Case 2:19-cv-06301-AB-KS Document 91 Filed 08/14/20 Page 1 of 11 Page ID #:3404
`
`
`JEAN-PAUL CIARDULLO, CA Bar No. 284170
` jciardullo@foley.com
`FOLEY & LARDNER LLP
`555 South Flower Street, Suite 3300
`Los Angeles, CA 90071
`Telephone: 213-972-4500
`Facsimile: 213-486-0065
`
`ELEY O. THOMPSON (pro hac vice)
` ethompson@foley.com
`FOLEY & LARDNER LLP
`321 N. Clark Street, Suite 2800
`Chicago, IL 60654-5313
`Telephone: 312-832-4359
`Facsimile: 312-83204700
`
`RUBEN J. RODRIGUES (pro hac vice)
`rrodrigues@foley.com
`LUCAS I. SILVA (pro hac vice)
`lsilva@foley.com
`JOHN W. CUSTER (pro hac vice)
`jcuster@foley.com
`FOLEY & LARDNER LLP
`111 Huntington Avenue, Suite 2500
`Boston, MA 02199-7610
`Telephone: (617) 342-4000
`Facsimile: (617) 342-4001
`
`Attorneys for Plaintiff
`Philips North America LLC
`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`WESTERN DIVISION
` Case No. 2:19-cv-06301-AB-KS
`PHILIPS NORTH AMERICA LLC’s
`REPLY IN SUPPORT OF ITS
`MOTION TO DISMISS IN THE
`ALTERNATIVE
`
`
`
`Philips North America LLC,
`
`
`
`
`Plaintiff,
`
`
`vs.
`
`
`Garmin International, Inc. and
`Garmin Ltd.,
`
`
`
`
`
`
`Defendants.
`
`August 28, 2020
`Date:
`10:00 A.M.
`Time:
`Courtroom: 7B
`
`Hon. André Birotte Jr.
`
`
`
`
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`Case 2:19-cv-06301-AB-KS Document 91 Filed 08/14/20 Page 2 of 11 Page ID #:3405
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`I. 
`II. 
`
`TABLE OF CONTENTS
`
`INTRODUCTION .................................................................................................. 1 
`THE INEQUITABLE CONDUCT PLEADINGS SHOULD BE
`DISMISSED UNDER RULE 12(B)(6) .................................................................. 2 
`III.  GARMIN’S NEW REQUEST FOR FURTHER AMENDEMNT SHOULD
`BE DENIED, AND DISMISSAL SHOULD BE WITH PREJUDICE ................. 5 
`IV.  CONCLUSION ....................................................................................................... 6 
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`Case 2:19-cv-06301-AB-KS Document 91 Filed 08/14/20 Page 3 of 11 Page ID #:3406
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`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Federal Cases
`Atwell v. Lisle Park Dist.,
`00 C 7267, 2001 U.S. Dist. LEXIS 6550 (N.D. Ill. May 16, 2001) ............................... 1
`Bell v. Wells Fargo Bank, N.A.,
`No. CV 14-4316-JFW, 2014 U.S. Dist. LEXIS 153170 (C.D. Cal. Oct.
`28, 2014) ......................................................................................................................... 6
`Exergen Corp. v. Wal-Mart Stores, Inc.,
`575 F.3d 1312 (Fed. Cir. 2009) .................................................................................. 1, 3
`Fabritex Inc. v. Target Corp.,
`No. CV 15-08231-AB, 2016 U.S. Dist. LEXIS 186320 (C.D. Cal. July
`19, 2016) (Birotte, J.) ...................................................................................................... 6
`iLife Techs., Inc. v. AliphCom,
`No. 14-cv-03345-WHO, 2015 U.S. Dist. LEXIS 20743 (N.D. Cal. Feb.
`19, 2015) ..................................................................................................................... 4, 5
`Johnson v. Mammoth Recreations, Inc.,
`975 F.2d 604 (9th Cir. 1992) .......................................................................................... 6
`Rutman Wine Co. v. E. & J. Gallo Winery,
`829 F.2d 729 (9th Cir. 1987) .......................................................................................... 6
`Therasense, Inc. v. Becton, Dickinson & Co.,
`649 F.3d 1276 (Fed. Cir. 2011) ...................................................................................... 3
`Torres v. Nationstar Mortg. LLC,
`No. EDCV 16-302-JFW, 2016 U.S. Dist. LEXIS 195476 (C.D. Cal. Apr.
`8, 2016) ........................................................................................................................... 5
`
`Wolde-Giorgis v. Dillard,
`No. CV 06-0289-PHX-MHM, 2006 U.S. Dist. LEXIS 71356 (D. Ariz.
`Sep. 22, 2006) ................................................................................................................. 1
`Zivkovic v. S. California Edison Co.,
`302 F.3d 1080 (9th Cir. 2002) ........................................................................................ 6
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`Case 2:19-cv-06301-AB-KS Document 91 Filed 08/14/20 Page 4 of 11 Page ID #:3407
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`
`Rules
`Fed. R. Civ. P. 9(b) .............................................................................................................. 3
`Fed. R. Civ. P. 12(b)(6) .................................................................................................... 1, 2
`Fed. R. Civ. P. 15 ................................................................................................................. 1
`Fed. R. Civ. P. 16(b) ........................................................................................................ 1, 6
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`PHILIPS REPLY ON MOTION TO DISMISS
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`Case 2:19-cv-06301-AB-KS Document 91 Filed 08/14/20 Page 5 of 11 Page ID #:3408
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`I.
`
`INTRODUCTION
`Plaintiff Philips North America, LLC (“Philips”) hereby respectfully submits this
`short Reply in support of its Motion in the Alternative to Dismiss (Dkt. 87). Prior briefing
`addressed Garmin’s Motion to Amend and futility of Garmin’s deficient allegations of
`inequitable conduct with respect to U.S. Patent No. 9,314,192 (“’192 Patent”). The parties
`stipulated as part of their request to the Court to extend the deadline for Garmin to move
`to amend that Philips be afforded this opportunity to submit a Reply in support of its Motion
`in the Alternative to Dismiss. (Dkt. 78.) This Reply also responds to Garmin’s new request
`in its last submission for leave to further amend its pleadings.
`To be sure, as argued in its prior submission (Dkt. 87), Philips believes that Garmin’s
`Motion to Amend should simply be denied on grounds of futility, with no need to consider
`the Motion to Dismiss in the alternative. While Philips believes that the futility of
`amendment standard under Fed. R. Civ. P. 15 should exactly mirror the standard that would
`be applied under Fed. R. Civ. P. 12(b)(6) as to the sufficiency of the pleadings in this case,
`Philips made a simultaneous Motion in the Alternative to Dismiss (Dkt. 87) in the event
`that the Court were to disagree with this premise, so as to save the parties and the Court
`the added delay and cost of a second round of briefing and a second hearing on a follow-
`on Motion to Dismiss.1 This short Reply further shows that, even if amendment were
`allowed, the pleadings would nonetheless be deficient under Rule 12(b)(6) in view of the
`Exergen pleading requirements.
`Finally, Garmin’s new request for leave to further amend its inequitable conduct
`pleadings should be denied. The deadline to amend has now long since passed, and Garmin
`shows no good cause to further modify the case schedule under Rule 16(b), nor has Garmin
`explained how any further amendment would not be futile.
`
`
`1 Simultaneously opposing amendment while alternatively seeking dismissal is a known
`procedure, and an efficient way to avoid delay. See, e.g., Wolde-Giorgis v. Dillard, No.
`CV 06-0289-PHX-MHM, 2006 U.S. Dist. LEXIS 71356, at *6-7 (D. Ariz. Sep. 22, 2006);
`Atwell v. Lisle Park Dist., 00 C 7267, 2001 U.S. Dist. LEXIS 6550, at *4 (N.D. Ill. May
`16, 2001).
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` PHILIPS REPLY ON MOTION TO DISMISS
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`Case 2:19-cv-06301-AB-KS Document 91 Filed 08/14/20 Page 6 of 11 Page ID #:3409
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`II. THE INEQUITABLE CONDUCT PLEADINGS SHOULD BE DISMISSED
`UNDER RULE 12(b)(6)
`Garmin asserts without basis that Philips does not dispute the allegations of the
`proposed amended complaint. (Garmin Reply, Dkt. 88, p. 4-5.) This is manifestly untrue.
`The entire point of Philips’s briefing was to show that the allegations were facially
`implausible in view of the surrounding facts and prosecution history record that were
`incorporated into the record as part of the proposed amended pleading.2 These objective
`facts show that the European patent prosecutor herself seemed barely conscious of
`Yamamoto, having never commented on it, and having withdrawn the European
`application as part of a pro forma routine withdrawal of many other applications. (Dkt. 87,
`p. 9.) There is no plausible allegation that any single identified one of the US prosecutors
`knew anything about Yamamoto (which was only even cited by the EPO six years after US
`prosecution began – a fact that Garmin chose to ignore in its motion), or knew anything
`about the Japanese application for that matter. (Id., Section III.)
`Nor did Philips “strategically omit[] essential facts” as Garmin argues in Section I.B
`of its Reply.3 Everything in Garmin’s redline of Philips’s timeline was discussed in
`Philips’s prior brief, with Philips demonstrating that there was nothing in the prosecution
`history showing that the any single identified person on the US prosecution team had any
`knowledge of the Japanese prosecution, much less “selectively disclosed” prior art. (Dkt.
`87, Section III.D.) While Garmin assumes without basis that the US prosecutors learned
`
`
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`2 Garmin oddly faults Philips for not venturing beyond the pleadings (Garmin Reply,
`p. 3), but of course Philips (and Garmin for that matter) is prohibited from going beyond
`the pleadings – and the materials incorporated therein by reference, or that the Court may
`judicially notice – in regards to a Rule 12(b)(6) motion.
`
`
`3 It is ironic that Garmin would speak of “strategic omission of essential facts” when
`it was Garmin that failed to attach the file histories of the patent prosecution for the Court’s
`review, and improperly framed its proposed pleadings to make it sound as if it were self-
`evident that the US prosecution team knew of the Yamamoto reference and was
`withholding it, when no such evidence or plausible pleading existed.
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`Case 2:19-cv-06301-AB-KS Document 91 Filed 08/14/20 Page 7 of 11 Page ID #:3410
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`of the JP2003-102692 prior art reference from tracking the Japanese prosecution (as
`opposed to learning of it independently), this still says nothing about whether any single
`identifiable US prosecutor knew of the Yamamoto reference from the EU prosecution.
`And of course even nominal knowledge of Yamamoto by a US prosecutor would not satisfy
`the pleading standard under Exergen: there would need to be facts demonstrating deliberate
`intent to deceive the Patent Office.
`Garmin also complains that Philips is seeking “summary judgment” and “dedicating
`its entire brief to contesting the sufficiency of Garmin’s ‘proof’ in support of its
`allegations.” (Garmin Reply, p. 2.) But this is also untrue. Philips does no more than
`apply the heightened pleading requirements under Rule 9(b) as articulated in Exergen
`Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1331 (Fed. Cir. 2009), which explicitly held
`that “[t]he mere fact that an applicant disclosed a reference during prosecution of one
`application, but did not disclose it during prosecution of a related application, is insufficient
`to meet the threshold level of deceptive intent required to support an allegation of
`inequitable conduct.” Garmin does not contest the Exergen standard because it of course
`cannot.
`There is good reason that the high bar of Exergen should apply, as was articulated
`later in the Federal Circuit’s decision in Therasense, Inc. v. Becton, Dickinson & Co., 649
`F.3d 1276, 1288-90 (Fed. Cir. 2011). The historical problem with inequitable conduct
`claims has been that they are too easily invoked to apply unwarranted and purely tactical
`pressure on patent owners, leading to wasteful litigation, and ultimately also disrupting the
`entire patent prosecution process as patent practitioners work in fear that even innocent
`omissions will subject them and their clients to claims of inequitable conduct. Id.
`It is not enough then, for Garmin to lump Philips’s many patent prosecutors into the
`same boat and impute perfect knowledge (which is completely implausible) among them
`across a worldwide operation based on tenuous purported connections, like the
`unsurprising fact that related patent applications are given similar internal docket numbers.
`If allegations such as Garmin’s could survive a motion to dismiss, then all major
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`Case 2:19-cv-06301-AB-KS Document 91 Filed 08/14/20 Page 8 of 11 Page ID #:3411
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`technology companies with large patent prosecution departments practicing in different
`countries would be constantly subjected to speculative and implausible inequitable conduct
`claims based every time a piece of prior art was cited in one place but not another.
`Philips’s prior brief showed how Garmin’s proposed allegations fall squarely within
`what was deemed insufficient by Exergen. Ultimately, the only authority that Garmin cites
`in which a pleading survived a motion to dismiss under Exergen is the case iLife Techs.,
`Inc. v. AliphCom, No. 14-cv-03345-WHO, 2015 U.S. Dist. LEXIS 20743 (N.D. Cal. Feb.
`19, 2015), but this case is easily distinguished. Unlike the present case, iLife involved a
`relatively small company with a relatively small patent prosecution team consisting of a
`very closely involved inventor (Michael Lehrman), a US prosecuting attorney (David
`Munck), and European patent counsel (Carpmaels & Ransford). AliphCom’s inequitable
`conduct pleading alleged – and, unlike the present case, the patent owner did not truly
`dispute – that Lehrman and Munck coordinated closely with the European counsel at
`Carpmaels & Ransford. Id. at *4-9, *14-19. In the present case, by contrast, there is no
`such evidence or admission of direction and control by the US attorney of foreign
`prosecution. Id. at *19-22.
`More than that, AliphCom also had a smoking gun email from inventor Lehrman in
`which he bragged that he knew how to invalidate the patents-in-suit (but had not revealed
`the invalidating information to the US Patent Office), and that he was so closely involved
`in all aspects of the patents’ prosecution (including in Europe) that iLife “should have an
`insurance policy on him.” Id. at *4, *23. There is no indication that iLife seriously
`disputed these allegations of knowledge, and instead iLife seemed only to dispute whether
`the adverse prior art was material, and whether the withholding of that prior art was done
`with intent to deceive. Id. at *18-19.
`Even with all this evidence, the iLife court still barely allowed the inequitable
`conduct claims to survive a motion to dismiss under Exergen: “Although this is a close
`question, I find that the facts pleaded in this case nudge AliphCom’s allegations that Munck
`and Lehrman intended to deceive the PTO from conceivable to plausible.” Id. at *26. In
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`Case 2:19-cv-06301-AB-KS Document 91 Filed 08/14/20 Page 9 of 11 Page ID #:3412
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`the present case, far from having a smoking gun email and clear evidence of knowledge of
`the adverse prior art, all that Garmin can ultimately point to is that Philips – which has an
`immense and segmented patent prosecution group operating in different offices around the
`world – uses similar internal docket numbering convention. The patent file histories show
`that the US prosecution proceeded on its own separate track independent of any foreign
`prosecution. Garmin can bring to bear no plausible showing that any single identified US
`prosecutors knew about Yamamoto, much less that they believed it was material and
`withheld it with intent to deceive. This simply cannot support the inequitable conduct
`pleading under Exergen.
`Furthermore, as Philips previously noted, Garmin is free to try to argue invalidity
`based on Yamamoto, so hardly needs to press a meritless inequitable conduct claim. That
`Garmin would nonetheless press this issue without proper factual support indicates that the
`inequitable conduct allegations are being pursued for purely tactical reasons.
`III. GARMIN’S NEW REQUEST FOR FURTHER AMENDEMNT SHOULD BE
`DENIED, AND DISMISSAL SHOULD BE WITH PREJUDICE
`Although Garmin makes a throw-away request to be afforded an opportunity to further
`amend its inequitable conduct pleadings (Reply, p. 9), Garmin fails to explain to the Court how
`it proposes it could possibly improve upon them. Clearly, whatever factual assertions Garmin
`could have made already have been made, so there is no reason to carry this on any longer. As
`such, Garmin’s request for further amendment should be denied, and the inequitable conduct
`allegations dismissed with prejudice. Torres v. Nationstar Mortg. LLC, No. EDCV 16-302-
`JFW (SPx), 2016 U.S. Dist. LEXIS 195476, at *5 (C.D. Cal. Apr. 8, 2016) (“Plaintiff has failed
`to allege any facts [] that indicates leave to amend would not be futile. Accordingly, the Court
`denies leave to amend, and Plaintiff's Complaint is DISMISSED with prejudice.”) (citing
`Rutman Wine Co. v. E. & J. Gallo Winery, 829 F.2d 729, 738 (9th Cir. 1987) (“Denial of leave
`to amend is not an abuse of discretion where the pleadings before the court demonstrate that
`further amendment would be futile.”); see also Bell v. Wells Fargo Bank, N.A., No. CV 14-
`4316-JFW (MRWx), 2014 U.S. Dist. LEXIS 153170, at *11-12 (C.D. Cal. Oct. 28, 2014)
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`Case 2:19-cv-06301-AB-KS Document 91 Filed 08/14/20 Page 10 of 11 Page ID #:3413
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`(dismissing with prejudice and denying leave to further amend where no showing made that
`further amendment would not be futile).
`Furthermore, Garmin has already exceeded the originally scheduled deadline to amend
`the pleadings, and has not shown the requisite good cause under Rule 16(b) to modify the case
`schedule to further extend the deadline to amend at this late stage of the litigation. As was
`explained in Fabritex Inc. v. Target Corp., No. CV 15-08231-AB (JPRx), 2016 U.S. Dist.
`LEXIS 186320, at *6-7 (C.D. Cal. July 19, 2016) (Birotte, J.):
`Parties seeking leave to amend must, however, comply with the court's
`scheduling order. Fed. R. Civ. P. 16(b). Where a party seeks to amend
`the pleadings beyond the schedule set by the court, the party must first
`seek to modify the scheduling order.
` Johnson v. Mammoth
`Recreations, Inc., 975 F.2d 604, 608-09 (9th Cir. 1992). Unlike the
`liberal amendment standard, a scheduling order “may be modified only
`for good cause and with the judge's consent.” Fed. R. Civ. P. 16(b)(4).
`In this context, good cause “primarily considers the diligence of the
`party seeking the amendment. The district court may modify the pretrial
`schedule if it cannot reasonably be met despite the diligence of the party
`seeking the extension.” Johnson, 975 F.2d at 609. “If the party seeking
`the modification 'was not diligent, the inquiry should end' and the
`motion to modify should not be granted.” Zivkovic v. S. California
`Edison Co., 302 F.3d 1080, 1087 (9th Cir. 2002).
`Here, Garmin fails to articulate any basis under Rule 16(b) to allow further amendment
`beyond the Court’s Scheduling Order. Moreover, further engagement on this issue at this stage
`of the case is indeed prejudicial to Philips. No further amendment should be allowed.
`IV. CONCLUSION
`To the extent the Court does not simply deny Garmin’s Motion to Amend as futile,
`any resulting amended pleading of inequitable conduct should be dismissed with prejudice
`for failure to state a claim.
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`Case 2:19-cv-06301-AB-KS Document 91 Filed 08/14/20 Page 11 of 11 Page ID #:3414
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`Respectfully submitted,
`
`FOLEY & LARDNER LLP
`
`
`/s/ Jean-Paul Ciardullo
`Jean-Paul Ciardullo, CA Bar No. 284170
` jciardullo@foley.com
`555 South Flower Street, Suite 3300
`Los Angeles, CA 90071
`Telephone: 213-972-4500
`Facsimile: 213-486-0065
`
`
`Eley O. Thompson (pro hac vice)
` ethompson@foley.com
`321 N. Clark Street, Suite 2800
`Chicago, IL 60654-5313
`Telephone: 312-832-4359
`Facsimile: 312-83204700
`
`
`Ruben J. Rodrigues (pro hac vice)
` rrodrigues@foley.com
`Lucas I. Silva (pro hac vice)
` lsilva@foley.com
`John W. Custer (pro hac vice)
` jcuster@foley.com
`111 Huntington Avenue, Suite 2500
`Boston, MA 02199-7610
`Telephone: (617) 342-4000
`Facsimile: (617) 342-4001
`
`Attorneys for Plaintiff
`Philips North America LLC
`
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`PHILIPS REPLY ON MOTION TO DISMISS
`CASE NO. 2:19-cv-06301-AB-KS
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` DATED: August 14, 2020
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