Powertech Technology Inc v. Tessera, Inc.
Filing
124
ORDER by Judge Claudia Wilken GRANTING IN PART, AND DENYING IN PART, TESSERAS 107 MOTION TO DISMISS AND STRIKE AND GRANTING 111 MOTION AND 112 STIPULATION TO FILE UNDER SEAL. (ndr, COURT STAFF) (Filed on 8/10/2012)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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POWERTECH TECHNOLOGY, INC., a
Taiwanese corporation,
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v.
TESSERA, INC., a Delaware
corporation,
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United States District Court
For the Northern District of California
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ORDER GRANTING IN
PART, AND DENYING
IN PART, TESSERA’S
MOTION TO DISMISS
AND STRIKE (Docket
No. 107) AND
GRANTING MOTION
AND STIPULATION TO
FILE UNDER SEAL
(Docket Nos. 111
and 112)
Plaintiff,
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7
No. C 11-6121 CW
Defendant.
________________________________/
Defendant Tessera, Inc. moves to dismiss the fifth claim for
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patent misuse asserted against it by Powertech Technology, Inc.
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(PTI) and to strike portions of PTI’s fourth claim for fraud.
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Tessera asks that PTI not be allowed to amend the complaint to
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remedy the problems it raises.
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part and asserts that it can file amended claims as a matter of
17
right.
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claims.
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amended complaint (2AC).
20
submission on the papers.
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the parties, the Court GRANTS Tessera’s motion in part and DENIES
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it in part.
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file under seal.
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PTI opposes Tessera’s motion in
Alternatively, PTI seeks leave of the Court to amend the
The parties also seek to seal PTI’s proposed second
The Court took Tessera’s motion under
Having considered the papers filed by
The Court also GRANTS the motion and stipulation to
BACKGROUND
On October 20, 2003, PTI and Tessera entered into a contract
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called Tessera Compliant Chip License Agreement (TCC License).
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Compl., Appendix A (TCC License).
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use Tessera’s patents to make integrated circuit packages and to
The TCC License allows PTI to
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use or sell these products world-wide.
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¶ II.A.
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payments to Tessera.
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Compl. ¶ 1; TCC License
In return, PTI is obliged to make certain royalty
See TCC License § III.
In December 2007, Tessera initiated ITC Investigation No.
5
337-TA-630 (the 630 Investigation), accusing certain companies of
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infringing certain Tessera patents, including its 5,663,106 patent
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(’106 patent), through the importation and sale of particular wBGA
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and uBGA products.
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a civil action in the Eastern District of Texas, in which it
Compl. ¶ 5.
Tessera also simultaneously filed
United States District Court
For the Northern District of California
10
asserted the same patents against the same defendants for the same
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products as in the ITC action.
12
Tech. Co., No. 07–534 (E.D. Tex. Dec. 7, 2007), Docket No. 1.1
Complaint, Tessera, Inc. v. A–DATA
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PTI was not named as a respondent in the ITC action or as a
14
defendant in the Texas action, but Powerchip Semiconductor Corp.
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(PSC), ProMos Technologies Corp., and Elpida Memory Inc. were.
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related litigation, PTI has since asserted that these companies
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were among PTI’s customers for the accused products.
18
Mot. to Dismiss, Powertech Technology, Inc. v. Tessera, Inc. (PTI
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945 case), Case No. 10-945 (N.D. Cal.), Docket No. 33; Powertech
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Technology, Inc. v. Tessera, Inc., 660 F.3d 1301, 1304 (Fed. Cir.
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2011).
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In
See Opp. to
In August 2009, the Administrative Law Judge (ALJ) in the 630
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Investigation issued an initial determination, finding, among
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other things, that for uBGA products, “Tessera’s patent rights are
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1
The Texas action was subsequently stayed pending the final
resolution of the 630 Investigation. Order, Tessera, Inc. v. A–
DATA Tech. Co., No. 07–534 (E.D. Tex. Feb. 28, 2008), Docket No.
48.
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exhausted as to those accused products purchased from Tessera’s
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licensees,” precluding any liability based on these products.
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Tessera v. ITC, 646 F.3d 1357, 1363 (Fed. Cir. 2011) (summarizing
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the ALJ’s conclusions).
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final determination in the 630 Investigation, affirming the ALJ’s
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finding of patent exhaustion.
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holding).
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On January 4, 2010, the ITC issued its
Id.
(summarizing the ITC’s
On March 5, 2010, several months after the ITC issued its
final determination in the 630 Investigation, PTI filed an action
United States District Court
For the Northern District of California
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for declaratory relief in this Court.
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Docket No. 1.
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non-infringement and invalidity of the ’106 patent and maintained
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that it faced an imminent threat of injury because Tessera had
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accused PTI’s customers of infringement based on PTI-packaged
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products.
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lack of subject matter jurisdiction, stating that, to its
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knowledge, “PTI is a licensee in good standing and it and its
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customers therefore enjoy protection against any suit accusing its
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licensed products of infringement of the ’106 patent or any other
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licensed patent.”
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6.
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and its customers.”
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the action for lack of subject matter jurisdiction, finding that
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there was no Article III case or controversy between the parties,
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because Tessera had explicitly excluded licensed products from its
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enforcement actions.
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2010 U.S. Dist. Lexis 53621, at *7-8 (N.D. Cal.).
See Compl., PTI 945 case,
In that case, PTI sought declarations of
On April 1, 2010, Tessera moved to dismiss the case for
Mot. to Dismiss, PTI 945 case, Docket No. 14,
Tessera also asserted that its license with PTI “protects PTI
Id. at 3.
In June 2010, this Court dismissed
Powertech Technology, Inc. v. Tessera, Inc.,
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On May 23, 2011, the Federal Circuit affirmed in part the
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ITC’s final determination in the 630 Investigation and reversed it
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in part.2
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of patent exhaustion with respect to the infringement accusations
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against the uBGA products, and stated that because “Tessera’s
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licensees were authorized to sell the accused products” at the
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time of sale without reservation, Tessera could not subsequently
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assert its patent rights against the licensees’ customers.
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Tessera v. ITC, 646 F.3d at 1369-71.
In particular, the Federal Circuit upheld the finding
In so holding, the court
United States District Court
For the Northern District of California
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rejected Tessera’s argument that its licensees’ sales to their
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customers were initially unauthorized until the time that the
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licensee remitted the related royalty payment to Tessera which,
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under its licensing agreements, may not have happened for months
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after the products were sold.
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Id. at 1370.
Several months later, on September 30, 2011, the Federal
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Circuit reversed this Court’s dismissal in the PTI 945 case,
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finding that a controversy did exist between the parties.
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Powertech Technology, Inc. v. Tessera, Inc., 660 F.3d 1301, 1307-
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10 (Fed. Cir. 2011).
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had not accused PTI’s products, and that “PTI has paid all the
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royalties due. . . . PTI and its customers therefore enjoy
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protection against suit on PTI’s licensed products on any of the
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hundreds of licensed patents, of which the ’106 patent is but
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one.”
25
Tessera, Inc. 4, Powertech, Case No. 10-1489 (Fed. Cir. Jan. 18,
On appeal, Tessera had again argued that it
Corrected Non-Confidential Brief of Defendant-Appellee
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2
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The Federal Circuit also affirmed the ITC’s determination
that the wBGA products did not infringe the ’106 patent. Tessera
v. ITC, 646 F.3d at 1366-67.
4
1
2011).
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position that it had not accused PTI’s products as inconsistent
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with the position that Tessera had argued before it in the ITC
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action, that the products were initially unauthorized until the
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royalty payments were subsequently made and that some licensees,
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including PTI, had underpaid their royalties or paid them late, so
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exhaustion was not triggered.
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United States District Court
For the Northern District of California
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In its decision, the Federal Circuit rejected Tessera’s
The court specifically noted that
we have no doubt that PTI’s customers and products were
specifically targeted in [the ITC and Texas actions].
For example, witnesses for Elpida testified that the
accused products in the ITC and Texas actions were
licensed from several licensees, including PTI. Indeed,
Tessera’s infringement expert in the ITC action focused
part of his analysis on an Elpida wBGA chip that was
clearly packaged by PTI and identified with a PTI model
number.
Powertech, 660 F.3d at 1308 n.4.
A week later, on October 6, 2011, PTI notified Tessera by
15
letter that PTI believed that Tessera was in breach under the TCC
16
License.
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Compl. ¶ 20.
PTI initiated the current case on December 6, 2011.
Docket
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No. 1.
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(1) declaratory judgment that PTI may terminate the TCC License;
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(2) breach of contract; and (3) breach of the implied covenant of
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good faith and fair dealing.
In the original complaint, PTI asserted claims for:
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On May 21, 2012, the Court denied Tessera’s motion to dismiss
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PTI’s complaint and to strike it under California’s anti-Strategic
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Lawsuit Against Public Participation (anti-SLAPP) statute, Cal.
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Code Civ. Proc. § 425.16(b).
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Docket No. 93.
On June 1, 2012, the parties stipulated to allow PTI to file
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a first amended complaint (1AC), adding claims for fraud, patent
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misuse and declaratory judgment interpreting the TCC License.
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1
Docket No. 99.
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102.
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Docket No. 103.
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PTI filed the 1AC on June 3, 2012.
Docket No.
The Court granted the parties’ stipulation on June 4, 2012.
On June 19, 2012, Tessera filed the instant motion.
Docket
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No. 107.
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patent misuse and to strike portions of its claim for fraud.
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In the motion, Tessera seeks to dismiss PTI’s claim for
On July 3, 2012, PTI filed its opposition to Tessera’s
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motion.
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parties stipulated, to file under seal an unredacted version of
Docket No. 109.
At the same time, PTI moved, and the
United States District Court
For the Northern District of California
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PTI’s proposed 2AC.
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of the 2AC with the Court.
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that PTI can file the unredacted 2AC under seal as an exhibit to
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PTI’s opposition to the instant motion.
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its reply in support of the current motion, Tessera states that
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PTI’s motion to file under seal should be denied, because leave to
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file the 2AC at all should not be granted, but averred that, if
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leave to file the 2AC is granted, then certain portions should be
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filed under seal.
Docket Nos. 111, 112.
In the stipulation, the parties agree
Docket No. 112, 1.
In
Reply at 8 n.6.
19
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PTI also lodged a copy
DISCUSSION
Tessera moves to dismiss PTI’s claim for patent misuse for
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failure to state a claim.
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of PTI’s claim for fraud on the basis that it accuses Tessera of
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conduct that is protected by California’s litigation privilege.
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Finally, Tessera seeks to strike the phrase “including but not
25
limited to” from the fraud claim on the basis that this phrase
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violates the particularity requirement of Rule 9(b).
Tessera also seeks to strike portions
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PTI responds that the phrase “including but not limited to”
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does not diminish its specific allegations that meet Rule 9(b)’s
6
1
particularity requirement.
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2AC as a matter of right and thereby cure the possible defects in
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the 1AC or, alternatively, that the Court should grant it leave to
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amend.
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I.
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PTI also contends that it can file the
Amendment as a Matter of Right
PTI asserts that it does not need leave of the Court to amend
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its claims and that it may do so as a matter of right.
8
15(a)(1) provides,
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United States District Court
For the Northern District of California
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Rule
A party may amend its pleading once as a matter of
course within: . . . if the pleading is one to which a
responsive pleading is required, 21 days after service
of a responsive pleading or 21 days after service of a
motion under Rule 12(b), (e), or (f), whichever is
earlier.
Federal Rule of Civil Procedure 15(a)(1)(B).
Tessera replies that the 2AC is not an amended pleading,
regardless of how PTI labeled it, and is instead a supplemental
pleading, because it “included allegations regarding events that
happened after” the 1AC was filed.
See Prasco, LLC v. Medicis
Pharm. Corp., 537 F.3d 1329, 1337 (Fed. Cir. 2008) (citing Federal
Rule of Civil Procedure 15(d)).
Tessera is correct that, in
addition to changing other allegations related to conduct prior to
the date on which the 1AC was filed, the proposed 2AC also
contains five paragraphs with new allegations related to PTI’s
termination of the TCC License on June 30, 2012 and Tessera’s
reactions thereto.
See 2AC ¶¶ 74-77, 110.
In its opposition to
the instant motion, PTI relies in part on these new paragraphs to
argue that it has “pled facts that establish a substantial
controversy between the Parties,” because Tessera “has stated
publicly that it will defend the license in court” and so PTI “has
7
1
a reasonable apprehension that Tessera will attempt to enforce a
2
purported requirement that PTI continue to pay royalties on wBGA
3
products.”
4
Opp. at 8.
Because the proposed 2AC is a supplemental pleading as well
5
as an amended pleading, it is governed by Rule 15(d) and not Rule
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15(a).
7
court may permit a party to serve a supplemental pleading “[o]n
8
motion and reasonable notice” and “on just terms.”
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provision for supplementation as a matter of right.
See Prasco, 537 F.3d at 1337 n.5.
Under Rule 15(d), a
There is no
Accordingly,
United States District Court
For the Northern District of California
10
the Court rejects PTI’s argument that it is allowed to file the
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2AC as a matter of right.
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The Court nonetheless has discretion to allow the
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supplemental pleading “upon reasonable notice and upon such terms
14
as are just.”
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response as a motion to supplement its pleadings to include the
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allegations related to its termination of the TCC License on June
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30, 2012 and Tessera’s reactions thereto.
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opportunity to address these supplemental allegations in its reply
19
and has identified no reason why inclusion of these allegations
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would be unjust.
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to allow PTI to add these supplemental allegations to its
22
pleading.
23
II.
24
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Id. (citing Rule 15(d)).
The Court construes PTI’s
Tessera has had an
Accordingly, the Court exercises its discretion
Motion to Dismiss
A. Legal Standard
A complaint must contain a “short and plain statement of the
26
claim showing that the pleader is entitled to relief.”
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Civ. P. 8(a).
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state a claim, dismissal is appropriate only when the complaint
Fed. R.
On a motion under Rule 12(b)(6) for failure to
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1
does not give the defendant fair notice of a legally cognizable
2
claim and the grounds on which it rests.
3
Twombly, 550 U.S. 544, 555 (2007).
4
complaint is sufficient to state a claim, the court will take all
5
material allegations as true and construe them in the light most
6
favorable to the plaintiff.
7
896, 898 (9th Cir. 1986).
8
to legal conclusions; “threadbare recitals of the elements of a
9
cause of action, supported by mere conclusory statements,” are not
In considering whether the
NL Indus., Inc. v. Kaplan, 792 F.2d
However, this principle is inapplicable
10
United States District Court
For the Northern District of California
Bell Atl. Corp. v.
taken as true.
11
(citing Twombly, 550 U.S. at 555).
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
12
When granting a motion to dismiss, the court is generally
13
required to grant the plaintiff leave to amend, even if no request
14
to amend the pleading was made, unless amendment would be futile.
15
Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911
16
F.2d 242, 246-47 (9th Cir. 1990).
17
amendment would be futile, the court examines whether the
18
complaint could be amended to cure the defect requiring dismissal
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“without contradicting any of the allegations of [the] original
20
complaint.”
21
Cir. 1990).
22
In determining whether
Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th
B. Discussion
23
Tessera seeks to dismiss PTI’s claim for patent misuse,
24
arguing that patent misuse is an affirmative defense and cannot be
25
asserted as an independent actionable tort.
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the patent misuse claim, but instead seeks leave to amend to
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assert a declaratory relief claim for patent misuse.
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replies that the proposed declaratory relief claim as alleged in
9
PTI does not defend
Tessera
1
the proposed 2AC is improperly plead, because it seeks relief that
2
cannot be granted for such a claim and because it does not name
3
particular patents that it believes could be the subject of an
4
enforcement action.
5
first time in the reply, PTI has not had an opportunity to respond
6
to it.
Since the latter argument was raised for the
7
Both parties agree that courts have permitted parties to
8
raise patent misuse through an action for declaratory relief.
9
Mot. at 4; Opp. at 6.
See B. Braun Medical, Inc. v. Abbott
United States District Court
For the Northern District of California
10
Laboratories, 124 F.3d 1419, 1428 (Fed. Cir. 1997) (noting that
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the district court could enter a declaratory judgment that the
12
patent was unenforceable due to misuse); Inamed Corp. v. Kuzmak,
13
275 F. Supp. 2d 1100, 1124 (C.D. Cal. 2002).
14
argues, the relief that may be sought for such a claim is very
15
limited.
16
However, as Tessera
“Patent misuse arose, as an equitable defense available to
17
the accused infringer, from the desire ‘to restrain practices that
18
did not in themselves violate any law, but that drew
19
anticompetitive strength from the patent right, and thus were
20
deemed to be contrary to public policy.’”
21
1427 (quoting Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700,
22
704 (Fed. Cir. 1992)).
23
results in rendering the patent unenforceable until the misuse is
24
purged.”
25
damages to the accused infringer.”
26
patent misuse may not be converted to an affirmative claim for
27
damages simply by restyling it as a declaratory judgment
28
counterclaim.”
Id.
B. Braun, 124 F.3d at
“When used successfully, this defense
“It does not, however, result in an award of
Id. at 1428.
10
Id.
Thus, “the defense of
1
Such a declaratory relief claim may be used “solely to enjoin
2
defendant from asserting a patent infringement claim against
3
plaintiff” but any such injunction “must limit its effect to
4
rendering the patent unenforceable only until the misuse is
5
purged.”
6
2005 U.S. Dist. LEXIS 37504, at *23-24 (N.D. Ill.) (citing B.
7
Braun, 124 F.3d at 1427).
8
awarded ‘under a declaratory judgment counterclaim based on patent
9
misuse,’ because patent misuse simply renders the patent
Rosenthal Collins Group, LLC v. Trading Tech. Int’l,
While “monetary damages may not be
United States District Court
For the Northern District of California
10
unenforceable,” after such a finding, the court may consider
11
whether the plaintiff has stated another “substantive claim upon
12
which it is entitled to recover damages,” such as through an
13
antitrust or breach of contract theory.
14
1428 & n.5.
15
B. Braun, 124 F.3d at
PTI’s original patent claim sought “recovery of all royalties
16
paid on wBGA products since at least September 24, 2010.”
17
¶ 108.
18
patents are unenforceable until Tessera has purged its patent
19
misuse and an injunction preventing Tessera from enforcing them
20
and the TCC License against PTI until such time, PTI also seeks
21
“termination of the TCC License at least as early as September 24,
22
2010” and “restitution of all royalties paid on wBGA products
23
since at least September 24, 2010 or the date when the Court
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determines that the patent misuse began.”
25
PTI also requests an accounting.
26
the PTI is seeking termination of the license, restitution and an
27
injunction against the TCC License rather than certain patents,
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such relief is not available through this claim.
1AC
In the proposed 2AC, in addition to a declaration that the
2AC ¶¶ 115-120 & p.27.
Id. at 27.
11
To the extent that
1
Tessera also contends that the claim is overly broad, because
2
PTI seeks as relief a declaration that all Tessera patents
3
identified in the TCC License are unenforceable, but only
4
identifies purportedly improper actions regarding three particular
5
patents.
6
and prove that defendant impermissibly broadened the ‘physical or
7
temporal scope’ of the patent grant with anticompetitive effect.”
8
Rosenthal Collins Group, 2005 U.S. Dist. LEXIS 37504, at *24.
9
the 2AC, PTI alleges the following in support of this claim:
United States District Court
For the Northern District of California
10
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“In order to show patent misuse, plaintiff must plead
In
111. PTI’s wBGA products were found not to infringe
Tessera’s ’106 patent . . . Tessera’s ‘627 Patent and
‘977 Patent expired September 24, 2010. Tessera has not
asserted that PTI’s wBGA products infringe upon any
valid claim of any unexpired Tessera Patent. . . .
112. Tessera asserts and interprets the TCC License
to require payment of royalties on PTI’s wBGA products
even if PTI’s wBGA products no longer infringe any valid
and unexpired Tessera Patent.
113. Tessera asserts and interprets the TCC License
to require payment of royalties for an indefinite period
of time beyond 2027 through a scheme of adding an “everexpanding” group of patents to the licensed Tessera
Patents and thereby extending the expiration date of the
TCC License unilaterally and possibly indefinitely.
114. [If] Tessera’s assertions and interpretations
are taken as true, then the TCC License represents
misuse of the underlying U.S. patents which were
initially licensed as well as any U.S. patent that
Tessera has added . . .
22
2AC ¶¶ 111-14.
23
misinterpreted the TCC License, not that it has misused all of the
24
underlying patents other than the ’106, ’627 and ’977 patents,
25
even though PTI makes a conclusory statement that
26
misinterpretation of the TCC License constitutes misuse of the
27
underlying patents.
PTI appears to allege that Tessera has
PTI, however, has not had an opportunity to
28
12
1
defend the allegations in the proposed 2AC, and it may be that PTI
2
could make more specific allegations about particular patents.
3
Accordingly, the Court GRANTS Tessera’s motion to dismiss
4
PTI’s claim for patent misuse.
5
assert a declaratory relief claim for patent misuse, provided that
6
it is able to remedy the deficiencies in its proposed 2AC
7
identified above.
8
III. Motion to Strike
9
A. Legal Standard
United States District Court
For the Northern District of California
10
PTI is granted leave to amend to
Pursuant to Federal Rule of Civil Procedure 12(f), the court
11
may strike from a pleading “any redundant, immaterial, impertinent
12
or scandalous matter.”
13
avoid spending time and money litigating spurious issues.
14
Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993),
15
rev’d on other grounds, 510 U.S. 517 (1994).
16
if it has no essential or important relationship to the claim for
17
relief plead.
18
and is not necessary to the issues in question in the case.
19
“Superfluous historical allegations are a proper subject of a
20
motion to strike.”
21
they are often used as delaying tactics and because of the limited
22
importance of pleadings in federal practice.
23
922 F. Supp. 1450, 1478 (C.D. Cal. 1996).
24
granted unless it is clear that the matter to be stricken could
25
have no possible bearing on the subject matter of the litigation.
26
Colaprico v. Sun Microsystems, Inc., 758 F. Supp. 1335, 1339 (N.D.
27
Cal. 1991).
Id.
The purpose of a Rule 12(f) motion is to
Matter is immaterial
Matter is impertinent if it does not pertain
Id.
Id.
Motions to strike are disfavored because
28
13
Bureerong v. Uvawas,
They should not be
1
B. Litigation privilege
2
Tessera contends that PTI’s fraud claim in the 1AC is barred
3
by the state law litigation privilege, because it is based on
4
statements and positions taken during legal proceedings in the
5
ITC, this Court and the Federal Circuit.
6
proposed 2AC, it has cured “any possible defect by clarifying that
7
PTI’s claim for fraud is based on Tessera’s misrepresentation to
8
PTI,” and that the allegations of Tessera’s litigation activity
9
are “evidence that Tessera intended PTI to rely” on the out-of-
PTI states that, in its
United States District Court
For the Northern District of California
10
court misrepresentations and that PTI’s reliance thereon was
11
reasonable.
12
still bases the “fraud claim on Tessera’s statements in legal
13
proceedings.”
14
that the statements that it made to PTI outside of these
15
proceedings are not protected by the privilege.
16
Opp. at 9.
Tessera replies that the proposed 2AC
Reply at 6.
Tessera does not appear to dispute
California Civil Code section 47(b) provides that
17
communications made in or related to judicial proceedings are
18
absolutely immune from tort liability.
19
Court explains that the purpose of the privilege is “to afford
20
litigants . . . the utmost freedom of access to the courts without
21
fear of being harassed subsequently by derivative tort actions.”
22
Silberg v. Anderson, 50 Cal. 3d 205, 213 (1990).
23
privilege applies to any communications (1) made in a judicial
24
proceeding; (2) by litigants or other participants authorized by
25
law; (3) to achieve the objects of the litigation; (4) that have
26
some connection or logical relation to the action.”
27
Corp. v. Target Corp., 425 F. Supp. 2d 1056, 1077 (N.D. Cal. 2006)
28
(citing Silberg, 50 Cal. 3d at 212).
14
The California Supreme
“The litigation
Sharper Image
The privilege also applies
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to “prelitigation communication” that “relates to litigation that
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is contemplated in good faith and under serious consideration.”
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Action Apartment Ass’n Inc. v. City of Santa Monica, 41 Cal. 4th
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1232, 1251 (2007).
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of “conduct prior to the litigation . . . may be privileged if
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reasonably related to the action”).
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met, section 47(b) operates as an absolute privilege.
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Cal. 3d at 216.
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resolved in favor of applying it.”
United States District Court
For the Northern District of California
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See also Kearney, 590 F.3d at 650 (allegations
Once these requirements are
Silberg, 50
“Any doubt about whether the privilege applies is
Kashian v. Harriman, 98 Cal.
App. 4th 892, 913 (2002).
Here, in the proposed 2AC, PTI alleges that Tessera made
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false and misleading out-of-court statements to PTI, including
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that it would not attack licensed PTI-packaged products in the 630
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Investigation.
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fact accuse such products.
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Tessera represented to this Court and to the Federal Circuit that
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it did not accuse these products, which evidences that Tessera
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intended to induce PTI to rely on the out-of-court statements, and
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that PTI’s reliance thereon was reasonable.
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2AC ¶ 103.
PTI also contends that Tessera did in
Id. at ¶ 48.
It further alleges that
Id. at ¶¶ 45-47.
Tessera is correct that PTI may not assert a fraud claim
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based on Tessera’s in-court statements.
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fraud claim on Tessera’s out-of-court statements and use Tessera’s
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in-court statements as evidence to support certain elements
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thereof.
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However, PTI may base a
“The privileges of Civil Code section 47, unlike evidentiary
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privileges which function by the exclusion of evidence, . . .
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operate as limitations upon liability.”
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v. Greenberg, Bernhard, Weiss & Karma, Inc., 42 Cal. 3d 1157, 1168
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Oren Royal Oaks Venture
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(1986).
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clear that section 47(2) has never been thought to bar the
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evidentiary use of every ‘statement or publication’ made in the
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course of a judicial proceeding” and that “while section 47(2)
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bars certain tort causes of action which are predicated on a
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judicial statement or publication itself, the section does not
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create an evidentiary privilege for such statements.”
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as an example, those statements can be used for evidentiary
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purposes to determine a person’s intent.”
The California Supreme Court has stated that it is “quite
Id.
“Thus,
Stacy & Witbeck v. City
United States District Court
For the Northern District of California
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and Cnty. of San Francisco, 36 Cal. App. 4th 1074, 1091 (1995).
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See also Ambat v. City & Cnty. of San Francisco, 693 F. Supp. 2d
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1130, 1145 (N.D. Cal. 2010) (“Section 47 prohibits the use of such
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statements as a basis for civil liability for certain torts,
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including defamation, but does not impose any limitation on
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evidentiary use of such statements, much less prohibit adverse
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employment actions based on such statements.”).
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Thus, the litigation privilege does not prevent PTI from
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using Tessera’s in-court statements, for example, to help
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establish the falsity of Tessera’s out-of-court statements,
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Tessera’s intent to induce reliance on the out-of-court statements
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and the reasonableness of PTI’s reliance thereon, as long as PTI
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does not base its fraud claim on the in-court statements
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themselves.
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Accordingly, the Court GRANTS Tessera’s motion to strike the
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fraud claim as plead in the 1AC, and GRANTS PTI leave to amend its
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fraud claim as proposed in the 2AC.
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C. “including but not limited to”
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In the 1AC and proposed 2AC, PTI states that “Tessera
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knowingly made false and misleading statements to PTI including
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but not limited to:” five specific misrepresentations.
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2AC ¶ 103.
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1AC ¶ 95;
Tessera argues that the phrase “including but not limited to”
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should be stricken.
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phrase violates the specificity requirement of Rule 9(b) and is
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therefore “immaterial.”
United States District Court
For the Northern District of California
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Tessera contends that the inclusion of this
The Court finds Tessera’s argument unpersuasive.
Tessera
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does not dispute that PTI has specifically plead in its fraud
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claim the “who, what, when, where and how” of the purported
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misrepresentations.
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particularity requirement to plead every fact that it may possibly
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discover or use to support its claims.
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PTI is not required to go beyond Rule 9(b)’s
Accordingly, the Court DENIES Tessera’s motion to strike the
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phrase “including but not limited to.”
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IV.
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Motion and stipulation to seal
PTI seeks leave to file under seal its unredacted proposed
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2AC, as well as Appendices A and G through Q.
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These items are attached as Exhibit 1 to the Declaration of Jacob
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M. Heath in support of its opposition to Tessera’s instant motion
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to dismiss and to strike.
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stipulation agreeing that these items should be filed under seal.
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Docket No. 112.
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Docket No. 111.
The parties have also filed a
The parties seek to seal court records that are closely
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related to the merits of its case.
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documents are sealable, the party who has designated them as
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To establish that the
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confidential “must overcome a strong presumption of access by
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showing that ‘compelling reasons supported by specific factual
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findings . . . outweigh the general history of access and the
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public policies favoring disclosure.’”
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Ass’n, 605 F.3d 665, 679 (9th Cir. 2010) (citation omitted).
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id. at 678 (explaining that a less stringent “good cause” standard
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is required to seal discovery documents related to non-dispositive
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motions).
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showing that the document is subject to a protective order or by
Pintos v. Pac. Creditors
Cf.
Compelling reasons cannot be established simply by
United States District Court
For the Northern District of California
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stating in general terms that the material is considered to be
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confidential, but rather must be supported by a sworn declaration
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demonstrating with particularity the need to file each document
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under seal.
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Civil Local Rule 79-5(a).
PTI states that it seeks to file under seal Appendix A to its
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proposed 2AC, which contains the Tessera Compliant Chip License
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Agreement (TCC License), because it contains “proprietary and
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confidential information, including provisions regarding the
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calculation, payment, and amount of royalties PTI pays to Tessera
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on licensed products,” and that its disclosure would harm PTI by
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giving its competitors this proprietary information.
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¶ 16.
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the TCC License under seal.
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also previously granted permission to file under seal Appendices G
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through O, which contain confidential and proprietary information
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regarding the licensing relationship between the parties.
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PTI represents that Appendices P and Q are presentation slides and
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handwritten notes taken during a November 3, 2009 meeting between
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the parties in which they discussed the terms of the TCC License
Heath Decl.
The Court has previously granted the parties leave to file
See Docket Nos. 26, 96.
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The Court
Id.
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and royalty payments.
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documents, the Court concludes that the parties have established
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that Appendices A and G through Q are sealable.
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Heath Decl. ¶¶ 14-16.
Having reviewed the
PTI also seeks to file its proposed 2AC under seal.
PTI
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represents that the proposed 2AC “references and discusses” the
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information contained in Appendices A and G through Q.
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Seal at 3.
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statements from the May 2012 depositions of Brian Marcucci in his
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personal capacity and as the Rule 30(b)(6) designee for Tessera,
Mot. to
PTI also states that the proposed 2AC discusses
United States District Court
For the Northern District of California
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in which he discussed the business and licensing relationship
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between the parties.
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disclosure of this testimony, which contains information similar
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to that in Appendices A and G through Q, could cause harm similar
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to that which would be caused by disclosure of those appendices.
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Id.
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indicated in the copy provided to the Court the portions of the
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proposed 2AC that refer to the confidential material and that it
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seeks to redact in the public version.
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the parties have established compelling reasons to seal the
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unredacted proposed 2AC and to file the redacted version in the
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public record.
Health Decl. ¶ 3.
PTI states that public
See also Hely Decl., Docket No. 98, ¶¶ 2-9.
PTI has
Thus, the Court finds that
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CONCLUSION
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For the reasons set forth above, the Court GRANTS in part
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Tessera’s motion to dismiss and to strike and DENIES it in part
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(Docket No. 107).
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supplemental complaint as allowed above within fourteen days of
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the date of this Order.
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file an unredacted version of its amended and supplemental
PTI is granted leave to file an amended and
If it does so, PTI is granted leave to
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complaint and Appendices A and G through Q under seal, and shall
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file a redacted version in the public record, as set forth above.
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If PTI files an amended and supplemental complaint, Tessera
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shall respond to it within fourteen days after it is filed.
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Tessera moves to dismiss PTI’s amended and supplemental complaint,
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it shall not renew the arguments that the Court rejected herein.
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Any motion to dismiss will be decided on the papers.
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If
PTI’s motion and the parties’ stipulation to file documents
under seal are GRANTED (Docket No. 111 and 112).
Within three
United States District Court
For the Northern District of California
10
days of the date of this Order, PTI shall electronically file
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under seal the redacted version of Exhibit 1 to the Heath
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declaration in support of its opposition and shall file an
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unredacted version in the public docket.
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IT IS SO ORDERED.
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Dated:
8/10/2012
CLAUDIA WILKEN
United States District Judge
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