Plaintiff Keranos, LLC ("Keranos") alleged that Silicon Storage Technology ("Silicon Storage") and other defendants infringed three related patents by manufacturing certain flash memory products. Keranos sought leave to amend its infringement contentions to add additional products that the defendants disclosed during discovery.
As explained by the district court, the Eastern District of Texas' Local Patent Rule 3-1 requires a party claiming infringement to identify each accused product in its infringement contentions. The "identification shall be as specific as possible," including name and model number, if known. PR 3-1(b). Generally, infringement contentions may only be amended or supplemented upon a showing of good cause. PR 3-6(b). The Court considers four factors when reviewing a motion to amend infringement contentions: "(1) the explanation for the party's failure to meet the deadline, (2) the importance of what the Court is excluding, (3) the potential prejudice if the Court allows the thing that would be excluded, and (4) the availability of a continuance to cure such prejudice." Alexsam Inc. v. IDT Corp., No. 2:07-cv-420-CE, 2011 WL 108725, at *1 (E.D. Tex. Jan. 12, 2011). As part of the good cause showing, the party seeking to amend must demonstrate that it was diligent in discovering the additional products and in seeking to amend. Id.; see also West v. Jewelry Innovations, Inc., No. C 07-1812, 2008 WL 4532558, at *2 (Oct. 8, 2008) (finding that a party must be diligent in discovering the basis for amendment).
After reciting these standards and cases, the district court also noted that Keranos' proposed amendment would add thousands of additional products not specifically disclosed in the original infringement contentions. Because each of these products allegedly incorporated Silicon Storage's SuperFlash technology, Keranos argued that each of these products fall within the scope of its original infringement contentions, which identified some specific products and generally "identified" other products sold by defendants in the United States that incorporated the SuperFlash technology.
Keranos also argued that it was not adding any new claims or altering its infringement theory. Keranos further explained that the it sought to add were only disclosed by Defendants in response to interrogatories.
The defendants argued in response that Keranos failed to exercise due diligence prior to filing the lawsuit or in the 18 months between when the action was first filed and when Keranos served its original infringement contentions. "Specifically, Defendants note that the many of the products were designated as including the SuperFlash technology in documents already in Plaintiff's possession at the time of its original infringement contentions. Furthermore, Defendants note that
other products could have been identified using public documents available on Defendants' websites or using third-party websites to search product datasheets. Additionally, Defendants insist that once they identified the additional products, Plaintiff continued to delay in amending its infringement contentions. Defendants argue that Plaintiff's failure to exercise diligence in identifying infringing products cannot be excused under the facts of this case."
The district court concluded that Keranos had failed to demonstrate that it acted diligently in searching for and naming the additional products that incorporate the accused technology. "Defendants demonstrate a number of means through which Plaintiff could have identified products incorporating the SuperFlash technology. Instead of making these efforts, Plaintiff chose to list a handful of exemplar products and then demand that Defendants disclose additional products. But the burden is on Plaintiff, not Defendants, to search for and identify infringing products to the extent possible based on publically available information. Am. Video Graphics, L.P. v. Elec. Arts, Inc., 359 F. Supp. 2d 558, 560 (E.D. Tex. 2005) ("The Patent Rules demonstrate high expectations as to plaintiffs' preparedness before bringing suit, requiring plaintiffs to disclose their preliminary infringement contentions before discovery has even begun.").
The district court then found "unavailing Plaintiff's argument that the publically available documents did not conclusively demonstrate that the products incorporated the accused technology or address whether the products were sold in the United States. First, many of the products identified by Plaintiff in its original contentions were identified using the exact or similar documents that Plaintiff now claims are insufficient. Plaintiff simply did not exhaust its search, instead choosing to shift the burden to Defendants."
The district court also concluded that the volume of the additional products weighed against allowing the motion to amend. "Furthermore, the Court finds significant the sheer volume of the additional products Plaintiff seeks to add. It may be conceivable that even acting diligently, Plaintiff would have failed to identify some of the products that incorporate the accused technology. Instead, Plaintiff found the efforts to identify products to be expensive and cumbersome and instead disclosed only a few products in its original contentions, then demanded that Defendants identify the remaining products that incorporate the accused technology. This is contrary to Plaintiff's responsibility under the local patent rules and demonstrates a lack of diligence by Plaintiff."
Accordingly, the district court denied Keranos' motion to amend the infringement contentions.
Keranos, LLC v. Silicon Storage Technology, Inc. et al., Case No. 2:13-cv-17 (E.D. Tex. Aug. 5, 2013)
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