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Marical, Inc. v. Cooke Aquaculture, Inc.

United States District Court, D. Maine

April 17, 2018

MARICAL, INC., et al., Plaintiffs,
COOKE AQUACULTURE, INC., et al., Defendants.



         This case concerns the validity and alleged infringement of patents teaching methods for improving the transition of pre-adult, farm-raised salmon from freshwater to seawater. The issue before the Court arises from the Defendants Cooke Aquaculture Inc., Cooke Aquaculture USA Inc., True North Salmon Co. Ltd., True North Salmon U.S. Inc., True North Sales U.S. Inc., and Salmones Cupquelan S.A.'s (“Defendants” or “Cooke”) Motion to Amend their Answer (ECF No. 214). In a Decision and Order issued July 31, 2017, Magistrate Judge John C. Nivison granted the Motion (ECF No. 282). Plaintiffs Marical Inc., Europharma AS, and Europharma Inc. Canada (“Plaintiffs” or “Marical”) filed a Motion for Reconsideration and Request for Clarification on August 8, 2017 (ECF No. 285). In a Decision and Order issued November 15, 2017 (ECF No. 309), Magistrate Judge Nivison granted the Plaintiffs' Motion, in part, by clarifying the scope of the allowed amendment, but otherwise denied the Motion. The Defendants filed their Amended Answer on November 22, 2017 (ECF No. 314). On November 29, 2017, the Plaintiffs filed an Objection to both of the Magistrate Judge's Decisions and Orders granting Defendants' Motion to Amend (ECF No. 315). For the reasons that follow, the Plaintiffs' Objection (ECF No. 315) is OVERRULED and the Magistrate Judge's Orders granting the Defendants' Motion to Amend (ECF Nos. 282 and 309) are AFFIRMED.

         I. BACKGROUND

         On February 28, 2017, the last day of fact discovery, the Defendants deposed Dr. William Harris, the lead inventor of the patents-in-suit. According to the Defendants, Dr. Harris testified that he knew of material prior art that he did not disclose to the United States Patent and Trademark Office (“USPTO”) during the patent prosecution process. ECF No. 214 at 1-2. Based on the testimony, the Defendants argued they could state an actionable claim of inequitable conduct and that the timing of the revelation justified an amendment to their answer even though the scheduling order deadline for amendment of the pleadings had expired. Through a claim of inequitable conduct, a patent infringement defendant asserts that the patentee obtained the patent-in-suit by making material misrepresentations to the USPTO or by taking measures to suppress evidence that, if disclosed, would have prevented issuance of a patent. Id. at 1285-87. “Inequitable conduct is an equitable defense to patent infringement that, if proved, bars enforcement of a patent.” Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1285 (Fed. Cir. 2011).

         The Magistrate Judge's Decisions and Orders concluded that a reference titled Nutrient Requirements of Fish, National Research Council (1993) (“NRC 1993”), which contained information concerning the tryptophan content of salmon feed in the same ranges taught by the patents, and which, the Defendants allege, Dr. Harris knew about but did not disclose, could support the plausible inference that the aquaculture industry already had available a prior art fish feed within the scope of the specially made feed described in the patents. See ECF No. 282 at 15; see also ECF No. 309 at 6 n.5.


         The district court reviews the decision of a magistrate judge on a non-dispositive matter to determine whether it is “clearly erroneous or contrary to law.” 28 U.S.C.A § 636(b)(1)(A) (2018); Fed.R.Civ.P. 72(a) (2018). A motion to amend a complaint is a non-dispositive pretrial matter within the purview of Fed.R.Civ.P. 72(a). See Hofland v. LaHaye, No. cv-09-172-B-W, 2010 WL 231737, at *2 (D. Me. Jan. 14, 2010). Thus, my review applies the clearly erroneous or contrary to law standard. “A finding is ‘clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” Reich v. Newspapers of New England, Inc., 44 F.3d 1060, 1080 (1st Cir. 1995) (quoting United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948) (internal alteration omitted). “A finding is contrary to law if the magistrate judge has misinterpreted or misapplied applicable law.” Stile v. Cumberland Cty. Sheriff, No. 2:14-cv-00406-JAW, 2017 WL 878440, at *4 (D. Me. Mar. 6, 2017) (quoting Gunter v. Ridgewood Energy Corp., 32 F.Supp.2d 162, 164 (D.N.J. 1998).


         Once a scheduling order is in place, the liberal default rule, under which leave to amend is “freely given, ” is replaced by the more demanding “good cause” standard. Steir v. Girl Scouts of the USA, 383 F.3d 7, 12 (1st Cir. 2004). “This standard focuses on the diligence (or lack thereof) of the moving party more than it does on any prejudice to the party-opponent.” Id. Yet, even where there is good cause, a court can exercise its discretion to deny a motion to amend if the amendment would be futile. See Glassman v. Computervision Corp., 90 F.3d 617, 622-23 (1st Cir. 1996). “In assessing futility, the district court must apply the standard which applies to motions to dismiss under Fed.R.Civ.P. 12(b)(6).” Adorno v. Crowley Towing and Transp. Co., 443 F.3d 122, 126 (1st Cir. 2006).

         Thus, to avoid futility, a pleading “must contain sufficient factual matter, accepted as true, to ‘state a claim for relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In addition, “the strict pleading requirements of Fed.R.Civ.P. 9(b) apply to counterclaims of inequitable conduct, requiring detailed factual averments and not merely notice pleading with respect to such claims.” Therasense, 649 F.3d at 1304-05 (Bryson, J., dissenting).

         The Plaintiffs argue that the Magistrate Judge erred by concluding that the Defendants' proposed amendment was not futile because the Court incorrectly found Defendants pleaded sufficient facts from which a factfinder could find that (A) Dr. Harris intended to deceive the USPTO; and (B), the prior art allegedly withheld from the USPTO was material to patentability and non-cumulative of other cited references.

         A. Intent to Deceive

         The Plaintiffs argue that the amended pleading is futile because Dr. Harris testified at his deposition that he had never seen NRC 1993 prior to the deposition, and thus he could not have had the requisite intent to deceive the USPTO. Accordingly, the Plaintiffs contend that the Defendants cannot meet the heightened standard of Rule 9(b) for pleading inequitable conduct. See Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1326 (Fed. Cir. 2009); see also Therasense, 649 F.3d at 1290 (“To prevail on a claim of inequitable conduct, the accused infringer must prove that the patentee acted with the specific intent to deceive the [US]PTO. A finding that the misrepresentation or omission amounts to gross negligence or negligence under a should have known standard does not satisfy this intent requirement.”) (internal citations omitted).

         The Magistrate Judge disagreed with the Plaintiffs, concluding that the Defendants alleged sufficient facts from which to infer that Dr. Harris knew of NRC 1993 at the time of the patent application. At his deposition, Dr. Harris did not testify that he was unfamiliar with NRC 1993, or had not been aware of it at the time of the patent application, but instead testified that “[he had] never seen this document before.” ECF No. 315 at 7. NRC 1993, however, is a nutritional feed guideline, and Dr. Harris testified that he was familiar with the nutritional guidelines-and discussed them with ...

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