United States District Court, N.D. California
ORDER DENYING PLAINTIFFS' MOTION FOR LEAVE TO
AMEND INFRINGEMENT CONTENTIONS AND ASSERTED CLAIMS RE: DKT.
NO. 166, RE: DKT. NO. 157
HAYWOOD S GILLIAM, JR. UNITED STATES DISTRICT JUDGE
before the Court is Plaintiffs' motion for leave to amend
their infringement contentions and asserted claims in the
above-captioned actions. Case No. 15-cv-3752-HSG, Dkt. No.
166 (“Mot.”); Case No. 15-cv-03755-HSG, Dkt. No.
157. The Court finds that this matter is appropriate for
disposition without oral argument and the matter is deemed
submitted. See Civil L.R. 7-1(b). For the reasons
stated below, the Court DENIES
filed these patent infringement actions in 2014 against
Defendants Samsung and Apple in the Southern District of New
York, alleging that Defendants infringed the following
patents owned by IXI: U.S. Patent No. 7, 295, 532 (the
“'532 Patent”), U.S. Patent No. 7, 039, 033
(the “'033 Patent”); and U.S. Patent No. 7,
016, 648 (the “'648 Patent”). See Dkt.
No. 1 ¶ 15. The patents are related to “mobile
tethering” technology. Id. ¶ 12. The
cases were transferred to this Court in August 2015. Dkt.
Nos. 79, 90.
2015, Defendants Apple and Samsung filed petitions for
inter partes review (“IPR”) by the
Patent Trial and Appeal Board (“PTAB”),
challenging the validity of each asserted claim of all three
patents at issue. Dkt. No. 119-1 ¶ 5. After filing the
IPR petitions, Defendants moved to stay the litigation, and
the Court granted the stay on November 12, 2015. Dkt. Nos.
119, 133. The PTAB instituted review of all the challenged
claims except claim 10 of the '532 Patent. Dkt. No. 142.
In December 2016, the PTAB found all the instituted claims
unpatentable. Dkt. No. 147, Exs. 2-5. Plaintiffs appealed the
PTAB's decision regarding the '033 Patent. Dkt. No.
142. On September 10, 2018, the Federal Circuit affirmed the
PTAB's decision invalidating the challenged claims of the
'033 Patent. Dkt. No. 147, Ex. 6. The final result of
Defendants' 2015 IPRs was the invalidation of every claim
asserted in this case other than claim 10 of the '532
March 2017, while the Federal Circuit appeal was pending,
Plaintiffs sought ex parte reexamination of the
'033 Patent with the United States Patent and Trademark
Office (“PTO”) and submitted a set of amended and
new claims. Dkt. No. 173-6, Ex. 5. The PTO issued an ex
parte reexamination certificate on February 1, 2018,
amending claim 56 and adding claims 57-124 to the '033
Patent. Id. Apple filed a request for ex
parte reexamination of certain challenged claims of the
'532 Patent. Id. The PTO rejected all the
challenged claims, including claim 10. Dkt. No. 173-3, Ex. 2.
Plaintiffs then filed a supplemental response and proposed
adding claims 64-98. Dkt. No. 173-4, Ex. 3. Reexamination of
the proposed '532 Patent claims is still ongoing.
February 21, 2019, the Court lifted the stay. Dkt. Nos. 162,
Patent Local Rules 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, 1366 (Fed. Cir. 2006). Accordingly, under Patent Local
Rule 3-6, amendment to infringement contentions “may be
made only by order of the Court upon a timely showing of good
cause.” In determining whether good cause exists, the
Court considers (1) whether the moving party was diligent in
moving to amend its contentions, and (2) whether the
non-moving party would suffer prejudice if leave to amend
were granted. Koninklijke Philips N.V. v. Acer Inc.,
No. 18-CV-01885-HSG, 2019 WL 652868, at *1 (N.D. Cal. Feb.
15, 2019) (citation omitted). “The party seeking to
amend its contentions bears the burden of establishing
diligence.” Id. (citation and quotations
omitted). The moving party must establish diligence in two
distinct phases: “(1) diligence in discovering the
basis for amendment; and (2) diligence in seeking amendment
once the basis for amendment has been discovered.”
Id. (citation and quotations omitted). However, good
cause “does not require perfect diligence.”
Id. (citation and quotations omitted). Absent undue
prejudice to the non-moving party, good cause may be
supported by “[r]ecent discovery of material, prior art
despite earlier diligent search.” Patent L.R. 3-6(b).
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.'” Verinata Health, Inc. v. Ariosa
Diagnostics, Inc., 236 F.Supp.3d 1110, 1113 (N.D. Cal.
2017) (citation omitted). The rules were “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.” O2 Micro, 467 F.3d
at 1366 n.12 (citation and quotations omitted).
the Court begins its analysis, it is important to note the
posture of these cases, which were filed over five years ago,
and transferred to this district over four years ago. In
November 2015, the Court stayed the cases pending resolution
of the IPR proceedings, primarily because the case could be
substantially streamlined if the PTAB invalidated some or all
of the asserted claims. See Dkt. No. 133 at 7. And
that is exactly what happened: the IPR resulted in the
invalidation of all but one of the forty-one claims asserted
by Plaintiffs in this litigation, meaning that the current
scope of the case is down to a single claim. But Plaintiffs
now seek to re-expand the scope of the case, dramatically, by
asserting what could be more than a hundred new claims
generated in the reexamination proceedings, including some
undetermined number of claims that may result from the
ongoing review of proposed claims of the '532 Patent. So
it is no exaggeration to observe that if Plaintiffs are
allowed to proceed as they propose, the Court's stay to
permit completion of the IPR was essentially pointless, and
accomplished nothing other than delaying resolution of this
case by several years. Plaintiffs will not be surprised to
hear that the Court did not anticipate, or intend, that
argue that res judicata, or claim preclusion, bars
Plaintiffs' assertion of the new claims for the '033
Patent. Dkt. No. 173 (“Opp.”) at 5. With respect
to the proposed claims for the '532 Patent, Defendants
contend that Plaintiffs cannot assert claims the PTO has not
yet issued. Opp. at 11. And Defendants contend more broadly
that Plaintiffs have not shown good cause to amend, given
their lack of diligence and the prejudice that would result
from the proposed amendments. Id. at 15-16.
Court finds that at this stage, it need not decide whether
claim or issue preclusion bars the new reexamination claims,
because Plaintiffs have not established they were diligent in
seeking amendment. And even if Plaintiffs did establish
diligence, Defendants would suffer undue prejudice if