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Unisone Strategic IP, Inc. v. Life Technologies Corp.

United States District Court, S.D. California

August 23, 2019

LIFE TECHNOLOGIES CORPORATION; and DOES 1 through 300, inclusive, Defendant.


          Hon. Gonzalo P. Curiel, United States District Judge.

         Plaintiff Unisone Strategic IP, Inc. (“Plaintiff” or “Unisone”) has moved for leave to file a second amended complaint against Defendant Life Technologies Corporation (“Life Tech”). ECF No. 120. On August 2, 2019, Life Tech filed a response in opposition to the motion. ECF No. 121. Subsequently, Unisone filed its reply in support of the motion for leave on August 9, 2019. ECF No. 122. Upon review of the moving papers, the Court finds that good cause exists to permit the filing of a Second Amended Complaint.

         I. Background

         On July 25, 2013, Plaintiff filed its initial Complaint asserting infringement of U.S. Pat. No. 6, 996, 538 (“the ‘538 patent”) against Defendant. ECF No. 1. Defendant soon filed a motion to dismiss the Complaint, ECF No. 10, which the Court granted on October 22, 2013. ECF No. 19. On November 4, 2013, TraceLink, Inc. (“TraceLink”), a defendant in a co-pending action before this Court, filed a request for ex parte reexamination of the ‘538 patent. See 3:13-CV-01743-GPC-LL. Shortly afterwards, Plaintiff filed a first amended complaint alleging infringement of the same patent. ECF No. 21. The Court stayed this action on April 2, 2014, pending the reexamination of the patent. ECF No. 35.

         A reexamination certificate was subsequently issued on November 24, 2014, amending the ‘538 patent and allowing the claims over the asserted prior art. U.S. Ex Parte Reexamination Cert. No. U.S. 6, 996, 538 C1. Afterwards, on December 5, 2014, Life Tech filed a petition requesting covered business method (CBM) patent review of the ‘538 patent before the United States Patent and Trademark Office Patent Trial and Appeal Board (“USPTO PTAB”). CBM2015-00037. As such, on April 8, 2015, the Court stayed the instant action until the outcome of the CBM review. ECF No. 60.

         On December 30, 2015, Life Tech filed a second petition requesting CBM patent review of the ‘538 patent before the USPTO PTAB on December 30, 2015. CBM2016-00025. In total, Life Tech sought CBM review of claims 1, 14, 19, 22-28, 32, 34-36, 52, 62, 67, 70-76, 81, 83-85, and 96. CBM2015-00037, Paper No. 1; CBM2016-0025, Paper No. 2. None of these challenged claims survived CBM review and were thus declared invalid by the USPTO.

         Claims 2-13, 15-18, 20, 21, 29-31, 33, 37-51, 52-61, 64-66, 68, 69, 77-80, 82, 86-95 were not challenged. Plaintiff now seeks to bring only these claims against the Defendant in its second amended complaint.

         II. Legal Standard

         Rule 15(a) of the Federal Rules of Civil Procedure states that, after the initial period for amendments as of right, pleadings may only be amended by leave of court, which “[t]he court shall freely give when justice so requires.” Fed.R.Civ.P. 15(a)(2). Courts commonly use four factors to determine the propriety of a motion for leave to amend: bad faith, undue delay, prejudice to the opposing party, and futility of amendment. Ditto v. McCurdy, 510 F.3d 1070, 1078-79 (9th Cir. 2007); Loehr v. Ventura Cnty. Cmty. Coll. Dist., 743 F.2d 1310, 1319 (9th Cir. 1984); Howey v. United States, 481 F.2d 1187, 1190 (9th Cir. 1973). “When weighing these factors . . . all inferences should be made in favor of granting the motion to amend.” Hofstetter v. Chase Home Fin., LLC, 751 F.Supp.2d 1116, 1122 (N.D. Cal 2010) (citing Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 880 (9th Cir. 1999)). In accordance with the Federal Rules' liberal pleading standards, courts typically apply the policy of free amendment with much liberality. DCD Programs, Ltd. V. Leighton, 833 F.2d 183, 186 (9th Cir. 1987), citing United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981).

         III. Discussion

         Plaintiff argues that this Court should grant its motion for leave to file an amended complaint because such motions are granted liberally - and because the Complaint has been amended to assert plausible infringement claims. Defendants counter that Plaintiff's motion should be denied on the basis of futility. Specifically, Defendants contend that Unisone cannot present a viable argument that its remaining claims on the ‘538 patent are valid. Moreover, Defendants proffer that Unisone's claims are collaterally estopped following the ex parte reexamination of the patent. As such, Life Tech submits that Unisone cannot present a non-frivolous infringement position that would survive a motion to dismiss and should not be allowed to file a second amended complaint. The Court will address these arguments in turn.

         a. Futility Under Rule 15

         While Courts can freely grant leave to amend under Rule 15, the Court may also deny leave for futility on a discretionary basis when a proposed amendment lacks a cognizable legal basis. See Shermoen v. United States, 982 F.2d 1312, 1319 (9th Cir. 1992). Amendments can be considered futile when “no set of facts can be proved under the amendment to the pleadings that would constitute a valid and sufficient claim or defense.” Missouri ex rel. Koster v. Harris, 849 F.3d 646, 656 (9th Cir. 2017) (internal quotation omitted). Examples of futile amendments include those that are “duplicative of existing claims” or “patently frivolous.” Murray v. Schriro, 745 F.3d 984, 1015 (9th Cir. 2014) (alteration omitted).

         Denial of leave to amend for futility is rare since Courts typically defer consideration on the merits until after an amended pleading has been filed. See, e.g., Green Valley Corp. v. Caldo Oil Co., No. 09-CV-04028-LHK, 2011 WL 1465883, at *6 (N.D. Cal. Apr. 18, 2011) (pointing that there is a “general preference against denying a motion for leave to amend based on futility); Allen v. Bayshore Mall, 12-cv-02368-JST, 2013 WL 6441504, at *5 (N.D. Cal. Dec. 9, 2013) (“The merits or facts of a controversy are not properly decided in a motion for leave to amend and should instead be attacked by a motion to dismiss for failure to state a claim or for summary judgment.”). Courts have liberally construed the standard for leave to amend on the basis that ...

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