United States District Court, District of Columbia
IN RE PAPST LICENSING GMBH & CO. KG PATENT LITIGATION MDL No. 1880
MEMORANDUM OPINION AND ORDER
RANDOLPH D. MOSS UNITED STATES DISTRICT JUDGE.
matter is before the Court on the Camera Manufacturers'
Motion for Leave to Amend Invalidity Contentions as to the
“new patents” (U.S. Pat. Nos. 8, 966, 144 and 8,
504, 746) asserted by Papst in this multidistrict
litigation. Dkt. 662. The Camera Manufacturers contend
that they recently discovered a break in the chain of
priority that links Papst's new patents to its “old
patents” (U.S. Pat. Nos. 6, 470, 399 and 6, 895, 449)
rendering “Papst's own earlier published patent
applications prior art to the [n]ew [p]atents.”
Id. at 4; see also id. at 5-9, 12. Because
this theory was not set forth in the Camera
Manufacturers' invalidity contentions, they seek leave to
amend those contentions. Id. Papst opposes the
Camera Manufacturers' motion, arguing that the Camera
Manufacturers have failed to meet their burden of
establishing “good cause” for amending their
invalidity contentions. Dkt. 669.
reasons explained below, the Court will
GRANT the Camera Manufacturers' motion
for leave to amend their invalidity contentions.
almost a decade ago, this multidistrict litigation originally
concerned two patents-U.S. Patent Nos. 6, 470, 399 ('399
patent) and 6, 895, 449 ('449 patent). After extended
proceedings, the Court entered final judgment of
non-infringement pursuant to Rule 54(b) with respect to
certain defendants, Dkts. 559, 560, and the plaintiff-Papst
Licensing GMBH & Co. KG (“Papst”)-appealed
that partial final judgment, Dkt. 561. In February 2015, the
Federal Circuit concluded that the Court had incorrectly
construed various claims terms and, accordingly, vacated the
Court's entry of summary judgment. In re Papst
Licensing Digital Camera Patent Lit., 778 F.3d 1255
(Fed. Cir. 2015). After the case was remanded, Papst asserted
two additional patents-U.S. Patent Nos. 8, 504, 746 ('746
patent) and 8, 966, 144 ('144 patent)-against the
defendants, and, over Papst's objection, those new patent
infringement actions were transferred to this Court in
October 2015 for inclusion in the pending multidistrict
litigation. See Dkt. 606.
the transfer of the new cases asserting the '746 and
'144 patents, the Court issued its Ninth Practice and
Procedure Order. Dkt. 608. Among other things, that Order
designated which cases would be included in the “First
Wave” cases and designated the defendants in those
cases as the “Camera Manufacturers;” affirmed
that the litigation would be governed by the Patent Local
Rules of the Northern District of California (“Patent
Local Rules”); stayed all discovery other than
discovery relating to claims construction; and directed that
the Camera Manufacturers file their invalidity contentions no
later than February 12, 2016. Id. at 1- 5. The Order
emphasized that the Camera Manufacturers would be permitted
to amend their invalidity contentions only “by order of
the Court upon a timely showing of good cause, ” as
provided in Patent Local Rule 3-6. Id. at 6 (quoting
Patent L.R. 3-6). The Camera Manufacturers filed their
invalidity contentions on January 29, 2016. Dkt. 620.
2016, the multidistrict litigation was transferred to the
undersigned judge, Dkt. 632, and the Court held a four-day
claims construction hearing in November and December 2016. On
October 17, 2016, roughly a month before the claims
construction hearing, counsel for the Camera Manufacturers
wrote to Papst indicating that they intended to seek leave of
the Court, pursuant to Patent Local Rule 3-6, to amend their
invalidity contentions with respect to the '746 and
'144 patents, and asking whether Papst would consent to
the proposed amendment. Dkt. 662-3 at 2. As explained in the
October 17, 2016, letter, the Camera Manufacturers asserted
that the new patents were “not entitled to claim
priority” back to the old patents because the chain of
priority linking them together “was broken.”
Id. Specifically, the Camera Manufacturers pointed
out that patent application '778-the application that the
new patents cite to support their priority claim back to the
old patents, see Dkt. 662 at 6-7-failed to claim
priority to the '399 patent or its application, Dkt.
662-3 at 2. Accordingly, the Camera Manufacturers continued,
“all asserted claims in the [new patents] [we]re
invalid as anticipated . . . by” the inventor's
“earlier publications” and applications.
Id.; see also Dkt. 662 at 9. On October 28,
2016, Papst responded in a letter that posed a series of
questions relating to whether the standards set forth in
Patent Local Rule 3-6 were satisfied, denied that
“there [wa]s any break in the priority chain for”
the new patents, and indicated that, “[b]ased on [the]
October 17, 2016[, ] letter, Papst [could not] consent to the
[Camera Manufacturers'] proposed amendment to [their]
invalidity contentions.” Dkt. 662-4 at 2.
Papst's denial that there was a break in the priority
chain, on November 10, 2016, Papst filed a petition with the
U.S. Patent and Trademark Office (“PTO”) for a
“delayed claim of priority, ” arguing that the
failure of the '778 patent application to claim priority
to the '399 patent was the “result of an
administrative error” that had only “recently
come to [Papst's] attention.” Dkt. 662-1 at 4. The
parties continued to correspond with each other over the next
several months. On December 7, 2016, the Camera Manufacturers
responded to the list of questions posed by Papst on October
28, 2016. Dkt. 662-5 at 2. They explained that the '778
application was not the application for either of the new
patents, but rather was “one of many applications
related to” those patents; that the prosecution of the
new patents “spanned a period of [eighteen]
years” and that the prosecution history included
“tens of thousands of pages;” that the Camera
Manufacturers informed Papst of the issue “[u]pon
discover[y]” of the alleged priority defect; that Papst
has been on notice of the issue “since at least
August” when it was raised in a similar case
“pending in the Eastern District of Texas;” and
that Papst would suffer no prejudice by permitting the
amendment. Id. About three weeks later, Papst
responded more definitively than in its first letter,
asserting that “it is apparent that the Camera
Manufacturers . . . cannot demonstrate the requisite
diligence for amending [their] invalidity contentions”
and that, accordingly, Papst would oppose their motion for
leave to amend. Dkt. 662-6 at 2.
mid-January 2017, the Camera Manufacturers had learned that
Papst had filed a petition with the PTO for a delayed claim
of priority with respect to the '778 patent application,
and, on that basis, they asked, once “again[, ] that
Papst consent to the proposed amendment to the invalidity
contentions” in order to “avoid wasting the
parties' and the Court's time with an unnecessary
dispute.” Dkt. 662-7 at 2. If Papst would not consent,
the Camera Manufacturers continued, they intended to
“request a telephonic conference [with the Court, as
required by the Court's procedures] to discuss the
parties' dispute and [to] seek leave to file a motion for
leave to amend [their] invalidity contentions.”
Id. The next day, Papst responded succinctly:
“Papst does not consent to the [Camera
Manufacturers'] request to amend their invalidity
contentions.” Dkt. 662-8 at 2. At a telephonic status
conference held on January 27, 2017, the Court granted the
Camera Manufacturers leave to file the pending motion.
See Minute Entry (Jan. 27, 2017).
parties have agreed and the Court has repeatedly confirmed,
unless otherwise ordered, the Patent Local Rules for the
Northern District of California apply to this litigation.
See, e.g., Dkt. 628 at 2. As relevant here,
Patent Local Rule 3-6, provides that invalidity contentions
may be amended “only by order of the Court upon a
timely showing of good cause.” Patent L.R. 3-6. The
moving party bears the burden of establishing good cause.
See O2 Micro Int'l Ltd. v. Monolithic Power
Sys., Inc., 467 F.3d 1355, 1366 (Fed. Cir.
2006). To do so, it must demonstrate that it “acted
with diligence in promptly moving to amend.”
Id. at 1363. If the moving party is able to show
sufficient diligence, the Court “then must determine
whether the non-moving party would suffer [undue] prejudice
if the motion to amend were granted.” Tech.
Licensing Corp. v. Blackmagic Design Pty Ltd., No.
13-cv-05184, 2014 WL 5499511, at *2 (N.D. Cal. Oct. 30, 2014)
(internal quotation marks omitted) (citing Patent L.R. 3-6).
whether “good cause” exists is not a mechanical
process. The Court must consider all of the relevant
circumstances, including the extent to which permitting an
amendment would interfere with the purposes of requiring the
early disclosure of invalidity contentions, and whether
permitting an amendment would facilitate the “just,
speedy, and inexpensive determination” of the
litigation, see Fed. R. Civ. P. 1.
explained below, the Court concludes that the Camera
Manufacturers have acted with sufficient diligence at this
early stage of the proceeding concerning the new patents.
“The diligence required for a showing of good cause has
two phases: (1) diligence in discovering the basis for
amendment; and (2) diligence in seeking amendment once the
basis for amendment has been discovered.” Tech.
Props. Ltd. LLC v. Canon Inc., No. 14-cv-03640, 2016 WL
1570163, at *2 (N.D. ...