U.S. Ethernet Innovations, LLC v. Acer, Inc. et al

Filing 734

ORDER by Judge Claudia Wilken GRANTING APPLES (Docket No. 685 in 10-3724) MOTION, GRANTING SIGMAS (Docket No. 431 in 10-5254) MOTION, GRANTING BROADCOMS (Docket No. 714 in 10-3724) MOTION, GRANTING IN PART, AND DENYING IN PART, USEIS (Docket Nos. 429 in 10-5254 and 711 in 10-3724)MOTION AND MODIFYING THE CASE MANAGEMENT SCHEDULE. (ndr, COURT STAFF) (Filed on 4/18/2013)

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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 U.S. ETHERNET INNOVATIONS, LLC, Plaintiff, 5 6 7 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 v. ACER, INC.; ACER AMERICA CORPORATION; APPLE, INC.; ASUS COMPUTER INTERNATIONAL; ASUSTEK COMPUTER, INC.; DELL, INC.; FUJITSU, LTD.; FUJITSU AMERICA, INC.; GATEWAY, INC.; HEWLETT PACKARD CO.; SONY CORPORATION; SONY CORPORATION OF AMERICA; SONY ELECTRONICS INC.; TOSHIBA CORPORATION; TOSHIBA AMERICA, INC.; and TOSHIBA AMERICA INFORMATION SYSTEMS, INC., Defendants, INTEL CORPORATION; NVIDIA CORPORATION; MARVELL SEMICONDUCTOR, INC.; ATHEROS COMMUNICATIONS, INC.; and BROADCOM CORPORATION, 17 Intervenors. 18 ________________________________/ 19 20 21 22 23 24 25 26 27 28 No. C 10-3724 CW 1 U.S. ETHERNET INNOVATIONS, LLC, 2 Plaintiff, 3 4 5 6 7 8 9 United States District Court For the Northern District of California 10 11 12 15 16 ORDER GRANTING APPLE’S MOTION (Docket No. 685 in 10-3724), GRANTING SIGMA’S MOTION (Docket No. 431 in 10-5254), GRANTING BROADCOM’S MOTION (Docket No. 714 in 10-3724), GRANTING IN PART, AND DENYING IN PART, USEI’S MOTION (Docket Nos. 429 in 10-5254 and 711 in 10-3724) AND MODIFYING THE CASE MANAGEMENT SCHEDULE v. AT&T MOBILITY LLC; BARNES & NOBLE, INC.; CLAIRE’S BOUTIQUES, INC.; J. C. PENNEY COMPANY, INC.; SALLY BEAUTY HOLDINGS, INC.; ANN TAYLOR STORES CORPORATION; ANN TAYLOR RETAIL, INC.; HARLEYDAVIDSON, INC.; HARLEY-DAVIDSON MOTOR COMPANY, INC.; KIRKLAND’S INC.; KIRKLAND’S STORES, INC.; MACY’S, INC.; MACY’S RETAIL HOLDINGS, INC.; MACY’S WEST STORES, INC.; NEW YORK & COMPANY, INC.; LERNER NEW YORK, INC.; RADIOSHACK CORPORATION; RENT-ACENTER, INC.; and THE DRESS BARN, INC., Defendants. 13 14 No. C 10-5254 CW ________________________________/ AND ALL RELATED CLAIMS AND COUNTERCLAIMS ________________________________/ Defendant Apple, Inc., Proposed Intervenor Sigma Designs 17 Inc., Intervenor Broadcom Corporation and Plaintiff U.S. Ethernet 18 Innovations, LLC (USEI) move for leave to file various new or 19 amended pleadings and to assert additional claims. The Court took 20 the motions under submission on the papers and now orders as 21 follows. The Court also modifies the case management schedule. 22 I. Apple’s motion to file a third-party complaint 23 Apple seeks leave to file a third-party complaint against 24 third party Oracle America, Inc. for indemnification for the 25 claims asserted against it by USEI. Apple contends that Oracle’s 26 predecessor-in-interest, Sun Microsystems, supplied the Ethernet 27 technology that USEI accuses in this lawsuit. 28 2 Apple has submitted 1 a copy of its proposed pleading. 2 been received. 3 Court GRANTS Apple’s motion (Docket No. 685 in 10-3724). 4 shall file its third-party complaint within three days of the date 5 of this Order and shall serve it forthwith. 6 II. 7 No opposition to the motion has Having reviewed Apple’s proposed pleading, the Apple Sigma’s motion Sigma moves to intervene in Case No. 10-5254. It represents that it designs and sells a chip that includes an Ethernet adapter 9 function used in the manufacture of U-Verse set-top boxes for 10 United States District Court For the Northern District of California 8 Defendant AT&T Services, Inc., sued as AT&T Mobility, Inc., an 11 accused product in that case. 12 proposed pleading. 13 Having reviewed the proposed complaint in intervention, the Court 14 GRANTS Sigma’s motion (Docket No. 431 in 10-5254). 15 file its complaint in intervention within three days of the date 16 of this Order and USEI shall respond within twenty-one days 17 thereafter. 18 III. Broadcom’s motion 19 Sigma has submitted a copy of its No opposition to the motion has been received. Sigma shall Broadcom seeks leave to join Third-Party Parallel Technology, 20 LLC as a Defendant in its complaint in intervention and to file a 21 first amended complaint in intervention and third party complaint. 22 Broadcom has submitted a copy of its proposed amended pleading. 23 USEI opposes Broadcom’s motion. 24 proposed claim for intentional interference with contractual 25 relations against USEI and Parallel is time-barred and that 26 Broadcom has failed to show that Parallel is subject to personal 27 jurisdiction in this district. It argues that Broadcom’s 28 3 1 USEI’s argument that leave to amend to add Parallel should be 2 denied because the Court lacks personal jurisdiction over Parallel 3 is unavailing. 4 to make a prima facie showing of personal jurisdiction, this 5 defense can be raised only by Parallel, which may instead choose 6 to waive any such defect. 7 2009 WL 3628100, at *3 (S.D. Cal.) (noting that personal 8 jurisdiction represents “a restriction on judicial power not as a 9 matter of sovereignty, but as a matter of individual liberty,” and Even if Broadcom had not alleged facts sufficient See, e.g., Jenkins v. Smead Mfg. Co., United States District Court For the Northern District of California 10 is “waivable by the affected parties,” so the defense “cannot be 11 raised on their behalf by anyone else”). 12 USEI contends that the intentional interference claim against 13 it is subject to a two year statute of limitations and was not 14 timely because it was not brought within two years of October 9, 15 2009, when USEI filed its initial complaint in this action, or 16 January 19, 2011, when USEI filed its answer and counterclaims 17 against Broadcom. 18 claim against USEI is timely because it relates back to its 19 original complaint in intervention, which was filed on December 20 22, 2010. 21 Opp. at 2-3 & n.1.1 Broadcom replies that the Reply at 1. Federal Rule of Civil Procedure 15 provides in relevant part 22 that an “amendment to a pleading relates back to the date of the 23 original pleading when . . . the amendment asserts a claim or 24 defense that arose out of the conduct, transaction, or occurrence 25 26 27 28 1 USEI also asserts that this claim is untimely as asserted against Parallel. The Court declines to consider this issue at this time and instead will consider it only if Parallel chooses to invoke the defense on its own behalf. 4 set out . . . in the original pleading.” 2 Procedure 15(c)(1)(B). 3 met, courts ‘consider whether the original and amended pleadings 4 share a common core of operative facts so that the adverse party 5 has fair notice of the transaction, occurrence, or conduct called 6 into question.’” 7 164402, at *23 (N.D. Cal.) (quoting Martell v. Trilogy Ltd., 872 8 F.2d 322, 325 (9th Cir. 1989)). 9 this standard is met is to ‘compare[] the original complaint with 10 United States District Court For the Northern District of California 1 the amended complaint and decide[] whether the claim to be added 11 will likely be proved by the same kind of evidence offered in 12 support of the original pleading.’” 13 v. San Francisco General Hosp., 841 F.2d 975, 978 (9th Cir. 1988)) 14 (brackets in original). 15 Federal Rule of Civil “To determine whether this standard is Rowe v. Hornblower Fleet, 2012 U.S. Dist. LEXIS “One way to determine whether Id. at *23-24 (quoting Percy In Broadcom’s original pleading, it alleged that USEI accused 16 its products of being part of computer systems that infringed 17 USEI’s patents but that, pursuant to a settlement and license 18 agreement, Broadcom “is licensed to practice one or more of the 19 Asserted Patents.” 20 alleged that it had informed USEI of the license but that USEI 21 stated that its products were not covered by the license. 22 ¶¶ 15-16. 23 licensed to practice the asserted patents and that USEI’s 24 infringement claims regarding its products are barred by the 25 license agreement. 26 pleading, Broadcom relies on the same allegations to assert that 27 USEI’s allegations of infringement interfered with its rights Compl., Docket No. 476, ¶¶ 8-9, 13. It also Id. at Broadcom sought declaratory judgment that it is Id. at ¶¶ 28-35. 28 5 In its proposed amended 1 under the license agreement. 2 714-2, ¶ 54. Proposed Am. Compl., Docket No. 3 The proposed new claim shares a common core of operative 4 facts with the claims that Broadcom previously asserted such that 5 USEI had fair notice of the conduct at issue. 6 will be used to prove the new claim is likely to be substantially 7 the same as that relevant to the declaratory judgment claims 8 asserted in the original pleading. 9 Broadcom’s intentional interference claim relates back to its United States District Court For the Northern District of California 10 The evidence that Thus, the Court finds that original pleading and is not time-barred as against USEI. 11 Accordingly, the Court GRANTS Broadcom’s motion (Docket No. 12 714 in 10-3724). 13 three days of the date of this Order and USEI shall respond within 14 twenty-one days thereafter. 15 forthwith. 16 IV. 17 Broadcom shall file its amended pleading within Broadcom shall serve Parallel USEI’s motions USEI moves for leave to assert claims against Third-Party 18 Defendant Silicon Integrated Systems Corporation (SiS), which was 19 recently added to this action after the Court granted the motion 20 of Defendants ASUSTek Computer Inc. and ASUS Computer 21 International to file a third-party complaint against it. 22 also seeks leave to assert claims against Oracle and any other 23 third parties that the Court allows into these related cases. 24 USEI, however, does not state what claims it would like to assert 25 against these parties. 26 complaint setting forth the claims it seeks to bring against any 27 of these parties. 28 moving to file an amended pleading must reproduce the entire USEI Nor has USEI submitted a proposed amended See Civil Local Rule 10-1 (“Any party . . . 6 1 proposed pleading . . .”). 2 to assert unspecified claims against SiS, Oracle and any other new 3 parties is DENIED. 4 filing a renewed motion for leave to amend to assert claims 5 against these parties, provided that it attaches its proposed 6 amended pleading to any such motion. 7 Accordingly, USEI’s motion for leave This denial is without prejudice to USEI USEI also seeks leave to “add the [AT&T] U-verse gateway to 8 this action,” in addition to the AT&T U-verse set-top box. 9 No. 429 in 10-5254, 4. Docket USEI represents that it believes that the United States District Court For the Northern District of California 10 Gateway product is already at issue in this litigation but that, 11 to the extent that it is not, it seeks leave to add the Gateway 12 product. 13 The Court finds that the Gateway product is not already at 14 issue. 15 claims against them in the 10-5254 case pending resolution of the 16 claims at issue in the 10-3724 case. 17 Defendants described themselves as “Retailers” and argued that 18 they were end-users who bought, or license and use, Ethernet- 19 enabled computers and printers in their offices and stores. 20 argued that resolution of the claims involving the Acer Defendants 21 and Intervenors will resolve the claims against them and that 22 therefore the claims against them should remain stayed. 23 opposed staying the claims against AT&T Mobility LLC, asserting 24 that “USEI’s infringement contentions include an AT&T U-Verse 25 settop box as an accused product.” 26 “AT&T Mobility LLC is similarly situated to the Acer Defendants” 27 and that “resolution of the claims against the Acer Defendants and 28 Intervenors will not dispose of USEI’s claims against AT&T AT&T Defendants previously sought to continue to stay the 7 In their papers, AT&T They USEI Thus, it claimed that thus 1 Mobility LLC with regard to at least its U-Verse settop box.” 2 Docket No. 406 in 10-5254, 2-3. 3 products. 4 involving AT&T Defendants, except as to AT&T Mobility, LLC to the 5 extent that such claims involved the AT&T U-verse set-top box. 6 USEI identified no other AT&T Thereafter, the Court extended the stay as to claims Further, the Gateway product was not identified in any 7 infringement contentions properly served by USEI. 8 USEI, the U-verse set-top box incorporates an Ethernet adapter 9 provided by Sigma, while the Gateway incorporates an Ethernet According to United States District Court For the Northern District of California 10 adapter provided by Davicom. 11 that, in USEI’s first amended infringement contentions and 12 attached claim charts, USEI accuses a “device from the Sigma 13 Designs SMP8630 Series . . . for controlling communication between 14 a host system (such as the AT&T U-Verse Set-Top-Box)” but does not 15 identify products that include the Davicom adapter or refer to the 16 U-verse Gateway device. 17 amended infringement contentions upon AT&T Mobility in March 2012 18 that specifically identified the Gateway as well, USEI did not 19 seek or receive permission to amend its infringement contentions. 20 See Patent Local Rule 3-6 (“Amendment of the Infringement 21 Contentions or the Invalidity Contentions may be made only by 22 order of the Court upon a timely showing of good cause.”). Mot. at 3 n.3. The Court notes Although USEI states that it later served 23 In its reply brief, USEI argues for the first time that good 24 cause exists to allow it to amend its infringement contentions to 25 include the Gateway product. 26 basis in its opening paper and has thus waived the argument for 27 the purposes of this motion. 28 cause does not exist to permit amendment. However, USEI did not move on this Further, the Court finds that good 8 Even though it has known for at least a year that it would like to accuse this 2 product, USEI has not acted diligently. 3 amendment would unduly prejudice AT&T and the manufacturer of the 4 Gateway product and its chip supplier. 5 it “purchases the Gateway Product from a third party manufacturer, 6 who incorporates Ethernet chips supplied by another third party.” 7 Opp. at 6. 8 not provided notice to these third parties, they have not had the 9 opportunity to seek to intervene in this action or to participate 10 United States District Court For the Northern District of California 1 in the proceedings that have taken place already, including claim 11 construction. 12 other parties into this action even at this point and has not 13 shown that they are aware that USEI is attempting to accuse their 14 products here. 15 Defendants and Intervenors file a dispositive motion addressing 16 certain issues shortly. 17 were to attempt to join the case at this point, it is unlikely 18 that they would be able to participate in those briefs at all or 19 in a meaningful way. 20 As a result that AT&T has represented that Because USEI did not previously seek to amend and has Notably, USEI has not attempted to bring these Further, the case schedule requires that If the manufacturer and chip supplier Finally, USEI moves for leave to assert claims against AT&T 21 Services, Inc. 22 USEI asserted a claim for patent infringement against AT&T, Inc. 23 Docket No. 1. 24 Inc.’s joint motion to substitute AT&T Mobility, LLC in place of 25 AT&T, Inc. and on May 19, 2010, USEI filed an amended complaint 26 substituting AT&T Mobility. 27 2013, AT&T Mobility informed USEI that, with regard to the Sigma 28 chip in the set-top box, AT&T Services is an additional necessary In its original complaint filed on March 10, 2010, On May 13, 2010, the Court granted USEI and AT&T, Docket Nos. 51, 64. 9 On January 28, 1 party. 2 filed a second amended complaint, adding AT&T Services as a 3 Defendant, but did not seek or receive permission from the Court 4 to do so. 5 that “it is unclear to USEI whether it was necessary to seek leave 6 to assert claims” against AT&T Services. 7 Docket No. 429-1. Docket No. 416. Thereafter, on February 15, 2013, USEI In the instant motion, USEI states Docket No. 429. Except under limited circumstances not present here, “a party 8 may amend its pleading only with the opposing party’s written 9 consent or the court’s leave.” Federal Rule of Civil Procedure United States District Court For the Northern District of California 10 15(a)(2). 11 consent, USEI was not required to obtain permission of the Court 12 for this amendment. 13 additional necessary party regarding the set-top box. 14 amendment does not provide USEI with permission to expand its 15 infringement contentions to encompass the Gateway product or other 16 products not already accused. 17 the 10-5254 case to encompass claims against AT&T Services except 18 to the extent that such claims involve the AT&T U-verse set-top 19 box. To the extent that it has the opposing party’s written However, the amendment was to add an This Thus, the Court extends the stay in 20 CONCLUSION 21 For the reasons set forth above, the Court GRANTS Apple’s 22 motion (Docket No. 685 in 10-3724), GRANTS Sigma’s motion (Docket 23 No. 431 in 10-5254), GRANTS Broadcom’s motion (Docket No. 714 in 24 10-3724) and GRANTS in part USEI’s motion and DENIES it in part 25 (Docket Nos. 429 in 10-5254 and 711 in 10-3724). 26 27 The Court also finds good cause to modify the case management schedule as follows: 28 10 Deadline for Defendants and Intervenors to file a joint dispositive motion, contained in a single brief of twentyfive pages or less, addressing the application of the marking defense under 35 U.S.C. § 287 and whether recovery is limited to nominal damages if Defendants and Intervenors are able to prove ultimately that the accused features have been disabled for the entire time period for which Plaintiff can pursue damages Thursday, May 16, 2013 Deadline for Plaintiff to file a response, of twenty-five pages or less, to Defendants’ and Intervenors’ dispositive motion regarding marking and nominal damages Thursday, May 30, 2013 Deadline for Defendants and Intervenors to file a joint reply, in a single brief of fifteen pages or less, in support of their motion regarding marking and nominal damages Thursday, June 6, 2013 Case Management Statement due Thursday, June 20, 2013 Thursday, June 27, 2013 at 2:00 p.m. 16 Hearing on Defendants’ and Intervenors’ dispositive motion regarding marking and nominal damages and further case management conference 17 To the extent possible, if Oracle, Parallel, USEI or another party 18 files a motion to dismiss, they should notice the motion to be 19 heard on June 27, 2013 concurrently with the dispositive motion 20 regarding marking and nominal damages and further case management 21 conference. 22 dismiss (Docket No. 731 in 10-3724) is continued from May 23, 2013 23 to June 27, 2013 at 2:00 p.m. 1 2 3 4 5 6 7 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 The hearing on Third Party Defendant SiS’s motion to 24 The remainder of the case management schedule is maintained. 25 IT IS SO ORDERED. 26 27 28 Dated: 4/18/2013 CLAUDIA WILKEN United States District Judge 11

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