SFA Systems v. Amazon: SFA Permitted to Amend Infringement Contentions Where Amendment Would Streamline Discovery and Prejudice to Amazon Would Be Minimal

June 26, 2013

SFA Systems ("SFA") filed a patent infringement action against Amazon and twenty-six other defendants in 2011. SFA subsequently timely served its infringement contentions pursuant to the local rules in the Eastern District of Texas. After receiving discovery from Amazon, SFA requested that Amazon supplement its discovery responses to produce documents relating to the Kindle Fire and the Amazon Mobile application. Amazon declined to do so on the basis that the Kindle Fire and the Amazon Mobile app were not accused in the infringement contentions. After several attempts to meet and confer, SFA sought to amend its infringement contentions.

As explained by the district court, the local Patent Rule 3-6 sets forth the procedures for amending infringement contentions. This rule provides that infringement contentions. "shall be deemed to be...final contentions." Patent Rule 3-69a). When a party seeks to amend or supplement its invalidity contentions and considers four factors in ruling on motions for leave to do so: (1) the explanation for the party's failure to meet the deadline; (2) the importance of the thing that would be excluded; (3) the potential prejudice in allowing the thing that would be excluded; and (4) the availability of a continuance to cure such prejudice. Global Sessions LP, 2012 WL 1903903, at *2 (citing S & W Enters., L.L.C. v. Southtrust Bank of Ala., NA, 315 F.3d 533, 536 (5th Cir. 2003)).

The district court then noted that "[t]he Parties agree that SFA's original Infringement Contentions accused the product recommendations' back-end system that powers the Amazon.com website. Plaintiff's proposed amended Infringement Contentions accuse the same product-recommendation system, while specifying that the accused system may be accessed by different devices or channels."

As the district court explained, the rules are not meant to provide a forum for litigating substantive issues. "The preparation and supplementation of infringement contentions is a matter of pleading and merely notifies a defendant of the asserted theories of infringement in order to provide adequate notice and streamline discovery. Davis-Lynch, Inc. v. Weatherford Int'l, Inc., No. 6:07-cv-559, 2009 WL 81874, *3 *(E.D. Tex. 2009). While infringement contention must be reasonably precise and detailed to provide a defendant with adequate notice of the plaintiff's theories of infringement, they need not meet the level of detail required on a motion or summary judgment because infringement contentions are not meant to provide a forum for litigation of the substantive issues. Linex Tech., Inc., v. Belkin Intern., Inc., 628 F. Supp. 2d 703, 2008 WL 4372708, *2 (E.D. Tex. 2008)."

The district court then concluded that the infringement contentions provided Amazon with notice of the system and that the theory of infringement was not changing in the amended contentions. "Here, Plaintiff's original Infringement Contentions provided Amazon with notice that Plaintiff accuses the product-recommendation system. Plaintiff's theory of infringement remains the same in its Amended Infringement Contentions."

As a result, the district court found that allowing the amended contentions would be more efficient and the prejudice to Amazon would be minimal. "However, Plaintiff proposed the Amended Infringement Contentions to streamline discovery, since Amazon refuses to produce the requested documents because the Infringement Contentions do not explicitly name the Kindle device, the mobile application, and the web services to third parties. SFA has been diligent in notifying Amazon that its theory of infringement was not limited to access by the website, but that the accused system also included access by other devices. Therefore, the prejudice to Amazon in allowing the amendments is minimal. Further, excluding allegations of infringement by the accused system when accessed by the Kindle device or the mobile applications would unnecessarily waste the Parties' and the Court's resources, as identical claims would need to be brought against the same accused system."

Accordingly, the district court granted the motion to amend the infringement contentions..

SFA Systems, LLC v. Amazon.com Inc., et al., Case No. 6:11-CV-052-LED (E.D. Tex. June 19, 2013)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.