Allvoice v. Microsoft: Allvoice Loses Attempt to Modify Infringement Contentions after an Adverse Markman Ruling

January 9, 2013

In this patent infringement action, plaintiff Allvoice Developments US LLC ("Allvoice") moved to amend its infringement contentions against Microsoft. Allvoice sought the amendment to incorporate changes that related to two claim constructions by the district court that differed from those asserted by Allvoice and to provide technical corrections or clarifications that would avoid confusion. Allvoice asserted there was good cause for the amendments and there be no prejudice to Microsoft. Microsoft opposed the amendment on the grounds of undue delay and unfair prejudice.

The district court began its analysis of the motion by citing to the local patent rules. "Local Patent Rule 124 allows for amendments of infringement contentions 'only by order of the Court upon a timely showing of good cause.' W.D. Wash. Local Patent Rule 124. Non-exhaustive examples of circumstances that may, absent undue prejudice to the non-moving party, support a finding of good cause include: (a) a claim construction by the Court different from that proposed by the party seeking amendment; (b) recent discovery of material prior art despite earlier diligent search; and (c) recent discovery of nonpublic information about the Accused Device which was not discovered, despite diligent efforts, before the service of the Infringement Contentions."

The district court then noted that there is a two-part test in the Western District of Washington to determine whether good cause exists to amend infringement contentions: "first, examining the diligence of the moving party; and second, upon a finding of diligence, examining the prejudice to the non-moving party."

The district court then summarized the sequence of events in the case. "A brief sequence of events is helpful to the analysis of this case. Allvoice represents that on July 23, 2010, it served its currently operative infringement contentions. On September 3, 2010, Allvoice and Microsoft submitted the Joint Claim Construction Chart that included both parties' proposed claim constructions of the disputed terms. Dkt. # 180. In its December 21, 2011 Markman order, the Court, among other things, construed certain claim terms in a manner unfavorable to Allvoice. Dkt. # 166. On January 4, 2012, Allvoice asked the Court for reconsideration of the Markman order (Dkt. # 169). The Court denied Allvoice's motion for reconsideration on January 23, 2012. Dkt. # 172. The parties stipulated that Allvoice could seek leave to amend its infringement contentions on or before April 12, 2012 (emphasis added). Dkt. # 174. On April 12, 2012, Allvoice served its amended infringement contentions now at issue. Dkt. # 177. "

After reciting this sequence of events, the district court rejected Allvoice's argument that an adverse claim construction normally provides good cause to amend infringement contentions. "To allow Allvoice to amend its infringement contentions without regard to its diligence would virtually destroy the effectiveness of the Local Patent Rules in balancing the conduct of discovery, trial preparation, and responsibilities of the parties."

The district court then concluded that Allvoice had not been diligent. "In this instance, Allvoice has not demonstrated that it acted diligently in seeking to amend its infringement contentions. Allvoice does not explain why it waited more than three months after the Markman order to seek leave to amend, or more than nineteen months since the joint claim construction of the disputed terms. Nor has Allvoice explained what it was actually doing during its "recent investigation" of Microsoft One Note before the April 12 motion to amend.4 While the parties may have separately agreed that Allvoice may file its motion to amend "on or before" April 12, 2012, that side agreement alone does not demonstrate diligence and is not binding on the Court. Determining whether the moving party has demonstrated diligence is a matter that falls squarely within the discretion of the district court. Avocent Redmond Corp. v. Rose Electronics, 2012 WL 4903278, at *1 (W.D. Wash. July 6, 2012). Accordingly, the Court concludes that Allvoice has not carried its burden of demonstrating diligence with respect to seeking leave to amend its infringement contentions. Because Allvoice has not demonstrated diligence, the Court does not need to address the question of prejudice to Microsoft. O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1368 (Fed. Cir. 2006)."


Allvoice Developments US, LLC v. Microsoft Corporation, Case No. 2:10-cv-02102-RAJ (W.D. Wash. Dec. 27, 2012)

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