Procter & Gamble Co. v. Nabisco Brands, Inc.

125 F.R.D. 405, 3 U.S.P.Q. 2d (BNA) 1207, 1987 U.S. Dist. LEXIS 14940, 1987 WL 49900
CourtDistrict Court, D. Delaware
DecidedApril 2, 1987
DocketCiv. A. No. 84-333 LON
StatusPublished
Cited by9 cases

This text of 125 F.R.D. 405 (Procter & Gamble Co. v. Nabisco Brands, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Procter & Gamble Co. v. Nabisco Brands, Inc., 125 F.R.D. 405, 3 U.S.P.Q. 2d (BNA) 1207, 1987 U.S. Dist. LEXIS 14940, 1987 WL 49900 (D. Del. 1987).

Opinion

OPINION

LONGOBARDI, District Judge.

On June 19,1984, Plaintiff The Procter & Gamble Company (“P & G”) brought these actions alleging patent infringement, inducement of patent infringement and unfair competition.1 United States Letters Patent No. 4,455,333 (“the ’333 patent”) was issued to P & G on the same date and covers the invention styled “Doughs and Cookies Providing Storage-Stable Texture Variability.” The patent describes a method of manufacturing ready-to-serve cookies which remain crispy on the outside and chewy on the inside during an extended shelf-life. P & G markets its product under the Duncan Hines label.

P & G brought separate actions against each of the three Defendants. Nabisco Brands, Inc. (“Nabisco”), the Defendant in Civil Action No. 84-333 LON, markets its own line of dualtextured cookies under both the “Almost Home” and “Chewy Chips Ahoy” labels. Civil Action No. 84-334 LON was brought against Defendant Keebler Company (“Keebler”) which markets “Soft Batch” cookies; and Civil Action No. 84-335 LON was initiated against Defendant Frito-Lay, Inc. (“Frito-Lay”) which markets “Grandma’s Rich ’n Chewy” cookies. Each of the Defendants has challenged the validity of the ’333 patent, denied infringement by their products, and each has counterclaimed alleging acts of unfair competition by P & G and inequitable conduct before the United States Patent and Trademark Office (“the PTO”). More importantly, for the purposes of the instant dispute, each of the Defendants has also vigorously denied P & G’s allegations of unfair competition.2

The original complaints filed by P & G allege various acts of unfair competition committed by each Defendant. The acts described on the face of the complaint are limited to what might broadly be termed “industrial espionage.”3 On several occasions, including a pretrial conference, P & G has affirmatively represented that the case is “basically a patent infringement case.”4 The Court itself noted that the unfair competition allegations apparently involved simple acts of industrial espionage allegedly committed by Defendants’ employees.5

In June, 1986, P & G filed the present motions seeking to amend Count IV in each of the original complaints in order to allege other acts of unfair competition, comprised mainly of alleged fraudulent conduct before the PTO.6 As to Frito-Lay, P & G [408]*408also seeks specifically to allege participation in a conspiracy with the other Defendants to prevent or delay the issuance of the ’333 patent. P & G also seeks to add to or further define the original claims of industrial espionage. Defendants do not oppose the amendments insofar as they relate to industrial espionage.7 As to the remaining allegations of unfair competition based on either alleged fraudulent actions before the PTO or conspiracy in furtherance thereof, Defendants vigorously oppose P & G’s motions on several grounds.

I. LEGAL STANDARDS

Rule 15(a) of the Federal Rules of Civil Procedure provides the standard by which the Court must judge motions to amend. In relevant part, the Rule provides that “a party may amend his pleading only by leave of the court or by written consent of the adverse party; and leave shall be freely given when justice so requires.” Fed. R.Civ.P. 15(a) (emphasis added).

The policies informing Rule 15 are well-established and require little elaboration here. In general, the Rule reflects the policy of ensuring that claims are decided on the merits rather than on the procedural technicalities of pleading and the related policy which dictates that pleadings play the relatively limited role of providing notice of claims and defenses. See 6 C. Wright & A. Miller, Federal Practice and Procedure § 1471 (1971). In modern practice, pleadings do not serve the purposes of fact revelation and issue formulation. Those steps are adequately discharged by discovery. See id.

In setting forth guidelines for the exercise of the wide discretion given the District Courts under Rule 15, the Supreme Court expressly noted the policy of facilitating decisions on the merits rather than on technicalities. See Foman v. Davis, 371 U.S. 178, 181-82, 83 S.Ct. 227, 229-30, 9 L.Ed.2d 222 (1962) (quoting Conley v. Gibson, 355 U.S. 41, 48, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957)). More specifically, the Court stated

Rule 15(a) declares that leave to amend “shall be freely given when justice so requires”; this mandate is to be heeded. See generally, 3 Moore, Federal Practice (2d ed. 1948), 111115.08, 15.10. If the underlying facts or circumstances relied upon by plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. —the leave sought should, as the rules require, be “freely given.” Of course, the grant or denial of an opportunity to amend is within the discretion of the District Court, but outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules.

371 U.S. at 182, 83 S.Ct. at 230, quoted in Thermal American Fused Quartz Company v. John L. Briggs & Company, C.A. No. 84-46 LON, slip op. at 2-3 (D.Del. Sept. 15, 1986). As such, courts consider undue delay, bad faith or dilatory motive, undue prejudice and failure to state a cause of action in deciding whether leave to amend should be granted. See Adams v. Gould, Inc., 739 F.2d 858, 864 (3d Cir.1984), cert. denied, 469 U.S. 1122, 105 S.Ct. 806, 83 L.Ed.2d 799 (1985).

Well-established precedent in the Third Circuit8 dictates that delay, in and of itself, is an insufficient basis for denial of a motion to amend. Thermal American, C.A. No. 84-46 LON, slip op. at 4 (noting [409]*409Butcher & Singer, Inc. v. Kellam, 105 F.R.D. 450, 452 (D.Del.1984)); see Heyl & Patterson Intern., Inc. v. F.D. Rich Housing, 663 F.2d 419, 425-26 (3d Cir.1981), cert. denied, 455 U.S. 1018, 102 S.Ct. 1714, 72 L.Ed.2d 136 (1982). Hence, a showing of undue prejudice or unfair disadvantage to the nonmovant is required before delay provides an adequate basis for denial. Butcher & Singer, 105 F.R.D. at 452; see Howze v. Jones & Laughlin Steel Corp., 750 F.2d 1208, 1212 (3d Cir.1984); Cornell & Co., Inc. v. Occup. S.

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125 F.R.D. 405, 3 U.S.P.Q. 2d (BNA) 1207, 1987 U.S. Dist. LEXIS 14940, 1987 WL 49900, Counsel Stack Legal Research, https://law.counselstack.com/opinion/procter-gamble-co-v-nabisco-brands-inc-ded-1987.