) (6) witness do not establish a
la ck of diligence.
4
See Perez v . MVNBC Corp., No. 15 Civ. 6127
(ER), 2016 WL 6996179, at *4
(S.D.N.Y. Nov. 29, 2016)
(finding
"no lack of diligence" by plaintiffs, even when the sought
information was publically available, given "potential
confusion" from the publically available information and the
lack of defendants' response to discovery requests); Soroof
Trading Dev. Co ., Ltd. v. GE Microgen, Inc., 283 F.R.D. 142,
148-49 (S.D.N.Y. 2012)
(finding diligence and allowing amendment
filed two months after facts allegedly learned quring
4
Defendants principally cite two cases in support of their
position, neither of which clearly warrant deni ~ l of the instant
motion. In Rent-A-Ctr., Inc. v . 47 Mamaroneck Ay e . Corp ., 215
F.R.D. 100 (S .D. N.Y . 2003), the court found the movants had
knowledge of their claim back when the original complaint was
filed. See Rent-A-Ctr., 215 F.R.D. at 104. Rent 1 A-Ctr. also did
not address more recent Second Circuit authority that direct
that "good cause" should not be "the only consi h eration" a
district court should l ook to when deciding a motion to amend.
Kassner, 496 F.3d at 244; see Rent-A-Ctr., 215 ~ .R.D. at 103
(discussing only Parker v . Columbia Pictures In dus ., 204 F.3d
326 (2d Cir. 2000)) . The factual and legal landscape here is
different. In Werking v . Andrews, 526 F. App'x 94, 96 (2d Cir .
2013) , the Second Circuit affirmed the denial of a motion to
amend and found that the plaintiff had "sufficient notice of the
relevant facts" far earlier and that the proposed amendment
would have "changed the entire nature of the case by turning it
into a class action " and adding Monell claims. Id. Plaintiff's
proposed amendment is no such radical departure from the claims
already present.
7
discovery); Enzymotec Ltd. v. NBTY,
537
(E.D.N.Y.
20 10)
Inc.,
754 F. Supp. 2d 527,
(finding good cause and no lack of diligence
when plaintiff "may have suspected" that defendant breached an
agreement but only filing motion to amend when i t s cause of
action was "based on factual allegations, not factual
speculation").
In addition, the Second Circuit has "left open the
possibility that amendments could be permitted even where a
plaintiff has not been diligent in seeking an amendment," such
as considering whether the amendment would ha ve result in un due
prejudice for the defendant.
F.R.D. at 175
Fresh Del Monte Produce,
(quo ting Castro, 20 10 WL 889865, at *2).
can exist if an amendment would "(1)
Inc.,
304
Prejudice
require the defendant to
expend 'significant additional resources' to conduct discovery,
or would (2)
'significantly delay' the resolution of the
dispute." Scott v . Chipotle Mexican Grill,
200
(S.D.N.Y. 20 14)
F. 2d 344, 350
Inc.,
300 F.R.D. 193,
(quoting Block v . First Blood Assocs.,
988
(2d Cir. 1993)). Courts are more like l y "to find
prejudice where the parties have already completed discovery and
the defendant has moved for summary judgment." Werking v .
Andrews,
526 F. App'x 94,
discovery were prolonged,
96
(2d Cir. 2013) . However,
"e ven if
'the adverse party's b urden of
undertaking discovery , standing alone, does not suffice to
8
warrant denial of a motion t o amend a pleading.'" A.V. by
Versace , In c . v. Gianni Versace S.p.A., 87 F. Supp. 2d 281, 299
(S.D.N.Y. 2000)
(quoting United States v. Cont'l Ill. Nat'l Bank
& Trust Co., 889 F.2d 1 2 48, 1255 (2d Cir. 1989))
(considering a
Rule 15 motion to amend) .
Defendants aver that to grant Plaintiff's motion will
prejudice them, nec e ssitating additional discovery and
prolonging the disposition of this action. While amending the
Complaint at this point in the litigation's lifec yc le is later
than preferable, no trial date has been set, and the
interrelati on of the old c laim and a new related, narrow claim
to this patent case indicates that additional discovery, while
warranted, will n o t prolong the proceedings significantly. See
Estrada v . Ctny. of Nassau, No. 05 Civ. 1821 (LOW)
WL 2218802, at *l (E.D .N.Y. May 28 , 2010)
(ARL) , 2010
(recounting how the
court previously granted a motion to amend and add a new c laim
two week bef o re trial, wh ile summary judgment motion was under
consideration, and had allowed limited discovery "exclusively
with respect to the amendment"). As such, any prejudice is
outwe ighed by the interests o f justice in having these related
claims tried together. See Ansam Assocs.,
Petroleum, Ltd., 760 F. 2d 442,
Inc. v. Cola
446 (2d Cir. 1985)
(affirming
denial of motion to amend post-discovery while a motion for
9
summary judgment was under consideration when the proposed
claims "allege an entirely new set of operative facts"); State
Teachers Ret. Bd. v . Fluor Corp., 654 F.2d 843, 8 56 (2d Cir.
1981)
(reversing denial of motion to amend and finding that an
amendment would cause delay, but not undue prejudice because
"amended claim was obviously one of the objects of discovery and
related closely to the original claim" and no trial date had
been set).
10
Conclusion
Plaintiff ' s motion to amend its Complaint is granted. The
parties will meet and confer with respect to any additional
discovery necessary to the issue of wi ll fu l infringement and the
schedule for any further motions , including the presently
scheduled motions in limine , and for t rial . Any unresolved
issues wi ll be the subject of the pretrial conference scheduled
for October 31, 2017, at noon, or at such adjourned date as the
parties may agree upon .
It i s so ordered.
New York , NY
October~ , 2017
U.S.D.J .
11
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