United States District Court, N.D. California
ORDER ON DSS'S MOTION TO AMEND INFRINGEMENT
CONTENTIONS AND APPLE'S CROSS-MOTION TO STRIKE EXPERT
REPORT REDACTED VERSION RE: DKT. NOS. 213, 215, 219, 220,
231, 233, 246
HAYWOOD S. GILLIAM, JR. UNITED STATES DISTRICT JUDGE
before the Court is DSS's motion to amend infringement
contentions, Dkt. Nos., 215 (“Mot.”), 220
(“Opp./XMot.”), 232 (“Reply”), and
Apple's cross-motion to strike DSS's infringement
expert report, Dkt. Nos. 220, 234 (“XOpp.”), 249
(“XReply”). The parties also filed related
motions to seal portions of its briefs and accompanying
exhibits. Dkt. Nos. 213, 219, 231, 233, 246. For the reasons
provided below, the Court DENIES DSS's
motion to amend infringement contentions and
GRANTS Apple's cross-motion to strike
DSS's infringement expert report.
DSS Technology Management, Inc. filed its complaint against
Defendant Apple, Inc. on November 26, 2013, in the Eastern
District of Texas, alleging infringement of U.S. Patent Nos.
6, 128, 290 (the “'290 patent”) and 5, 699,
357 (the “'357 patent”). Dkt. No. 1. DSS
later withdrew all infringement allegations as to the
'357 patent, so presently only the '290 patent is at
issue. See Dkt. No. 96 at 2, 4. DSS alleges that
Apple's development and sale of computers and other
devices (iMacs, Mac Minis, Mac Pros, iPhones, iPads, and
iPods) that provide wireless Bluetooth connections to
peripheral devices (such as keyboards and mice) infringes the
'290 patent. Specifically, DSS alleges that the '290
patent "solved the problem of how to connect peripherals
wirelessly to a computer but still have sufficient battery
life to be practical." Mot. at 6. This was achieved by
"a communication scheme whereby the computer would place
the peripheral[ devices] on a schedule as to when the devices
might periodically communicate with the computer."
Id. As opposed to keeping the Bluetooth transmitter
in these peripheral devices always on, this "low duty
cycle" reduced the peripheral devices' battery power
consumption by turning the transmitter on for only short
periods. There are two modes hi which a device may operate to
effectuate this "low duty cycle:" Bluetooth Sniff
Mode and Sniff Subrating Mode. Dkt. No. 213-7 at 129. Both
reduce batteiy power consumption by negotiating periods of
time when the peripheral device's Bluetooth transmitter
turns back on. Id. Sniff Subrating Mode
"further reduc[es] the active duty cycle" and saves
power by specifying lower maximum access points.
Id. Bluetooth Sniff Subrating Mode is an
optional functionality. Id. at 668.
March 13, 2014, DSS seived initial Preliminary Infringement
Contentions ("PICs") on Apple. See Dkt.
No. 214-1 (Mot. Ex. 15). After correspondence with Apple, DSS
seived Amended PICs on May 2, 2014, which added information
about the accused products. Dkt. No. 214-3. The contentions
contain three clahn charts-only Exhibit B (for the '290
patent for "Apple Bluetooth v4.0 Products") and
Exhibit C (for the '290 patent for "Apple Bluetooth
v2.1 Products") are at issue. Dkt. No. 215-18 (Ex. B,
Ex. C). Exhibit B states that "[t]his particular set of
Preliminary Infringement Contentions maps Apple's
products that make use of the Bluetooth 4.0 standard ... for
wireless communications between a device and its peripherals
to the claims of. . . the '290 patent." Id.
Ex. B at 1. Similarly, Exhibit C states that "[t]his
particular set of Preliminary Infringement Contentions maps
Apple's products that make use of versions of the
Bluetooth standards between versions 2.1 .. . and 4.0 for
wireless communications between a device and its peripherals
to the claims of . . . the '290 patent.”
Id. Ex. C at 1. As relevant to the issues presented
in the parties' motions, Bluetooth version 2.1 introduced
Sniff Subrating Mode. Dkt. No. 220-2 at 2. Previous versions
relied on Sniff Mode only. Id.
November 7, 2014, the originally-assigned judge in the
Eastern District of Texas granted Defendant's motion to
transfer the case to the Northern District of California.
Dkt. No. 85. On February 13, 2015, the case was reassigned to
this Court. On December 4, 2014, Defendant filed two
petitions for inter partes review (IPR) of the '290
patent. Dkt. No. 99 at 1. All of the '290 patent claims
asserted by Plaintiff were covered by Defendant's
petitions. Id. at 3. On May 1, 2015, the Court
stayed this case pending results of the IPRs. Dkt. No. 122.
Both IPRs resulted in a final decision in Plaintiff's
favor, and the Court lifted the stay on July 27, 2018. Dkt.
holding a technology tutorial hearing on September 14, 2018
and a claim construction hearing on September 21, 2018, the
Court issued a claim construction order on December 6, 2018.
See Dkt. No. 175. The Court construed the disputed
terms from Claims 1 through 4 of the '290 Patent.
Immediately following the hearing, the Court conducted a
further Case Management Conference. The Court scheduled
various dates in the action, including a fact discovery
cut-off date of June 14, 2019. See Dkt. No. 183.
Patent Local Rules state that a plaintiff must provide:
(b) Separately for each asserted claim, each accused
apparatus, product, device, process, method, act, or other
instrumentality (“Accused Instrumentality”) of
each opposing party of which the party is aware. This
identification shall be as specific as possible. Each
product, device, and apparatus shall be identified by name or
model number, if known. Each method or process shall be
identified by name, if known, or by any product, device, or
apparatus which, when used, allegedly results in the practice
of the claimed method or process; . . .
(e) A chart identifying specifically where each limitation of
each asserted claim is found within each Accused
Instrumentality, including for each limitation that such
party contends is governed by 35 U.S.C. § 112(6), the
identity of the structure(s), act(s), or material(s) in the
Accused Instrumentality that performs the claimed function.
See Patent L.R. 3-1(b), (e). “[A]ll courts
agree that the degree of specificity under Local Rule 3-1
must be sufficient to provide reasonable notice to the
defendant why the plaintiff believes it has a
‘reasonable chance of proving infringement.'”
Shared Memory Graphics LLC v. Apple, Inc., 812
F.Supp.2d 1022, 1025 (N.D. Cal. 2010) (quoting View
Eng'g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d
981, 986 (Fed. Cir. 2000)).
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 and
quotations 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).
party may not use an expert report to introduce new
infringement theories, new infringing instrumentalities, new
invalidity theories, or new prior art references not
disclosed in the parties' infringement contentions or
invalidity contentions.” ASUS Computer Int'l v.
Round Rock Research, LLC, No. 12-CV-02099 JST (NC), 2014
WL 1463609, at *1 (N.D. Cal. Apr. 11, 2014). “The scope
of contentions and expert reports are not, however,
coextensive.” Apple Inc. v. Samsung Elecs.
Co., No. 5:12-CV-0630-LHK-PSG, 2014 WL 173409, at *1
(N.D. Cal. Jan. 9, 2014). “Infringement contentions
need not disclose specific evidence, whereas expert reports
must include a complete statement of the expert's
opinions, the basis and reasons for them, and any data or
other information considered when forming them.”
Digital Reg of Texas, LLC v. Adobe Sys. Inc., No. CV
12-01971-CW (KAW), 2014 WL 1653131, at *2 (N.D. Cal. Apr. 24,
2014) (internal quotation marks omitted). “The
threshold question in deciding whether to strike an expert
report is whether the expert has permissibly specified the
application of a disclosed theory or impermissibly
substituted a new theory altogether.” Id.
motion to amend infringement contentions and the cross-motion
to strike DSS's expert report put essentially DSS's
entire case at issue. The Amended PICs allege that
Apple's products using versions of Bluetooth between
v.2.1 and 4.0 infringed the '290 patent. Bluetooth Sniff
Subrating Mode became an optional feature beginning with
v2.1; prior versions-v1.0 to 2.0- only had Bluetooth Sniff
Mode. Without dispute, Apple's products XXXXX. In its motion, DSS asks the Court for
leave to amend its infringement contentions to include
contentions relating to Broadcom proprietary mode. DSS also
argues that the Amended PICs put Apple on notice that its
products operating in just Bluetooth Sniff Mode infringe the
'290 patent. Apple disagrees and argues that DSS did not
show diligence in seeking amendment, and that the Amended
PICs do not allege that Apple's products operating in
Sniff mode infringe the '290 patent. Accordingly, Apple
asks the Court to strike DSS's expert report for
impermissibly substituting two new theories. The Court
addresses each motion in turn.
Motion to Amend Infringement Contentions
seeks to add XXXXX as an infringing
mode to its Amended Contentions. Mot. at 21-25. This proposed
amendment arises out of DSS's purported recent discovery
on May 15, 2019, during a Rule 30(b)(6) deposition, that
Apple XXXXX. Mot. at 21-22. As noted
above, the Court must consider whether DSS acted with
diligence in moving ...