Becton, Dickinson and Company v. Cytek Biosciences Inc.

Background

Becton, Dickinson and Company sued Cytek Biosciences Inc. Becton alleged that Cytek used Becton’s confidential, proprietary, and trade-secret information in developing Cytek’s Aurora line of spectral flow cytometers.

Cytek asserted counterclaims under California’s Unfair Competition Law (UCL). Earlier versions of the UCL claim relied on theories involving an alleged tying arrangement and employee-agreement provisions. The court previously dismissed those theories and allowed Cytek to amend only to cure the identified problems.

In its Second Amended Counterclaims, Cytek added a new claim under Section 2 of the Sherman Antitrust Act. Cytek alleged that, beginning around fall 2017, Becton refused to sell parts needed for Cytek to service Becton cytometers. Cytek also based part of its UCL claim on that alleged Sherman Act violation.

Motion and Analysis

Becton moved to strike or dismiss the new Sherman Act claim and the related portion of the UCL claim. Becton argued that the court’s earlier order did not authorize Cytek to add a new cause of action and that Cytek had waited too long to seek permission to do so.

The court agreed that the amendment exceeded the scope of the earlier permission to amend. That permission allowed Cytek to amend its UCL claim only to cure deficiencies previously identified by the court; it did not authorize a new claim. The court also held that Rule 16 of the Federal Rules of Civil Procedure, rather than the more permissive Rule 15, governed because a scheduling order had set February 28, 2019, as the deadline for amending pleadings.

Under Rule 16, a scheduling deadline may be changed only for good cause. The court explained that this required Cytek to show diligence in seeking the amendment. The court rejected Cytek’s argument that its Sherman Act claim did not become actionable until April 2019, reasoning that a competitor need not first go out of business to allege harm to competition. The court further found that, even assuming the claim became actionable in April, Cytek waited four months before asserting it or bringing it to the court’s attention. Because Cytek had not shown diligence, it had not shown good cause. The court stated that the lack of diligence ended the inquiry, without needing to focus on prejudice to Becton.

Disposition

Judge Chesney granted Becton’s motion. The First Cause of Action, the Sherman Act claim, was stricken without prejudice to refiling in a separate action. The Second Cause of Action, the UCL claim, was stricken to the extent it was based on the Sherman Act claim. The remainder of the Second Cause of Action was dismissed without leave to amend.