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Maquet Cardiovascular LLC v. Saphena Medical, Inc.

United States District Court, N.D. California

July 27, 2017

MAQUET CARDIOVASCULAR LLC, Plaintiff,
v.
SAPHENA MEDICAL, INC., and ALBERT CHIN, Defendants.

          ORDER RE MOTION FOR LEAVE TO FILE AMENDED COUNTERCLAIM AND MOTION TO STAY, SEVER, OR BIFURCATE

          WILLIAM ALSUP UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         Following dismissal of its antitrust counterclaim, one defendant in this patent infringement action moves for leave to file an amended counterclaim. Plaintiff opposes and, in the event leave to amend is granted, revives its motion to stay, sever, or bifurcate the amended counterclaim. Defendant's motion for leave to amend is Granted in part and Denied in part. Plaintiff's motion to stay, sever, or bifurcate is Granted in part and Denied in part.

         STATEMENT

         Plaintiff Maquet Cardiovascular LLC and defendant Saphena Medical, Inc. (founded by former Maquet employee and defendant Dr. Albert Chin), both sell medical devices designed for endoscopic vessel harvesting (EVH) procedures. Maquet brought this action against Saphena and Dr. Chin for patent infringement, breach of contract, false advertising in violation of the Lanham Act, and correction of inventorship. Saphena and Dr. Chin both answered.

         Saphena alone asserted counterclaims against Maquet for (1) below-cost sales in violation of Section 17043, (2) tortious interference with prospective business relationships, (3) unfair competition in violation of Section 17200, (4) loss leaders in violation of Section 17044, (5) false advertising in violation of the Lanham Act, (6) attempted monopolization in violation of Section 2 of the Sherman Act, and (7) unfair competition in violation of Massachusetts law.[1]

         A prior order dated May 26 (Dkt. No. 82) granted Maquet's motion to dismiss Saphena's counterclaim under Federal Rule of Civil Procedure 12(b)(6) and held in abeyance Maquet's concurrent motion to stay, sever, or bifurcate the counterclaim (see Dkt. No. 63). Pursuant to the May 26 order, Saphena now moves for leave to file an amended counterclaim (Dkt. No. 86). Its proposed amendment would drop two claims for relief under the Lanham Act and Massachusetts law, add two claims for declaratory judgment of patent non-infringement, and add one claim for declaratory judgment of patent invalidity. Maquet opposes Saphena's motion and, in case leave to amend is granted, revives its own motion to stay, sever, or bifurcate the counterclaim (Dkt. No. 100). This order follows full briefing and oral argument.

         ANALYSIS

         1. Saphena's Motion for Leave to File an Amended Counterclaim.

         Rule 15(a)(2) advises, “The court should freely give leave when justice so requires.” In ruling on motions for leave to amend, courts consider (1) bad faith, (2) undue delay, (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether the movant has previously amended their pleading. Nunes v. Ashcroft, 375 F.3d 805, 808 (9th Cir. 2003). Prejudice to the opposing party is the most important factor. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). Absent prejudice or a strong showing of another factor, there is a presumption under Rule 15(a) in favor of granting leave to amend. Ibid. Nevertheless, futility alone can justify denying leave to amend. Nunes, 375 F.3d at 808; see also Ebner v. Fresh, Inc., 838 F.3d 958, 968 (9th Cir. 2016).

         Maquet contends leave to amend should be denied here because (1) Saphena's proposed amendment would be futile as to most of its claims, and (2) Saphena proposed its amendment in bad faith. This order addresses each contention in turn.

         A. Whether Saphena's Proposed Amendment Would Be Futile.

         Maquet's argument about futility is directed only to Saphena's returning counterclaims for violations of California law, tortious interference, and violation of the Sherman Act. For purposes of assessing futility on this motion, the legal standard is the same as it would be on a motion to dismiss, i.e., the counterclaim must plead “enough facts to state a claim to relief that is plausible on its face.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has facial plausibility when the party asserting it pleads factual content that allows the court to draw the reasonable inference that the other side is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). This analysis generally considers only allegations in the pleadings, attached exhibits, and matters properly subject to judicial notice. Factual allegations in the counterclaim are accepted as true and construed in the light most favorable to Saphena. See Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1030-31 (9th Cir. 2008).

         (1) Below-Cost Sales.

         Section 17043 makes it “unlawful for any person engaged in business within this State to sell any article or product at less than the cost thereof to such vendor, or to give away any article or product, for the purpose of injuring competitors or destroying competition.” Saphena's proposed amended counterclaim alleges that Maquet, as part of its campaign to “protect” its own customers and “attack” Saphena, has sold or given away products at a loss to itself - including through discounts and giveaways outside of bundling arrangements. Saphena further alleges that Maquet specifically targets these discounts and giveaways, which involve products directly competing with Saphena's product, to customers that are considering a purchase from Saphena (see Dkt. No. 86-2 ¶¶ 71-78, 105-10).

         Rather than discuss the legal sufficiency of these factual allegations as pled, Maquet attacks as “wild[] mischaracteriz[ation]” Saphena's reliance on certain documents - for example, a sales data ...


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