Case 2:19-cv-06301-AB-KS Document 83 Filed 07/22/20 Page 1 of 8 Page ID #:2433
`
`
`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
`
`LAMKIN IP DEFENSE
`RDL@LamkinIPDefense.com
`Rachael D. Lamkin (246066)
`One Harbor Drive, Suite 304
`Sausalito, CA 94965
`(916) 747-6091 Telephone
`Michelle L. Marriott (pro hac vice)
`michelle.marriott@eriseip.com
`Erise IP, P.A.
`7015 College Blvd.
`Suite 700
`Overland Park, KS 66211
`(913) 777-5600 Telephone
`(913) 777-5601 Facsimile
`
`Attorneys for Defendants Garmin
`International, Inc. and Garmin Ltd.
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE CENTRAL DISTRICT OF CALIFORNIA
`
`
`
`
`
`
`
`
`
`v.
`
`
`
`PHILIPS NORTH AMERICA LLC,
`
`
`
`
`
`GARMIN INTERNATIONAL, INC.
`AND GARMIN LTD.,
`
`
`
`
`
`
`
`
`
`
`
`
`
`Plaintiff,
`
`Defendants.
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`
`Case No. 2:19-cv-06301-AB-KS
`
`MEMORANDUM OF POINTS
`AND AUTHORITIES IN
`SUPPORT OF DEFENDANTS’
`MOTION TO AMEND
`PLEADING
`
`Date: August 28, 2020
`Time: 10:00 A.M.
`Courtroom: 7B
`Judge: Hon. André Birotte Jr.
`
`Date Filed: July 22, 2020
`Trial Date: March 30, 2021
`
`
`
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’
`MOTION TO AMEND PLEADING
`
`

`

`Case 2:19-cv-06301-AB-KS Document 83 Filed 07/22/20 Page 2 of 8 Page ID #:2434
`
`
`Defendants Garmin International, Inc. and Garmin Ltd. (collectively,
`“Garmin”) respectfully seek leave, pursuant to Fed. R. Civ. P. 15(a), Local Rule 15,
`the Court’s Standing Order, and the Court’s Order (Dkt. 81), to file the Proposed
`First Amended Answer, Affirmative Defenses, and Counterclaims attached as
`Exhibits A (Garmin International, Inc.) and B (Garmin Ltd.) to bring an affirmative
`defense and counterclaim for inequitable conduct relating to U.S. Patent No.
`9,314,192 against Plaintiff Philips North America LLC (“Philips”).
`I.
`INTRODUCTION
`Garmin seeks to amend its pleadings to assert an affirmative defense and
`counterclaim of inequitable conduct. Garmin’s inequitable conduct claim relates to
`one of the patents asserted in this case, U.S. Patent No. 9,314,192 (“the ’192
`Patent”). The ’192 Patent was filed and prosecuted by Philips, and claims priority
`to a patent application filed by Philips in the European Patent Office (the application
`referred to herein as the “EP Application”). As detailed in the proposed amended
`pleading and below, the European Patent Office rejected the EP Application in view
`of the Yamamoto prior art reference. After receiving the Yamamoto rejection, Philips
`abandoned and withdrew the EP Application entirely.
`Despite this rejection and abandonment of the EP Application due to
`Yamamoto, Philips never disclosed Yamamoto to the United States Patent and
`Trademark Office (“USPTO”) in connection with the related ’192 Patent. Instead,
`Philips withheld the Yamamoto reference from the USPTO, knowing that it was fatal
`to the EP Application, while selectively disclosing other prior art references that
`Philips was able to successfully overcome in prosecution of other related foreign
`counterparts to the ’192 Patent.
`Garmin should be granted leave to amend. Garmin’s amended pleading
`explains in detail the available factual basis for Philips’ knowledge of Yamamoto,
`and why Philips’ withholding of Yamamoto was but-for-material to the patentability
`
`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
`
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’
`MOTION TO AMEND PLEADING
`
`

`

`Case 2:19-cv-06301-AB-KS Document 83 Filed 07/22/20 Page 3 of 8 Page ID #:2435
`
`
`of the ’192 Patent claims. In view of these facts, Philips understood that when
`Yamamoto was disclosed, the patent application was rejected; and when Yamamoto
`was not disclosed, the patent application was granted. Philips also understood the
`materiality of Yamamoto to the claims of the ’192 Patent, as the European Patent
`Office mapped the claim limitations to Yamamoto in its rejection. These facts –
`pleaded in detail and with particularity – are more than sufficient to allege
`inequitable conduct.
`Garmin therefore respectfully requests that the Court grant leave to amend its
`pleading to assert inequitable conduct. Pursuant to the Court’s Standing Order 7(b),
`Garmin states that the effect of the proposed amendment is to assert a defense and
`counterclaim for inequitable conduct as to the ’192 Patent. The amendment consists
`of “Counterclaim 4 and Affirmative Defense” contained on pages 24-34 of Exhibits
`A and B.
`II.
`PROCEDURAL BACKGROUND
`Garmin timely sought to amend its pleadings to assert inequitable conduct
`after discovering the underlying facts when finalizing its invalidity contentions. The
`Parties met and conferred regarding Garmin’s motion to amend on May 21, 2020
`pursuant to L.R. 7-3. During this meet-and-confer, counsel for Philips stated that
`Philips did not oppose the amendment as untimely but did intend to oppose only on
`grounds of futility. However, in order to further assess such opposition, counsel for
`Garmin agreed to provide the amended pleading to counsel for Philips for review.
`After such review, counsel for Philips confirmed its above-stated position, but did
`not further explain Philips’ position. See Dkt. 78.
`The parties submitted a Joint Stipulation seeking to amend the scheduling
`order to permit Garmin leave to file this motion to amend. Dkt. 78. As noted in that
`Stipulation, “Garmin did not delay in seeking amendment,” “Philips did not oppose
`the amendment as untimely,” and “[t]he Parties submit that there is good cause for
`
`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
`
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’
`MOTION TO AMEND PLEADING
`
`

`

`Case 2:19-cv-06301-AB-KS Document 83 Filed 07/22/20 Page 4 of 8 Page ID #:2436
`
`
`the requested extension.” Id. The parties also agreed to a briefing procedure to
`accommodate Philips’ desired motion practice. The Court granted the parties’
`request to amend the scheduling order. Dkt. 81.
`Garmin has served written discovery requests on Philips seeking, inter alia,
`documents “relating to the prosecution of the ’192 Patent,” documents “reflecting
`the structure, contents, filing hierarchy, and accessibility of information related to”
`Philips’ internal files relating to the EP Application and the ’192 Patent, documents
`relating to “the identity of computers or server architecture utilized by Philips IP&S
`[Intellectual Property & Standards] in connection with the prosecution of the ’192
`Patent,” documents “sufficient to identify all individuals affiliated with Philips IP&S
`that were involved in any way with the prosecution of the ’192 Patent,” and
`documents “relating to Philips IP&S’ knowledge that the claims of the European
`patent application from which the ’192 Patent claims priority were found to be not
`novel in view of” Yamamoto. As of the filing of this motion, Philips has served
`objections to these requests, but has not yet produced the requested documents. See
`Exhibit C.
`III. LEGAL STANDARDS
`Under Federal Rule of Civil Procedure 15, titled “Amended and Supplemental
`Pleadings,” courts “should freely give leave [to amend] when justice so requires.”
`FRCP 15(a)(2). “Accordingly, Rule 15’s policy of favoring amendments to
`pleadings should be applied with ‘extreme liberality.’” United States v. Webb, 655
`F.2d 977, 979 (9th Cir. 1981).
`Leave to amend lies “within the sound discretion of the trial court.” Webb,
`655 F.2d at 979. In exercising its discretion, “a court must be guided by the
`underlying purpose of Rule 15: to facilitate decision on the merits, rather than on the
`pleadings or technicalities.” Id. “Amendment is to be liberally granted where from
`the underlying facts or circumstances, the [claimant] may be able to state a claim.”
`
`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
`
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’
`MOTION TO AMEND PLEADING
`
`

`

`Case 2:19-cv-06301-AB-KS Document 83 Filed 07/22/20 Page 5 of 8 Page ID #:2437
`
`
`DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). While a motion
`for leave to amend may be denied if it is futile, an opposed 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), overruled on other grounds by Ashcroft v. Iqbal, 556
`U.S. 662 (2009). As the party opposing amendment, Philips bears the burden of
`showing futility. Leighton, 833 F.2d at 187.
`IV. ARGUMENT
`Garmin’s proposed amended pleading sufficiently alleges that individuals
`employed by Philips knew of the Yamamoto reference, knew that Yamamoto was
`material to the patentability of the claims of the ’192 Patent, and withheld Yamamoto
`with a specific intent to deceive the USPTO. Thus, contrary to Philips’ suggestion
`of futility, Garmin’s proposed amendment is more than sufficient to state a claim for
`inequitable conduct.
`Inequitable conduct is a judicially-created equitable defense to patent
`infringement. Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1285
`(Fed. Cir. 2011) (en banc). When a court determines that inequitable conduct has
`occurred as to one or more claims of a patent, the entire patent is rendered
`unenforceable. Id. at 1287. Inequitable conduct generally requires a showing of (1)
`specific intent to deceive the Patent Office and (2) “but-for materiality,” meaning
`that the patent would not have issued but for the misrepresentation or omission.” Id.;
`Glaukos Corp. v. Ivantis, Inc., No. CV-18620-JVS-JDEX, 2019 WL 4198641, at *4
`(C.D. Cal. July 17, 2019) (granting motion to amend to assert inequitable conduct).
`The standard for pleading inequitable conduct was set forth in Exergen Corp.
`v. Wal-Mart Stores, Inc, 575 F.3d 1312, 1327 (Fed. Cir. 2009), which requires that
`inequitable conduct be pleaded with particularity – i.e., an “identification of the
`specific who, what, when, where, and how of the material misrepresentation or
`
`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
`
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’
`MOTION TO AMEND PLEADING
`
`

`

`Case 2:19-cv-06301-AB-KS Document 83 Filed 07/22/20 Page 6 of 8 Page ID #:2438
`
`
`omission committed before the PTO.” Exergen, 575 F.3d at 1327; see also Kaneka
`Corp. v. SKC Kolon PI, Inc., No. CV 11-3397 JGB (RZX), 2014 WL 12779863, at
`*2-3 (C.D. Cal. May 30, 2014). The “who” is an inference that specific individual(s)
`knew of material information and deliberately withheld it with the specific intent to
`deceive the PTO. Kaneka, 2014 WL 12779863, at *3. The “what” and “where” are
`satisfied when the pleading “identif[ies] which claims, and which limitations in those
`claims, the withheld references are relevant to.” Id. (quoting Exergen, 575 F.3d at
`1329). Such allegations help explain both “why” the withheld information is
`material and “how” an examiner would have used this information in assessing the
`patentability of the claims. Exergen, 575 F.3d at 1328–30. “[K]nowledge” and
`“intent” may be “averred generally,” but the pleading must “include sufficient
`allegations of underlying facts from which a court may reasonably infer1 that a
`specific individual (1) knew of the withheld material information or of the falsity of
`the material misrepresentation, and (2) withheld or misrepresented this information
`with a specific intent to deceive the PTO.” Id. at 1328-29; see also Kaneka, 2014
`WL 12779863, at *3.
`At over ten pages, Garmin’s Amended Counterclaim sets forth the who, what,
`when, where, why, and how of Philips’ inequitable conduct in connection with the
`’192 Patent. As detailed in the pleading, the ’192 Patent claims priority to the earlier-
`filed EP Application filed in the European Patent Office. The European Patent
`Office rejected the EP Application in view of the Yamamoto reference, detailing how
`the teachings of Yamamoto invalidated the claim limitations. As a result, Philips
`withdrew the EP Application entirely. Yet despite its knowledge of Yamamoto and
`its teachings, the European Patent Office’s rejection of the EP Application, and
`
`
`1 A “reasonable inference” is one that “is plausible and that flows logically from the
`facts alleged.” Exergen, 575 F.3d at 1329 n.5.
`
`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
`
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’
`MOTION TO AMEND PLEADING
`
`

`

`Case 2:19-cv-06301-AB-KS Document 83 Filed 07/22/20 Page 7 of 8 Page ID #:2439
`
`
`Philips’ withdrawal of the parent application in view of Yamamoto, Philips withheld
`Yamamoto from the USPTO during prosecution of the ’192 Patent while disclosing
`other prior art that was not fatal to the claims of the EP Application and other foreign
`counterparts.
`In short, the amended pleading factually alleges that Philips knew of
`Yamamoto, knew that Yamamoto was material to the patentability of the ’192 Patent
`because it had been used by the European Patent Office to reject similar claims to
`the ’192 Patent,2 and selectively withheld Yamamoto from the USPTO in order to
`avoid a similar rejection of the ’192 Patent. The amended counterclaim summarizes
`these allegations as follows:
`a. Who: Philips IP&S employees responsible for prosecution of
`the ’192 Patent, including but not limited to Yan Glickberg,
`Kathleen Asher, Patricia Heim, Edward Goodman, and Jeanne
`Rusciano.
`b. What: withheld the Yamamoto reference—which was fatal to
`the EP Application—during
`the prosecution of
`the US
`Application that led to the ’192 Patent, while simultaneously
`disclosing art from other foreign prosecution that had not been
`fatal to those applications.
`c. When: from June 21, 2007 to December 17, 2015.
`d. Where: before the USPTO and in Philips IP&S offices
`containing the persons named in ¶ 56(a), supra.
`e. How: by violating their duty of candor the USPTO.
`
`
`2 The amended pleading contains a chart showing how claim 1 of the ’192 Patent is
`taught by the specific teachings of Yamamoto identified by the European Patent
`Office.
`
`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
`
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’
`MOTION TO AMEND PLEADING
`
`

`

`Case 2:19-cv-06301-AB-KS Document 83 Filed 07/22/20 Page 8 of 8 Page ID #:2440
`
`
`All together, these allegations explain why the withheld reference is material and
`how an examiner would have used this information in assessing the patentability of
`claim 1 of the ’192 Patent—that the “USPTO would not have allowed the claims of
`the ’192 Patent had it been aware of the Yamamoto reference” – allegations from
`which the Court may reasonably infer that Philips IP&S knew of Yamamoto and
`withheld it with a specific intent to deceive the USPTO. See Exhibits A, B.
`V. CONCLUSION
`Garmin’s proposed amended pleading alleges inequitable conduct with
`particularity. Accordingly, pursuant to Federal Rule of Civil Procedure 15, Garmin
`respectfully requests that the Court grant Garmin’s Motion to Amend.
`
`
`DATED: July 22, 2020
`
`
`
`
`LAMKIN IP DEFENSE
`ERISE IP, P.A.
`
`
`By: /s/ Michelle L. Marriott
`
`
`
`Counsel for Defendants Garmin International,
`Inc. and Garmin Ltd.
`
`
`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
`
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’
`MOTION TO AMEND PLEADING
`
`