300 F.R.D. 201
S.D.N.Y.2014Background
- Masterson owns two patents in customizable jewelry, the '095 and '536 patents.
- NY Fusion is a New Jersey LLC whose members are Lily Lin and Greg Chen; Lin formerly worked for Masterson as an independent contractor.
- Masterson first contacted NY Fusion in 2008 to halt a jewelry line; she claimed a Mutual Nondisclosure Agreement was breached.
- Masterson filed suit in 2013 for direct infringement of both patents; NY Fusion was served in 2013 and filed a motion to dismiss in 2014.
- Masterson filed the First Amended Complaint (FAC) on February 24, 2014; NY Fusion’s service and timing issues were litigated, with the court deeming the FAC timely for purposes of the motion.
- The court denied NY Fusion’s motion to dismiss (and to stay discovery) and noted potential implications of Petrella for laches in patent cases.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether laches bars Masterson's patent claims. | Masterson argues delay does not support laches; presumption does not apply. | Delay after 2011–2013 is potentially prejudicial and unreasonable. | Laches not established on face of FAC; no presumption or undue delay shown. |
| Whether equitable estoppel bars Masterson's claims. | No misleading conduct or relationship creating reliance. | Delay plus alleged relationship could show reliance and prejudice. | Equitable estoppel not shown on the FAC; facts insufficient. |
| Whether discovery should be stayed pending disposition of the motion to dismiss. | Stay unnecessary if claims proceed. | Discovery stay pending dismissal. | Stay denied as moot because dismissal denied. |
| Whether the FAC was timely filed and properly served. | Filed timely under applicable rules given later nunc pro tunc extension. | Service and timing issues could render filing untimely. | FAC timely for purpose of ruling; nunc pro tunc extension applied. |
Key Cases Cited
- A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020 (Fed.Cir.1992) (establishes laches and equitable estoppel standards in patent cases; presumption when delay ≥ six years)
- In re Elevator Antitrust Litig., 502 F.3d 47 (2d Cir.2007) (discusses burden and scope of pleading in complex antitrust matters)
- Chambers v. Time Warner, Inc., 282 F.3d 147 (2d Cir.2002) (documents incorporated by reference in a complaint may be considered on motion to dismiss)
- DiFolco v. MSNBC Cable LLC, 622 F.3d 104 (2d Cir.2010) (integral documents may be considered on a Rule 12(b)(6) motion when relied upon by the complaint)
- Advanced Cardiovascular Sys., Inc. v. Scimed Life Sys., Inc., 988 F.2d 1157 (Fed.Cir.1993) (court may consider facts outside the complaint for laches; not appropriate on a 12(b)(6) unless clear on face)