R.N Nehushtan Trust Ltd. v. Apple Inc.

Background

R.N. Nehushtan Trust Ltd. asked for permission to amend its infringement contentions for the third time. It said the proposed changes were based on its review of Apple’s source code, documents that helped explain the code, and technical depositions. The proposed amendments included additional support and clarification for existing contentions, a theory of literal infringement concerning claim 5 of U.S. Patent No. 9,642,002, and contentions involving how devices determine available memory for software updates, collect certain analytics, and automatically update applications.

Apple did not contest some amendments that mainly added citations to deposition transcripts, source code, and technical documents or clarified existing contentions. Apple opposed the remaining amendments, arguing that the Trust had not diligently discovered the basis for them or sought permission to amend. Apple also argued that the amendments concerned different processes and would require reopening fact discovery, which had closed on August 2, 2023, so Apple could find witnesses, produce documents, and supplement its responses.

Legal standard

Patent Local Rule 3-6 permits amendment of infringement contentions by court order upon a timely showing of good cause. The good-cause inquiry considers the moving party’s diligence and whether the opposing party would suffer prejudice. Diligence includes both discovering the basis for amendment and seeking amendment after discovering it. The moving party bears the burden of showing diligence, although the court may grant leave without diligence if the opposing party would not be prejudiced.

Court’s analysis

The court found that the Trust was diligent in discovering the basis for the proposed amendments. Although Apple made source code available in September 2022, the Trust waited to inspect it until after the court issued its claim-construction order. The Trust’s expert reviewed the source code beginning May 15, 2023. Two days later, the Trust requested technical reference manuals and other documents describing the source code. Apple produced three relevant documents on July 7, 2023, and the Trust learned of their significance during a July 18 deposition of Apple software engineer Erik Phillips.

The court also found that the Trust acted diligently in seeking amendment. It filed the motion less than a month after the depositions and after spending part of that period seeking documents and meeting with Apple. The court rejected Apple’s argument that the Trust should have discovered the information earlier, noting that the Trust’s understanding of the source code improved only after receiving the technical documents and conducting the depositions.

The court determined that allowing the amendments would not establish sufficient prejudice to deny the motion. Apple might need additional discovery, but the Trust would also need additional discovery, and Apple already had an internal understanding of the relevant processes. The court further found that the Trust had plausibly connected the proposed amendments to its existing infringement theories. Whether the processes were actually related to, or infringed, the patented technology was left for a later evidence-based determination.

Disposition

The court granted the Trust’s motion for leave to amend its infringement contentions. It also granted the parties’ three motions to redact briefing and exhibits and to seal certain exhibits because the materials contained sensitive, confidential technical information about trade secrets. The court scheduled a case-management conference for September 19, 2023, to discuss effects on the case schedule and required a joint case-management statement by September 12, 2023.