Alifax Holding Spa v. Alcor Scientific Inc. et al

Filing 67

MEMORANDUM AND ORDER granting 55 Motion to File Amended Pleading. So Ordered by Chief Judge William E. Smith on 3/20/2017. (Jackson, Ryan)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
)
)
)
Plaintiffs,
)
)
v.
)
)
ALCOR SCIENTIFIC INC.; and
)
FRANCESCO A. FRAPPA,
)
)
Defendants.
)
___________________________________)
ALIFAX HOLDING SPA; and SIRE
ANALYTICAL SYSTEMS SRL,

C.A. No. 14-440 S

MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
I. Background
Plaintiff

Alifax

Holding

SpA

(“Alifax”)

initiated

this

patent infringement case against a former employee, Defendant
Francesco

Frappa,

Defendant

Alcor

and

the

Scientific

(Compl. ¶ 1, ECF No. 1.)
developed

a

diagnostic

former
Inc.

employee’s

(“Alcor”),

new

in

employer,

October

2014.

Alifax alleges that Defendant Alcor

erythrocyte

sedimentation

rate

(“ESR”)

analyzer using patented intellectual property to which Defendant
Frappa had access while working for Alifax and then shared with
Alcor. (Id. ¶ 5.)
Alifax filed an Amended Complaint in March 2015 with assent
from

Defendants,

adding

Alifax’s

subsidiary,

Sire

Analytical

Systems Srl (“Sire”), as a Plaintiff. (Mem. in Supp. of Pl.’s
Assented to Mot. to Am. Compl., ECF No. 19; 3/17/15 Text Order.)
The Amended Complaint lists three counts: patent infringement
against Alcor, misappropriation of trade secrets against Alcor
and Frappa, and breach of a confidential relationship against
Alcor

and

Frappa.

The

Court

denied

Defendants’

Motion

to

Dismiss two counts of the Amended Complaint in September 2015.
Defendants then answered the Amended Complaint and asserted two
counterclaims, alleging that both patents at issue are invalid.
(Defs.’ Answer and Countercl. 13, ECF No. 28.)
parties

engaged

in

fact

discovery

and

Thereafter, the

claim

construction

briefing.
In

October

2016,

Alifax

filed

a

motion

supplement the Amended Complaint. (ECF No. 55.)

to

amend

and

On February 22,

2017, the Court held a claim construction hearing and also heard
oral

argument

regarding

Alifax’s

request

Amended and Supplemental Complaint.

to

file

a

Second

This Memorandum and Order

will address Alifax’s motion to amend its pleading; a separate
Memorandum

and

Order

regarding

the

parties’

request

for

the

Court to construe seven claim terms in the patents at issue is
forthcoming.
II. Discussion
Plaintiffs’

proposed

Second

Amended

and

Supplemental

Complaint reflects four main changes to the Amended Complaint:
2

it

(1)

removes

Sire

as

a

named

plaintiff

because

Sire

has

completely merged into Alifax and no longer exists as a discrete
business
claim

entity;

against

(2)

Alcor

adds

detail

regarding

to

its

the

patent

alleged

infringement

infringement

and

introduces allegations about induced infringement; (3) adds a
supplemental claim for copyright infringement; and (4) amends
some

of

the

factual

allegations

pertinent

to

the

misappropriation of trade secrets claim to clarify that this
claim is not based on ultrasound technology but is based instead
in part on computer source code. (Pls.’ Mem. in Supp. 3, ECF No.
55; Ex. 2, ECF No. 55-2.)
Alifax asserts that the proposed changes to the Amended
Complaint are intended to clarify facts learned during discovery
and

to

reflect

an

evolution

of

its

theories

of

Defendants’

liabilities for their alleged misconduct. (Pls.’ Mem. in Supp.
4.)

Alifax argues that Defendants will not suffer any unfair

prejudice from these changes because discovery is in the early
stages; depositions have not been either scheduled or taken, the
parties have not finished exchanging documents, and the scope of
discovery will not be materially affected by the changes. (Id.
at 5, 6; Pls.’ Reply Mem. 7, ECF No. 60.)

Alifax also argues

that it could not have brought this claim as part of its initial
or amended pleading because the factual basis for the copyright
infringement claim was not discovered until it reviewed Alcor’s
3

source code as part of the discovery process during Spring 2016.
(Pls.’ Reply Mem. 9.)
Alcor
supplement

vigorously
on

the

opposes

basis

that

Alifax’s
the

motion

addition

to

of

amend

the

and

copyright

infringement claim reflects an abuse of the protective order in
place governing confidential material and is futile because it
will not survive a motion to dismiss.
Obj. 1-2, 12-13, ECF No. 56.)

(Defs.’ Mem. in Supp. of

Defendants also argue that they

will be unfairly prejudiced by the new claim because it has
already translated many of the documents that Alifax produced
from Italian to English, but would need to re-review all of the
documents produced by Alifax thus far to determine whether any
are relevant to the new claim. (Id. at 10.)
Rule

15(a)(2)

of

the

Federal

Rules

of

Civil

Procedure

provides that the court should “freely give leave [to amend]
when justice so requires.”

A motion for leave to amend may be

denied “[i]n appropriate circumstances — undue delay, bad faith,
futility, and the absence of due diligence on the movant’s part
. . . .” Palmer v. Champion Mortg., 465 F.3d 24, 30 (1st Cir.
2006) (citing Foman v. Davis, 371 U.S. 178, 182 (1962)).
request
totality

to
of

discretion

amend
the
in

.

.

.

requires

circumstances

and

constructing

a

4

the
to

court

to

exercise

balance

examine
its

of

“[A]
the

informed
pertinent

considerations.”

Id.

at

30-31

(citing

Quaker

State

Oil

Ref.

Corp. v. Garrity Oil Co., 884 F.2d 1510, 1517 (1st Cir. 1989)).
Defendants

do

not

oppose

removing

Sire

as

plaintiff. (Defs.’ Mem. in Supp. of Obj. 9 n.3.)

a

named

Other than

questioning Alifax’s purpose for adding factual allegations and
clarifying the basis for the misappropriation of trade secrets
claim, Defendants have not provided a compelling argument that
these

proposed

changes

to

the

Amended

Complaint

are

either

unduly delayed, made in bad faith, futile, or a reflection of
the absence of due diligence on Alifax’s part.
F.3d at 30.

See Palmer, 465

Instead, Defendants focus their objections to the

proposed amendments primarily on the addition of the new claim
for

copyright

infringement.

Therefore,

to

the

extent

that

Alifax seeks to amend its pleading, its proposed amendments will
be

allowed

because

early stage.

this

litigation

is

still

in

a

relatively

The fact discovery period has not been closed and

neither

party

has

yet

parties

have

filed

a

scheduled
joint

depositions.

motion

to

extend

In
the

fact,

the

discovery

schedule to allow fact discovery to continue until four months
from the date of this Order. (ECF No. 63.)
amend

its

pleading

at

this

stage

will

not

Allowing Alifax to
result

in

unfair

prejudice to Defendants.
Turning

to

Alifax’s

proposed

supplemental

claim

for

copyright infringement, Rule 15(d) provides that “the court may,
5

on just terms, permit a party to serve a supplemental pleading
setting out any transaction, occurrence, or event that happened
after the date of the pleading to be supplemented.”

According

to Alifax, it reviewed Alcor’s source code in compliance with
the terms of the protective order, secured copyright protection
for

its

own

source

code,

and

now

seeks

to

supplement

its

pleading in this litigation with a copyright infringement claim.
(Pls.’ Reply Mem. 9.) According to Defendants, the request to
add this claim is futile because it will not survive a motion to
dismiss. 1 (Defs.’ Mem. in Supp. of Obj. 2.)
This

Court

has

previously

considered

whether

a

proposed

supplement to a pleading pursuant to Rule 15(d) is futile by
using

the

whether

a

same

standard

proposed

as

amendment

that
to

a

applied
pleading

when

it

pursuant

considers
to

Rule

15(a) is futile. Pelletier v. Rhode Island, CA No. 07-186S, 2008
WL 4900951, at *1 (D.R.I. Nov. 14, 2008).

While futility can be

a reason to deny a motion to amend or supplement a pleading,
“[i]f leave to amend is sought before discovery is complete and

1

Defendants also assert that Alifax violated the terms of
the protective order when it filed for copyright protection of
its source code after reviewing Alcor’s source code. (Defs.’
Mem. in Supp. of Obj. 11.) During oral argument it became clear
that Defendants considered the timeline of Alifax’s copyright
infringement claim development to be suspicious, but were not
asserting any nefarious conduct on the part of Alifax’s
attorneys of record.
6

neither party has moved for summary judgment, the accuracy of
the

‘futility’

criteria”

of

label
Rule

is

gauged

12(b)(6)

by

of

reference

the

Federal

to

the

Rules

liberal

of

Civil

Procedure. Hatch v. Dep’t for Children, Youth & Their Families,
274

F.3d

12,

19

(1st

Cir.

2001)

(citing

Glassman

Computervision Corp., 90 F.3d 617, 623 (1st Cir. 1996)).

v.
“In

this situation, amendment is not deemed futile as long as the
proposed amended complaint sets forth a general scenario which,
if proven, would entitle the plaintiff to relief against the
defendant on some cognizable theory.” Id.
A claim for copyright infringement requires a plaintiff to
demonstrate that it has registered its copyright, that it owns a
valid

copyright,

and

that

a

defendant

has

copied

original

elements of the copyrighted work. Airframe Sys., Inc. v. L-3
Commc’ns Corp., 658 F.3d 100, 105 (1st Cir. 2011).

A review of

the proposed Second Amended and Supplemental Complaint reveals
that Alifax has sufficiently pleaded to each of these elements.
(Second Am. and Suppl. Compl. ¶¶ 78-82, ECF No. 55-2.)

For this

reason,

and

the

Alifax’s

request

to

amend

copyright

reasons
its

infringement

articulated

Amended
claim

above

Complaint,
and

Amended and Supplemental Complaint.

7

file

regarding
Alifax

its

may

proposed

add

the

Second

III. Conclusion
Alifax’s Motion to File Amended Pleading (ECF No. 55) is
GRANTED.
IT IS SO ORDERED.

William E. Smith
Chief Judge
Date: March 20, 2017

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