General Mills v. Kraft Foods (Fed. Cir. 2007).
Fruit by the Foot is similar the more popular Fuit Roll Up. The product is essentially three-feet of mashed fruit mixed with corn-syrup. General Mills patented this new food (U.S. Patent No. 5,723,163) and then sued Farley Candy Company for infringement. The Farley case settled with an agreed lump-sum payment for General Mills and a covenant not to sue Farley or its successors on the patent. The settlement includes a provision that successors only have rights under the agreement if the entire business is transferred.
After the settlement, Kraft purchased Farley's entire business, properly becoming a successor under the agreement. Kraft then sold-off most of Farley's business to a third party, but attempted to hold-on to its right of continued infringement. General Mills then sued for infringement.
On appeal of a R.12(b)(6) dismissal, the CAFC gave a literal interpretation to the settlement agreement: First finding that Kraft had properly become a successor based on its purchase of the entire Farely business. Then, because the agreement did not specifically address the issue of divestiture of assets, the court held that Kraft maintained its right to infringe despite selling the Farley assets.
Dismissal affirmed
Notes:
- The case also includes a Civil Procedure gem for those of you thinking about responding to an amended complaint:
Here, the court held that a response to an amended complaint is still due within 10-days regardless filing of a R.12(b)(6) motion to dismiss. R.12(a)(1) and (a)(2) provide the rules regarding timing of responive pleadings; R.12(a)(4) allows a delay in filing a responsive pleading under certain conditions; and R.15 provides a 10-day window for responding to amended complaints in particular. The opinion focused on the the phrase "these periods of time" to limit the delay provision of 12(a)(4) so that it only applies the timing provisions of Rule 12 (and not Rule 15).
"Rule 12(a)(4) then provides that “[u]nless a different time is fixed by court order, the service of a motion permitted under this rule [including a Rule 12(b)(6) motion to dismiss] alters these periods of time” so as to extend the deadline until a motion is ruled upon. Fed. R. Civ. P. 12(a)(4) (emphasis added). However, the time for answering an amended complaint is not one of “these periods of time.” Rather, the deadline for responding to an amended complaint is established separately under Rule 15: “A party shall plead in response to an amended pleading within the time remaining for response to the original pleading or within 10 days after service of the amended pleading, whichever period may be the longer, unless the court otherwise orders.” Fed. R. Civ. P. 15(a)."
This decision confused me because the phrase "these periods of time" is not found in my version of Rule 12(a)(4). Rather, my version discusses "the periods of time . . . [for] responsive pleading," which might then include a response to an amended complaint under Rule 15. As you can see below, my version is different than the CAFC's! In the future, differences will be corrected by the Supreme Court's upcoming amendment: Effective December 1, 2007, Rule 12 will be amended to "these periods."
Various sources have different versions of the rule:
- Cornell Online Version: "the periods of time."
- USCS Fed Rules Civ Proc R 12 (Lexis): "the periods of time."
- Federal Rules (Thompson West 2005 Rev. Ed.): "these periods of time."
- Federal Rules (Westlaw 2007): "these periods of time."
- All cases found in Lexis & Westlaw cite to the rule as "these periods of time."
