VLSI Technology LLC v. Intel Corporation

Filing 420

ORDER granting in part and denying in part Dkt. No. 393, VLSI's motion to further amend infringement contentions. (Cousins, Nathanael) (Filed on 3/6/2023)

Case 5:17-cv-05671-BLF Document 420 Filed 03/06/23 Page 1 of 6

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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VLSI TECHNOLOGY LLC,

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United States District Court
Northern District of California

Plaintiff,
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v.
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INTEL CORPORATION,

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Defendant.
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Case No. 17-cv-05671-BLF (NC)
ORDER GRANTING IN PART
AND DENYING IN PART
PLAINTIFF'S REQUEST TO
AMEND ITS PATENT
INFRINGEMENT
CONTENTIONS
Re: ECF 393

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Plaintiff VLSI Technology LLC (“VLSI”) and Defendant Intel Corporation

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(“Intel”) submitted a joint discovery letter requesting the Court’s assistance in resolving

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whether VLSI can amend its infringement contentions. VLSI has already had the

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opportunity to amend its infringement contentions twice over the span of this sprawling

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dispute. Despite its claims that a third amended infringement statement is necessary due to

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the discovery of new information, VLSI not only fails to adequately describe these

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discoveries but also fails to expound on their diligence efforts. Additionally, Intel would

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be prejudiced by the requested amendment at this late stage in the discovery process.

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Therefore, the Court GRANTS the stipulated portion of the parties’ requests, but DENIES

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the remaining requests.

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I.

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BACKGROUND
VLSI initiated this case on October 2, 2017, alleging Intel’s microprocessors

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infringe on VLSI’s patented semiconductor and microprocessor technology. ECF 1 ¶ 9.

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VLSI served its initial infringement contentions under Patent Local Rule 3-1 on January

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18, 2018. ECF 401 (“Selwyn Decl.”) ¶ 3. After a discovery dispute concerning the

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sufficiency of this disclosure, the Court permitted VLSI to serve amended infringement

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contentions. Id. ¶ 6. VLSI served its first amended infringement contentions on August

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13, 2018. Id. ¶ 7.

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On March 11, 2019, the Court stayed the case pending issuance of a final written

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decision by the Patent Trial and Appeal Board on the inter partes reviews (“IPR”) of the

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patents-in-suit. ECF 261. The stay was lifted on September 1, 2021. ECF 290. In a joint

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status update, VLSI indicated its intention of “proposing targeted amendment to its

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infringement contentions.” ECF 314 at 4. On September 30, 2021, the parties attended a

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case management conference. During the conference, the Court noted the second amended

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infringement contentions (“SAIC”) “should have been filed September 1” and that VLSI

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had already “unnecessarily delayed [Intel’s] opportunity to begin considering the case by

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not having your request to amend infringement contentions on file.” ECF 320 at 9. The

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Court further noted the “IPRs are intended to narrow a case, not allow it time to expand”

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and that the Court doesn’t “have much patience with an expanding case.” Id. at 10.

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Nevertheless, VLSI served the SAIC on October 27, 2021. ECF 324; Selwyn Decl. ¶ 13.
The parties proceeded with discovery. On June 17, 2022, Intel provided certain

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non-infringement positions in response to VLSI’s written discovery. Selwyn Decl. ¶ 20.

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On September 6, 2022, VLSI served Intel with its third amended infringement contentions.

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Id. ¶ 22. However, VLSI did not move for leave to amend the SAIC until February 10,

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2023. ECF 393.

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II.

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LEGAL STANDARD
The Patent Local Rules were designed to streamline the technical and complex

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patent litigation process and prompt plaintiffs to crystallize their infringement contentions

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early in the case. See O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355,

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1365–66 (Fed. Cir. 2006). Despite these intentions, it is unrealistic for a patentee to have a
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“precise sense of its infringement theory at the outset.” Radware Ltd. v. F5 Networks, Inc.,

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No. 13-cv-02021 RMW, 2014 WL 3728482, at *2 (N.D. Cal. 2014).

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Patent Local Rule 3-6 permits the amendment of infringement contentions “only by

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order of the Court upon a timely showing of good cause.” The “good cause” standard is a

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two-step inquiry that first considers “whether the moving party was diligent in amending

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its contentions and then whether the non-moving party would suffer prejudice if the

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motion to amend were granted.” Acer, Inc. v. Tech. Properties Ltd., No. 08–cv–00877

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JF(HRL), 2010 WL 3618687, at *3 (N.D. Cal. Sept. 10, 2010). The moving party bears

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the burden of demonstrating good cause. O2 Micro, 467 F.3d at 1366. Overall, the good

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cause inquiry “serves to balance the parties' rights to develop new information in discovery

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along with the need for certainty in legal theories at the start of the case.” Apple Inc. v.

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Samsung Electronics Co., No. 12-cv-00630 LHK, 2012 WL 5632618, at *2 (N.D. Cal.

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Nov. 15, 2012). Unlike the court’s lenient posture towards amending pleadings in other

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civil matters, “the philosophy behind amending claim charts is decidedly conservative, and

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designed to prevent the ‘shifting sands’ approach to claim construction.” Verinata Health,

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Inc. v. Ariosa Diagnostics, Inc., 236 F. Supp. 3d 1110, 1113 (N.D. Cal. 2017).

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III. DISCUSSION

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VLSI’s amendments to its SAIC fall under four categories: (1) amended

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infringement contentions for the ‘836 patent, (2) addition of new products that incorporate

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allegedly infringing technology, (3) inclusion of language pertaining to allegations of

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infringement under the doctrine of equivalents, and (4) the addition of previously

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dismissed claim 1 of the ‘672 patent. The parties stipulated to amendments to the ‘836

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patent. ECF 393 at 3, n.1. The Court GRANTS VLSI’s request to amend with respect to

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these amendments. The remaining amendments are considered below.

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A.

Diligence

Diligence is the “critical issue” in the good cause determination. Sunpower Corp.

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Sys. v. Sunlink Corp., No. 08-cv-02807 SBA, 2009 WL 1657987, at *1 (N.D. Cal. June 12,

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2009). “[T]he diligence required for a showing of good cause has two subparts: (1)
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diligence in discovering the basis for amendment; and (2) diligence in seeking amendment

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once the basis for amendment has been discovered.” Positive Techs., Inc. v. Sony

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Electronics, Inc., No. 11-cv-02226 SI, 2013 WL 322556, at *2 (N.D. Cal. Jan. 28, 2013).

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The crux of this diligence assessment hinges on the timing and content of VLSI’s

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motion to amend its infringement contentions. VLSI alludes to two triggering events

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justifying the amendments: (1) Intel’s production of source code, and (2) Intel’s statement

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of non-infringement served on June 17, 2022. To start, a “noninfringement statement, on

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its own, generally does not warrant granting leave to amend.” Verinata, 236 F. Supp. 3d at

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1114. To justify amendment, the “noninfringement contentions must typically disclose

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new or nonpublic information. Id. However, VLSI not only fails to describe the contours

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of this new information but also doesn’t provide any detail as to why Intel’s

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noninfringement statement necessitates the amendments. Instead, VLSI conclusively avers

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that the “proposed amendments are . . . rooted in new information.” ECF 393 at 2. This is

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insufficient as it gives the Court little foundation on which to base a finding of diligence.

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Moreover, VLSI’s allegations regarding Intel’s production of source code are

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equally unavailing. There appear to be two sets of production relevant to VSLI’s

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amendments – one occurred in March 2022, and a subsequent production occurred

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between September 2022 and January 2023. The latter production purportedly consisted

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of “11,000 source code files” comprised of millions or tens of millions of lines of source

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code. Despite the burdens of this production, VSLI managed to extract infringement

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information from this morass of data to form the foundation of its amendments to the ‘836

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patent. The same cannot be said for the March 2022 production. As above, VLSI does not

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describe what information was gleaned from this production or how it relates to the

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proposed amendments. Assuming the information pertains to the amendments, VLSI

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makes no attempt to justify the ten-month delay in filing its third amended infringement

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contentions. This contrasts with VLSI’s analysis of the second source code production,

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whereupon it managed to assess millions of lines of source codes and add amendments in

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half that time.
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to explain its position in both the letter brief and supplementary briefing, VLSI has failed

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to provide any details on how it conducted its search for information, what they uncovered,

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or how it affects their existing contentions. See Karl Storz Endoscopy-Am., Inc. v. Stryker

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Corp., No. 14-cv-00876 RS(JSC), 2016 WL 2855260, at *4 (N.D. Cal. May 13, 2016).

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Therefore, the Court finds VLSI has not been diligent in its attempt to amend its

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infringement contentions.

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Altogether, it is VLSI’s burden to show diligence. However, despite the opportunity

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Prejudice

Even if VLSI demonstrated diligence, Intel would be prejudiced by the amendments

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at this stage in the litigation. “Prejudice is typically found when the movant seeks to

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amend late in a case’s pre-trial schedule or when amendment would disrupt a previous

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motion or order.” WhatsApp Inc. v. Intercarrier Commc’ns, LLC, No. 13-cv-04272 JST,

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2014 WL 12703766, at *4 (N.D. Cal. Sept. 3, 2014). Prejudice can also be shown when a

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party changes its infringement theories or requires its opponent to prepare additional

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defenses. See Apple Inc. v. Samsung Electronics. Co., Ltd., No. 12-cv-00630 LHK, 2012

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WL 5632618, at *3 (N.D. Cal. Nov. 15, 2012).

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Here, VLSI’s amendment comes just two weeks before the close of fact discovery.

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As noted in the discovery letter, Intel relied on VLSI’s Second Amended Infringement

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Contentions from October 2021 to develop its case, including written discovery and

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deposition strategy. ECF 393 at 5. An amendment at this stage of the proceedings would

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necessitate extending fact discovery to permit Intel to develop evidence and conduct

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additional discovery on its defenses. See Google, Inc. v. Netlist, Inc., No. 08-cv-4144

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SBA, 2010 WL 1838693, at *3 (N.D. Cal. May 5, 2010) (finding of prejudice to Netlist

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because an amendment of infringement contentions would require reopening discovery).

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IV. CONCLUSION

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Based on the foregoing, the Court GRANTS VLSI’s motion to amend its second

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amended infringement contentions based on recently produced source code for the ‘836

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patent. The Court DENIES VLSI’s motion to amend its second amended infringement
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contentions with respect to the remaining claims.
IT IS SO ORDERED.

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Dated: March 6, 2023

_____________________________________
NATHANAEL M. COUSINS
United States Magistrate Judge

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United States District Court
Northern District of California

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