United States District Court, D. Delaware
December 21, 2015, Nespresso USA filed a complaint against
Ethical Coffee Company SA ("ECC") requesting
declaratory judgment that Nespresso USA does not infringe
ECC's U.S. Patent No. 9, 113, 746 (the "'746
Patent"). (D.I. 1 ¶ 30-31). On April 18, 2016, ECC
answered the complaint, and counterclaimed that Nespresso
USA, Nestle Nespresso SA (collectively,
"Nespresso"), Nestle SA, and Nestec SA infringe the
'746 Patent, violate the Sherman Act, conduct unfair
competition, and commit unjust enrichment. (D.I. 24 ¶
1-3). On September 7, 2016, the court dismissed ECC's
unfair competition and unjust enrichment claims. (D.I. 64).
On July 13, 2017, the court dismissed Nestle SA and Nestec SA
from the case for lack of personal jurisdiction. (D.I. 108).
Currently pending before the court are ECC's two motions
to amend its answer and counterclaims: (1) ECC's Motion
for Leave to Amend its Answer and Counterclaims, filed on
September 20, 2016, (D.I. 72); and (2) ECC's Motion for
Leave to Amend its Answer and Amended Counterclaims, filed on
February 1, 2017. (D.I. 94). Nespresso opposes both motions.
For the reasons that follow, the court will grant ECC's
September 20, 2017 motion to amend, (D.I. 72), and grant in
part and deny in part ECC's February 1, 2017 motion to
amend. (D.I. 94).
FACTUAL AND PROCEDURAL BACKGROUND
originally asserted five counterclaims: (1) direct patent
infringement of U.S. Patent No. 9, 113, 746 ("the
'746 patent") against Nespresso; (2) induced patent
mfringement of the '746 patent; (3) monopolization under
Section 2 of the Sherman Act; (4) attempted monopolization
under Section 2 of the Sherman Act; (5) unfair competition
under Delaware common law; and (6) unjust enrichment under
Delaware common law. (D.I. 24 at 19-27). By its pending
September 20, 2016 motion to amend, ECC seeks to add facts to
bolster its previously dismissed unfair competition claim.
(D.I. 72-1). The court dismissed ECC's unfair competition
counterclaim because "ECC failed to allege any factual
support for its contention that negotiations were advanced or
that a business relationship was reasonably probable."
(D.I. 64 at n.1).
pending February 1, 2017 motion to amend-which was filed on
the deadline to amend the pleadings-seeks to drop the patent
infringement allegations, and add additional facts to the
monopolization, attempted monopolization, and unfair
competition claims. (D.I. 95tI). Essentially, ECC's
amendments add further factual support to its contentions
that Nespresso modified its capsule housing in 2010 and 2013
for the purpose of excluding ECC from the Nespresso
machine-compatible espresso capsule market. Id. ECC
contends that the capsule housing redesign, along with
alleged sham litigation in Europe, deprived ECC of business
opportunities in the United States and precluded ECC's
ability to launch its capsules in the United States.
Id. ¶¶ 49-76, 96-106, 112-138, 152-165.
That motion to amend also adds a false advertising claim
under the Lanham Act, 15 U.S.C. § 1125(a)(1)(B).
Id. ¶ 139-152. To support its false advertising
claim, ECC alleges that Nespresso promoted a study on its
website that mislead consumers about the environmental impact
of Nespresso capsules. Id. ¶¶ 30-39,
77-89). ECC also maintains that Nespresso made statements in
its instruction manuals that misled consumers regarding the
compatibility of non-Nespresso espresso capsules with
Nespresso machines. Id.
STANDARD OF REVIEW
court is to "freely give leave" to parties to amend
their pleadings "when justice so requires."
Fed.R.Civ.P. 15(a)(2). "Leave to amend must generally be
granted unless equitable considerations render it otherwise
unjust." Arthur v. Maersk, Inc., 434 F.3d 196,
204 (3d Cir. 2006). Such equitable considerations include the
existence or absence of "undue delay, bad faith or
dilatory motive on the part of the movant, . . . undue
prejudice to the opposing party by virtue of allowance of the
amendment, [or] futility of the amendment." Foman v.
Davis, 371 U.S. 178, 182(1962).
amendment will be futile if it could not survive a motion to
dismiss. Enzo Life Scis., Inc. v. Digene Corp., 270
F.Supp.2d 484, 489 (D. Del. 2003). "To determine whether
a proposed amendment is futile, the Court applies the
standards for a Rule 12(b)(6) motion to dismiss and must
decide whether, accepting all the well-pleaded facts of the
proposed amendments as true, the party states a claim upon
which relief can be granted." Lynch v. Coinmaster
USA, Inc., 2007 WL 39433, at *2 (D. Del. 2007).
asks the court to grant it leave to amend its Answer and
Counterclaims to forego litigation on the patent claims, add
further facts to support its antitrust claims, and add a
violation under the Lanham Act. ECC contends that amending
its Answer and Counterclaim would not produce undue delay, be
the product of bad faith, result in undue prejudice to the
Plaintiffs, nor would it be futile. Nespresso's entire
argument focuses on the futility of ECC's amendments.
reasons that follow, the court grants ECC's September 20,
2016 motion to amend its answer and counterclaims. The court
also grants in part and denies in part ECC's February 1,
2017 motion to amend its answer and counterclaims.
ECC's September 20, 2017 Motion to Amend its Answer and
September 20, 2017 motion adds facts to support its
previously dismissed unfair competition claim. Nespresso
argues that because the court did not expressly dismiss
ECC's state law unfair competition claim without
prejudice, ECC's motion to amend is procedurally
improper. (D.I. 80 at 4). The court acknowledges that there
exists case law in this Circuit stating that claims dismissed
under Rule 12(b)(6) are presumed to be dismissed with
prejudice, unless the court states otherwise. Ball v.
Famiglio, 726 F.3d 448, 460 n.l7 (3d Cir. 2013),
abrogated on other grounds by Coleman v. Tollefson,
135 S.Ct. 1759 (2015). Regardless, the court exercises its
discretion to grant ECC leave to amend its unfair competition
counterclaim. It was implied in the court's September 7,
2016 order that ECC could cure its pleading deficiencies by
adding further factual support for its contention that it was
in advanced negotiations with a large U.S. coffee company.
See (D.I. 62 at 2 n.1). ECC did just that.
ECC's amendments to its state law unfair competition
claim are not futile. Delaware's Court of Chancery has
explained that "[t]he essential element separating
unfair competition from legitimate market participation ...
is an unfair action on the part of the defendant by which he
prevents plaintiff from legitimately earning revenue."
EDIX Media Grp., Inc. v. Mahani, No. CIV.A. 2186-N,
2006 WL 3742595, at * 11 (Del. Ch. Dec. 12, 2006). While the
type of conduct actionable under unfair competition law has
been labeled as "notoriously undefined, " State
ex rel. Brady v. Wellington Homes, Inc., No.
CIV.A.99C-09-168-JTV, 2003 WL 22048231, at *1 (Del. Super.
Ct. Aug. 20, 2003), the court finds that ECC has alleged
enough facts to raise a right to relief above the speculative
level. See Bell Ail. Corp. v. Twombly,550 U.S. 544,
555 (2007). Specifically, ECC alleges that it had a
reasonable expectancy of entering into a business
relationship with Starbucks, as evidenced by Starbucks'
executives' visit to ECC's factory, discussions
between company executives, and execution of a Mutual
Confidentiality and Non-Disclosure Agreement. (D.I. 72-1
¶ 50-51). ECC contends that Nespresso wrongfully
interfered with that expected business relationship when it
added barbed hooks to its capsule housing for the sole
purpose of excluding ECC's biodegradable capsules from
the market. Id. ¶ 95. Starbucks terminated its
relationship and the mutual NDA ...