Olaf Soot Design, LLC v. Daktronics, Inc., et al, No. 1:2015cv05024 - Document 176 (S.D.N.Y. 2017)

Court Description: 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)

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Olaf Soot Design, LLC v. Daktronics, Inc., et al Doc. 176 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------x OLAF SOOT DESIGN, LLC, Plaintiff, 15 5024 (RWS) - against OPIINION DAKTRONICS, INC. and DAKTRONICS HOIST, INC., Defendants. -------------------------------------------x A P P E A R A N C E S: Attorneys for Plaintiff USD¢SDNY I DOCV1\1ENT ELE TRONICALLY FILED DOC#: PI.::-:L=-=-.,D-: E . l. . . . 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. { I 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. Dockets.Justia.com 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 J reconsideration (S.D.N.Y. 2016) (RWS), 2017 WL 17, 2 017) . Familiarity is assumed. 1 v . Daktronics, I (S.D.N.Y. May I . 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 ::: 200 (2d Cir. 2007)). Where, as here, a motion 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 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 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 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, in a deadline of November 9, 2016. (See Dkt. Nos. 29 & 72.) The parties do not appear to dispute this is the operative 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 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 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 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 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 I ("Pak Deel."), 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 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 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 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 2017 U.S.D.J . 11

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