Opinion
99 Civ. 11674 (JGK) (RLE)
May 25, 2000
MEMORANDUM OPINION ORDER
Before the Court is an application by the plaintiff N.V. Organon ("Organon") to amend its complaint against defendant Elan Pharmaceuticals, Inc. ("Elan").
On March 31, 2000, Organon moved to amend its complaint to add an additional claim of fraud. This proposed second claim of fraud arises from the alleged forgery of Raymond Geraldson on a Notice of Opposition, filed on behalf of Elan in the United States Patent and Trademark Office on November 8, 1999. Organon argues that Geraldson's signature was obviously signed by another person, which Geraldson admitted to in his deposition, and this signing by another violates administrative law 37 C.F.R. § 10.18 (a).
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 Ronzani v. Sanofi S.A ., 899 F.2d 195, 198 (2nd Cir. 1990). Notwithstanding the liberality of the general rule, "[w]hether to allow amendment is a decision that rests in the discretion of the district court," and for the proper reasons, a court may deny permission to amend, in whole or in part. H.L . Hayden Co. of New York v. Siemens Medical Systems, Inc ., 112 F.R.D. 417, 419 (S.D.N.Y. 1986) (citing Zenith Radio Corp. v . Hazeltime Research, Inc ., 401 U.S. 321, 330-32 (1971)). "Reasons for a proper denial of leave to amend include undue delay, bad faith, futility of the amendment, and perhaps most important, the resulting prejudice to the opposing party." State Teachers Retirement Board v. Fluor Corp ., 654 F.2d 843, 856 (2nd Cir. 1981); Dluhos v. Floating and Abandoned Vessel, Known as New York , 162 F.3d 63, 69 (2nd Cir. 1998).
Here, while the prejudice to Elan is significant, the strongest factor precluding amendment is the futility of the proposed claim. Any challenge to the validity of the Notice of Opposition should be properly before the agency it was filed with, namely the Patent and Trademark Office Trademark Trial and Appeal Board. Assuming that this issue could be brought before this Court for monetary damages based on a violation of an administrative rule, Organon's fraud claim would necessarily fail because it does not indicate any factual support for the proposition that Geraldson meant to deceive Organon by having an associate sign for him. Therefore, the proposed claim would be futile because Organon cannot show a material element, namely, that Geraldson willfully withheld material information from the Patent and Trademark Office. Also rebutting the assertion that the signature was fraudulent is the fact that signing another's name, and adding one's own initials to indicate that the signature was applied by someone other than the named person, is common business practice. See Cerveceria India Inc. v. Cerveceria Centroamericana, S.A ., 10 U.S.P.Q.2d 1064, 1067 (Trademark Tr. App. Bd. 1989). Given the futility of Organon's proposed amendment, and the indication that Elan would be prejudiced as the case draws near the close of discovery, Organon's motion to amend the complaint is DENIED.