Looksmart Group, Inc. v. Microsoft Corporation
Filing
103
ORDER RE: MOTION FOR LEAVE TO AMEND INVALIDITY CONTENTIONS by Judge Jon S. Tigar denying 95 Motion to Amend/Correct. (wsn, COURT STAFF) (Filed on 2/6/2019)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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LOOKSMART GROUP, INC.,
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Plaintiff,
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ORDER RE: MOTION FOR LEAVE TO
AMEND INVALIDITY CONTENTIONS
v.
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MICROSOFT CORPORATION,
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Re: ECF No. 95
Defendant.
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United States District Court
Northern District of California
Case No. 17-cv-04709-JST
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Before the Court is Defendant Microsoft Corp.’s motion for leave to amend its invalidity
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contentions. ECF No. 95. The Court issued a claim construction order on November 8, 2018.
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ECF No. 88. Microsoft now seeks to amend its invalidity contentions, asserting that its
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amendments were prompted by the Court’s order, which primarily adopted Plaintiff Looksmart
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Group, Inc.’s competing constructions. Looksmart opposes some, but not all, of the proposed
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amendments. ECF No. 97. The Court will deny the motion to the extent it is opposed.
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I.
LEGAL STANDARD
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Patent Local Rule 3-6 allows amendment “upon a timely showing of good cause.” This
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inquiry “considers first whether the moving party was diligent in amending its contentions and
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then whether the nonmoving party would suffer prejudice if the motion to amend were granted.
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The burden is on the movant to establish diligence rather than on the opposing party to establish
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lack of diligence.” Radware Ltd. v. F5 Networks, Inc., No. C-13-02021-RMW, 2014 WL
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3728482, at *1 (N.D. Cal. July 28, 2014) (internal quotation marks and citations omitted). The
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moving party must demonstrate both “(1) diligence in discovering the basis for amendment” and
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“(2) diligence in seeking amendment once the basis for amendment has been discovered.”
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Positive Techs., Inc. v. Sony Elecs., Inc., No. C 11-2226 SI, 2013 WL 322556, at *2 (N.D. Cal.
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Jan. 28, 2013). If the moving party was not diligent, there is “no need to consider the question of
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prejudice.” O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1368 (Fed. Cir.
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2006).
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II.
Looksmart opposes Microsoft’s motion primarily on the basis that Microsoft has not been
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DISCUSSION
diligent. ECF No. 97 at 5-10.
Patent Local Rule 3-6 lists “claim construction by the Court different from that proposed
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by the party seeking amendment” as a “[n]on-exhaustive example[] of [a] circumstance[] that may,
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absent undue prejudice to the non-moving party, support a finding of good cause.” However,
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many judges in this district have determined that “where the court adopts the opposing party’s
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United States District Court
Northern District of California
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proposed claim construction, the moving party’s diligence, without which there is no good cause,
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is measured from the day the moving party received the proposed constructions, not the date of
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issuance of the Court's claim construction opinion.” Word to Info Inc. v. Facebook Inc., No. 15-
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CV-03485-WHO, 2016 WL 6276956, at *4 (N.D. Cal. Oct. 27, 2016), aff’d, 700 F. App’x 1007
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(Fed. Cir. 2017) (internal quotation marks and citation omitted). On the other hand, several courts
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in this district have also “rejected the date-of-disclosure rule and have instead measured diligence
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from the date of the claim construction order.” Id. “While courts in this district have not applied a
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uniform rule, review of all of the cases reveals that, regardless of the rule applied, diligence
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determinations are necessarily fact intensive inquiries and must be determined based on the
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individual facts of each case.” Id.
As the Court has previously observed, “[c]ourts often follow the ‘date-of-order’ rule when
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the court adopts its own construction.” Asia Vital Components Co. v. Asetek Danmark A/S, No.
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16-CV-07160-JST, 2018 WL 3108927, at *2 (N.D. Cal. June 25, 2018). But where the Court’s
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changes to the proposed constructions do “not significantly or materially modify the parties’
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proposed terms,” the Court has declined to rely on that justification to apply the date-of-order rule.
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Id.
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Here, the Court adopted in full Looksmart’s proposed construction for three of the four
disputed terms. ECF No. 88 at 8, 13, 16. For the final term, the Court largely adopted
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Looksmart’s construction, save for deleting a phrase that Microsoft argued was rendered
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redundant by surrounding claim language. Id. at 9-10.1 Given that Microsoft asserted that this
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language was duplicative, its omission “did not add, alter, or delete any limitations” in the claims.
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Word to Info Inc., 2016 WL 6276956, at *5. Accordingly, this line of cases does not aid
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Microsoft.
Relying on the individualized nature of the diligence inquiry, see id. at *4, Microsoft urges
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the Court to nonetheless apply the date-of-order rule for additional reasons. Microsoft contends
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that because the parties proposed significantly divergent constructions and Microsoft “relied
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heavily” on its own construction in crafting its invalidity contentions, “it was reasonable for
Microsoft to wait for this Court’s constructions before considering whether to amend.” ECF No.
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United States District Court
Northern District of California
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98 at 9. As a threshold matter, Microsoft’s premise that it consciously (and reasonably) chose to
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await the Court’s order is undermined by its invalidity contentions themselves, which already set
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forth theories based on “Looksmart’s application of the claim terms.” E.g., ECF No. 95-5 at 24,
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31, 34. Regardless, the Court finds Microsoft’s proposition unpersuasive. To the extent Microsoft
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simply believed its constructions were better supported and that it would prevail, its choice to rely
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on that assessment does not provide a basis for establishing diligence. See Word to Info Inc., 2016
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WL 6276956, at *5 (“[I]f [parties] determine that a proposed contention is frivolous, unlikely to be
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adopted, relatively unimportant, or too complicated to respond to, they can make a strategic
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decision not to pursue amendment.”). Nor has Microsoft identified any authority suggesting that
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the diligence inquiry should turn on a post-hoc analysis of the reasonableness of a party’s claim
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construction position. Cf. Verinata Health, Inc. v. Sequenom, Inc., No. C 12-00865 SI, 2014 WL
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789197, at *3 (N.D. Cal. Feb. 26, 2014) (rejecting the argument “that it was proper . . . to wait
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until the Court issued its claim construction order before seeking amendment because Sequenom
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reasonably believed that the Court would reject Verinata’s proposed constructions”). To the
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extent that the disparity between the competing constructions may make formulating alternative
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Looksmart proposed to construe the term “content score” as “a score generated by comparing
content on a web page with a selected word that indicates the relevance of the content to the
selected word.” ECF No. 88 at 9 (emphasis added). The Court adopted a construction of “a score
that indicates the relevance of the content to the selected word.” Id. at 9-10.
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invalidity theories more burdensome in some instances, the purportedly minor nature of
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Microsoft’s proposed amendments suggests that this is not one of those cases.
Microsoft further argues that the date-of-order rule should apply because “the case
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schedule provided for further amendments following claim construction.” ECF No. 98 at 7
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(quoting Radware, 2014 WL 3728482, at *2). Microsoft does not cite the case schedule, which
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did not set any deadlines for post-claim construction amendment. ECF No. 36 at 6-7; ECF No. 38
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(adopting deadlines in ECF No. 36). Rather, Microsoft relies on Looksmart’s failure to object in
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the parties’ joint case management statement after the Court issued its claim construction order,
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where Microsoft stated that it was considering seeking leave to amend and provided a date by
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which it expected to do so. ECF No. 89 at 4. Unlike in Radware, this post-claim construction
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United States District Court
Northern District of California
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waiver-by-silence theory has no bearing on whether it was “reasonable for [Microsoft] to wait
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until after claim construction to amend,” and so does not argue in favor of applying the date-of-
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order rule. 2014 WL 3728482, at *2.2
Nor does ChriMar Systems Inc. v. Cisco Systems Inc. support Microsoft’s argument. No.
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13CV01300JSWMEJ, 2015 WL 13449849 (N.D. Cal. May 14, 2015), report and recommendation
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adopted, No. C 13-01300 JSW, 2015 WL 13450357 (N.D. Cal. June 8, 2015). In ChriMar
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Systems, the court repeatedly emphasized in its diligence finding that “fact discovery is ongoing
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and there is no fact discovery cut-off date, and no trial date has been set.” Id. at *4; see also id. at
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*5 (“[N]o deadlines have been set as to the close of discovery, the parties have not engaged in
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expert discovery, and no trial date is set.”). Microsoft’s assertion that the present schedule is
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analogous falls flat. Here, there is a fact discovery cut-off, and it occurs today. See ECF No. 36 at
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6-7; ECF No. 38. Because ChriMar Systems is not on point, the Court need not determine
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whether lack of prejudice alone supplies a sufficient reason to apply the date-of-order rule.
Accordingly, the Court will measure Microsoft’s diligence from June 1, 2018 – the date
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the parties submitted their joint claim construction statement. ECF No. 62. Microsoft filed its
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motion over six-and-a-half months later. The Court concludes that Microsoft was not diligent in
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Nor is the Court anxious to adopt a rule that would encourage parties the making of additional
objections in case management statements regarding issues that are not yet ripe for decision.
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doing so. See Word to Info Inc., 2016 WL 6276956, at *6 (collecting cases where courts have
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found that a three-to-four month delay in amending contentions is not diligent). Indeed, Microsoft
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does not even attempt to argue in the alternative that it was diligent under the date-of-disclosure
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approach. Cf. ECF No. 98 at 8-10.
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Because Microsoft cannot establish diligence, the Court need not address prejudice. O2
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Micro, 467 F.3d at 1368 (“Having concluded that the district court could properly conclude that
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O2 Micro did not act diligently in moving to amend its infringement contentions, we see no need
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to consider the question of prejudice.”).
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CONCLUSION
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For the foregoing reasons, the Court DENIES Microsoft’s motion for leave to amend to the
United States District Court
Northern District of California
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extent it is opposed. Microsoft shall serve amended invalidity contentions consistent with the
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terms of this order by February 20, 2019.
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IT IS SO ORDERED.
Dated: February 6, 2019
______________________________________
JON S. TIGAR
United States District Judge
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