Electronic Scripting Products, Inc. v. HTC America, Inc.

Background

Electronic Scripting Products, Inc. sued HTC America, Inc. alleging that HTC’s virtual-reality devices infringed U.S. Patent No. 8,542,934. The patent concerns wearable equipment, such as glasses for a virtual-reality program, that uses light sources and a photodetector to determine position or orientation. The patent listed Michael J. Mandella, Hector H. Gonzalez-Banos, and Marek Alboszta as inventors.

HTC asked for permission to amend its invalidity contentions to add a defense under 35 U.S.C. § 102(f), asserting that the patent was allegedly invalid because it failed to name Stewart R. Carl as an inventor. HTC relied on Carl’s April 2021 deposition testimony that he first contributed the concept of placing a photosensor or camera on a tracked object and using the sensor’s data to calculate the object’s position and orientation.

Parties’ Arguments

Electronic Scripting Products argued that Carl had not contributed to the new patentable matter in the patent’s claims. It also argued that HTC’s request was unsupported by Carl’s testimony, that inventorship issues required factual and claim-specific analysis, and that HTC was not diligent because it had known about Carl and his claimed invention earlier in the litigation.

HTC argued that it acted promptly after obtaining Carl’s deposition testimony and that the amendment would not delay the case or impose an undue burden. HTC also argued that the court did not need to decide the strength of the proposed inventorship defense when deciding whether to allow the amendment.

Court’s Analysis

The Northern District of California’s Local Patent Rules require parties to disclose their infringement and invalidity theories early. A party may amend those contentions only with a court order and a timely showing of good cause. Good cause includes diligence and consideration of possible prejudice to the opposing party.

Judge Robert M. Illman concluded that HTC acted diligently. Although HTC had earlier documentary information about Carl, the court found it reasonable for HTC to wait until it obtained corroborating deposition testimony before seeking to amend its contentions. HTC notified Electronic Scripting Products of its intent to seek the amendment a little over a week after receiving Carl’s deposition transcript and then completed the required discussions before filing the request.

The court also found that Electronic Scripting Products had not identified real prejudice. Fact discovery was still ongoing, Carl was the only witness who had been deposed at that point, and Electronic Scripting Products’ counsel had attended Carl’s deposition and had the opportunity to question him.

The court rejected Electronic Scripting Products’ argument that it had to decide whether Carl actually contributed to the patentable subject matter. The court explained that the request concerned permission to amend the contentions, not whether HTC would ultimately prove improper inventorship by clear and convincing evidence. The court likewise found that objections to Carl’s testimony and the lack of a new claim-construction issue did not defeat good cause for the amendment.

Ruling

The court found that HTC satisfied Local Patent Rule 3-6 and had shown good cause to amend its invalidity contentions. Judge Robert M. Illman granted HTC America, Inc.’s request for leave to amend its invalidity contentions to assert that the ’934 Patent was allegedly invalid for failing to name Stewart R. Carl as an inventor. The ruling did not decide whether the patent was actually invalid or whether HTC would ultimately prevail on that defense.