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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