Contour IP Holding, LLC v. GoPro, Inc.

Background

Contour brought a second patent-infringement suit asserting the same claims against new GoPro products, and the second suit was consolidated with the first. GoPro asserted inequitable conduct as an affirmative defense. Inequitable conduct is a defense alleging that someone involved in obtaining a patent misled the Patent and Trademark Office by making a material misrepresentation, withholding material information, or submitting false information with a specific intent to deceive the agency. If proved, the defense can bar enforcement of a patent.

In a prior order, the court struck GoPro’s defense because GoPro had not adequately pleaded who committed the alleged inequitable conduct. The court allowed GoPro to seek leave to amend and directed it to attach the proposed amended answer. GoPro then moved for leave to file its first amended answer.

Motion for Leave to Amend

Under Federal Rule of Civil Procedure 15, courts generally should freely allow amendment when justice requires it. The court considered factors including bad faith, delay, prejudice, whether amendment would be futile, and whether the party had previously amended. The court found no undue delay, undue prejudice, or bad faith, and noted that this was GoPro’s first attempt to amend.

The court concluded that the proposed amended answer adequately pleaded the inequitable-conduct defense under the heightened detail requirement in Rule 9(b). GoPro identified two patent inventors, Laura O’Donnell and Richard Mander, and Contour’s chief technology officer, Jason Green. GoPro alleged that they failed to disclose Ambarella technology and the involvement of Ambarella employees, including information and a processor used in the claimed technology. GoPro also alleged that Green showed the Patent and Trademark Office a demonstration unit containing an Ambarella chip without disclosing that fact.

The court rejected Contour’s argument that the allegations could not support an inventorship theory because the Ambarella chips were prior art. The court explained that whether Ambarella employees made a significant contribution to conception or reduction to practice required an evidentiary record. At the pleading stage, GoPro’s allegations that Ambarella provided the processor, an idea, a demonstration, and image-processing information made possible joint inventorship sufficiently plausible.

The court also found that GoPro adequately alleged the required details concerning the alleged nondisclosures. The proposed answer identified what information was allegedly withheld, and it placed the alleged omissions during patent prosecution before the Patent and Trademark Office. The court found it plausible that a reasonable examiner would have considered the information important to patentability because GoPro alleged that disclosure could have led to rejection based on improper inventorship or prior art. GoPro identified particular claim limitations connected to the Ambarella components, although the court stated that GoPro would be limited to the listed examples unless it obtained further permission to amend.

The court rejected Contour’s argument that the allegations concerning Green failed for the same reasons. It found no rule limiting inequitable-conduct allegations to information withheld in written filings rather than during an in-person demonstration before the Patent and Trademark Office.

The court therefore granted GoPro’s motion for leave to file its first amended answer. This ruling allowed GoPro to plead the defense; it did not decide whether inequitable conduct occurred or whether the defense would ultimately succeed.

Motion to Seal

GoPro also moved to seal portions of its reply and three exhibits based on confidentiality designations by Contour and Ambarella. The court granted the request as to redactions concerning valuable, confidential Ambarella technological information because the redactions were narrowly tailored and the information was not material to resolving the motion.

The court denied the sealing request as to deposition testimony by O’Donnell because Contour had not filed a supporting declaration justifying those designations. The court directed GoPro to file an unredacted version of the relevant reply and exhibit F within seven days.

Disposition

The motion for leave to file a first amended answer was GRANTED. The sealing motion was granted as to the confidential Ambarella technology information and denied as to the challenged designations covering O’Donnell’s deposition testimony.