Judge Thynge recommends denying plaintiff’s motion to amend complaint with new defendant

In StrikeForce Technologies, Inc. v. PhoneFactor, Inc., C.A. No. 13-490-RGA-MPT (D. Del. May 26, 2015), Magistrate Judge Mary P. Thynge recommended denying plaintiff’s (“StrikeForce”) motion to amend its complaint to  add allegations of infringement against Microsoft Corporation (“Microsoft”) pursuant to Fed. R. Civ. P. 15(a).  StrikeForce acknowledged that “it was aware Microsoft acquired [defendant] PhoneFactor as its wholly-owned subsidiary in October 2012,” but argued that “it was only shortly before filing its motion to amend its complaint and join Microsoft that it became apparent PhoneFactor is not operating as an independent entity, purportedly necessitating the filing of that motion.” Id. at 3.

In reaching the recommendation to deny StrikeForce’s motion, Judge Thynge first concluded that StrikeForce’s “delay in seeking to join Microsoft was undue and its explanation for that delay insufficient to support granting its motion.” Id. at 10. Judge Thynge observed that “[d]espite StrikeForce giving Microsoft actual notice of the ‘599 patent, its belief that Microsoft was one of its ‘largest infringers,’ and Microsoft’s public announcement of its ‘phone based two factor authentication,’ StrikeForce did not name Microsoft as a defendant.” Id. at 7.  Judge Thynge also noted that “StrikeForce waited almost twenty-two months after its CEO commented that Microsoft was ‘one of our largest infringers’ and almost nineteen months after filing its initial complaint, and after the Markman hearing was held, to seek to sue Microsoft for infringement in this case.”

In recommending denial of the motion, Judge Thynge also found that “StrikeForce’s ability to separately bring suit against Microsoft, as well as the disruption and delay of the schedule in the instant suit at this stage of the proceeding by the addition of Microsoft, would prejudice PhoneFactor and disrupt the orderly continuation of this case under the current scheduling order.” Id. at 12. Judge Thynge found it notable that StrikeForce “filed its motion to amend after the claim construction hearing had taken place.” Id.

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