`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF UTAH
`
`MEMORANDUM DECISION AND
`ORDER GRANTING DEFENDANT’S
`MOTION FOR LEAVE TO FILE FIRST
`AMENDED ANSWER AND
`COUNTERCLAIMS, AND GRANTING IN
`PART AND DENYING IN PART
`PLAINTIFFS’ MOTION FOR LEAVE TO
`FILE AN AMENDED COMPLAINT
`
`Case No. 2:21-cv-00283-TS-DAO
`
`
`District Judge Ted Stewart
`
`Magistrate Judge Daphne A. Oberg
`
`
`
`
`
`
`
`EAGLE VIEW TECHNOLOGIES, INC.,
`and PICTOMETRY INTERNATIONAL,
`CORP.,
`
`
`v.
`
`
`NEARMAP US, INC.,
`
`
`Plaintiffs,
`
`Defendant.
`
`
`
`This matter is before the Court on Defendant Nearmap US, Inc.’s Motion for Leave to
`
`File First Amended Answer and Counterclaims (“Nearmap’s Motion”)1 and Plaintiffs Eagle
`
`View Technologies, Inc. and Pictometry International Corp.’s (collectively, “EagleView”)
`
`Motion for Leave to File an Amended Complaint or, In the Alternative, to Consolidate Cases
`
`(“EagleView’s Motion”).2 For the reasons discussed below, the Court will grant Nearmap’s
`
`Motion, and grant in part and deny in part EagleView’s Motion.
`
`I. BACKGROUND
`
`On May 4, 2021, EagleView filed patent infringement lawsuits against Nearmap in the
`
`District of Utah and against GAF Materials LLC (“GAF”) in the District of New Jersey. On
`
`
`
`1 Docket No. 101.
`2 Docket No. 155.
`
`1
`
`
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`Case 2:21-cv-00283-TS-DAO Document 267 Filed 03/14/23 PageID.15910 Page 2 of 8
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`March 28, 2022, the New Jersey court transferred the GAF case to this District. After transfer,
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`EagleView moved to consolidate the two cases for pretrial purposes. This Court denied that
`
`motion and the parties have since been actively engaged in discovery until the discovery period
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`concluded on January 13, 2023.
`
`Nearmap filed its initial Answer in this case on November 29, 2021.3 The Court’s Second
`
`Amended Scheduling Order4 designated January 17, 2023, as the deadline to amend pleadings.
`
`Nearmap filed its motion on September 20, 2022, seeking to amend its Answer to include a
`
`defense of patent misuse.5 EagleView filed its motion on November 9, 2022. EagleView seeks to
`
`amend its Complaint to name new defendants, GAF Materials LLC (“GAF”) and additional
`
`Nearmap entities, add new infringement allegations, and assert additional claims regarding trade
`
`secret misappropriations.6
`
`II. LEGAL STANDARD
`
`The Federal Rules of Civil Procedure instruct that “court[s] should freely give leave” to
`
`amend “when justice so requires.”7 “In the absence of . . . undue delay, bad faith or dilatory
`
`motive on the part of the movant, repeated failure to cure deficiencies by amendments previously
`
`allowed, undue prejudice to the opposing party by virtue [] of the amendment, futility of
`
`amendment etc.—the leave sought should, as the rules require, be freely given.”8
`
`
`3 Docket No. 51. The initial Complaint was filed on May 4, 2021. Docket No. 2.
`4 Docket No. 152.
`5 Docket No. 101.
`6 Docket No. 155, at 1.
`7 Fed. R. Civ. P. 15(a)(2).
`8 Foman v. Davis, 371 U.S. 178, 182 (1962) (internal quotation marks omitted); accord
`Frank v. U.S. W., Inc., 3 F.3d 1357, 1365–66 (10th Cir. 1993).
`
`2
`
`
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`Case 2:21-cv-00283-TS-DAO Document 267 Filed 03/14/23 PageID.15911 Page 3 of 8
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`III. DISCUSSION
`
`A. NEARMAP MOTION
`
`EagleView argues that Nearmap’s Motion would be futile and cause undue prejudice. “A
`
`proposed amendment is futile if the complaint, as amended, would be subject to dismissal.”9 To
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`determine whether Nearmap’s amendment is futile therefore requires consideration of what
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`Defendants must prove to establish patent misuse.
`
`The Federal Circuit has characterized patent misuse as a “patentee’s act of
`
`‘impermissibly broaden[ing] the physical or temporal scope of the patent grant with
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`anticompetitive effect.’”10 Where, as here, the defendant does not allege per se patent misuse, the
`
`Court uses a two-part inquiry.11 First, the court considers whether the practice, alleged as misuse,
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`is “reasonably within the patent grant, i.e., that it relates to subject matter within the scope of the
`
`patent claims.”12 If so, there is no misuse. Second, if the practice extends outside of the subject
`
`matter of the patent grant, the court
`
`“must decide whether the questioned practice imposes an unreasonable restraint on
`competition, taking into account a variety of factors, including specific information
`about the relevant business, its condition before and after the restraint was imposed,
`and the restraint’s history, nature, and effect.”13
`
`
`9 Jefferson Cnty. Sch. Dist. v. Moody’s Investor’s Servs., 175 F.3d 848, 859 (10th Cir.
`
`1999).
`
`10 Princo Corp. v. Int’l Trade Comm’n, 616 F.3d 1318, 1328 (Fed. Cir. 2010) (alteration
`in original) (quoting Windsurfing Int’l, Inc. v. AMF, Inc., 782 F.2d 995, 1001 (Fed. Cir. 1986)).
`11 Va. Panel Corp. v. MAC Panel Co., 133 F.3d 860, 869 (Fed. Cir. 1997).
`12 Id. (quoting Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, 708 (Fed.Cir. 1992)).
`13 Id. (quoting State Oil Co. v. Kahn, 522 U.S. 3, 10 (1997)).
`
`3
`
`
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`Case 2:21-cv-00283-TS-DAO Document 267 Filed 03/14/23 PageID.15912 Page 4 of 8
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`Nearmap’s proposed patent misuse defense is based on a previous, non-public settlement
`
`between EagleView and Verisk Analytics, Inc. (“Verisk”).14 Nearmap’s allegations satisfy both
`
`parts of the patent misuse inquiry. First, Nearmap alleges that EagleView impermissibly
`
`broadened the scope of its patents by “conditioning a settlement . . . on the condition that Verisk
`
`stop selling certain unaccused products that compete with EagleView.”15 Second, Nearmap
`
`alleges that the settlement had anticompetitive effects.16 At this stage of the suit, the Court
`
`accepts the well-pleaded allegations in the amendment as true and views them in the light most
`
`favorable to Nearmap.17 Thus, the Court cannot conclude at this time that the proposed
`
`amendment would be futile.
`
`EagleView next argues that Nearmap’s proposed amendment would cause undue
`
`prejudice, because it would increase the scope of discovery and lead to reputational harm.
`
`Specifically, EagleView asserts that defending against a patent misuse claim would require
`
`“investigating and litigating the scope of the entirety of EagleView’s patent portfolio,
`
`including the scope of unasserted patents.”18
`
`“[The] most important [] factor in deciding a motion to amend the pleadings, is whether
`
`the amendment would prejudice the nonmoving party.”19 “Courts typically find prejudice only
`
`when the amendment unfairly affects the defendants ‘in terms of preparing their defense to the
`
`
`14 See Eagle View Techs., Inc. v. Xactware Sols., Inc., 325 F.R.D. 90 (D.N.J. 2018).
`15 Docket 118, at 2.
`16 Id. at 5.
`17 Bauchman for Bauchman v. W. High Sch., 132 F.3d 542, 550 (10th Cir. 1997).
`18 Docket No. 107, at 9 (emphasis omitted).
`19 Minter v. Prime Equip. Co., 451 F.3d 1196, 1207 (10th Cir. 2006).
`
`4
`
`
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`Case 2:21-cv-00283-TS-DAO Document 267 Filed 03/14/23 PageID.15913 Page 5 of 8
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`amendment.’”20 “A need to reopen discovery, a delay in proceedings, or the addition of
`
`complaints or parties are indicators of prejudice.”21
`
`The scope of discovery for this claim may not neatly overlap with the existing claims, but
`
`the overlap will likely be substantial. Accordingly, it is unlikely that Nearmap’s Motion will lead
`
`to a significant delay in the proceedings. As to reputational harm, EagleView presents no
`
`standard for the Court to consider in relation to this claim and the Court can find none.
`
`EagleView makes conclusory statements that such allegations will “cast a shadow on both
`
`EagleView and Verisk.”22 Nearmap’s allegations do not appear to include information solely for
`
`the purpose of harming EagleView’s reputation. EagleView may defend against the allegations
`
`contained in Nearmap’s patent misuse defense and vindicate itself in litigation. Thus, the
`
`amendment does not rise to the level of undue prejudice.
`
`Therefore, the Court will grant Nearmap’s Motion.
`
`B. EAGLEVIEW MOTION
`
`EagleView seeks to add GAF to the case as to existing Counts 1–2 and 4–8, assert new
`
`patent infringement claims against Nearmap and GAF as to Counts 9–11, assert new patent
`
`infringement claims against Nearmap as to Counts 12 and 13, and add new trade secret
`
`misappropriation claims against Nearmap as to Counts 14 and 15. In addition, EagleView seeks
`
`to add Nearmap entities—Nearmap Australia Pty Ltd. and Nearmap Ltd.—to the suit. For the
`
`
`20 Id. at 1208 (quoting Patton v. Guyer, 443 F.2d 79, 86 (10th Cir. 1971)).
`21 US Magnesium, LLC v. ATI Titanium LLC, No. 2:17-cv-00923-HCN-PMW, 2020 WL
`2616212 at *2 (D. Utah May 22, 2020).
`22 Docket No. 107, at 10.
`
`5
`
`
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`Case 2:21-cv-00283-TS-DAO Document 267 Filed 03/14/23 PageID.15914 Page 6 of 8
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`following reasons, the Court will deny EagleView’s Motion as to GAF’s inclusion in Counts 1–2
`
`and 4–11. The Court will grant the Motion as to the remaining Counts 9–15 against Nearmap.
`
`The Court views EagleView’s request partly as a motion to reconsider this Court’s denial
`
`of consolidation.23 In its previous motion to consolidate, EagleView asserted that “GAF uses the
`
`same Nearmap technology accused of infringement in the Nearmap case, which GAF says is
`
`rebranded as GAF ‘QuickMeasure’ reports.”24 That was prior to discovery. As part of discovery,
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`EagleView now alleges it has proof that “Nearmap was involved in creating QuickMeasure
`
`reports.”25 At the time of its motion to consolidate in April 2022, EagleView accused Nearmap
`
`and GAF of using the same infringing technology. Now, EagleView accuses Nearmap of helping
`
`create QuickMeasure reports. The difference between these two allegations is not significant
`
`enough to warrant a reconsideration of this Court’s denial on the previous motion to consolidate.
`
`Though the claims against Nearmap and GAF may involve similar questions of law
`
`regarding several patents, there are patents and claims uncommon to both suits that will raise
`
`different issues. EagleView argues that they will be forced to engage in duplicative discovery
`
`without consolidation, 26 however, discovery can and has run concurrently for both cases.
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`Therefore, the Court denies EagleView’s Motion to amend its Complaint to add GAF as a
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`party as stated in Counts 1–2 and 4–11.
`
`
`
`23 See Docket No. 64.
`24 Docket No. 60, at 6.
`25 Docket No. 155, at 3.
`26 Docket No. 60, at 3.
`
`6
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`Case 2:21-cv-00283-TS-DAO Document 267 Filed 03/14/23 PageID.15915 Page 7 of 8
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`Nearmap argues that EagleView’s proposed amendments regarding its claims against
`
`Nearmap would result in undue prejudice, were unduly and inexplicably delayed, and are futile.
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`Nearmap contends that the amendments would “require largely restarting the case,” because it
`
`would need to re-serve non-infringement contentions, redo discovery, and produce documents
`
`and witnesses on new issues.27
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`EagleView’s amendments will surely prejudice Nearmap by further delaying and
`
`complicating an already complex litigation. However, the burden to Nearmap is not undue
`
`because the remaining patent infringement and trade misappropriation claims are similar enough
`
`to the those already in-suit that their inclusion would not pose a major disruption to the current
`
`trajectory of the litigation. Indeed, much of the discovery relating to these claims is likely
`
`partially or fully completed. Thus, the amendments will not cause Nearmap undue prejudice.
`
`Nearmap also argues the Court should deny the Motion for undue delay because much of
`
`the information EagleView relies on was either publicly available or disclosed in discovery more
`
`than six months prior to its Motion.28 The Tenth Circuit has held that “denial of leave to amend
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`is appropriate when the party filing the motion has no adequate explanation for the delay.”29
`
`EagleView argues, and the Court agrees, that it was not required to “serially amend its complaint
`
`as it learned about each new piece of evidence.”30 Given that some of the information cited in
`
`Counts 9–15 was unveiled in discovery and this is EagleView’s first attempt at amending its
`
`
`27 Docket No. 175, at 6.
`28 Id. at 8.
`29 Minter, 451 F.3d at 1206 (internal quotations and citations omitted).
`30 Docket No. 179, at 5.
`
`7
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`
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`Case 2:21-cv-00283-TS-DAO Document 267 Filed 03/14/23 PageID.15916 Page 8 of 8
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`Complaint, and did so prior to the deadline for amending pleadings, the Court finds no undue
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`delay by EagleView.
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`Lastly, Nearmap argues that Counts 9–15 are futile, either because they lack specificity
`
`as required by Bell Atlantic Corporation v. Twombly31 or are directed to abstract ideas under 35
`
`U.S.C. § 101. These futility arguments are duplicative of arguments already raised and
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`rejected,32 and they do not preclude amendment.
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`Therefore, the Court will grant EagleView’s Motion as to the remaining Counts 9–15
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`against Nearmap.
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`It is hereby
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`IV. CONCLUSION
`
`ORDERED that Defendant’s Motion for Leave to File First Amended Answer and
`
`Counterclaims (Docket No. 101) is GRANTED. Defendant should file its First Amended Answer
`
`within twenty-one (21) days of Plaintiff’s First Amended Complaint. It is further
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`ORDERED that Plaintiff’s Motion for Leave to File an Amended Complaint (Docket No.
`
`155) is GRANTED IN PART and DENIED IN PART. Plaintiff should file its First Amended
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`Complaint within fourteen (14) days of this order.
`
`
`
`DATED this 14th day of March, 2023.
`
`BY THE COURT:
`
`
`
`Ted Stewart
`United States District Judge
`
`
`
`
`31 550 U.S. 544 (2007).
`32 Docket No. 50.
`
`8
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`
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