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AgroFresh Inc. v. Essentiv LLC

United States District Court, D. Delaware

November 30, 2018

AGROFRESH INC., Plaintiff,
v.
ESSENTIV LLC, DECCO U.S. POST-HARVEST, INC., and CEREXAGRI, INC. d/b/a DECCO POST-HARVEST, Defendants.

          MEMORANDUM OPINION

          SHERRY R. FALLON UNITED STATES DISTRICT JUDGE

         I. INTRODUCTION

         Presently before the court in this patent infringement action are the following motions: (1) the motion for an extension of time to amend or supplement identification of trade secrets at issue, filed by plaintiff AgroFresh, Inc. ("AgroFresh") (D.I. 171); (2) the motion to seal the motion to dismiss pursuant to Federal Rule of Civil Procedure 41(b), filed by defendants MirTech, Inc. ("MirTech") and Dr. Nazir Mir ("Dr. Mir") (together, the "MirTech defendants") (D.I. 177); (3) the MirTech defendants' motion for leave to file a sur-reply to the motion to dismiss pursuant to Rule 41(b) (D.I. 199); and (4) the motion for an extension of time to join other parties and amend the pleadings, filed by defendants Decco U.S. Post-Harvest, Inc., Cerexagri, Inc. d/b/a Decco Post-Harvest, and UPL, Ltd. (collectively, "Decco") (D.I. 179). For the following reasons: (I) AgroFresh's motion for an extension of time to amend or supplement its identification of trade secrets at issue (D.I. 171) is DENIED; (2) the motion to seal the MirTech defendants' motion to dismiss pursuant to Rule 41(b) (D.I. 177) is DENIED; (3) the motion to file a sur-reply regarding the MirTech defendants' motion to dismiss pursuant to Rule 41(b) (D.I. 199) is GRANTED-IN-PART; and (4) Decco's motion to extend the time to join parties and amend pleadings under the scheduling order (D.I. 179) is GRANTED.

         II. BACKGROUND

         AgroFresh is an Illinois corporation that researches, develops, and sells technology for pre- and post-harvest freshness preservation of fruits, vegetables, and other produce using a synthetic, volatile gas called I-methylcyclopropene ("1-MCP"). (D.I. 97 at 2; D.I. 106 at ¶ 2) AgroFresh owns patents on technologies used by growers to control the ripening of fruits and vegetables to reduce waste and improve product quality. (D.I. 106 at ¶ 2) AgroFresh's products include SmartFresh, Harvista, and RipeLock. (Id.)

         Dr. Mir is an inventor and expert in the field of post-harvest technology who has developed technologies relating to 1-methylcyclopropene ("1-MCP"), including an invention that combines 1-MCP with an engineered film known as a modified atmospheric package ("MAP"). (D.I. 97 at 3) MirTech is a New Jersey corporation solely owned by Dr. Mir. (Id.) TheMirTech defendants collaborated with AgroFresh pursuant to a Consulting Services Agreement and a Commercial Agreement to develop the RipeLock technology, which combined AgroFresh's 1-MCP expertise with Dr. Mir's modified atmosphere package ("MAP") technology. (Id. at 4-5)

         Decco U.S. Post-Harvest, Inc. is a Delaware corporation with a principal place of business in California. (D.I. 97 at 2) Cerexagri d/b/a Decco Post-Harvest is a Pennsylvania corporation with a principal place of business in Pennsylvania. (Id.) On November 30, 2014, Dr. Mir executed a letter of intent to form a strategic alliance with Decco for the commercialization of the technologies he developed as embodied by the provisional patent application related to United States Patent No. 9, 394, 216 ("the '216 patent"). (D.I. 181, Ex. 6; D.I. 97 at 11) Essentiv LLC is a Delaware limited liability company formed in accordance with a joint venture of MirTech and Decco, as contemplated by the letter of intent. (D.I. 97 at 2)

         On August 3, 2016, AgroFresh filed a complaint against defendants. The complaint arises out of a failed business relationship between AgroFresh and MirTech, and includes claims of ownership of certain intellectual property, breach of contract, tortious conduct, and patent infringement. In October 2016, the parties filed a joint motion to bifurcate Counts I and IV of the complaint, claiming that prioritizing the cause of action for ownership of the '216 patent and the fraudulent inducement claim would simplify and clarify the disputed issues in the case, likely facilitate resolution, and result in economies for the court and the parties. (D.I. 18) The court granted the motion, and held a bench trial on Counts I and IV from March 20 to March 22, 2017. In its Findings of Fact and Conclusions of Law, entered on June 30, 2017, the court entered judgment in favor of AgroFresh and against the MirTech defendants on Counts I and IV. Specifically, the court concluded that the '216 patent was an improvement related to the product which was automatically assigned to AgroFresh, and Dr. Mir fraudulently induced AgroFresh into executing an extension to various agreements by not disclosing the '216 patent disclosure or Dr. Mir's business relationship with Decco. (D.I. 97 at 33-34)

         Following the court's decision, AgroFresh filed its first amended complaint ("FAC") against the same original parties and added UPL Ltd. as a defendant. (D.I. 106) The FAC added causes of action under the Defend Trade Secrets Act, the Pennsylvania Trade Secrets Act, and related tort theories. (Id.) On September 15, 2017, the MirTech defendants and AgroFresh executed a private settlement agreement (the "Settlement Agreement"). (D.I. 178, Ex. A) On September 18, 2017, the MirTech defendants entered into a final consent judgment with AgroFresh, pursuant to which they "consent[ed] to a judgment establishing liability" for all counts alleged against them and "agree[d] to remit payment... to compensate AgroFresh," including $340, 000 in damages. (D.I. 115)

         On September 22, 2017, the MirTech defendants provided AgroFresh a complete list of inventions, discoveries, and improvements related to 1-MCP in accordance with the Settlement Agreement and consent judgment. The Settlement Agreement required AgroFresh to dismiss the MirTech defendants from the action without prejudice by September 25, 2017. On September 29, 2017, a scheduling order was entered on the remaining counts of the FAC, and Dr. Mir sat for a deposition pursuant to the terms of the Settlement Agreement. (D.I. 122) On October 15, 2017, the MirTech defendants executed a series of documents to assign the intellectual property rights to AgroFresh.

         III. DISCUSSION

         A. Motion to Extend Deadline to Supplement or Amend Identification of Trade Secrets at Issue

         1. Legal standard

         If a party seeks to extend a deadline imposed by the scheduling order, the court must apply the "good cause" standard in accordance with Rule 16 of the Federal Rules of Civil Procedure. Carrier Corp. v. Goodman Global, Inc.,49 F.Supp.3d 430, 433 (D. Del. 2014). Pursuant to Rule 16(b)(4), "[a] schedule may be modified only for good cause and with the judge's consent." "The good cause element requires the movant to demonstrate that, despite diligence, the proposed claims could not have been reasonably sought in a timely manner." Venetec Int'l v. Nexus Med,541 F.Supp.2d 612, 618 (D. Del. 2010). "[T]he good cause standard under Rule 16(b) hinges on the diligence of the movant, and not on the prejudice to the non-moving party." Id. "Whether or not the requirements of Rule 16(b) have been met is a procedural issue not ...


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