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