Synopsys, Inc. v. Real Intent, Inc.

Background

Synopsys sued Real Intent over alleged breaches of agreements and alleged copyright and patent infringement. The parties had previously entered agreements concerning software compatibility and a license for Real Intent to use certain Synopsys software. The court had earlier approved an agreement under which Synopsys dismissed its claim concerning the license’s audit provision with prejudice.

Synopsys sought leave to file a second amended complaint adding two state-law claims: intentional interference with contractual relations and intentional interference with prospective economic advantage. The proposed claims concerned Real Intent’s alleged solicitation and misuse of Synopsys’ DesignWare library models. Synopsys also intended to remove allegations concerning indirect copyright infringement, and Real Intent did not oppose that removal.

The scheduling-order deadline for amending the complaint had passed, so Synopsys had to show good cause under Federal Rule of Civil Procedure 16. If that requirement was met, the court then considered the more permissive amendment standard under Rule 15.

Court’s Analysis

The court found that Synopsys had acted with reasonable diligence. Although relevant emails and source code had been produced earlier in 2022, Real Intent did not make unencrypted versions of the source code available until August 2022. Synopsys’ expert reviewed the files on August 15, and Synopsys filed its motion two days later. The court concluded that Rule 16’s good-cause requirement was satisfied.

The court also rejected Real Intent’s argument that the proposed claims were futile for lack of subject-matter jurisdiction. It found supplemental jurisdiction under 28 U.S.C. § 1367 because the proposed claims shared a common set of facts with the existing copyright and patent claims. The products and intellectual property involved in the DesignWare claims were already involved in the federal claims, and the claims concerned overlapping allegations about access, product sales, and competition. The court noted that it could later decline supplemental jurisdiction if future developments showed that the new claims substantially predominated over the federal claims.

The court declined to decide at that stage whether the proposed claims ultimately stated legally sufficient claims. It explained that courts ordinarily consider such challenges after an amended pleading is filed and that Real Intent had not shown that the alleged defects could not be corrected through amendment.

The court also rejected Real Intent’s prejudice argument. Discovery was still ongoing, no discovery cutoff had been set, and the court did not expect the new claims to require extensive additional discovery. The emails and source code underlying the claims had already been produced, and evidence concerning contractual and prospective business relationships was likely in the parties’ possession. The court further stated that at least part of any delay resulted from Real Intent’s delay in producing unencrypted source code. Finally, the court found no evidence of bad faith because Synopsys had not unduly delayed seeking amendment.

Disposition

The court granted Synopsys’ motion for leave to amend. It ordered Synopsys to file the amended complaint within ten days of the order. The court separately denied Real Intent’s motion for leave to file a sur-reply, finding that Synopsys’ reply responded to arguments in Real Intent’s opposition rather than improperly raising new arguments.