Monday, February 20, 2012

Amended Pleading (Rule 15(a)(1)) vs. Supplemental Pleading (Rule 15(d)) -- Are they different?


MacNeil IP (an Illinois company) sent a cease and desist letter to Kramer America (a Florida company) informing Kramer of a number of patents owned by MacNeil and asserting that Kramer infringed one of those patents.  As is the risk whenever you send a letter accusing another of infringement, Kramer responding by filing a declaratory judgment lawsuit, asking the Court to declare that Kramer did not infringe the patent MacNeil had accused it of infringing.

MacNeil responded by doing two things.  First, it provided Kramer a covenant promising that it would not sue Kramer for the patent MacNeil previously accused Kramer of infringing.  This had the net effect of removing subject matter jurisdiction as no controversy existed between the parties related to that patent any longer.  (For a discussion on this approach, see my post on Super Sack.)  MacNeil also filed a patent infringement case in Illinois, charging Kramer with infringing some of MacNeil's other patents.

Kramer responded to the covenant not to sue by filing an Amended Complaint, pursuant to Fed. R. Civ. P. 15(a)(1), asking now for a declaration that it did not infringe the patents MacNeil sued over in Illinois.  MacNeil objected, and asked the Court to strike the "Amended Complaint" as not being an amended complaint at all.  Instead, MacNeil argued the "Amended Complaint" was a "Supplemental Complaint" pursuant to Rule 15(d), which Kramer needed leave of court to file.

Rule 15(a)(1) allows a party to file an amended pleading, without leave of court, within a 21-day time period (which Kramer was within).  Rule 15(d), on the other hand, allows a party to file a supplemental pleading setting out any transaction, occurrence, or event that happened after the original pleading was filed.  But a party must first receive permission from the Court to file such a supplemental pleading.

MacNeil further argued that the "Amended Complaint" could not supplement the original complaint under Rule 15(d) because, while there was subject matter jurisdiction for the original complaint as, at the time it was filed, there was a controversy between the parties related to the patent at issue therein, there was not subject matter jurisdiction at the time the original complaint was filed related to the other patents because they had not been asserted against Kramer.

The Court refused to strike the Amended Complaint, and instead invited MacNeil to file a motion to dismiss the Amended Complaint under this subject matter jurisdiction analysis.  MacNeil did precisely that.

MacNeil's cease and desist letter stated:
We ... are writing to you concerning the ... vehicle floor mat that you manufacture, sell, offer to sell and import.  MacNeil owns multiple patents directed to vehicle floor trays, including U.S. Patent Nos. 7,401,837; 7,316,847; 7686,370; 7607,713; 7,444,748; 7686,371; and 7,784,848. ....
It has come to our attention that your use, manufacture, sale, offers to sell and importing of the ... mats infringes at least one of the MacNeil IP LLC patents.  See U.S. Patent No. 7,401,837 attached hereto....
While MacNeil provided a covenant not to sue on the '837 patent, MacNeil did sue Kramer for infringement of the '370 and '819 patents.

The issues presented are different for the '370 patent and the '819 patent.  First, the '370 patent is identified in MacNeil's letter.  The '819 is not.  Second, the '819 patent is related to a mechanism for affixing a floor mat to a vehicle floor, and not to a floor tray itself.  Thus, the Court determined that subject matter properly exists for the declaratory judgment case related to the '370 patent.  But the declaratory judgment count concerning the '819 patent (and related trade dress and unfair competition issues) did not present a justiciable issue at the time the complaint was filed because they had not been asserted.

[NOTE: This presents an interesting timing issue to me.  Kramer has subject matter jurisdiction here in Florida on one patent claim.  The day after it filed its declaratory judgment case here, MacNeil filed a patent infringement case in Illinois asserting another patent (not previously identified in its letter).  But MacNeil's letter says that Kramer allegedly infringes "at least one of" MacNeil's patents.  So Kramer amends its complaint to name the two others MacNeil sued on in Illinois.  One of those cases can stick because that patent number happened to be mentioned in the cease and desist letter, but the other can't because it wasn't mentioned?  This seems to give MacNeil grounds to go back to Illinois -- the second filed jurisdiction -- and seek to proceed there on the second patent.  Thus, 2 different court will be addressing the same parties in similar patents at the same time.  Perhaps the next round of motions here will shake that issue out.  We'll see.]

Kramer America, Inc. v. MacNeil IP, LLC, Case No. 6:11-cv-1489, (M.D. Fla. Dec. 8, 2011 (motion to strike amended complaint) Feb. 3, 2012 (motion to dismiss amended complaint)) (J. Presnell)

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