Johnstech International Corp. v. JF Technology Berhad et al

Filing 115

Order by Hon. James Donato re 96 Motion to Amend/Correct. (jdlc1S, COURT STAFF) (Filed on 3/10/2016)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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JOHNSTECH INTERNATIONAL CORP.,
Plaintiff,

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ORDER RE MOTION FOR LEAVE TO
AMEND INVALIDITY CONTENTIONS

v.
JF MICROTECHNOLOGY SDN BHD,

Re: Dkt. No. 96

Defendant.

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United States District Court
Northern District of California

Case No. 14-cv-02864-JD

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Plaintiff Johnstech International Corporation (“Johnstech”) asserts against defendant JF

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Microtechnology SDN BHD (“JFM”) all four claims of U.S. Patent No. 7,059,866 (the “’866

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patent”) for a device to test integrated circuits,. The case was filed June 20, 2014, JFM served

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invalidity contentions pursuant to Patent Local Rule 3-3 on February 5, 2015, Dkt. No. 97-1, and

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fact discovery closed November 13, 2015. Since the completion of briefing on the motion, the

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Court has issued a claim construction order for the case and expert discovery has closed. Dkt.

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Nos. 93, 110.

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JFM deposed a number of Johnstech’s witnesses shortly before the fact discovery deadline,

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including patent-in-suit co-inventor Matthew Gilk on October 21, 2015, and Michael Andres,

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Johnstech’s corporate witness on invalidity and infringement topics, on November 11, 2015. Dkt.

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No. 96 at 2. In this motion, JFM says that new information disclosed in these depositions provides

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“good cause” for leave to amend its invalidity contentions. Dkt. No. 96. In opposition, Johnstech

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says that JFM did not show due diligence in discovering the supposedly new facts and that

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Johnstech would be prejudiced by amendment. Dkt. No. 102. The Court took the motion for

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decision without oral argument pursuant to Civil Local Rule 7-1(b), and denies it with one

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unopposed exception to fix a clerical error.

DISCUSSION

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I.

STANDARDS
The Northern District of California’s Patent Local Rules require parties to provide early

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identification of their infringement and invalidity theories. See Patent L.R. 3-1, 3-3. Once served,

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the rules allow amendment of invalidity contentions “only by order of the Court upon a timely

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showing of good cause.” Patent L.R. 3-6. “A precondition to demonstrating good cause is ‘a

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showing that the party seeking leave to amend acted with diligence in promptly moving to amend

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when new evidence is revealed in discovery.’” Altera Corp. v. PACT XPP Techs., AG, No. 14-

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CV-02868-JD, 2015 WL 3832389, at *1 (N.D. Cal. Jun. 19, 2015) (quoting O2 Micro Int’l Ltd. v.

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Monolithic Power Systems, Inc., 467 F.3d 1355, 1363,1366 (Fed. Cir. 2006)). “The critical issue

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United States District Court
Northern District of California

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is not when [the party] discovered [the] information, but rather, whether [it] could have discovered

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it earlier had it acted with the requisite diligence.” Google, Inc. v. Netlist, Inc., No. C 08-4144

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SBA, 2010 WL 1838693, at *2 (N.D. Cal. May 5, 2010). If diligence is shown, then the moving

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party must also demonstrate that the other party will not be prejudiced by the amendment. Altera,

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2015 WL 3832389, at *1 (citing Takeda Pharm. Co., Ltd. v. TWi Pharm., Inc., No. 13–cv–02420–

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LHK, 2015 WL 1227817, at *6–7 (N.D. Cal. Mar. 17, 2015)).

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II.

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LEAVE TO AMEND
The Court grants defendant JFM’s request to include U.S. Patent No. 6,472,396 in its list

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of patents under Patent L.R. 3.3(A). Dkt. No. 96 at 6-7. This appears to be a clerical error and

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Johnstech does not oppose it.

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The remainder of JFM’s requests are denied for failure to establish diligence in seeking

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leave to amend. JFM has not demonstrated diligence in seeking to add claim charts and other

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statements alleging invalidity based on U.S. Patent No. 6,954,091 (the “Nelson reference”) and a

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“1mm Evaluation Product” that “incorporated the Nelson reference technology.” Id. at 5. JFM

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concedes that it could have asserted Nelson earlier -- this reference was identified as relevant in

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Gilk’s invention disclosure and could have been discovered “in an earlier search for prior art.” Id.

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at 5, 7. And it provides no excuse or explanation for its failure to identify the 1mm Evaluation

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Product as prior art earlier. JFM’s claim that it was diligent in moving to amend when the
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importance of the references became clear at the parties’ tutorial and depositions is unavailing.

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That contention fails to explain why JFM waited almost two months after the September 29, 2015

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tutorial to file its motion, or why it waited until the eve of fact discovery close to depose key

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witnesses.

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In addition, Johnstech’s allegedly “newly presented theory” in the tutorial and depositions

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-- that any amount of sliding “less than the prior S-shaped contacts” reads on the patent claims --

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was not really new to JFM at that point. See id. at 7. JFM argued in claim construction briefing in

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June 2015 that the amount of sliding allowed was not described adequately in the patent,

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indefinite, and ambiguous under Johnstech’s construction. See, e.g., Dkt. No. 78 at 18-21. In any
case, a theory along these lines has been foreclosed by the Court’s claim construction, which

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United States District Court
Northern District of California

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requires that sliding motion in the device be “approximately eliminated” to read on the patent

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claims. Dkt. No. 110 at 13-15.

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JFM also requests permission to “add an update” to the written description and enablement

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section of its contentions based on testimony by Gilk and Andres about the “quantification of the

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amount of sliding” in the patented device described in the patent. Dkt. No. 96 at 6. Presumably

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this refers to the newly added last paragraph of Section IV of the contentions. Dkt. No. 97-2 at 11.

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But a comparison with the original, Dkt. No. 97-1 at 10-11, shows that the proposed amendment

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introduces a new substantive contention rather than merely supplementing a previously-disclosed

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one. JFM does not explain how it was diligent to wait until the close of fact discovery to contend

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that the “patent fails the written description and enablement requirement because it fails to

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disclose . . . how much sliding is permitted and . . . eliminated.” Dkt. No. 97-2 at 11. JFM does

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not explain why a statement like that, based on the patent alone, could not have been made its

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initial contentions. In addition, JFM argued in its claim construction briefing that the patent failed

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to quantify the amount of sliding permitted in the patented device. Dkt. No. 78 at 18-21. Waiting

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until after fact discovery closed to add these arguments to the invalidity contentions was not

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diligent in the least.

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The Court also denies JFM’s requests to add “a Section 101 and/or 102(f) invalidity

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argument based on the failure to identify John Nelson as an inventor” and to modify “the listing of
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prior art product section to incorporate admissions that the products were sold prior to filing date

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of the patent-in-suit.” Dkt. No. 96 at 3. For the former, JFM has not provided any detailed

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supporting argument or showing of diligence. For the latter, JFM argues that Johnstech’s

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“admissions” provide cause for the proposed amendment, but it does not identify the specific

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admissions or when they were made, preventing any meaningful evaluation of its diligence. Dkt.

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No. 96 at 7.

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Because JFM has failed to manifest the required degree of diligence, the Court need not

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consider whether the proposed amendments would be prejudicial to Johnstech. See Takeda, 2015

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WL 1227817, at *6–7; Radware, Ltd. v. F5 Networks, Inc., No. 5:13-CV-02024-RMW, 2015 WL

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7960004, at *4 (N.D. Cal. Dec. 4, 2015). The requests are denied.
CONCLUSION

United States District Court
Northern District of California

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The Court denies defendant JFM’s requests for leave to amend its invalidity contentions,

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with the one exception that it may include U.S. Patent No. 6,472,396 in its listing of patents under

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Patent L.R. 3.3(A).

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IT IS SO ORDERED.
Dated: March 10, 2016

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JAMES DONATO
United States District Judge

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