Summary
directing party to amend complaint to add counterclaims in reply to simplify the pleadings
Summary of this case from Johnson v. JohnsonOpinion
No. C 06-6613 CW.
June 6, 2007
Defendants Nanya Technology Corp. and Nanya Technology Corp. U.S.A. (collectively, Nanya) move to strike the counterclaims filed by Plaintiffs Fujitsu Limited and Fujitsu Microelectronics America, Inc. (collectively, Fujitsu). In a separate motion, Nanya moves to strike Fujitsu's First Supplemental Patent Local Rule 3-1 Disclosure. Fujitsu opposes the motions. The matter is decided on the papers. Having considered all of the papers filed by the parties, the Court grants in part Nanya's motion to strike Fujitsu's counterclaims and denies Nanya's motion to strike Fujitsu's First Supplemental Patent Local Rule 3-1 Disclosure.
BACKGROUND
At the case management conference on February 2, 2007, the Court asked whether Nanya or Fujitsu would be adding any additional claims or parties to the lawsuit. Counsel for Fujitsu responded that "as of now, we don't have any. . . ." Counsel for Nanya indicated that it would be asserting additional counterclaims and additional declaratory claims along with its answer. The Court informed Nanya that it could file its counterclaims with its answer, but other than that, February 2, 2007, was the deadline for adding additional parties and claims. The scheduling order provides that, with the exception of any counterclaim filed with the answer, the deadline to add additional parties or claims was February 2, 2007.
Prior to the case management conference, the Court heard argument on Nanya's motion to dismiss, transfer or stay. In its February 9, 2007 order, the Court denied without prejudice Nanya's motion. The Court concluded that the case Nanya filed against Fujitsu in Guam was the first-filed case and, therefore, this Court would defer to the Guam district court to decide the appropriate forum and whether the first-filed rule is applicable. The Court is still awaiting the Guam district court's ruling on Fujitsu's motion to transfer the case in Guam to the Northern District of California. If that motion is denied, this case will be transferred to Guam. Nonetheless, in the interest of efficiency, the Court rules on the within motions.
On February 21, 2007, Nanya filed its Answer, Affirmative Defenses and Counterclaims. Count Thirteen was entitled, "Non-Infringement, Invalidity, and Unenforceability of U.S. Patent No. 5,227,996." Although Fujitsu had previously accused Nanya of infringing its `996 patent, Fujitsu had not alleged that Nanya infringed the `996 patent in its complaint in this action, nor did it include any assertions of the `996 patent in its Patent Local Rule 3-1 Disclosure of Asserted Claims and Preliminary Contentions.
On March 16, 2007, Fujitsu filed its Reply, Affirmative Defenses and Counterclaims. It contained six counterclaims. The first counterclaim alleged that Nanya infringed its `996 patent. The remaining counterclaims alleged breach of contract, breach of confidentiality, fraud, negligent misrepresentation and unfair competition under California law. On April 4, 2007, Fujitsu filed its First Supplemental Patent Local Rule 3-1 Disclosure of Asserted Claims and Preliminary Infringement Contentions, which asserts that Nanya infringes claims 1, 2, 3, 4, 5 and 13 of the `996 patent. Fujitsu did not seek leave of the Court to file its six new claims or to file its supplemental patent infringement disclosure.
DISCUSSION
Nanya argues that Fujitsu's counterclaims and supplemental disclosure were filed without leave of the Court in violation of the Court's scheduling order, the Federal Rules of Civil Procedure and the Local Patent Rules and, thus, should be stricken because they constitute immaterial and impertinent matter. Pursuant to Federal Rule of Civil Procedure 12(f), the Court may strike from a pleading "any insufficient defense or any redundant, immaterial, impertinent or scandalous matter." See also Fed.R.Civ.P. 15(a) ("a party may amend the party's pleading only by leave of court or by written consent of the adverse party"); Patent L.R. 3-7 (explaining that, except in situations not applicable here, amendment or modification of preliminary infringement contentions "may be made only by order of the Court, which shall be entered only upon a showing of good cause").
Fujitsu responds that its counterclaims are compulsory in response to Nanya's counterclaims and thus should not be stricken. It argues that it was not required to seek leave to file these counterclaims or to supplement its preliminary infringement contentions.
The Ninth Circuit has noted that counterclaims in reply may be used in situations where the counterclaims are compulsory. Frank Briscoe Co., Inc. v. Dynatex Corp., 857 F.2d 606, 610 (9th Cir. 1988). Nanya does not dispute that Fujitsu's counterclaims in reply are responsive to its counterclaims, nor does it argue that the counterclaims in reply are not compulsory. Nanya points out that Fujitsu was aware of the facts on which its counterclaims in reply are predicated before Nanya filed its counterclaims and that Fujitsu could have brought, in its original complaint, the claims it now seeks to bring, but chose not to do so. This, however, does not provide cause to strike Fujitsu's counterclaims in reply.
Nonetheless, counterclaims in reply are treated "as an amendment to the complaint." Electroglas, Inc. v. Dynatex Corp., 473 F. Supp. 1167, 1171 (N.D. Cal. 1979). To simplify the pleadings, the Court directs Fujitsu to amend its complaint to add its six counterclaims in reply as causes of actions in its complaint.
Pursuant to the Local Patent Rules, Fujitsu should have sought leave to file its supplemental patent infringement contentions. Nonetheless, in the interest of judicial efficiency, and because good cause does exist, the Court will not force Fujitsu to seek leave to file its supplemental patent infringement contentions, nor will the Court strike the supplemental contentions. So as not to prejudice Nanya, the Court will allow Nanya an additional twenty-two days to file its response to Fujitsu's supplemental patent infringement contentions. If Nanya has already filed its response, it may file an amended response twenty-two days from the date of this order.
CONCLUSION
For the foregoing reasons, Nanya's motion to strike Fujitsu's counterclaims (Docket No. 87) is GRANTED IN PART. The Court strikes Fujitsu's counterclaims, but it grants Fujitsu leave to amend its complaint to add the causes of action it sought to bring in its counterclaims in reply. Fujitsu must file its amended complaint within five days from the date of this order. Nanya may then file an answer, or it may rest on its prior answer and claims. Nanya's motion to strike Fujitsu's First Supplemental Patent Local Rule 3-1 Disclosures (Docket No. 92) is DENIED. Nanya's request for attorneys' fees and costs incurred in bringing its motions, is also DENIED.
Nanya's request for judicial notice (Docket No. 88) is GRANTED.
IT IS SO ORDERED.