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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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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U.S. ETHERNET INNOVATIONS, LLC,
Plaintiff,

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United States District Court
For the Northern District of California

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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,

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Intervenors.

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________________________________/

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No. C 10-3724 CW

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U.S. ETHERNET INNOVATIONS, LLC,

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Plaintiff,

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United States District Court
For the Northern District of California

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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.

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No. C 10-5254 CW

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AND ALL RELATED CLAIMS AND
COUNTERCLAIMS
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Defendant Apple, Inc., Proposed Intervenor Sigma Designs

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Inc., Intervenor Broadcom Corporation and Plaintiff U.S. Ethernet
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Innovations, LLC (USEI) move for leave to file various new or
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amended pleadings and to assert additional claims.

The Court took

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the motions under submission on the papers and now orders as
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follows.

The Court also modifies the case management schedule.

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I.

Apple’s motion to file a third-party complaint

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Apple seeks leave to file a third-party complaint against
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third party Oracle America, Inc. for indemnification for the
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claims asserted against it by USEI.

Apple contends that Oracle’s

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predecessor-in-interest, Sun Microsystems, supplied the Ethernet
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technology that USEI accuses in this lawsuit.
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Apple has submitted

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a copy of its proposed pleading.

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been received.

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Court GRANTS Apple’s motion (Docket No. 685 in 10-3724).

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shall file its third-party complaint within three days of the date

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of this Order and shall serve it forthwith.

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II.

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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

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function used in the manufacture of U-Verse set-top boxes for

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United States District Court
For the Northern District of California

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Defendant AT&T Services, Inc., sued as AT&T Mobility, Inc., an

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accused product in that case.

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proposed pleading.

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Having reviewed the proposed complaint in intervention, the Court

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GRANTS Sigma’s motion (Docket No. 431 in 10-5254).

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file its complaint in intervention within three days of the date

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of this Order and USEI shall respond within twenty-one days

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thereafter.

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III. Broadcom’s motion

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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,

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LLC as a Defendant in its complaint in intervention and to file a

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first amended complaint in intervention and third party complaint.

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Broadcom has submitted a copy of its proposed amended pleading.

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USEI opposes Broadcom’s motion.

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proposed claim for intentional interference with contractual

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relations against USEI and Parallel is time-barred and that

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Broadcom has failed to show that Parallel is subject to personal

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jurisdiction in this district.

It argues that Broadcom’s

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USEI’s argument that leave to amend to add Parallel should be

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denied because the Court lacks personal jurisdiction over Parallel

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is unavailing.

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to make a prima facie showing of personal jurisdiction, this

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defense can be raised only by Parallel, which may instead choose

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to waive any such defect.

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2009 WL 3628100, at *3 (S.D. Cal.) (noting that personal

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jurisdiction represents “a restriction on judicial power not as a

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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

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is “waivable by the affected parties,” so the defense “cannot be

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raised on their behalf by anyone else”).

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USEI contends that the intentional interference claim against

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it is subject to a two year statute of limitations and was not

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timely because it was not brought within two years of October 9,

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2009, when USEI filed its initial complaint in this action, or

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January 19, 2011, when USEI filed its answer and counterclaims

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against Broadcom.

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claim against USEI is timely because it relates back to its

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original complaint in intervention, which was filed on December

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22, 2010.

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Opp. at 2-3 & n.1.1

Broadcom replies that the

Reply at 1.

Federal Rule of Civil Procedure 15 provides in relevant part

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that an “amendment to a pleading relates back to the date of the

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original pleading when . . . the amendment asserts a claim or

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defense that arose out of the conduct, transaction, or occurrence

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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.
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set out . . . in the original pleading.”

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Procedure 15(c)(1)(B).

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met, courts ‘consider whether the original and amended pleadings

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share a common core of operative facts so that the adverse party

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has fair notice of the transaction, occurrence, or conduct called

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into question.’”

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164402, at *23 (N.D. Cal.) (quoting Martell v. Trilogy Ltd., 872

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F.2d 322, 325 (9th Cir. 1989)).

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this standard is met is to ‘compare[] the original complaint with

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United States District Court
For the Northern District of California

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the amended complaint and decide[] whether the claim to be added

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will likely be proved by the same kind of evidence offered in

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support of the original pleading.’”

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v. San Francisco General Hosp., 841 F.2d 975, 978 (9th Cir. 1988))

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(brackets in original).

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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

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its products of being part of computer systems that infringed

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USEI’s patents but that, pursuant to a settlement and license

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agreement, Broadcom “is licensed to practice one or more of the

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Asserted Patents.”

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alleged that it had informed USEI of the license but that USEI

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stated that its products were not covered by the license.

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¶¶ 15-16.

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licensed to practice the asserted patents and that USEI’s

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infringement claims regarding its products are barred by the

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license agreement.

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pleading, Broadcom relies on the same allegations to assert that

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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.

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In its proposed amended

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under the license agreement.

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714-2, ¶ 54.

Proposed Am. Compl., Docket No.

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The proposed new claim shares a common core of operative

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facts with the claims that Broadcom previously asserted such that

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USEI had fair notice of the conduct at issue.

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will be used to prove the new claim is likely to be substantially

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the same as that relevant to the declaratory judgment claims

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asserted in the original pleading.

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Broadcom’s intentional interference claim relates back to its

United States District Court
For the Northern District of California

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The evidence that

Thus, the Court finds that

original pleading and is not time-barred as against USEI.

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Accordingly, the Court GRANTS Broadcom’s motion (Docket No.

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714 in 10-3724).

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three days of the date of this Order and USEI shall respond within

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twenty-one days thereafter.

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forthwith.

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IV.

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Broadcom shall file its amended pleading within

Broadcom shall serve Parallel

USEI’s motions
USEI moves for leave to assert claims against Third-Party

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Defendant Silicon Integrated Systems Corporation (SiS), which was

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recently added to this action after the Court granted the motion

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of Defendants ASUSTek Computer Inc. and ASUS Computer

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International to file a third-party complaint against it.

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also seeks leave to assert claims against Oracle and any other

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third parties that the Court allows into these related cases.

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USEI, however, does not state what claims it would like to assert

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against these parties.

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complaint setting forth the claims it seeks to bring against any

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of these parties.

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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 . . .

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proposed pleading . . .”).

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to assert unspecified claims against SiS, Oracle and any other new

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parties is DENIED.

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filing a renewed motion for leave to amend to assert claims

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against these parties, provided that it attaches its proposed

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amended pleading to any such motion.

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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

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this action,” in addition to the AT&T U-verse set-top box.

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No. 429 in 10-5254, 4.

Docket

USEI represents that it believes that the

United States District Court
For the Northern District of California

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Gateway product is already at issue in this litigation but that,

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to the extent that it is not, it seeks leave to add the Gateway

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product.

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The Court finds that the Gateway product is not already at

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issue.

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claims against them in the 10-5254 case pending resolution of the

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claims at issue in the 10-3724 case.

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Defendants described themselves as “Retailers” and argued that

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they were end-users who bought, or license and use, Ethernet-

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enabled computers and printers in their offices and stores.

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argued that resolution of the claims involving the Acer Defendants

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and Intervenors will resolve the claims against them and that

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therefore the claims against them should remain stayed.

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opposed staying the claims against AT&T Mobility LLC, asserting

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that “USEI’s infringement contentions include an AT&T U-Verse

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settop box as an accused product.”

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“AT&T Mobility LLC is similarly situated to the Acer Defendants”

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and that “resolution of the claims against the Acer Defendants and

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Intervenors will not dispose of USEI’s claims against AT&T

AT&T Defendants previously sought to continue to stay the

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In their papers, AT&T

They

USEI

Thus, it claimed that thus

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Mobility LLC with regard to at least its U-Verse settop box.”

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Docket No. 406 in 10-5254, 2-3.

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products.

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involving AT&T Defendants, except as to AT&T Mobility, LLC to the

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extent that such claims involved the AT&T U-verse set-top box.

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USEI identified no other AT&T

Thereafter, the Court extended the stay as to claims

Further, the Gateway product was not identified in any

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infringement contentions properly served by USEI.

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USEI, the U-verse set-top box incorporates an Ethernet adapter

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provided by Sigma, while the Gateway incorporates an Ethernet

According to

United States District Court
For the Northern District of California

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adapter provided by Davicom.

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that, in USEI’s first amended infringement contentions and

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attached claim charts, USEI accuses a “device from the Sigma

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Designs SMP8630 Series . . . for controlling communication between

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a host system (such as the AT&T U-Verse Set-Top-Box)” but does not

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identify products that include the Davicom adapter or refer to the

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U-verse Gateway device.

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amended infringement contentions upon AT&T Mobility in March 2012

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that specifically identified the Gateway as well, USEI did not

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seek or receive permission to amend its infringement contentions.

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See Patent Local Rule 3-6 (“Amendment of the Infringement

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Contentions or the Invalidity Contentions may be made only by

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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

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In its reply brief, USEI argues for the first time that good

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cause exists to allow it to amend its infringement contentions to

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include the Gateway product.

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basis in its opening paper and has thus waived the argument for

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the purposes of this motion.

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cause does not exist to permit amendment.

However, USEI did not move on this

Further, the Court finds that good

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Even though it has

known for at least a year that it would like to accuse this

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product, USEI has not acted diligently.

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amendment would unduly prejudice AT&T and the manufacturer of the

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Gateway product and its chip supplier.

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it “purchases the Gateway Product from a third party manufacturer,

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who incorporates Ethernet chips supplied by another third party.”

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Opp. at 6.

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not provided notice to these third parties, they have not had the

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opportunity to seek to intervene in this action or to participate

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United States District Court
For the Northern District of California

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in the proceedings that have taken place already, including claim

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construction.

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other parties into this action even at this point and has not

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shown that they are aware that USEI is attempting to accuse their

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products here.

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Defendants and Intervenors file a dispositive motion addressing

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certain issues shortly.

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were to attempt to join the case at this point, it is unlikely

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that they would be able to participate in those briefs at all or

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in a meaningful way.

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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

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Services, Inc.

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USEI asserted a claim for patent infringement against AT&T, Inc.

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Docket No. 1.

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Inc.’s joint motion to substitute AT&T Mobility, LLC in place of

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AT&T, Inc. and on May 19, 2010, USEI filed an amended complaint

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substituting AT&T Mobility.

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2013, AT&T Mobility informed USEI that, with regard to the Sigma

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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.

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On January 28,

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party.

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filed a second amended complaint, adding AT&T Services as a

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Defendant, but did not seek or receive permission from the Court

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to do so.

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that “it is unclear to USEI whether it was necessary to seek leave

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to assert claims” against AT&T Services.

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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

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may amend its pleading only with the opposing party’s written

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consent or the court’s leave.”

Federal Rule of Civil Procedure

United States District Court
For the Northern District of California

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15(a)(2).

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consent, USEI was not required to obtain permission of the Court

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for this amendment.

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additional necessary party regarding the set-top box.

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amendment does not provide USEI with permission to expand its

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infringement contentions to encompass the Gateway product or other

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products not already accused.

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the 10-5254 case to encompass claims against AT&T Services except

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to the extent that such claims involve the AT&T U-verse set-top

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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

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CONCLUSION

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For the reasons set forth above, the Court GRANTS Apple’s

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motion (Docket No. 685 in 10-3724), GRANTS Sigma’s motion (Docket

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No. 431 in 10-5254), GRANTS Broadcom’s motion (Docket No. 714 in

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10-3724) and GRANTS in part USEI’s motion and DENIES it in part

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(Docket Nos. 429 in 10-5254 and 711 in 10-3724).

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The Court also finds good cause to modify the case management
schedule as follows:

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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.

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Hearing on Defendants’ and Intervenors’
dispositive motion regarding marking and
nominal damages and further case
management conference

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To the extent possible, if Oracle, Parallel, USEI or another party

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files a motion to dismiss, they should notice the motion to be

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heard on June 27, 2013 concurrently with the dispositive motion

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regarding marking and nominal damages and further case management

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conference.

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dismiss (Docket No. 731 in 10-3724) is continued from May 23, 2013

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to June 27, 2013 at 2:00 p.m.

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United States District Court
For the Northern District of California

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The hearing on Third Party Defendant SiS’s motion to

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The remainder of the case management schedule is maintained.

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IT IS SO ORDERED.

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Dated: 4/18/2013

CLAUDIA WILKEN
United States District Judge
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