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Nomadix, Inc v. Hewlett-Packard Company

March 22, 2012

NOMADIX, INC., PLAINTIFF,
v.
HEWLETT-PACKARD COMPANY, A DELAWARE CORPORATION; WAYPORT, INC., A DELAWARE CORPORATION; IBAHN CORPORATION, A DELAWARE CORPORATION; GUEST-TEK INTERACTIVE ENTERTAINMENT LTD., A CANADIAN CORPORATION; GUEST-TEK INTERACTIVE ENTERTAINMENT, INC.; A CALIFORNIA CORPORATION; LODGENET INTERACTIVE CORPORATION, A DELAWARE CORPORATION; LODGENET STAYONLINE, INC., A DELAWARE CORPORATION; ARUBA NETWORKS, INC.; A DELAWARE CORPORATION; SUPERCLICK, INC., A WASHINGTON CORPORATION; SUPERCLICK NETWORKS, INC., A CANADIAN CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

O

ORDER DENYING DEFENDANTS' MOTION FOR LEAVE TO SUPPLEMENT THEIR INVALIDITY CONTENTIONS [Docket No. 715]

Defendants Wayport, Inc., Hewlett-Packard Co., iBahn Corp., Aruba Networks, Inc., Superclick, Inc., Superclick Networks, Inc., and Solutioninc Technologies Ltd. (collectively, "Defendants") have filed a Motion for Leave to Supplement Their Invalidity Contentions ("Motion"). Defendants' current contentions state that: 1) U.S. Patent No. 6,636,894 ("'894 Patent") is invalid in light of U.S. Patent No. 6,779,118 ("'118 Patent"); and 2) U.S. Patent No. 7,689,716 ("'716 Patent") is invalid in light of the Stanford Secure Public Internet Access Handler ("SPINACH") system and other references.*fn1 (Decl. of Benedict Frey in Supp. of Mot. ("Frey Decl."), Exs. 2-3.) Defendants now request leave to add invalidity contentions against U.S. Patent Nos. 7,194,554 ("'554 Patent"), 6,868,399 ("'399 Patent"), 6,130,892 ("'892 Patent"), 7,088,727 ("'727 Patent"), and 7,554,995 ("'995 Patent"). (Id., Exs. 8-12.) Having reviewed the parties' moving papers and heard oral argument, the court denies the Motion and adopts the following Order.

I. BACKGROUND

In July 2010, Defendants served initial invalidity contentions against the '894 Patent asserted in Nomadix's original complaint. The contentions included an invalidity chart explaining how the '894 Patent was anticipated by the '118 Patent issued to Dr. Koichiro Ikudome. (Mot. at 2.) Defendant Wayport has been acquainted with Dr. Ikudome's work since at least 2008, when Linksmart Wireless Technologies, LLC - in which Dr. Ikudome is a partner - sued Defendants Wayport and iBahn for infringing the '118 Patent. (Opp'n at 2-3.) During the course of that lawsuit, Wayport deposed Dr. Ikudome, with the deposition subject to a protective order. (Id.) In October 2010, Wayport became a licensee of the '118 Patent.

The July 2010 invalidity contentions also provided a more general 42-page table of prior art references, including the SPINACH system as disclosed in a 1997 article by Elliot Poger and Mary Baker, "Secure public internet access handler (SPINACH)," and a 1999 article by Guido Appenzeller, Mema Roussopolous, and Mary Baker, "User-Friendly Access Control for Public Network Ports." (Frey Decl., Ex. 1.) Defendants prefaced the table with the general statements that: 1) "[t]he following references may constitute prior art to one or more of U.S. Patent Nos. ['892, '727, '995, '894, '554, '399, '110, and '716]"; and 2) one or more of these references may anticipate or render obvious one or more of the patent claims. (Id.)

The '716 Patent issued to Nomadix in March 2010. In July 2011, Defendants updated their invalidity contentions to include express assertions that the '716 Patent was invalid in light of the SPINACH system as disclosed in the 1999 article, in combination with other references. The article's co-author, Dr. Roussopolous, was one of the key developers of the SPINACH system and has been a consultant to Defendant Wayport since September 2009. (Mot. at 1; Opp'n at 3-4.)

In October 2011, Defendants served a subpoena on Dr. Ikudome. (Mot. at 3.) On November 1, 2011, Defendants deposed him, with Nomadix present. (Id.) Based on Dr. Ikudome's deposition testimony, Defendants served Nomadix with supplemental invalidity contentions on November 4, 2011. (Id. at 4.) The contentions added that the '118 Patent and other references invalidated not only Nomadix's '894 Patent, but its '554 Patent and '399 Patent as well. (Frey Decl., Ex. 1.) Nomadix did not respond to Defendants' request that they stipulate to these supplemental contentions, which are now the subject of this Motion.

Also in October 2011, Defendants discovered a 1996 article by Jos Vos, "Linux firewall facilities for kernel-level screening" ("Vos article"). (Mot. at 4.) Defendants state that they found the article through ongoing Internet searches for prior art. (Id.) However, the Vos article was also cited in the 1997 SPINACH article referenced in Defendants' initial contentions.

Then, on November 3, 2011, Defendant Wayport noticed a deposition of Dr. Roussopolous for November 16, 2011. (Mot. at 3.) Defendants state that they had previously been unable to depose Dr. Roussopolous, because she was unwilling to travel to the United States from her home in Greece. However, Defendants were able to speak with Dr. Roussopolous informally in Greece on November 15, 2011. (Id.) The deposition itself did not take place, as Nomadix had filed a motion to quash. (Id.)

Based on information learned from their conversation with Dr. Roussopolous and disclosed in the Vos article, Defendants served Nomadix with additional supplemental invalidity contentions on November 21, 2011. (Mot. at 4.) Nomadix declined to stipulate to the supplemental contentions, and Defendants therefore filed this Motion on November 30, 2011. (Id.)

II. LEGAL STANDARD

The parties have adopted a modified version of the Northern District of California's Patent Local Rules. Rule 3-1 requires a defendant asserting an invalidity defense to serve invalidity contentions on the plaintiff within 45 days of receipt of infringement contentions. After this time, the invalidity contentions may only be amended "by order of the Court upon a timely showing of good cause." Relevant here, "[r]ecent discovery of material, prior art despite earlier diligent search" can support a finding of good cause, "absent undue prejudice to the non-moving party." Id. R. 3-6. Courts have also found good cause to supplement contentions where the amendments develop previously identified invalidity theories, and do not add new theories late in discovery. Golden Hour Data Sys., Inc. v. Health Servs. Integration, Inc., No. C 06-7477, 2008 WL 2622794, at *4-5 (N.D. Cal. Jul. 1, 2008). However, demonstrating good cause also "requires a showing of diligence," and "[t]he burden is on the movant to establish diligence." O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1366 (Fed. Cir. 2006).

More broadly, leave to amend "shall be freely given when justice so requires." Fed. R. Civ. P. 15(a). The Patent Local Rules are "not a straitjacket into which litigants are locked from the moment their contentions are served. There is a modest degree of flexibility, at least near the outset." Comcast Commc'ns Corp., LLC v. Finistar Corp., No. C 06-04206, 2007 WL 716131, at *2 (N.D. Cal. Mar. 2, 2007). However, "the philosophy behind amending claim charts is decidedly conservative, and designed to prevent the shifting sands approach to claim construction." Golden Hour, 2008 WL 2622794, at *2 (internal quotation marks omitted). The Local ...


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