Opinion ID: 3066527
Heading Depth: 3
Heading Rank: 1

Heading: Joinder of Insituform Netherlands

Text: Defendants appeal the joinder of Insituform Netherlands. According to defendants, the current owner of the ‘012 patent, Insituform Netherlands, never filed suit and was named to this litigation only because of a misrepresentation to the district court in 1994, after the case was reassigned to a new judge. They assert that the district court’s 1994 decision adding Insituform Netherlands as a party was in error and that no properly named party has standing to sue for damages. Plaintiffs respond that the district court acted well within its discretion (i) in granting the joint 1994 motion that Insituform Netherlands be added as a party, and (ii) in refusing to alter that decision in 1999. The original corporate plaintiff, and owner of the ‘012 patent, was Insituform Licensees B.V. Insituform Licensees B.V. filed this lawsuit in 1990. In 1992, the case went to trial. At that time, the plaintiffs were Insituform Licensees B.V.; Insituform of North America, Inc.; and Insituform Gulf South, Inc. The defendants were CAT, MSC, KS, and Firstliner. Following a jury trial, a verdict, and after a new trial was ordered, Insituform Licensees B.V. assigned the ‘012 patent to Insituform Netherlands. The assignment included the right to sue for past infringement. At the time of the assignment, Insituform Netherlands was not a party to the lawsuit, and it did nothing to join the suit for two years. On November 30, 1994, the parties entered a joint motion asking the court to make Insituform Netherlands a party. The motion stated that “legal title to the patent in suit has been transferred from Insituform Licensees B.V. to Insituform (Netherlands) BV.” Plaintiffs also represented to defendants and to the district court that Insituform Licensees B.V. had changed its name to Insituform Netherlands. This was not technically true. While ownership of the patent had, indeed, changed hands, Insituform Licensees B.V. was still an existing corporate entity at the time of the motion. After the motion to join Insituform Netherlands was granted, defendants discovered the alleged misrepresentation and, on that basis, now challenge Insituform Netherlands’ standing. Probably to remedy what they perceived to be a potential defective parties problem, plaintiffs, in 1999, sought leave to amend their pleadings to include Insituform North America, Inc.[4] and, if necessary, Insituform Netherlands as parties under Fed. R. Civ. P. 15(a) and 21. The district court stated that “[Insituform Netherlands] was made a party to this suit by order of this court on November 30, 1994.” District Court Opinion, slip op. at 21. The court also stated that “the rights of the legal patent owner have been at issue since the inception of this case and . . . [Insituform Netherlands] has presented evidence of recoverable monetary damages that Defendants have been able to rebut at trial. Therefore, Defendants would not be prejudiced if [Insituform Netherlands] is recognized as a party plaintiff in this suit.” Id. at 21-22. In other words, the district court ruled that it had already joined Insituform Netherlands as a party in November 1994, and it refused to change that decision in 1999, despite the arguments of defendants. Because the joinder issue is not unique to patent law, we apply the law of the regional circuit. McGinley v. Franklin Sports, Inc., 262 F.3d 1339, 1357 (Fed. Cir. 2001) (“A district court’s decision to grant or deny a motion for leave to join a party involves a procedural question that raises no special issues relating to patent law, and therefore [regional circuit] law applies.”); Datascope Corp. v. SMEC, Inc., 962 F.2d 1043, 1045 (Fed. Cir. 1992) (Regional circuit law determines “the standard for determining whether the district court abused its discretion in denying [the patentee] leave to amend” its complaint to add a new party.). Rule 15(a) provides that a party may amend its pleadings “only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires.” Fed. R. Civ. P. 15(a). Rule 21 states that “parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just.” Fed. R. Civ. P. 21. In applying Rule 21, the court is governed by the liberal amendment standards of Rule 15(a). See McLellan v. Miss. Power & Light, 526 F.2d 870, 873 (5th Cir. 1976). The decision to grant or deny a motion for leave to amend thus lies within the sound discretion of the trial court. Jacobsen v. Osborne, 133 F.3d 315, 318 (5th Cir. 1998); Datascope Corp., 962 F.2d at 1045. The Fifth Circuit has stated that leave should be granted “in the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment.” Jacobsen, 133 F.3d at 318. The district court exercised its discretion in this case fully aware of plaintiffs’ alleged misrepresentation in the 1994 joint motion and determined that defendants would suffer no prejudice were Insituform Netherlands joined as a party. District Court Opinion, slip op. at 21-22. We discern no abuse of discretion in this decision, and thus affirm the district court’s ruling.[5] We have considered the defendant’s other arguments on this point and find them not persuasive.