Magnesystems, Inc. v. Nikken, Inc.
| Decision Date | 30 July 1996 |
| Docket Number | No. CV94-0715 ABC (EEx).,CV94-0715 ABC (EEx). |
| Citation | 933 F. Supp. 944 |
| Parties | MAGNESYSTEMS, INC., Plaintiff, v. NIKKEN, INC., and Nu-Magnetics, Inc., Defendants. |
| Court | U.S. District Court — Central District of California |
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Ronald W. Reagin, Stanley W. Sokoloff, Blahely, Sokoloff, Taylor & Zafman, Los Angeles, CA, for plaintiff.
Edwin D. Schindler, New York City, Daniel Cislo, Santa Monica, CA, for defendants.
Defendants' Motion for Leave to File an Amended Answer and Counterclaims was taken under submission on June 3, 1996. After reviewing the materials submitted by the parties and the case file, it is hereby ORDERED that Defendants' motion is DENIED.
This is a patent infringement case. Plaintiff MAGNESYSTEMS, INC., ("Magnesystems") owns all rights and interests in United States Letters Patent No. 4,489,711 ("'711 Patent"). The U.S. Patent and Trademark Office ("PTO") issued the '711 Patent to Arno W. Latzke for the "magnetic plaster," a magnetized elastic sheet product which can be therapeutic when applied to a person's skin. On February 1, 1994, Plaintiff filed a Complaint against Defendants NIKKEN USA, INC. and NU-MAGNETICS, INC., (collectively "Nikken") for making, using, and selling, without a license from Plaintiff, a line of magnetized elastic sheet products that infringe upon '711 Patent.
On February 23, 1994, Defendants filed an Answer and Counterclaims alleging that their competing product was distinguishable from Plaintiff's product because Defendants' product resembled a "checkerboard" whereas Plaintiff's product was "striped."
On May 9, 1994, Plaintiff and Defendants cross-moved for summary judgment on the question of Defendants' infringement of the '711 Patent and the validity of the '711 Patent. On June 13, 1994, the Court granted summary judgment in favor of Plaintiff, ruling, as a matter of law, that Defendants have infringed upon the '711 Patent and that the '711 Patent is valid.
On June 23, 1994, Defendants filed a Notice of Appeal, announcing that they were appealing the Court's judgment entered on June 16, 1994. On June 30, 1994, Plaintiff filed a motion for an amendment to the judgment on June 16, 1994 to provide for the entry of a permanent injunction. On August 8, 1994, the Court issued a permanent injunction against Defendants from manufacturing and selling their infringing product. In the same Order, the Court also denied Defendants' cross motions for a stay of the injunction pending appeal and stay of all proceedings pending PTO reexamination proceedings, and granted Defendants' motion for a stay of discovery pending appeal.
On August 30, 1994, the Federal Circuit denied Defendants' motion to declare the district court to be without authority to issue an injunction and Defendants' motion for stay, pending appeal and/or reexamination. On July 17, 1995, the Federal Circuit affirmed the Court's summary judgment and injunction orders and remanded the case back to this Court for further proceedings.
On the basis of prior art not previously presented to or considered by this Court, Defendants contemporaneously instituted reexamination proceedings against the '711 Patent in the PTO. On September 11, 1995, the Court granted Defendants a further stay on proceedings until the PTO rendered a decision. In a Joint Status Report filed on December 15, 1995, the parties notified the Court that on December 1, 1995, the PTO issued its Notice of Intent to Issue Reexamination Certificate, in which the reexamination was terminated with the patentability of all of the claims of the '711 Patent being confirmed by the PTO. In a Joint Status Report issued on February 5, 1996, the parties agreed that there was no longer any reason to stay this action. Accordingly, the Court lifted the stay on proceedings.
On May 13, 1996, Defendants filed this Motion for Leave to File an Amended Answer and Counterclaims. Defendants request the addition of both counterclaims and affirmative defenses.
Defendants move to add the following counterclaims: (1) first counterclaim for declaratory judgment of invalidity of the '711 Patent on the ground of anticipation by prior art pursuant to 3 U.S.C. § 102(b); (2) second counterclaim for declaratory judgment of invalidity of the '711 Patent on the ground of obviousness over the prior art pursuant to 35 U.S.C. § 103; (3) third counterclaim for Magnesystems' infringement of Defendants' Patent No. 5,277,692 ("'692 Patent"); (4) fourth counterclaim for Magnesystems' infringement of Patent No. 5,514,072 ("'072 Patent"); (5) fifth counterclaim for a declaratory judgment that Defendants do not infringe the '711 Patent in light of the separate patentability of the "checkerboard" pattern flexible magnetic pad product by Defendants; (6) sixth counterclaim for declaratory judgment that '711 Patent is unenforceable against Defendant under the equitable doctrine of "unclean hands."
Defendants also move to add the following affirmative defenses: (1) second affirmative defense that Defendants' "checkerboard" pattern of flexible magnetic pad product, being novel and nonobvious over that which is disclosed and claimed in the '711 Patent does not infringe the '711 Patent literally or under the doctrine of equivalents; (2) third affirmative defense that independent claims 1 and 12 of '711 Patent are anticipated by Tanaka, French Patent No. 1,215,110 ("Tanaka Patent"), published April 14, 1960, pursuant to 35 U.S.C. § 102(b) and/or obvious over the Tanaka Patent, considered singly or, in the alternative, considered in view of Miyake, Japanese Patent Application No. Sho 56-7405 ("Miyake Patent"), published January 26, 1981, pursuant to 35 U.S.C. § 103, and therefore invalid; (3) fourth affirmative defense that Claims 1-15 of the '711 Patent are obvious over the Tanaka Patent, considered singly or, in the alternative, considered in view of the Miyake Patent, and/or Van den Bulke, French Patent No. 2,371,916 ("Van den Bulke Patent"), published June 23, 1978, pursuant to 35 U.S.C. § 103, and are therefore invalid; (4) fifth affirmative defense asserting the doctrine of unclean hands against Plaintiff for willfully infringing upon Defendants' '692 Patent; (5) sixth affirmative defense asserting the doctrine of unclean hands against Plaintiff for willfully infringing upon Defendants' '072 Patent. On May 20, 1996, Plaintiff filed an Opposition. Defendants filed their Reply on May 28, 1996.
Federal Rule of Civil Procedure 13(e) provides, in pertinent part: "a claim which either matured or was acquired by the pleader after serving a pleading may, with the permission of the court, be presented as a counterclaim by supplemental pleading." Fed.R.Civ.P. 13(e). Federal Rule 13(e) applies when facts giving rise to a claim arise after the filing of the complaint. Fed. R.Civ.P. 13(e). AM Industries, et. al. v. Con-Vey/Keystone, Inc., et. al., 856 F.Supp. 1443, 1450 (D.Or.1994). The moving party is limited to asserting only those claims which were not actually litigated in the case. Id. at 1451.
Courts have considered Federal Rule 13 in conjunction with Federal Rule 15, applying factors to consider for leave to amend to counterclaims. See Intel v. Hyundai Elec. America, Inc., 692 F.Supp. 1113, 1117 (N.D.Cal.1987). Federal Rule 15(a) provides that "a party may amend the party's pleading only by leave of court or by written consent of the adverse party and leave shall be freely given as justice so requires." Fed.R.Civ.P. 15(a). In deciding whether to grant leave to amend, "a court must be guided by the underlying purpose of Rule 15 — to facilitate decision on the merits rather than on the pleadings or technicalities." United States v. Webb, 655 F.2d 977, 979 (9th Cir.1981). This policy of favoring amendments to pleadings "is to be applied with extreme liberality." Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir.1990). DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir.1987) (citations omitted). "These factors, however, are not of equal weight in that delay, by itself, is insufficient to justify denial of leave to amend." Id. (citations omitted).
An affirmative defense not listed under Federal Rule of Civil Procedure 12 may be added by amendment pursuant to Federal Rule 15(a). Fed.R.Civ.P. 12(h);1 Fed. R.Civ.P. 15(a). The factors that applied above are also appropriate here.
For the sake of clarity, the counterclaims and affirmative defenses will be grouped according to the subject matter.
Defendants seek to amend their Answer and Counterclaims to assert that the Amended Answer ¶¶ 24, 26, 35, and 45.
On June 13, 1994, the Court held that the ...
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