Alacritech Inc. v. CenturyLink, Inc.

Filing 327

MEMORANDUM AND ORDER re 184 SEALED MOTION for Leave to Serve Amended Infringement Contentions and File Amended Complaint Against Defendants Wistron Corporation and Wiwynn Corporation filed by Alacritech Inc... Signed by Magistrate Judge Roy S. Payne on 8/20/2017. (nkl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
ALACRITECH INC.,
Plaintiff,
v.
CENTURYLINK, INC., et al.,
Defendants.

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No. 2:16-CV-00693-RWS-RSP
(lead case)

MEMORANDUM AND ORDER
In this patent case, the Court now considers Alacritech’s Motion for Leave to Serve
Amended Infringement Contentions Against Defendants Wistron and Wiwynn and Assert
Infringement of U.S. Patent No. 7,945,699 [Dkt. # 184]. After considering the parties’
briefing and arguments of counsel, the Court will GRANT the motion as to amendment of
Alacritech’s infringement contentions (with some caveats), but DENY Alacritech leave to
assert the ’699 Patent against Wistron and Wiwynn.
I.

BACKGROUND
A.

The Technology

The technology at issue concerns transferring and storing data within a network.
Compl. [Dkt. # 1] ¶ 16. According to Alacritech, traditional methodologies wasted too
much processing power performing brute-force data transfer and storage. Id. ¶ 18. To address that waste, Alacritech developed the use of dedicated network interface controllers

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(NICs) to more efficiently handle the processing. Id. Offloading processing tasks to a dedicated NIC implementing the methodologies taught by the asserted patents accelerates data
transfer between devices and allows the host CPUs to keep processing power for more
substantive tasks. Id.
Very generally, the asserted patents can be thought of as being directed to devices
and methods enabling four “functionalities”:
(1)

Large Segment Offload (LSO);

(2)

Receive Side Coalescing (RSC);

(3)

TCP Offload Engine (TOE); and

(4)

Remote Direct Memory Access (RDMA), such as the InfiniBand protocol,
the RDMA over Converged Ethernet (RoCE) protocol, the Internet Wide
Area RDMA Protocol (iWARP), the Internet Small Computer System Interface (iSCSI) Extensions for RDMA (iSER) protocol, and the Server Message
Block (SMB).

Alacritech ties these functionalities to the various asserted patents as follows:
U.S. Patent

Functionalities

Citation

7,124,205

RSC, Inifiband, RoCE

First Am. Compl. [Dkt. # 29]
¶ 39.

7,237,036

RSC

Id. ¶ 52.

7,337,241

RSC, LSO, Inifiband, RoCE

Id. ¶ 64.

7,673,072

LSO

Id. ¶ 77.

7,945,699

InfiniBand, RoCE

Id. ¶ 90.

8,131,880

RSC

Id. ¶ 103.

8,805,948

RSC

Id. ¶ 116.

9,055,104

LSO

Id. ¶ 129.

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B.

Alacritech’s Lawsuit Against Wistron and Wiwynn.

In June 2016, Alacritech sued Wistron and Wiwynn in Case No. 2:16-CV-00692,
which the Court later consolidated with this action. Alacritech asserted infringement of
each of the above-referenced patents except the ’699 Patent, which is the only asserted
patent not directed to RSC or LSO in some capacity.
In September 2016, Alacritech served its infringement contentions on Wistron and
Wiwynn, asserting 117 claims across the seven asserted patents. The contentions named 36
Wiwynn products capable of RSC and LSO functionality as allegedly infringing devices.
Later, in response to Alacritech’s discovery requests, Wistron and Wiwynn identified over 400 additional products. See [Dkt. # 184-7], [Dkt. # 184-8], [Dkt. # 184-9], [Dkt.
# 184-10].The identification of each product included its associated functionalities (e.g.,
RSC, LSO, Ifiniband, etc.). Wistron and Wiwynn disclosed these additional products by
January 30, 2017.
Two months later, Alacritech informed Wistron and Wiwynn of its intent to add the
products to its infringement contentions. See Letter From Joseph Paunovich to Harold Davis (Mar. 31, 2017) [Dkt. # 184-14]. At the same time, Alacritech first informed Wistron
and Wiwynn of its intent to assert the ’699 Patent. Id. Wistron and Wiwynn suggested they
might be amenable to aspects of Alacritech’s proposed amendment, but rejected (1) any
amendments that would add a publicly known NIC to Alacritech’s contentions, and (2) the
addition of the ’699 Patent to the lawsuit. See Letter From Harold Davis to Joe Paunovich
(Apr. 3, 2017) [Dkt. # 184-15]. The parties could not reach an agreement, and Alacritech

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filed this motion shortly thereafter.
II.

APPLICABLE LAW
The same legal standard applies to both aspects of Alacritech’s motion. When a

party seeks to amend its contentions, leave to amend is generally required and may only be
granted upon a showing of good cause. P.R. 3-6(b). Similarly, leave to amend a complaint
after the scheduling order’s deadline for doing so also requires good cause. Fed. R. Civ. P.
16. In determining good cause, courts consider (1) the reason for the delay and whether the
party has been diligent; (2) the importance of what the court is excluding and the availability of lesser sanctions; (3) potential prejudice in allowing the amendment; and (4) the availability of a continuance to cure such prejudice. S&W Enters., LLC v. SouthTrust Bank of
Alabama, NA, 315 F.3d 533, 536 (5th Cir. 2003); see also Motion Games, LLC v. Nintendo
Co., No. 6:12-CV-00878, 2015 WL 1774448, at *2 (E.D. Tex. Apr. 16, 2015).
III.

DISCUSSION
A.

Amendments to Alacritech’s Contentions

In both its pleadings and its contentions, Alacritech broadly frames its infringement
allegations by “accused functionality.” See, e.g., First Am. Compl. [Dkt. # 29] ¶¶ 39, 52,
64, 77, 90, 103, 116, 129; Alacritech’s Infringement Chart for ’036 Patent Claim 1 [Dkt.
# 184-3] at 1 (accusing “any version of its server or computer products capable of providing
infringing RSC functionality”). Given that, all Alacritech needed to know for contention
purposes is what Wistron and Wiwynn products are capable of what functionalities. Wis-

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tron and Wiwynn provided that information at least as early as January 30, 2017, yet Alacritech waited two months before seeking leave to amend. In light of that two-month delay,
the Court agrees Alacritech was not diligent in seeking leave.
The Court, however, finds it would serve no purpose to deny the amendment as to
some of the Wistron and Wiwynn products. For one, the Court does not expect the addition
of these additional instrumentalities to impact the schedule in this case. Moreover, because
Alacritech chose to identify accused instrumentalities by functionality, Wistron and
Wiwynn should not be surprised by the addition of these products and will suffer little, if
any, prejudice by way of the amendment. And for efficiency, the Court prefers to resolve
the infringement issue concerning as many of these additional instrumentalities as possible
in one case rather than have Alacritech initiate a separate action.
The Court will therefore grant Alacritech’s motion for leave, but with some limits.
First, the Court’s leave will not extend to the ’699 Patent. Second, Alacritech may not assert
any new infringement theories or claims as to the already asserted patents.
B.

Assertion of the ’699 Patent

By January 30, Wistron and Wiwynn had already identified their products that practice or support Infiniband, RoCE, or RoCEv2 functionalities, which are the functionalities
associated with the ’699 Patent. See, e.g., Wiwynn’s First Supp. Resps. [Dkt. 184-8 at 43]
(identifying 11 Wiwynn models with RoCE functionality); Wistron’s Second Supp. Resps.
[Dkt. # 184-9] at 49–64 (identifying 20 Wistron products with RoCE or Infiniband functionality); Wiwynn’s Second Supp. Resps. [Dkt. # 184-10] at 44–46. The deadline to amend

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pleadings without leave was February 28.
Alacritech argues it did not have enough information to assert the ’699 Patent until
March 14, when Wistron and Wiwynn served supplemental interrogatory responses. Alacritech’s Motion [Dkt. # 184] at 12. Prior to that, says Alacritech, Wistron’s and Wiwynn’s
responses only identified the infringing products by their internal, non-public model names.
Id.
That argument is not convincing for two reasons. First, because the purpose of infringement contentions is to put the defendant on notice of what products are alleged to
infringe, it matters not whether Alacritech’s identification of products used the internal
names or publicly available names; Wistron and Wiwynn would have been on notice either
way. Second, Alacritech’s argument is belied by use in its proposed contentions of the already discussed and very broad catch-all language directed to “capabilities.” As an example, Alacritech’s proposed contentions for claim 1 of the ’699 Patent accuse
any version of its server or computer products capable of providing InfiniBand, RDMA over Converged Internet (RoCE), or IP Routable RoCE
(RoCEv2) compliant connectivity functionality (e.g., [list of products]); and
(ii) any of its other activities, products and/or services that use server or computer products to practice and/or support Infiniband and/or RoCE/RoCEv2
compliant connectivity functionality.
Alacritech’s Proposed ’699 Contentions [Dkt. # 699] at 1–4. As discussed with reference
to amendment of Alacritech’s current infringement contentions, that broad language only
requires Alacritech to know the functionalities associated with each product, which Wistron
and Wiwynn provided a month before the deadline to amend.

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But despite Alacritech’s delay, the biggest hurdle for finding “good cause” is that
Wistron and Wiwynn have not participated in claim construction concerning the ’699 Patent. Alacritech argues all claim construction disclosures and briefing have been conducted
jointly by all defendants, and therefore Wistron and Wywinn had a meaningful opportunity
to participate. Alacritech’s Motion [Dkt. # 184] at 15. The Court, however, will not presume
Wistron’s and Wiwynn’s attorneys spent their time participating in claim construction proceedings regarding a patent that was not asserted against their clients. So, given the importance of claim construction and the potential prejudice to these two defendants, the
Court must side with Wistron and Wiwynn and deny Alacritech’s motion as it pertains to
the ’699 Patent. Accordingly, the Court will deny Alacritech’s motion for leave on that
point.
IV.
.

CONCLUSION AND ORDER
Having considered the parties’ briefing and arguments of counsel, the Court

GRANTS Alacritech’s Motion for Leave to Serve Amended Infringement Contentions
Against Defendants Wistron and Wiwynn and Assert Infringement of U.S. Patent No.
7,945,699 [Dkt. # 184] IN PART. Specifically, the Court GRANTS the motion as to
amendment of Alacritech’s infringement contentions as necessary, but Alacritech may not
assert any new infringement theories or claims. The Court DENIES leave to assert the
’699 Patent against Wistron and Wiwynn.

SIGNED this 3rd day of January, 2012.

SIGNED this 20th day of August, 2017.

____________________________________
ROY S. PAYNE
UNITED STATES MAGISTRATE JUDGE
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