THK America, Inc. v. NSK Ltd.

157 F.R.D. 660, 33 U.S.P.Q. 2d (BNA) 1248, 1994 U.S. Dist. LEXIS 18174
CourtDistrict Court, N.D. Illinois
DecidedMarch 22, 1994
DocketNo. 90 C 6049
StatusPublished
Cited by3 cases

This text of 157 F.R.D. 660 (THK America, Inc. v. NSK Ltd.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
THK America, Inc. v. NSK Ltd., 157 F.R.D. 660, 33 U.S.P.Q. 2d (BNA) 1248, 1994 U.S. Dist. LEXIS 18174 (N.D. Ill. 1994).

Opinion

ORDER

ROSEMOND, United States Magistrate Judge.

This action was commenced on October 17, 1990 by plaintiff THK America (“THK”). In its complaint, THK charged defendants NSK, Ltd. and NSK Corporation (collectively “NSK”) with infringement of two United States patents concerning linear guides with re-circulating ball bearings. These products [661]*661are primarily used in the industrial arena for the linear movement of large and heavy objects or machinery, such as industrial robots, with great precision.1 In the period since the ease was commenced, the parties have filed scores of motions and discovery requests. This order addresses the latest of these motions, a motion made by NSK on November 30,1992, for leave to file amended answers, to join THK Co. (hereinafter “THK Japan”) as a party plaintiff, and to add substantive counterclaims alleging violations of federal and state antitrust law and common law tort causes of action. NSK’s motion is denied in its entirety.

A. NSK’s Motion to Join THK Japan as a Necessary Party.

The first component of NSK’s present motion seeks joinder of THK Japan as a necessary party under Rule 19(a) of the Federal Rules of Civil Procedure. Under Rule 19(a), a party is necessary where: (1) the party’s absence from the litigation will preclude the court from providing complete relief for those already parties in the action, or (2) the party claims an interest relating to the subject of the action and is situated such that the disposition of the action in the party’s absence may (i) impair or impede the party’s ability to protect that interest, or (ii) leave any of the existing parties subject to a substantial risk of multiple or inconsistent obligations as a result of the claimed interest.2 Where a party meets one of these criteria, the court is required to join the party unless the court lacks jurisdiction over the party or where joinder would destroy the court’s jurisdiction over the existing litigants.3

Generally, patent rights may be enforced in court only by the patent’s owner or assignee.4 However, courts have recognized that an exclusive licensee having substantial patent rights qualifies as an assignee for enforcement purposes.5 Therefore, because the exclusive licensee has standing to sue on the patent in its own right, the patent’s owner is not a necessary party under Rule 19(a). In this case, the owner (THK Japan—who has relinquished the right to sell the product in the United States to the exclusive licensee—THK America) faces no threat of having its interests compromised in the litigation, and the existing parties {i.e., the exclusive licensee and the alleged infringer) are fully able to gain complete relief.6

THK is an exclusive licensee of the patents at issue here. While NSK has gone to great effort to recharacterize the license granted THK by THK Japan as a “mere license,”7 the very language of the license clearly grants THK an exclusive right to “make, use and sell and otherwise practice the inventions covered by [the subject patents] and to sue others for past and future infringement thereof.”8 As the language and validity of the agreement is plain and unambiguous, we decline to accept NSK’s invitation to look behind the document for any ulterior motivation that might have prompted the parties to enter into it.

Furthermore, we cannot help but note that NSK’s present position on the exclusivity of the license carries a strong scent of eleventh-hour litigation delay strategy. THK alleged in its complaint that it was the exclusive licensee of the subject patents.9 NSK raised no issue as to this fact in its answer.10 And we do not believe that it would take two years of discovery to unearth new facts concerning the exclusivity of THK’s license. [662]*662For NSK to now submit a motion devoting sixteen pages to argue the exclusivity of THK’s license—a point that it conceded without the slightest hesitation at the time the suit was commenced—strikes us as an eleventh-hour afterthought. In any event, we find that THK Japan is not a necessary party in this litigation under Rule 19(a). NSK’s motion to join THK Japan is therefore denied.

B. NSK’s Motion to Amend.

The second component of NSK’s present motion involves an attempt to amend its pleadings to assert four counterclaims against THK and to raise an affirmative defense of patent misuse. As with its motion to join THK Japan, NSK claims that its discovery efforts have revealed new (unspecified) facts purportedly supporting the misuse defense and four counterclaims against THK. NSK argues that in light of the liberal amendment policy embodied in Rule 15(a), these assertions provide an ample basis for the Court to permit its proposed amendments.

THK counters that the motions should be denied as a result of NSK’s delay in raising the counterclaims, the potential for prejudice by allowing amendment at this late date, the potential burden on the judicial system, and the fact that NSK’s counterclaims fail to state a cause of action. In light of the background facts and history of the litigation, it is clear that THK has the better of the argument.

NSK seeks to amend its answer to the complaint to include counterclaims charging THK with antitrust violations and various state-law infractions. NSK’s first counterclaim alleges that THK has attempted to monopolize the linear guide market in violation of Section 2 of the Sherman Antitrust Act.11 Particularly, NSK claims that from 1988 until the time this litigation was commenced, THK and THK Japan, through their founder and president, Mr. Hiroshi Terama-chi, attempted to gain NSK’s participation in a plan to reduce competition in the linear guide industry by raising prices in the United States and elsewhere. NSK also alleges that THK requested that NSK withdraw from the linear guide market in return for THK’s withdrawal from the ball screw market. NSK claims that THK attempted to coerce NSK’s compliance with these anti-competitive schemes by threatening and commencing the present action, which NSK characterizes as “sham” litigation. Such charges will not support an antitrust claim.

Evidence of anti-competitive intent or purpose—standing alone—cannot transform otherwise legitimate activitg—such as the filing of a lawsuit—into “sham” litigation.12 Thus, even an “improperly motivated” lawsuit is not a sham unless such it is “baseless”.13

Litigation is not a sham unless it is “objectivelg baseless”. Under the Real Estate Investors ease, a lawsuit is “objectively baseless” if no reasonable litigant could realistically expect success on the merits.14 If an objective litigant could conclude that a lawsuit is reasonably calculated to elicit a favorable outcome, the suit is not subject to an antitrust challenge predicated on a charge of “sham” litigation.15 Only if the challenged litigation is objectively meritless may a court examine a litigant’s subjective motivation.16

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Cite This Page — Counsel Stack

Bluebook (online)
157 F.R.D. 660, 33 U.S.P.Q. 2d (BNA) 1248, 1994 U.S. Dist. LEXIS 18174, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thk-america-inc-v-nsk-ltd-ilnd-1994.