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QUALCOMM, INC. v. MOTOROLA

November 6, 1997

QUALCOMM, INCORPORATED, Plaintiff,
v.
MOTOROLA, INC., Defendant.



The opinion of the court was delivered by: JONES

 This matter comes before the Court on Qualcomm's motion to amend its complaint in the 97-372 case, the lead action in a group of consolidated cases.

 I. FACTUAL BACKGROUND

 On March 5, 1997, Qualcomm filed case number 97-372, seeking, inter alia, a declaration of noninfringement and invalidity of three of Motorola's utility patents, namely: (1) "the '155 patent"; (2) "the '223 patent"; and (3) "the '774 patent." Qualcomm's complaint also seeks a declaration of noninfringement and invalidity of one design patent, "the '734 patent." Motorola filed an answer and counterclaim, as well as a "First Amended Counterclaims," alleging infringement of the '774 patent and the '734 patent.

 According to Qualcomm, after it filed its complaint in the instant case, it learned that a representative from Motorola had stolen an upper housing for the "Q" Phone from one of Qualcomm's suppliers. (Mem. of Points and Authorities at 1). Motorola has admitted on record that such theft did indeed occur. Qualcomm alleges that during discovery, Qualcomm learned of "the valuable information Motorola gained as a result of the theft, the large number of Motorola employees and attorneys who knew about the stolen Q Phone Housing, and the related and ineffectual response Motorola had to the theft." Id. at 1-2. Qualcomm now wishes to amend its complaint in order to add new causes of action for conversion, theft of trade secrets, and unfair business practices.

 Motorola has filed an opposition to the motion to amend. Motorola argues that allowing the amendment would substantially prejudice Motorola and that the proposed new claims are futile inasmuch as Motorola believes the claims could not withstand a motion to dismiss for lack of jurisdiction or for failure to state a claim. (Opposition at 3).

 II. MOTION TO AMEND COMPLAINT UNDER FRCP 15(a)

 Qualcomm has already amended its complaint once as a matter of course. Motorola has filed an answer to Qualcomm's first amended complaint. Therefore, Qualcomm properly seeks leave of the Court to amend its complaint.

 Qualcomm's motion is governed by Federal Rule of Civil Procedure 15(a). In part, this rule provides that "a party may amend the party's pleadings . . . by leave of court . . . and leave shall be freely given when justice so requires." FED. R. CIV. P. 15(a). Although leave to amend a complaint is not to be granted automatically, the policy permitting leave to amend is applied with "extraordinary liberality." Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990).

 In Foman v. Davis, 371 U.S. 178, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962), the Supreme Court identified four factors that are to be taken into consideration before granting a party leave to amend pleadings: (1) undue delay; (2) bad faith or dilatory motive; (3) futility of amendment; and (4) prejudice to the opposing party. Foman, 371 U.S. at 182. See also Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989); United States v. Webb, 655 F.2d 977, 980 (9th Cir. 1981).

 A. Delay

 First, the district court is to consider the party's delay in seeking leave to amend the pleadings. Morongo Band, 893 F.2d at 1079. Qualcomm argues that its motion to amend "is not the product of undue delay." (Mem. at 3). According to Qualcomm,

 
This litigation is still in its early stages. . . . The theft of the Q Phone Housing was not uncovered until discovery was underway in this litigation. Once Qualcomm learned of the taking, Qualcomm initiated discovery, which is still proceeding, specifically focusing on the taking of the Q Phone Housing and its use at Motorola. As a result of the discovery taken to date, Qualcomm now has sufficient information upon which to base its claims for relief arising from the theft.

 (Mem. at 3). There are no indications that Qualcomm has delayed in seeking to amend its complaint. As Qualcomm indicates in its motion, investigation and discovery revealed that the proposed new claims could be added to the present action. Motorola does not address the issue of delay in its opposition. ...


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