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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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 LOOKSMART GROUP, INC., 7 Plaintiff, 8 ORDER RE: MOTION FOR LEAVE TO AMEND INVALIDITY CONTENTIONS v. 9 MICROSOFT CORPORATION, 10 Re: ECF No. 95 Defendant. 11 United States District Court Northern District of California Case No. 17-cv-04709-JST 12 Before the Court is Defendant Microsoft Corp.’s motion for leave to amend its invalidity 13 14 contentions. ECF No. 95. The Court issued a claim construction order on November 8, 2018. 15 ECF No. 88. Microsoft now seeks to amend its invalidity contentions, asserting that its 16 amendments were prompted by the Court’s order, which primarily adopted Plaintiff Looksmart 17 Group, Inc.’s competing constructions. Looksmart opposes some, but not all, of the proposed 18 amendments. ECF No. 97. The Court will deny the motion to the extent it is opposed. 19 I. LEGAL STANDARD 20 Patent Local Rule 3-6 allows amendment “upon a timely showing of good cause.” This 21 inquiry “considers first whether the moving party was diligent in amending its contentions and 22 then whether the nonmoving party would suffer prejudice if the motion to amend were granted. 23 The burden is on the movant to establish diligence rather than on the opposing party to establish 24 lack of diligence.” Radware Ltd. v. F5 Networks, Inc., No. C-13-02021-RMW, 2014 WL 25 3728482, at *1 (N.D. Cal. July 28, 2014) (internal quotation marks and citations omitted). The 26 moving party must demonstrate both “(1) diligence in discovering the basis for amendment” and 27 “(2) diligence in seeking amendment once the basis for amendment has been discovered.” 28 Positive Techs., Inc. v. Sony Elecs., Inc., No. C 11-2226 SI, 2013 WL 322556, at *2 (N.D. Cal. 1 Jan. 28, 2013). If the moving party was not diligent, there is “no need to consider the question of 2 prejudice.” O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1368 (Fed. Cir. 3 2006). 4 II. Looksmart opposes Microsoft’s motion primarily on the basis that Microsoft has not been 5 6 DISCUSSION diligent. ECF No. 97 at 5-10. Patent Local Rule 3-6 lists “claim construction by the Court different from that proposed 7 by the party seeking amendment” as a “[n]on-exhaustive example[] of [a] circumstance[] that may, 9 absent undue prejudice to the non-moving party, support a finding of good cause.” However, 10 many judges in this district have determined that “where the court adopts the opposing party’s 11 United States District Court Northern District of California 8 proposed claim construction, the moving party’s diligence, without which there is no good cause, 12 is measured from the day the moving party received the proposed constructions, not the date of 13 issuance of the Court's claim construction opinion.” Word to Info Inc. v. Facebook Inc., No. 15- 14 CV-03485-WHO, 2016 WL 6276956, at *4 (N.D. Cal. Oct. 27, 2016), aff’d, 700 F. App’x 1007 15 (Fed. Cir. 2017) (internal quotation marks and citation omitted). On the other hand, several courts 16 in this district have also “rejected the date-of-disclosure rule and have instead measured diligence 17 from the date of the claim construction order.” Id. “While courts in this district have not applied a 18 uniform rule, review of all of the cases reveals that, regardless of the rule applied, diligence 19 determinations are necessarily fact intensive inquiries and must be determined based on the 20 individual facts of each case.” Id. As the Court has previously observed, “[c]ourts often follow the ‘date-of-order’ rule when 21 22 the court adopts its own construction.” Asia Vital Components Co. v. Asetek Danmark A/S, No. 23 16-CV-07160-JST, 2018 WL 3108927, at *2 (N.D. Cal. June 25, 2018). But where the Court’s 24 changes to the proposed constructions do “not significantly or materially modify the parties’ 25 proposed terms,” the Court has declined to rely on that justification to apply the date-of-order rule. 26 Id. 27 28 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 2 1 Looksmart’s construction, save for deleting a phrase that Microsoft argued was rendered 2 redundant by surrounding claim language. Id. at 9-10.1 Given that Microsoft asserted that this 3 language was duplicative, its omission “did not add, alter, or delete any limitations” in the claims. 4 Word to Info Inc., 2016 WL 6276956, at *5. Accordingly, this line of cases does not aid 5 Microsoft. Relying on the individualized nature of the diligence inquiry, see id. at *4, Microsoft urges 6 7 the Court to nonetheless apply the date-of-order rule for additional reasons. Microsoft contends 8 that because the parties proposed significantly divergent constructions and Microsoft “relied 9 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. 11 United States District Court Northern District of California 10 98 at 9. As a threshold matter, Microsoft’s premise that it consciously (and reasonably) chose to 12 await the Court’s order is undermined by its invalidity contentions themselves, which already set 13 forth theories based on “Looksmart’s application of the claim terms.” E.g., ECF No. 95-5 at 24, 14 31, 34. Regardless, the Court finds Microsoft’s proposition unpersuasive. To the extent Microsoft 15 simply believed its constructions were better supported and that it would prevail, its choice to rely 16 on that assessment does not provide a basis for establishing diligence. See Word to Info Inc., 2016 17 WL 6276956, at *5 (“[I]f [parties] determine that a proposed contention is frivolous, unlikely to be 18 adopted, relatively unimportant, or too complicated to respond to, they can make a strategic 19 decision not to pursue amendment.”). Nor has Microsoft identified any authority suggesting that 20 the diligence inquiry should turn on a post-hoc analysis of the reasonableness of a party’s claim 21 construction position. Cf. Verinata Health, Inc. v. Sequenom, Inc., No. C 12-00865 SI, 2014 WL 22 789197, at *3 (N.D. Cal. Feb. 26, 2014) (rejecting the argument “that it was proper . . . to wait 23 until the Court issued its claim construction order before seeking amendment because Sequenom 24 reasonably believed that the Court would reject Verinata’s proposed constructions”). To the 25 extent that the disparity between the competing constructions may make formulating alternative 26 27 28 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. 3 1 1 invalidity theories more burdensome in some instances, the purportedly minor nature of 2 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 3 schedule provided for further amendments following claim construction.” ECF No. 98 at 7 5 (quoting Radware, 2014 WL 3728482, at *2). Microsoft does not cite the case schedule, which 6 did not set any deadlines for post-claim construction amendment. ECF No. 36 at 6-7; ECF No. 38 7 (adopting deadlines in ECF No. 36). Rather, Microsoft relies on Looksmart’s failure to object in 8 the parties’ joint case management statement after the Court issued its claim construction order, 9 where Microsoft stated that it was considering seeking leave to amend and provided a date by 10 which it expected to do so. ECF No. 89 at 4. Unlike in Radware, this post-claim construction 11 United States District Court Northern District of California 4 waiver-by-silence theory has no bearing on whether it was “reasonable for [Microsoft] to wait 12 until after claim construction to amend,” and so does not argue in favor of applying the date-of- 13 order rule. 2014 WL 3728482, at *2.2 Nor does ChriMar Systems Inc. v. Cisco Systems Inc. support Microsoft’s argument. No. 14 15 13CV01300JSWMEJ, 2015 WL 13449849 (N.D. Cal. May 14, 2015), report and recommendation 16 adopted, No. C 13-01300 JSW, 2015 WL 13450357 (N.D. Cal. June 8, 2015). In ChriMar 17 Systems, the court repeatedly emphasized in its diligence finding that “fact discovery is ongoing 18 and there is no fact discovery cut-off date, and no trial date has been set.” Id. at *4; see also id. at 19 *5 (“[N]o deadlines have been set as to the close of discovery, the parties have not engaged in 20 expert discovery, and no trial date is set.”). Microsoft’s assertion that the present schedule is 21 analogous falls flat. Here, there is a fact discovery cut-off, and it occurs today. See ECF No. 36 at 22 6-7; ECF No. 38. Because ChriMar Systems is not on point, the Court need not determine 23 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 24 25 the parties submitted their joint claim construction statement. ECF No. 62. Microsoft filed its 26 motion over six-and-a-half months later. The Court concludes that Microsoft was not diligent in 27 28 2 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. 4 1 doing so. See Word to Info Inc., 2016 WL 6276956, at *6 (collecting cases where courts have 2 found that a three-to-four month delay in amending contentions is not diligent). Indeed, Microsoft 3 does not even attempt to argue in the alternative that it was diligent under the date-of-disclosure 4 approach. Cf. ECF No. 98 at 8-10. 5 Because Microsoft cannot establish diligence, the Court need not address prejudice. O2 6 Micro, 467 F.3d at 1368 (“Having concluded that the district court could properly conclude that 7 O2 Micro did not act diligently in moving to amend its infringement contentions, we see no need 8 to consider the question of prejudice.”). 9 CONCLUSION 10 For the foregoing reasons, the Court DENIES Microsoft’s motion for leave to amend to the United States District Court Northern District of California 11 extent it is opposed. Microsoft shall serve amended invalidity contentions consistent with the 12 terms of this order by February 20, 2019. 13 14 15 16 IT IS SO ORDERED. Dated: February 6, 2019 ______________________________________ JON S. TIGAR United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28 5

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