Case 3:20-cv-05784-ZNQ-DEA Document 202 Filed 12/29/23 Page 1 of 8 PageID: 7003
`
`
`
`
`
`
`
`
`
`
`
`
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
`
`
`
`
`
`
`
`
`
`
`
`:
`
`
`
`
`
`
`
`:
`
`OANDA CORPORATION
`
`
`:
`
`
`
`
`
`
`
`: Civil Action No. 20-5784 (ZNQ)(DEA)
`
`
`
`Plaintiff,
`
`
`:
`
`
`
`
`
`
`
`:
`
`v.
`
`
`
`
`:
`
`
`
`
`
`GAIN CAPITAL HOLDINGS, INC. et al,
`
`:
`
`
`
`
`
`
`
`:
`
`
`Defendants.
`
`
`
`:
`
`
`
`
`
`
`
`:
`
`
`MEMORANDUM ORDER
`
`
`
`THIS MATTER comes before the Court on OANDA Corporation’s (“Plaintiff”) Motion
`
`to Amend Infringement Contentions pursuant to Local Patent Rule 3.7. ECF Nos. 170 & 171. The
`
`Motion having been fully briefed, the Court decides this Motion without oral argument pursuant
`
`to Federal Rule of Civil Procedure 78 and Local Civil Rule 78.1. For the reasons below, the Court
`
`GRANTS Plaintiff’s Motion.
`
`I. Background and Procedural History
`Plaintiff is the owner, by assignment, of U.S. Patent Nos. 7,146,336 (the ’336 Patent) and
`
`8,392,311 (the ’311 Patent). Plaintiff’s First Amended Complaint (“FAC”), filed on April 20,
`
`2021, alleges that Defendants have infringed one or more claims of the Patents by making, using,
`
`selling, offering for sale, or selling products and/or services, and that GAIN has made, used, sold,
`
`and offered for sale infringing instrumentalities at https://forex.com, and Holdings has used those
`
`infringing instrumentalities, including the application programming interfaces (“APIs”), to operate
`
`automated infringing trading systems.
`
`A. Plaintiff’s Arguments in Support of the Motion to Amend
`
`
`
`1
`
`

`

`Case 3:20-cv-05784-ZNQ-DEA Document 202 Filed 12/29/23 Page 2 of 8 PageID: 7004
`
`In making this Motion, Plaintiff seeks to “provide additional detail and citations to
`
`Defendant GAIN’s technical documents supporting OANDA’s already-disclosed infringement
`
`theories, as well as to eliminate some of the alleged patent claims.” ECF No. 171 at 4. Plaintiff
`
`believes good cause exists because of Defendants’ recent production of technical documents that
`
`were produced in April of 2023. Id. Plaintiff argues its Motion cannot be opposed on diligence
`
`grounds where “[i]mmediately following the Court’s [January 9, 2023] ruling, the parties
`
`continued their meet-and-confer efforts concerning GAIN’s technical production” and “GAIN’s
`
`story that it had produced substantially complete technical documents about the accused products
`
`unraveled.” Id.
`
`Plaintiff also anticipates two further arguments by Defendants that Plaintiff fails to
`
`establish its diligence. First, Plaintiff addresses the point that Plaintiff should have done more to
`
`make Defendant comply with discovery obligations. Id. at 6. Plaintiff counters that Defendant
`
`should not profit from its own failures and regardless, Plaintiff “has been diligently attempting to
`
`push Gain to meet its discovery obligations” for documents requested more than a year ago from
`
`the date of the Motion. Id. Second, Plaintiff addresses the point that Plaintiff should have sought
`
`to amend its infringement contentions in November of 2021, when it received the initial source
`
`code and technical information. Id. Plaintiff counters that this argument should be rejected because
`
`the source code and technical documents received in November of 2021 “did not provide it with
`
`sufficient information to understand GAIN’s backend systems and thereby meaningfully amend
`
`its contentions.” Id.
`
`Plaintiff concludes that the Defendants would not be prejudiced if these proposed
`
`amendments are permitted because the case is “in many ways in its early stages.” Id. at 6.
`
`B. Defendants’ Arguments Opposing the Motion to Amend
`
`
`
`2
`
`

`

`Case 3:20-cv-05784-ZNQ-DEA Document 202 Filed 12/29/23 Page 3 of 8 PageID: 7005
`
`Defendants, writing jointly, oppose this Motion chiefly because Plaintiff’s proposed
`
`amendments rely upon information that Defendants’ assert Plaintiff has long had access to. ECF
`
`No. 179 at 5. Thus, Defendants argue that Plaintiff “cannot show that it acted in a timely manner
`
`and with diligence to amend its infringement contentions.” Id. To support this contention,
`
`Defendants explain that Plaintiff created a record of discovery disputes to “falsely blame its delay
`
`on others.” Id. at 6. Defendants note that to “avoid burdening this Court with continuous motion
`
`practice, GAIN cooperated with OANDA” and produced documents in 2023 even though “GAIN
`
`maintained that such documents were either (a) irrelevant or (b) duplicative and cumulative of
`
`what OANDA already possessed.” Id. Defendants conclude on the issue of diligence:
`
`What is now clear is that OANDA merely engaged in a litigation strategy to pursue
`a never-ending document demand so that it could create the false appearance that
`GAIN delayed discovery. Indeed, OANDA did not identify a single document in
`its Motion that it allegedly “discovered” that was “necessary” to understand
`anything about GAIN’s previously produced documents.
`
`Id.
`
`Further, Defendants note while the Court should not even reach the issue of prejudice
`
`because Plaintiff’s request is untimely and not diligently made, that Defendants would nevertheless
`
`be prejudiced by the proposed amended contentions for a couple of reasons. Id. at 6. First,
`
`Defendants argue Plaintiff’s failure to timely and diligently amend its contentions resulted in
`
`Defendants being “forced [] to expend resources on two years of broad discovery inquests.” Id.
`
`Second, Defendants argue they are prejudiced because they have “had to complete all of claim
`
`construction blind – without knowing [Plaintiff’s] theories.” Third, Defendants argue they have
`
`been prejudiced by Plaintiff’s failure to comply with the Local Civil Rules and its failure to
`
`“provide the required notice of its infringement allegations.” Id. at 6-7.
`
`C. Plaintiff’s Reply
`
`
`
`3
`
`

`

`Case 3:20-cv-05784-ZNQ-DEA Document 202 Filed 12/29/23 Page 4 of 8 PageID: 7006
`
`Plaintiff concedes that the proposed amended infringement contentions “do not change
`
`(and in fact narrow) the infringement theories” of the case. ECF No. 184 at 4. Plaintiff reiterates
`
`that the Defendants’ prior productions were “inadequate to explain the design and operation of
`
`GAIN’s FX trading platform or to understand GAIN’s source code.” Id. Due to these suggested
`
`inadequacies, Plaintiff expounds that it spent the year of 2022 propounding additional discovery.
`
`Id.
`
`Plaintiff argues that the April 2023 production made by GAIN cannot be seen as
`
`“cumulative and irrelevant”1 because the new production “contained countless new architectural
`
`diagrams and flowcharts of direct relevant to the design and operation of the accused product.” Id.
`
`at 5. Plaintiff further refutes Defendants’ allegation that Plaintiff does not in fact rely upon any of
`
`the new discovery by explaining that:
`
`contrary to GAIN’s claim, the fact that the amendments do not only include
`citations to the new material, but also citations to some public documents, some
`documents that were produced in 2021, and some source code does not mean the
`same amendments could have been made in the absence of the 180,000+-page
`Confluence production.
`ECF No. 184 at 5. In sum, “GAIN’s belated Confluence production not only provided OANDA
`
`with new pieces of the puzzle, but also explained how they connected to the pieces OANDA
`
`already had.” Id.
`
`
`
`With regards to prejudice, Plaintiff replies that “the claim that OANDA not amending its
`
`contentions earlier caused discovery disputes gets things backwards: GAIN baselessly withheld
`
`discovery, preventing OANDA from providing the amended contentions that GAIN professed to
`
`want.” Id. at 14. Additionally, Plaintiff argues the prejudice highlighted by Defendants based on
`
`
`1 Plaintiff takes note of Defendants’ complaint that Plaintiff is relying on the whole Confluence production by
`tacking on “e.g.” Plaintiff stipulates, in response to this complaint, that its contentions rely upon the specific
`documents cited, absent further amendment. ECF No. 184 at 15.
`4
`
`
`
`

`

`Case 3:20-cv-05784-ZNQ-DEA Document 202 Filed 12/29/23 Page 5 of 8 PageID: 7007
`
`alleged noncompliance with L. Pat. R. 3.1 “misses the mark” because “OANDA’s amended
`
`contentions do what Rule 3.1(c) requires: they provide charts ‘identifying specifically where each
`
`limitation of each asserted claim is found within each Accused Instrumentality.’” Id.
`
`II. Discussion
`“The Local Patent Rules ‘are designed to require parties to crystallize their theories of the
`
`case early in the litigation and to adhere to those theories once they have been disclosed.’” Aurinia
`
`Pharms. Inc. v. Sun Pharm. Indus., Inc., 2022 WL 3040950, at *6 (D.N.J. Aug. 2, 2022). The
`
`Rules “seek to balance the right to develop new information in discovery with the need for certainty
`
`as to legal theories.” Nautilus Neurosciences, Inc. v. Wockhardt USA LLC, 2013 WL 7901901, at
`
`*2 (D.N.J. Jan. 23, 2013). Rule 3.7 provides that “[a]mendment of any contentions ... required to
`
`be filed or exchanged pursuant to these Local Patent Rules may be made only by order of the Court
`
`upon a timely application and showing of good cause.” L. Pat. R. 3.7.
`
`Applying the Rule, courts have noted that, unlike the liberal standard for amending
`
`pleadings under Federal Rule of Civil Procedure 15(a), Patent Rule 3.7 implements a
`
`“conservative” approach to amending contentions, “designed to prevent the ‘shifting sands’
`
`approach to claim construction.” King Pharm., Inc. v. Sandoz Inc., 2010 WL 2015258 at *4 (D.N.J.
`
`May 20, 2010). “Sufficiently satisfying the elements set forth in Rule 3.7 is not a simple
`
`undertaking, and requires the movant to overcome a substantial preference against granting the
`
`amendment.” Nautilus Neurosciences, 2013 WL 7901901, at *2.
`
`Under L. Pat. R. 3.7, good cause “considers first whether the moving party was diligent in
`
`amending its contentions and then whether the non-moving party would suffer prejudice if the
`
`motion to amend were granted.” Takeda Pharm. Co. Ltd. v. Sun Pharma Glob. FZE, 2016 WL
`
`9229318, at *3 (D.N.J. May 16, 2016). Moreover, a party must not only prove that it was diligent
`
`
`
`5
`
`

`

`Case 3:20-cv-05784-ZNQ-DEA Document 202 Filed 12/29/23 Page 6 of 8 PageID: 7008
`
`in seeking leave to amend, but also prove that it was diligent in discovering the basis for the
`
`proposed amendment. In re Fetzima, 2020 WL 468438, at *3 (D.N.J. Jan. 29, 2020). Importantly,
`
`absent a showing of diligence, the Court does not reach prejudice. See Warner Chilcott Co., LLC
`
`v. Lupin, Ltd., 2013 WL 4494949, at *2 (D.N.J. Aug. 19, 2013) (citing Apple v. Samsung, 2012
`
`U.S. Dist. LEXIS 83115, at *13 (N.D. Cal. Mar. 27, 2012) (collecting cases)). The party seeking
`
`to amend its contentions bears the burden of establishing diligence. Id. Further, in determining
`
`good cause and diligence, the Court may consider other facts such as:
`
`(1) the reason for the delay, including whether it was within the reasonable control
`of the party responsible for it; (2) the importance of what is to be excluded; (3) the
`danger of unfair prejudice; and (4) the availability of a continuance and the potential
`impact of a delay on judicial proceedings.
`Id. (citing Oy Ajat, Ltd. v. Vatech Am., Inc., 2012 WL 1067900, at *20–21 (D.N.J. Mar. 29, 2012)
`
`(collecting cases)).
`
`A. Diligence
`Plaintiff adequately establishes its diligence pursuant to L. Pat. R. 3.7. First, regarding
`
`whether Plaintiff was diligent in seeking leave to amend, Plaintiff sent GAIN its proposed amended
`
`infringement contentions on April 27, 2023, after receiving a large production of more than
`
`180,000 pages of technical documents earlier that same month from GAIN.
`
`Second, as to whether Plaintiff was diligent in discovering the bases for the proposed
`
`amendments, Plaintiff has provided a clear timeline of events showing its diligence in seeking
`
`additional technical documents. While it is the case that Plaintiff was in receipt of documents since
`
`2021 through early 2022, Plaintiff’s expert testified that “it [did] not contain either the volume or
`
`type of documents I would expect to see in a case like this one, with few architectural diagrams,
`
`and no architectural diagrams or flowcharts at all with respect to some components of the accused
`
`
`
`6
`
`

`

`Case 3:20-cv-05784-ZNQ-DEA Document 202 Filed 12/29/23 Page 7 of 8 PageID: 7009
`
`product.” ECF No. 184 at 6. Looking past the earlier productions, in June of 2022, Plaintiff made
`
`targeted requests for technical documents through RFPs; in September of 2022 Plaintiff “sought
`
`to compel production of technical documents. . . over GAIN’s objection”; also in September of
`
`2022 Plaintiff deposed GAIN’s Senior Software Engineer and learned of “architectural diagrams
`
`relevant to the accused product” not yet produced; in October of 2022 Plaintiff sought such
`
`“architectural diagrams and other technical documents.” Plaintiff identified multiple pieces of
`
`information discovered through this 2023 production that formed the bases of this Motion and
`
`thus, the new production cannot be described wholesale as “cumulative and irrelevant.” For
`
`example, the 2023 production of technical documents identified 21 of 22 Confluence “Spaces”
`
`that Plaintiff previously had no access to. Among these newly identified Spaces was a Space
`
`focusing on “PRICING,” on which Plaintiff comments “the software that generates prices is a
`
`critical component of all asserted claims of the patents-at-issue.” Through the PRICING Space,
`
`Plaintiff learned of GAIN’s pricing software by accessing hundreds of documents relating to
`
`XCON, a pricing engine the accused product used during the relevant period. In previous technical
`
`productions, documents on XCON consisted of a document and a single standalone diagram that
`
`“did not explain how XCON worked or how it fit into the larger software ecosystem.” ECF No.
`
`184 at 10-11. Plaintiff explains that it used “material from 12 of 22 Confluence Spaces to gain an
`
`understanding of GAIN’s FX trading system and amend its contentions.” Id. at 11.
`
`B. Prejudice
`In evaluating whether Defendants will be unduly prejudiced, this Court will look to
`
`whether the proposed amendments would (1) require Defendants to expend significant additional
`
`resources, or (2) significantly delay the resolution of the dispute. See e.g. TFH Publications, Inc.
`
`v. Doskocil Mfg. Co., 705 F. Supp. 2d 361, 366 (D.N.J. 2010). While there could be some resulting
`
`
`
`7
`
`

`

`Case 3:20-cv-05784-ZNQ-DEA Document 202 Filed 12/29/23 Page 8 of 8 PageID: 7010
`
`prejudice, denial of leave to amend requires that additional work required be substantial or
`
`“undue.” Amgen Inc. v. Kashiv Biosciences, LLC, 2019 WL 5445974, at *3 (D.N.J. Oct. 24, 2019)
`
`(citing to AS Am., Inc. v. Masco Corp. of Ind., 2013 WL 4084237, at *3 (D.N.J. Aug. 13, 2013)
`
`(“[a]lthough defendant's amendment may require some additional work on plaintiff's part, the
`
`additional work is not significant or vexatious.”)).
`
`First, Defendants do not elaborate on any expenditure of resources anticipated if
`
`amendment is granted. Specifically, no party has identified any additional discovery needed as a
`
`result of proposed amendment. Second, for several reasons, amendment will not significantly delay
`
`the resolution of the dispute: trial is not imminent and has not even been scheduled, fact discovery
`
`has not yet closed, expert reports have not been produced, and there is no pending dispositive
`
`motion. ECF No. 166.
`
`III. Conclusion and Order
`For the reasons herein, Plaintiff’s Motion for Leave to Amend its Infringement Contentions
`
`[ECF Nos. 170 & 171] is GRANTED.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`--This Order terminates ECF Nos. 170 & 171.
`
`
`
`
`
`
`
`/s/ Douglas E. Arpert
`DOUGLAS E. ARPERT
`United States Magistrate Judge
`
`
`
`
`
`
`
`8
`
`