IXI Mobile Ltd. v. Apple, Inc.

Background

IXI Mobile and other plaintiffs brought patent-infringement actions against Apple and Samsung involving three IXI patents related to mobile tethering technology. The actions were transferred to the Northern District of California in 2015 and stayed while the Patent Trial and Appeal Board conducted inter partes review, a proceeding in which the Board examines patent claims challenged by an opposing party.

The Board found all instituted claims unpatentable, and the Federal Circuit affirmed the decision concerning one of the patents. The court stated that the defendants’ review proceedings invalidated every claim asserted in the litigation except claim 10 of the ’532 Patent. Later, the Patent and Trademark Office issued an ex parte reexamination certificate for the ’033 Patent that amended one claim and added claims 57 through 124. Reexamination of proposed additional claims for the ’532 Patent was still ongoing.

After the court lifted the stay, the plaintiffs moved for permission to amend their infringement contentions and asserted claims. They sought to add more than 100 new claims, including some claims that had not yet been issued by the Patent and Trademark Office.

Legal standard

Under Patent Local Rule 3-6, a party may amend infringement contentions only with a court order and a timely showing of good cause. The moving party must show diligence both in discovering the basis for the amendment and in seeking permission to amend after discovering it. The court also considers whether the amendment would unfairly prejudice the opposing party.

The court explained that the Patent Local Rules are intended to make the parties settle their legal theories early and prevent them from repeatedly changing their infringement theories during the case.

Court’s analysis

The court found that the plaintiffs had not shown the required diligence. They did not identify the new infringement contentions or the accused products they wanted to add. Because the plaintiffs did not provide the proposed changes, the court could not determine how those changes differed from the original contentions, when the supporting information was discovered, or whether the changes would cause prejudice.

The court rejected the plaintiffs’ position that the addition of claims during reexamination automatically allowed amendment. It also found that the plaintiffs had not shown that they investigated potentially infringing products involving the new claims.

The court separately held that the defendants would suffer undue prejudice even if the plaintiffs had shown diligence. The defendants had prepared their defense based on the original 41 asserted claims, and the patent-review proceedings had narrowed the case to one claim. Adding more than 100 claims would require substantial additional time and resources, effectively restarting and significantly prolonging the litigation.

The defendants also argued that claim preclusion barred the new ’033 Patent claims and that the plaintiffs could not assert ’532 Patent claims that the Patent and Trademark Office had not yet issued. The court expressly stated that it did not need to decide those issues because the plaintiffs failed to show diligence and the proposed amendments would cause undue prejudice.

Disposition

The court denied the plaintiffs’ motion for leave to amend their infringement contentions and asserted claims. It also set a case-management conference for October 22, 2019, and directed the parties to file a joint case-management statement proposing a schedule for resolving the remaining single-claim action. The court stated that the plaintiffs could try to enforce their newly created claims in a new case.