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Oakley, Inc. v. Bugaboos Eyewear Corp.

November 23, 2010

OAKLEY, INC., PLAINTIFF,
v.
BUGABOOS EYEWEAR CORP., BUGABOOS EYEWEAR (U.S.) INC., DEFENDANT.



The opinion of the court was delivered by: Honorable Janis L. Sammartino United States District Judge

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR LEAVE TO AMEND ANSWER TO COUNTERCLAIMS OF DEFENDANT (Doc. No. 29.)

Presently before the Court is Plaintiff Oakley, Inc.'s (Oakley) motion for leave to amend answer to counterclaims of defendant. (Doc. No. 29 (Mot. to Amend).) Also before the Court is Defendants Bugaboos Eyewear Corp. and Bugaboos Eyewear (U.S.) Inc.'s (Bugaboos) response in opposition (Doc. No. 44 (Opp'n)) and Oakley's reply in support. (Doc. No. 53 (Reply).) For the reasons stated below, Plaintiff's motion for leave to amend is GRANTED IN PART AND DENIED IN PART.

BACKGROUND

Oakley filed its first amended complaint on November 6, 2009. (Doc. No. 7 (FAC).) Oakley asserted that Bugaboos had infringed on U.S. Design Patent D580,963, U.S. Patent 5,387,949, U.S. Patent 5,638,145, Trademark 2,393,107, Trademark 2,900,432, and Trademark 2,768,242. Six months later, Bugaboos*fn1 filed its answer and counterclaims. (Doc. No. 12.) Oakley answered the counterclaims soon thereafter. (Doc. No. 15.) Three months later, on August 30, 2010, Oakley filed the present motion for leave to amend.

Oakley wishes to amend paragraph 74 of its answer and assert thirteen new affirmative defenses. (Mot. to Amend at 2.) Bugaboos does not object to amending paragraph 74 and adding affirmative defenses one and three. (Opp'n at 4, 6.) But Bugaboos does object to adding the other eleven affirmative defenses.

LEGAL STANDARD

Leave to amend should be freely given "when justice so requires." Fed. R. Civ. P. 15(a)(2). But while the rule should be interpreted extremely liberally, it should not be granted automatically. Jackson v. Bank of Haw., 902 F.2d 1385, 1387 (9th Cir. 1990). The opposing party bears the burden of demonstrating why denial is necessary. A trial court may deny a motion for leave to amend based on various factors, including bad faith, undue delay, prejudice to the opposing party, futility of amendment, and whether the party has previously amended. Johnson v. Buckley, 365 F.3d 1067, 1077 (9th Cir. 2004).

ANALYSIS

Bugaboos raises two arguments against the addition of the eleven defenses. The Court will address them in the order they are raised. First, the Court will assess whether Oakley unduly delayed in seeking to amend its answer. (See Opp'n at 2.) Second, the Court will determine whether the affirmative defenses are futile. (See id. at 4.)

I. Undue Delay

Oakley filed its motion for leave to amend prior to the Court-ordered deadline. Nonetheless, the motion must still be analyzed for undue delay under Rule 15(a). AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 953 (9th Cir. 2006). In most situations, undue delay by itself "is insufficient to justify denying a motion to amend." Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999). But in some egregious cases, delays may be sufficient on their own to deny amendment. See AmerisourceBergen, 465 F.3d at 953. See also Texaco, Inc. v. Ponsoldt, 939 F.2d 794, 799 (9th Cir. 1991) (holding an eight month delay before seeking leave to amend is unreasonable).

The Court finds that this is not the type of egregious case in which leave to amend should be denied solely on the basis of delay. Oakley began discussing the possibility of amendments approximately three months after it filed its first answer. The amending party in AmerisourceBergen delayed for more than fifteen months. AmerisourceBergen, 465 F.3d at 953. If any affirmative defenses will be barred, they will be barred on another basis.

II. Futility

The Court will mirror the parties and discuss the affirmative defenses in the following order: defenses two and thirteen, four and five, six ...


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