Opinion
No. 04 Civ. 9135 (RMB) (JCF).
June 30, 2005
MEMORANDUM AND ORDER
Ovadia Corporation ("Ovadia"), the plaintiff in this patent infringement action, has filed a motion to amend its complaint to add Instyle Jewellery (of India) ("Instyle (India)") as an additional defendant pursuant to Rules 15(a) and 20(a) of the Federal Rules of Civil Procedure. Instyle Jewellery (of New York) ("Instyle (New York)"), the current defendant, opposes the amendment on the ground that it is futile. For the reasons that follow, the plaintiff's motion to amend is granted.
Instyle (New York) and Instyle (India) both spell the word "Jewellery" in their trade names with two "l"s and an additional "e." (Deposition of Deepen Parikh dated April 7, 2005 ("Parikh Dep."), attached as Exh. A to Declaration of Joseph Sutton dated May 16, 2005 ("Sutton Decl."), at 70-71).
Background
In its complaint filed November 19, 2004, Ovadia named Instyle (New York) as the sole defendant. (Complaint for Patent Infringement dated November 18, 2004 ("Compl."), ¶ 2). Ovadia claimed patent infringement stemming from the defendant's use of jewelry display pads and trays that allegedly infringed five patents held by the plaintiff. (Compl., ¶¶ 5-10, 13). The alleged infringement took place in a jewelry booth at a Las Vegas trade show in early June 2004. (Amended Complaint for Patent Infringement dated May 16, 2005 ("Amend. Compl."), ¶ 14; Parikh Dep. at 62). Both Deepen Parikh and Mitesh Kalthia, the defendant's manager and principal owner, respectively, admitted being present at the booth where the alleged infringement occurred. (Parikh Dep. at 64; Deposition of Mitesh Kalthia dated May 2, 2005 ("Kalthia Dep."), attached as Exh. B to Sutton Decl., at 45-46).
According to Ovadia, a representative in the Las Vegas booth handed the plaintiff a business card that identified the company as "Instyle Jewellery" and listed the defendant's place of business as 580 Fifth Avenue, New York, New York. (Sutton Decl., Exh. C; Plaintiff's Memorandum of Law in Support of its Motion to Amend the Complaint to Add Instyle Jewellery (India) as a Co-Defendant ("Pl. Memo.") at 3). A sign above the booth likewise bore the name "Instyle Jewellery." (Parikh Dep. at 71-72). As a result, Ovadia asserts that it believed that the defendant was the owner of the booth, as well as of the displays used and the jewelry sold there. (Pl. Memo. at 3). During the course of their depositions, however, Mr. Parikh and Mr. Kalthia both disclosed that the actual owner of the booth and most of its contents was Instyle (India). (Parikh Dep. at 50-52, 54, 61; Kalthia Dep. at 40). Instyle (India) not only shares a trade name with the defendant (Parikh Dep. at 51-52; Kalthia Dep. at 36-38), but is owned by Mr. Kalthia's brother-in-law (Parikh Dep. at 51; Kalthia Dep. at 31) and supplies the defendant with all of its jewelry. (Parikh Dep. at 58-59; Kalthia Dep. at 24).
Upon witnessing the alleged infringement in June 2004, the plaintiff sent the defendant a cease and desist letter on June 16, 2004 (Letter from Mark Hartmann to Instyle Jewellery dated June 16, 2004, attached as Exh. F to Compl., at 1st and 2nd unnumbered pages) and another on August 24, 2004 (Letter from Mark Hartmann to Deepen Parikh dated Aug. 24, 2004, attached as Exh. F to Compl., at 3rd unnumbered page). When the defendant failed to respond to these letters, the plaintiff brought this action.
Thereafter, discovery commenced and was scheduled to be completed by April 30, 2005. (Case Management Plan dated June 10, 2005). The plaintiff deposed Mr. Parikh on April 7, 2005 and Mr. Kalthia on May 2, 2005. (Parikh Dep. at 1; Kalthia Dep. at 1). As mentioned above, the plaintiff asserts that it first learned of Instyle (India)'s existence, as well as of its participation in the Las Vegas trade show, through these depositions. (Pl. Memo. at 3-4). Soon thereafter, the plaintiff filed its motion to amend.
Discussion
A motion to amend is governed by Rule 15(a) of the Federal Rules of Civil Procedure, which states that leave to amend shall be "freely given when justice so requires." Fed.R.Civ.P. 15(a); see Oneida Indian Nation of New York v. City of Sherrill, 337 F.3d 139, 168 (2d Cir. 2003), rev'd on other grounds, ___ U.S. ___, 125 S. Ct. 1478 (2005). Notwithstanding this standard, it is within the sound discretion of the court to decide whether to grant a motion to amend. See John Hancock Mutual Life Insurance Co. v. Amerford International Corp., 22 F.3d 458, 462 (2d Cir. 1994); EK Success, Ltd. v. Uchida of America, Corp., No. 04 Civ. 1556, 2004 WL 1837357, at *1 (S.D.N.Y. Aug. 17, 2004). Leave to amend may be denied for reasons such as: (1) undue delay; (2) bad faith; (3) repeated failure to cure deficiencies by amendments previously allowed; (4) undue prejudice to the opposing party; or (5) futility of the amendment. Foman v. Davis, 371 U.S. 178, 182 (1962); Liegey v. Ellen Figg, Inc., No. 02 Civ. 1492, 2003 WL 21361724, at *2 (S.D.N.Y. June 11, 2003).
Here, the plaintiff seeks to add Instyle (India) as a defendant pursuant to Rule 20(a) of the Federal Rules of Civil Procedure. (Notice of Motion for Leave to File Amended Complaint Adding New Defendant dated May 16, 2005 ("Motion to Amend"), at 12-). Rule 20(a) allows persons to be joined as defendants if the plaintiff asserts against them a claim arising out of the same occurrence or transaction and any question of law or fact common to all the defendants will arise in the action. Fed.R.Civ.P. 20(a). This standard is applied liberally so as to promote judicial economy by allowing "all reasonably related claims for relief by or against different parties to be tried in a single proceeding." Liegey, 2003 WL 21361724, at *3 (quoting A.I.A. Holdings, S.A. v. Lehman Brothers, Inc., No. 97 Civ. 4978, 1998 WL 159059, at *5 (S.D.N.Y. April 1, 1998)).
Ovadia has easily satisfied the joinder requirements set forth in Rule 20(a). First, both Ovadia's complaint against the defendant and Ovadia's proposed claim against Instyle (India) allege patent infringement based on the use of certain jewelry displays at the Las Vegas trade show in June 2004. (Amend. Compl., ¶ 14). The defendant's manager acknowledged during his deposition that the booth, the jewelry, and some of the display trays are actually owned by Instyle (India). (Parikh Dep. at 51-54, 60-62). In addition, representatives from both Instyle (New York) and Instyle (India) were present at the booth when the alleged violation occurred. (Parikh Dep. at 52-54; Kalthia Dep. at 46). In fact, Mr. Parikh went to Las Vegas at Mr. Kalthia's direction specifically to help Instyle (India) with their jewelry exhibition. (Kalthia Dep. at 48-49). Thus, the claim that Ovadia now seeks to assert against Instyle (India) clearly arises from the same transaction as that which forms the basis for the claim already asserted against the defendant in the plaintiff's initial complaint.
Second, pursuant to 35 U.S.C. § 271, a person is guilty of patent infringement if that person "without authority . . . uses . . . any patented invention." 35 U.S.C. § 271. Although the exact relationship between the defendant and Instyle (India) is not completely clear, the plaintiff contends that both of them used the allegedly infringing display trays and pads to exhibit jewelry at the booth in Las Vegas. (Amend. Compl., ¶ 14). Because the plaintiff's claims against both the defendant and Instyle (India) assert patent infringement arising out of the same use of display trays, Ovadia's claims against Instyle (New York) and against Instyle (India) are based on common questions of law and fact.
The plaintiff refers to the defendant as an "affiliate" of Instyle (India). (Amend. Compl., ¶ 5). The defendant's representatives, however, while acknowledging the name that the companies share, the vendor relationship between them, and the familial relationship between their owners, deny the existence of any corporate relationship between the two companies. (Parikh Dep. at 56-7; Kalthia Dep. at 31-34).
The defendant, however, opposes the amendment to join Instyle (India) as futile, arguing that the display trays that it brought to the Las Vegas show were purchased from Advance Jewelry Display ("Advance"), one of the plaintiff's own distributors. (Memorandum of Law in Support of Defendant's Opposition to Plaintiff's Motion for Leave to File an Amended Complaint dated May 26, 2005 ("Def. Memo."), at 5-6).
This argument is flawed in two respects. First, it fails to address the fact that Instyle (India) also brought display trays to the trade show: trays that may not have been bought from Advance and may be infringing. (Parikh Dep. at 47-50, 62). More fundamentally, the defendant asks that the proposed amendment be rejected based on an adjudication of the facts, as would occur on summary judgment or at trial. But leave to amend may be denied on grounds of futility only if the amendment would not be able to survive a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6). See Oneida Indian Nation, 337 F.3d at 168;Milanese v. Rust-Oleum Corp., 244 F.3d 104, 110 (2d Cir. 2000);RM Jewelry, LLC. v. Michael Anthony Jewelers, Inc., 221 F.R.D. 398, 399 (S.D.N.Y. 2004). Thus, amendment should be denied as futile only where it appears beyond a reasonable doubt that the plaintiff can plead no set of facts which would entitle him to relief. See Milanese, 244 F.3d at 110 (citing Ricciuti v. New York City Transit Authority, 941 F.2d 119, 123 (2d Cir. 1991)).
Here, the plaintiff has stated a valid claim against Instyle (India) and should be given the opportunity to present evidence in support of this claim. Although not raised by the defendant, it is worth noting that there is no evidence of bad faith on the part of Ovadia in making this motion, nor is there any indication that allowing the proposed amendment will prejudice the defendant in any way. In addition, granting the plaintiff's motion should not cause any undue delay of these proceedings given that the period for discovery has been extended to August 31, 2005. (Order dated May 6, 2005, at 1). In sum, there is no compelling reason for denying the plaintiff's instant motion to amend.
Conclusion
For the reasons set forth above, Ovadia's motion to amend the complaint to add Instyle (India) as a defendant is granted.
SO ORDERED.