Oracle Corporation et al v. SAP AG et al

Filing 456

RESPONSE in Support re 438 MOTION to Seal Document Defendants' Administrative Motion to Permit Defendants to File Under Seal Plaintiffs' Information Disclosed in Defendants' Answer and Affirmative Defenses to Fourth Amended Complaint filed byOracle EMEA Limited, Oracle International Corporation, Oracle USA Inc., Siebel Systems, Inc.. (Attachments: # 1 Proposed Order)(Howard, Geoffrey) (Filed on 8/31/2009)

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Robert A. Mittelstaedt (SBN 0 6 0 3 5 9 ) J a s o n M c D o n e l l ( S B N 115084) E l a i n e W a l l a c e ( S B N 197882) JONES D A Y 555 California Street, 26th Floor San F r a n c i s c o , C A 9 4 1 0 4 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] [e-mail] T h a r a n G r e g o r y L a n i e r ( S B N 138784) J a n e L. F r o y d ( S B N 2 2 0 7 7 6 ) JONES D A Y 1755 Embarcadero Road P a l o A l t o , C A 94303 Telephone: [phone] Facsimile: [phone] [e-mail] [e-mail] Scott W. Cowan (Admitted Pro Hac Vice) Joshua L. Fuchs (Admitted Pro Hac Vice) JONES D A Y 717 Texas, Suite 3300 Houston, T X 7 7 0 0 2 Telephone: (832) 2 3 9 - 3 9 3 9 Facsimile: (832) 2 3 9 - 3 6 0 0 [e-mail] [e-mail] A t t o r n e y s for D e f e n d a n t s S A P A G , S A P A M E R I C A , INC., a n d TOMORROWNOW, INC. U N I T E D STATES DISTRICT C O U R T N O R T H E R N D I S T R I C T OF C A L I F O R N I A S A N FRANCISCO DIVISION O R A C L E USA, INC., et aI., Plaintiffs,
v.

Case No. 07-CV-1658 PJH (EDL)

DEFENDANTS' O P P O S I T I O N T O P L A I N T I F F S ' MOTION T O AMEND COMPLAINT
Date: Time: Courtroom: Judge: August 19, 2009 9:00 a.m. 5, 17th Floor Hon. Phyllis J. Hamilton

SAP AG, e t aI., Defendants.

D E F E N D A N T S ' OPPOSITION T O P L A I N T I F F S ' MOTION TO AMEND COMPLAINT Case No. 07-CV-I658 P l H (EDL)

1 2 3 4 5 6 7 8 9 10 Ill. 11 12 B. 13 14 15 16 17 18 19 C. 20 21 22 23 24 25 26 27 28 V. 2. 3. (b) (c) 2.
N.
I.

T A B L E OF C O N T E N T S

Page(s) INTRODUCTION AND SUMMARY OF ARGUMENT RELEVANT BACKGROUND
A. B.

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ll.

The Case Schedule and This Belated Motion P l a i n t i f f s ' K n o w l e d g e o f T h e i r Potential Claims 1. 2. 3. 4. Scope and Accurate Timing o f Relevant Discovery

Plaintiffs Knew About Their Alleged Claims Related to the Additional PeopleSoft Registrations at the Beginning o f This Case .......... 6 Plaintiffs K n e w A b o u t T h e i r A l l e g e d K n o w l e d g e M a n a g e m e n t Claims 7 8 9 9 10 10 10 11

Plaintiffs Cannot Hide Behind Discovery Disputes and Purport Ignorance o f the Alleged Database Claims LEGAL STANDARDS
A.

Rule 16(b)'s " G o o d Cause" Standard Applies When the Deadline for a Motion to Amend Has Passed Even I f "Good Cause" Is Shown, Rule 15(a) Must Also Be Satisfied

ARGUMENT: PLAINTIFFS' MOTION SHOULD BE DENIED AS TO THE CONTESTED AMENDMENTS A. Plaintiffs Must Move Under Both Rule 16(b) and Rule 15(a) Because They Missed the Deadline to Amend B. Plaintiffs Fail to Meet the Rule 16(b) "Good Cause" Standard Because They Were Not Diligent in Bringing This Motion 1. Plaintiffs C o u l d H a v e A s s e r t e d the K n o w l e d g e Management Registrations and Historic PeopleSoft Registrations as Early as the Initial Complaint Plaintiffs Were o n Notice o f the Oracle Database Issue

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Plaintiffs Brought This Motion in Bad Faith After Undue Delay, to the Prejudice o f D e f e n d a n t s 1. Plaintiffs' Bad Faith in Bringing This Motion Justifies Denial (a) Plaintiffs' stated rationale for the motion is contrary to what they told Magistrate Judge Laporte Plaintiffs' characterizations o f Defendants' production are misleading Plaintiffs mischaracterize the contested amendments as " c o n f o r m i n g " amendments

Plaintiffs U n d u l y D e l a y e d B r i n g i n g T h i s M o t i o n Defendants Will Be Prejudiced by Late Amendment..

CONCLUSION

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D E F E N D A N T S ' OPPOSITION TO P L A I N T I F F S ' MOTION TO A M E N D C O M P L A I N T Case No. 07-CV-1658 PJH (EDL)

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TABLE O F A U T H O R I T I E S
Page(s) Cases

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A c r i v. Int 'I A s s 'n o f Machinists & Aerospace Workers, 781 F . 2 d 1393 (9th Cir. 1986) Allen v. Beverly Hills, 911 F.2d 3 6 7 (9th Cir. 1990) AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F . 3 d 9 4 6 ( 9 t h Cir. 2 0 0 6 ) A t m e l Corp. v. Authentec, Inc., N o . C 0 6 - 2 1 3 8 C W , 2 0 0 8 U . S . D i s t . L E X I S 1 0 8 4 6 ( N . D . C a l . Jan. 3 1 , 2 0 0 8 ) Brown v. Wireless Networks, Inc., N o . C 0 7 - 4 3 0 1 ( E D L ) , 2 0 0 8 U . S . D i s t . L E X I S 3 6 4 7 2 ( N . D . C a l . Apr. 2 4 , 2 0 0 8 ) Chodos v. West P u b l ' g Co., 2 9 2 F . 3 d 992 (9th Cir. 2 0 0 2 ) Coleman v. Quaker Oats Co., 232 F.3d 1271 (9th Cir. 2 0 0 0 ) Durney v. WaveCrest Labs., LLC, 441 F. Supp. 2 d 1055 (N.D. Cal. 2005) Hannon v. Chater, 887 F. Supp. 1303 (N.D. Cal. 1995) In re Fritz Cos. Sees. Litig., 2 8 2 F. Supp. 2 d 1105 (N.D. Cal. 2003) Jackson v. B a n k o fHawaii, 902 F.2d 1385 (9th Cir. 1990) Johnson v. Mammoth Recreations, Inc., 975 F . 2 d 6 0 4 ( 9 t h C i r . 1 9 9 2 ) L e n d a l l v. Chase Manhattan Mortgage Corp., N o . C 0 5 - 0 3 2 9 5 W H A , 2 0 0 6 U . S . D i s t . L E X I S 8 1 4 3 0 ( N . D . C a l . O c t . 27, 2 0 0 6 ) L o c k h e e d Martin Corp. v. Network Solutions, Inc., 194 F . 3 d 9 8 0 ( 9 t h C i r . 1 9 9 9 ) Lukovsky v. City & County o fSan Francisco, No. C 0 5 - 0 0 3 8 9 W H A , 2 0 0 6 U.S. Dist. L E X I S 2 6 7 6 2 ( N . D . C a l . A p r . 26, 2 0 0 6 ) Mullen v. Surtshin, 590 F. Supp. 2 d 1233 (N.D. Cal. 2008) RE: LAUNCH, L L C v . P C Treasures, Inc., No. C - 0 5 - 0 6 9 7 P J H , 2 0 0 6 U . S . Dist. L E X I S 2 7 6 7 3 ( N . D . C a l . A p r . 28, 2 0 0 6 ) Robertson v. Qadri, No. 06-4624 JF (HRL), 2 0 0 9 U.S. Dist. LEXIS 3 7 9 0 (N.D. Cal. Jan. 1 5 , 2 0 0 9 ) Scognamillo v. Credit Swisse First Boston, LLC, 587 F. Supp. 2 d 1149 (N.D. Cal. 2008)

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TABLE O F AUTHORITIES (continued) Page(s)

St. P a u l Fire & Marine Ins. Co. v. Vedatech Int'l, Inc., 2 4 5 F e d . A p p x . 5 8 8 ( 9 t h Cir. 2 0 0 7 ) Strickland v. Jewell, 562 F. Supp. 2 d 661 (M.D.N.C. 2007) Trimble Navigation Ltd. v. RHS, Inc., No. C 03-1604 P i l i , 2007 WL 2 7 2 7 1 6 4 (N.D. Cal. Sept. 1 7 , 2 0 0 7 )
Statutes
17 U.S.C. § 101 Fed. R. Civ. P. 15 Fed. R. Civ. P. 16

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I.

I N T R O D U C T I O N AND S U M M A R Y O F A R G U M E N T Plaintiffs now seek leave to bring their fifth complaint. This new complaint would add

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dozens o f copyright registrations (almost every one o f which was registered years before the original complaint in this case was filed), purportedly covering "thousands" o f items and new technology, j u s t months before discovery is to end. These are hardly "conforming" amendments and allowing them will "overload an already robust complaint," as Plaintiffs told Judge LaPorte. Plaintiffs bring this motion well after the deadline to amend had passed, despite knowing about the "new" claims long (or in some cases years) before. Plaintiffs' lack o f diligence in bringing their motion is reason enough to deny it under Rule 16(b). Combined with the prejudice Defendants will suffer as result o f the amendments and Plaintiffs' bad faith in bringing this motion, there is ample reason to deny Plaintiffs' motion under Rule 15(a) as well.

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Plaintiffs' belated amendment unduly prejudices Defendants. There are (mercifully) but
a few months left in discovery. Adding 29 new registrations-effectively 29 new claims for copyright infringement-now would be unfair and would prejudice Defendants, who do not have enough time on an already extended schedule to properly conduct discovery to defend against these claims. The potential prejudice is exacerbated because Plaintiffs continue to resist such basic work as identifying what is covered by the registrations already in the case and providing basic financial and related discovery. And, as Plaintiffs acknowledge, adding the database issues would introduce entirely new technical and business issues into the case. All o f this might have been manageable had Plaintiffs not delayed. I t is too late now.

Plaintiffs' motion is brought in bad faith. Plaintiffs' statements that they did not or
could not know about the " n e w " claims until j u s t recently are false. Plaintiffs misrepresent key production dates (they present the dates o f supplemental productions as the dates o f original production). Plaintiffs contend that they present merely "conforming amendments," but told Magistrate Judge Laporte that adding these new registrations would "overload" the case. Plaintiffs' misrepresentations in this motion are but an instance in a pattern o f misrepresentations made to this Court about amendments (for example, Plaintiffs said that they needed more time to file the Second Amended Complaint "to obtain" new copyright registrations, when every
- 1D E F E N D A N T S ' OPPOSITION T O PLAINTIFFS' MOTION T O AMEND COMPLAINT Case No. 07-CV-1658 PJH (EDL)

registration eventually added in that amendment long predated this lawsuit), and evidence their 2 bad faith.

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Plaintiffs knew about their " n e w " claims long before the amendment deadline.
Plaintiffs assert that they raise the contested amendments now because they only recently became, or could have become, aware o f the " n e w " claims. This is false. Specifically, Plaintiffs claim that they could not have known to add the "knowledge management solutions" registrations, but each previous complaint specifically mentions those very "solutions." Plaintiffs claim that they did not know enough to add the 20 PeopleSoft registrations, but those registrations were made six to nine years before this case was filed and address the same products at issue since the case started. Plaintiffs claim that they could not have known to assert claims about the Oracle database, but their lawyers took deposition testimony on this very issue a full year before the amendment deadline. Their alleged ignorance aside, Plaintiffs' only excuse for their delay in asserting these claims is that there was too much discovery, produced too late, for them to act more quickly. Not true. Whatever additional details the discovery may contain, Plaintiffs actually knew about the alleged "new" claims months or years ago. Plaintiffs cannot establish good cause for bringing their Motion months after the March 20, 2009 deadline and it should be denied on that basis alone. Even were the Court to excuse Plaintiffs' late filing, the motion should still be denied under Rule 15(a), because o f Plaintiffs' undue delay and bad faith and the unfair prejudice to Defendants. I t is time to complete discovery and resolve this case.
II.

R E L E V A N T BACKGROUND

A.

T h e C a s e Schedule a n d T h i s Belated Motion.

This case began over two years ago on March 22, 2007, when Oracle Corporation, Oracle USA, Inc. ( " a U SA") and Oracle International Corp. ("OIC") (collectively "Original Plaintiffs") filed suit. See Declaration o f Tharan Gregory Lanier in Support o f Defendants' Opposition to Plaintiffs' Motion to Amend ("Lanier Decl.") ~ 1. In the ensuing two-plus years, Plaintiffs have filed three amended complaints and now seek leave to file what would be their fifth complaint. The Court's May 5, 2008 Case Management and Pretrial Order, see O J . 84 ("May 5, 2008
-2D E F E N D A N T S ' O P P O S I T I O N TO P L A I N T I F F S ' M O T I O N TO AMEND C O M P L A I N T Case No. 0 7 - C V - I 6 5 8 PJH (EDL)

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Order"), set June 19, 2009 as the fact discovery c u t - o f f date and stated that the deadline to amend the pleadings was " n o later than 90 days before fact discovery c u t o f f date," i.e., March 20, 2009. O J . 84. The M a y 5, 2008 Order further provided that "[n]o provision o f this order may be changed except by written order o f this court upon its own motion o r upon motion o f one o r more parties made pursuant to Civil L. R. 7-11 with a showing o f good cause." O J . 84. In particular, the May 5, 2008 Order made clear that " [ i ] f t h e modification sought is an extension o f a deadline contained herein, the motion must b e brought before expiration o f that deadline. The parties may not modify the pretrial schedule b y stipulation." O J . 84. O n M a y 1 2 , 2 0 0 9 , the parties filed a Joint Administrative Motion to Modify May 5, 2008 Case Management Order, see O J . 304 ("Joint Motion"), and a Proposed Revised Case M a n a g e m e n t S c h e d u l e , s e e O J . 305. T h i s p r o p o s e d s c h e d u l e s u g g e s t e d m o d i f y i n g m a n y o f t h e prospective deadlines set forth in the M a y 5, 2005 Order, but did not suggest modifying the March 2 0 , 2 0 0 9 deadline for amending the pleadings, which deadline h a d already passed. See O J . 305. In fact, while negotiating the proposed modifications to the case schedule, Defendants expressly declined to modify the amendment deadline. See Lanier Decl. ~ 49. After the May 28, 2009 Case Management Conference, the Court issued a Revised Case Management and Pretrial Order. See O J . 325 ("June 1 1 , 2 0 0 9 Order"). The June 1 1 , 2 0 0 9 Order did not reset the March 20, 2009 deadline to amend the pleadings. See D J . 325. Rather, the June 1 1 , 2 0 0 9 O r d e r granted the parties' Rule 16(b)(4) motion as to some issues and gave Plaintiffs leave to move to amend the complaint b y July 1 5 , 2 0 0 9 specifically " t o add Siebel-related claims and any other claims o r allegations agreed to by the Parties prior to July 1 5 , 2 0 0 9 . " O J . 325 The June 11, 2009 Order further provided that " S h o u l d Plaintiffs intend to seek any other amendment to the complaint, then Plaintiffs shall make the appropriate motion(s) no later than August 2 6 , 2 0 0 9 . " D J . 325
(~5)

(~

5).

( e m p h a s i s added).

In their Motion to Amend ("Motion"), Plaintiffs seek to add not only the Siebel-related claims, b u t also three categories o f contested amendments. S e e Lanier Decl. ~ 10-13. The first category consists o f 20 additional, historic PeopleSoft registrations, which were registered six to nine years before the initial complaint was filed. The second category consists o f two recently-3D E F E N D A N T S ' OPPOSITION TO P L A I N T I F F S ' MOTION T O A M E N D C O M P L A I N T Case No. 07-CV-J658 PJH (EDL)

1 2 3 4 5 6 7 8 9

obtained registrations for PeopleSoft and J.D. Edwards ("IDE") "Database[s] o f Documentary Support," ("Knowledge Management registrations"), each purporting to cover an automated database created in 2009 containing "thousands o f 'knowledge management' solutions." See id.

mr 11-12.
B.

The third category consists o f seven registrations for Oracle's database product, five o f

which pre-date the initial complaint. See id. , 13. P l a i n t i f f s ' Knowledge o f T h e i r P o t e n t i a l Claims.

Plaintiffs claim that due to late and complex discovery, they only recently learned or could have learned about the purported issues underlying the contested amendments. Their claims o f surprise and ignorance are patently false. Plaintiffs have known about the "new" claims since

l O w e l l prior to the amendment deadline, both from the extensive discovery produced by Defendants 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 as well as from information within Plaintiffs' own control. Their misrepresentations regarding Defendants' discovery attempt to cover up this knowledge. At Plaintiffs' request and insistence, the scope o f discovery sought from and produced by Defendants has been significant. I n addition to over 60 depositions noticed and taken by Plaintiffs and hundreds o f written discovery requests, Defendants have produced substantial volumes o f data showing how TN provided customer service. See Declaration o f Joshua L. Fuchs in Support o f Defendants' Opposition to Plaintiffs' Motion to Amend ("Fuchs D e c l . " ) ' 3. To date, Defendants have produced 7,896,044 Bates numbered pages, including data from 100 custodians, and in excess o f 17 terabytes o f other electronic data. See id.

1.

Scope a n d A c c u r a t e T i m i n g o f R e l e v a n t Discovery.

Plaintiffs mischaracterize Defendants' document productions and the dates by which Plaintiffs possessed information underlying the contested amendments. To fully understand the scope o f Defendants' discovery and Plaintiffs' misrepresentations, a b r i e f explanation o f T N ' s business is helpful. Before October 31, 2008, when TN shut down operations, it provided third-party maintenance and support for enterprise software applications, including various PeopleSoft products. These services included troubleshooting, developing "bug" fixes and providing tax and regulatory updates. For many customers, TN maintained development environments on its
-4D E F E N D A N T S ' OPPOSITION T O P L A I N T I F F S ' MOTION T O AMEND C O M P L A I N T C a s e N o . 0 7 - C V - 1 6 5 8 PJH ( E D L )

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systems that were separated from the customer production environments and that were maintained for the purpose o f troubleshooting, developing and testing o f individual fixes and updates. See id. ~ 21. Generally, an environment is the hardware or software configuration, or the mode o f operation, o f a computer system; an environment a t TN could include " a database and other software programs required to run an instance o f that environment." Id.
~

17.

As a general practice, TN stored information relating to its support services in different databases, including databases known as SAS, BakTrak and dotProject. TN employees used the SAS database to document the scoping (researching o f an issue), development and testing o f the fixes and regulatory updates created for TN customers. See id. ~ 8. Moreover, TN employees

l O u s e d B a k T r a k t o t r a c k w h e n a n d w h y TN c u s t o m e r e n v i r o n m e n t s a n d / o r e n v i r o n m e n t 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 components were backed-up and/or restored. S e e id. a t ~ 7. Finally, the dotProject database contains information regarding downloads TN made for customers, including the date the downloads were completed and the credentials and product questionnaires provided by the customer. See id. at ~ 9. While these databases are not perfect in every instance, they are by far t h e b e s t s o u r c e o f i n f o r m a t i o n r e g a r d i n g T N ' s s e r v i c e a c t i v i t i e s . D e c l a r a t i o n o f Kevin M a n d i a i n Support o f O r a c l e ' s Motion to Amend Complaint (0.1. 349) ~ 6. Defendants produced extensive data from these TN services databases (SAS, BakTrak and dotProject). See Fuchs Dec1.
~~

3, 7-9.

The parties initially agreed to limit most productions to January 1 , 2 0 0 4 to March 22, 2007 (or shortly thereafter) time frame. See id.
~

4. I n November 2008, the parties entered into

an "Expanded Discovery Timeline Agreement," which expanded the production time frame for specific subsets o f data, including data from TN services databases. The expanded time frame for these limited sets o f data went back to January 1 , 2 0 0 2 and up to October 3 1 , 2 0 0 8 (i.e., the date that T N ' s day-to-day business operations were wound down). See id. ~ 5. Plaintiffs misrepresent the timing o f Defendants' document productions and thereby mischaracterize the dates by which Plaintiffs possessed information underlying the contested amendments. Specifically, the production dates for the TN databases referenced in the motion (SAS, BakTrak and dotProject) are not the original production dates for these materials. Rather, the dates Plaintiffs cite are the supplemental production dates completed pursuant to the

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D E F E N D A N T S ' O P P O S I T I O N TO P L A I N T I F F S ' MOTION T O AMEND C O M P L A I N T C a s e No. 07-CV-1658 PJH (EDL)

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Expanded Discovery Timeline Agreement. See id.

~

6. I n fact, Defendants completed production

o f T N ' s services databases much earlier than Plaintiffs assert. Defendants produced all content from BakTrak in one format on February 4, 2008 and produced the entire native version on March 12,2008. See id. ~ 7. Defendants began producing SAS in native form i n 2007, completing production o f the entire SAS database for all TN PeopleSoft and IDE customers on December 4 , 2 0 0 7 . See id.
~

8. Defendants produced dotProject on March 26, 2008. See id. ~ 9.

In addition to all o f this data, Defendants made T N ' s services and support servers available to Plaintiffs for review through a "Data Warehouse" (a procedure permitting Plaintiffs remote access review o f images from TN's services and support servers and server partitions) in July 2008. See id. W 10-11. Defendants began producing (starting with metadata reports) from the "Data Warehouse" in August 2008, and continued on a rolling basis. See i d
~~

11-12. And,

by October 2008, Defendants had produced all responsive, non-privileged materials from one server outside o f the "Data Warehouse" procedures, which housed the majority o f materials downloaded by TN on behalf o f its customers. Defendants later agreed to a limited production o f post-lawsuit information from the "Data Warehouse." See id. ~ 13.

2.

P l a i n t i f f s K n e w A b o u t T h e i r Alleged C l a i m s R e l a t e d t o t h e A d d i t i o n a l PeopleSoft R e g i s t r a t i o n s a t t h e Beginning o f T h i s Case.

Plaintiffs could have asserted the 20 additional PeopleSoft registrations from the beginning o f this case. Plaintiffs' claims have always encompassed alleged infringement o f PeopleSoft software, including software subject to copyright registrations made long before the case was filed. See Lanier Decl. mr 1 , 2 , 6 , 8 ; Section IV(B)(I), infra. The "new" registrations at issue in this motion were also all made six to nine years before the initial complaint was filed.
See i d
~

11. They cover release levels or discrete components o f the same software lines at issue

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in the case for years. Plaintiffs unequivocally knew about T N ' s access to PeopleSoft software and "environments" since before filing this lawsuit.

This information was then relayed to an attorney for Oracle.
- 6D E F E N D A N T S ' OPPOSITION T O PLAINTIFFS' M O T I O N T O AMEND COMPLAINT C a s e No. 07-CV-1658 PJH (EDL)

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See Fuchs Decl.

~

18, Ex. C - I . Similarly, Oracle employee Edward Abbo testified regarding his

knowledge o f a December 2006 article stating: "TomorrowNow set up a test environment at its own site that mirrored Pomeroy's. That way, when the solution was ready, it was straightforward to implement o n Pomeroy's systems." See id. ~ 19, Ex. C-2, K - l , K-2. Moreover, discovery received by Plaintiffs long before the March 20, 2009 amendment deadline also put Plaintiffs on ample additional notice o f t h e i r potential claims related to access o f PeopleSoft software. Starting August 6, 2007, T N began producing its customer contracts, which document the PeopleSoft products TN supported for each customer. See id. ~ 35. Defendants' September 2 1 , 2 0 0 7 response to Interrogatory N o . 9 and December 2 7 , 2 0 0 7 response to Interrogatory 12 gave detailed information regarding both emergency backup copies o f PeopleSoft applications and development environments maintained by TN o n behalf o f some customers. See id.
~~

2 1 , 2 4 . Similarly, on October 3 0 , 2 0 0 7 , former TN employee Mark Kreutz

testified that T N had some customers' demo environments on its systems. See id. ~ 22. And, as described above, by early 2008, Defendants had produced SAS, dotProject and the full native version o f BakTrak, together providing a fairly complete picture o f T N ' s activities, customer services and access to PeopleSoft software on behalf o f T N ' s customers. See id. ~ 7-9.

3.

P l a i n t i f f s K n e w A b o u t T h e i r Alleged K n o w l e d g e M a n a g e m e n t C l a i m s .

Plaintiffs delayed filing for their Knowledge Management registrations until July 1, 2009. Each registration purports to cover an automated database created in 2009 containing "thousands o f 'knowledge management' solutions" for the JDE and PeopleSoft lines, respectively. See Lanier Decl. ~ 12. These solutions long predate 2009, though. See id. Plaintiffs' argument that they could not have known before now to add these thousands o f "solutions" is stunning, given that every one o f the four preceding complaints have specifically mentioned "knowledge management." See id. ~~ 1 , 2 , 6 , 8 . In fact, Plaintiffs have known about T N ' s downloading o f PeopleSoft documents since before filing this lawsuit. In anticipation o f filing the lawsuit, Plaintiffs reviewed "log entries, and other reports generated by Oracle's software, including Change Assistant, [which] provide[s] the specific identifiers for the individual Software and Support Materials requested at any given time . . . . " See Fuchs Decl. ~ 28. Plaintiffs relied on -7D E F E N D A N T S ' OPPOSITION T O PLAINTIFFS' MOTION T O AMEND C O M P L A I N T C a s e N o . 0 7 - C V - 1 6 5 8 PJH ( E D L )

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t h i s i n f o n n a t i o n i n d r a f t i n g p a r a g r a p h s 7 5 - 8 0 o f t h e M a r c h 22, 2 0 0 7 i n i t i a l c o m p l a i n t , w h i c h p r o v i d e d detailed statements concerning w h a t Plaintiffs b e l i e v e d T N downloaded from the O r a c l e C u s t o m e r C o n n e c t i o n website. See id.
~

28.

D i s c o v e r y r e c e i v e d b y Plaintiffs h a s also p u t t h e m o n a m p l e a n d additional notice t h a t T N w a s d o w n l o a d i n g materials n o w referred t o as " K n o w l e d g e M a n a g e m e n t " documents o n b e h a l f o f its customers. F o r example, since mid-2008, v i a the " D a t a W a r e h o u s e , " Plaintiffs have e x a m i n e d a n d r e q u e s t e d s o f t w a r e a n d s u p p o r t m a t e r i a l s d o w n l o a d e d b y T N o n b e h a l f o f its customers, i n c l u d i n g " K n o w l e d g e M a n a g e m e n t " documents. See id.
~~

1 1 - 1 2 , 29. M o r e o v e r , t h e

server t h a t P l a i n t i f f s r e v i e w e d o u t s i d e t h e D a t a W a r e h o u s e p r o t o c o l h o u s e d the majority o f m a t e r i a l s d o w n l o a d e d b y T N o n b e h a l f o f its c u s t o m e r s . D e f e n d a n t s c o m p l e t e d p r o d u c t i o n f r o m t h i s s e r v e r b y O c t o b e r 2 0 0 8 , m o n t h s b e f o r e t h e a m e n d m e n t d e a d l i n e . See i d
~

29.

4.

Plaintiffs Cannot Hide Behind Discovery Disputes and Purport I g n o r a n c e o f t h e Alleged D a t a b a s e Claims.

Similarly, Plaintiffs have k n o w n a b o u t T N ' s access to O r a c l e databases in providing c u s t o m e r service s i n c e a t l e a s t early 2008. T h i s k n o w l e d g e s t a r t e d ( a t least) w i t h deposition t e s t i m o n y , w h e n , o n F e b r u a r y 6, 2 0 0 8 , T N 3 0 ( b ) ( 6 ) w i t n e s s J o h n B a u g h t e s t i f i e d t h a t T N o b t a i n e d i t s d a t a b a s e p l a t f o n n s f r o m a v a r i e t y o f v e n d o r s , i n c l u d i n g O r a c l e . See i d
~

31.

A n d t h e r e w a s a d d i t i o n a l , c l e a r n o t i c e o f t h i s i s s u e in d o c u m e n t s p r o d u c e d b y D e f e n d a n t s . O n F e b r u a r y 8, 2008 a n d M a r c h 1 3 , 2 0 0 8 , Defendants p r o d u c e d documents concerning Oracle databases, i n c l u d i n g two e-mail c o m m u n i c a t i o n s b e t w e e n n o w - f o n n e r T N employees regarding T N ' s use o f O r a c l e databases. See id.
~

32. These are Exhibits M a n d N to the Declaration o f

C h a d R u s s e l l i n S u p p o r t o f O r a c l e ' s M o t i o n ( " R u s s e l l Dec!."). P l a i n t i f f s u s e d t h e s e d o c u m e n t s as exhibits d u r i n g a deposition i n April 2009. Defendants also p r o d u c e d on February 8, 2008 the database-related d o c u m e n t attached as E x h i b i t 0 to the Russell Dec!. See id.
~

32.

D i s c o v e r y o n this topic did n o t stop i n February 2008. O n A p r i l 1, 2008, f o n n e r T N e m p l o y e e K a t h y W i l l i a m s t e s t i f i e d r e g a r d i n g the d i f f e r e n t c o m p o n e n t p a r t s o f a n e n v i r o n m e n t including t h e " r e l a t i o n a l database p l a t f o n n " - a n d T N ' s database n a m i n g conventions. See id. 31. O n April 2, 2008, f o n n e r T N e m p l o y e e Catherine H y d e also testified to these naming
~

- 8-

D E F E N D A N T S ' OPPOSITION T O P L A I N T I F F S ' M O T I O N T O AMEND C O M P L A I N T C a s e N o . 0 7 - C V - 1 6 5 8 PJH ( E D L )

I 2 3 4 5 6 7 8
9

conventions. See id. And, throughout the latter h a l f o f 2 0 0 8 , Plaintiffs had the opportunity to review and select for production files from T N ' s servers containing database components as part o f the "Data Warehouse" production described above. See id. -,r 33. Bottom line, Plaintiffs knew o f the claims they are now trying to add at least a year, i f not years, before the amendment deadline. The fact that there has been a lot o f discovery does not change Plaintiffs' knowledge. Nor, as shown below, does it excuse their dilatory conduct. III. L E G A L STANDARDS

A.

R u l e 1 6 ( b ) ' s " G o o d C a u s e " S t a n d a r d Applies W h e n t h e Deadline f o r a Motion t o A m e n d H a s Passed.

10 II 12 13 14 15 16 17 18 19 20 21 22

When a party moves to amend a complaint after the deadline to amend has passed, the party must first satisfy Rule 16(b) o f the Federal Rules o f Civil Procedure, which governs modifications to scheduling order deadlines. See Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294 (9th Cir. 2000); Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08, 610 (9th Cir. 1992); RE: LAUNCH, L L C v. P C Treasures, Inc., No. C-05-0697 PJH, 2006 u.s. Dist. LEXIS 27673, at *2-3 (N.D. Cal. Apr. 28, 2006) (Hamilton, J.). Rule 16(b) provides that a pretrial scheduling order "may be modified only for good cause and with the j u d g e ' s consent." Fed. R. Civ. P. 16(b). It is Rule 16(b)'s more stringent good cause standard, and not the more liberal amendment procedures afforded by Rule 15 that governs a motion to amend filed past the deadline for amending a pleading. See Johnson, 975 F.2d at 610 (noting that Rule 16's standards may not be "short-circuited" by those o f Rule' 15 because "[d]isregard o f the [scheduling] order would undermine the court's ability to control its docket, disrupt the agreed-upon course o f the litigation, and reward the indolent and the cavalier"); L e n d a l l v. Chase Manhattan Mortgage
Corp., No. C 05-03295 WHA, 2006 U.S. Dist. LEXIS 81430, at *18-19 (N.D. Cal. Oct. 27, 2006).

23
24 25 26 27 28

Good cause depends on the diligence o f the moving party, and "[a] lack o f diligence alone is grounds to deny leave to amend." L u k o v s k y v. City & County o f San Francisco, No. C 0500389 WHA, 2006 U.S. Dist. LEXIS 26762, at *4 (N.D. Cal. Apr. 26, 2006); s e e also Johnson, 975 F.2d at 609 (holding that i f the moving party was not diligent, "the inquiry should end"). To meet the good cause standard, the moving party must show that despite its diligence, it could not -9D E F E N D A N T S ' OPPOSITION TO P L A I N T I F F S ' MOTION T O A M E N D C O M P L A I N T Case No. 07-CV-1658 PJH (EDL)

1 2 3 4
5

reasonably have met the scheduling order deadline. See, e.g., Lendall, 2006 U.S. Dist. LEXIS 81430, at *18-19; RE: LAUNCH, LLC, 2006 U.S. Dist. LEXIS 27673, at *3; Hannon v. Chater, 887 F. Supp. 1303, 1319 (N.D. Cal. 1995). Prejudice to the non-moving party provides additional justification to deny leave to amend under Rule 16(b). See Johnson, 975 F.2d at 609.

B.

Even I f " G o o d C a u s e " Is Shown, R u l e 15(a) M u s t Also Be Satisfied.

6 7 8 9 10
11

Even i f a party succeeds in showing good cause for amendment under Rule 16(b), the party must still establish that the post-deadline amendment is proper under Rule 15(a). See
AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 952 (9th Cir. 2006); A t m e l Corp.

v. Authentec, Inc., No. C 06-2138 CW, 2008 U.S. Dist. LEXIS 10846, at *3 (N.D. Cal. Jan. 31,
2008); Hannon, 887 F. Supp. at 1319 (denying p l a i n t i f f s motion to amend the complaint under both Rule 16(b) and Rule 15(a)). Under Rule 15(a), leave to amend a pleading is given "when justice so requires." Fed. R. Civ. P. 15(a)(2). Although Rule 15(a) has a more permissive standard, leave to amend "is not to be granted automatically." Coleman, 232 F.3d at 1294. In evaluating a motion to amend, a court will consider whether the moving party is guilty o f bad faith (or dilatory motive), undue delay or prejudice to non-moving party. See Allen v. Beverly Hills, 911 F.2d 3 6 7 , 3 7 3 (9th Cir. 1990);
Mullen v. Surtshin, 590 F. Supp. 2d 1233, 1236 (N.D. Cal. 2008) (denying amendment due to

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

p l a i n t i f f s undue delay, prejudice to defendant and the fact that plaintiff filed two previous amended complaints). IV. A R G U M E N T : P L A I N T I F F S ' M O T I O N S H O U L D BE D E N I E D AS T O T H E C O N T E S T E D AMENDMENTS Plaintiffs' motion fails under Rule 16(b) because Plaintiffs could have asserted all three contested amendments months or years before the amendment deadline. Plaintiffs are not entitled to "liberal amendment" under Rule 15(a) because this motion is brought in bad faith, after undue delay, to the great prejudice o f Defendants.

A.

P l a i n t i f f s M u s t M o v e U n d e r B o t h R u l e 1 6 ( b ) a n d R u l e 15(a) B e c a u s e T h e y Missed t h e D e a d l i n e t o A m e n d .

Plaintiffs must meet Rule 16(b)' s good cause standard because they filed this motion well - 10D E F E N D A N T S ' OPPOSITION T O P L A I N T I F F S ' MOTION TO A M E N D C O M P L A I N T C a s e N o . 0 7 - C V - 1 6 5 8 PJH ( E D L )

1 2 3 4 5 6 7 8 9 10
11

after the March 20, 2009 deadline to amend pleadings had expired. The C o u r t ' s June 11, 2009 O r d e r did not modify that deadline. Rather, it granted that part o f the parties' j o i n t Rule 16(b) motion in which Plaintiffs had asked for permission to file a motion to amend to add the Siebelr e l a t e d c l a i m s , a n d s e t a J u l y 1 5 , 2 0 0 9 d e a d l i n e b y w h i c h P l a i n t i f f s c o u l d m a k e this v e r y s p e c i f i c motion. See D.1. 325
(~

6); Lanier Decl. ~~ 49, 51. With regard to any other proposed

amendments, the June 1 1 , 2 0 0 9 Order stated "[s]hould Plaintiffs intend to seek any other amendment to the complaint, then Plaintiffs shall make the appropriate motion(s) no later than A u g u s t 2 6 , 2 0 0 9 . " D J . 325
(~

5) ( e m p h a s i s s u p p l i e d ) . I n o t h e r w o r d s , t h e C o u r t d i d n o t r e s e t t h e

amendment deadline b y which a party may move solely under Rule 15(a), rather it s e t a [mal deadline by which Plaintiffs could seek leave to move to amend under both Rules 16(b) and 15(a).

B.

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Plaintiffs F a i l t o M e e t t h e R u l e 16(b) " G o o d C a u s e " S t a n d a r d Because T h e y Were Not Diligent in Bringing This Motion.

When a party inexplicably delays moving to amend until after the deadline to amend has passed, the party has not acted diligently, and its motion to amend must be denied. See Lendall, 2006 U.S. Dist. LEXIS 81430, at *18-19 (denying amendment where p l a i n t i f f failed to articulate " n e w " facts that explained w h y she filed the motion to amend after the deadline). Plaintiffs could long ago have moved to add the contested amendments. Their lack o f diligence is, alone, reason to d e n y t h e M o t i o n .

1.

Plaintiffs Could Have Asserted t h e Knowledge M a n a g e m e n t R e g i s t r a t i o n s a n d Historic PeopleSo f t Registrations as E a r l y as t h e Initial Complaint.

A s e x p l a i n e d a b o v e , t h e K n o w l e d g e M a n a g e m e n t a n d historic PeopleS o f t registration a m e n d m e n t s a r e p u r p o r t e d l y b a s e d o n i n f o r m a t i o n t h a t h a s b e e n i n P l a i n t i f f s ' p o s s e s s i o n for a long time. Plaintiffs have k n o w n o f these issues since before the initial complaint was filed. Plaintiffs' failure to earlier move to add these claims is inexplicable and illustrates their lack o f diligence. P l a i n t i f f s c l a i m t h a t d e l a y s i n D e f e n d a n t s ' p r o d u c t i o n h a v e p r e v e n t e d P l a i n t i f f s from l e a r n i n g w h i c h h i s t o r i c P e o p l e S o f t p r o d u c t l i n e s w e r e i n f r i n g e d , a n d thus, w h i c h t o i n c l u d e i n t h e complaint. See Motion at 7-10. Plaintiffs' misrepresentations o f Defendants' production aside
- 11 D E F E N D A N T S ' O P P O S I T I O N TO P L A I N T I F F S ' MOTION T O AMEND COMPLAINT C a s e N o . 0 7 - C V - 1 6 5 8 PJH ( E D L )

(see Section IV(C)(3), infra), Plaintiffs fail to disclose that other sources to which they had access

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

a n d a c t u a l l y b a s e d t h e i r M o t i o n , i n c l u d i n g T N c u s t o m e r c o n t r a c t s a n d t h e SAS d a t a b a s e , p u t t h e m o n specific notice o f these issues. For one example, Plaintiffs allege that they only recently learned that T N provided support for CRM version 8.4 S P I as a result o f Defendants' May 2009 supplemental production o f the SAS database. S e e Motion at 8; Russell Decl., ~~ 9-10, Ex. G, H. However, a T N contract produced on November 9, 2007, shows that TN supported CRM version 8.4 S P I . S e e Fuchs Decl. ~ 36. Further, the version o f the SAS database that Plaintiffs acknowledge was produced on December 4, 2007 is precisely the source that Plaintiffs could have used to determine that many o f the historic PeopleSoft registrations they now seek to add were supported b y TN. S e e id. ~~ 8 , 3 6 . Similarly, t h e K n o w l e d g e M a n a g e m e n t a m e n d m e n t s are b a s e d o n i n f o r m a t i o n Plaintiffs have h a d in their possession since at least 2007. A s part o f their investigation leading up to this case, P l a i n t i f f s g e n e r a t e d r e p o r t s t h a t i d e n t i f i e d t h e s o f t w a r e a n d s u p p o r t m a t e r i a l s d o w n l o a d e d from Plaintiffs' customer websites. See id.
~

28. Plaintiffs' access to the Data Warehouse in

2008 a n d t h e R u l e 3 0 ( b ) ( 6 ) t e s t i m o n y o f T N , t a k e n b y P l a i n t i f f s i n 2 0 0 7 , c o n s t i t u t e further sources o f information about the Knowledge Management solutions Plaintiffs had in their possession well before the deadline for amendment. Id.
~~

29-30. I n l i g h t o f P l a i n t i f f s '

knowledge, P l a i n t i f f s ' l a s t minute registration o f t h e s e c o p y r i g h t s - m o n t h s a f t e r the amendment d e a d l i n e a n d w e e k s a f t e r t h e C o u r t discusses a m e n d m e n t w i t h P l a i n t i f f s - i s b o t h inexplicable a n d inexcusable. When a motion to amend seeks to add a new theory that is "fully congruent with the facts alleged in [the] original pleading" and, thus, "should have been included therein," a court will deny the motion. H a n n o n , 887 F. Supp. at 1319. The historic PeopleSoft registrations and the Knowledge Management registrations purport to cover the exact type o f material at issue in Plaintiffs' very first complaint. Starting with the March 2 2 , 2 0 0 7 complaint, and in each o f the three subsequent complaints, Plaintiffs have alleged improper access to and copying o f PeopleSoft and I D E software and support materials, including the types o f "knowledge m a n a g e m e n t s o l u t i o n s " p u r p o r t e d l y c o v e r e d b y t h e K n o w l e d g e M a n a g e m e n t registrations. S e e - 12DEFENDANTS' OPPOSITION T O PLAINTIFFS' MOTION T O AMEND COMPLAINT Case No. 07-CV-1658 P1H (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Lanier Dec1.

~~1,

2, 6, 8. Because Plaintiffs h a d copyright registrations for the historic

P e o p l e S o f t r e g i s t r a t i o n s a t l e a s t s i x y e a r s b e f o r e filing t h e i n i t i a l c o m p l a i n t , a n d b e c a u s e P l a i n t i f f s k n e w from t h e i r p r e - l a w s u i t i n v e s t i g a t i o n w h i c h k n o w l e d g e m a n a g e m e n t s o l u t i o n s h a d b e e n downloaded, Plaintiffs could have asserted both claims when this case started o r in any subsequent complaint. See id. ~~ 1, 2, 6, 8, 11. Plaintiffs' failure to do so demonstrates a lack o f d i l i g e n c e a n d a l o n e j u s t i f i e s denial o f t h e m o t i o n .

2.

Plaintiffs W e r e o n Notice o f t h e O r a c l e D a t a b a s e Issue.

P l a i n t i f f s ' j u s t i f i c a t i o n for t h e i r d e l a y i n m o v i n g t o a m e n d t o a d d t h e O r a c l e d a t a b a s e claims is that " t h e volume and complexity o f discovery did not allow for thorough analysis." See Motion at 7. Regardless o f the volume and complexity o f discovery, occasioned entirely by Plaintiffs' scorched earth approach, Plaintiffs w e r e p u t o n express notice o f T N ' s access to Oracle d a t a b a s e s as e a r l y a s F e b r u a r y 2 0 0 8 , a n d c o u l d h a v e b r o u g h t t h i s m o t i o n b e f o r e t h e a m e n d m e n t d e a d l i n e p a s s e d m o r e t h a n a y e a r later. As explained in detail in Section II(C)(3), supra, Plaintiffs took live testimony on February 6, 2008 that T N u s e d Oracle database software in connection with some PeopleSoft an d I D E applications software at TN. See Fuchs Decl.
~

31. Two months later, Plaintiffs obtained

additional testimony from T N witnesses confirming that T N used Oracle databases. See i d ~ 31. F u r t h e r m o r e , D e f e n d a n t s p r o d u c e d d o c u m e n t s r e g a r d i n g p o t e n t i a l p u r c h a s e o f O r a c l e database licenses on February 8 and March 1 3 , 2 0 0 8 . See id. ~ 32; Russell Dec1. Exs. M, N, O. Yet, despite claiming to have " f o u n d " these documents in Defendants' production o n February 8, 2009, P l a i n t i f f s d i d n o t s e e k a d d i t i o n a l i n f o r m a t i o n a b o u t T N ' s u s e o f the O r a c l e d a t a b a s e s u n t i l t h e y deposed a former T N employee in April 2 0 0 9 - a f t e r the deadline for amendment had passed.

23
24 25 26 27 28

See Russell Decl., ~ 21; Fuchs Decl. ~ 31. Moreover, despite having the opportunity in 2008 to
review and select for immediate production Oracle database files from the Data Warehouse, Plaintiffs never did. T h i s C o u r t h a s m a d e c l e a r t h a t a p l a i n t i f f s failure t o c o n d u c t a s u f f i c i e n t i n v e s t i g a t i o n o f the facts o f its case, which w o u l d have earlier revealed the existence o f a potential claim based o n i n f o r m a t i o n i n t h e p l a i n t i f f s p o s s e s s i o n , d o e s n o t c o n s t i t u t e g o o d c a u s e f o r t h e b e l a t e d filing o f a - 13 D E F E N D A N T S ' OPPOSITION T O PLAINTIFFS' M O T I O N T O AMEND C O M P L A I N T Case No. 07-CV-I658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11

motion to amend. See RE: LAUNCH, LLC, 2006 U.S. Dist. LEXIS 27673, at *3 (denying a m e n d m e n t b e c a u s e p l a i n t i f f " f a i l e d t o e s t a b l i s h t h a t it a c t e d d i l i g e n t l y i n d i s c o v e r i n g t h e availability o f the n e w cause o f action" a n d thus lacked good cause). Plaintiffs' failure to ask follow-up q u e s t i o n s d u r i n g the d e p o s i t i o n s a t w h i c h T N ' s u s e o f O r a c l e d a t a b a s e s was d i s c l o s e d o r to s e e k a n y discovery related to the O r a c l e databases for an entire y e a r does not show P l a i n t i f f s ' d i l i g e n c e , b u t r a t h e r t h e i r l a c k thereof. There w a s no o t h e r barrier to Plaintiffs bringing the database claims earlier. I n fact, o f the seven database copyright registrations, five pre-date the initial complaint, one was registered o n J a n u a r y 1 6 , 2 0 0 9 a n d o n e w a s r e g i s t e r e d o n J u n e 2 9 , 2 0 0 9 . See L a n i e r D e c l .
~

13. Plaintiffs o f f e r

no meaningful explanation for their delay in making these two registrations, and the first five h a v e l o n g b e e n a v a i l a b l e to assert.

12
13 14 15 16 17 18 19 20 21

Trimble Navigation Ltd. v. RHS, Inc. does not support Plaintiffs' claim that they acted
diligently in " d i s c o v e r i n g " the bases for the contested amendments a n d in moving to amend. See No. C 03-1604 PJH, 2007 W L 2727164, a t *10-11 (N.D. Cal. Sept. 1 7 , 2 0 0 7 ) . I n Trimble, this Court permitted a patent infringement d e f e n d a n t to amend its answer to assert inequitable c o n d u c t five months after the amendment deadline h a d passed. See id. a t *10. Specifically, the Court found t h a t a l t h o u g h t h e d e f e n d a n t p o s s e s s e d s o m e e v i d e n c e o f i n e q u i t a b l e c o n d u c t before t h e a m e n d m e n t d e a d l i n e , t h e d e f e n d a n t w a i t e d t o m o v e u n t i l it w a s a b l e t o o b t a i n a d d i t i o n a l information so that its amendment complied w i t h the strict pleading standards for fraud. See id. T h e C o u r t f o u n d t h a t a l t h o u g h the a m e n d m e n t d e a d l i n e h a d p a s s e d , t h e d e f e n d a n t h a d di l i gent l y u s e d the i n t e r v e n i n g t i m e to d e v e l o p i t s c l a i m to m e e t the h e i g h t e n e d p l e a d i n g requirements. S e e

22
23 24 25 26 27 28

id. B y contrast, Plaintiffs here have h a d all the information required to assert the continued
a m e n d m e n t s f o r o v e r a y e a r b e f o r e t h e a m e n d m e n t deadline, a n d do n o t a s s e r t claims t h a t h a v e a heightened p l e a d i n g standard. Trimble is no excuse for their delay.

c.

Plaintiffs B r o u g h t This Motion i n Bad F a i t h A f t e r Undue Delay, to the P r e j u d i c e o f Defendants.

E v e n i f P l a i n t i f f s c o u l d s h o w g o o d c a u s e for b r i n g i n g t h e i r m o t i o n l o n g a f t e r t h e a m e n d m e n t d e a d l i n e , P l a i n t i f f s ' m o t i o n fails t h e s e p a r a t e R u l e 1 5 ( a ) s t a n d a r d b e c a u s e P l a i n t i f f s - 14D E F E N D A N T S ' OPPOSITION T O PLAINTIFFS' M O T I O N T O AMEND C O M P L A I N T C a s e No. 07-CV-1658 PJH (EDL)

I

brought their motion in bad faith, after undue delay and to the prejudice o f Defendants. A court's "discretion to deny leave to amend is particularly broad where plaintiff has previously amended the complaint." St. Paul Fire & Marine Ins. Co. v. Vedatech Int'l, Inc., 245 Fed. Appx. 588, 59192 (9th Cir. 2007); see Mullen, 590 F. Supp. 2d at 1236. That discretion should be exercised to deny Plaintiffs' Motion. 1. P l a i n t i f f s ' B a d F a i t h i n B r i n g i n g T h i s M o t i o n J u s t i f i e s Denial.

2 3 4 5 6 7 8 9 10
II

Courts deny leave to amend i f the moving party brings the motion in bad faith or for a dilatory motive. See e.g., Chodos v. West P u b l ' g Co., 292 F.3d 992, 1003 (9th Cir. 2002); Lockheed Martin Corp. v. Network Solutions, Inc., 194 F .3d 980, 986 (9th Cir. 1999); Robertson v. Qadri, No. 06-4624 JF (HRL), 2009 U.S. Dist. LEXIS 3790, at *7-8 (N.D. Cal. Jan. 15,2009) (fmding that attempts to amend a claim with facts known prior to the complaint in order to avoid dismissal was both bad faith and undue delay); Brown v. Wireless Networks, Inc., No. C 07-4301 (EDL), 2008 U.S. Dist. LEXIS 36472, at *4 (N.D. Cal. Apr. 24, 2008) (Laporte, M.J.). Further, the longer a party waits to amend its complaint, the more likely it is that there is bad faith. Strickland v. Jewell, 562 F. Supp. 2d 661, 668-69 (M.D.N.C. 2007) ("[T]he further the case progresses, the more likely it is that the amendment will prejudice the opposing side or will help support a finding o f bad faith."). Plaintiffs rely upon mischaracterizations and misrepresentations to conceal their dilatory motives behind bringing this motion. The Court should deny the Motion in light o f Plaintiffs' bad faith.
(a)

12
13

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

P l a i n t i f f s ' s t a t e d r a t i o n a l e f o r t h e motion is c o n t r a r y to w h a t they told M a g i s t r a t e J u d g e L a p o r t e .

Only three months ago, Plaintiffs told Judge Laporte that they had knowingly and deliberately declined to assert copyright registrations beyond the "Registered Works" (the works underlying the copyright registrations), claiming that adding more registrations was ( I ) unnecessary and (2) too burdensome to include on an aheady bloated case. See Lanier Dec1. Plaintiffs' stated rationale for bringing this Motion is flatly inconsistent with the positions Plaintiffs took with Judge Laporte. This suggests that Plaintiffs' true goal is not to conform their pleading with facts, but to improperly delay resolution o f this case. - 15 D E F E N D A N T S ' OPPOSITION TO P L A I N T I F F S ' M O T I O N TO AMEND C O M P L A I N T Case No. 07-CV-1658 PJH (EDL)

~

27.

1

Plaintiffs c l a i m t h a t t h e " S e c o n d A m e n d e d C o m p l a i n t d i d n o t include every p o s s i b l e r e l e v a n t r e g i s t r a t i o n , " b e c a u s e Plaintiffs received i n a d e q u a t e d i s c o v e r y responses a n d d e l a y e d p r o d u c t i o n s o f i n f o r m a t i o n a n d b e c a u s e d i s c o v e r y has b e e n so v o l u m i n o u s a n d complex. See M o t i o n a t 7. Plaintiffs also c l a i m t h a t t h e y d i d n o t r e a l i z e t h a t t h e historic P e o p l e S o f t r e g i s t r a t i o n s w o u l d b e at issue i n this c a s e u n t i l D e f e n d a n t s filed t h e i r m o t i o n to c o m p e l i n f o r m a t i o n a b o u t t h e p r e e x i s t i n g w o r k s u n d e r l y i n g t h e d e r i v a t i v e R e g i s t e r e d Works. See M o t i o n a t 10-11. T h e s e s t a t e m e n t s are b e l i e d b y P l a i n t i f f s ' s t a t e m e n t s t o J u d g e L a p o r t e o n l y t h r e e m o n t h s ago. L a n i e r D e c l .
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27-28.

I n particular, i n r e s p o n d i n g to D e f e n d a n t s ' m o t i o n t o c o m p e l copyright information, Plaintiffs t o l d J u d g e Laporte t h a t t h e y deliberately h a d c h o s e n n o t t o assert infringement o f r e g i s t r a t i o n s b e y o n d the R e g i s t e r e d W o r k s b e c a u s e d o i n g s o w o u l d b e t o o burdensome: N o t w a n t i n g to o v e r l o a d a n a l r e a d y r o b u s t C o m p l a i n t w i t h e v e r y r e g i s t e r e d v e r s i o n o f e v e r y s o f t w a r e r e l e a s e t h a t it o w n s , a n d w h i c h m a y f o r m s o m e o f t h e c o d e b a s e o f l a t e r w o r k s t h a t S A P infringed, O r a c l e a l l e g e d i n f r i n g e m e n t o f c e r t a i n o f the actual v e r s i o n s o f s o f t w a r e t h a t S A P c o p i e d , d i s t r i b u t e d a n d s t o r e d o n its s y s t e m s . D . I . 2 9 9 a t 7; L a n i e r D e c l . ~ 2 7 . M o r e o v e r , P l a i n t i f f s s p e c i f i c a l l y r e p r e s e n t e d t o J u d g e L a p o r t e t h a t t h e y b e l i e v e d the addition o f t h e historic P e o p l e S o f t registrations is " e n t i r e l y u n n e c e s s a r y b e c a u s e a l l o f t h e c o d e e n c o m p a s s e d b y t h e s e a d d i t i o n a l r e g i s t r a t i o n s , for w h i c h O r a c l e a l l e g e s i n f r i n g e m e n t , is a l r e a d y in t h e c a s e t h r o u g h t h e derivative registrations O r a c l e obtained a n d p l e a d . " See id.
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28.

P l a i n t i f f s ' statements to J u d g e Laporte s h o w t h a t Plaintiffs n o t only w e r e aware that c o p y r i g h t r e g i s t r a t i o n s b e y o n d the R e g i s t e r e d W o r k s m i g h t b e a n i s s u e , b u t a l s o d e l i b e r a t e l y c h o s e n o t t o a s s e r t t h e s e r e g i s t r a t i o n s a n d b e l i e v e t h a t i t i s n o t n e c e s s a r y to a d d t h e m . A s a r e s u l t , Plaintiffs h a v e n o excuse and, t h e y a c k n o w l e d g e , no reason to a d d t h e contested a m e n d m e n t s a t this late date. See M o t i o n a t 12 ( " O r a c l e s h o u l d b e e n t i t l e d to a d d all sixty-three registrations i m p l i c a t e d b y D e f e n d a n t s ' a r g u m e n t as a p r e c a u t i o n a r y m e a s u r e , while reserving its rights as to

22
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t h e i r relevance.").
P l a i n t i f f s ' m o t i o n n o w raises a n intriguing q u e s t i o n - h o w d i d t h e y k n o w e n o u g h i n April 2 0 0 7 t o o b t a i n the P e o p l e S o f t registrations t h e y a d d e d i n t h e F i r s t A m e n d e d Complaint, b u t

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D E F E N D A N T S ' OPPOSITION TO P L A I N T I F F S ' MOTION TO A M E N D C O M P L A I N T Case No. 07-CV-1658 PJH (EDL)

1 2 3
4

couldn't know until now to add their registrations already made related to the same products? The answer is that the claim o f ignorance is false, made only to excuse their delay and negligence. That is bad faith objectified.
(b)

5
6 7 8 9 10 11 12 13 14
15

Plaintiffs' characterizations o f Defendants' production a r e misleading.

Plaintiffs' bad faith is punctuated by misrepresenting that they only learned that certain works were at issue upon receiving Defendants' production o f certain databases and information after the March 20, 2009 deadline for amendment had passed. See Motion at 7. As shown above, the production dates for BakTrak, SAS and dotProject referenced in Plaintiffs' Motion only represent the supplemental production dates for post-lawsuit content completed per the November 2008 Expanded Discovery Timeline A g r e e m e n t - n o t , as the Plaintiffs' misleadingly suggest, the original production dates for the materials. See Fuchs Decl.
~

6. In claiming that BakTrak was "produced in full on April 20, 2009," Plaintiffs omit that

Defendants produced the native version, with content through February 2008, on March 12,2008.
See id.
~

7. Similarly, in stating only that " a more complete version o f the SAS database" was

16 17 18 19 20 21 22 23 24 25 26 27 28

produced on March 6, 2009, Plaintiffs omit that Defendants produced on December 4 , 2 0 0 7 the
entire SAS database, containing records through the end o f April 2007. See id.
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8. Finally, in

representing that dotProject was "produced in full on May 8, 2009," Plaintiffs omit that Defendants produced the entire dotProject database, through the end o f June 2007, to Plaintiffs on March 26,2008. See id.
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9. The later productions o f BakTrak, SAS and dotProject, respectively,

simply supplement the earlier, complete productions with data through October 31, 2008, pursuant to the Expanded Discovery Timeline Agreement. See id.
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6-9.

Second, Plaintiffs misrepresent the date on which information from the Data Warehouse became available and the reasons that production from the Data Warehouse is ongoing. Plaintiffs claim that "Defendants did not begin producing (and thus Oracle's experts could not review) Data Warehouse images until October 2 5 , 2 0 0 8 . " Motion a t 9. In fact, 52 partitions from T N ' s support servers were made available for review starting in July 2008. See Fuchs Decl. ~ 11. Defendants began rolling productions (starting with metadata reports) from the Data Warehouse - 17D E F E N D A N T S ' OPPOSITION T O P L A I N T I F F S ' MOTION T O A M E N D C O M P L A I N T Case No. 07-CV-1658 P I H (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

in August 2008, completing production o f files requested by Plaintiffs by February 9, 2009, over a month before the deadline to amend. See id. , 11. I n claiming that the Data Warehouse production "is still not fmished," Plaintiffs fail to disclose that the only remaining review and productions relate to Plaintiffs' specific request to review data under the Expanded Discovery Timeline Agreement and Plaintiffs' March 16, 2009 request that Plaintiffs be allowed to review three additional servers in the "Data Warehouse." See id. , 16. Finally, Plaintiffs' suggestion that they were unaware o f the valuable information in BakTrak, SAS, dotProject and the Data Warehouse until Defendants amended their discovery responses is ludicrous. See Motion at 7. Plaintiffs demanded all this data, at great expense to Defendants, and presumably reviewed it during the long time it has been available. I n fact, Plaintiffs have extensively used and referenced data from all four sources throughout discovery, including using printouts from those sources as hundreds o f deposition exhibits. Fuchs Decl. , 3.\ Plaintiffs' misrepresentations to the Court regarding when they received information appear designed to conceal that Plaintiffs have not been diligent in their own review o f Defendants' production, that they have unduly delayed in moving to amend and that their true aim is to delay resolving this case. These misrepresentations are part o f a continuing pattern. For example, in January 2008, the Original Plaintiffs informed Defendants (and in April 2008, the Court) that they planned to amend a second time, but could not do so until they "obtained" additional registrations. See Lanier Decl. " 3 - 5 . This statement was false. When the Original Plaintiffs finally filed the Second Amended Complaint ("SAC") on July 28, 2008, all o f the additional registrations p r e - d a t e d the First Amended Complaint ("F AC"). See id. a t ' 5. Similarly, the Original Plaintiffs also claimed that the amendments in the SAC were necessary because "discovery in this case has revealed that" TN housed software environments on its computers. D.l. 132 ( , 14); see Motion at 5. However, subsequent deposition testimony clearly establishes Plaintiffs knew about T N ' s use o f environments before filing the initial complaint, having learned this information from
See Fuchs D e c l . " 18-19.
1 Both sides provided supplemental discovery responses, on May 22, 2009. See Fuchs Decl. , 27 n.2.

and periodicals as early as 2006.

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D E F E N D A N T S ' OPPOSITION T O PLAINTIFFS' MOTION T O A M E N D C O M P L A I N T C a s e No. 0 7 - C V - 1 6 5 8 P I H (EDL)

1 2 3 4

M o s t importantly, P l a i n t i f f s ' misrepresentations a b o u t discovery miss the p o i n t P l a i n t i f f s already k n e w a b o u t t h e i r a l l e g e d " n e w " claims. W h e t h e r a d d i t i o n a l d i s c o v e r y w o u l d h a v e p r o v i d e d m o r e d e t a i l s , P l a i n t i f f s c a n n o t h i d e t h e i r a c t u a l k n o w l e d g e o f t h e b a s e s for t h e c o n t e s t e d a m e n d m e n t s a y e a r o r m o r e b e f o r e t h e a m e n d m e n t deadline. 2

5

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P l a i n t i f f s m i s c h a r a c t e r i z e t h e c o n t e s t e d a m e n d m e n t s as "conforming" amendments.

Finally, P l a i n t i f f s a l s o m i s c h a r a c t e r i z e t h e c o n t e s t e d a m e n d m e n t s as " c o n f o r m i n g a m e n d m e n t s " t o h i d e t h e fact t h a t s u c h a m e n d m e n t s w o u l d r e s u l t i n f u r t h e r e x p a n s i o n o f t h e i s s u e s i n this c a s e a n d w o u l d r e q u i r e m o r e t i m e a n d d i s c o v e r y t h a n c a n b e a c c o m p l i s h e d o n t h e c o u r t s c h e d u l e . C o n t r a r y t o P l a i n t i f f s ' a s s e r t i o n s , a m e n d m e n t o f the c o m p l a i n t t o a d d t h e O r a c l e database, K n o w l e d g e M a n a g e m e n t a n d h i s t o r i c P e o p l e S o f t a m e n d m e n t s w o u l d b e n e i t h e r "conforming" n o r "routine." P l a i n t i f f s i n a c c u r a t e l y s t a t e t h a t t h e c o n t e s t e d a m e n d m e n t s a d d n o n e w c l a i m s t o t h e case. I n fact, the c o n t e s t e d amendments s e e k to a d d 2 9 n e w claims for c o p y r i g h t infringement. A s P l a i n t i f f s ' a c k n o w l e d g e i n t h e M o t i o n , t h e c l a i m s for i n f r i n g e m e n t o f t h e O r a c l e d a t a b a s e s i m p l i c a t e a n e n t i r e l y d i f f e r e n t t y p e o f t e c h n o l o g y f r o m t h e s o f t w a r e a p p l i c a t i o n s t h a t h a v e b e e n in issue. See M o t i o n a t 12. I n addition to the n e w c o p y r i g h t claims related to O r a c l e ' s database technology, the c o n t e s t e d a m e n d m e n t s i n c l u d e a l l e g a t i o n s t h a t T N b r e a c h e d a n additional c o n t r a c t - t h e D e v e l o p e r ' s L i c e n s e that Plaintiffs r e p r e s e n t governs t h e u s e o f t h e Oracle database technology. See O J . 348-1
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105, 124). Similarly, the Knowledge M a n a g e m e n t registrations

constitute a w h o l l y different type o f copyright registration (i.e., a n " a u t o m a t e d database" registration) from t h e t y p e p r e v i o u s l y a s s e r t e d i n t h e c a s e a n d require critical additional discovery
2 I t is w o r t h n o t i n g t h a t D e f e n d a n t s d i d n o t r e s p o n d t o t h e S A C , b e c a u s e a f t e r D e f e n d a n t s a d v i s e d t h a t t h e y w o u l d m o v e t o d i s m i s s t h e S A C , o n A u g u s t 28, 2008, t h e O r i g i n a l P l a i n t i f f s informed Defendants t h a t t h e y p l a n n e d o n c e m o r e t o s e e k leave to a m e n d to m a k e " s o m e a d j u s t m e n t to t h e p l a i n t i f f entities c u r r e n t l y d e s c r i b e d i n t h e [SAC]." T h i s followed P l a i n t i f f s ' p u r p o r t e d " d i s c o v e r y " o f i n t e r - c o m p a n y a s s i g n m e n t , distribution a n d c o s t - s h a r i n g agreements relating to o w n e r s h i p o f the copyrights-in-suit ( " i n t e r - c o m p a n y agreements"). See L a n i e r Dec!. ~ 7. T h e O r i g i n a l Plaintiffs s u b s e q u e n t l y produced 18 inter-company agreements. See id. O n October 8, 2 0 0 8 , Plaintiffs O U S A , O I C a n d O E M E A , a l o n g with n o w - f o r m e r plaintiffs J.D. Edwards E u r o p e L i m i t e d ( " I D E E " ) a n d Oracle Systems Corp. ( " O S C " ) , filed the TAC. See id. ~ 8. B a s e d o n t h e i n t e r - c o m p a n y agreements, D e f e n d a n t s successfully m o v e d to dismiss I D E E a n d O S C from the case. See id. ~ 9.

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D E F E N D A N T S ' O P P O S I T I O N TO P L A I N T I F F S ' M O T I O N TO A M E N D C O M P L A I N T Case No. 07-CV-1658 PJH (EDL)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

(including information related to whether these registrations are even proper). See Lanier Decl. , 12. And, Plaintiffs admitted to Judge Laporte in April o f this year that this case has not included the 20 historic PeopleSoft registrations, which Plaintiffs claimed they did not assert because doing so would be unnecessary, burdensome on discovery and would "overload an already robust Complaint." I d . , 27. For these reasons, the contested amendments are not "conforming" and should require extensive additional discovery, analysis and likely motions. Plaintiffs' characterization o f the contested amendments as "conforming" is also directly inconsistent with the positions Plaintiffs have taken in communications with Defendants. Plaintiffs have consistently maintained that i f Defendants did not stipulate to amendment, Plaintiffs reserved their right to bring a separate lawsuit based on the contested amendments. Id. Ex. E. Plaintiffs maintain this position even in light o f the black letter rule that a lawsuit based on the "same transactional nucleus o f facts" as a previous lawsuit will be barred under the doctrine o f res judicata. Durney v. WaveCrest Labs., LLC, 441 F. Supp. 2d 1055, 1060 (N.D. Cal. 2005). Despite representing to Defendants their belief that the contested amendments were sufficiently different from the existing claims to ground a separate lawsuit, Plaintiffs now (correctly) tell the Court that the "additional registrations arise from the same basic set o f operative facts already included in Oracle's complaint." Motion at 16. Plaintiffs told Defendants that the new issues could justify a separate lawsuit and told Judge Laporte that they would overload the case. Plaintiffs now tell the Court that these amendments are merely conforming. This "inconsistency" can only be interpreted as a bad faith ef