Match Group, LLC v. Bumble Trading Inc.

Western District of Texas, txwd-6:2018-cv-00080

Opposed MOTION for Leave to File Third Amended Complaint by Match Group, LLC.

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0 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS WACO DIVISION MATCH GROUP, LLC Plaintiff, No. 6:18-cv-00080-ADA v. BUMBLE TRADING INC. JURY TRIAL DEMANDED Defendant. PLAINTIFF MATCH GROUP, LLC'S PARTIALLY OPPOSED MOTION FOR LEAVE TO FILE ITS THIRD AMENDED COMPLAINT 0 TABLE OF CONTENTS I. INTRODUCTION ................................................................................................................ 1 II. BACKGROUND .................................................................................................................. 2 III. ARGUMENT ....................................................................................................................... 3 A. There Is No Legitimate Reason to Deny Leave. ............................................................ 3 B. Joinder of Bumble Holding, Ltd. Is Proper. ................................................................... 6 IV. CONCLUSION .................................................................................................................... 6 i 0 TABLE OF AUTHORITIES Cases Deussouy v. Gulf Cost Inv. Corp. 660 F.2d 595 (5th Cir. 2001) ................................................................................................... 3, 4 Dueling v. Devon Energy Corp. 623 F. App'x 127 (5th Cir. 2015)............................................................................................ 3, 5 Nation Wide Prods. LLC v. MJC Am. Ltd. No. 4:10-cv-880-Y, 2011 WL 13233559 (N.D. Tex. May 5, 2011) ........................................... 3 Smith v. EMC Corp. 393 F.3d 590 (5th Cir. 2004) ....................................................................................................... 3 Rules Fed. R. Civ. P. 15 ............................................................................................................................ 2 Fed. R. Civ. P. 15(a)(2) ................................................................................................................... 3 Fed. R. Civ. P. 20 ............................................................................................................................ 6 Fed. R. Civ. P. 20(a)(2) ................................................................................................................... 3 ii 0 I. INTRODUCTION In the live pleadings, Plaintiff Match Group, LLC ("Match") alleges infringement by Bumble Trading Inc. ("Bumble Trading") of U.S. Patents Nos. 9,733,811 ("'811 Patent"); 9,959,023 ("'023 Patent"); and 10,203,854 ("'854 Patent") along with non-patent claims. By this motion, Match seeks leave to add Bumble Holding, Ltd. ("Bumble Holding") to the full scope of this lawsuit. Defendants Bumble Trading and Bumble Holding (collectively, "Bumble") are unopposed to this request to extent Match alleges infringement by Bumble Holding of the '811 and '023 Patents. But, puzzlingly, Bumble opposes leave to assert the '854 Patent and non- patent claims against Bumble Holding. The Court should grant Match's request for leave in full and allow it to assert the full scope of claims against Bumble Holding. There is no principled basis for Bumble to oppose Match's request. Bumble has already agreed that Bumble Holding can be added as a defendant. It has already agreed to accept service for Bumble Holding. Bumble Holding is represented by the same counsel as Bumble Trading. Bumble Holding, like Bumble Trading, plays a role in distributing and marketing the Bumble app, the distribution of which is the cornerstone of Match's allegations here. And the joinder of Bumble Holding has no effect on case scheduling, jurisdiction, or any other consideration for which courts may occasionally deny amendment. Indeed, were the Court's full through-trial model order governing patent cases entered in this case, a motion for leave in these circumstances would not even be required. See Order Governing Proceedings – Patent Case at 5 (listing deadlines to add parties and amend complaints after Markman). The Court should grant leave to allege all claims against Bumble Holding. Bumble's only stated basis for opposing the full amendment is that it does not wish to "expand" the existing case against Bumble Holding from the allegations that were part of the live 1 0 pleadings in 18-cv-350. But this is not a proper basis to deny amendment of pleadings. Leave to amend pleading should be "freely granted." See Fed. R. Civ. P. 15. And while the Court may deny amendment in exceptional circumstances, a defendant's wish to arbitrarily limit the scope of the case against it is not one of them. For the reasons stated below, Match's motion should be granted. II. BACKGROUND Match filed this suit on March 16, 2018, alleging a variety of intellectual-property violations by Bumble Trading, including infringement of the '811 Patent. See Dkt. 1. On April 30, 2018, Match filed a First Amended Complaint, adding allegations of infringement of the '023 Patent, which had just issued. Dkt. 10. On February 19, 2019, Match filed a motion seeking leave to file a Second Amended Complaint to add the '854 Patent, which had then just issued. Based on a party agreement, that motion was granted as unopposed on March 5, 2019. Dkt. 59. Meanwhile, on March 28, 2018, Bumble Trading and Bumble Holding collectively sued Match in a Texas state court action. In its original counterclaims, Match alleged infringement of the '811 and '023 Patents against both Bumble Trading Inc. and Bumble Holding, Ltd.1 18-cv- 350 Dkt. 1-16. That case ultimately ended up before this Court, styled as Bumble Trading Inc. et al., v. Match Group, LLC, 18-cv-350. After significant briefing, the parties agreed to series of dismissals on various terms to end the 18-cv-350 case. 18-cv-350 Dkts. 68, 70. Part of that agreement was to join Bumble Holding in this case. 18-cv-350 Dkt. 68 at ¶ 6. 1 Match Group also alleged infringement of the '314 Design Patent, an allegation that has since been withdrawn and dismissed. 2 0 As compared to Match's operative complaint, Match's proposed amendment asks for only one change: to allege the same claims against Bumble Holding that it does against Bumble Trading. III. ARGUMENT The Federal Rules of Civil Procedure provide that leave to amend a complaint should be "freely given." Fed. R. Civ. P. 15(a)(2). Amendments to join parties and supplement allegations against additional parties is governed by the same standard, provided that the allegations of liability against the defendant sought to be joined arise from the same transaction or occurrence as the claims already in the case, and the defendant's alleged liability shares common questions of law or fact with the existing allegations and claims. Fed. R. Civ. P. 20(a)(2); see, e.g., Nation Wide Prods. LLC v. MJC Am. Ltd., No. 4:10-cv-880-Y, 2011 WL 13233559, at *2-3 (N.D. Tex. May 5, 2011). In this Circuit, only five circumstances justify denial of a requested amendment: "(1) undue delay, (2) bad faith or dilatory motive, (3) repeated failure to cure deficiencies by previous amendments, (4) undue prejudice to the opposing party, and (5) futility of the amendment." Smith v. EMC Corp., 393 F.3d 590, 595 (5th Cir. 2004). "The touchstone for denial of leave to amend under Rule 15(a) is prejudice." Dueling v. Devon Energy Corp., 623 F. App'x 127, 130 (5th Cir. 2015). If the basis for opposing leave is delay, dismissal is appropriate "only if the delay presents the possibility of serious prejudice to the opponent." Id. (quoting Deussouy v. Gulf Cost Inv. Corp., 660 F.2d 595, 598-99 & n.2 (5th Cir. 2001)). This Court's model order for patent cases also contemplates adding parties and amending pleadings after the Markman hearing. The scheduled Markman hearing in this case is still six weeks away. A. There Is No Legitimate Reason to Deny Leave. This request presents none of the five circumstances that would warrant denial of leave. 3 0 First, Match has not delayed in its request. This motion is made shortly after the parties' agreement to allow Bumble Holding in this case. At least as soon as Bumble Holding sued Match for harms it allegedly suffered from Match's lawsuit, Match knew Bumble Holding should be part of this overall dispute, and Match pled its allegations against Bumble Holding in Bumble's now-dismissed affirmative lawsuit. That was more practical since Bumble Holding, a foreign company, had already consented to jurisdiction in that case. While Match could have asserted the full scope of intellectual-property violations against Bumble Holding as soon as Match answered, Match reasonably waited until the multiple lawsuits reduced to one. And the Court had stayed all non-patent claims in this case until after Markman, nullifying any impact of delay. As soon as the parties' agreed that all of Match's patent and non-patent claims would proceed in this case, Match sought leave to amend. Here, where Bumble Holding is represented by the same counsel, where it is alleged to infringe via its role in distributing the same app at issue in all the relevant claims, and where general discovery has not even opened, Match has clearly not unduly delayed making this proposed amendment. Second, Match's request is not made in bad faith or with dilatory motive. Again, general fact discovery has not even opened, so there can be no finding of bad faith or dilatory motive. Instead, this request is a pragmatic matter of formally including Bumble Holding into all existing allegations surrounding the Bumble app, which both Bumble entities have some role in distributing and marketing. No reasonable litigant could find bad faith or dilatory motive here. Third, there has been no failure in previous amendments to "cure" any "deficiencies." Match's complaint has never had "deficiencies" to be cured. To date, Match's amendments have been confined to including newly issued patents. And the Court denied Bumble's only motion to dismiss in its entirety. See Dussouy, 660 F.2d at 600 (no repeated failure to cure deficiencies 4 0 when amendment sought was "not simply a continuation of the deficiencies at issue in the initial challenges to [plaintiff's] complaint."). This amendment is not intended to correct deficiencies, but merely to ensure that Bumble Holding is formally involved in this case based on its role in distributing the Bumble app. Fourth, there is no undue prejudice to either Bumble entity. Given the stage of this case, the only possible argument Bumble could make would be that Match unreasonably delayed including Bumble Holding in this case. But "[d]elay is undue and prejudice only if it hinders the opposing party's ability to respond to the proposed amendment or to prepare for trial." Dueling, 623 F. App'x at 130. Given that discovery has not even opened, and that Bumble Holding is represented by the same counsel in connection with infringement by an identical product (the Bumble app), there is no prejudice here. Finally, the amendment is obviously not futile; it makes the same allegations against Bumble Holding as the live complaint makes against Bumble Trading. Bumble Holding has some role in distributing the Bumble app; it is listed as the distributor on the Apple App Store and the Google Play Store. Indeed, were Bumble Holding not an appropriate defendant as related to the Bumble application, it would not have agreed to accept the amendment as to any of the infringement allegations. In sum, none of the considerations for denying leave apply here. Bumble has opposed inclusion of Bumble Holding in the '854 Patent infringement allegations, as well as the trademark, trade dress, and trade secret misappropriation allegations, based on a nonsensical notion that Match is not entitled to "expand" the scope of the case of Bumble Holding. The truth is that the status of the pleadings against Bumble Holding was always a product of uncertainty as between the 18-cv-80 and 18-cv-350 cases, and that uncertainty has now been resolved. No 5 0 party will suffer any prejudice. The amendments can be implemented with no changes to the schedule. And (of course) leave to amend should generally be "freely granted." For the reasons stated above, Match's motion should be granted. B. Joinder of Bumble Holding, Ltd. Is Proper. To the extent Bumble's opposition depends on an alleged impropriety of joining Bumble Holding, this opposition would also be baseless. A plaintiff may join any defendant where "(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendant will arise in the action." Fed. R. Civ. P. 20. Match seeks to add Bumble Holding based on its role in distributing and marketing the exact same Bumble application accused of infringement. The two entities are jointly and severally liable because of their joint role in making and distributing the Bumble app. And the right to relief plainly arises from the same transaction as it is the entities joint role in making, distributing, and marketing the Bumble app that gives rise to the right to relief. Indeed, were joinder here improper, Bumble likely would not have agreed to include Bumble Holding as to some claims but not others. Thus, joinder is no basis for denying leave. IV. CONCLUSION For the reasons stated above, Match respectfully requests that Court grant it leave to file its Third Amended Complaint, attached as Exhibit 1. 6 0 DATED: March 14, 2019 Respectfully submitted, Caldwell Cassady & Curry /s/ Bradley W. Caldwell Bradley W. Caldwell Texas State Bar No. 24040630 Email: bcaldwell@caldwellcc.com John F. Summers Texas State Bar No. 24079417 Email: jsummers@caldwellcc.com Warren J. McCarty, III Texas State Bar No. 24107857 Email: wmccarty@caldwellcc.com Caldwell Cassady Curry P.C. 2101 Cedar Springs Road, Suite 1000 Dallas, Texas 75201 Telephone: (214) 888-4848 Facsimile: (214) 888-4849 John P. Palmer State Bar. 15430600 Email: palmer@namanhowell.com Naman, Howell, Smith & Lee, PLLC 400 Austin Avenue, 8th Floor P.O. Box 1470 Waco, TX 76701 Telephone: (254) 755-4100 Facsimile: (254) 754-6331 ATTORNEYS FOR PLAINTIFF MATCH GROUP, LLC CERTIFICATE OF SERVICE The undersigned certifies that the foregoing document was filed electronically with the Clerk of Court using the CM/ECF system which will send notification of such filing to all counsel registered as Filing Users on this 14th day of March, 2019. /s/ Bradley W. Caldwell Bradley W. Caldwell