ABT Systems, LLC et al v. Emerson Climate Technologies, Inc. et al

Filing 332

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Plaintiffs motion for leave to amend their final infringement contentions is DENIED. (Doc. No. 325). Signed by District Judge Audrey G. Fleissig on 12/26/12. (JWJ)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

ABT SYSTEMS, LLC, et al.,

)
)
Plaintiffs / Counterclaim Defendants, )
)
vs.
)
)
EMERSON ELECTRIC CO.,
)
)
Defendant / Counterclaim Plaintiff. )

Case No. 4:11CV00374 AGF

MEMORANDUM AND ORDER
This patent infringement case is before the Court on the motion (Doc. No. 325) of
Plaintiffs/Counterclaim Defendants ABT Systems, LLC, and The University of Central
Florida Board of Trustees for leave to amend their final infringement contentions. For the
reasons set forth below, this motion shall be denied.
BACKGROUND
Plaintiffs claims in this action that thermostats manufactured and/or sold by
Defendant infringe two patents held by Plaintiffs, U.S. Patent No. 5,547,017 (the ’017
patent”) and U.S. Patent No. 6,431,268 (“the ’268 patent”). Plaintiffs seek damages
under 35 U.S.C. § 284 of a reasonable royalty, treble damages if the alleged infringement
is found to be wilful, an injunction prohibiting further infringement, and attorney’s fees.
Defendant filed a counterclaim for declaratory judgment of noninfringement, invalidity,
and unenforceability, due in part to Plaintiffs’ alleged misrepresentations to the United
States Patent and Trademark Office regarding the scope of prior art.

Plaintiffs initiated this lawsuit on November 5, 2009. Plaintiffs’ Final Infringement
Contentions were served on November 1, 2010, alleging infringement of Claims 1-6 of the
’017 patent and Claims 1-2, 4-7, and 9 of the ’268 patent. On March 3, 2012, the Court
issued its Markman Order. On March 12, 2012, the trial date was moved from August 13,
2012, to January 28, 2013.
On April 23, 2012, Plaintiffs served the expert report of Armin Rudd, who was also
the inventor of the patents. The report advanced for the first time, infringement
allegations based on Claims 3 and 8 of the ’268 patent, which relate to thermostats that
work with window and wall air conditioner units. The report notes in a footnote that these
“dependent claims” were not in Plaintiff’s Final Infringement Contentions, but that “new
evidence” showed that certain accused thermostats were specified to work with such units.
(Doc. No. 326-1.) In his deposition of July 9, 2012, Mr. Rudd was asked about these two
claims, and counsel for Plaintiffs stipulated that Claims 3 and 8 of the ’268 patent were not
part of their final infringement contentions. (Doc. No. 328-1 at 3.)
As of October 23, 2012, the parties’ cross motions for summary judgment were
fully briefed. The present motion for leave to amend their final infringement contentions
by adding Claims 3 and 8 of the ’268 patent was filed by Plaintiffs on November 29, 2012.
Plaintiffs acknowledge that under Local Patent Rule 3-8, an amendment of contentions is
permitted only “by order of the Court, upon a showing of good cause,” and that to show
good cause, a movant must show that it acted with diligence in promptly moving to amend
when new evidence was revealed in discovery. Plaintiff’s recognize that in addition, the

-2-

Court must consider whether permitting an amendment would prejudice the non-moving
party. Plaintiffs assert that they acted with diligence upon learning that accused
thermostats also infringed on Claims 3 and 8 of the ‘268 patent.
Plaintiffs also assert that Defendant will not be prejudiced by the amendment
because it has known of these new claims since April 23, 2012, and had the opportunity to
rebut them in its expert reports and to depose Mr. Rudd about the additional claims. In
addition, according to Plaintiffs, “these newly asserted dependent claims . . . will not
significantly affect [Defendant’s] non-infringement position since they merely add another
type of air conditioning system that the accused products can be used with, rather than
creating some new infringement theory.” (Doc. 326 at 3.)
Defendant responds that Plaintiffs did not demonstrate diligence in pursuing Claims
3 and 8 of the ‘268 patent, and that Defendant would be prejudiced if the Court were to
grant Plaintiffs leave to amend. Defendant asserts that in light of the above-noted
stipulation at Mr. Rudd’s deposition, Defendant had no reason to depose Mr. Rudd about
Claims 3 and 8, and that granting Plaintiffs’ motion would require resetting the trial date to
give Defendant the opportunity to prepare and serve substantive non-infringement
contentions, supplemental expert reports regarding Claims 3 and 8, and additional
summary judgment briefing to address the invalidity of the new claims.
DISCUSSION
Both sides recognize that a plaintiff’s diligence in amending its infringement
contentions is central to a finding of good cause. See O2 Micro Int’l, Ltd. v. Monolithic

-3-

Power Sys., 467 F.3d 1355, 1367 (Fed. Cir. 2006). Here, Plaintiffs knew of the “new
evidence” supporting their proposed new contentions by April 2012, yet did not move for
leave to amend until the end of November 2012, two months before the trial date. The
Court concludes that, especially in light of the fact that the trial date was quickly
approaching, this does not show diligence, but the opposite.
As Defendants state, fact and expert discovery had closed, the Court had issued its
Markman decision, and the parties had already fully briefed their respective motions for
summary judgment. Under these circumstances, the Court finds both the lack of diligence
on Plaintiffs’ part, and the existence of prejudice to Defendants if the amendment were to
be permitted. See, e.g., Thermapure, Inc. v. Giertsen Co. of Ill., No. 10 C 4724 , 2012 WL
6196912, at *4 (N.D. Ill. Dec. 11, 2012); Network Appliance Inc. v. Sun Microsystems
Inc., No. C-07-06053 EDL, 2009 WL 2761924, at *6 (N.D. Cal. Aug. 31, 2009) (denying
amendments to infringement contentions as prejudicial where case was at an advanced
stage, with fact discovery closed, and expert reports exchanged).
CONCLUSION
Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ motion for leave to amend their final
infringement contentions is DENIED. (Doc. No. 325).

AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 26th day of December, 2012.
-4-