IXI Mobile Ltd. v. Samsung Electronics Co., Ltd.

Background

IXI Mobile (R&D) Ltd. and other plaintiffs brought patent-infringement actions against Samsung Electronics Co., Ltd. and Apple Inc. The actions concerned three IXI patents involving mobile tethering technology. The cases were filed in 2014 in the Southern District of New York and later transferred to the Northern District of California. The opinion addresses the Samsung action, No. 15-cv-03752-HSG, and the related Apple action, No. 15-cv-03755-HSG.

In 2015, Samsung and Apple asked the Patent Trial and Appeal Board to review the validity of the asserted patent claims. The district court stayed the litigation while those proceedings took place. The Board found all instituted claims unpatentable, and the Federal Circuit later affirmed the decision concerning the ’033 Patent. As a result, every claim asserted in the litigation was invalidated except claim 10 of the ’532 Patent.

During separate patent-office reexamination proceedings, the ’033 Patent received an amended claim and additional claims. Reexamination of proposed additional claims for the ’532 Patent was still ongoing. After the district court lifted the stay, IXI sought permission to amend its infringement contentions and asserted claims to add the reexamination claims.

Legal standard

Patent Local Rule 3-6 allows amendment of infringement contentions only by court order and only upon a timely showing of “good cause.” The party seeking amendment must show diligence both in discovering the basis for the amendment and in seeking permission after discovering it. The court may also consider whether the amendment would prejudice the opposing party. The court explained that patent infringement contentions are amended under a conservative standard intended to prevent parties from repeatedly changing their legal theories.

Court’s reasoning

The court did not decide whether claim preclusion or issue preclusion barred IXI from asserting the new reexamination claims. Instead, it held that IXI had not shown the required diligence. IXI had not identified the new infringement contentions or the accused products it sought to add. Without those details, the court could not determine how the proposed contentions differed from the original ones, when supporting evidence was discovered, or whether the proposed changes would cause prejudice.

The court separately concluded that Samsung and Apple would suffer undue prejudice even if IXI had established diligence. The case had been narrowed from 41 asserted claims to one after years of patent-review proceedings and a stay. Adding more than 100 new claims, including some claims that had not yet been issued by the Patent and Trademark Office, would require the defendants and the court to devote substantial additional time and resources and would effectively restart the litigation.

Ruling and next steps

The court DENIED Plaintiffs’ motion for leave to amend 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 by October 15, 2019, containing a proposed schedule for resolving what remained of the case. The court stated that IXI could try to enforce its newly created claims in a new case.