24/7 Customer, Inc. v. LivePerson, Inc.

Filing 103

ORDER by Judge Kandis A. Westmore regarding 92 Discovery Letter Brief. Defendant's request to amend the invalidity contentions is granted. Amended invalidity contentions are due by 12/5/2016. (kawlc1, COURT STAFF) (Filed on 11/14/2016)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 24/7 CUSTOMER, INC., Case No. 3:15-cv-02897-JST (KAW) Plaintiff, 8 ORDER REGARDING 10/17/16 JOINT DISCOVERY LETTER v. 9 10 Re: Dkt. No. 92 LIVEPERSON, INC., Defendant. United States District Court Northern District of California 11 12 On October 17, 2016, the parties filed a joint letter concerning Defendant LivePerson, 13 14 Inc.’s request to amend its invalidity contentions. (Joint Letter, Dkt. No. 92 at 1.) Plaintiff [24]7 15 Customer, Inc. argues that good cause does not exist, because Defendant was not diligent in 16 seeking leave to amend and [24]/7 will be prejudiced if leave to amend is granted. (Joint Letter at 17 3.) 18 19 Upon review of the joint letter, and for the reasons set forth below, the Court GRANTS LivePerson’s request to amend its invalidity contentions. 20 I. BACKGROUND 21 On June 22, 2015, Plaintiff [24]7 Customer, Inc. filed a lawsuit against Defendant 22 LivePerson, Inc. alleging infringement on several patents pertaining to its customer engagement 23 software platform. 24 On March 23, 2016, [24]7 served its infringement contentions, which included 122 25 asserted claims across 13 patents. (Joint Letter at 1.) On June 20, 2016, LivePerson served its 26 invalidity contentions for all 122 claims. Id. The initial invalidity contentions broadly asserted that 27 “[t]he asserted claims of the [patents-in-suit] are also invalid under 35 U.S.C. § 112.” Id. 28 On July 25, 2016, LivePerson informed [24]7 of its intention to amend the invalidity 1 contentions to assert that certain claims were invalid under 35 U.S.C. § 112 immediately after 2 discovering its positions. Id. [24]7 contends that it responded immediately, stating that the newly 3 disclosed positions were “improper, untimely, and ineffective.” (Joint Letter at 5.) [24]7 claims 4 that LivePerson did not respond. Id. 5 On September 1, 2016, LivePerson requested to meet and confer regarding a motion to 6 amend the invalidity contentions. (Joint Letter at 2.) On September 19, 2016, [24]7 responded that 7 it opposed such a motion. Id. It does not appear that the parties sufficiently engaged in good faith 8 meet and confer efforts regarding the proposed amendment despite their attestations to the 9 contrary. 10 On October 17, 2016, the parties filed the instant joint letter in which LivePerson seeks United States District Court Northern District of California 11 leave to amend its invalidity contentions, pursuant to Patent L.R. 3-6, to contend that certain 12 claims are invalid under 35 U.S.C. § 112. 13 14 II. LEGAL STANDARD “The local patent rules in the Northern District of California . . . require both the plaintiff 15 and the defendant in patent cases to provide early notice of their infringement and invalidity 16 contentions, and to proceed with diligence in amending those contentions when new information 17 comes to light in the course of discovery.” O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 18 F.3d 1355, 1365–66 (Fed. Cir. 2006). The Patent Local Rules seek to achieve this objective by 19 24 requiring invalidity contentions to be served early in the case to disclose: (1) the identity of each item of prior art that allegedly anticipates each asserted claim or renders it obvious, Patent L.R. 3–3(a); (2) whether each of those items of prior art anticipates each asserted claim or renders it obvious, Patent L.R. 3–3(b); (3) a chart identifying where specifically in each alleged item of prior art each limitation of each asserted claim is found, Patent L.R. 3–3(c); and [(4)] any grounds of invalidity based on 35 U.S.C. § 101, indefiniteness under 35 U.S.C. § 112(2) or enablement or written description under 35 U.S.C. § 112(1) of any of the asserted claims, Patent L.R. 3-3(d). 25 Largan Precision Co., Ltd. v. Genius Elec. Optical Co., No. 13–CV–02502–JD, 2014 WL 26 6882275, at *1 (N.D. Cal. Dec. 5, 2014). 20 21 22 23 27 28 “Any invalidity theories not disclosed pursuant to Local Rule 3-3 are barred . . . from presentation at trial (whether through expert opinion testimony or otherwise).” MediaTek Inc. v. 2 1 Freescale Semiconductor, Inc., No. 11–CV–5341–YGR, 2014 WL 690161, at *1 (N.D. Cal. Feb. 2 21, 2014) (citing Avago Techs. Gen. IP PTE Ltd. v. Elan Microelectronics Corp., 2007 WL 3 2103896, at *1 (N.D. Cal. July 20, 2007)). 4 Patent Local Rule 3-6 allows a party to amend its invalidity contentions only upon a 10 showing of good cause: Amendment of the Infringement Contentions or the Invalidity Contentions may be made only by order of the Court upon a timely showing of good cause. Non-exhaustive examples of circumstances that may, absent undue prejudice to the non-moving party, support a finding of good cause include:(a) A claim construction by the Court different from that proposed by the party seeking amendment; (b) Recent discovery of material, prior art despite earlier diligent search; and (c) Recent discovery of nonpublic information about the Accused Instrumentality which was not discovered, despite diligent efforts, before the service of the Infringement Contentions. 11 Patent L.R. 3-6. The good cause inquiry is two-fold: (1) whether the moving party was diligent in 12 amending its contentions; and (2) whether the non-moving party would suffer prejudice if the 13 motion to amend were granted. Barco N.V. v. Tech. Properties Ltd., 2011 WL 3957390, at * 1 14 (N.D. Cal. Sept. 7, 2011). Other factors relevant to this inquiry include the “relevance of newly- 15 discovered prior art, whether the request to amend is motivated by gamesmanship, and whether the 16 opposing party will be prejudiced by the amendment.” West v. Jewelry Innovations, Inc., 2009 WL 17 152136, at *2 (N.D. Cal. Jan. 22, 2009). The moving party has the burden of demonstrating good 18 cause. O2 Micro Int'l, 467 F.3d at 1366. 19 III. 5 6 7 8 United States District Court Northern District of California 9 20 21 DISCUSSION LivePerson argues that it has good cause to amend its invalidity contentions, because it acted diligently and there is no prejudice to [24]7. (Joint Letter at 1-3.) 22 A. 23 LivePerson served its initial invalidity contentions on June 20, 2016, and claims that it first Whether LivePerson was diligent in seeking amendment. 24 made its § 112 positions known to [24]7 on July 25, 2016, immediately after discovery. (Joint 25 Letter at 1.) Furthermore, LivePerson contends that its initial invalidity contentions already gave 26 notice by broadly contending that “[t]he asserted claims of the [patents-in-suit] are also invalid 27 under 35 U.S.C. § 112.” Id. LivePerson’s supplemental contentions, dated September 1, 2016, 28 assert that several claims for the Asserted Patents are invalid as indefinite under § 112. (See Joint 3 1 2 Letter, Ex. A.) In opposition, [24]7 argues that LivePerson was not diligent, because the indefiniteness contentions could have been identified based solely on the Asserted Patents, and, therefore, should 4 have been in the initial contentions served on June 20, 2016. (Joint Letter at 3.) [24]7 argues that, 5 as a result, any amendment is not timely. Id. [24]7 further argues that LivePerson missed the July 6 5, 2016 deadline to identify those issues with the proposed claim terms for claim construction. Id. 7 This, however, is not dispositive. Additionally, the cases [24]7 relies on are distinguishable. For 8 example, in Hewlett Packard Co. v. ServiceNow, Inc., ServiceNow conceded that the invalidity 9 contentions were defective during the technology tutorial, so the court advised counsel to seek 10 leave to amend. Instead, counsel sought a ruling that its invalidity contentions did not require 11 United States District Court Northern District of California 3 amendment on the grounds that it duly raised § 112(f) arguments against the asserted patents in its 12 initial contentions. 2016 WL 692828, at *1 (N.D. Cal. Feb. 19, 2016). Here, the tutorial has 13 recently occurred, and Defendant is proactively seeking to amend its contentions prior to the claim 14 construction hearing. 15 “The local rules on [invalidity] contentions are ‘not a straitjacket into which litigants are 16 locked from the moment their contentions are served. There is a modest degree of flexibility, at 17 least near the outset.’” Largin Precision Co, Ltd., 2014 WL 6882275, at *1 (quoting Comcast 18 Cable Comm’ns Corp., LLC v. Finisar Corp., 2007 WL 716131, at *2 (N.D. Cal. Mar. 2, 2007)). 19 Again, the parties here have only completed claim construction discovery and have not completed 20 claim construction itself. Further, LivePerson informed [24]7 of its new § 112 position one month 21 after it served the initial invalidity contentions, and sought to meet and confer regarding the 22 supplemental contentions a little more than one month later, on September 1, 2016, prior to the 23 close of claim construction discovery. [24]7 responded on September 19, 2016, more than two 24 weeks later, stating that it opposed any amendment. Thus, the passage of a couple of months 25 cannot be wholly attributed to LivePerson. 26 Accordingly, the Court finds that LivePerson has been diligent in seeking amendment. 27 B. 28 [24]7 contends that it will be prejudiced if LivePerson is permitted leave to amend, Whether [24]7 would be prejudiced if the motion to amend is granted. 4 because [24]7 has already selected terms for claim construction, submitted its claim construction 2 positions, filed its opening brief, and selected claims for assertion. (Joint Letter at 5.) The Court 3 notes, however, that had [24]7 been amenable to amendment on September 1, 2016, prior to the 4 close of claim construction discovery, most of those deadlines would not have passed. As such, 5 [24]7’s contentions that, had LivePerson timely identified its § 112 arguments, it may have chosen 6 different terms for claim construction and different claims for assertion, are not credible for two 7 reasons. (See Joint Letter at 5.) First, at the latest, [24]7 was on notice of LivePerson’s § 112 8 positions on September 1, 2016, when LivePerson served its supplemental invalidity contentions. 9 While the proposed terms were already identified, [24]7 does not identify any of the terms that it 10 believes would have to be construed given the new theories of invalidity, rendering the argument 11 United States District Court Northern District of California 1 that different terms may have been chosen as mere speculation. Second, amendment to invalidity 12 contentions may be permitted after the claim construction order is issued, so the fact that 13 LivePerson seeks amendment prior to the order being issued is not dispositive. See Patent L.R. 3- 14 6. 15 16 Thus, [24]7 has failed to show that it would truly suffer prejudice if LivePerson is permitted to amend its invalidity contentions. 17 18 19 20 21 IV. CONCLUSION In light of the foregoing, LivePerson’s request to amend its invalidity contentions is GRANTED, and LivePerson shall serve its amended contentions within 21 days. IT IS SO ORDERED. Dated: November 14, 2016 __________________________________ KANDIS A. WESTMORE United States Magistrate Judge 22 23 24 25 26 27 28 5

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