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

Filing 903

ORDER by Judge Claudia Wilken GRANTING 853 MOTION FOR LEAVE TO AMEND. (ndr, COURT STAFF) (Filed on 10/11/2013)

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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, No. C 10-3724 CW 5 Plaintiff, ORDER GRANTING MOTION FOR LEAVE TO AMEND (Docket No. 853) 6 v. 7 ACER, Inc., et al., 8 Defendants. ________________________________/ 9 United States District Court For the Northern District of California 10 11 Plaintiff U.S. Ethernet Innovations, LLC (USEI) moves for 12 leave to amend its infringement contentions. 13 Intervenor Defendant Intel opposes USEI’s motion. 14 considered the papers submitted by the parties, the Court GRANTS 15 USEI’s motion for leave to amend. 16 Docket No. 853. Having BACKGROUND 17 USEI owns United States Patent Nos. 5,307,459 (the ‘459 18 19 patent), 5,434,872 (the ‘872 patent), 5,732,094 (the ‘094 patent), 20 and 5,299,313 (the ‘313 patent). 21 infringement suit on October 9, 2009. 22 29, 2010, on behalf of Defendants who are its customers, Defendant 23 Intervenor Intel filed its motion to intervene. 24 USEI filed this patent Docket No. 1. On January Docket No. 107. On September 9, 2013, USEI moved to amend its infringement 25 contentions to drop a total of nineteen claims and add three 26 claims. First, regarding the ‘094 patent, USEI proposes to add 27 28 Claims 47 and 51 and drop eleven claims (Claims 1, 2, 3, 4, 5, 7, 1 39, 40, 41, 43, and 54). Second, regarding the ‘459 patent, USEI 2 proposes to add Claim 15 and drop eight claims (Claims 22, 24, 25, 3 26, 27, 31, 32, and 34). 4 5 6 Pl’s Reply at 1. USEI alleges that it has sought the technical information that forms the basis of its amendments since July 2010, but that it did not receive relevant technical documents until recently. 7 USEI notes that this Court did not open discovery until January 8 9 17, 2013, and as a consequence, Intel did not produce documents United States District Court For the Northern District of California 10 until March 11, 2013 and its source code until April 12, 2013. 11 Id. 12 relevant technical information, including relevant source code. 13 Id. 14 USEI further asserts Intel has yet to complete production of Intel responds that USEI bases its amendments on information it has possessed since March 2010. Defs.’ Opp at 3. Intel 15 asserts that USEI failed to investigate its own information and 16 thus has not met its burden of showing that it has acted 17 18 diligently. Id. at 9. 19 DISCUSSION 20 A party may amend its infringement contentions upon a showing 21 of good cause and by order of the Court. 22 Examples of good cause include 23 24 25 26 27 Patent L.R. 3-6. (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. 28 2 1 2 Patent L.R. 3-6. Good cause requires a showing of diligence. The burden is on the party seeking to amend its contentions “to 3 establish diligence rather than on the opposing party to establish 4 5 a lack of diligence.” O2 Micro Int'l, Ltd. v. Monolithic Power 6 Sys., Inc., 467 F.3d 1355, 1359 (Fed. Cir. 2006). 7 “serves to balance the parties’ rights to develop new information 8 in discovery along with the need for certainty in legal theories 9 at the start of the case.” United States District Court For the Northern District of California 10 Patent L.R. 3-6 Apple, Inc. v. Samsung Elecs. Co., Ltd., 2012 WL 5632618, at *2 (N.D. Cal. 2012) (citing O2 Micro 11 Int’l Ltd., 467 F.3d at 1365-66)) 12 The good cause inquiry considers first whether “the party 13 14 seeking leave to amend acted with diligence in promptly moving to 15 amend when new evidence [was] released.” 16 1363. 17 question is whether the party ‘could have discovered [the new 18 information] earlier had it acted with the requisite diligence.’” 19 O2 Micro, 467 F.3d at “In considering the party’s diligence, the critical Apple, 2012 WL 5632618, at *6 (citing Google, Inc. v. Netlist, 20 2010 WL 1838693, at *2 (N.D. Cal.)). The burden is on the moving 21 22 party to show diligence. Id. The court should then consider 23 prejudice to the non-moving party. 24 moving party was not diligent in amending its infringement 25 contentions, it does not need to consider the question of 26 prejudice to the non-moving party. 27 If the court finds that the See 02 Micro, 467 F.3d at 1368 (affirming the district court’s decision refusing leave to amend 28 3 1 upon finding the moving party was not diligent, without 2 considering the question of prejudice to the non-moving party). 3 Even if the movant was arguably not diligent, the court retains 4 discretion to grant leave to amend. 5 (granting leave to amend infringement contentions, even though 6 Apple, 2012 WL 5632618, at *6 court found plaintiff failed to establish diligence, because of 7 lack of prejudice to defendant). 8 9 United States District Court For the Northern District of California 10 A. ‘094 Patent, Claims 47 and 51 USEI asserts that it discovered during its initial review of 11 Intel’s source code on or around May 29, 2013 that Intel 12 programmed its driver software to optimize automatically the 13 transmit threshold value of the “early transmit” feature. 14 Reply at 4. Pl’s USEI proposes adding: 1) dependent Claim 51 (“the 15 step of altering the threshold value . . . using a driver in the 16 host system to process status information, and in response write a 17 18 new threshold value in [the] register”), and 2) the claim on which 19 it depends, Claim 47. 20 should have known about the transmit threshold optimization 21 feature, as well as the fact that the gigabit products contain the 22 accused early transmit feature. 23 Id. at 4-5. Intel responds that USEI Id. at 7-9. As evidence, Intel points to the fact that its “Gigabit Ethernet Controller Software 24 Developer’s Manual” and driver configuration window are publicly 25 26 27 28 available. Id. at 5. Here, USEI has demonstrated diligence in proposing the amended charges. USEI adequately alleges that it did not obtain 4 1 the driver source code until May 29, 2013, and therefore could not 2 have known whether the driver software manipulated the transmit 3 threshold. 4 the content of the publicly available manual, on its own, could 5 not have provided the information it needed. 6 Pl’s Reply at 5. USEI also responds plausibly that As USEI points out, the “Gigabit Ethernet Controller Software Developer’s Manual” does 7 not mention the “ETT.Txthreshold” value other than a description 8 9 of the “Transmit Underrun” status field of a descriptor. Pl’s United States District Court For the Northern District of California 10 Reply at 7. 11 discovery “discuss in great detail” the ETT, including “the 12 description and address location of the ETT register in hardware, 13 the number of bits assigned to the TxThreshold portion of the ETT 14 In contrast, the documents that Intel produced during register, and a detailed explanation of the register’s use by the 15 system.” Id. It is also plausible that USEI only learned that 16 Intel’s gigabit products contain the “early transmit” feature 17 18 covered by the ‘094 patent upon its recent deposition of Intel. 19 Id. at 6. 20 have known of the transmit threshold optimization feature, USEI 21 asserts plausibly that the driver configuration window 22 demonstrates the easy manipulability of Intel’s transmit threshold 23 setting. Finally, contrary to Intel’s charge that USEI should Pl’s Reply at 5-6. 24 The proposed additions of Claims 47 and 51 also will not 25 26 27 prejudice Defendants. infringement theories. These proposed changes do not add new The additional claim element of driver 28 5 1 2 software mirrors previous claims and will not significantly affect claim construction. 3 B. ‘459 Patent, Claim 15 4 USEI seeks to add Claim 15 of the ‘459 patent. 5 6 USEI’s proposed amendment asserts that the accused instrumentalities include the apparatus of Claim 7, wherein the threshold value is a 7 length-left threshold value. Gann Dec., Ex. C and D. USEI claims 8 9 that it was diligent because it discovered Intel’s infringement of United States District Court For the Northern District of California 10 Claim 15 only after analyzing confidential technical information 11 made available by Intel. 12 “the information USEI now cites in its proposed new infringement 13 contentions for Claim 15 appears verbatim in its March 5, 2010 14 Pl’s Mot. at 8-9. infringement contentions.” Intel responds that Defs.’ Opp. at 3-4. 15 Here, Intel is probably correct that USEI was not diligent in 16 proposing its amendment sooner. As Intel notes, the 8255x Open 17 18 Source Software Developers Manual was publicly available on its 19 website for years and cited by USEI in its Infringement 20 Contentions in 2010. 21 USEI states vaguely, “While certain technical documents provided a 22 general description of Intel’s ‘early receive interrupt’ feature, 23 Id. USEI’s responses are unconvincing. further details were needed as to the functionality of that 24 feature as it relates to Claim 15[.]” Pl’s Reply at 8. USEI does 25 26 not state what those details might be. Instead, USEI argues that 27 it was not until USEI’s deposition of Intel on June 7, 2013 that 28 it learned “some of the accused products employ this 6 1 implementation.” Id. USEI does not respond to Intel’s charge 2 that the feature was publicly available on Intel’s website, nor 3 explain why it failed to propose the changes earlier. 4 5 6 Although USEI could have proposed changes earlier, the Court has discretion to consider whether Defendant will suffer prejudice. See Apple, 2012 WL 5632618, at *6 (granting leave to 7 amend infringement contentions, even though court found plaintiff 8 9 failed to establish diligence, because of lack of prejudice to United States District Court For the Northern District of California 10 defendant). 11 on the pretrial clock, and that Claim 15 mirrors claims that have 12 already been the subject of claim construction proceedings, it 13 seems unlikely that the proposed amendment will cause prejudice to 14 Here, given that there is still sufficient time left Defendant. 15 CONCLUSION 16 For the reasons set forth above, this Court GRANTS USEI’s 17 18 19 motion for leave to amend its infringement contentions. USEI shall file its amended infringement contentions forthwith. 20 This order terminates Docket No. 853. 21 IT IS SO ORDERED. 22 23 Dated: 10/11/2013 24 CLAUDIA WILKEN United States District Judge 25 26 27 28 7

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