J.R. Simplot Co. v. McCain Foods U.S., Inc.
| Decision Date | 05 January 2022 |
| Docket Number | 1:16-cv-00449-DCN |
| Court | U.S. District Court — District of Idaho |
| Parties | J.R. SIMPLOT COMPANY, Plaintiff, v. McCAIN FOODS USA, INC., Defendant. McCAIN FOODS LIMITED, Plaintiff, v. J.R. SIMPLOT COMPANY, Defendant. J.R. SIMPLOT COMPANY, Plaintiff, v. ELEA VERTRIEBS-UND-VERMARKTUNGSGESELLSCHAFT, MBH; FOOD PHYSICS LLC, Third-Party Defendants. |
Pending before the Court is McCain Foods Limited and McCain Foods USA, Inc.'s ("McCain") Motion to Amend/Correct Infringement Contentions (Dkt. 306) and J.R. Simplot Company's ("Simplot") Motion to Amend/Correct (Dkt 308).[1]
Having reviewed the record and briefs, the Court finds that the facts and legal arguments are adequately presented. Accordingly, in the interest of avoiding further delay, and because the Court finds that the decisional process would not be significantly aided by oral argument, the Court will decide the Motions without oral argument. Dist. Idaho Loc. Civ. R. 7.1(d)(1)(B). Upon review, and for the reasons set forth below, the Court GRANTS both Motions.
McCain brings the instant motion to amend its infringement contentions to "align and conform . . . with the evidence produced during discovery and the opinions offered by [the parties'] experts." Dkt. 306-1, at 2. Notably, McCain "does not think this amendment is necessary," but "brings [it] in an abundance of caution to streamline issues . .. and avoid needless disputes about the scope of expert opinions proffered in this case." Id.
McCain argues that, from the outset of this litigation, the parties have engaged in discovery based upon the understanding that McCain has accused Simplot of: (1) infringing McCain's U.S. Patent Number 6, 821, 540 ("the '540 Patent") via Simplot's PEFed potato products processed in the United States, or processed in Canada and imported for sale into the United States; and (2) infringing McCain's U.S. Design Patent Number D720, 916 ("the '916 patent") with Simplot's SIDEWINDERS products.
Recently, Simplot's damages expert, Ryan Sullivan, suggested in his expert report (filed on the final day of expert discovery) that Simplot's products PEFed in Canada and imported for sale in the United States, as well as nine SIDEWINDERS SKUs, [2] should be excluded from the damages' calculation.
In light of this expert opinion, and to avoid any misunderstanding as the parties prepare their cases for trial, McCain seeks to amend its invalidity contentions to explicitly reference the Canadian PEFed products and the other nine SKUs.
In its response to McCain's motion, Simplot states that although it reserves the right to challenge the admissibility of the SKUs at a later time, it does not oppose McCain's Motion to Amend with respect to the addition of the nine SKUs. Accordingly, McCain's Motion is GRANTED to that extent. Simplot does, however, oppose McCain's request that it be allowed to amend its infringement contentions to reference PEFed products produced in its Canadian facility and imported for sale in the United States.
Idaho's Local Patent Rules allow a party to amend its infringement contentions only by order of the Court upon a timely showing of good cause. See DIST. IDAHO LOC. PATENT R 3.7.
Good cause to amend turns on: (1) whether the moving party was diligent in amending its contentions; and (2) whether the non-moving party would be prejudiced if leave to amend were granted. Barco N. V. v. Tech. Props. Ltd., No. 5:08-cv-05398 JF/HRL, 2011 WL 3957390, at * 1 (N.D. Cal. Sept. 7, 2011). The party seeking leave to amend bears the burden of establishing diligence. Radware Ltd. v. F5 Networks, Inc., No. C-13-02021-RMW, 2014 WL 3728482, at *1 (N.D. Cal. 2014) (citation omitted). If the moving party was not diligent, there is "no need to consider the question of prejudice." 02 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1368 (Fed. Cir. 2006).
Simplot begins by noting that McCain's original infringement contentions-served on November 7, 2017-explained it was seeking to protect its PEFed technology from Simplot's use "in its United States plants" without any mention of products produced in Canada and imported for sale in the United States. Dkt. 311-2, at 5. Simplot argues McCain's addition of this "new theory" is impermissible at this stage and that it will be prejudiced should the court allow amendment. In support, Simplot raises arguments regarding diligence and prejudice under the local patent rule.
The Court does not mean to summarily discount Simplot's diligence or prejudice arguments. Nevertheless, the Court's primary concerns are: (1) whether this is an impermissible new theory of the case, and/or (2) whether this amendment is even necessary in the first place. To be sure, Simplot addresses these concerns against the backdrop of the local rule, but the Court is not as persuaded by arguments of diligence when the issue seems to have arisen on literally the last day of expert discovery and McCain diligently filed the instant motion two weeks thereafter. The Court does have concerns about prejudice, but, again, whether couched under the official prejudice umbrella or not, the Court is mostly concerned about the integrity of the pleadings and whether this is a new theory being asserted on the eve of summary judgment.
In its original infringement contentions, McCain stated that Simplot infringed the '540 patent under 35 U.S.C. § 271(a). Dkt. 311-2, at 4. Section 271(a) outlines that:
Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.
As part of its infringement contentions, McCain reserved the right to amend its pleadings under subsections (b) and (c), but never referenced subsection (g). Dkt. 311-2, at 4. Subsections (b) and (c) are irrelevant for today's purposes, but subsection (g)-the "new" subsection McCain seeks to reference-outlines that:
Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent.
35 U.S.C. § 271(g).
McCain first argues that while it cites a new subsection in support of infringement, it is not introducing a new legal theory of the case and the inclusion of subsection (g) will not affect anything that has already occurred or will yet occur. Simplot counters that "infringement liability under [Section 271(g)] is distinct" and allowing amendment now would cause prejudice. Dkt. 311, at 14 (citing Syngenta Crop Prot, LLC v. Willowood, LLC, 944 F.3d 1344, 1359-60 (Fed. Cir. 2019), cert, denied, 141 S.Ct. 236 (2020)). In response, McCain highlights that, in the case cited by Simplot (Syngenta), that court was faced with a vastly different situation than the one present here and, furthermore, that it "did not hold Section 271(g) is a separate infringement theory from Section 271(a)." Dkt. 317, at 7. This is a somewhat convoluted argument-by both sides. While the Syngenta court did not say the theories are different under subsections (a) and (g), it also did not say they are the same. The Syngenta court's commentary dealt with liability, noting "infringement liability under the two sections is distinct." 944 F.3d at 1360 (emphasis added). McCain argues that the distinction, therefore, is when and how liability attaches, not whether or not there is infringement in the first place. The Court disagrees to a certain extent. The Syngenta court noted there are differences between "the act[s]" that give rise to the specific liabilities under subsections (a) and (g), thus indicating that the distinction isn't simply a difference in when liability attaches, but how liability is determined. Id. Thus, Syngenta does not specifically stand for the proposition recited by either party.
To be sure, the two subsections are closely related. This aside, the Court is concerned about allowing McCain to introduce this new subsection at such a late stage in the case-regardless of whether it is considered a new legal theory or not. This cuts against permitting amendment.
However, this brings the Court to McCain's second point which is that, regardless of how the alleged infringement is couched (be it under subsection (a) or (g)), both parties have been operating under the assumption that the sales into the United States from the Canadian plant were part of this lawsuit from the outset. For instance, on October 27, 2017, McCain propounded Interrogatory Nos. 8-9 on Simplot asking it to identify all frozen potato and sweet potato products that Simplot has PEFed in the United States or imported into the United States which are accused of infringing the '540 patent or the '916 patent. Dkt. 307-1, at 4-6. When Simplot later responded to Interrogatory Nos. 8-9, it produced detailed spreadsheets with data regarding "each Simplot product made in the U.S.," "[e]ach Simplot product made in the U.S. and sold in the U.S.," and "[e]ach Simplot product processed using PEF technology and imported into the U.S. for sale". Dkt. 307-1, at 4-5 (emphasis added).
Additionally McCain propounded Interrogatory No. 10 asking Simplot to identify the locations of the PEF systems used by Simplot to process its potato products, and Simplot disclosed...
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