CG Technology Development, LLC et al v. 888 Holdings PLC

Filing 121

ORDER denying ECF No. 110 Motion to Reconsider. Signed by Judge Robert C. Jones on 11/20/2017. (Copies have been distributed pursuant to the NEF - KR)

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UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA
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CG TECHNOLOGY DEVELOPMENT, LLC )
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et al.,
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Plaintiffs,
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vs.
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888 HOLDINGS PLC,
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Defendant.
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2:16-cv-00856-RCJ-VCF
ORDER

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These three consolidated cases arise out of the alleged infringement of several patents

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relating to online sports gambling. The Court has transferred four other previously consolidated

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cases to various other districts for improper venue under 28 U.S.C. § 1406 and TC Heartland

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LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017).

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Because discovery remains open, Plaintiffs may amend their initial infringement

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contentions without prior leave, but only with good cause. L.R. 16.1-12. Defendants may

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challenge such an amendment via a motion to strike. Bravo Co. USA, Inc. v. Badger Ordnance

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LLC, No. 2:14-cv-387, 2016 WL 6518436, at *2 (D. Nev. Nov. 2, 2016) (Foley, Mag. J.). Non-

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exhaustive examples of good cause supporting amendment of infringement contentions include

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an adverse claim construction or recent discovery of material prior art or nonpublic information

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about the accused product despite earlier diligent searches. L.R. 16.1-12.

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Plaintiffs filed their initial infringement contentions on January 5, 2017. Defendants filed

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their initial non-infringement, invalidity, and unenforceability contentions on March 21 and

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April 4, 2017. Plaintiffs later served Defendants with amended infringement contentions, adding

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claims 26, 30, and 33 of the ‘818 Patent; claims 1, 6, 7, 8, and 9 of the ‘058 Patent; and

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additional theories of infringement. Defendants asked the Magistrate Judge to strike the

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amended infringement contentions because Plaintiffs had not shown good cause. The new

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contentions were based mainly on the same evidence (and completely on evidence previously

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available through normal diligence). Defendants also argued that they would be prejudiced if the

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amendments were permitted to stand, because they had instituted inter-partes review (“IPR”)

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proceedings at the Patent Trial and Appeal Board (“PTAB”) against the claims identified in

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Plaintiffs’ initial infringement contentions, and Plaintiffs’ addition of claims via amendment to

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the infringement contentions after the statutory bar had passed for Defendants to attack the new

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claims via IPR at the PTAB was an improper ambush tactic to avoid the possibility of having to

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defend those claims at the PTAB (which is more defendant-friendly than the district courts

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because the standard used for claim construction at the PTAB is more likely to result in claims

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being struck down as anticipated or obvious). Plaintiffs argued in opposition that they simply

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wanted to correct Defendants’ alleged misapprehension of the meanings of various claim terms.

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The Magistrate Judge struck the amended infringement contentions. Plaintiffs have

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asked the Court to overrule the Magistrate Judge under Rule 72(a). The Court denies the motion.

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The Magistrate Judge made no error of law in ruling that the proper method to resolve

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disagreements in claim interpretation is through Markman proceedings. Moreover, in addition to

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requiring good cause to add infringement contentions without adding patent claims, a party may

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not add new patent claims to a case, i.e., new causes of action for infringement, except via

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amendment. See, e.g., Sage Electrochromics, Inc. v. View, Inc., No. 12-cv-6441, 2014 WL

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1379282, at *2 (N.D. Cal. Apr. 8, 2014) (noting that the only question was whether an

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infringement plaintiff seeking to add new claims of infringement must satisfy only Rule 15 or

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also the local patent rules); see also Straight Path IP Grp. v. Apple Inc., No. C16-3582, 2017

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WL 3967864, at *5 (N.D. Cal. Sept. 9, 2017) (limiting leave to amend infringement contentions

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to the scope of existing claims in the complaint). In other words, when a plaintiff seeks to

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introduce new patent claims into an infringement action, amendment of the relevant pleading

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under the standards of Rule 15 is required, regardless of whether good cause is also required

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under any local patent rules. Plaintiffs here used their as-of-right amendment under Rule 15 long

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before serving the amended infringement contentions, and they did not move to amend the

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Complaint to add the patent claims at issue. For this additional reason, the Magistrate Judge was

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correct to strike the amended infringement contentions.
CONCLUSION

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IT IS HEREBY ORDERED that the Motion to Reconsider (ECF No. 110) is DENIED.

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IT IS SO ORDERED.

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20th day of November, 2017.
Dated this 12th day of October, 2017.

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_____________________________________
ROBERT C. JONES
United States District Judge

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