Walker Digital LLC v. Google Inc. et al.

Filing 322

MEMORANDUM ORDER denying 175 MOTION to Stay [DEFENDANT GOOGLE INC.'S MOTION FOR A STAY OF PROCEEDINGS PENDING REEXAMINATION OF THE PATENT-IN-SUIT]; denying 180 MOTION for Leave to File First Amended Complaint. Signed by Judge Sue L. Robinson on 4/11/2013. (nmfn)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

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) Civ. No. 11-309-SLR
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WALKER DIGITAL, LLC.,
Plaintiff,
GOOGLE, INC., et al.,
Defendants.

MEMORANDUM ORDER
At Wilmington this 11th day of April, 2013, having reviewed the pending motions
and the papers submitted in connection therewith;
IT IS ORDERED that:
1. Motion to amend. Plaintiff Walker Digital, LLC's ("Walker Digital") motion for
leave to file a first amended complaint to add a claim for induced infringement (D. I. 180)
is denied, for the reasons that follow:
a. Standard. The Federal Rules of Civil Procedure require courts to
"freely grant: leave to amend "when justice so requires." Fed. R. Civ. P. 15(a)(2).
Nevertheless, courts "ha[ve] discretion to deny a motion to amend for reasons of 'undue
delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposing party
by virtue of allowance of the amendment, futility of amendment, etc."' Merck & Co., Inc.

v. Apotex, Inc., 287 Fed. App'x 884, 888 (Fed. Cir. 2008) (quoting Foman v. Davis, 371
U.S. 178, 182 (1962)). After a pleading deadline has passed, courts have required the

movant to also satisfy the more rigorous "good cause" standard of Fed. R. Civ. P.
16(b)(4). 1 See, e.g., E. Minerals & Chems. Co. v. Mahan, 225 F.3d 330, 340 (3d Cir.
2000); ICU Med. Inc. v. RyMed Techs., Inc., 674 F. Supp. 2d 574, 578 (D. Del. 2009);
Cordance Corp. v. Amazon.com, Inc., 255 F.R.D. 366, 371 (D. Del. 2009).

b. Background. Although Walker Digital included allegations of induced
infringement for particular claim limitations in its preliminary infringement contentions on
December 2, 2011 (D.I. 219, ex. 1), it did not formally move to plead induced
infringement until September 21, 2012, some nine months past the deadline for filing
amended pleadings and a month before the close offact discovery. 2 In its moving
papers, Walker Digital argues that "good cause" exists for its motion because: (1) the
Federal Circuit's August 31, 2012 decision in Akamai Technologies, Inc. v. Limelight
Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012), constituted an intervening change in

law; 3 (2) defendants' 4 September 10, 2012 claim constructions identified the potential
need to rely on inducement; and (3) defendants cannot show that allowing the
amendment would cause undue prejudice. Defendants take exception to each of these

1

Rule 16(b)(4) provides that a scheduling order "may be modified only for good
cause and with the judge's consent."
2

The deadline for amending pleadings was January 9, 2012; fact discovery
closed on October 5, 2012. (0.1. 100)
3

The Federal Circuit in Akamai held generally that a defendant may now be held
liable for induced infringement if it induces others to perform either all (as was
previously the case) or just some of the steps of a method patent, if the defendant
performs the remaining steps.
4

The defendants include Google, Inc., Microsoft Corporation, and Samsung
Telecommunications America, LLC.

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grounds.
c. Analysis. With respect to the Federal Circuit's decision in Akamai,
defendants argue that said decision is irrelevant, because "[n]either [defendants] nor
Walker Digital contend that only some claimed steps are performed by a third party.
Defendants have argued only that their accused products do not perform the claimed
steps because the interfaces are incapable of providing the claimed navigation
experience- oriented representations of photos displayed with navigational instructions,
no matter the user." (D.I. 218 at 7) And, indeed, Walker Digital has not demonstrated
through its proposed amended pleading that the Akamai analysis is applicable, alleging
only generally that defendants induce others to infringe
by taking active steps to encourage and facilitate direct infringement by
others with knowledge of that infringement, such as, upon information
and belief, by importing, making, making available for use, offering for
sale, and/or selling products and/or services that when used as intended
infringe the '014 patent. Such products and/or services include, by way
of example and without limitation, Google Maps, Google turn-by-turn, 3d.
map.navigation service, Street View, and 360-degree street-level imagery,
and related products and services.
(D. I. 180, ex. B,

1f 18)

Although such allegations arguably would have passed muster at

the commencement of the case, they are insufficient to demonstrate good cause to
amend under Akamai as Walker Digital does not allege that only some steps are
performed by third parties.
d. With respect to Walker Digital's speculation that defendants' proposed
claim constructions constitute the basis for the assertion of a non-infringement

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argument, 5 the court is satisfied with defendants' representations that they do not in fact
intend to assert such a defense. (D. I. 218 at 9) I will certainly hold defendants to their
representations.
e. Finally, because I have not found good cause to allow Walker Digital to
amend, whether or not there is prejudice to defendants in this regard will not
addressed.
2. Motion to stay. Defendant Google, Inc.'s motion to stay pending
reexamination (D. I. 175) is denied, for the reasons that follow:
a. Standard. In determining whether to grant a stay pending
reexamination, three factors are considered:
(1) whether granting the stay will simplify the issues for trial; (2) whether
discovery is complete and a trial date is set; and (3) whether granting a
stay would cause the non-moving party to suffer undue prejudice from
any delay, or a clear tactical disadvantage.
Cephalon, Inc. v. Sandoz Inc., Civ. No. 10-123, 2011 WL 1750446, at *2 (D. Del. May
5,2011).
b. Background. On February 15, 2013, the United States Patent and
Trademark Office ("PTO") issued an "Action Closing Prosecution" in an inter partes
reexamination initiated by Google, Inc., with the PTO rejecting every claim of the sole
patent-in-suit, the '014 patent. The PTO based its invalidity determinations on "at least

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To wit, that the accused products do not directly infringe because the driving
directions are shown on the screens of third parties. Consistent with their
representations directed at Akamai, defendants contend that their accused products do
not infringe because not all of the steps of method claim 4 of United States Patent No.
6,199,014 ("the '014 patent") are performed at all, not that third parties practice any of
the steps. (D.I. 218 at 9-1 0)

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six independent grounds." (D. I. 282) The parties are engaged in summary judgment
briefing, with trial scheduled to commence in the fall of this year. 6
c. Analysis. With respect to the first two factors, there is no dispute that
a final resolution of the administrative process would simplify the judicial process, and
that the judicial process is scheduled to conclude by the end of the year. There is also
no dispute that the administrative process is less expensive than the judicial process.
The heart of the dispute between the parties revolves around the issue of prejudice.
d. In this regard, Google7 contends that the "Action Closing Prosecution"
is a significant milestone in the administrative process, especially in light of the multiple
grounds for rejection of the '014 patent. Because Google contends that the '014 patent
is invalid, it is understandable that it does not want to spend any more resources than it
has to defending against it. In contrast, because Walker Digital is a non-practicing
entity, any prejudice that may result from a stay can be remedied by monetary
damages.
e. Walker Digital responds that, while it may not manufacture products, it
is a research-oriented business that will be prejudiced if its rights under the '014 patent
are not adjudicated timely. Walker Digital also argues that this case is in its final
stages, while the administrative process has many possible remaining steps with no
reliable time table to conclusion.
f. Although it is tempting to hand-off the responsibility for resolving this

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1 acknowledge the case had not progressed past fact discovery when the motion
to stay was filed.
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Joined by its co-defendants.

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dispute to the PTO, I am mindful that it was the PTO that issued the '014 patent in the
first instance, and that the '014 patent is still presumed to be valid. In balancing the
equities of the parties' respective circumstances, I find that the judicial process has
proceeded far enough (and the administrative process has not) that a stay would unduly
prejudice Walker Digital. In this regard, however, if the '014 patent is found to be
invalid, 8 Google may apply for its fees and costs pursuant to 35 U.S.C. § 285; i.e., any
prejudice stemming from the motion for stay being denied may be at least partially
remedied by the award of attorney fees.

United State

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1stnct Judge

Particularly if invalidity is apparent at the summary judgment stage.

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