Fluidigm Corporation, a Delaware Corporation v. Ionpath, Inc., a Delaware Corporation

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6

8 FLUIDIGM CORPORATION, et al., 9 Plaintiffs, No. C 19-05639 WHA

10 v.

11 IONPATH, INC., ORDER DENYING LEAVE TO FILE THIRD AMENDED COMPLAINT 12 Defendant.

13 14 INTRODUCTION 15 In this patent and business interference suit, patent owner seeks leave to amend its 16 complaint for the third time to add a claim under the Lanham Act. This order does not reach the 17 merits of the proposed pleading, however, as patent owner failed to diligently investigate the 18 facts that it says gave rise to this new claim. The motion is DENIED. 19 STATEMENT 20 Prior orders detail the facts here (Dkt. Nos. 46, 58). In brief, patent owner, Fluidigm 21 Corporation and Fluidigm Canada Inc., markets mass cytometry methods and systems for cell 22 structure and biomarker analysis. The methods involve labelling a sample, usually a cell or 23 tissue suspension, with metal tags attached to antibodies in a process called “staining.” Different 24 antibodies bind to different cell targets, and different metal tags attach to different antibodies. 25 Following staining and washing, to remove unbound antibodies, only antibody-metal tags bound 26 to present targets remain (Dkt. No. 59 at ¶¶ 23–24). 27 To analyze the samples, the metal tags are released and ionized. A mass spectrometer 1 identifies the various metal tags released from the sample. And, because the various metal tags 2 bound to antibodies which in-turn bound to varying targets, identifying the metal tags identifies 3 the targets present in the sample (Dkt. No. 59 at ¶¶ 25–27). 4 Patent owner markets these mass cytometry methods and devices. And, it markets its own 5 line of “Maxpar” antibody-metal tag reagents. Patent owner also, unsurprisingly, holds and 6 asserts here several patents covering those processes and products. The patents, however, do not 7 play in this present matter. 8 Defendant IONpath, Inc., markets its own mass cytometry system, the “MIBIscope,” its 9 own line of antibody-metal tag reagents, “MIBItags,” and is apparently after patent owner’s 10 customers. Though patent owner’s sales terms prohibit the use of the Maxpar reagents with any 11 system but patent owner’s proprietary system, defendant has (allegedly) encouraged its 12 customers to use patent owner’s Maxpar reagents with defendants’ MIBIscope. So, patent owner 13 sued for this alleged intentional interference with contractual relations (Dkt. No. 59 at ¶¶ 27, 71– 14 78, 96–99, 121–31). 15 Following patent owner’s September and October 2019 complaint and first amended 16 complaint, discovery opened at the January 23 case management conference. A January 24 17 order dismissed the interference claim, but a March 24 order granted leave to reassert the claim 18 with strengthened allegations in patent owner’s second amended complaint. An April 16 case 19 management scheduling order directed patent owner to finalize its pleadings by May 28. 20 Patent owner now moves for leave to file a third amended complaint. During an August 28 21 deposition, patent owner learned that defendant (allegedly) used Maxpar reagents with 22 defendants’ own MIBIscope in 2017 and recently published the resulting research without 23 revealing the source of the material used. According to patent owner, the paper repeatedly and 24 falsely claimed that defendant used only its own material in the course of the research, 25 amounting to a false and deceptive commercial advertisement under the Lanham Act. Though 26 patent owner initially sought leave to add both breach of contract (based on illicit use of patent 27 owner’s Maxpar reagents with other systems) and Lanham Act claims, patent owner 1 subsequently retracted the contract claim (Dkt. Nos. 133-4, 139). This order follows full briefing 2 and is appropriate for disposition on the papers. 3 ANALYSIS 4 Federal Rule of Civil Procedure 15(a) dictates that leave to amend shall be freely given 5 “when justice so requires.” Absent (1) undue delay; (2) bad faith; (3) repeated failure to cure 6 deficiencies; (4) undue prejudice; or (5) futility, leave should be granted. Foman v. Davis, 371 7 U.S. 178, 182 (1962). But the May 28 deadline for amended pleadings has long passed (Dkt. 8 No. 72). Where the Court has imposed a deadline, Rule 16(b)(4) permits modification “only for 9 good cause.” “The central inquiry under Fed. R. Civ. P. 16(b)(4) is whether the requesting party 10 was diligent in seeking the amendment.” DRK Photo v. McGraw-Hill Glob. Ed. Holds., 870 F.3d 11 978, 989 (9th Cir. 2017). New facts may certainly constitute good cause to amend a complaint, 12 but only where the moving party has diligently pursued discovery of those facts. See, e.g., Bot 13 M8 v. Sony, No. C 19-07027 WHA, 2020 WL 1643692 (N.D. Cal. April 2, 2020). 14 Here, new facts have arisen. Patent owner learned during an August 28 deposition that 15 defendant used patent owner’s Maxpar reagents along with defendant’s MIBIscope in 2017 and 16 submitted a paper in December 2019 describing (incorrectly, as patent owner alleges) that 17 research. But even accepting patent owner’s contention that it could not have known of these 18 facts until defendant revealed them, patent owner did not diligently pursue them. 19 From the start, patent owner’s complaints alleged that not only had defendant encouraged 20 others to use patent owner’s Maxpar reagents with defendant’s MIBIscope, but that, in fact, 21 defendant itself had already so used the reagents. Patent owner’s September 2019 complaint 22 alleged that: 1. Defendants had contacted patent owner’s “customers for the 23 express purpose of convincing [them] to use [patent owner’s] proprietary Maxpar® antibodies and related reagents with 24 [defendant’s] systems;”

25 2. Defendant’s founders, Drs. Sean Bendall and Michael Angelo, had submitted a paper to the scientific journal Cell in April 2018 26 based on research they performed using Fluidigm materials with IONpath technology; 27 3. Defendant had published a brochure depicting cell images 1 generated by defendants’ machines with patent owner’s Maxpar reagents; and 2 4. Defendant did not start marketing its MIBItags, its version of 3 patent owner’s Maxpar reagents, until at least 2019. 4 (Dkt. No. 1 at ¶¶ 60, 64, 73, 115). Patent owner’s October 2019 first amended complaint 5 repeated these allegations (Dkt. No. 13 at ¶¶ 68, 72, 81, 123). 6 Moving for leave to file its second amended complaint in February 2020, patent owner 7 again repeated the first three allegations and expanded on the fourth, explaining why defendant 8 needed to encourage the use of patent owner’s reagents with defendant’s own system, the 9 MIBIscope. Specifically, the second amended complaint alleged that the special mass cytometry 10 reagents, used by its own system and by defendant’s MIBIscope, were (and continue to be) 11 tailor-made products and not widely available. The complaint explained that between 2017, 12 when defendant began marketing its MIBIscope, and July 2019, when it first marketed 13 MIBItags, patent owner’s Maxpar reagents would have been the primary antibody-metal tags on 14 the market. Then, beyond the 2018 Cell article by Drs. Bendall and Angelo, the second amended 15 complaint newly alleged that another of defendant’s founders, Dr. Gary Nolan, purchased patent 16 owner’s Maxpar reagents for use with his MIBIscope in his lab at Stanford University. And 17 even further, the second amended complaint alleged that Drs. Angelo and Bendall had written a 18 new article, published in January 2020, again describing the use of patent owner’s Maxpar 19 reagents with defendant’s MIBIscope (Dkt. No. 59 at ¶¶ 71, 73, 76, 80–84, 95, 99). 20 Simply put, patent owner has premised much of this case for the past year on its allegations 21 that defendant itself used, and encouraged others to use, patent owner’s Maxpar reagents with 22 defendant’s MIBIscope. And yet now, patent owner justifies the delayed addition of new claims 23 in a third amended complaint, based on defendant’s use of Maxpar reagents in 2017, with the 24 assertion that it had no reason to suspect the newly discovered facts until an August 28 25 deposition. Had this case been purely about defendant encouraging others to use the Maxpar 26 reagents with its MIBIscope, a preeminent inquiry still would have been whether defendant had 27 every used patent owner’s reagents with its machine. But this case is about more than use by 1 suspicion that defendant itself had used its Maxpar reagents with defendant’s MIBIscope and 2 even published papers based on that illicit used. Patent owner’s first round of discovery could 3 have (and should have) discovered defendant’s alleged 2017 use of those reagents. Diligent 4 follow up would have revealed the resultant December 2019 article submission and March 2020 5 publication. Patent owner instead dithered. 6 Both parties wholly miss this point, and instead quibble about the discovery that was taken 7 and when it would have discovered the relevant facts. Patent owner contends that the relevant 8 facts fell within five of its December 2019 requests for production, thus responsibility for its 9 failure to learn of these facts earlier rests on defendant’s inadequate document production. In 10 ordinary circumstances, perhaps so. A party is, to a reasonable extent, entitled to rely on the 11 completeness of an opposing party’s document production. So a party without reason to suspect 12 new facts might be excused where delayed production in turn delayed revelation of the facts. 13 But patent owner did suspect. This order repeats: patent owner suspected and repeatedly 14 pled from the beginning that defendant had used its Maxpar reagents with a MIBIscope and 15 published research based on that use. And, by February, patent owner knew that defendant had 16 done it again, publishing a new paper in January. That warranted at least a direct interrogatory 17 or a request for admission into the extent of defendant’s use of Maxpar reagents with its 18 MIBIscope and subsequent use of the research. Diligent follow-up would have led to the facts 19 now pled. Yet patent owner subordinated its duty to diligently and specifically inquire to broad 20 document requests. Not until June 30, more than one month after the pleading amendment 21 deadline, did patent owner serve its first set of interrogatories and requests for admission which 22 directly asked if defendant has used Maxpar reagents with a MIBIscope. Patent owner offers no 23 explanation for its failure to take this discovery months earlier. 24 Last, the parties’ late summer finagling about the scope and pace of discovery outside the 25 bounds of the patent showdown does nothing to change the fact that patent owner did not 26 diligently pursue the relevant facts for the preceding six months. Regardless, the January 24 case 27 management order clearly stated that the patent showdown should in no way slow or narrow both 1 CONCLUSION 2 Patent owner failing to diligently pursue discovery of the claims it now seeks leave to add, 3 the motion is DENIED. Because defendant has not submitted a declaration under Civil Local 4 Rule 79-5(e)(1) in support of patent owner’s motion to seal portions of its motion and proposed 5 complaint, the motion to seal is DENIED. The October 15 hearing is VACATED. 6 IT IS SO ORDERED. 7 Dated: October 9, 2020. 8

WILLIAM ALSUP 10 UNITED STATES DISTRICT JUDGE 11 12

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