Case 1:16-cv-00455-RGA Document 117 Filed 05/05/17 Page 1 of 4 PageID #: 12579
`
`M O R R I S , N I C H O L S , A R S H T & T U N N E L L L L P
`
`1201 NORTH MARKET STREET
`P.O. BOX 1347
`WILMINGTON, DELAWARE 19899-1347
`
`(302) 658-9200
`(302) 658-3989 FAX
`
`JACK B. BLUMENFELD
`(302) 351-9291
`(302) 425-3012 FAX
`jblumenfeld@mnat.com
`
`The Honorable Richard G. Andrews
`United States District Court
` for the District of Delaware
`844 North King Street
`Wilmington, DE 19801
`
`May 5, 2017
`
`VIA ELECTRONIC FILING
`
`Re:
`
`Acceleration Bay LLC; C.A. Nos. 16-453 (RGA); 16-454 (RGA); and 16-455 (RGA)
`
`Dear Judge Andrews:
`
`On April 13, 2017, the Court denied Acceleration Bay’s attempt to substitute newly-
`elected patent claims. The Court noted that the election of claims is not subject to change on
`“whim,” but requires good cause. (D.I. 116.)1 The Court did not “see good cause in what
`Plaintiff states in its letter,” but allowed Plaintiff the opportunity to address the good cause
`standard. (D.I. 116)
`
`On May 1, 2017, Acceleration Bay again sought leave to substitute two previously
`unelected claims it could have elected at the outset of this case had it desired to do so.2
`Acceleration Bay seeks to add claim 10 of the ‘634 Patent and claim 12 of the ‘344 Patent,
`because the PTAB’s IPRs decisions found 13 of Acceleration Bay’s 33 previously elected claims
`to be unpatentable (leaving it with 20 asserted claims in these cases). (D.I. 140). Acceleration
`Bay largely repeats its prior arguments. (D.I. 115). Acceleration Bay’s second letter brief, like
`its first, failed to demonstrate good cause for the proposed substitution or that Defendants would
`not be prejudiced by the addition of new claims at this stage of the cases. Instead, Acceleration
`Bay argues that it was diligent in seeking to add these claims after the IPR decisions.
`
`While arguing its supposed diligence in waiting over two years to elect new claims that
`were available at the outset (and waiting until the claim construction process was already well
`
`
`All citations to docket entries refer to C.A. No. 16-453.
`1
`Acceleration Bay has withdrawn all previously elected claims found to be unpatentable
`2
`by the PTAB.
`
`

`

`Case 1:16-cv-00455-RGA Document 117 Filed 05/05/17 Page 2 of 4 PageID #: 12580
`The Honorable Richard G. Andrews
`May 5, 2017
`Page 2
`
`underway and 90 days before the end of fact discovery), Acceleration Bay ignores the good
`cause standard for adding or substituting claims, as set forth in the Federal Circuit’s Katz line of
`cases. In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1312 (Fed. Cir.
`2011). The Federal Circuit in Katz found that trial courts could require plaintiffs to limit asserted
`claims as long as there was a good cause mechanism for adding claims back into the case.
`Courts following Katz have found that “courts should allow patent holders to bring back in non-
`selected claims upon a showing of ‘good cause’ that the non-selected claims present unique
`issues of infringement or invalidity.” Thought, Inc. v. Oracle Corp., C.A. No. 12-5601, 2013
`WL 5587559, at *2 (N.D. Cal. Oct. 10, 2013) (citing Masimo Corp. v. Philips Elecs. N. Am.
`Corp., 918 F. Supp. 2d 277, 284 (D. Del. 2013)). Thus, the good cause inquiry turns on whether
`the proposed new claims present unique issues of infringement or invalidity such that the
`plaintiff would be prejudiced by their exclusion. Acceleration Bay has made no attempt to show
`how it would be prejudiced if it cannot proceed with the two substitute claims. It is difficult to
`see how Acceleration Bay could be prejudiced when it currently has 20 elected claims that are
`not subject to this unpatentability ruling from the PTAB.
`
`Rather than addressing good cause head on, Acceleration Bay argues that it was diligent
`because it acted quickly after the PTAB decisions. That a patentee acted quickly to attempt to
`substitute claims found to be unpatentable with other claims is not surprising, but it also does not
`demonstrate good cause or diligence. Acceleration Bay seeks to elect claims that it could have
`elected at the outset. And as the Court observed in denying Acceleration Bay’s attempt to add
`these claims in April: “When one side or the other seeks to replace[] newly-identified weaklings
`with more robust claims, that side is going in the wrong direction.” (D.I. 116). Acceleration Bay
`did not act quickly or diligently. It was entirely predictable when Acceleration Bay sought a fast
`schedule in these cases that the PTAB would hold some of the elected claims to be unpatentable
`during the litigation. Acceleration Bay chose to proceed on that basis, and deliberately chose not
`to assert the claims it now seeks to substitute.
`
`Acceleration Bay first asserted these patents against Defendants in March and April
`2015. The Defendants filed their first IPRs in September 2015. Several months later, in March
`2016, Acceleration Bay made its election of claims in its earlier-filed cases. On June 3, 2016,
`this Court dismissed the earlier cases. Even though the IPRs had been instituted and were
`moving toward a trial, Acceleration Bay filed these cases on June 17, 2016. With its eyes wide
`open and the IPRs moving forward, Acceleration Bay incorporated its prior election of claims in
`these refiled cases. Acceleration Bay never suggested that it might seek to substitute elected
`claims if the PTAB found some of its claims to be unpatentable. Acceleration Bay also did not
`seek to stay the litigation – or its election of claims – until after the PTAB ruled. To the
`contrary, Acceleration Bay sought (and received) a fast schedule on the basis that these cases
`were continuations of the prior cases and that the issues were largely developed. It did so after
`the December 2016 trials in the IPRs. In short, Acceleration Bay elected to move forward on a
`fast schedule here, even as the IPRs were also proceeding.
`
`As a result of the schedule Acceleration Bay obtained, the parties are now briefing claim
`construction issues. Acceleration Bay has served its opening brief, and Defendants’ answering
`brief is due in two weeks. A Markman hearing is set for July 10, 2017, and fact discovery also
`
`

`

`Case 1:16-cv-00455-RGA Document 117 Filed 05/05/17 Page 3 of 4 PageID #: 12581
`The Honorable Richard G. Andrews
`May 5, 2017
`Page 3
`
`ends in July. Having chosen to litigate these cases at full speed while the IPRs were pending,
`Acceleration Bay should not be allowed to substitute claims in view of the IPR decisions at this
`stage of the cases. Indeed, this Court has recognized the inconsistency of continuing to litigate
`while reserving the right to add back in claims that survive IPR. MiiCs & Partners Am Inc. v.
`Toshiba Corp., C.A. No. 14-803-RGA, Tr. at 32 (D. Del. Mar. 17, 2016) (Ex. A) (“[I]f we go
`ahead and do claim construction . . . that really is inconsistent with . . . being able to bring back
`any of the claims that are subject to the IPR, even if [plaintiff] win[s] them”); see also
`Greatbatch Ltd. v. AVX Corp., C.A. No. 13-723-LPS, D.I. 368 (D. Del. July 28, 2015) (Ex. B)
`(“[T]he Court will not allow changes to the parties' elections solely on the basis of any decisions
`by the [PTAB] related to any [IPR] petitions involving the asserted claims . . . .”).
`
`On the other hand, Defendants would be prejudiced by this late substitution of elected
`claims. With claim construction proceeding and fact discovery well advanced, Acceleration Bay
`has not provided infringement contentions for the claim 10 of the ‘634 and only some
`contentions for claim 12 of the ‘344. Indeed, the Order Acceleration Bay attached to its letter
`demonstrates the prejudice to Defendants by proposing that Acceleration Bay will serve
`infringement contentions on the two new claims within 10 days of the entry of the Order, and
`that Defendants will then serve invalidity contentions within 31 days of the Order. Accordingly,
`Defendants were not able to address claim terms in these previously unelected claims in the
`exchange of terms for construction and would not have time to address the new claims in its
`claim construction brief. Acceleration Bay even seeks to impose a penalty on Defendants if they
`do not meet that schedule, as if Defendants were somehow responsible for the situation. It seeks
`a Court Order that “Failure to serve invalidity contentions within that time periods shall be
`deemed an admission that the claims are valid.” It is too late to start on infringement and
`invalidity contentions on additional claims after claim construction briefing and at the end of fact
`discovery.3 More fundamentally, Defendants have planned their approach to this litigation
`around the claims Acceleration Bay elected and chose to litigate since 2015.
`
`There is also no question that the addition of the two new claims would require additional
`claim construction. Acceleration Bay concedes as much for Claim 10 of the ‘634 patent. Indeed
`the addition of these claims could require the construction of up to three key terms that are not
`found in other claims, and which were the subject of litigation during the IPR proceedings. The
`proposed substitution would prejudice Defendants. That alone is a sufficient basis to deny
`Acceleration Bay’s request.
`
`Defendants respectfully request that the Court find that Acceleration Bay has failed to
`demonstrate good cause and deny Acceleration Bay’s motion to add claim 12 of the ‘344 Patent
`and claim 10 of the ‘634 patent as elected claims.
`
`
`Moreover, Acceleration Bay refuses to provide detailed infringement contentions on the
`3
`20 claims already in the case in response to Defendants’ Interrogatory No. 7, claiming
`that answering the interrogatory for 20 asserted claims is too burdensome. Defendants
`have prevailed on two motions to compel before the Special Master, and a third is now
`pending. Acceleration Bay has refused to comply with the first two orders.
`
`

`

`Case 1:16-cv-00455-RGA Document 117 Filed 05/05/17 Page 4 of 4 PageID #: 12582
`The Honorable Richard G. Andrews
`May 5, 2017
`Page 4
`
`Respectfully,
`
`/s/ Jack B. Blumenfeld
`
`Jack B. Blumenfeld (#1014)
`
`JBB/bac
`Enclosure
`
`cc:
`
`Clerk of Court (via hand delivery; w/enclosure)
`All Counsel of Record (via electronic mail; w/enclosure)
`
`