28 Days to Amend Contentions Following Disclosure of Preliminary Claim Constructions

In an interesting decision applying California’s Local Patent Rules, Northern District of California District Court Judge William Alsup held that “after receiving the other side’s preliminary claim construction disclosure under Rule 4-2, a party in a patent litigation must move promptly to disclose any back-up contentions it may wish (or eventually wish) to make for its infringement or invalidity case, in the event the other side’s claim construction is thereafter adopted or else any such back-up contentions will be deemed waived. Promptly means within 28 days at the latest.” Fluidigm Corp., et al. v. IONpath, Inc. at 4.

Judge Alsup’s decision was his answer to “the question of the extent to which our patent local rules require infringement and invalidity contentions to set forth not only a party’s primary theory but also its backup theory in case its opponent’s claim construction prevails.” Id. at 1. In answering that question, Judge Alsup provided a brief exposition on California’s Local Patent Rules.

“Before our local patent rules, parties struggled to determine the opposing party’s theory of liability via discovery requests, such as contentions interrogatories.” Id. at 6. The adoption of local patent rules “replaced the bone-crushing burden of scrutinizing and investigating discovery responses with the parties’ infringement and invalidity contentions.” In alleviating that burden, local patent rules “‘require both the plaintiff and the defendant in patent cases to provide early notice of their infringement and invalidity contentions’” (quoting O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1365 (Fed. Cir. 2006)) and “‘to adhere to those theories once they have been disclosed.’” Id. at 5-6 (quoting LG Elecs. Inc. v. Q-Lity Comp. Inc., 211 F.R.D. 360, 367 (N.D. Cal. 2002).

Judge Alsup acknowledged that the current version of 3-6 (the equivalent version of D.N.J. L.Pat.R. 3.7) identifies an adverse claim construction as an example that may show good cause, he points out that “the primary question of good cause is a party’s diligence, and “‘[i]n considering the party’s diligence, the critical question is whether the party could have discovered the new information earlier had it acted with the requisite diligence.’” Id. at 6 (quoting Radware Ltd. v. F5 Networks, Inc., No. C 13-02024 RMW, 2014 WL 3728482, at *1 (N.D. Cal. Jan. 1, 2014)(alteration in original). “Under the current rules, ‘parties should proffer all of the theories of infringement [or invalidity] that they in good faith believe they can assert.’” Id. (quoting Apple Inc. v. Samsung Elecs. Co., No. C 12-0630 LHK, 2013 WL 3246094, at *3 (N.D. Cal. June 26, 2013)(alteration and emphasis in original). Thus, to “eliminate[] guess work and further[] the purpose of [California’s] patent local rules, [w]here a party may wish to advance backup infringement or invalidity theories contingent upon the opposition’s claim construction, the clock starts ticking when the parties exchange those formal claim constructions.” And, “twenty eight days will generally be the outside limit of a reasonable and adequate amount of time for a party to move for leave to amend its contentions.” If a party does not seek to amend its contentions to add back-up positions based on the other party’s proposed constructions, if the other party prevails, “a party will not be allowed to assert back-up theories at [a] later juncture.” Id. at 4.

Judge Alsup seems to clarify that only a formal disclosure, such as that under L.Pat.R. 4-2 (equivalent to D.N.J. L.Pat.R. 4.2), can start the clock. “[A] mere letter, email, or disclosure other than the formal disclosure imposes no duty to amend” nor “any alternative claim constructions” nor any later modified claim constructions. Id. at 4-5.

Curiously though, under the precedence above, Judge Alsup held that the party seeking to amend was not diligent, but still allowed the party to amend its contentions. “Though the inquiry may end if the amending party was not diligent, a court retains discretion to grant leave to amend in the absence of prejudice to the opposing party.” In this case, Judge Alsup amended the schedule to alleviate the prejudice to the other party.

Gibbons P.C. will continue to monitor and report developments in patent local rules.

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