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CyWee Group Ltd. v. HTC Corp.

United States District Court, W.D. Washington, Seattle

May 18, 2018

CYWEE GROUP LTD., Plaintiff,
v.
HTC CORPORATION, et al., Defendants/Third-Party Plaintiffs,
v.
STMICROELECTRONICS N.V., et al., Third-Party Defendants.

          ORDER

          JAMES L. ROBART, United States District Judge

         I. INTRODUCTION

         Before the court is Plaintiff CyWee Group Ltd.'s (“CyWee”) motion to preclude consideration of Defendants HTC Corporation and HTC America, Inc.'s (collectively, “HTC”) allegedly belated claim construction positions. (Mot. (Dkt. # 76).) HTC opposes the motion. (Resp. (Dkt. # 80).) The court has reviewed the motion, the parties' filings in support of and in opposition to the motion, the relevant portions of the record, and the applicable law. Being fully advised, [1] the court DENIES CyWee's motion for the reasons discussed below.

         II. BACKGROUND

         CyWee brings this patent suit against HTC for allegedly infringing upon CyWee's U.S. Patent No. 8, 441, 438 (“the '438 Patent”) and U.S. Patent No. 8, 552, 978 (“the '978 Patent”) (collectively, “Patents-in-suit”). (SAC (Dkt. # 61) ¶¶ 20-177.) On January 19, 2018, HTC served CyWee with its Preliminary Invalidity Contentions, which contained the terms within the Patents-in-suit that HTC planned to argue were invalid. (See Prelim. Contentions (Dkt. ## 76-1, 81-1).)[2] HTC specifically identified the term “the spatial reference frame” in the '978 Patent as indefinite. (Id. at 42.) HTC also incorporated by reference the following:

[A]ny additional invalidity contentions . . . previously disclosed by any party to any other pending or prior litigation or U.S. Patent & Trademark Office proceeding involving the [Patents-in-suit] or any related patent, including any invalidity contentions yet to be produced by [CyWee] from prior litigations and proceeds.

(Id. at 3.) Based on HTC's preliminary contentions, CyWee served its expert report regarding claim construction issues and addressed indefiniteness only as to the specifically identified term, “the spatial reference frame.” (See Mot. at 2.) On March 2, 2018, CyWee additionally produced the invalidity contentions that defendants made in CyWee Group Ltd v. Samsung Electronics Co. Ltd., No. 2:17-cv-00140-RWS-RSP (E.D. Tex.) (hereinafter, “Samsung”).[3] (See Shih Decl. ¶ 7, Ex. B (“Samsung Invalidity Contentions”).)

         ORDER

         On March 30, 2018, HTC served its Disclosure of Preliminary Claim Constructions, in which HTC identified three additional terms as indefinite.[4] (See HTC Disclosure (Dkt. # 76-2) at 3-4.) These additional terms were also identified as indefinite by the defendants in Samsung. (See Samsung Invalidity Contentions at 73-74.) CyWee objected to the disclosure of the three additional terms, and the parties met and conferred on the issue to no avail. (Shih Decl. ¶¶ 4-5.) // // Subsequently, and for unrelated reasons, the court amended the scheduling order to (1) extend the joint claim chart and prehearing statement deadline from April 25, 2018, to July 27, 2018; (2) extend the opening claim construction brief deadline from May 18, 2018, to August 2, 2018; and (3) move the Markman hearing from July 13, 2018, to September 21, 2018. (Compare Sched. Order (Dkt. # 42), with Am. Sched. Order (Dkt. # 73).)

         CyWee moves to preclude consideration of HTC's belated identification of indefinite terms, arguing that HTC has violated the court's scheduling order and has “substantially prejudice[d] CyWee by preventing its expert from rendering an opinion applicable to this case.” (Mot. at 2.) HTC maintains that it has not violated the court's scheduling order because the three additional terms were incorporated by reference in the preliminary contentions. (Resp. at 5-8.) Even if the three additional terms qualify as an amendment, HTC argues that there is no prejudice to CyWee, especially now that the court has extended the Markman-associated deadlines. (Id. at 3-5.) The court now addresses CyWee's motion.

         III. ANALYSIS

         The parties' dispute boils down to two issues: (1) whether HTC's addition of three terms constitutes an amendment or whether the additional terms were encompassed by the Preliminary Invalidity Contentions through incorporation by reference; and (2) if the additional terms constitute an amendment, whether there is good cause to allow amendment. (See Mot., Resp.) Because the court finds that good cause exists to allow amendment, there is no need to decide whether HTC's broad incorporation by reference properly disclosed the three additional terms.

         Local Patent Rule 124 allows the parties to amend infringement and invalidity contentions “only by order of the [c]ourt upon a timely showing of good cause.” Local Rules W.D. Wash. LPR 124. Whether a party has established good cause lies within the sound discretion of the trial court. See MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1380 n.5 (Fed. Cir. 2005). This District's Local Patent Rules “requir[e] both the plaintiff and the defendant in patent cases to provide early notice of their infringement and invalidity contentions, and to proceed with diligence in amending those contentions when new information comes to light in the course of discovery. The rules thus seek to balance the right to develop new information in discovery with the need for certainty as to the legal theories.” REC Software USA, Inc. v. Bamboo Sols. Corp., No. C11-0554JLR, 2012 WL 3527891, at *2 (W.D. Wash. Aug. 15, 2012) (quoting O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1365-66 (Fed. Cir. 2006)).

         In determining whether good cause exists to amend, courts consider (1) whether the party was diligent in amending its contentions; and (2) whether the non-amending party would suffer prejudice if the contentions were to be amended. See Id. Regarding diligence, courts should focus on whether the amending party's “actions comport with the purpose behind the federal discovery rules in diligently . . . developing new theories of invalidity.” Id. at *3. The good cause inquiry “may also ...


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