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Sage Electrochromics Inc. v. View Inc.

United States District Court, N.D. California

May 15, 2014

SAGE ELECTROCHROMICS INC., Plaintiff,
v.
VIEW INC., Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO STRIKE [DOCKET NO. 156]

DONNA M. RYU, Magistrate Judge.

Defendant-Counterclaimant View, Inc. ("View") and Intervenor-Plaintiff Leybold Optics, GmbH ("Leybold") filed a joint discovery letter regarding View's motion to strike Leybold's invalidity contentions. [Docket No. 156 (Joint Letter).] The court conducted a hearing on May 8, 2014. For the following reasons, the court grants View's motion to strike.

I. Background

Plaintiff-Counterclaim Defendant SAGE Electrochromics, Inc. ("Sage") filed this action on December 20, 2012, alleging that View's dynamic glass product infringes two of Sage's patents. Sage develops "dynamic glass, " sometimes referred to as "electrochromic glass, " which can change from a clear state to a tinted state upon the application of an electric charge to the glass. (Compl. ΒΆ 13.) In its February 2013 answer, View asserted a counterclaim alleging that Sage is infringing one of View's patents. [Docket No. 29.] View later amended its answer in March and May 2013 to add additional counterclaims for infringement of two patents. [Docket Nos. 34, 58.] Of importance to this motion, View's March 2013 amended counterclaim alleged that Sage infringed at least one claim of U.S. Patent Nos. 5, 831, 851 ("the 851 patent") by "making, using, selling, offering to sell and/or importing thin-film coating equipment for the manufacture of electrochromic glass products." [Docket No. 34 at 11-12.]

Following an initial case management conference on May 29, 2013, the Honorable Jon S. Tigar, the presiding judge in this matter, entered a scheduling order. [Docket No. 57.] The court set deadlines of June 12, 2013 and August 1, 2013 for the parties to serve infringement and invalidity contentions, respectively, with the close of claim construction discovery on November 7, 2013. The court also set a claim construction briefing schedule and a claim construction hearing for January 28, 2014.[1] The court did not set a deadline for fact or expert discovery.

In its June 12, 2013 infringement contentions, View identified Sage's alleged infringement of the 851 patent by a "film deposition apparatus made by Leybold Optics."[2] [Docket No. 107 (Order Granting Mot. to Intervene) 2.] View and Sage exchanged invalidity contentions as scheduled on August 1, 2013. (Joint Letter 2 n.1.)

On September 19, 2013, Leybold moved to intervene solely on the basis of its indemnification of Sage against claims that the use of Leybold's coating equipment infringes the 851 patent. [Docket No. 85 (Mot. to Intervene) 3, 5 n.5.] Leybold argued that View would not be prejudiced by its intervention as the case was "in its infancy" and Leybold was "not requesting to alter the dates" of the court's scheduling order. (Mot. to Intervene 5.)

View opposed the motion as untimely, arguing that Leybold did not move to intervene for seven months after it became aware that its equipment and coating system were implicated, citing a February 2013 letter by View to Sage regarding Sage's use of Leybold's equipment. [Docket No. 91 (Opp'n to Mot. to Intervene) 3, 6-7.] In the alternative, View argued that if the court allowed Leybold to intervene, the court should impose certain restrictions on Leybold's participation, including deeming Leybold and Sage to "constitute one side'" and limiting Leybold's right to discovery to that to which Sage was entitled under the parties' discovery plan. (Opp'n to Mot. to Intervene 8.) In its reply, to highlight its argument that View would not be prejudiced by its intervention, Leybold acknowledged that the court had entered a scheduling order "[w]ith respect to proposed claim construction exchanges, claim construction briefing, and claim construction hearings, as well as certain contentions, " and reiterated its representation that "it [would] not request to alter the dates" of the scheduling order. [Docket No. 94 (Reply) 2-3.]

On November 21, 2013, the court granted Leybold leave to intervene as of right. While finding that Leybold's seven month delay in seeking intervention was "unexplained, " the court ultimately concluded that the motion was not untimely. (Order Granting Mot. to Intervene 4-5.) The court rejected View's request for limitations on Leybold, holding that it would not "impose blanket restrictions on a party entitled as a matter of right to participate in the case." (Order Granting Mot. to Intervene 5.) Instead, the court noted that in considering any future requests for relief, the court would consider, "as appropriate, the various equitable factors that may weigh for or against granting such relief." (Order Granting Mot. to Intervene 5.) The court did not issue a new scheduling order.[3]

On November 22, 2013, Leybold filed its Complaint in Intervention, seeking a declaratory judgment that the 851 patent was invalid or not infringed. (Compl. in Intervention 3-4.) Thereafter, Leybold participated in the claim construction briefing and tutorial. (Joint Letter 7.) On January 23, 2014, days before the January 28 Markman hearing and without seeking leave of court, Leybold served invalidity contentions on View. These contentions introduce additional patent prior art and obviousness combinations that were not part of Sage's 851 patent invalidity contentions. (Joint Letter 3.)

On March 31, 2014, View and Leybold submitted the instant joint letter brief, in which View asks the court to strike Leybold's invalidity contentions. View argues that Leybold's invalidity contentions were served well beyond the August 1, 2013 deadline set by Judge Tigar in the scheduling order, and that Leybold did not seek relief from the scheduling order.

II. Legal Standards

Under Federal Rule of Civil Procedure 16(b), "[a] schedule may be modified only for good cause and with the judge's consent." Fed.R.Civ.P. 16(b)(4). In determining whether there is good cause to modify a scheduling order, courts focus on the reasonable diligence of the moving party. See Noyes v. Kelly Servs., 488 F.3d 1163, 1174 n.6 (9th Cir. 2007). "Although the existence or degree of prejudice to the party opposing the modification might supply additional reasons to deny a motion, the focus of the inquiry is upon the moving party's reasons for seeking modification." Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992).

Patent Local Rules 3-1 and 3-3 are discovery devices that set forth the standards for disclosing asserted claims, infringement contentions, and invalidity contentions in patent infringement actions. Rule 3-1, which addresses the timing and substance of infringement contentions, "takes the place of a series of interrogatories that defendants would likely have propounded had the patent local rules not provided for streamlined discovery." Intertrust Techs. Corp. v. Microsoft Corp., No. 01-1640 SBA, 2003 WL 23120174, at *1 (N.D. Cal. Dec. 1, 2003) (citation and quotation marks omitted); accord Bender v. Freescale Semiconductor, Inc., No. 09-1156 PJH (MEJ), 2010 WL 1689465, at *2 (N.D. Cal. Apr. 26, 2010). Patent Local Rule 3-3 requires a party opposing a claim of patent infringement to serve on all parties its invalidity contentions within 45 days after being served with the patentee's Rule 3-1 infringement contentions. These rules require parties to define their theories of patent infringement and invalidity early on in the course of litigation. O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1359 (Fed. Cir. 2006). They aim to "make the ...


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