Wednesday, June 22, 2011

Leave to amend answer to assert inequitable defense is ok in the early stages

Mitsubishi Heavy Industries and General Electric are engaged in various patent infringement litigations related to "modern-day wind turbines." In defending itself, GE claims that Mitsubishi cannot enforce at least one of the patents-in-suit because of inequitable conduct Mitsubishi committed on the Patent Office. Problem is, GE claims it could not properly assert its inequitable conduct counterclaim prior to the Court's deadline for amending pleadings.

The basis of the alleged inequitable conduct stems from a failure by Mitsubishi to cite certain prior art to the Patent Office during prosecution of the subject patent. Three Japanese prior art references were cited in a Japanese patent application (from which the subject patent claims priority). These references were not cited to the U.S. Patent Office. In one of the other litigations between the parties, GE asked for copies of the Japanese patent application and the cited references, but was not provided any English translations. GE did not receive English translations until after the deadline had passed to amend its answer (and assert its inequitable conduct claim).

For a Court to grant leave, good cause must be shown. GE argued that such good cause existed because it could not satisfy heightened pleading requirements of Rule 9 and its obligations under Rule 11 without having English translations of the prior art references. And it didn't have those translations until after the deadline to amend.

Mitsubishi objected that if leave were granted, it would be "greatly prejudiced." The Court was not persuaded:
Although Defendant does not provide specific dates showing when it received the English translation of the '312 patent application and associated prior art references, or when exactly Defendant obtained the necessary facts to enable it to plead with particularity inequitable conduct, it seems that Defendant obtained this information after the October 19, 2010 deadline to amend pleadings. In appreciation of the requirements and consequences of Rule 11, Defendant waited until it had the necessary factual predicate to move to add the affirmative defenses and counterclaim based upon inequitable conduct. Accordingly, the Court finds the Defendant has demonstrated good cause to amend its pleading after the deadline.
Leave to amend granted.

Mitsubishi Heavy Industries, Ltd. v. General Electric, Co., slip op., Case No. 6:10-cv-00812, (M.D. Fla. June 14, 2011) (Mag. Kelly)

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