Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 1 of 20 Page ID #:7755
`
`
`QUINN EMANUEL URQUHART
` & SULLIVAN, LLP
`James R. Asperger (Bar No. 083188)
`jimasperger@quinnemanuel.com
`Bryan C. Hathorn (Bar No. 294413)
`bryanhathorn@quinnemanuel.com
`865 S. Figueroa St., 10th Floor
`Los Angeles, California 90017
`Telephone: (213) 443-3000
`Facsimile: (213) 443-3100
`
`Kevin P.B. Johnson (Bar No. 177129)
`kevinjohnson@quinnemanuel.com
`Mark Yeh-Kai Tung (Bar No. 245782)
`marktung@quinnemanuel.com
`555 Twin Dolphin Drive, 5th Floor
`Redwood Shores, California 94065
`Telephone: (650) 801-5000
`Facsimile: (650) 801-5100
`
`Attorneys for Plaintiff
`California Institute of Technology
`
`[Additional counsel listed on signature page]
`
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`The CALIFORNIA INSTITUTE OF
` CASE NO. 2:13-CV-07245-MRP
`TECHNOLOGY, a California
`(JEMx)
`corporation,
`
`PLAINTIFF CALIFORNIA
`
`INSTITUTE OF TECHNOLOGY’S
`MOTION FOR LEAVE TO
`
`AMEND THE COMPLAINT
`v.
`
`
`HUGHES COMMUNICATIONS, INC.,
`Hon. Mariana R. Pfaelzer
`a Delaware corporation, HUGHES
`NETWORK SYSTEMS, LLC, a
`Delaware limited liability company,
`DISH NETWORK CORPORATION, a
`Nevada corporation, DISH NETWORK
`L.L.C., a Colorado limited liability
`company, and DISHNET SATELLITE
`BROADBAND L.L.C., a Colorado
`limited liability company,
`
`Defendants.
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`
`
`Plaintiff,
`
`
`
`
`
`
`
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`CALTECH - EXHIBIT 2004
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 2 of 20 Page ID #:7756
`
`
`TABLE OF CONTENTS
`
`Page
`
`INTRODUCTION ............................................................................................. 1
`STATEMENT OF FACTS ................................................................................ 2
`A.
`Caltech’s Initial Complaints ................................................................... 2
`B.
`Caltech Has Repeatedly Sought Discovery Regarding Relevant
`Entities and Products ............................................................................... 3
`Caltech Seeks to Add Related Entities and Products .............................. 5
`C.
`III. ARGUMENT .................................................................................................... 6
`A.
`Rule 15(a) Requires that Leave to Amend Should Be “Freely”
`Granted .................................................................................................... 6
`Caltech’s Proposed Amendments Do Not Unfairly Prejudice
`Defendants ............................................................................................... 7
`Caltech’s Proposed Amendments Will Not Cause Undue Delay ........... 8
`1.
`Caltech’s Proposed Amendments Will Not Result In Delay ....... 9
`2.
`Caltech Is Timely Seeking To Amend Its Complaint .................. 9
`Caltech Seeks to Amend Its Complaint In Good Faith ......................... 11
`D.
`Caltech’s Amendments Have Merit ...................................................... 11
`E.
`Caltech Only Amended the Complaint Once ....................................... 12
`F.
`Judicial Economy Favors Amendment in These Circumstances .......... 12
`G.
`IV. CONCLUSION ............................................................................................... 13
`
`
`B.
`
`C.
`
`
`I.
`II.
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-i-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 3 of 20 Page ID #:7757
`
`
`TABLE OF AUTHORITIES
`
`Page
`
`Cases
`Beery v. Hitachi Home Elecs. (Am.), Inc.,
`157 F.R.D. 481 (C.D. Cal. 1994)............................................................................ 6
`DCD Programs, Ltd. v. Leighton,
`833 F.2d 183 (9th Cir. 1987) ........................................................................ 6, 7, 10
`Deakyne v. Comm'n of Lewes,
`416 F.2d 290 (3d Cir. 1969) ........................................................................... 10, 11
`Eminence Capital, LLC v. Aspeon, Inc.,
`316 F.3d 1048 (9th Cir. 2003) ............................................................................ 6, 7
`F.D.I.C. v. Jackson-Shaw Partners No. 46, Ltd.,
`Civ. No. 92–20556, 1994 WL 669879 (N.D. Cal. Nov. 18, 1994) ........................ 7
`Foman v. Davis,
`371 U.S. 178 (1962) ....................................................................................... 11, 13
`Golden Hour Data Sys., Inc. v. Health Servs. Integration, Inc.,
`No. C 06-7477, 2008 WL 2622794 (N.D. Cal. July 1, 2008) .............................. 10
`Howey v. United States,
`481 F.2d 1187 (9th Cir. 1973) .............................................................................. 10
`Hurn v. Ret. Fund Trust of Plumbing,
`648 F.2d 1252 (9th Cir. 1981) .............................................................................. 10
`IXYS v. Advanced Power Tech., Inc.,
`No. C 02–03942, 2004 WL 135861 (N.D. Cal., Jan. 22, 2004) ....................... 8, 12
`Islamic Republic of Iran v. Boeing Co.,
`771 F.2d 1279 (9th Cir. 1985) .............................................................................. 10
`Jardin v. Datallegro, Inc.,
`No. 10–CV–2552, 2011 WL 1897164 (S.D. Cal. May 17, 2011) ....................... 10
`Johnson v. Buckley,
`356 F.3d 1067 (9th Cir. 2004) ................................................................................ 6
`Keniston v. Roberts,
`717 F.2d 1295 (9th Cir. 1983) ................................................................................ 7
`Miller v. Rykoff-Sexton, Inc.,
`845 F.2d 209 (9th Cir. 1988) ................................................................................ 11
`Morongo Band of Mission Indians v. Rose,
`893 F.2d 1074 (9th Cir. 1990) ............................................................................ 6, 9
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-ii-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 4 of 20 Page ID #:7758
`
`
`SAES Getters, S.p.A. v. Aeronex, Inc.,
`219 F. Supp. 2d 1081 (S.D. Cal. 2002) ................................................................ 11
`Sierra Club v. Union Oil Co. of Cal.,
`813 F.2d 1480 (9th Cir. 1987), vacated on other grounds, 485 U.S. 931 (1988) .. 7
`Soroksky v. Burroughs Corp.,
`826 F.2d 794 (9th Cir. 1987) ................................................................................ 11
`Tourgeman v. Collins Fin. Servs, Inc.,
`No. 08-CV-1392, 2010 WL 4817990 (S.D. Cal. Nov. 22, 2010) ...................... 8, 9
`United States v. Webb,
`655 F.2d 977 (1981) ............................................................................................... 6
`
`Statutes
`Fed.R.Civ.P. 15 ................................................................................................... passim
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-iii-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 5 of 20 Page ID #:7759
`
`
`I.
`
`INTRODUCTION
`Caltech seeks leave to amend its Complaint to name EchoStar Corporation,
`EchoStar Technologies LLC, and EchoStar Satellite Services LLC. These entities
`are within the same corporate family as the named Hughes Defendants1, and they
`provide set-top box receivers or satellite services to certain of the named Dish
`Defendants2. Caltech further seeks to amend its Complaint to identify additional
`set-top box receivers3 based on Caltech’s already-identified infringement theories.4
`There is a strong presumption favoring liberal amendment of claims created
`by the Federal Rules and embraced by the Ninth Circuit. Caltech’s amendments do
`not expand the scope of this case to new corporate families or types of products.
`Nor do the amendments allege new and distinct infringement theories. Rather, as
`with the previously accused products, all claims are based on the encoding and/or
`decoding of DVB-S2 compliant signals. For these and other reasons set forth
`below, Defendants cannot credibly claim any prejudice arising from Caltech’s
`amendment.
`
`
`1 “Hughes Defendants” include Hughes Communications, Inc. and Hughes
`Network Systems, LLC.
`2 “Dish Defendants” include Dish Network Corporation, Dish Network L.L.C.,
`and dishNET Satellite Broadband L.L.C.
`3 Caltech seeks to amend its Complaint to identify the following set-top box
`receivers: the ViP922, ViP722k, ViP622, ViP612c, ViP612, ViP222k, ViP211z, and
`ViP211k.
`4 To avoid confusion, Caltech inserted additional clarifications in its proposed
`Second Amended Complaint and clarified the factual bases for its claims. In
`particular, to avoid any confusion over the term “implement the DVB-S2
`standard,” Caltech revised these assertions to more clearly allege that Defendants’
`products and services “encode signals in accord with the DVB-S2 standard and/or
`decode such signals.”
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-1-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 6 of 20 Page ID #:7760
`
`
`Caltech’s proposed amendments are timely and narrow in scope, in good
`faith, and not futile.5 In these circumstances, and given that the amendments add
`solely related entities and products, judicial efficiency favors disposing of the claims
`in one proceeding. Caltech’s proposed Second Amended Complaint is attached
`hereto as Attachment A.
`II.
`STATEMENT OF FACTS
`A. Caltech’s Initial Complaints
`On October 1, 2013, Caltech filed a complaint against the Hughes and Dish
`Defendants, alleging infringement of four patents directed generally to systems and
`methods of encoding and decoding digital satellite transmissions. (Dkt. 1.)
`Caltech’s Complaint accuses Defendants’ products, methods, equipment, and/or
`services, including those that encode or decode signals in accordance with the
`current standard for digital satellite transmissions—the DVB-S2 standard—of
`practicing one or more claims of the asserted patents. (Id.) Caltech’s initial claims
`specifically identified Defendants’ satellite broadband internet equipment and
`services that encode or decode signals in accordance with the DVB-S2 standard.
`(Id.)
`
`On March 6, 2014, Caltech lodged with the Court, as a matter of right, an
`amended complaint against the same Hughes and Dish Defendants named in
`Caltech’s original complaint. (Dkt. 29.) Based on additional information
`discovered by Caltech, the Amended Complaint alleges, on information and belief,
`that the Dish Defendants offer for sale, sell, and/or use, among other activities, the
`Hopper set-top box that practices one or more claims of Caltech’s asserted patents in
`the decoding of satellite video broadcasts. (Id.) Caltech was conservative with this
`
`5 On September 10, 2014, following the lifting of the stay on discovery, the
`Court set a deadline of September 26, 2014 for Caltech to amend the pleadings and
`join new parties. (Dkt. 124.)
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-2-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 7 of 20 Page ID #:7761
`
`
`amendment, solely adding the Hopper set-top box as an accused product, with the
`expectation that discovery would potentially lead to further products and entities to
`be named in the Complaint.
`B. Caltech Has Repeatedly Sought Discovery Regarding Relevant
`Entities and Products
`On February 25, 2014, one day after the opening of discovery in this case,
`Caltech served interrogatories and requests for production on Defendants. (Hathorn
`Decl. ¶ 4.)6 Caltech’s discovery requests sought information to assist Caltech in
`identifying additional products that infringed its patents. Specifically, Caltech
`requested that Defendants identify, on behalf of themselves and their parents,
`subsidiaries, and affiliates:
`apparatuses, processes,
`equipment,
`[P]roducts, devices,
`methods, services, acts, or other instrumentalities that, when
`made, used, imported, offered for sale, sold, or practiced (either
`by itself or in conjunction with other products, methods, or
`processes), implements, practices, incorporates, or embodies the
`DVB-S2 STANDARD.
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`(Id. ¶ 5.) Caltech’s requests for production similarly sought documents regarding
`these products and services. (Id. ¶ 5.)
`
`Caltech’s requests for production additionally sought documents to assist
`Caltech in determining whether additional parties should be added to the Complaint.
`For example, Caltech sought documents regarding Defendants’ “past and current
`organizational structure” and “personnel in the areas responsible for management,
`licensing, marketing, sales, engineering, testing and research and development”
`relating to any accused product. (Id. ¶ 7.)
`
`
`6 Caltech submits the Declaration of Bryan C. Hathorn (“Hathorn Decl.”) in
`support of this motion.
`
`
`
`
`
`
`
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-3-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 8 of 20 Page ID #:7762
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`Defendants have not provided the information sought by Caltech’s discovery
`requests. Instead, Defendants chose unilaterally to limit their discovery responses to
`the named entities, and refused to provide discovery from their parent, subsidiary,
`and affiliates. (Id. ¶ 5.) Similarly, since the filing of Caltech’s infringement
`contentions, defendants have refused to produce any information on products other
`than the products identified by Caltech, thereby unilaterally denying Caltech
`relevant information that would address the operation of other products that Caltech
`believed were likely infringing its patents. (Id. ¶ 5, 9, 11.) In addition, while
`Defendants stated that they would “produce documents sufficient to show the
`organizational structure of each Defendant and sufficient to identify Defendants’
`employees with knowledge relevant to the Accused Instrumentalities,” no such
`documents have been identified. (Id. ¶ 7.)
`Caltech has repeatedly identified these and other deficiencies. It has also
`repeatedly requested information from Defendants that would assist with identifying
`products to add to the Complaint. Defendants, though, have continued to fail to
`provide any discovery regarding Defendants’ related entities and their roles with
`respect to the accused and other potentially infringing products. These discovery
`disputes are reflected in extensive correspondence between the parties from July 21,
`2014, to September 24, 2014, and have further been discussed by the parties in
`multiple meet and confer sessions. (Id. ¶¶ 8-13, 16-18.) It appears that the parties
`will not be able to resolve these disputes and they will ultimately need to be
`addressed by the Court.
`It became clear following the Court’s lifting of the discovery stay and the
`Court’s entry of its scheduling order (Dkt. 124) that Defendants were not being
`forthcoming in providing the information Caltech believed relevant to making the
`decision to add parties or claims. Caltech in parallel engaged in further independent
`due diligence and research through third-party sources, attempting to obtain, among
`other things, further information about the set-top box receivers and the entities
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-4-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`
`
`
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 9 of 20 Page ID #:7763
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`involved in manufacturing, using, offering for sale, and/or selling, among other
`activities, these set-top box receivers. Although Caltech had repeatedly requested
`the relevant information directly from Defendants, the information Caltech
`uncovered led it to the conclusion that adding the additional parties and claims was
`appropriate on the merits and made the most sense from the standpoint of judicial
`economy in addressing Defendants’ infringement of Caltech’s patents.
`C.
` Caltech Seeks to Add Related Entities and Products
`The entities Caltech seeks to add to its Complaint are all related to the
`
`previously named entities. Specifically, EchoStar Corporation is the parent
`corporation of the Hughes Defendants, and EchoStar provides accused products and
`services to certain Dish Defendants. (See Dkt. 31 ¶¶ 4, 10.) In fact, EchoStar and
`Dish Defendants were previously one company, and in approximately January 2008,
`EchoStar and Dish Defendants became two separate companies (the “spin-off”).
`(Id. ¶ 9.) Even after the spin-off, the business relationship among EchoStar and
`Dish Defendants remains integrated. As Defendants admitted, the same individual
`serves as the Chairman of both EchoStar and Dish Defendants, and he holds a
`substantial majority of the voting power of the shares of both EchoStar and Dish
`Defendants. (Id. ¶ 10.)
`The relationship between the newly identified defendants and the Dish
`Defendants is particularly interrelated for the newly accused set-top box receivers.
`Based on EchoStar’s 2013 10-K Statement, EchoStar Technologies, which designs
`and distributes digital set-top boxes, “primarily” provides digital broadcast
`operations to certain Dish Defendants. Further, according to EchoStar’s 10-K
`Statement, EchoStar Satellite “primarily” provides satellite services from its owned
`and leased in-orbit satellites to certain Dish Defendants. Based, at least in part, on
`this business, Dish Network Corporation accounted for 82.5% of EchoStar
`Corporation’s total revenue and in 2012, Dish Network Corporation accounted for
`49.5% of EchoStar Corporation’s total revenue. (Dkt. 31 ¶ 10.)
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-5-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`
`
`
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 10 of 20 Page ID
` #:7764
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`III. ARGUMENT
`A. Rule 15(a) Requires that Leave to Amend Should Be “Freely”
`Granted
`Federal Rule of Civil Procedure 15(a) states that leave to amend “shall be
`freely given when justice so requires.” The Ninth Circuit construes Rule 15
`broadly, requiring leave to amend be granted with “extreme liberality.” Morongo
`Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990); see also
`DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987) (“Rule 15’s
`policy of favoring amendments to pleadings should be applied with extreme
`liberality” (quoting United States v. Webb, 655 F.2d 977, 979 (1981) (internal
`quotation marks omitted))); cf. Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d
`1048, 1051 (9th Cir. 2003) (“Federal policy strongly favors determination of cases
`on their merits”); Beery v. Hitachi Home Elecs. (Am.), Inc., 157 F.R.D. 481, 482
`(C.D. Cal. 1994) (same). “This liberality in granting leave to amend is not
`dependent on whether the amendment will add causes of action or parties.” DCD
`Programs, 833 F.2d at 186.
`In the Ninth Circuit, “[f]ive factors are taken into account to assess the
`propriety of a motion for leave to amend: bad faith, undue delay, prejudice to the
`opposing party, futility of amendment, and whether the plaintiff has previously
`amended the complaint.” Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004).
`These five factors, however, do not carry equal weight. Eminence Capital, 316 F.3d
`at 1052. Whereas delay alone is “insufficient to justify denial of leave to amend”
`(DCD Programs, 833 F.2d at 186), the absence of unfair prejudice is a strong factor
`supporting amendment. Id. at 187; see also Eminence Capital, 316 F.3d at 1052
`(“absent prejudice, or strong showing” of other factors “there exists a presumption
`under Rule 15(a) in favor of granting leave to amend”) (emphasis in original). As
`the party opposing leave to amend, Defendants bear the burden of showing
`prejudice. DCD Programs, 833 F.2d at 187. Here, no unfair prejudice can be
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-6-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`
`
`
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 11 of 20 Page ID
` #:7765
`
`
`shown, the only previous amendment was as a matter of right, and the remaining
`factors also support amendment.
`B. Caltech’s Proposed Amendments Do Not Unfairly Prejudice
`Defendants
`Prejudice is the “touchstone” of the amendment analysis. Eminence Capital,
`316 F.3d at 1052. Absent a showing of prejudice, “leave to amend should be freely
`given.” F.D.I.C. v. Jackson-Shaw Partners No. 46, Ltd., Civ. No. 92–20556, 1994
`WL 669879, at *6 (N.D. Cal. Nov. 18, 1994); see also Keniston v. Roberts, 717 F.2d
`1295, 1300 (9th Cir. 1983) (“[L]eave to amend should be freely given in the absence
`of prejudice to the opposing party”).
`Here, there is no unfair prejudice to either the newly added entities, or the
`previously named defendants. As an initial matter, Caltech is not seeking to add
`unrelated entities, products, or infringement theories. The newly added entities are
`within the same corporate family as the Hughes Defendants, and provide products
`and services to certain Dish Defendants. Further, Caltech’s infringement claims
`against the newly accused set-top box receivers are functionally identical to those
`previously asserted against the accused Hopper set-top box and similar to those
`previously asserted against broadband internet product and services—namely, that
`these products encode or decode signals in accordance with the DVB-S2.
`In addition, EchoStar Corporation is and has been aware of Caltech’s action
`and the nature of the claims from the outset of this case, and has long been aware
`that their broadcast activities and set-top box manufacturing activities were
`implicated by Caltech’s theory of infringement. See Sierra Club v. Union Oil Co. of
`Cal., 813 F.2d 1480, 1493 (9th Cir. 1987), vacated on other grounds, 485 U.S. 931
`(1988) (“[W]here a defendant is on notice of the facts contained in an amendment to
`a complaint, there is no serious prejudice to defendant in allowing the
`amendment.”). For example, Echostar Corporation’s most recent 10-K filing states:
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-7-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 12 of 20 Page ID
` #:7766
`
`
`“Caltech appears to assert that encoding data specified by the DVB-S2 standard
`infringes each of the asserted patents.”
`Moreover, Caltech timely sought information regarding other relevant
`products and services, as well as entities involved with those products and services,
`serving discovery requests one day after the opening of discovery. (See supra
`Section II.B.) Defendants, though, have failed to provide the requested discovery.
`Defendants have instead unilaterally limited their discovery responses to solely the
`products Caltech has previously identified. (Id.) Further, Defendants have not
`provided any of the requested discovery regarding its organizational structure and
`the related entities involved in the management, licensing, marketing, sales,
`engineering, testing and research and development of the accused products and
`systems. (Id.) In these circumstances, any prejudice that Defendants assert is their
`own making—and does not preclude Caltech’s proposed amendments. See
`Tourgeman v. Collins Fin. Servs, Inc., No. 08-CV-1392, 2010 WL 4817990, at *5
`(S.D. Cal. Nov. 22, 2010) (granting
`leave
`to amend where defendants’
`“obstreperousness in discovery [] prevented Plaintiff from learning the facts that
`give rise to his proposed amendments.”).
`C. Caltech’s Proposed Amendments Will Not Cause Undue Delay
`With respect to the precise meaning of the “undue delay” factor, the Ninth
`Circuit has, in some cases, indicated that the reviewing court must analyze whether
`the proposed amendment would cause undue delays in a proceeding, while in other
`cases it has described a party’s delay in moving to amend as the pertinent inquiry.
`See IXYS v. Advanced Power Tech., Inc., No. C 02–03942, 2004 WL 135861, at *4
`(N.D. Cal., Jan. 22, 2004). Although the Ninth Circuit has variously described both
`views as important, “the former is far more significant for all practical purposes.”
`Id. Under either view, Caltech’s proposed amendment should be permitted.
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-8-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 13 of 20 Page ID
` #:7767
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`1.
`Caltech’s Proposed Amendments Will Not Result In Delay
`Caltech’s proposed amendments do not represent a significant change in the
`scope of the lawsuit, resulting in no delay from Caltech’s proposed amendments.
`No new corporate families are being added to the Complaint, nor are new product
`fields being included. Specifically, set-top box receivers are already within the
`scope of this lawsuit based on Caltech’s claims against the Hopper. Caltech’s
`infringement allegations against the newly accused set-top box receivers is similar
`to its allegations against the Hopper and Defendants’ baseband internet products—
`specifically, Caltech alleges they encode a DVB-S2 compliant signal and/or decode
`a DVB-S2 compliant signal. Based on this overlap, discovery regarding the newly
`identified entities and the newly accused products will overlap with much of the
`discovery that Caltech has been seeking. Similarly, no delay in the case schedule or
`trial date is necessary based on this amendment. In these circumstances, the undue
`delay analysis favors Caltech. See Tourgeman, 2010 WL 4817990, at *5 (granting
`leave to amend when any delay resulted from defendants failure to respond to
`written discovery, and noting that the proposed amendments would not “greatly
`alter[ ] the nature of the litigation.”) (quoting Morongo, 893 F.2d at 1079).
`2.
`Caltech Is Timely Seeking To Amend Its Complaint
`Caltech is seeking leave to amend within the Court’s timeframe for amending
`pleadings and joining new parties. (Dkt. 124.) Since the stay on fact discovery was
`lifted, Caltech has been diligently seeking information from Defendants to assist
`with determining whether to add entities and accused products to this case. In
`response, Defendants have consistently hindered Caltech’s efforts to obtain this
`information. (See supra Section II.B.) Thus, without Defendants’ assistance and
`with the Court’s impending deadline to amend pleadings and join new parties (Dkt.
`124), Caltech was required to rely on further diligence and additional investigations
`through third-party sources. Based upon its additional diligence and investigation,
`Caltech is timely seeking leave to amend.
`
`
`
`
`
`
`
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-9-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 14 of 20 Page ID
` #:7768
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`In any event, even where (unlike here) undue delay exists, “delay alone is not
`sufficient to justify the denial of a motion requesting leave to amend.” DCD
`Programs, 833 F.2d at 187 (citing Hurn v. Ret. Fund Trust of Plumbing, 648 F.2d
`1252, 1254, 980 (9th Cir. 1981) (“Delay alone does not provide sufficient grounds
`for denying leave to amend.”)); Islamic Republic of Iran v. Boeing Co., 771 F.2d
`1279, 1287 (9th Cir. 1985) (two-year delay between discovery of the counterclaims
`and moving to amend did not, by itself, necessitate denial of leave to amend);
`Howey v. United States, 481 F.2d 1187, 1191 (9th Cir. 1973) (“Only where
`prejudice is shown or the movant acts in bad faith are courts protecting the judicial
`system or other litigants when they deny leave to amend a pleading.”).
`To overcome the presumption favoring amendment, any delay must be linked
`to prejudice. Defendants can articulate no prejudice that will result from Caltech’s
`amendment given the early stages of discovery that the parties now find themselves,
`weighing in favor of leave to amend. Jardin v. Datallegro, Inc., No. 10–CV–2552,
`2011 WL 1897164 (S.D. Cal. May 17, 2011) (granting motion for leave because
`defendants did not make a sufficient showing of undue delay or prejudice given the
`early stage of litigation); Golden Hour Data Sys., Inc. v. Health Servs. Integration,
`Inc., No. C 06-7477, 2008 WL 2622794 (N.D. Cal. July 1, 2008) (granting motion
`for leave to amend an answer, noting that the discovery cut-off was more than three
`months away).7
`
`7 Embedded in Rule 15(b), which permits amendment of pleadings to conform
`to proof during and after trial, is the principle that even delay until the time of trial
`is insufficient to defeat a motion for leave to amend where the opposing party will
`not be prejudiced by the amendment. See Fed.R.Civ.P 15(b)(1) (“If, at trial, a party
`objects that evidence is not within the issues raised in the pleadings, the court may
`permit the pleadings to be amended. The court should freely permit an amendment
`when doing so will aid in presenting the merits and the objecting party fails to
`satisfy the court that the evidence would prejudice that party’s action or defense on
`the merits.”); Deakyne v. Comm’n of Lewes, 416 F.2d 290, 299 (3d Cir. 1969)
`(footnote continued)
`
`
`
`
`
`
`
`CASE NO. 2:13-CV-07245-MRP (JEMx)
`-10-
`CALTECH’S MOTION FOR LEAVE TO AMEND THE COMPLAINT
`
`

`
`Case 2:13-cv-07245-MRP-JEM Document 132 Filed 09/30/14 Page 15 of 20 Page ID
` #:7769
`
`
`D. Caltech Seeks to Amend Its Complaint In Good Faith
`The “bad faith” that courts consider when evaluating Rule 15(a) motions is
`“understood to mean such tactics as, for example, seeking to add a defendant merely
`to destroy diversity jurisdiction.” SAES Getters, S.p.A. v. Aeronex, Inc., 219 F.
`Supp. 2d 1081, 1086 (S.D. Cal. 2002) (citing Soroksky v. Burroughs Corp., 826
`F.2d 794, 805 (9th Cir. 1987)). Caltech seeks in good faith to amend its complaint
`to add entities and products based on investigations. This factor therefore also
`favors Caltech.
`E. Caltech’s Amendments Have Merit
`The standard for denying a motion for leave to amend based upon futility is
`exceedingly high. Ninth Circuit law dictates that “a proposed amendment is futile
`only if no set of facts can be proved under the amendment to the pleadings that
`would constitute a valid and sufficient claim or defense.” Miller v. Rykoff-Sexton,
`Inc., 845 F.2d 209, 214 (9th Cir. 1988) (reversing denial of leave to amend answer)
`(emphasis added). As the Supreme Court has stated, “[i]f the underlying facts or
`circumstances relied upon by a plaintiff may be a proper subject of relief, he ought
`to be afforded an opportunity to test his claims on the merits.” Foman v. Davis, 371
`
`(“amendment is to be freely allowed in order to aid in the presentation of t