United States District Court, N.D. California, San Jose Division
ORDER GRANTING PLAINTIFFS' MOTIONS FOR LEAVE TO AMEND INFRINGEMENT CONTENTIONS
HOWARD R. LLOYD, Magistrate Judge.
Plaintiffs Radware, Ltd. and Radware, Inc. (collectively, "Radware") sue defendants A10 Networks, Inc. ("A10") and F5 Networks, Inc. ("F5") (collectively, "Defendants") in two separate but related cases alleging that Defendants' products infringe three Radware patents related to "Load Balancing" technology. The related cases are subject to the same case management schedule, at least through claim construction. Radware served its preliminary infringement contentions ("PICs") in August 2013. Defendants made source code available for inspection by October 1, 2013. In mid to late December, Radware served its proposed amended infringement contentions ("AICs"), which amendments are purportedly based entirely on information gleaned from Defendants' productions of source code. Radware then filed the instant motions for leave to amend on January 28, 2014. Defendants oppose the motions. The matters were deemed suitable for determination without oral argument, and the March 21, 2014, hearing was vacated. See Civil L.R. 7-1(b). Based on the moving and responding papers, Radware's motions are granted.
A10's production of source code on October 1, 2013, consisted of nearly 300 total versions of the two alleged infringing product series, each version consisting of millions of lines of code. Radware consistently reviewed the available source code from October 8 through October 18, and again from November 4 through November 15; it did not inspect the source code during the two-week period in between. Radware requested hard copies of select portions of the source code in mid-November, some of which it did not receive until December 18. On December 19, Radware served A10 with its AICs, which added: (1) citations to source code; (2) new citations to documents previously cited; and (3) new doctrine of equivalents (DOE) theories for four claim elements. The AICs also eliminated previous assertions of infringement of 10 claims.
F5 produced its source code for inspection on September 30, which comprised nearly nine gigabytes of source code - more than one million lines of code. Radware began its review of the source code on October 11. It requested hard copies on October 15, which F5 did not produce until November 2. On December 23, Radware served F5 with its AICs, which added the same three categories of information described above. The AICs also removed eight claims previously alleged to have been infringed.
"Amendment of the Infringement Contentions... may be made only by order of the Court upon a timely showing of good cause." Patent L.R. 3-6. The good cause inquiry "considers first whether the moving party was diligent in amending its contentions and then whether the non-moving party would suffer prejudice if the motion to amend were granted. Acer, Inc. v. Tech. Props. Ltd., No. 08-cv-00882JF (HRL), 2010 WL 3618687, at *3 (N.D. Cal. Sept. 10, 2010) (citing O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1366-68 (Fed. Cir. 2006)). "The burden is on the movant to establish diligence rather than on the opposing party to establish lack of diligence." Karl Storz Endoscopy-America, Inc. v. Stryker Corp., No. C09-00355, 2011 WL 5574807, at *1 (N.D. Cal. Nov. 16, 2011) (quoting O2 Micro, 467 F.3d at 1366). "However, even if the movant was arguably not diligent, the court retains discretion to grant leave to amend." Linex Techs., Inc. v. Hewlett-Packard Co., No. C13-159 CW, 2013 WL 5955548, at *1 (N.D. Cal. Nov. 6, 2013); see also Apple Inc. v. Samsung Electronics Co., No. CV 12-00630 LHK, 2012 WL 5632618 (N.D. Cal. Nov. 15, 2012) (granting leave to amend infringement contentions, even though court found plaintiff failed to establish diligence, because of lack of prejudice to the defendants). "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 *2 (internal quotation marks omitted).
"The rules are designed to require parties to crystallize their theories of the case early in the litigation and to adhere to those theories once they have been disclosed...." LG Electronics Inc. v. Q-Lity Computer Inc., 211 F.R.D. 360 (N.D. Cal. 2002) (quoting Atmel Corp. v. Information Storage Devices, Inc., No. C 95-1987 FMS, 1998 WL 775115, at *2 (N.D. Cal. 1998)). However, the expectation that a "patentee would have a precise sense of its infringement theory at the outset" is "unrealistic... [where] the patentee may not have been able to get access to the necessary information because it is hidden from view (for example, source code)." Peter S. Menell et al., Federal Judicial Center, Patent Case Management Judicial Guide 4-14 (2009). Thus, the good cause standard of 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, 2012 WL 5632618, at *2. "Courts typically grant leave to amend infringement contentions after a patentee has been given the opportunity to inspect relevant source code." Linex, 2013 WL 5955548, at *2.
Radware asserts that all its proposed amendments are based on information gleaned from Defendants' productions of source code. Good cause to amend exists because it has been diligent in reviewing the source code and in amending its infringement contentions based thereon. Moreover, Defendants will not be prejudiced because the AICs were served more than two months prior to claim construction briefing, and by citing to source code and eliminating several claims it previously contended were infringed, the AICs provide Defendants with greater specificity.
A. Compliance with Patent L.R. 3-1
As an initial matter, the Court will address the proper context for Defendants' arguments that Radware's AICs do not comply with Patent L.R. 3-1, which constitutes the majority of Defendants' oppositions. The Court agrees with Radware that this is not the appropriate vehicle for challenging the sufficiency of the AICs as a whole. Here, the Court is only concerned with (1) whether Radware acted diligently and (2) whether Defendants will be prejudiced by the amendments themselves as compared to the PICs. Thus, the sufficiency of the amendments is only relevant insofar as it affects the diligence and/or prejudice inquiries of the good cause standard.
F5 does not really fit its insufficiency argument into either prong and generally asserts that "Courts have found that one of the factors denying leave to amend is when the proposed amendments are still deficient." F5 Opp. at 6. However, in support it only cites a single federal claims court case, albeit one applying this district's Patent Local Rules, which noted that the amended claim chart was significantly deficient, but only after having already found that the plaintiff had not satisfied the good cause standard. See Canvs. Corp. v. United States, 107 Fed.Cl. 100, 109 (2012).
A10 asserts that the sufficiency of the Radware's AICs goes to the diligence prong of the good cause analysis. According to A10, "[i]t is axiomatic that a party cannot demonstrate diligence when it fails to satisfy the requirement of the local ...