Case 5:19-cv-00036-RWS Document 201 Filed 02/24/20 Page 1 of 8 PageID #: 8576
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TEXARKANA DIVISION
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`MAXELL LTD.,
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`Plaintiff,
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`v.
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`APPLE INC,
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`Defendant.
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`CIVIL ACTION NO. 5:19-CV-00036-RWS
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`ORDER
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`Before the Court is Defendant Apple’s Motion for Leave to Amend Invalidity Contentions.
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`Docket No. 130. For the reasons discussed below, the motion is GRANTED.
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`BACKGROUND
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`Maxell filed this suit asserting that Apple infringes 10 patents, including U.S. Patent No.
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`8,339,493. Docket No. 1. On August 14, 2019, Apple served Maxell with its initial P.R. 3-3
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`Invalidity Contentions in accordance with the scheduling order deadline. Docket No. 130-2 ¶ 2.
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`On November 14, 2019, Apple moved for leave to amend its invalidity contentions to add
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`additional prior art––the Casio QV-8000SX Digital Camera (“Casio Camera”)––as invalidating
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`the asserted claims of the ’493 Patent.
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`Apple asserts that, both before and after its deadline to serve its initial invalidity
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`contentions, it engaged in extensive efforts to locate relevant prior art. Docket No. 130 at 2. To
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`supplement the prior art searches conducted by Apple’s litigation counsel, Apple retained an
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`intellectual property law firm that specializes in patent matters and engaged a prior art search firm
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`to search for prior art. Id.
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`Case 5:19-cv-00036-RWS Document 201 Filed 02/24/20 Page 2 of 8 PageID #: 8577
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`On October 16, 2019, a technical analyst working under Apple’s direction discovered a
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`German website published by an individual camera enthusiast which contained information
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`relating to old models of digital cameras. Id. at 3. Within a few days the analyst identified the
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`Casio Camera as potentially relevant and, after searching for available technical information and
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`product literature, identified a product manual describing the Casio Camera’s technical features.
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`Id.
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`On October 25, 2019, Apple’s counsel prepared a supplemental invalidity claim chart.
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`Apple shared the chart with Maxell on November 4, 2019 and moved for leave to amend its
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`invalidity contentions ten days later on November 14. Id. at 4.
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`LEGAL STANDARD
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`Under the Local Rules of the Eastern District of Texas, Appendix B Patent Rules, leave to
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`amend invalidity contentions “may be made only by order of the court, which shall be entered only
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`upon a showing of good cause.” P.R. 3-6(b). “Good cause,” according to the Federal Circuit,
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`“requires a showing of diligence.” O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., , 1366 (Fed
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`Cir. 2006).
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`The Court weighs multiple factors in determining whether good cause exists, including but
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`not limited to:
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`1. The length of the delay and its potential impact on judicial proceedings;
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`2. The reason for the delay, including whether it was within the reasonable control of the
`movant;
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`3. Whether the offending party was diligent in seeking an extension of time;
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`4. The importance of the particular matter; and
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`5. The danger of unfair prejudice to the non-movant.
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`Case 5:19-cv-00036-RWS Document 201 Filed 02/24/20 Page 3 of 8 PageID #: 8578
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`Allure Energy, Inc. v. Nest Labs, Inc., 84 F. Supp. 3d 538, 540-41 (E.D. Tex. 2015) (quoting
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`Comput. Acceleration Corp. v. Microsoft Corp., 481 F. Supp. 2d 620, 625 (E.D. Tex. 2007)).
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`ANALYSIS
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`A. The Length of the Delay and the Impact on the Proceedings
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`Apple filed this motion to amend on November 14, 2019, three months after serving the
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`initial invalidity contentions. Such a delay weighs against granting leave to amend. Allure Energy,
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`84 F. Supp. 3d at 541–42. As in Allure Energy, during that three-month interval “[Maxell] was
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`required by the Scheduling Order to: propose terms for construction; file amended pleadings
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`without leave; exchange proposed claim constructions and extrinsic evidence; serve a preliminary
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`election of asserted claims; [and] complete discovery on claim construction.” Id. Further,
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`Maxell’s deadline to serve its opening claim construction brief was November 14, 2019, ten days
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`after Apple shared its supplemental invalidity chart and four days after Apple moved for leave to
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`amend. This first factor weighs against granting leave to amend.
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`B. The Reason for the Delay and Exercise of Diligence
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`Apple asserts that it has been diligent in searching for prior art and that the delay in
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`discovering the Casio Camera is excusable. Docket No. 130 at 2. With regard to diligence, Apple
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`asserts that its litigation counsel, an additional intellectual property law firm and a prior art search
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`firm all conducted extensive prior art searches. Id. Apple further argues that its delay in
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`discovering and identifying the Casio Camera is excusable “because of the significant difficulty
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`associated with locating technical information about prior art products sold twenty years ago.” Id.
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`To Apple, “[u]nlike patents and technical publications, physical prior art products, such as the
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`Casio Camera, are difficult to find” because “there is no centralized database cataloging such
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`products and their characteristics.” Id. at 3. Finally, Apple asserts that it promptly notified Maxell
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`Case 5:19-cv-00036-RWS Document 201 Filed 02/24/20 Page 4 of 8 PageID #: 8579
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`of the discovery of the Casio Camera and provided a supplemental invalidity claim chart “within
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`six business days of confirming the relevance of the Casio Camera’s product manual.” Id. at 3.
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`Maxell argues that Apple’s motion is “nothing more than an effort to correct for its own
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`lack of diligence.” Docket No. 148 at 3. For support, Maxell states that, on July 10, 2019, it
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`disclosed screenshots of the German website that Apple alleges to have first discovered on October
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`16, 2019. Id. The screenshots identified the Casio Camera. Maxell thus asserts that Apple could
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`have, through reasonable diligence, discovered the Casio Camera before its deadline to serve the
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`initial infringement contentions. Id. Apple responds that the disclosure was buried in 17 pages of
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`screenshots comprising a list of 390 cameras produced without accompanying explanation along
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`with 3,773 other documents totaling 193,586 pages. Docket No. 159 at 2.
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`“The Court . . . appreciates the difficulty of discovering all relevant prior art and
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`supplemental materials.” Tech. Pharmacy Serv. v. Alixa Rx LLC, No. 4:15-cv-766, 2017 WL
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`2833460, at *4 (E.D. Tex. Jan. 19, 2017). The delay in identifying and recognizing the Casio
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`Camera as relevant prior art can be expected even by a party conducting a proper investigation,
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`particularly when the prior art is disclosed in the manner it was here. Hearing Components, Inc.
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`v. Shure, Inc., No. 0:07-cv-104 , 2008 WL 11348009, at *2 (E.D. Tex. June 5, 2008) (finding a
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`three-month delay between plaintiff’s disclosure and defendant’s discovery of prior art reference
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`“can be expected when a party conducts a proper investigation into the merits of its potential
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`defenses).
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`Under the conditions described, the delay in discovering the Casio Camera is excusable.
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`The timeline Apple laid out evidences that it worked quickly to prepare the proposed supplemental
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`invalidity contentions and that Apple communicated with Maxell less than three weeks after
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`discovering the prior art. Seven Networks, LLC v. Google LLC, No. 2:17-cv-00442-JRG, 2018
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`Case 5:19-cv-00036-RWS Document 201 Filed 02/24/20 Page 5 of 8 PageID #: 8580
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`WL 3327927, at *1 (E.D. Tex. July 6, 2018) (finding diligence was “greatly bolstered by the
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`relative speed with which [the defendant] passed along the production of [prior art information]”);
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`Tech. Pharmacy Servs., 2017 WL 2833460, at *4 (considering defendant’s lack of communication
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`relevant to the diligence analysis). These factors weigh in favor of granting leave to amend.
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`C. The Importance of the Matter
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`In determining whether a prior art reference is important, courts consider whether the prior
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`art discloses features not present in the previously disclosed prior art are necessary or whether it
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`is merely cumulative in light of the references already asserted. MacroSolve, Inc. v. Antenna
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`Software, Inc., No. 6:11-cv-287, 2013 WL 3833079, at *3 (E.D. Tex. July 23, 2013); Tech.
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`Pharmacy Servs., 2017 WL 2833460, at *4 (“If the amendment merely ‘further proves’
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`Defendants’ contentions, it follows that the amendment is not necessary, if not completely
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`unimportant, in presenting Defendant’s case.”).
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`Apple asserts that the Casio Camera is important because it anticipates several asserted
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`claims of the ’493 patent and, in combination with other references already disclosed, renders the
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`remaining claims obvious. Docket No. 130 at 5. Apple further asserts that the importance of the
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`prior art is “shown by the fact that Apple plans to select this prior art among the small number of
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`references it will pick for its preliminary election of prior art.” Id. During the hearing on this
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`motion, Apple’s counsel added that the camera was important because it would “give the jury a
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`plain and understandable explanation of Apple’s invalidity defense.” Docket No. 189 at 8:16–17.
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`Specifically, the manual gives “the specifics of the pixel specification and none of the other
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`manuals include that information. To get there, [Apple would] have to kind of piece together prior
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`art in a manner that would be very . . . confusing to the jurors.” Id. at 18:7–10. Maxell asserts that
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`the amendment is not important because Apple has failed to identify a feature of the Casio Camera
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`that is not present in the previously asserted references. Docket No. 148 at 7.
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`Case 5:19-cv-00036-RWS Document 201 Filed 02/24/20 Page 6 of 8 PageID #: 8581
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`Because Apple does not demonstrate the Casio Camera discloses features not previously
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`disclosed in prior art, the Casio Camera seems cumulative to the already disclosed references. An
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`amendment to add prior art is generally not necessary if the prior art to be added “merely further
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`proves Defendant’s contentions.” Tech. Pharmacy Servs., 2017 WL 2833460, at *4. However,
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`Apple asserts that the prior art would clarify Apple’s arguments for the jury. Clarity to the trier of
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`fact is important. Barry v. Medtronic, No. 1:14-cv-104, 2016 WL 7665768, at *4 (E.D. Tex. May
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`9, 2016). Accordingly, this factor weighs slightly in favor of a finding of good cause to amend.
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`D. Danger of Unfair Prejudice
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`Maxell asserts that it will be prejudiced by the amendment because the parties filed their
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`joint claim construction and prehearing statement before Apple disclosed the Casio Camera.
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`Docket No. 148 at 7. Though Apple asserts that any prejudice can be cured by an extension to the
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`discovery period, Maxell alleges that there is not enough time to accommodate an extension.
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`As the court stated in Allure Energy, “no experienced practitioner would argue that the
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`sudden introduction of a new prior art reference is not prejudicial. But prejudicing an opponent is
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`the goal of a trial lawyer.” 84 F.Supp.3d at 542. The question, therefore, is not whether the
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`proposed amended invalidity contentions are prejudicial, but whether they are unfairly prejudicial.
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`Id.
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`Amendments to invalidity contentions after parties have disclosed and argued for their
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`claim constructions positions are prejudicial. See Innovative Display Techs. LLC v. Acer Inc., No.
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`2:13–cv–00522–JRG, 2014 WL 2796555, at *2 (E.D. Tex. June 19, 2014) (“Although the Court
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`does not base its claim construction on invalidity contentions, the parties’ claim construction
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`positions as a practical matter would be influenced by the scope and combination of the specific
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`prior arts disclosed in invalidity contentions.”); see also, Imperium IP Holdings (Cayman) Ltd. v.
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`Samsung Elecs. Co., Ltd., No. 4:14–cv–371, 2016 WL 3854700, at *2 (E.D. Tex. March 28, 2016).
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`Because Apple sought leave to amend after Maxell’s preliminary election of asserted claim
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`terms and just before its deadline to file the initial claim construction brief, there is undoubtedly
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`some prejudice to Maxell. However, courts in this district frequently allow amendments to
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`invalidity contentions after Markman proceedings. Alt. v. Medtronic, Inc., No. 2:04-CV-370, 2006
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`WL 278868, at *2 (E.D. Tex. Feb. 1, 2006) (stating that the court was “unwilling” to adopt a per
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`se rule that invalidity contentions cannot be amended after Markman proceedings); Sybase, Inc. v.
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`Vertica Sys., Inc., No. 6:08-cv-24, 2009 WL 4574690, at *3 (E.D. Tex. Nov. 30, 2009). This
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`prejudice is alleviated, at least in part, by the fact that Maxell had notice of Apple’s supplemental
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`invalidity contentions before responsive briefing and the Markman hearing. Moreover, Maxell
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`did not allege any specific claim construction arguments that would be affected by the
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`supplemental invalidity contentions. Alt. v. Medtronic, Inc., No. 2:04-CV-370, 2006 WL 278868,
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`at *2 (E.D. Tex. Feb. 1, 2006). The prejudice caused by allowing amended invalidity contentions
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`after the relevant Markman deadlines is not unfair prejudice.
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`Further, any prejudice in connection to ongoing discovery can be cured by an extension to
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`the relevant discovery deadlines if needed. Alt. v. Medtronic, Inc., No. 2:04-CV-370, 2006 WL
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`278868, at *2 (E.D. Tex. Feb. 1, 2006); Sybase, Inc. v. Vertica Sys., Inc., No. , 2009 WL 4574690,
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`at * (finding a continuance of discovery deadlines would cure prejudice resulting from amending
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`contentions shortly after the Markman hearing). Despite Maxell’s arguments, the Court finds that
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`the parties’ schedule would allow for modified interim discovery deadlines without affecting the
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`October trial setting.
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`In sum, the potential prejudice does not weigh against granting leave to amend.
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`Case 5:19-cv-00036-RWS Document 201 Filed 02/24/20 Page 8 of 8 PageID #: 8583
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`CONCLUSION
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`Ultimately, the Court finds that, despite the relatively slight importance of the amendment
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`and length of time between the initial invalidity contentions and amendment, Apple’s diligence
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`and excusable delay, as well as the as the lack of unfair prejudice to Maxell, warrants granting
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`Apple’s motion for leave to amend its invalidity contentions. Accordingly, it is hereby
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`ORDERED that Apples motion for leave to amend (Docket No. 130) is GRANTED.
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`.
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`____________________________________
`ROBERT W. SCHROEDER III
`UNITED STATES DISTRICT JUDGE
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`So ORDERED and SIGNED this 24th day of February, 2020.
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