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Masonite Corporation v. Craftmaster Manufacturing

April 29, 2011

MASONITE CORPORATION, PLAINTIFF/COUNTERCLAIM DEFENDANT,
v.
CRAFTMASTER MANUFACTURING, INC.,
DEFENDANT/COUNTERCLAIM PLAINTIFF.



The opinion of the court was delivered by: Honorable Joan B. Gottschall

MEMORANDUM OPINION AND ORDER

Plaintiff Masonite Corporation ("Masonite") moves for leave to file a supplemental complaint under Federal Rule of Civil Procedure 15(d) and to modify the scheduling order under Federal Rule of Civil Procedure 16(b)(4). For the reasons stated below, the motion is granted.

I.BACKGROUND

In January 2009, Craftmaster Manufacturing, Inc. ("Craftmaster") sent Masonite a letter calling into doubt the validity of Masonite's D516,226 patent (the "'226 patent") given alleged errors therein. In March 2009, Masonite petitioned the United States Patent and Trademark Office ("USPTO") for Certificates of Correction for both its '226 patent and its D516,225 patent (the "'225 patent"). Nevertheless, Masonite sued Craftmaster in April 2009 to enjoin alleged infringement of the '225 and '226 patents.

The deadline for amending the pleadings was initially set for November 30, 2009, (see Scheduling Order, June 3, 2009, ECF No. 20), but was extended to June 30, 2010. (See Scheduling Order, January 28, 2010, ECF No. 41.) More than a month after the June 30 deadline passed, on August 3 and 14, 2010 respectively, the U.S. Patent and Trademark Office ("USPTO") issued Certificates of Correction for the '226 and '225 patents. On November 22, 2010, after the parties were unable to resolve their dispute at an October 7, 2010 settlement conference, Masonite sought leave to supplement its complaint with counts alleging infringement of the patents as corrected by the certificates.

II.LEGAL STANDARD

Under Rule 15 of the Federal Rules of Civil Procedure, "the court may, on just terms, permit a party to serve a supplemental pleading setting out any transaction, occurrence, or event that happened after the date of the pleading to be supplemented." Fed. R. Civ. P. 15(d). To determine whether "just terms" exist for motions to supplement under Rule 15(d), the court uses the same factors as those used for motions to amend under 15(a). Glatt v. Chi. Park Dist., 87 F.3d 190, 194 (7th Cir. 1996). Accordingly, leave to supplement the pleadings should be granted when there is no apparent reason for denying leave such as "undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc." Foman v. Davis, 371 U.S. 178, 182 (1962). Under an old version of Rule 15, plaintiffs had "sometimes been needlessly remitted to the difficulties of commencing a new action even though events occurring after the commencement of the original action [had] made clear the right to relief." Fed. R. Civ. P. 15(d) advisory committee's notes (1963 Amendment). Under the current Rule 15(d), "[a]s in other situations where a supplemental pleading is offered, the court is to determine in the light of the particular circumstances whether filing should be permitted, and if so, upon what terms." Id.

Rule 16, on the other hand, requires "good cause" to modify a scheduling order. Fed. R. Civ. P. 16(b)(4). Good cause depends on whether the moving party, which missed the scheduling deadline, nonetheless exercised due diligence. Caliber One Indem. Co. v. Millard Chi. Window Cleaning, LLC, No. 04 C 2424, 2005 U.S. Dist. LEXIS 9964 at *7 (N.D. Ill. May 12, 2005) (finding good cause where plaintiff filed motion to amend six months after the deadline); see also Bridgeport Pain Control Ctr., Ltd. v. Cutera, Inc., No. 08-C-1116, 2009 U.S. Dist. LEXIS 15681 at *3 (N.D. Ill. Feb. 26, 2009) (recognizing "little case law on the contours of Federal Rule 16(b)(4).") If Rule 16(b) applies, the court should apply it first, followed by any appropriate Rule 15 analysis. See Caliber One, 2005 U.S. Dist. LEXIS 9964 at *7. Whether "good cause" exists is a matter within the court's discretion. See United States v. One Parcel of Real Estate Located at 1948 S. Martin Luther King Drive, 270 F.3d 1102, 1110 (7th Cir. 2001) (the standard of review on appeal for denial of leave to amend is an abuse of discretion).

III.ANALYSIS

Craftmaster opposes Masonite's motion for leave to supplement on three grounds. Craftmaster argues that: (1) the Certificates of Correction for the '225 and '226 patents are "ineffective" in this case, (2) Masonite lacks good cause under Rule 16, and (3) even if good cause exists, Masonite has not satisfied Rule 15.

A.The Effect of the Certificates of Correction

For clerical, typographical, or other mistakes of minor character, the USPTO can issue a certificate of correction. See 35 U.S.C. § 255 (2011) (for mistakes by the patent applicant); 35 U.S.C. § 254 (for mistakes by the USPTO). The certificate becomes part of the patent, and the patent is construed in corrected form "for causes thereafter arising." 35 U.S.C. § 255; see also 35 U.S.C. § 254. The Federal Circuit construed 35 U.S.C. § 254, which has the same language as § 255 regarding when it takes effect, in Southwest Software, Inc. v. Harlequin, Inc., 226 F.3d 1280 (Fed. Cir. 2000). The Southwest patentee sought to apply retroactively its certificate of correction by construing the language, "causes thereafter arising," as including all causes of action which arose after the patent's issue date. 226 F.3d at 1294. The court disagreed, holding that a certificate of correction is not "effective" for causes of action arising before the certificate issued. Id. at 1295. In the patent context, each act of patent infringement gives rise to a separate cause of action. E.I. du Pont de Nemours & Co. v. MacDermid Printing Solutions, LLC, 525 F.3d 1353, 1362 (Fed. Cir. 2008) (citing Hazelquist v. Guchi Moochie Tackle Co., Inc., 437 F.3d 1178, 1180 (Fed. Cir. 2006)).

Craftmaster contends that the certificates of correction cannot be given effect in this lawsuit because the certificates did not issue until after the suit commenced. (See Craftmaster's Resp. at 11 (quoting Southwest, 226 F.3dat 1294) ("We hold that the certificate of correction . . . is not to be given effect in this pre-certificate lawsuit. The certificate of correction is only effective for causes of action after it was issued.").) Craftmaster argues that granting Masonite leave to supplement its original pleadings would only add causes of action based on certificates of correction that are not effective for this pre-certificate lawsuit; consequently, these causes of action which would be futile as a matter of law.

The court in Lamoureux v. AnazaoHealth Corp., 669 F. Supp. 2d 227, 236 (D. Conn. 2009), considered the effect of a certificate of correction in the context of patent claim construction. There, the court noted that "the relevant inquiry for considering a certificate of correction is the date the cause of action arose rather than the date the suit was filed." Lamoureux, 669 F. Supp. 2d at 236 (citing STMicroelectronics, Inc. v. Motorola, Inc., 327 F. Supp. 2d 687, 700 (E.D. Tex. 2004)). The court observed that unlike in Southwest, its plaintiffs were suing for causes of action arising both before and after the certificate of correction issued because the plaintiffs had filed a supplemental complaint that encompassed acts of infringement arising ...


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