`
`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
`
`
`CYWEE GROUP LTD.,
`
`CASE NO. C17-0932JLR
`
`ORDER
`
`v.
`
`Plaintiff,
`
`
`
`
`HTC CORPORATION, et al.,
`
` Defendants/Third-Party Plaintiffs,
`
` v.
`
`STMICROELECTRONICS N.V., et
`al.,
`
` Third-Party Defendants.
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`
`
`19
`
`20
`
`21
`
`22
`
`
`
`I.
`
`INTRODUCTION
`
`Before the court is Plaintiff CyWee Group Ltd.’s (“CyWee”) motion to preclude
`
`consideration of Defendants HTC Corporation and HTC America, Inc.’s (collectively,
`
`“HTC”) allegedly belated claim construction positions. (Mot. (Dkt. # 76).) HTC
`
`ORDER - 1
`
`
`
`Case 2:17-cv-00932-JLR Document 89 Filed 05/18/18 Page 2 of 7
`
`
`
`1
`
`opposes the motion. (Resp. (Dkt. # 80).) The court has reviewed the motion, the parties’
`
`2
`
`filings in support of and in opposition to the motion, the relevant portions of the record,
`
`3
`
`and the applicable law. Being fully advised,1 the court DENIES CyWee’s motion for the
`
`4
`
`reasons discussed below.
`
`5
`
`6
`
`II.
`
`BACKGROUND
`
`CyWee brings this patent suit against HTC for allegedly infringing upon CyWee’s
`
`7
`
`U.S. Patent No. 8,441,438 (“the ’438 Patent”) and U.S. Patent No. 8,552,978 (“the ’978
`
`8
`
`Patent”) (collectively, “Patents-in-suit”). (SAC (Dkt. # 61) ¶¶ 20-177.) On January 19,
`
`9
`
`2018, HTC served CyWee with its Preliminary Invalidity Contentions, which contained
`
`10
`
`the terms within the Patents-in-suit that HTC planned to argue were invalid. (See Prelim.
`
`11
`
`Contentions (Dkt. ## 76-1, 81-1).)2 HTC specifically identified the term “the spatial
`
`12
`
`reference frame” in the ’978 Patent as indefinite. (Id. at 42.) HTC also incorporated by
`
`13
`
`reference the following:
`
`[A]ny additional invalidity contentions . . . previously disclosed by any party
`to any other pending or prior litigation or U.S. Patent & Trademark Office
`proceeding involving the [Patents-in-suit] or any related patent, including
`any invalidity contentions yet to be produced by [CyWee] from prior
`litigations and proceeds.
`
`
`//
`
`//
`
`
`1 No party requests oral argument (see Mot., Resp.), and the court finds that oral
`argument would not be helpful to its disposition of the motion, see Local Rules W.D. Wash.
`LCR 7(b)(4).
`
` 2
`
` Both parties attached different excerpts of HTC’s Preliminary Invalidity Contentions to
`their briefing. (See Mot., Ex. A (CyWee attachment); Shih Decl. (Dkt. # 81) ¶ 6, Ex. A (HTC
`attachment).) To minimize confusion, the court cites to the internal page number of the
`document, located at the bottom center of the page.
`
`ORDER - 2
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`
`
`
`
`Case 2:17-cv-00932-JLR Document 89 Filed 05/18/18 Page 3 of 7
`
`
`
`1
`
`(Id. at 3.) Based on HTC’s preliminary contentions, CyWee served its expert report
`
`2
`
`regarding claim construction issues and addressed indefiniteness only as to the
`
`3
`
`specifically identified term, “the spatial reference frame.” (See Mot. at 2.) On March 2,
`
`4
`
`2018, CyWee additionally produced the invalidity contentions that defendants made in
`
`5
`
`CyWee Group Ltd v. Samsung Electronics Co. Ltd., No. 2:17-cv-00140-RWS-RSP (E.D.
`
`6
`
`Tex.) (hereinafter, “Samsung”).3 (See Shih Decl. ¶ 7, Ex. B (“Samsung Invalidity
`
`7
`
`Contentions”).)
`
`8
`
`
`
`On March 30, 2018, HTC served its Disclosure of Preliminary Claim
`
`9
`
`Constructions, in which HTC identified three additional terms as indefinite.4 (See HTC
`
`10
`
`Disclosure (Dkt. # 76-2) at 3-4.) These additional terms were also identified as indefinite
`
`11
`
`by the defendants in Samsung. (See Samsung Invalidity Contentions at 73-74.) CyWee
`
`12
`
`objected to the disclosure of the three additional terms, and the parties met and conferred
`
`13
`
`on the issue to no avail. (Shih Decl. ¶¶ 4-5.)
`
`//
`
`//
`
`
`3 In Samsung, CyWee brought similar infringement claims of the ’438 Patent and the
`’978 Patent against Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc.
`(collectively, “Samsung”). See CyWee Grp. Ltd. v. Samsung Electronics Co. Ltd., et al.,
`No. 2:17-cv-00140-RWS-RSP (E.D. Tex.) (“Samsung”), Dkt. # 9 (“Am. Compl.”) ¶¶ 17-288.
`Indeed, CyWee’s complaint against Samsung mirrors its complaint against HTC. Compare
`generally id., with (SAC.)
`
` 4
`
` These terms are: (1) “utilizing a comparison to compare the first signal set with the
`second signal set” (the “First Disputed Term”); (2) comparing the second quaternion in relation
`to the measured angular velocities ωx, ωy, ωz of the current state at current time T with the
`measured axial accelerations Ax, Ay, Az and the predicted axial accelerations Ax’, Ay’, Az’ also
`at current time T” (the “Second Disputed Term”); and (3) “generating the orientation output
`based on the first signal set, the second signal set and the rotation output or based on the first
`signal set and the second signal set” (the “Third Disputed Term”). (See HTC Disclosure at 4.)
`
`ORDER - 3
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`
`
`
`
`Case 2:17-cv-00932-JLR Document 89 Filed 05/18/18 Page 4 of 7
`
`
`
`
`
`1
`
`Subsequently, and for unrelated reasons, the court amended the scheduling order
`
`2
`
`to (1) extend the joint claim chart and prehearing statement deadline from April 25, 2018,
`
`3
`
`to July 27, 2018; (2) extend the opening claim construction brief deadline from May 18,
`
`4
`
`2018, to August 2, 2018; and (3) move the Markman hearing from July 13, 2018, to
`
`5
`
`September 21, 2018. (Compare Sched. Order (Dkt. # 42), with Am. Sched. Order (Dkt.
`
`6
`
`# 73).)
`
`7
`
`
`
`CyWee moves to preclude consideration of HTC’s belated identification of
`
`8
`
`indefinite terms, arguing that HTC has violated the court’s scheduling order and has
`
`9
`
`“substantially prejudice[d] CyWee by preventing its expert from rendering an opinion
`
`10
`
`applicable to this case.” (Mot. at 2.) HTC maintains that it has not violated the court’s
`
`11
`
`scheduling order because the three additional terms were incorporated by reference in the
`
`12
`
`preliminary contentions. (Resp. at 5-8.) Even if the three additional terms qualify as an
`
`13
`
`amendment, HTC argues that there is no prejudice to CyWee, especially now that the
`
`14
`
`court has extended the Markman-associated deadlines. (Id. at 3-5.) The court now
`
`15
`
`addresses CyWee’s motion.
`
`16
`
`17
`
`III. ANALYSIS
`
`The parties’ dispute boils down to two issues: (1) whether HTC’s addition of
`
`18
`
`three terms constitutes an amendment or whether the additional terms were encompassed
`
`19
`
`by the Preliminary Invalidity Contentions through incorporation by reference; and (2) if
`
`20
`
`the additional terms constitute an amendment, whether there is good cause to allow
`
`21
`
`amendment. (See Mot., Resp.) Because the court finds that good cause exists to
`
`22
`
`//
`
`
`
`ORDER - 4
`
`
`
`Case 2:17-cv-00932-JLR Document 89 Filed 05/18/18 Page 5 of 7
`
`
`
`1
`
`allow amendment, there is no need to decide whether HTC’s broad incorporation by
`
`2
`
`reference properly disclosed the three additional terms.
`
`3
`
`Local Patent Rule 124 allows the parties to amend infringement and invalidity
`
`4
`
`contentions “only by order of the [c]ourt upon a timely showing of good cause.” Local
`
`5
`
`Rules W.D. Wash. LPR 124. Whether a party has established good cause lies within the
`
`6
`
`sound discretion of the trial court. See MEMC Elec. Materials, Inc. v. Mitsubishi
`
`7
`
`Materials Silicon Corp., 420 F.3d 1369, 1380 n.5 (Fed. Cir. 2005). This District’s Local
`
`8
`
`Patent Rules “requir[e] both the plaintiff and the defendant in patent cases to provide
`
`9
`
`early notice of their infringement and invalidity contentions, and to proceed with
`
`10
`
`diligence in amending those contentions when new information comes to light in the
`
`11
`
`course of discovery. The rules thus seek to balance the right to develop new information
`
`12
`
`in discovery with the need for certainty as to the legal theories.” REC Software USA, Inc.
`
`13
`
`v. Bamboo Sols. Corp., No. C11-0554JLR, 2012 WL 3527891, at *2 (W.D. Wash. Aug.
`
`14
`
`15, 2012) (quoting O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355,
`
`15
`
`1365-66 (Fed. Cir. 2006)).
`
`16
`
`In determining whether good cause exists to amend, courts consider (1) whether
`
`17
`
`the party was diligent in amending its contentions; and (2) whether the non-amending
`
`18
`
`party would suffer prejudice if the contentions were to be amended. See id. Regarding
`
`19
`
`diligence, courts should focus on whether the amending party’s “actions comport with the
`
`20
`
`purpose behind the federal discovery rules in diligently . . . developing new theories of
`
`21
`
`invalidity.” Id. at *3. The good cause inquiry “may also take into consideration the
`
`22
`
`//
`
`
`
`ORDER - 5
`
`
`
`Case 2:17-cv-00932-JLR Document 89 Filed 05/18/18 Page 6 of 7
`
`
`
`1
`
`circumstances of the individual case,” such as whether “gamesmanship” motivates the
`
`2
`
`amendment. Id.
`
`3
`
`Applying that standard to this case, the court concludes that even if HTC’s
`
`4
`
`additional terms constitute an amendment, there is good cause to amend. First, HTC has
`
`5
`
`shown that it was diligent in amending its invalidity contentions. CyWee produced the
`
`6
`
`Samsung invalidity contentions in early March, and HTC disclosed the three terms that
`
`7
`
`were presented in Samsung shortly thereafter on March 20, 2018. Although CyWee
`
`8
`
`claims that “there was nothing preventing HTC from [earlier] asserting” the three
`
`9
`
`additional terms, HTC disclosed the terms only after receiving CyWee’s production
`
`10
`
`regarding related litigation. The court finds that HTC was diligent in developing new
`
`11
`
`theories of invalidity and that there is no evidence HTC’s actions are “motivated by
`
`12
`
`gamesmanship.” See REC Software, 2012 WL 3527891, at *3.
`
`13
`
`Moreover, there is no prejudice to CyWee in allowing HTC to add these three
`
`14
`
`terms. Due to the amended scheduling order, CyWee now has over two months—and
`
`15
`
`had nearly three months at the time of its reply—to supplement its expert report to
`
`16
`
`include these three additional terms.5 (See Am. Sched. Order.) The lack of prejudice is
`
`17
`
`especially apparent given the fact that in Samsung, CyWee has already prepared an expert
`
`18
`
`19
`
`20
`
`21
`
`22
`
`
`
`
`5 In its reply, which CyWee submitted after the court’s amended scheduling order,
`CyWee “explicitly denies” that the amended schedule mitigates its prejudice but makes no
`argument as to what the remaining prejudice is. (See Reply (Dkt. # 82) at 5.) Construed
`liberally, CyWee’s assertion of prejudice seems to be a philosophical one: that if HTC is
`allowed to circumvent the Local Rules simply by delaying the proceedings, then HTC “will be
`able to continually change its invalidity theories.” (See id. at 6.) But that possibility is not
`currently before the court. And CyWee, of course, may bring the appropriate motion should that
`possibility become reality. Should such an occasion arise, the court strongly encourages the
`parties to reach agreement amongst themselves rather than to seek court intervention.
`
`ORDER - 6
`
`
`
`Case 2:17-cv-00932-JLR Document 89 Filed 05/18/18 Page 7 of 7
`
`
`
`1
`
`declaration responding to indefiniteness regarding the same three terms. See Samsung,
`
`2
`
`Dkt. # 66-6 (“LaViola Decl.”) ¶¶ 17-22 (addressing indefiniteness of the First Disputed
`
`3
`
`Term); id. ¶¶ 46-54 (addressing indefiniteness of the Second Disputed Term); id.
`
`4
`
`¶¶ 86-90 (addressing indefiniteness of the Third Disputed Term).
`
`5
`
`The court recognizes that the “philosophy behind amending claim charts is
`
`6
`
`decidedly conservative, and designed to prevent the ‘shifting sands’ approach to claims
`
`7
`
`construction.” L.G. Elecs. Inc. v. Q-Lity Comput. Inc., 211 F.R.D. 360, 367 (N.D. Cal.
`
`8
`
`2002). But here, nothing suggests that HTC is employing a “shifting sands” approach,
`
`9
`
`and sufficient time remains to protect against such a possibility. Because good cause
`
`10
`
`exists to amend, the court denies CyWee’s motion to preclude consideration of HTC’s
`
`11
`
`additional terms.
`
`12
`
`13
`
`IV. CONCLUSION
`
`For the foregoing reasons, the court DENIES CyWee’s motion to preclude
`
`14
`
`consideration of HTC’s additional claim terms (Dkt. # 76).
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`21
`
`22
`
`
`
`Dated this 18th day of May, 2018.
`
`A
`
`JAMES L. ROBART
`United States District Judge
`
`ORDER - 7
`
`