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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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,

No. C 10-3724 CW

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Plaintiff,

ORDER GRANTING
MOTION FOR LEAVE
TO AMEND (Docket
No. 853)

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v.

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ACER, Inc., et al.,

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Defendants.
________________________________/

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United States District Court
For the Northern District of California

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Plaintiff U.S. Ethernet Innovations, LLC (USEI) moves for

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leave to amend its infringement contentions.

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Intervenor Defendant Intel opposes USEI’s motion.

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considered the papers submitted by the parties, the Court GRANTS

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USEI’s motion for leave to amend.

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Docket No. 853.
Having

BACKGROUND

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USEI owns United States Patent Nos. 5,307,459 (the ‘459
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patent), 5,434,872 (the ‘872 patent), 5,732,094 (the ‘094 patent),

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and 5,299,313 (the ‘313 patent).

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infringement suit on October 9, 2009.

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29, 2010, on behalf of Defendants who are its customers, Defendant

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Intervenor Intel filed its motion to intervene.

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USEI filed this patent
Docket No. 1.

On January

Docket No. 107.

On September 9, 2013, USEI moved to amend its infringement

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contentions to drop a total of nineteen claims and add three
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claims.

First, regarding the ‘094 patent, USEI proposes to add

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Claims 47 and 51 and drop eleven claims (Claims 1, 2, 3, 4, 5, 7,

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39, 40, 41, 43, and 54).

Second, regarding the ‘459 patent, USEI

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proposes to add Claim 15 and drop eight claims (Claims 22, 24, 25,

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26, 27, 31, 32, and 34).

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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.

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USEI notes that this Court did not open discovery until January
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17, 2013, and as a consequence, Intel did not produce documents

United States District Court
For the Northern District of California

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until March 11, 2013 and its source code until April 12, 2013.

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Id.

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relevant technical information, including relevant source code.

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Id.

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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

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asserts that USEI failed to investigate its own information and
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thus has not met its burden of showing that it has acted
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diligently.

Id. at 9.

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DISCUSSION

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A party may amend its infringement contentions upon a showing

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of good cause and by order of the Court.

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Examples of good cause include

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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.

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Patent L.R. 3-6.

Good cause requires a showing of diligence.

The

burden is on the party seeking to amend its contentions “to

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establish diligence rather than on the opposing party to establish
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a lack of diligence.”

O2 Micro Int'l, Ltd. v. Monolithic Power

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Sys., Inc., 467 F.3d 1355, 1359 (Fed. Cir. 2006).

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“serves to balance the parties’ rights to develop new information

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in discovery along with the need for certainty in legal theories

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at the start of the case.”

United States District Court
For the Northern District of California

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Patent L.R. 3-6

Apple, Inc. v. Samsung Elecs. Co.,

Ltd., 2012 WL 5632618, at *2 (N.D. Cal. 2012) (citing O2 Micro

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Int’l Ltd., 467 F.3d at 1365-66))
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The good cause inquiry considers first whether “the party

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seeking leave to amend acted with diligence in promptly moving to

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amend when new evidence [was] released.”

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1363.

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question is whether the party ‘could have discovered [the new

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information] earlier had it acted with the requisite diligence.’”

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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,

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2010 WL 1838693, at *2 (N.D. Cal.)).

The burden is on the moving

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party to show diligence.

Id.

The court should then consider

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prejudice to the non-moving party.

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moving party was not diligent in amending its infringement

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contentions, it does not need to consider the question of

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prejudice to the non-moving party.

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If the court finds that the

See 02 Micro, 467 F.3d at 1368

(affirming the district court’s decision refusing leave to amend

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upon finding the moving party was not diligent, without

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considering the question of prejudice to the non-moving party).

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Even if the movant was arguably not diligent, the court retains

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discretion to grant leave to amend.

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(granting leave to amend infringement contentions, even though

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Apple, 2012 WL 5632618, at *6

court found plaintiff failed to establish diligence, because of

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lack of prejudice to defendant).
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United States District Court
For the Northern District of California

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A. ‘094 Patent, Claims 47 and 51
USEI asserts that it discovered during its initial review of

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Intel’s source code on or around May 29, 2013 that Intel

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programmed its driver software to optimize automatically the

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transmit threshold value of the “early transmit” feature.

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Reply at 4.

Pl’s

USEI proposes adding: 1) dependent Claim 51 (“the

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step of altering the threshold value . . . using a driver in the
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host system to process status information, and in response write a
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new threshold value in [the] register”), and 2) the claim on which

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it depends, Claim 47.

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should have known about the transmit threshold optimization

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feature, as well as the fact that the gigabit products contain the

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accused early transmit feature.

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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

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Developer’s Manual” and driver configuration window are publicly
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available.

Id. at 5.

Here, USEI has demonstrated diligence in proposing the
amended charges.

USEI adequately alleges that it did not obtain
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the driver source code until May 29, 2013, and therefore could not

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have known whether the driver software manipulated the transmit

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threshold.

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the content of the publicly available manual, on its own, could

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not have provided the information it needed.

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Pl’s Reply at 5.

USEI also responds plausibly that

As USEI points out,

the “Gigabit Ethernet Controller Software Developer’s Manual” does

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not mention the “ETT.Txthreshold” value other than a description
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of the “Transmit Underrun” status field of a descriptor.

Pl’s

United States District Court
For the Northern District of California

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Reply at 7.

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discovery “discuss in great detail” the ETT, including “the

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description and address location of the ETT register in hardware,

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the number of bits assigned to the TxThreshold portion of the ETT

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In contrast, the documents that Intel produced during

register, and a detailed explanation of the register’s use by the

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system.”

Id.

It is also plausible that USEI only learned that

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Intel’s gigabit products contain the “early transmit” feature
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covered by the ‘094 patent upon its recent deposition of Intel.

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Id. at 6.

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have known of the transmit threshold optimization feature, USEI

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asserts plausibly that the driver configuration window

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demonstrates the easy manipulability of Intel’s transmit threshold

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setting.

Finally, contrary to Intel’s charge that USEI should

Pl’s Reply at 5-6.

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The proposed additions of Claims 47 and 51 also will not
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prejudice Defendants.
infringement theories.

These proposed changes do not add new
The additional claim element of driver

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software mirrors previous claims and will not significantly affect
claim construction.

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B. ‘459 Patent, Claim 15

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USEI seeks to add Claim 15 of the ‘459 patent.

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USEI’s

proposed amendment asserts that the accused instrumentalities
include the apparatus of Claim 7, wherein the threshold value is a

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length-left threshold value.

Gann Dec., Ex. C and D.

USEI claims

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that it was diligent because it discovered Intel’s infringement of

United States District Court
For the Northern District of California

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Claim 15 only after analyzing confidential technical information

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made available by Intel.

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“the information USEI now cites in its proposed new infringement

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contentions for Claim 15 appears verbatim in its March 5, 2010

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Pl’s Mot. at 8-9.

infringement contentions.”

Intel responds that

Defs.’ Opp. at 3-4.

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Here, Intel is probably correct that USEI was not diligent in
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proposing its amendment sooner.

As Intel notes, the 8255x Open

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Source Software Developers Manual was publicly available on its

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website for years and cited by USEI in its Infringement

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Contentions in 2010.

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USEI states vaguely, “While certain technical documents provided a

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general description of Intel’s ‘early receive interrupt’ feature,

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Id.

USEI’s responses are unconvincing.

further details were needed as to the functionality of that

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feature as it relates to Claim 15[.]”

Pl’s Reply at 8.

USEI does

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not state what those details might be.

Instead, USEI argues that

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it was not until USEI’s deposition of Intel on June 7, 2013 that

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it learned “some of the accused products employ this
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implementation.”

Id.

USEI does not respond to Intel’s charge

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that the feature was publicly available on Intel’s website, nor

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explain why it failed to propose the changes earlier.

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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

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amend infringement contentions, even though court found plaintiff
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failed to establish diligence, because of lack of prejudice to

United States District Court
For the Northern District of California

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defendant).

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on the pretrial clock, and that Claim 15 mirrors claims that have

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already been the subject of claim construction proceedings, it

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seems unlikely that the proposed amendment will cause prejudice to

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Here, given that there is still sufficient time left

Defendant.

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CONCLUSION
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For the reasons set forth above, this Court GRANTS USEI’s
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motion for leave to amend its infringement contentions.

USEI

shall file its amended infringement contentions forthwith.

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This order terminates Docket No. 853.

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IT IS SO ORDERED.

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Dated: 10/11/2013
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CLAUDIA WILKEN
United States District Judge

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