Case 3:17-cv-05659-WHA Document 165 Filed 07/19/18 Page 1 of 5
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`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
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`FINJAN, INC., a Delaware corporation,
`Plaintiff,
`
` v.
`JUNIPER NETWORK, INC., a Delaware
`corporation,
`
`Defendant.
` /
`
`No. C 17-05659 WHA
`
`ORDER GRANTING
`MOTION FOR LEAVE TO
`FILE SECOND AMENDED
`COMPLAINT
`
`INTRODUCTION
`In this patent infringement action, plaintiff moves for leave to amend a second amended
`complaint. For the reasons stated below, plaintiff’s motion is GRANTED.
`STATEMENT
`Plaintiff Finjan, Inc., accuses defendant Juniper Networks, Inc., of infringing patents
`pertaining to malware-detection technology. Finjan’s allegations have been summarized in a
`prior order dated February 14, which dismissed Finjan’s claims of willfulness and induced
`infringement but allowed Finjan to move for leave to amend by February 22 (Dkt. No. 30 at 8).
`Finjan decided not to seek leave to amend to cure the deficiencies in those claims (see Dkt. No.
`31 at 2). A case management order dated February 23 then provided, among other things, that
`leave to amend pleadings must be sought by May 31 (Dkt. No. 35 at 1). The case management
`order also set forth a procedure whereby each side were scheduled to move for early summary
`judgment on one claim by June 7 (id. at 4).
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`Case 3:17-cv-05659-WHA Document 165 Filed 07/19/18 Page 2 of 5
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`On May 11, Finjan’s motion for leave to file a first amended complaint, which Juniper
`did not oppose, was granted in part and denied in part (Dkt. No. 85). That order granted
`Finjan’s leave to amend to add another accused product (ATP appliance) on the conditions that
`(1) Finjan remove its dismissed “willfulness” allegations and (2) ATP Appliance remain
`excluded from the first round of the early summary judgment procedure.
`Finjan now moves again for leave to amend its complaint to add an additional patent
`(U.S. Patent No. 7,418,731). Finjan filed the instant motion on May 31 — the last day it may
`amend its complaint pursuant to the case management order (Dkt. No. 91). Juniper opposes on
`the grounds of prejudice, undue delay, and dilatory motive (Dkt. No. 113).
`
`ANALYSIS
`
`LEGAL STANDARD.
`1.
`Under FRCP 15, leave to amend should be given when justice so requires. The
`underlying purpose of FRCP 15 is to facilitate decisions on the merits, rather than on the
`pleadings or technicalities. U.S. v. Webb, 655 F.2d 977, 979 (9th Cir. 1981). In the absence of
`an apparent reason — such as undue delay, bad faith, undue prejudice, or futility of amendment
`— leave should be “freely given.” Foman v. Davis, 371 U.S. 178, 182 (1962). “This policy is
`‘to be applied with extreme liberality.’ ” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d
`1048, 1051 (9th Cir. 2003) (quoting Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708,
`712 (9th Cir. 2001)). In assessing these factors, all inferences should be made in favor of
`granting the motion. Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 880 (9th Cir.1999).
`PREJUDICE.
`2.
`Prejudice is the “touchstone of the inquiry under” FRCP 15(a). Eminence Capital, 316
`F.3d at 1052 (quoting Lone Star Ladies Inv. Club v. Schlotzsky’s Inc., 238 F.3d 363, 368 (5th
`Cir. 2001)). In general, “[t]he party opposing amendment bears the burden of showing
`prejudice.” DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987). Our court of
`appeals has affirmed the denial of leave to amend when new allegations “would totally alter the
`basis of the action.” M/V Am. Queen v. San Diego Marine Const. Corp., 708 F.2d 1483, 1492
`(9th Cir. 1983). Here, Juniper did not make a sufficient showing of prejudice.
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`Case 3:17-cv-05659-WHA Document 165 Filed 07/19/18 Page 3 of 5
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`First, Juniper argues it would be prejudiced by the addition of the ’731 patent because it
`has already engaged in significant discovery leading up to the showdown procedure, which
`scheduled early summary motions for June 7 (Dkt. No. 113 at 4–5). This point is unpersuasive.
`Finjan does not (and cannot, given early summary judgment motions have already been filed)
`intend to include the ’731 patent in the early summary judgment procedure (Dkt. No. 91 at 2).
`Moreover, there are still nine months left for fact discovery and trial is a year away. Overall,
`the case management schedule will be largely unaffected by the amendment.
`Second, Juniper contends that the addition of the ’731 patent at this stage would be
`prejudicial because, essentially, it would require additional work. For example, under PLR 4-3,
`the parties are required to jointly identify the ten most important claim terms from all asserted
`claims by June 22 (and they have already filed a joint claim construction statement). Juniper
`argues adding the ’731 patent at this stage would require it to reassess the claim terms and re-
`strategize (Dkt. No. 113 at 5). Moreover, Juniper argues, prejudice is compounded by the fact
`that the extra work overlaps with the expedited schedule imposed by the early summary
`judgment procedure. While the addition of the ’731 patent (and its two asserted claims) would
`certainly impose inconvenience and affect the claim construction schedule to an extent, it would
`not “greatly alter[] the nature of the litigation.” Morongo Band of Mission Indians v. Rose, 893
`F.2d 1074, 1079 (9th Cir. 1990). Thus the amendment’s impact does not amount to prejudice as
`contemplated under FRCP 15.
`Juniper’s reliance on Alibaba.com Hong Kong Limited v. P.S. Products, Inc., 2012 WL
`13060303, at *2 (N.D. Cal. Mar. 19, 2012) is unavailing. The accused infringers in
`Alibaba.com sought leave to file a second amended complaint more than eight months after the
`deadline for seeking leave to amend. Ibid. At that point in Alibaba.com, FRCP 16(b)’s more
`strict “good cause” standard, rather than FRCP 15(a)’s liberal standard, governed. Alzheimer’s
`Institute of America v. Elan Corporation PLC, 274 F.R.D. 272, 276–77 (N.D. Cal. 2011) (Judge
`Elizabeth Laporte) is also distinguishable. Alzheimer’s dealt with additional concerns over
`public interest (potentially chilling mice research on Alzheimer’s disease) and the defendant’s
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`Case 3:17-cv-05659-WHA Document 165 Filed 07/19/18 Page 4 of 5
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`inability to coordinate with its co-defendants in claim construction strategy. No such
`prejudicial concerns are pertinent here. As such, this factor favors the amendment.
`UNDUE DELAY AND DILATORY MOTIVE.
`3.
`In assessing timeliness, courts inquire “whether the moving party knew or should have
`known the facts and theories raised by the amendment in the original pleading.” Jackson v.
`Bank of Hawaii, 902 F.2d 1385, 1388 (9th Cir.1990). Here, Juniper has not sufficiently shown
`that Finjan’s instant motion is unduly delayed.
`Finjan alleges this instant motion was prompted by “new information” revealed during a
`recent deposition that led it to believe Juniper’s accused product Sky ATP infringes the ’731
`patent (Dkt. No. 91 at 2). It claims it did not unduly delay its request to amend its complaint
`because it moved to amend two days after meeting and conferring with Juniper, two weeks after
`the deposition, and “after only two months of reviewing the millions of pages of Juniper’s
`source code” for the accused products (Dkt. No. 91 at 6).
`Juniper rebuts by arguing that Finjan sat on its ’731 patent infringement allegations for
`roughly two years, as allegedly shown by Finjan’s ’731 patent claim charts (which were created
`in October 2015 and directed to SRX Gateways only for licensing purposes) (Dkt. Nos. 113 at
`6, 133 at 4). Juniper counters Finjan’s alleged lack of knowledge of how Juniper’s products
`stored and indexed files (as relevant to the ’731 patent), arguing that Juniper produced source
`code several months ago and that Juniper’s publicly-available Sky ATP administration guide
`disclosed the relevant information. As such, Juniper contends that Finjan should have asserted
`the ’731 patent at least in its first motion to amend. Instead, Juniper argues, Finjan did not
`disclose the ’731 patent until now. Finjan acted with dilatory motive, so Juniper seems to
`argue, by “concealing its intentions” about the ’731 patent (Dkt. No. 113 at 6).
`Juniper cites Slot Speaker Technologies, Inc. v. Apple, Inc., No. C 13–01161, 2017 WL
`4354999 (N.D. Cal. Sept. 29, 2017) (Judge Haywood Gilliam, Jr.) in arguing that leave to
`amend should be denied where the plaintiff had known the facts and legal theories giving rise to
`its amendments. Slot Speaker is distinguishable. There, the plaintiff sought to add a willful
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`Case 3:17-cv-05659-WHA Document 165 Filed 07/19/18 Page 5 of 5
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`infringement claim over three years after filing its first amended complaint and despite have
`multiple opportunities to add the claim before finally moving to amend. Id. at *1.
`True, Finjan feasibly could have sought to add the ’731 patent at least in its first leave to
`amend had it been more diligent. But that by itself is not sufficient evidence showing that
`Finjan acted with dilatory motive. Though arguably belated, Finjan sought leave to amend
`within a couple of months of receiving Juniper’s source code and met and conferred with
`Juniper soon after the deposition that allegedly triggered the instant motion. Moreover, Finjan
`brought this instant motion within the case management deadline for seeking amendments (even
`if just barely). Finjan’s delay in revealing the ’731 patent to Juniper, which ultimately does not
`prejudice Juniper, is not the same as a delay in seeking the instant motion. Ultimately, this
`factor also favors the amendment.
`
`CONCLUSION
`For the foregoing reasons, Finjan’s motion for leave to file a second amended complaint
`is GRANTED. Finjan shall file its second amended complaint as a separate docket entry by
`JULY 27 AT NOON.
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`IT IS SO ORDERED.
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`Dated: July 19, 2018.
`
`
`WILLIAM ALSUP
`UNITED STATES DISTRICT JUDGE
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