United States District Court, N.D. California
January 22, 2004.
IXYS CORPORATION, Plaintiff,
ADVANCED POWER TECHNOLOGY, INC., Defendant. AND RELATED COUNTERCLAIMS
The opinion of the court was delivered by: MARILYN PATEL, Chief Judge District
MEMORANDUM AND ORDER RE: MOTION FOR LEAVE TO
Defendant and counter-claimant Advanced Power Technology, Inc. (APT)
has filed a motion for leave to amend seeking permission to counterclaim
against plaintiff IXYS Corporation (IXYS) for infringement of its U.S.
Patent No. 5,262,336 ("the 336 patent"), a patent not previously at suit.
After having considered the parties' arguments and submissions, and for
the reasons set forth below, the court rules as follows.
On August 15, 2002, IXYS filed the present action against APT alleging
infringement of U.S. Patents Nos. 5,486,715 ("the 715 patent") and
5,801,419 ("the `419 patent"), two patents for improved power MOSFET
devices. Six weeks later, on October 1, 2002, APT filed an answer and
counterclaimed against IXYS for infringement of its own patent, U.S.
Patent No. 5,283,202 ("the `202 patent"), which
describes the invention of diodes with improved lifetime control. Per
IXYS's request, APT filed amended counterclaims on October 18, 2002, that
served mainly to clarify its allegations of inequitable conduct.
The `336 patent made its first appearance in this case during a case
management conference held on December 16, 2002. At that conference, APT
informed the court that it intended to bring a motion for summary
judgment before the court had construed the relevant claims; it alleged
that IXYS's patents were invalid over the prior art of the `336 patent.
Catalano Dec., Exh. 2., at 12:11-21. Continuing in this vein, APT
officially included the 336 patent in its invalidity case by serving a
claim chart of that patent on IXYS in March of 2003. During that same
month, IXYS produced to APT all relevant documents describing the
processes that are now accused of infringing both the `202 and `336
patents. APT has not yet filed this motion for summary judgment.
As discovery in this case continued, the court held a technology
tutorial on September 24, 2003, and a claim construction hearing on
October 15, 2003, covering the subject matter and claims of IXYS's `715
and `419 patents, as well as APT's `202 patent. On October 24, 2003, IXYS
served upon APT a 30(b)(6) deposition notice that referenced both the
`202 and `336 patents. APT claims that it realized IXYS may be infringing
the `336 patent only after reading this deposition notice; on November
14, 2003, it sent a letter to IXYS requesting that IXYS allow APT to
amend its counterclaims to include infringement of the `336 patent.
Catalano Dec., Exh. 11. IXYS did not so consent, and on December 1, 2003,
APT filed this motion for leave to amend. As of December 1, 2003, neither
the 30(b)(6) deposition addressing the `202 and `336 patents, nor,
apparently, any other depositions, had yet taken place. Prior to the
hearing on this matter, fact discovery in this case (on every subject
other than willfulness) was set to end on January 20, 2004. Catalano
Dec., Exh. 15, at 1. Trial is currently set for July 6, 2004.
After responsive pleadings have been served, plaintiffs must seek the
court's permission to amend their complaint. Determining whether to grant
such leave "rests in the sound discretion of the trial court, and will be
reversed only for abuse of discretion." Swanson v. United States
Forest Serv., 87 F.3d 339, 343 (9th Cir. 1996). The Federal Rules of
Civil Procedure provide that leave to amend be "freely given when
justice so requires." Fed.R.Civ.Pro. 15(a). The Ninth Circuit has
construed this broadly, requiring leave to amend be granted with
"extraordinary liberality." Morongo Band of Mission Indians v.
Rose, 893 F.2d 1074, 1079 (9th Cir. 1990); see also PCD
Programs, Ltd. v. Lexington, 833 F.2d 183, 186 (9th Cir. 1987)
(Rule 15's policy of favoring amendments to pleadings should be applied with
`extreme liberality'"); Advanced Cardiovascular Sys., Inc. v. SciMed
Life Sys., Inc., 989 F. Supp. 1237, 1241 (N.D. Cal. 1997) ("[T]he
court must be very liberal in granting leave to amend").
Despite this liberal policy of amendment, leave will not be given where
the district court has "a substantial reason to deny" the motion. J.W.
Moore et al., Moore's Federal Practice § 15.14 (3d ed.
2003) ("[D]istrict judge[s] should freely grant leave to amend when
justice requires, absent a substantial reason to deny"). "The district
court's discretion to deny leave to amend is particularly broad where
plaintiff has previously amended the complaint." Sisseton-Wahpeton
Sioux Tribe v. United States, 90 F.3d 351, 355 (9th Cir 1996)
(citation omitted). The court may decline to grant leave where there is
"any apparent or declared reason" for doing so. Foman v. Davis,
371 U.S. 178, 182 (1962); see also Lockman Found, v.
Evangelical Alliance Mission 930 F.2d 764, 772 (9th Cir. 1991). The
Ninth Circuit has interpreted Foman as identifying "four
factors relevant to whether a motion for leave to amend pleadings should
be denied: undue delay, bad faith or dilatory motive, futility of
amendment, and prejudice to the opposing party." United States v.
Webb, 655 F.2d 977, 980 (9th Cir. 1981). It has also determined that
the enumerated factors are not of equal weight and that delay alone is
insufficient to deny leave to amend. Id. (citing Howey v.
United States, 481 F.2d 1187 (9th Cir. 1973)). By the same token,
"[p]rejudice to the opposing party is the most important factor."
Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990).
The party opposing leave to amend bears the burden of showing prejudice.
DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir.
1987). In such cases, justice does not require amendment; to grant such
amendment would further an injustice upon the defendant.
The advantages to the court (and to the parties) of allowing APT to
litigate its additional counterclaim as part of this action are obvious
and straightforward. Foremost are the self-evident gains in
judicial efficiency and consistent resolution of legal and factual
questions to be realized from litigating related issues in the same court
simultaneously. In addition and of particular relevance to this
action nearly all patent cases involve technology that is outside
of the core competency of a typical Article III judge, and therefore it
is especially in the interests of judges and parties involved in patent
litigation to consolidate all actions involving similar technology and
related patents in the same court, rather than forcing the parties to
repeatedly explain themselves to novel audiences.
The question thus arises as to whether any of the four Webb
factors are present here to the degree necessary to overcome the general
presumption in favor of allowing amendment. IXYS does not allege that APT
is acting in bad faith by seeking to amend its claims so close to the
conclusion of fact discovery and more than seven months after it was
first made aware of the processes it now claims infringe its patent. Nor
does IXYS argue that APT's amended counterclaim would be futile. The
court must therefore consider whether IXYS will be prejudiced if APT is
allowed to amend, and whether such an amendment will result in undue
delay. Webb, 655 F.2d at 980. This weighing of the factors,
unlike many of its type, is not precisely disjunctive; the Ninth Circuit
has stated explicitly that delay, standing alone, is not sufficient
grounds for denying leave to amend. Id. (" . . . delay alone
no matter how lengthy is an insufficient ground for denial of leave to
amend."); see also Morongo, 893 F.2d at 1079. Moreover,
prejudice to the non-moving party is considered the most important of the
four factors. Jackson, 902 F.2d at 1387. The court will thus
address the issue of prejudice before turning to the delay that will
result from APT's proposed amendment.
IXYS argues that it will suffer prejudice if APT is allowed to amend
its counterclaims because it will be forced to address a new legal theory
(infringement of the `336 patent) and conduct extensive additional
discovery. Indeed, the need for a party to conduct supplemental discovery
or to consider a new line of legal argument are classic sources of
prejudice that have regularly proven sufficient to defeat a motion for
leave to amend. See Zikovic v. Southern California Edison Co.,
302 F.3d 1080, 1087 (9th Cir. 2002) ("requirement of additional discovery
would have prejudiced Edison"); Morongo, 893 F.2d at 1079 (new
legal theory). Despite IXYS's strident protestations, the "new legal
theory" to which IXYS points would
not force it to undertake quite the "radical shift in direction" or
"entirely new course of defense" described in several of the cases that
relied upon the presentation of new legal avenues as grounds for refusing
to allow amendment. Id. The `336 patent is a parent of the `202
patent and describes correspondingly similar technology; the majority of
the claim terms in question in the `336 patent are repeated in the `202
patent. Nonetheless, IXYS notes correctly that this court would be forced
to construe a number of new claim terms, and thus that amendment would
force IXYS to address those new claim terms and their meaning within the
particular context of the `336 patent, issues which are novel to this
A more significant source of putative prejudice here is the additional
discovery that APT's proposed amended claims would necessitate. In order
to fully litigate the newly presented claims, IXYS would need to conduct
a further round of typical patent discovery, undoubtedly involving the
consultation of experts and the review of factual information relevant to
both the construction of the patent's claims and its validity, in
addition to the principal question of infringement. The fact that IXYS
has already obtained the patent's file history and somewhat more
recently APT's infringement contentions is helpful but not
compelling; the necessity for IXYS to consult experts and conduct factual
discovery regarding the novel questions raised by the `336 patent
remains. If the `336 and `202 patents were sufficiently similar as to
require no attending supplementary discovery, there would be no need for
APT to amend its counterclaims to add the `336 patent in the first
instance as the accused processes could all be said to infringe the
`202 patent. The court finds that IXYS will suffer some prejudice if
APT is allowed to amend its claims.
The Ninth Circuit has been uncharacteristically opaque regarding the
precise meaning of the "undue delay" factor described in Webb,
In some cases, the Ninth Circuit has appeared to indicate that the
reviewing court must inquire into whether allowing an amendment would
cause delays in the operative trial schedule. See, e.g., Loehr v.
Ventura County Community College District, 743 F.2d 1310, 1320 (9th
Cir. 1984) (permitting an amendment "would have substantially complicated
and delayed the case for new discovery, responsive pleadings, and
considerations of state law"). In others, the Circuit has described the
party's delay in moving to amend as the appropriate touchstone; undue
delay has occurred when a party
has filed a motion for leave to amend long after it should have
become aware of the information that underlies that motion. See,
e.g., Jackson 902 F.2d at 1388 ("Relevant to evaluating the delay
issue is whether the moving party knew or should have known the facts and
theories raised by the amendment in the original pleading.").
Though the Ninth Circuit has variously described these two conceptions
of undue delay as important, the former is far more significant for all
practical purposes. The existing prohibitions on amendment are not
intended simply as a punitive measure to be deployed against parties that
have carelessly prepared their causes of action, but are instead meant to
facilitate the orderly litigation of cases and the maximization of
judicial economy without burdening opposing parties with overly
deleterious consequences. It is difficult to imagine what deterrent
purpose one could possibly serve by penalizing a party for undue delay in
filing an amendment when that amendment neither alters the pre-existing
trial schedule nor causes significant prejudice to the opposing party.
By the more significant of these metrics, however, APT's motion for
leave to amend fares poorly. APT advocates placing the 336 patent's
infringement trial on the same scheduling track as the other three
patents already in suit, a process that would, as IXYS notes, force the
parties to complete in approximately two months a process for which the
local rules allow more than six months. In its rush to squeeze
consideration of the 336 patent into the pre-existing discovery and trial
timetable (or as close to it as possible), APT has proposed a truncated
discovery calendar that will itself trigger substantial prejudice to
IXYS. It may well be, as APT suggests, that IXYS's defenses and arguments
regarding the 336 patent will be so similar to its positions on the `202
patent that discovery, claim construction, and trial preparation can be
completed according to the current calendar. Yet this is by no means a
certainty, and to force IXYS to adhere to such a schedule would be to
penalize it for APT's own failures. This is a paradigmatic example of
prejudice to the opposing party, and this court cannot sanction it here.
By consequence, if these four patents are to be brought to trial
together, it will in all likelihood be necessary to extend the schedules
for fact discovery, pre-trial motions, and trial by some number of
months.*fn1 Given the natural length of patent litigation that type of
delay will not be overwhelming; however, IXYS, as the original plaintiff
in this action, has a vested interest in reaching trial with relative
so any further delay occasioned by APT's negligence again works to
IXYS's detriment through no fault of its own. If APT had discovered the
relevance of its own parent patent to this case when it filed
its counterclaims in October 2002, or even when it was served with the
documents describing IXYS's allegedly infringing processes in March 2003,
the counterclaims related to the `336 patent could have proceeded apace.
Regrettably, that ship has long since sailed, and the amendment APT
proposes would necessarily impose upon this court and upon the opposing
party a delay of significant length. The court finds that a delay of
several months will necessarily occur if APT is allowed to amend its
III. Non-Compulsory Counterclaim
A final factor that warrants consideration within this rubric is the
non-compulsory nature of APT's proposed amended counterclaim. APT could
almost surely bring its `336 patent infringement claim in a separate
action,*fn2 and thus this court need not be overly concerned with
preventing APT from litigating here a cause of action for which it will
subsequently be unable to find a proper forum. See J.W. Moore
et al., Moore's Federal Practice § 13.43 (3d ed. 2003)
("Another significant factor to be considered is whether the counterclaim
is compulsory; the risk of the claim being barred in a subsequent action
supports a liberal amendment standard to include omitted compulsory
counterclaims."). While this consideration is far from dispositive, it
nonetheless illustrates the extent to which denial of APT's motion for
leave to amend will not perpetrate a substantial injustice upon that
In sum, the substantial considerations of judicial economy and
efficiency that exist in these circumstances compel this court to allow
APT to amend its counterclaims unless the potential for equally grave
harm to IXYS demands otherwise. The court finds that IXYS will suffer
only de minimus prejudice if APT is permitted to amend, so long as APT's
counterclaims are placed on a schedule conducive to allowing IXYS the
full measure of time prescribed in the local rules to deal with these new
claims. If this solution is unsuitable to APT, it remains free to drop
its `336 patent counterclaim and return this case to the status quo ante.
For the foregoing reasons, APT's motion for leave to amend is GRANTED.
The parties are directed to jointly file a new schedule setting forth
schedules for discovery, briefing, claim construction, trial, and related
proceedings. Parties are to endeavor to maintain the schedule such that
the four patents are tried together, to the extent that such a schedule
remains possible. However, the court fully recognizes that trial on the
IXYS patents may need to proceed and trial and related proceedings on
APT's patents may need to be delayed so as not to render undue prejudice
and delay to IXYS. The court is prepared to resort to this "bifurcation"
if necessary, APT is ordered to pay all costs and fees incurred
by IXYS when IXYS is forced to conduct discovery or engage in other
proceedings related to the `336 patent that duplicates efforts it has
already made with respect to other patents at suit.
IT IS SO ORDERED.