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Aten International Co., Ltd v. Emine Technology Co.

April 12, 2010

ATEN INTERNATIONAL CO., LTD, ET AL., PLAINTIFF,
v.
EMINE TECHNOLOGY CO., LTD., ET AL., DEFENDANT.



The opinion of the court was delivered by: Andrew J. Guilford United States District Judge

ORDER GRANTING LEAVE TO FILE SECOND AMENDED COMPLAINT AND PARTIAL STAY OF CASE PENDING REEXAMINATION

Plaintiffs Aten International, Co., Ltd. and Aten Technology, Inc. (collectively "Aten") allege infringement by Defendants Belkin International, Inc., and Belkin, Inc. (collectively "Belkin") of two Keyboard-Video-Mouse ("KVM") patents. Aten moves to amend and supplement their complaint to add three additional patents. Belkin moves to stay litigation on one of the patents pending reexamination proceedings by the United States Patent and Trademark Office ("PTO"). After considering all papers and arguments submitted, both motions are GRANTED.

PRELIMINARY MATTERS

To support their motion, Belkin requests that the Court take judicial notice of several documents. This request goes unopposed. Under Federal Rule of Evidence 201, "[a] judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201. Facts subject to judicial notice may be considered on a motion to dismiss. Mullis v. United States Bankruptcy Ct., 828 F.2d 1385, 1388 (9th Cir. 1987).

Belkin requests that the Court take judicial notice of nine documents: (1) "Inter Partes Reexamination Filing Data - December 31, 2009," a PTO report; (2) Advanced Analogic Technologies, Inc. v. Kinetic Technologies, Inc., No. C-09-1360 MMC (N.D. Cal. Dec. 15, 2009) (Order Granting Defendant's Motion to Stay); (3) ValueClick, Inc. v. Tacoda, Inc., No. CV 08-4619 DSF (JCx) (N.D. Cal Nov. 23, 2009) (Order Granting in Part Motion to Stay); (4) Medtronic Sofamor Danek USA, Inc. v. NuVasive, Inc., No. 08cv1512-MMC (AJB) (N.D. Cal. Nov. 5, 2009) (Order Denying as Moot Motion to Stay); (5) Allflex USA, Inc. v. Avid Identification Systems, Inc., Case No. EDCV-06-1109-SGL (OPx) (C.D. Cal. Oct. 8, 2009) (Civil Minutes); (6) Allflex, (Oct. 30, 2009) (Order Sanctioning Avid and Fish & Richardson); (7) Kornit Digital Ltd. v. All American Manufacturing & Supply Co., et al., Case No. SACV 09-689 AG (MLGx) (C.D. Cal. Jan. 11, 2010) (Order Granting Stay); (8) Xyratex Technology, LTD. v. Teradyne, Inc., No. CV 08-04545 SJO (C.D. Cal. Apr. 10, 2009) (Order Denying Teradyne, Inc's Motion to Leave to File Amended Answer); and (9) SanDisk Corp., v. ITE Technologies, Inc., Case Nos. 07-cv-605-bbc and 07-cv-607-bbc , (W.D. Wis. Apr. 2, 2010) (Order Denying Plaintiff's Motion for Leave to Amend Complaint to Add Newly-Issued Patents). The Court finds that these documents meet the requirements of Rule 201, and Belkin's request for judicial notice is GRANTED as to those nine documents.

BACKGROUND

Aten originally filed two separate patent infringement suits: one for U.S. Patent No. 7,035,112 (the "'112 patent") entitled "Automatic Switch" filed in 2006, and another for U.S. Patent No. 6,564,275 (the "'275 patent") entitled "Electronic switching device for a universal serial bus interface" filed in 2008. From 2006 to 2008, the case for the '112 patent was stayed pending litigation in the International Trade Commission ("ITC"). The two cases were consolidated in March 2009, and transferred from the Eastern District of Texas to the Central District of California in July 2009.

When the motions were filed, the only discovery concerning the '275 patent were initial disclosures, patent infringement contentions, and document productions. (Belkin's Memo in Support of Motion to Stay, Ex. I.) No depositions have been taken and no expert reports have been exchanged for the '275 patent. (Declaration of Yaser M. El-Gamal in Support of Motion to Stay ("El-Gamal Decl.") ¶¶ 11-16.)

The court held a scheduling conference on January 11, 2010. The Scheduling Order issued at that conference sets March 12, 2010 as the last day for Joinder and Amendment Motions. Aten filed its Motion for Leave to file Second Amended and Supplemental Complaint ("Motion to Amend") on March 12, seeking to add three new patents to the infringement action. Belkin filed its Motion to Stay Case Pending Inter Partes Reexamination Proceedings ("Motion to Stay") on March 15, seeking to stay litigation on the '275 patent.

ANALYSIS

1. LEAVE TO AMEND AND SUPPLEMENT THE FIRST AMENDED COMPLAINT

Aten seeks to amend and supplement their First Amended Complaint ("FAC") by adding allegations of patent infringement for three other patents: (1) Patent 7,542,299 (the "'299 patent"), issued June 2, 2009, titled "Keyboard, video and mouse (KVM) switch," which is a continuation-in-part of the '112 patent already involved in the litigation; (2) Patent 6,957,287 (the "'287 patent"), issued Oct. 18, 2005, titled "Asynchronous/synchronous KVMP switch for console and peripheral devices"; and (3) Patent 7,613,854 (the "'854 patent"), issued Nov. 3, 2009, titled "Keyboard video mouse (KVM) switch wherein peripherals having source communication protocol are routed via KVM switch and converted to destination communication protocol." All three patents share a common inventor and relate generally to KVM switches.

The Court GRANTS Aten's motion for leave to supplement and amend the FAC.

1.1 Legal Standard

Federal Rule of Civil Procedure 15(a) instructs that "leave shall be freely granted when justice so requires." In determining whether to grant leave to amend, a court considers the following factors: (1) whether the movant unduly delayed in bringing the motion; (2) evidence of bad faith or dilatory motive on the part of the movant; (3) the movant's repeated failure to cure deficiencies by previous amendments; (4) prejudice to the opposing party; and (5) futility of amendment. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). While a court should consider each of the five factors when conducting its analysis, the crucial factor is the resulting prejudice to the opposing party. Howey v. Radio Corp. of Am., 481 F.2d 1187, 1190 (9th Cir. 1973). "Absent prejudice, or a strong showing of any of the remaining . . . factors, there exists a presumption under Rule 15(a) in favor of granting leave to amend." Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (emphasis omitted). See also Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999) (stating that when a court conducts a Rule 15(a) analysis, generally all inferences should be drawn in favor of granting the motion).

Because two of the patents to be added to the FAC were issued after filing the original complaint, the Court must also consider the standard under Rule 15(d). Under Rule 15(d), "the court may . . . permit a party to serve a supplemental pleading setting out any transaction, occurrence, or event that happened after the date of the pleading to be supplemented." "Rule 15(d) is intended to give district courts broad discretion in allowing supplemental pleadings." Keith v. Volpe, 858 F.2d 467, 473 (9th Cir. 1988). "The rule is a tool of judicial economy and convenience. Its use is therefore favored." Id. "The clear weight of authority . . . permits the bringing of new claims in a supplemental complaint to promote the economical and speedy disposition of the controversy . . . ." Id. The same principles in 15(a) apply to 15(d), in that leave should be "freely given" "[i]n the absence of any apparent or declared reason - such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc." Foman v. Davis, 371 U.S. 178, 182 (1962); see also Glatt v. Chicago Park Dist., 87 F.3d 190, 194 (7th Cir. 1996) (holding that the standard under 15(a) and 15(d) are the same). Thus, the Court may analyze a supplemental pleading under the traditional 15(a) analysis, keeping in mind the additional factor of judicial economy. See Keith, 858 F.3d at 473.

1.2 Analysis

Belkin argues that the motion should be denied because: (1) Aten's supplemental patents are unrelated to the pending claims; (2) Belkin will suffer prejudice if the additional patents are added; and (3) judicial economy is better served by denying leave to amend. These arguments are unpersuasive.

1.2.1 Unrelated Claims

Belkin argues that supplemental complaints should not be "used to introduce a separate, distinct and new cause of action." Planned Parenthood of Southern Arizona v. Neely, 130 F.3d 400, 402 (9th Cir. 1997). Under Belkin's theory, Aten is asking to add new, separate patent infringement allegations that are only loosely tied to ...


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