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Arkema Inc. and Arkema France v. Honeywell International

February 2, 2012

ARKEMA INC. AND ARKEMA FRANCE,
PLAINTIFFS,
v.
HONEYWELL INTERNATIONAL, INC., DEFENDANT.



The opinion of the court was delivered by: Yohn, J.

Memorandum

Plaintiffs, Arkema Inc. and Arkema France (collectively, "Arkema"), brought this declaratory-judgment action against defendant, Honeywell International, Inc. ("Honeywell"), seeking to have the claims of Honeywell's U.S. Patent Nos. 7,279,451 (the "'451 patent") and 7,534,366 (the "'366 patent") (collectively, the "patents-in-suit") declared invalid or not infringed. These are both composition patents. Arkema has filed a motion for leave to supplement the complaint in which Arkema seeks to add U.S. Patent Nos. 8,033,120 (the "'120 patent") and 8,065,882 (the "'882 patent") (collectively, the "method patents") recently obtained by Honeywell. Honeywell opposes the motion on the ground that the method patents do not present a justiciable case and controversy and thus Arkema's proposed supplementation is futile. For the reasons set forth below, I will deny Arkema's motion to supplement its complaint.

I. Factual Background and Procedural History

This action arises out of a dispute between Arkema and Honeywell concerning Arkema's past and planned sales of the chemical compound HFO-1234yf ("R-1234yf") to automobile manufacturers in the United States. R-1234yf is a refrigerant intended for use in automobile air-conditioning systems. As a result of changing environmental regulations, R-1234yf is considered the "next-generation" refrigerant among American and European manufacturers who are currently seeking to enter into multiyear supply contracts. In November 2009, Honeywell filed suit in Germany against Arkema's parent company, Arkema S.A., and Arkema's German sister company, Arkema GmbH, alleging liability for indirect infringement of Honeywell's European patent for the sale of R-1234yf to automobile manufacturers. The lawsuit was dismissed without prejudice by the German court.*fn1

Arkema alleges that it is poised to enter the market as a supplier of R-1234yf and has received numerous requests for quotations from automobile manufacturers in the U.S. but has been prevented from supplying R-1234yf to these potential customers because of the cloud of uncertainty concerning the validity of Honeywell's patents. In 2009, Arkema supplied samples of R-1234yf to General Motors for use in a vehicle-testing program. (Pl. Arkema's Mem. in Supp. of Mot. for Leave to Supplement the Compl. ("Pls.' Mem.") Ex. 3, 3.) Arkema has not sold R-1234yf to any customer in the United States since August 2010. (Def. Honeywell Int'l Inc.'s Opp'n to Pls.' Mot. for Leave to File a Supplemental Compl. ("Response") Ex. 2, 7.) Arkema has no contracts for the sale of R-1234yf in the United States and has no pending requests for quotations or offers to sell. (Response Ex. 2, 8; Response Ex. 3, 3.) Nevertheless, Arkema asserts that it has made substantial preparations in order to supply U.S. customers with R-1234yf, including building a manufacturing facility, but that it has suspended its efforts to sell R-1234yf to U.S. automobile manufacturers because of lingering doubt concerning the validity of Honeywell's patents. (Pls.' Mem. 12.)

Arkema filed this declaratory-judgment action on June 16, 2010. In the complaint, Arkema challenges the validity of the '451 patent*fn2 and the '366 patent, both of which contain claims covering the composition of the compound R-1234yf. Honeywell filed an answer on August 20, 2010, asserting counterclaims for infringement of the patents-in-suit.*fn3 The counterclaims allege that Arkema is liable for direct infringement, contributory infringement, or inducing infringement. The court's scheduling order allowed the parties to amend their pleadings as of right until March 11, 2011. Fact discovery closed on November 18, 2011, and the parties agreed to extend expert discovery until January 20, 2012. The deadline to file summary judgment motions was January 13, 2012, and trial was scheduled for June 11, 2012.*fn4

The '120 patent was issued to Honeywell on October 11, 2011. This patent is a "method patent" that covers a "method for cooling air" using R-1234yf. Arkema contacted Honeywell the next week to inquire whether Honeywell would consent to Arkema's motion for leave to supplement the complaint by adding the '120 patent. Honeywell informed Arkema that it would not on November 1, 2011. Arkema filed a motion for leave to supplement on November 9, 2011, Honeywell filed a response in opposition on November 23, 2011, and Arkema filed a reply on December 2, 2011.

The '882 patent was issued on November 29, 2011, and is also a "method patent" covering "a method of transferring heat . . . to provide cooler air in an automobile" using R-1234yf. Arkema inquired whether Honeywell would agree that this court's decision as to the '120 patent would also apply to the '882 patent, but on December 12, 2011, Honeywell informed Arkema that it would not. Arkema withdrew its first motion for leave to supplement on December 15, 2011, and filed a new motion for leave to supplement that addresses the addition of both the '120 patent and the '882 patent. In the accompanying memorandum, Arkema asserts that allowing supplementation would promote judicial economy because of the substantial overlap in issues between the patents-in-suit and the method patents. Honeywell filed its response in opposition on December 29, 2011. On January 6, 2011, Arkema filed its reply. Oral argument was heard on January 19, 2012.

II. Discussion

Federal Rule of Civil Procedure 15(d) provides that a court may "[u]pon motion of a party, . . . upon reasonable notice, and upon such terms as are just, permit the party to serve a supplemental pleading setting forth transactions or occurrences or events which have happened since the date of the pleading sought to be supplemented." Fed. R. Civ. P. 15(d). Although motions to supplement should be liberally granted, "[t]he decision of whether to permit a supplemental pleading is within this Court's discretion." Hassoun v. Cimmino, 126 F. Supp. 2d 353, 360 (D.N.J. 2000) (citing Owens-Illinois, Inc. v. Lake Shore Land Co., 610 F.2d 1185, 1188-89 (3d Cir. 1979)). "Leave to file a supplemental complaint should be freely permitted in the absence of undue delay, bad faith, dilatory tactics, undue prejudice to defendants, or futility, and when the supplemental facts are connected to the original pleading." Hassoun, 126 F. Supp. 2d at 360. Honeywell argues that leave to supplement the complaint should be denied on the basis of futility.*fn5

A. Justiciability of the Method Patents

Honeywell argues that Arkema's proposed supplemental pleading is futile because it fails to state a justiciable claim and thus should not be allowed. Indeed, where a claim would not survive a motion to dismiss, leave to supplement should be denied as futile. See Travelers Indem. Co. v. Dammann & Co., 594 F.3d 238, 243 (3d Cir. 2010); see also Hassoun, 126 F. Supp. 2d at 360.

A district court has the power to hear a claim for declaratory relief under the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, only "in a case of actual controversy within its jurisdiction." Id. § 2201. This requirement of an "actual controversy" "is the same as an Article III case or controversy." Teva Pharm. USA, Inc. v. Novartis Pharm. Corp., 482 F.3d 1330, 1338 (Fed. Cir. 2007). The burden is on the party seeking a declaratory judgment "to establish that an Article III case or controversy existed" at the time the claim was filed. Arris Group, Inc. v. British Telecommc'n PLC, 639 F.3d 1368, 1373 (Fed. Cir. 2011).

In MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), the United States Supreme Court announced the standard for determining whether a claim for declaratory relief states a justiciable case and controversy. "Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal ...


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