United States District Court, D. Delaware
R. FALLON UNITED STATES MAGISTRATE JUDGE.
before the court in this patent infringement action is a
motion for leave to amend the complaint pursuant to Federal
Rule of Civil Procedure 15(a)(2), filed by plaintiff
Fraunhofer-Gesellschaft Zur Forderung der angewandten
Forschung e.V. ("Fraunhofer"). (D.I. 156) Defendant
Sirius XM Radio Inc. ("SXM") opposes the motion.
(D.I. 160) For the following reasons, Fraunhofer's motion
to amend is DENIED.
is an applied research organization in Europe, encompassing
over sixty institutes and research units which develop
real-world innovations in the fields of health,
communications, security, transportation, and energy for both
privately and publicly funded projects. (D.I. 1 at ¶ 1)
In 1996, Fraunhofer developed patented technology related to
multicarrier modulation (the "MCM technologies")
for use in satellite radio broadcasting. (Id. at
¶¶ 4, 20) MCM is a method of transmitting data by
splitting it into several components and sending each of the
components over separate carrier signals. (Id. at
March 4, 1998, Fraunhofer entered into an exclusive license
agreement with WorldSpace International Network Inc.
("WorldSpace") to license all patents for MCM
technologies (the "MCM License")- (Id. at
¶ 21; D.I. 12, Ex. 1) Fraunhofer subsequently obtained
U.S. Patent Nos. 6, 314, 289 ("the '289
patent"), 6, 931, 084 ("the '1084
patent"), 6, 993, 084 ("the '3084
patent"), and 7, 061, 997 ("the '997
patent") (collectively, the
"patents-in-suit"), which relate to MCM
technologies and are covered by the MCM License. (D.I. 1 at
¶ 21) Thereafter, on July 24, 1998, WorldSpace granted a
sublicense under the MCM License to American Mobile Radio
Corporation, which was renamed as XM Satellite Radio, Inc.
("XM Satellite"). (Id. at ¶ 22; D.I.
12, Ex. 3 at § 2) XM Satellite used the sublicensed
technology to develop its Digital Audio Radio Services System
(the "XM DARS System"). (D.I. 1 at ¶ 22) In
2008, XM Satellite merged with Sirius Satellite Radio to form
SXM. (Id. at ¶ 26)
October 17, 2008, WorldSpace filed a voluntary petition under
chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware. (Id.
at ¶ 27) On June 18, 2009, the debtors filed a motion
for approval of a settlement agreement (the "Settlement
Agreement") to terminate certain contracts between the
parties and to pay the debtors a sum to fully satisfy the
current and future payment obligations owed under the
sublicense agreement. (D.I. 12, Ex. 5) The bankruptcy court
approved the Settlement Agreement on July 13, 2009.
(Id., Ex. 6)
a sale hearing on June 1, 2010, the bankruptcy court approved
an agreement between WorldSpace, Fraunhofer, and Yazmi, a
potential buyer of WorldSpace's assets, providing for the
final disposition of Workspace's rights under three
agreements and unambiguously rejecting the MCM License. (D.I.
1 at ¶ 27; 8/15/17 Tr. at 11:2-14) Because Fraunhofer
and Yazmi never entered into a new agreement regarding the
MCM License, the MCM License remained rejected. (D.I. 1 at
¶ 27 n.l; 8/15/17 Tr. at 11:15-12:2)
12, 2012, the chapter 11 bankruptcy proceeding was converted
to a chapter 7 proceeding, following which the Trustee had
sixty days to assume executory contracts and unexpired
leases. (D.I. 1 at ¶ 28) The Trustee did not assume the
MCM License. As a result, the MCM License was rejected as of
August 12, 2012. (Id.)
initiated the present litigation against SXM on February 22,
2017, asserting causes of action for infringement of the
patents-in-suit. (D.I. 1) A Rule 16 scheduling conference was
held on May 16, 2017, and a scheduling order was entered on
May 23, 2017. (D.I. 26) Pursuant to the scheduling order, the
deadline for amended pleadings was December 14, 2017.
(Id. at ¶ 2) The deadline for substantial
completion of document production was January 31, 2018, and
the discovery deadline will expire on July 31, 2018.
(Id. at ¶ 3(b))
April 17, 2017, SXM filed a Rule 12(b)(6) motion to dismiss
for failure to state a claim, alleging that SXM maintains a
sublicense to the patents-in-suit and therefore cannot be
found to infringe. (D.I. 10) The court held oral argument on
the motion to dismiss on August 15, 2017. (8/15/17 Tr.) On
March 29, 2018, the undersigned judicial officer issued a
Report and Recommendation recommending dismissal of the
action. (D.I. 146) Fraunhofer's objections to the Report
and Recommendation are currently pending before the assigned
District Judge. (D.I. 154)
April 16, 2018, Fraunhofer filed the present motion to amend
the complaint in an effort to cure the deficiencies
highlighted in the March 29, 2018 Report and Recommendation.
15(a)(2) of the Federal Rules of Civil Procedure provides
that after a responsive pleading has been filed, a party may
amend its pleading "only with the opposing party's
written consent or the court's leave," and
"[t]he court should freely give leave when justice so
requires." Fed.R.Civ.P. 15(a)(2). The decision to grant
or deny leave to amend lies within the discretion of the
court. See Foman v. Davis,371 U.S. 178, 182 (1962);
In re Burlington Coat Factory Sees. Litig, 114 F.3d
1410, 1434 (3d Cir. 1997). The Third Circuit has adopted a
liberal approach to the amendment of pleadings. See Dole
v. Arco,921 F.2d 484, 487 (3d Cir. 1990). In the
absence of undue delay, bad faith, or dilatory motives on the
part of the moving ...