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Advanced Micro Devices, Inc. v. LG Electronics, Inc.

United States District Court, N.D. California

June 26, 2017

ADVANCED MICRO DEVICES, INC., et al., Plaintiffs,
v.
LG ELECTRONICS, INC., et al., Defendants.

          ORDER RE: MOTIONS FOR LEAVE TO AMEND, RE: DKT. NOS. 184, 188, 201

          SUSAN ILLSTON United States District Judge.

         Before the Court are three motions: (i) AMD's motion for leave to file an amended complaint and infringement contentions to add claims for induced and contributory infringement, Dkt. No. 184; (ii) LG's motion for leave to amend its invalidity contentions, Dkt. No. 188; and (iii) AMD's motion for leave to file a sur-reply, Dkt. No. 201. Pursuant to Civil Local Rule 7-1(b), the Court finds that this matter is appropriate for resolution without oral argument. After careful consideration of papers submitted, the Court hereby DENIES AMD's motion for leave to amend, GRANTS IN PART and DENIES IN PART LG's motion for leave to amend, and DENIES AS MOOT AMD's motion for leave to file a sur-reply.

         BACKGROUND

         Plaintiffs Advanced Micro Devices, Inc. and subsidiary ATI Technologies ULC (collectively, “AMD”) filed this patent infringement suit on March 5, 2014. In the complaint, AMD accused defendants LG Electronics, Inc., LG Electronics U.S.A., Inc., and LG Electronics Mobilecomm U.S.A., Inc. (collectively, “LG”) of infringing nine AMD patents.[1] Compl. (Dkt. No. 1). LG brought several counterclaims, asserting, among other things, that AMD infringes four LG patents, none of which is relevant to these two motions.

         On August 1, 2014, AMD served LG with its Patent Local Rule 3-1 asserted claims and infringement contentions. LG served AMD with its Patent Local Rule 3-3 invalidity contentions on October 1, 2014. From February 2015 to August 2016, the Court stayed this litigation while several of the patents-in-suit underwent inter partes review (“IPR”). See Dkt. Nos. 99, 112. About four months after the Court lifted the stay, AMD sought leave to amend its infringement contentions to accuse hundreds of additional LG products, most of them released during the stay. See Dkt. No. 128. The Court granted AMD's motion, which expanded the number of unique accused LG products in this case to over 800 (represented by 73 exemplar claim charts). Dkt. No. 160.

         On April 18, 2017, the Court issued a Markman order construing approximately twenty terms across the various patents asserted by both parties. Dkt. No. 176. The Court has not yet set deadlines for close of discovery or a trial date in this matter. At a recent case management conference, the Court ordered the parties to meet and confer to divide up this case, if necessary, for trial.

         Both parties now seek to amend portions of their respective Patent Local Rule contentions. Consistent with AMD's proposed amended infringement contentions, AMD also seeks to amend its complaint to include claims for induced and contributory infringement. LG requests leave to amend its invalidity contentions to include additional prior art.

         LEGAL STANDARD

         I. Amendments to Patent Local Rule Contentions

         “The local patent rules in the Northern District of California . . . requir[e] both the plaintiff and the defendant in patent cases to provide early notice of their infringement and invalidity contentions, and to proceed with diligence in amending those contentions when new information comes to light in the course of discovery. The rules thus seek to balance the right to develop new information in discovery with the need for certainty as to the legal theories.” O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1365-66 (Fed. Cir. 2006). In contrast to the more liberal policy for amending pleadings, “the philosophy behind amending claim charts is decidedly conservative, and designed to prevent the ‘shifting sands' approach to claim construction.” LG Elecs. Inc. v. Q-Lity Computer Inc., 211 F.R.D. 360, 367 (N.D. Cal. 2002) (citation omitted).

         Patent Local Rule 3-6 provides,

Amendment of the Infringement Contentions or the Invalidity Contentions may be made only by order of the Court upon a timely showing of good cause. Non-exhaustive examples of circumstances that may, absent undue prejudice to the non-moving party, support a finding 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.

N.D. Cal. Patent L.R. 3-6.

         “The moving party has the burden of demonstrating good cause.” Karl Storz Endoscopy-Am. v. Stryker Corp., No. 14-0876-RS (JSC), 2016 U.S. Dist. LEXIS 176876, at *7 (N.D. Cal. Dec. 21, 2016). Good cause exists where the moving party has acted diligently and the opposing party will not be prejudiced. Id. The moving party bears the burden of first establishing diligence. O2 Micro, 467 F.3d at 1355; Radware Ltd. v. F5 Networks, Inc., No. 13-02021-RMW, 2014 WL 3728482, at *1 (N.D. Cal. July 28, 2014) (“The burden is on the movant to establish diligence rather than on the opposing party to establish lack of diligence.”). Diligence consists of two steps: “(1) diligence in discovering the basis for amendment; and (2) diligence in seeking amendment once the basis for amendment has been discovered.” Monolithic Power Sys., Inc. v. Silergy Corp., No. 14-1745-VC (KAW), 2015 WL 5440674, at *2 (N.D. Cal. Sept. 15, 2015). “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.” Radware, 2014 WL 3728482, at *1. When the moving party is unable to show diligence, there is “no need to consider the question of prejudice.” O2 Micro, 467 F.3d at 1368.

         “If the court finds that the moving party has acted with diligence, it must then determine whether the nonmoving party would suffer prejudice if the motion to amend were granted.” Apple Inc. v. Samsung Elecs. Co. Ltd, No. 12-0630-LHK (PSG), 2013 WL 3246094, at *1 (N.D. Cal. June 26, 2013) (internal quotation marks omitted). “Prejudice is typically found when amending contentions stand[s] to disrupt the case schedule or other court orders.” Karl Storz Endoscopy-Am., 2016 U.S. Dist. LEXIS 176876, at *8. In any case, “[c]ourts have allowed amendments when the movant made an honest mistake, the request to amend did not appear to be motivated by gamesmanship, or where there was still ample time left in discovery.” Id. (citation and internal quotation marks omitted).

         II. ...


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