Ideal Instruments, Inc. v. Rivard Instruments, Inc.

434 F. Supp. 2d 640, 65 Fed. R. Serv. 3d 733, 2006 U.S. Dist. LEXIS 41721, 2006 WL 1689319
District Court, N.D. Iowa·Decided June 21, 2006·No. C 05-3079-MWB·Published·Cited by 10 cases

Opinion

MEMORANDUM OPINION AND ORDER REGARDING DEFENDANTS’ MOTION TO RECONSIDER COURT’S ORDER REGARDING DEFENDANTS’ MOTION TO DISMISS AS IT RELATES TO COUNTS III-V AND TO GRANT A STAY AS TO COUNTS III-V and ORDER REGARDING PLAINTIFF’S MOTION TO AMEND COMPLAINT

BENNETT, Chief Judge.

TABLE OF CONTENTS

I. INTRODUCTION..................................................... .642

II. LEGAL ANALYSIS................................................... .644

A. The Motion To Amend............................................ .644

1. Should leave to amend be granted?............................. .645

2. What is the effect of the amendment on the motion to reconsider? .646

B. Standards For Reconsideration.................................... .646

C. Standards For A Stay Of Proceedings.............................. .648

III. CONCLUSION..................... .649

I. INTRODUCTION

In this ease, plaintiff Ideal Instruments, Inc., originally asserted claims of infringement by Canadian defendants, Ri-vard Instruments, Inc., and Meril Rivard, of Ideal’s United States patent, United States Patent No. 6,960,196 (the '196 patent), for “detectable” hypodermic needles for livestock, non-infringement by Ideal of the defendants’ Canadian patent for a similar device, and various commercial torts. More specifically, Ideal asserted the following claims: in Count 1, “patent infringement,” alleging infringement by Rivard Instruments and indirect infringement 1 by Meril Rivard of Ideal’s '196 patent; in Count II, a claim for “declaratory judgment,” seeking a declaration that Ideal is not infringing Rivard’s Canadian patent; in Count III, a claim of “corporate defamation,” alleging that the defendants have made false and defamatory statements to third parties of and concerning Ideal to the effect that Ideal’s D3 Detectable Needles infringe Rivard’s Canadian patent; in Count IV, a claim of “product disparagement/trade libel,” alleging that the defendants have made *643 false and derogatory statements of and concerning the quality of Ideal’s D3 Detectable Needles; in Count V, a claim of “tortious interference with advantageous business relationships and expectancies,” alleging that the defendants have intentionally and falsely accused Ideal of infringing Rivard’s Canadian patent and that the defendants have falsely informed existing and prospective customers and distributors that, if they purchase or use Ideal’s D3 Detectable Needles, they will infringe the defendants’ Canadian patent and may be sued; and in Count VI, another claim of “tortious interference with advantageous business relationships or expectancies,” this time alleging that the defendants have interfered with the relationship between Ideal and its manufacturer by making false and disparaging statements concerning Ideal and attempting to intimidate the manufacturer by threatening to return to its facility with lawyers.

In a memorandum opinion and order filed May 8, 2006, this court granted the defendants’ motion to dismiss Count II, the claim concerning non-infringement by Ideal of the defendants’ Canadian patent, for lack of subject matter jurisdiction, finding that only a Canadian court had subject matter jurisdiction over such a claim and that a Canadian court did, indeed, have such a claim before it, but denied the defendants’ motion to dismiss other challenged claims. See Ideal Instruments, Inc. v. Rivard Instruments, Inc., 434 F.Supp.2d 598, 2006 WL 1217201 (N.D.Iowa May 8, 2006) (also providing factual background to the present dispute and identifying in more detail the claims asserted). The court, therefore, directed the defendants to answer the remaining claims in Ideal’s Complaint.

As directed by the court, the defendants filed an answer to Ideal’s Complaint, on May 22, 2006, also asserting counterclaims essentially mirroring Ideal’s own claims. Also on May 22, 2006, the defendants filed their Motion To Reconsider Court’s Order Regarding Defendants’ Motion To Dismiss As It Relates To Counts III-V And To Grant A Stay As To Counts III-V (docket no. 40), which is now before the court. In their Motion To Reconsider, the defendants assert that, in its May 8, 2006, ruling, the court failed to consider their alternative motion for a stay of all proceedings pending disposition of related litigation in Canada between the parties involving the defendants’ claims of infringement by Ideal of the defendants’ Canadian patent. The defendants argue that the issue of whether or not Ideal is infringing the defendants’ Canadian patent is so intertwined with the remaining claims in this lawsuit that this lawsuit cannot proceed until the Canadian federal court has fully considered the defendants’ claim that Ideal is infringing their Canadian patent.

On June 2, 2006, Ideal filed a Combined Motion And Brief For Leave To File First Amended Complaint (docket no. 45). In that motion to amend, Ideal asserts that it is proffering a First Amended Complaint that corrects some typographical errors; adds more factual detail in certain paragraphs; clarifies that the infringement claim against individual defendant Meril Rivard is for “inducement of infringement,” rather than “contributory infringement,” consistent with the court’s May 8, 2006, ruling; eliminates the count for tor-tious interference related to Ideal’s Chinese manufacturer; and separates into individual counts its defamation and tortious interference claims based on different defamatory statements and conduct, i.e., accusations of infringement of Rivard’s Canadian patent as opposed to accusations that Ideal’s D3 Detectable Needles are of inferior quality. Somewhat more specifically, only Counts II and V of the proffered Amended Complaint now assert *644 claims based on the defendants’ accusations that Ideal is infringing the defendants’ Canadian patent. Ideal represents that the defendants have refused to consent to the proffered amendment, because they take the position that the court should first rule on their motion to reconsider the court’s May 8, 2006, ruling and to stay this litigation. Ideal, on the other hand, argues that its proffered amendment moots the defendants’ motion to reconsider and to stay as to all claims except, possibly, new Counts II and V.

On June 5, 2006, Ideal filed its response to the defendants’ Motion To Reconsider (docket no. 46). In its resistance, Ideal contends that the defendants failed to comply with a local rule requiring parties to consult with the opposing party to determine whether or not the opposing party consents to a non-dispositive motion, that the court denied the defendants’ alternative motion to stay proceedings sub silen-tio, that all or most of the defendants’ motion to reconsider is mooted by Ideal’s proffered Amended Complaint, and that a stay would prejudice Ideal and would not be in the interests of judicial economy, at least to the extent that the stay included the counts of the Amended Complaint that are not based on the defendants’ accusations that Ideal is infringing the defendants’ Canadian patent.

In a reply filed June 15, 2006 (docket no.

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Ideal Instruments, Inc. v. Rivard Instruments, Inc., 434 F. Supp. 2d 640, 65 Fed. R. Serv. 3d 733, 2006 U.S. Dist. LEXIS 41721, 2006 WL 1689319 (N.D. Iowa 2006).

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