IP Law Daily, PATENT—S.D.N.Y.: Order granting leave to amend affirmed in hair extension dispute, (Sep 19, 2023)

By Kevin M. Finson, J.D.

There was no prejudice to the opposing party and denying leave would lead to unnecessary duplicative litigation.

Additional claims attacking the validity of patent and trademark registrations were properly allowed as an amendment, the U.S. District Court in New York has held. Granting leave did not prejudice any party and promoted judicial efficiency (Covet & Mane, LLC v. Invisible Bead Extensions, LLC, September 18, 2023, Cronan, J.).

Covet & Mane, LLC (C&M) sought declaratory and monetary relief challenging the validity of intellectual property rights, both patent and trademark, claimed by Invisible Bead Extensions, LLC (IBE), a competitor in the hair extension business. C&M alleged that IBE had engaged in bad faith partnership negotiations in order to induce C&M to share its methods and product design, and that IBE then obtained patent and trademark registrations using C&M’s intellectual property and began manufacturing and selling a copycat line of hair extension products. After the time to amend laid out in the court’s scheduling order had elapsed, C&M moved for leave to amend, adding new claims challenging IBE’s patent and trademark registrations, a claim for product and brand disparagement, and adding as defendants several other parties. The assigned magistrate judge issued an order on those issues he saw as non-dispositive and a report and recommendation on the issues he saw as dispositive. IBE filed objections to the non-dispositive portions of the decision.

Patent. The magistrate judge had allowed C&M to add claims challenging the validity of the ’347 patent, which IBE argued was an error because a covenant not to sue between the parties had eliminated subject matter jurisdiction. The court held that the covenant in question did not address induced or contributory infringement and so there were still claims to resolve. IBE argued further that the matter was moot because its later-executed revised covenant not to sue, which had not been presented to the magistrate judge at the time of the magistrate’s decision, explicitly waived any right to sue for induced or contributory infringement. The court declined to overturn the magistrate’s decision based on evidence not presented to the magistrate, and accordingly overruled IBE’s objection.

Trademark. The magistrate judge agreed with IBE that C&M had failed to demonstrate diligence in its request for leave to add its trademark claims because the claims relied on the same facts alleged in the original complaint. The magistrate held that the court should exercise its discretion to allow the amendment anyway because there was no showing of prejudice and because requiring C&M to litigate its trademark claims in a separate proceeding would be unnecessarily duplicative. The court held that this was within the magistrate judge’s discretion, and overruled IBE’s objections.

Product disparagement. The magistrate judge had treated his denial of C&M’s request for leave to add product and brand disparagement claims as dispositive and therefore styled that portion of his decision as a report and recommendation, with the proper notices to the parties about time to file objections. Neither party objected to this portion of the decision within the time noted, so the court noted only that it had reviewed the entire decision de novo, found it well reasoned and well founded, and adopted the report as an order of the court.

The court overruled the objections to the magistrate judge’s decision.

The Case is No. 1:2021cv07740.

Attorneys: Thomas Dunlap (Dunlap Bennett & Ludwig, PLLC) for Covet & Mane, LLC. Joel Geoffrey MacMull (Mandelbaum Barrett PC) for Invisible Bead Extensions, LLC.

Companies: Covet & Mane, LLC; Invisible Bead Extensions, LLC

Cases: Patent NewYorkNews