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Judge Stark Grants Motions to Amend Complaint

Judge Leonard Stark has issued an interesting opinion allowing a plaintiff to amend its complaint for patent infringement to assert willful infringement and add additional patents. The Plaintiff, Cloud Farm Associates, filed a patent infringement action against Volkswagen and ZF Sachs for infringement of two patents. Cloud Farm later filed a first motion to amend the complaint to add allegations of willful infringement and a second motion to amend to add claims for infringement of two additional patents. Judge Stark addressed each motion in turn.

Volkswagen knew of the patents-in-suit since 1999 because of a letter sent to Rolls-Royce and copying Volkswagen regarding alleged infringement of the patents by a Rolls-Royce product. Despite this fact, however, Judge Stark determined that there was no undue delay in seeking to amend the complaint, as “knowledge of the patents-in-suit alone is not sufficient to prove willful infringement . . . [and] Cloud Farm asserts willful infringement for accused product lines that did not even exist in 1999. Thus, the Court focuses for purposes of undue delay on the thirteen month period from the time Cloud Farm filed its initial complaint until the time that Cloud Farm filed its First Proposed Amended Complaint.” Cloud Farm Associates, L.P. v. Volkswagen Group of America, Inc., C.A. No. 10-502-LPS at 4 n.2 (D. Del. Jul. 27, 2012). Similarly, Judge Stark found that “any prejudice resulting from delay prior to the filing of this lawsuit is not properly within the scope of consideration of the First Motion to Amend. Rather, the Court must consider whether Volkswagen has suffered prejudice in the time that has passed since the filing of this lawsuit.” Because there was “no evidence that Volkswagen suffered unfair prejudice during the time between the filing of the initial complaint and the filing of the First Proposed Amended Complaint,” Judge Stark granted the motion for leave to amend. Id. at 8. Furthermore and for similar reasons, Judge Stark concluded that “Cloud Farm’s claim against Volkswagen for willful infringement of the ‘354 patent is not barred by the equitable doctrine of laches [and] consequently, amendment is not futile.” Id. at 7. And in response to the Defendants’ claim that the First Proposed Amended Complaint did not adequately plead claims for willful infringement, Judge Stark found that Cloud Farm’s allegations regarding the letter to Rolls-Royce were sufficient to plead a claim for willful infringement. Id. at 5-6.

Considering the second motion to amend, which related to the addition of two new patents, Judge Stark stated: “The Court concludes that Plaintiff has demonstrated good cause to amend as it did not have sufficient factual information to allege infringement of the ‘616 patent and ‘115 patent until after the depositions of Defendants’ corporate representatives.” Id. at 9-10. While “the parties have already engaged in substantial discovery,” the case was not so far along that the schedule could not be amended to allow the Defendants time to respond to the new patents. Additionally, Judge Stark recognized that “if the Court were to deny leave to amend, the likely result would be that Plaintiff would assert the claims it attempts to add to this lawsuit in a new lawsuit against Defendants—which will require completely new discovery, another Markman hearing, and a separate trial—likely resulting in even higher increased costs for Defendants and further delay in resolution of the parties’ disputes. In these circumstances, the Court does not find undue prejudice [in allowing the addition of the new patents].” Id. at 10-11.

Cloud Farm Associates, L.P. v. Volkswagen Group of America, Inc., C.A. No. 10-502-LPS (D. Del. Jul. 27, 2012).

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