Codexis, Inc. v. Codex DNA, Inc.

Background

Codexis, Inc. brought four trademark-related claims against Codex DNA, Inc.: federal trademark infringement, federal unfair competition and false designation of origin, common-law trademark infringement, and common-law unfair competition. Codexis alleged that it owned registered CODEXIS and CODEX marks and that Codex DNA began using the CODEX mark after changing its name from SGI-DNA in April 2020.

The court had set January 18, 2021, as the deadline for amending pleadings. Codex DNA moved under Federal Rules of Civil Procedure 16(b)(4) and 15(a)(2) for permission to amend its answer. It sought to add a “priority affirmative defense,” asserting that Codexis lacked earlier trademark rights over Codex DNA in the field of DNA synthesis. It also sought to add three partial-cancellation counterclaims, arguing that Codexis had not proven use of its registered marks in connection with DNA-synthesis offerings and that the registrations should be limited to protein and enzyme optimization services.

Court’s analysis

Because the amendment deadline had passed, the court first applied Rule 16(b)(4), which requires good cause to modify a scheduling order. The court explained that the moving party must show diligence. If the party was not diligent, the inquiry ends. If good cause is shown, the court then considers Rule 15(a)(2), under which leave to amend should generally be freely given when justice requires, while considering factors such as delay, prejudice, and whether the amendment would be futile.

For the proposed priority defense, Codex DNA said it learned during May 2021 depositions that Codexis intended to enter the DNA-synthesis field and had begun selling certain DNA-related products. Codexis argued that Codex DNA already knew about its activities based on a June 2020 press release concerning a partnership with Molecular Assemblies. The court found that the press release did not say Codexis itself intended to expand into selling DNA-synthesis goods and services. Instead, the release suggested that Codexis would provide expertise while Molecular Assemblies would commercialize any resulting process. The court therefore found Codex DNA diligent and found good cause under Rule 16. It also rejected Codexis’s prejudice arguments and granted leave under Rule 15 to add the priority defense. The court noted that granting leave did not decide the defense’s merits.

For the proposed partial-cancellation counterclaims, Codex DNA argued that it did not learn until a deposition that Codexis claimed its trademark registrations covered DNA-synthesis goods and services. The court disagreed, finding that Codex DNA had known of that theory no later than the beginning of the lawsuit. The complaint itself identified Codexis’s registrations and alleged that Codex DNA’s CODEX-branded offerings involved writing synthetic genes and overlapped with or related to Codexis’s goods and services. The court therefore found Codex DNA lacked diligence and had not shown good cause to amend its answer to add the counterclaims.

Disposition

The court states that Codex DNA’s motion for leave to file an amended answer and counterclaims was GRANTED in part and DENIED in part. The portion seeking leave to add the priority affirmative defense was expressly GRANTED. Codex DNA was directed to file an amended answer by September 17, 2021. The supplied opinion text does not include the next numbered paragraph, so it does not expressly display the order’s separate numbered disposition of the proposed counterclaims; the preceding analysis rejects leave to add them, and the overall order states that the motion was denied in part. Judge Maxine M. Chesney signed the order.