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Linex Technologies, Inc. v. Hewlett-Packard Co.

United States District Court, Ninth Circuit

November 6, 2013

LINEX TECHNOLOGIES, INC., Plaintiff,
v.
HEWLETT-PACKARD COMPANY; APPLE COMPUTER, INC.; ARUBA NETWORKS, INC.; MERU NETWORKS; and RUCKUS WIRELESS, Defendants. AND ALL RELATED CLAIMS AND COUNTER-CLAIMS

ORDER GRANTING PLAINTIFF'S MOTION FOR LEAVE TO AMEND INFRINGEMENT CONTENTIONS (Docket No. 198) AND DENYING DEFENDANTS' CROSS-MOTION TO STRIKE (Docket No. 2013)

CLAUDIA WILKEN, District Judge.

Plaintiff Linex Technologies, Inc. moves for leave to amend its infringement contentions against Defendants Hewlett-Packard Company (HP); Apple Computer, Inc.; Aruba Networks, Inc.; Meru Networks; and Ruckus Wireless. Docket No. 198. Defendants oppose the motion and cross-move to strike Linex's infringement contentions. Docket No. 203. Having considered the papers submitted by the parties, the Court GRANTS Linex's Motion to Amend and DENIES Defendants' Cross-Motion to Strike.

BACKGROUND

Linex owns United States Patent Nos. 6, 757, 322 (the 322 patent), RE42, 219 (the 219 patent), and RE43, 812 (the 812 patent). In May 2011 Linex filed this patent infringement suit, contending that third-party Wi-Fi chipsets contained in Defendants' products infringe one or more claims. Docket No. 1. On August 2, 2013, Linex filed a motion to amend its infringement contentions. Docket No. 198. On August 16, 2013, Defendants filed a cross-motion to strike Linex's infringement contentions on the basis that they are deficient and unclear, and therefore fail to offer reasonable notice of Linex's infringement theory, as required by Patent L.R. 3-1.

LEGAL STANDARDS

A party may amend its infringement contentions upon a showing of good cause and by order of the Court. Patent L.R. 3-6. Examples of good cause include

(a) a claim construction by the Court different from that proposed by the party seeking amendment; (b) recent discovery of material, prior art despite earlier diligent search; and (c) recent discovery of nonpublic information about the Accused Instrumentality which was not discovered, despite diligent efforts, before the service of the Infringement Contentions.

Patent L.R. 3-6. Patent L.R. 3-6 "serves to balance the parties' rights to develop new information in discovery along with the need for certainty in legal theories at the start of the case." Apple, Inc. v. Samsung Elecs. Co., Ltd., 2012 WL 5632618, at *2 (N.D. Cal.) (citing O2 Micro Int'l, Ltd. v. Monolithic Power Sys., Inc. , 467 F.3d 1355, 1366 (Fed. Cir. 2006)).

The good cause inquiry considers first whether "the party seeking leave to amend acted with diligence in promptly moving to amend when new evidence [was] released." O2 Micro , 467 F.3d at 1363. "In considering the party's diligence, the critical question is whether the party could have discovered [the new information] earlier had it acted with the requisite diligence.'" Apple, 2012 WL 5632618, at *6 (citing Google, Inc. v. Netlist, 2010 WL 1838693, at *2 (N.D. Cal.)). The burden is on the moving party to show diligence. Id . If the court finds that the moving party was not diligent in amending its infringement contentions, it does not need to consider the question of prejudice to the non-moving party. See 02 Micro , 467 F.3d at 1368 (affirming the district court's decision refusing leave to amend upon finding the moving party was not diligent, without considering the question of prejudice to the non-moving party). However, even if the movant was arguably not diligent, the court retains discretion to grant leave to amend. Apple, 2012 WL 5632618, at *6 (granting leave to amend infringement contentions, even though court found plaintiff failed to establish diligence, because of lack of prejudice to defendant).

DISCUSSION

I. Linex's Motion to Amend

Linex filed its initial infringement contentions on May 15, 2013. At that time, Linex asserts, it had not yet been given the third-party chip suppliers' source code for inspection. Subsequently, on May 31, 2013, Marvell permitted Linex's expert to examine Marvell's source code. Linex accordingly incorporated analyses of the Marvell source code and served its first amended infringement contentions on July 2, 2013. Similarly, on June 11 and 12, 2013, Qualcomm-Atheros allowed Linex's expert to examine Qualcomm-Atheros' source code. Linex then amended its contentions to incorporate analyses of the Qualcomm-Atheros source code. Linex served these second amended contentions on July 17, 2013.

Linex has shown diligence sufficient to meet the good cause standard. Courts typically grant leave to amend infringement contentions after a patentee has been given the opportunity to inspect relevant source code. See, e.g., Big Baboon Corp. v. Dell, Inc. , 723 F.Supp.2d 1224, 1228 (C.D. Cal. 2010). Here, the record demonstrates that Linex amended its infringement contentions as it gained access to the relevant evidence from Defendants. As third-party chip suppliers provided Linex with access to documents and source code, Linex promptly amended its contentions to include citations to that third-party evidence.

Defendants also will not be prejudiced by Linex's proposed changes. This case remains in its early stage. Trial is not set until July 28, 2014. Defendants have sufficient time to review Linex's amended infringement contentions. As Linex notes, its proposed amendments to its infringement contentions do not add new patent claims or new products. See Apple, 2012 WL 5632618, at *3 (noting that proposed amendment did not add new claims or theories of infringement); see also Yodlee, Inc. v. Cashedge, Inc., 2007 WL 1454259 (N.D. ...


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