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Boba Inc. v. Blue Box Opco LLC

United States District Court, S.D. California

July 15, 2019

BOBA INC., Plaintiff,
v.
BLUE BOX OPCO LLC, doing business as INFANTINO, Defendant.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR LEAVE TO AMEND [DOC. NO. 50.]

          MARILYN L. HUFF, DISTRICT JUDGE

         On May 17, 2019, Defendant Blue Box Opco LLC doing business as Infantino filed a motion for leave to amend its answer and counterclaim. (Doc. No. 50.) On May 20, 2019, the Court took the motion under submission. (Doc. No. 51.) On June 5, 2019, Plaintiff Boba Inc. filed a response in opposition to Infantino's motion. (Doc. No. 59.) On June 12, 2019, Infantino filed a reply. (Doc. No. 60.) For the reasons below, the Court grants in part and denies in part Infantino's motion for leave to amend.

         Background

         The following facts are taken from the allegations set forth in the parties' pleadings. Boba and Infantino are both manufacturers and distributors of baby carriers. (Doc. No. 8, Compl. ¶¶ 1, 4.)

         On March 25, 2015, in response to assertions of patent infringement, Infantino, the Defendant in this action, filed a declaratory judgment action against non-party Caperon Designs, Inc. d/b/a BECO Baby Carrier, Inc. (“BECO”) in the Eastern District of Missouri, seeking to invalidate U.S. Patent No. 7, 766, 199.[1] (Doc. No. 24-3.) Shortly thereafter, Infantino and BECO resolved their dispute and entered into a Confidential Settlement Agreement, Patent License and Covenant Not to Sue (“Licensing Agreement”). (Doc. No. 8 ¶ 6, Ex. B.) On August 20, 2015, Infantino voluntarily dismissed its claims in the Missouri action without prejudice. (Doc. No. 24-2.)

         On March 30, 2016, Boba acquired BECO. (Doc. No. 8 ¶ 3.) Boba alleges that as part of that acquisition, it obtained all right, title and interest in the '199 patent, including the rights contained in the Licensing Agreement. (Id. ¶ 3, 20.)

         On February 12, 2019, Boba filed a complaint against Infantino, alleging a claim for breach of contract. (Doc. No. 8, Compl.) Specifically, Boba alleges that under the terms of the Licensing Agreement, Boba is owed royalties from Infantino for the sales of Infantino's Flip 4-In-1TM carrier. (Id. ¶¶ 12, 24-30.) Boba alleges that Infantino has breached the Licensing Agreement by refusing to pay those royalties. (Id. ¶ 31.)

         On March 14, 2019, Infantino filed an answer to Boba's complaint and a counterclaim for a declaratory judgment that the '199 patent is invalid. (Doc. No. 17.) On April 12, 2019, the Court issued a scheduling order in the action. (Doc. No. 30.) On May 15, 2019, the Court denied Boba's motion to dismiss Infantino's invalidity counterclaim and to strike Infantino's invalidity affirmative defense. (Doc. No. 49.) By the present motion, Infantino moves for leave to amend its answer and counterclaims to allege four new counterclaims for: (1) a declaratory judgment that the Flip 4-in-1TM baby carrier is not a licensed product under the settlement agreement; (2) breach of contract; (3) fraud; and (4) unfair competition. (Doc. No. 50-1 at 1; see Doc. No. 50-2, Ex. A.)

         Discussion

         I. Legal Standards

         Federal Rule of Civil Procedure 15(a) allows a party leave to amend its pleading once as a matter of right prior to service of a responsive pleading. Thereafter, “a party may amend that party's pleading only by leave of the court or by written consent of the adverse party and leave shall be freely given when justice so requires.” Fed.R.Civ.P. 15(a). The Ninth Circuit has instructed that this policy is “‘to be applied with extreme liberality.'” Owens v. Kaiser Foundation Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001). “Five factors are taken into account to assess the propriety of a motion for leave to amend: bad faith, undue delay, prejudice to the opposing party, futility of amendment, and whether the plaintiff has previously amended the complaint.” Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004) (citing Nunes v. Ashcroft, 348 F.3d 815, 818 (9th Cir. 2003)). The decision whether to grant leave to amend “is entrusted to the sound discretion of the trial court.” Pisciotta v. Teledyne Indus., 91 F.3d 1326, 1331 (9th Cir. 1996).

         II. Analysis

         By the present motion, Infantino moves for leave to amend its answer and counterclaims to allege four new counterclaims for: (1) a declaratory judgment that the Flip 4-in-1TM baby carrier is not a licensed product under the settlement agreement; (2) breach of contract; (3) fraud; and (4) unfair competition. (Doc. No. 50-1 at 1; see Doc. No. 50-2, Ex. A.) In response, Boba argues that the Court should deny Infantino's request for leave to ...


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