MLC Intellectual Property, LLC v. Micron Technology, Inc., No. 3:2014cv03657 - Document 61 (N.D. Cal. 2016)

Court Description: ORDER DENYING DEFENDANT'S MOTION FOR LEAVE TO SUPPLEMENT INVALIDITY CONTENTIONS 50 . (Illston, Susan) (Filed on 7/6/2016)
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 MLC INTELLECTUAL PROPERTY, LLC, Plaintiff, 8 v. 9 10 MICRON TECHNOLOGY, INC., Defendant. 11 United States District Court Northern District of California Case No. 14-cv-03657-SI ORDER DENYING DEFENDANT’S MOTION FOR LEAVE TO SUPPLEMENT INVALIDITY CONTENTIONS Re: Dkt. No. 50 12 13 Defendant Micron Technology Inc.’s motion for leave to amend its invalidity contentions 14 is scheduled for a hearing on July 8, 2016. Pursuant to Civil Local Rule 7–1(b), the Court finds 15 the matter appropriate for disposition without oral argument. For the reasons set forth below, the 16 Court DENIES defendant’s motion.1 17 BACKGROUND 18 19 On August 12, 2014, plaintiff MLC brought suit against defendant Micron, alleging 20 infringement of United States Patent No. 5,764,571 (“the ’571 patent” or “the asserted patent”). 21 Dkt. No. 1. On October 15, 2014, Micron answered and asserted several affirmative defenses, 22 including double patenting, as well as a counterclaim for declaratory judgment of non- 23 infringement and invalidity for double-patenting. Dkt. No. 13. On January 20, 2015 Micron 24 served its invalidity contentions. In the invalidity contentions, Micron again alleged that the 25 26 27 28 1 The court has received Micron’s motion for summary judgment of invalidity based on an obviousness-type double patenting theory referencing the patent ’851. The court will address whether Micron has provided adequate notice of this theory (through its answer and counterclaim) when ruling on that motion. 1 claims of the ’571 patent are invalid due to double patenting in view of U.S. Pat. Nos. 5,394,362 2 and/or 5,218,569 and pursuant to the judicially-created doctrine of obviousness-type double 3 patenting. On December 24, 2014, approximately one month before filing its invalidity contentions, 5 Micron filed a petition for inter partes review (“IPR”) at the U.S. Patent and Trademark Office 6 (“PTO”), challenging the patentability of at least each asserted claim. Dkt. No. 31. On February 7 3, 2015, the Court granted Micron’s motion to stay this case pending IPR of the 571 patent. Id. 8 On July 20, 2015 the PTAB denied Micron’s petition to institute the IPR, and on August 19, 2015 9 Micron filed a request for rehearing of that determination. Dkt. No. 48. The stay in this case 10 continued by agreement, until MLC moved to lift the stay on February 24, 2016. Id. On March 11 United States District Court Northern District of California 4 29, 2016, the Court granted MLC’s motion to lift the stay. Dkt. No. 43. On March 31, 2016, the 12 PTO denied Micron's rehearing request. Dkt. No. 48. 13 On May 13, 2016, Micron notified MLC that it intended to supplement its invalidity 14 contentions to include (1) two publications made of record during the IPR proceedings 2 and (2) 15 two MLC patents as references based on double patenting, U.S. Patent No. 7,911,851 (“the ’851 16 patent”) and U.S. Patent No. 8,570,814 (“the ’814 patent”). Micron then filed the instant motion 17 for leave to amend its invalidity contentions. 18 The 571 patent was filed on February 27, 1995, issued on June 9, 1998, and expired on 19 June 9, 2015. Both 851 and 814 patents were filed and issued later than the ‘571 patent, but 20 claimed priority to the 571 patent and contained claims directed to the same alleged invention as 21 the ’571 patent. Because the applications for these patents were filed after June 8, 1995, when 22 changes to U.S. patent law imposed a 20-year patent term measured from the earliest effective 23 filing date, both later-filed patents expired on February 27, 2015, just over three months before the 24 earlier-filed ’571 patent expired. 25 26 27 28 2 The publications are VLSI – Design Techniques for Analog and Digital Circuits, 1990, Geiger, Allen, Strader (McGraw Hill) and Fundamentals of Digital Systems Design, 1973, V. Thomas Rhyne (Prentice Hall, Inc.). 2 LEGAL STANDARD 1 Patent Local Rule 3-6 provides, 2 3 Amendment of the Infringement Contentions or the Invalidity Contentions may be made only by order of the Court upon a timely showing of good cause. Non-exhaustive examples of circumstances that may, absent undue prejudice to the non-moving party, support a finding of good cause include: 4 5 6 (a) A claim construction by the Court different from that proposed by the party seeking amendment; (b) Recent discovery of material, prior art despite earlier diligent search; and (c) Recent discovery of nonpublic information about the Accused Instrumentality which was not discovered, despite diligent efforts, before the service of the Infringement Contentions. 7 8 9 10 N.D. Cal. Patent Local Rule 3-6. United States District Court Northern District of California 11 “The local patent rules in the Northern District of California . . . requir[e] both the plaintiff 12 and the defendant in patent cases to provide early notice of their infringement and invalidity 13 contentions, and to proceed with diligence in amending those contentions when new information 14 comes to light in the course of discovery. The rules thus seek to balance the right to develop new 15 information in discovery with the need for certainty as to the legal theories.” O2 Micro Int’l Ltd. 16 v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1365–66 (Fed. Cir. 2006). In determining whether 17 a motion for leave to amend invalidity contentions should be granted, this Court has examined 18 such factors as the relevance of newly-discovered prior art, whether the request to amend is 19 motivated by gamesmanship, and whether the opposing party will be prejudiced by the 20 amendment. See Yodlee, Inc. v. CashEdge, Inc., 2007 WL 1454259, *2-3 (N.D. Cal. May 17, 21 2007). 22 In contrast to the more liberal policy for amending pleadings, “the philosophy behind 23 amending claim charts is decidedly conservative, and designed to prevent the ‘shifting sands’ 24 approach to claim construction.” LG Elecs. Inc. v. Q–Lity Computer Inc., 211 F.R.D. 360, 367 25 (N.D. Cal. 2002) (citation omitted). The patent local rules were “designed to require parties to 26 crystallize their theories of the case early in the litigation and to adhere to those theories once they 27 have been disclosed.” O2 Micro, 467 F.3d at 1366 n. 12 (quoting Nova Measuring Instruments 28 Ltd. v. Nanometrics, Inc., 417 F.Supp.2d 1121, 1123 (N.D. Cal. 2006)). 3 1 The moving party bears the burden of establishing diligence. O2 Micro, 467 F.3d at 1355. 2 Where the moving party is unable to show diligence, there is “no need to consider the question of 3 prejudice,” although a court in its discretion may elect to do so. See id. at 1368 (affirming the 4 district court’s decision refusing leave to amend upon finding the moving party was not diligent, 5 without considering the question of prejudice to the non-moving party). 6 DISCUSSION 8 Micron seeks leave to amend its invalidity contentions to add two textbooks as prior art 9 and to add patents 851 and 814 under its obviousness-type double patenting theory. A defendant 10 may amend its invalidity contentions “upon a timely showing of good cause.” Pat. L.R. 3-6. 11 United States District Court Northern District of California 7 Good cause requires “a showing that the party seeking leave to amend acted with diligence in 12 promptly moving to amend when new evidence is revealed in discovery.” O2 Micro, 467 F.3d at 13 1363. The diligence required for a showing of good cause has two phases: (1) diligence in 14 discovering the basis for amendment; and (2) diligence in seeking amendment once the basis for 15 amendment has been discovered. See Yodlee, 2007 WL 1454259, at *3. 16 17 I. Publications 18 Micron seeks to supplement its invalidity contentions to add two textbook references as 19 “potential combinatory prior art under 35 U.S.C. § 103 to explicitly form part of the obviousness 20 grounds in this litigation.” Dkt. No. 50 at 7-8. The Court finds that Micron has not demonstrated 21 good cause for the amendment because these references are not “newly discovered.” See Patent 22 Local Rule 3-6; see also O2 Micro Int’l Ltd., 467 F.3d at 1363 (“[T]he good cause requirement in 23 the [Northern District of California] local patent rules . . . require a showing that the party seeking 24 leave to amend acted with diligence in promptly moving to amend when new evidence is revealed 25 in discovery.”). The publications in question are well-known textbooks that were published in 26 1973 and 1990. Micron included the textbooks in its IPR petition, and therefore knew of their 27 existence as early as December 24, 2014. Dkt. No. 53-1. The Court concludes that the fact that 28 Micron knew about the textbook references before filing its invalidity contentions on January 20, 4 1 2015, defeats a showing of good cause. Micron argues that there is good cause to add these references because “PTAB’s 3 interpretation of the ’571 patent and the prior art renders these references highly material to 4 invalidity of the ’571 patent.” Dkt. No. 50 at 8. The Court finds this argument unpersuasive. 5 Under the local rules, Micron was required to include in its invalidity contentions all prior art 6 references of which it was aware and that it believed were relevant, regardless of whether 7 subsequent events rendered those references more significant. See Altera Corp. v. PACT XXP 8 Techs., AG, No. 14-cv-02868 JD, 2015 WL 3832389, at *3 (N.D. Cal. June 19, 2015) (denying 9 motion to add three references to “strengthen” invalidity contentions where proposed new 10 references were not newly discovered, and noting “Altera had nothing to lose by charting the 11 United States District Court Northern District of California 2 references in the first place. Presumably, a party asserting invalidity would want each of their 12 theories to be as strong as possible, even if it thought it had other, more squarely on-point theories 13 that depended on later art.”); Catch a Wave Techs., Inc. v. Sirius XM Radio, Inc., No. C. 12-05791 14 WHA, 2014 WL 186405, at *2 (N.D. Cal. Jan. 16, 2014) (denying the defendant’s motion to 15 amend infringement contentions to add prior art reference previously known to the defendant but 16 “which, according to defendant, only became relevant in light of plaintiff’s claim construction 17 reply brief” because “[t]he rules do not state that defendants can limit themselves to only 18 references they believe are relevant to plaintiff’s read of the patent. Defendant could have (and 19 perhaps should have) charted the reference but defendant did not. Defendant must now live with 20 that choice.”). 21 22 II. Patents ’851 and ’814 23 Micron seeks to add the ’851 and ’814 patents as references to its obviousness-type double 24 patenting defense. “[T]he obviousness-type double patenting doctrine prohibits an inventor from 25 extending his right to exclude through claims in a later-expiring patent that are not patentably 26 distinct from the claims of the inventor’s earlier-expiring patent.” Gilead Sciences, Inc. v. Natco 27 Pharma Ltd., 753 F.3d 1208, 1210 (Fed. Cir. 2014). When faced with a double patenting 28 challenge during litigation, a patentee can assure the validity of the patent as against a defendant’s 5 1 claim of double patenting by filing a terminal disclaimer with the Patent and Trademark Office, 2 which limits the term of a later expiring patent to the term of an earlier expiring patent. See 3 Boehringer Ingelheim Int’l GmbH v. Barr Labs., Inc., 592 F.3d 1340, 1347 (Fed. Cir. 2010). Micron contends that it has good cause for this supplementation because when it filed its 5 original invalidity contentions, the ’851 and ’814 patents “did not present a dispositive invalidity 6 defense,” since they “had not yet expired.” Dkt. No. 50 at 7. Micron asserts that “MLC could 7 have chosen to disclaim the term of the ’571 patent that extended beyond the term of the ’851 and 8 ’814 patents (February 27, 2015 to June 9, 2015) and therefore eliminated those patents as 9 obviousness-type double patenting references.” Dkt. No. 50 at 7. Micron argues that because 10 MLC did not file a terminal disclaimer of the ’571 patent, “the now-expired ’851 and ’814 patents 11 United States District Court Northern District of California 4 invalidate all asserted claims and present a case-dispositive defense.” Id. 12 MLC responds that Micron has not demonstrated good cause for amendment because 13 Micron’s delay in identifying the ’851 and ’814 patents as double patenting references was 14 deliberate and strategic. MLC asserts that Micron does not deny that it knew about the ’851 and 15 ’814 patents, which issued before the case was filed and are in the same family as the asserted 16 ’571 patent, when its served its original invalidity contentions. 17 deliberately elected to conceal its erroneous double patenting theory until the later-filed, but 18 earlier-expiring, patents expired so that MLC, lacking notice that a far-fetched theory would be 19 asserted, would not have the opportunity to hedge against the risk of an expansion of the law by 20 filing a terminal disclaimer that would shorten the term of the ’571 patent by a few months.” Dkt. 21 No. 53 at 5. MLC argues that “Micron 22 The Court concludes that Micron has not demonstrated good cause for the proposed 23 amendment. Micron asserts that “good cause exists for Micron’s proposed amendments because 24 the particular double patenting references expired while this litigation was stayed and MLC chose 25 not to disclaim the portion of the asserted ’571 patent term that extended beyond MLC’s ’851 and 26 ’814 patents.” Dkt. No. 55 at 5. However, Micron does not cite any authority holding that 27 expiration of the patents is a condition precedent to assert an obviousness-type double patenting 28 defense. To the contrary, both this district and the Federal Circuit have reviewed obviousness-type 6 double patenting issues in which the reference patents were unexpired. See Gilead Sciences, Inc. 2 v. Natco Pharma Ltd., 753 F.3d 1208 (Fed. Cir. 2014) (addressing the obviousness-type double 3 patenting defense in 2014 despite expiration of the reference patent in February 2015); see also 4 Apple, Inc. v. Samsung Elecs. Co., 920 F. Supp. 2d 1079, 1095 (N.D. Cal. 2013), aff’d in part, 5 rev’d in part, 786 F.3d 983 (Fed. Circ. 2015) (deciding an obviousness-type double patenting 6 challenge with an unexpired reference patent). Furthermore, the Federal Circuit has explained that 7 “a patentee may [assure the validity of a patent by filing] a disclaimer after issuance of the 8 challenged patent or during litigation, even after a finding that the challenged patent is invalid for 9 obviousness-type double patenting” insofar as the terminal disclaimer was filed before the 10 expiration of the earlier patent. Boehringer Ingelheim Int’l GmbH, 592 F.3d at 1347-48 (holding 11 United States District Court Northern District of California 1 that a terminal disclaimer filed after the expiration of the earlier patent over which claims have 12 been found obvious cannot cure obviousness-type double patenting). Thus, Micron did not need 13 to wait until the ’851 and ’814 patents expired in order to seek amendment, and Micron does not 14 dispute that it knew about these patents when it filed its original invalidity contentions. Therefore, 15 Micron has failed to show diligence, which defeats a showing of a good cause.3 16 Micron argues that because Patent Local Rule 3-3 is silent regarding obviousness-type 17 double patenting, Micron was not required to include this defense in its invalidity contentions. 18 Docket No. 50 at 5. Micron further argues that obviousness-type double patenting references are 19 not prior art and therefore need not be claim charted, because Patent Local Rules 3-3(a)-(c) only 20 require such charts for "prior art." Id. at 5-6. Micron finally adds that because Patent Local Rule 21 3.3(d) explicitly addresses statutory defenses, disclosure requirements under this rule cannot apply to 22 non-statutory defenses such as obviousness-type double patenting. Id. at 6. Micron’s narrow reading 23 of Patent Local Rules 3-3 is not supported by any decisions of this District and is, in any event, 24 irrelevant to the motion at hand. Patent Local Rule 3–6, which governs the amendment of invalidity 25 26 27 28 3 To the extent Micron suggests it need not have good cause to amend its invalidity contentions because Patent Local Rule 3-3 does not expressly reference nonstatutory double patenting, the Court disagrees. This argument has been rejected by other courts in this District. See Synopsys, Inc. v. Mentor Graphics Corp., No. 12-6467 MMC, 2013 WL 6577143, at *2 n.3 (N.D. Cal. Dec. 13, 2013). 7 1 contentions, expressly requires a “timely showing of good cause.” Pat. L.R. 3-6; See also Synopsys, 2 Inc. v. Mentor Graphics Corp., No. 12-6467 C MMC, 2013 WL 6577143, at *2 n.3 (N.D. Cal. 3 Dec. 13, 2013). As explained above, no good cause could be found. The motion is therefore 4 DENIED. 5 CONCLUSION 6 7 8 For the foregoing reasons, the Court DENIES defendant’s motion to amend invalidity contentions. 9 10 United States District Court Northern District of California 11 IT IS SO ORDERED. Dated: July 6, 2016 12 SUSAN ILLSTON United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8