EDWARD M. CHEN, District Judge.
Plaintiff Collaborative Agreements, LLC (doing business as Oui Agree) ("OA") has filed a patent infringement lawsuit against multiple defendants, including Adobe Systems Incorporated ("Adobe"). The operative complaint is the second amended complaint ("SAC"). In that complaint, OA claims infringement of only one patent, namely, the `393 patent. The parties' papers reflect that the accused product is Adobe's EchoSign technology.
Currently pending before the Court is Adobe's motion for summary adjudication. In the motion, Adobe asks the Court to conclude that the date of invention for the `393 patent is the date that the application for the `393 patent was filed — i.e., November 1, 2011. See Bausch & Lomb, Inc. v. Barnes-Hind/Hydrocurve, Inc., 796 F.2d 443, 449 (Fed. Cir. 1986) (stating that the date of invention is "presumed to be the filing date of the application until an earlier date is proved"); see also In re NTP, Inc., 654 F.3d 1268, 1276 (Fed. Cir. 2011) (same). If the Court agrees with that date of invention, then, based on OA's own representations, the EchoSign technology cannot be said to infringe because it was in use prior to November 1, 2011. Adobe admits that OA has asserted an earlier date of invention — i.e., an earlier priority date — but argues that, as a matter of law, that priority claim fails because the invention claimed in the `393 patent was not sufficiently disclosed in the parent application.
Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby
The `393 patent is titled "System and Method for Facilitating Transactions Between Two or More Parties." Both parties similarly describe the invention claimed by the `393 patent. For example, Adobe states as follows:
Mot. at 8.
Similarly, OA states:
Opp'n at 2.
On the first page of the patent, there is a section titled "
`393 patent (emphasis added).
Based on the above-identified applications (copies of which are attached to the Gilliland declaration in support of OA's opposition), OA could have claimed various priority dates — potentially, up to five (in the alternative, of course).
After this case was transferred to this Court (from the Western District of Texas), Adobe informed the Court (through a joint CMC statement filed in December 2015) that it intended to file an early summary adjudication motion on the priority date of the `393 patent. See Docket No. 130 (St. at 5-6). The Court stated that it would allow the early motion. See Docket No. 134 (order).
Subsequently, on January 4, 2016, in compliance with this District's Patent Local Rules, OA served on Adobe its patent infringement contentions. See Wolff Decl., Ex. 2 (infringement contentions). One of the statements in the infringement contentions addressed the issue of priority date, as required by Patent Local Rule 3-1(f). See Pat. L.R. 3-1(f) (providing that "the `Disclosure of Asserted Claims and Infringement Contentions' shall contain the following information:. . . . For any patent that claims priority to an earlier application, the priority date to which each asserted claim allegedly is entitled"). OA's statement reads as follows:
Wolff Decl., Ex. 2 (infringement contentions) (emphasis added).
Three days later, Adobe filed its early summary adjudication motion regarding the priority date.
The date of invention for a patent is "presumed to be the filing date of the application until an earlier date is proved." Bausch & Lomb, Inc. v. Barnes-Hind/Hydrocurve, Inc., 796 F.2d 443, 449 (Fed. Cir. 1986); see also In re NTP, Inc., 654 F.3d 1268, 1276 (Fed. Cir. 2011) (same). Here, the `393 patent has an application filing date of November 2, 2011. Adobe contends that the Court should find that November 2, 2011, is the date of invention for the `393 patent.
As indicated above, OA wants an earlier date of invention — i.e., it wants to claim a date of invention based on a prior application. OA's Rule 3-1(f) disclosure identifies the priority date as follows: "
Adobe then argues that, looking solely at the `578 provisional application, it is clear that not all of the elements of the invention claimed in the `393 patent are found in that application. Notably, OA does not really dispute that the `578 application does not disclose all of the elements of the invention claimed in the `393 patent. See, e.g., Opp'n at 9-11 (arguing that only one out of five identified elements can be found in the `578 provisional application). OA argues, however, that all of the elements can be found in three other applications (i.e., the `172, `151, and `540 applications) and that Adobe was fairly on notice of priority based on these applications as they were identified on the face of the `393 patent.
Given the above circumstances, the basic dispute for the Court to resolve is twofold: (1) did OA's infringement contentions fairly put Adobe on notice of the `172, `151, and `540 applications; and (2) if not, then should OA be allowed to amend its infringement contentions?
As to the first issue, the Court finds that OA's infringement contentions did not fairly put Adobe on notice of the `172, `151, and `540 applications. The main purpose of the discovery-related Patent Local Rules is to get the parties to commit to positions early on in the litigation and stick to them absent good cause. See Hewlett Packard Co. v. ServiceNow, Inc., No. 14-cv-00570-BLJ (HRL), 2016 U.S. Dist. LEXIS 20591, at *3 (N.D. Cal. Feb. 19, 2016) ("This district's Patent Local Rules require parties to promptly disclose their infringement . . . contentions and to adhere to those contentions unless good cause arises to justify amendment. This district adopted these rules to prevent vexatious `shifting sands' claim-construction strategies. . . ."); Quantum Corp. v. Crossroads Sys., No. C 14-04293 WHA, 2015 U.S. Dist. LEXIS 131769, at *6 (N.D. Cal. Sept. 29, 2015) ("The [patent local] rules are designed to require parties to crystallize their theories of the case early in the litigation and to adhere to those theories once they have been disclosed.' The purpose of increased scrutiny for amending infringement contentions, in contrast to a liberal policy for amending pleadings, is to prevent the shifting sands approach to claim construction.") (internal quotation marks omitted); see also O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1364 (Fed. Cir. 2006) (noting that the Patent Local Rules are "designed specifically to require parties to crystallize their theories of the case early in the litigation so as to prevent the shifting sands approach to claim construction") (internal quotation marks omitted). So even though Adobe knew from the face of the `393 patent that, in theory, OA could have claimed priority based on various applications, Adobe did not know with any certainty what position OA would ultimately take until it served its infringement contentions. In its infringement contentions, OA made clear that it did not claim priority based on the `172, `151, and `540 applications — even though it could have — and instead asserted a priority date of "
The issue thus now turns whether OA should be permitted to amend its infringement contentions to include a priority claim based on the `172, `151, and `540 applications. Adobe makes much of the fact that OA has not formally moved to amend but that argument essentially elevates form over substance and it makes sense to address that issue now. See also Opp'n at 15 (stating that, "[i]f it is necessary to amend [the] Local Patent Rule 3-1(f) filing, [OA] requests the permission to amend its filing").
Patent Local Rule 3-6 governs amendment to infringement contentions. It provides as follows:
Pat. L.R. 3-6. "[G]ood cause under the local rules is subject to a two-part inquiry, which considers whether: (i) the moving party has shown diligence in amending its contentions,[
Here, this case is easily resolved based on the diligence factor. More specifically, OA has entirely failed to show diligence because it had all the information at its disposal at the outset of this litigation but failed to include the information in its infringement contentions. See Delphix Corp. v. Actifio, Inc., No. 13-CV-04613 BLJ (HRL), 2015 U.S. Dist. LEXIS 131821, at *4-5 (N.D. Cal. Sept. 29, 2015) ("`In considering the party's diligence, the critical question is whether the party could have discovered the new information earlier had it acted with the requisite diligence.'").
At the hearing, the Court noted that the only possible argument OA might make (although it did not expressly make such an argument in its papers) is that it made a mistake. The problem, however, for OA is that it never offered any evidence (such as a declaration from the attorney who prepared the Rule 3-1(f) disclosure) that the omission of the `172, `151, and `540 applications, or the use of the phrase "no later," was a mistake. Indeed, as noted above, OA failed to give any excuse for its failure to identify the `172, `151, and `540 applications (not even in the alternative) in its infringement contentions.
Furthermore, even if OA had claimed mistake, the Court finds that position untenable. Notably, during claim construction before the Texas court, Adobe expressly argued that each claim should reference a skilled artisan's understanding as of November 1, 2011 (i.e., the `393 patent application's filing date) because the `393 patent "includes
To the extent OA argues that it should be permitted to amend (i.e., even in the absence of any diligence) because there would be no prejudice to Adobe, as noted above, prejudice is not required to consider prejudice where the diligence prong has not been satisfied. See Symantec, 2013 U.S. Dist. LEXIS 137845, at *14; see also O2, 467 F.3d at 1368 (stating that, because "the district court could properly conclude that O2 Micro did not act diligently in moving to amend its infringement contentions, we see no need to consider the question of prejudice to MPS").
Finally, even if the Court were inclined to consider prejudice, it would also have to consider whether OA's proposed amendment would be futile. According to Adobe, there is futility because "numerous claim elements now recited in the asserted claims [of the `393 patent] are not found anywhere in the priority documents[
(1) The limitation that "the identity validation of the first party indicates that the first party has agreed to the one or more electronic documents";
(2) The limitation that "whenever an acceptance of any or the one or more electronic documents is received by the server computer from the client communications device of the second party, attaching the identity validation from the first party and the second party to the accepted one or more electronic documents"; and
(3) The limitation that all or part of the electronic documents "are locked against future changes."
(These limitations can be found in all of the independent claims, including claim 1.)
Adobe's contentions have merit. As to the first two limitations above, the asserted priority documents only disclose attaching an electronic signature specifically, and not (more broadly) an identity validation. As Adobe points out, electronic signature and identity are not equivalents. This is implicitly acknowledged in the `393 patent itself, which indicates that an electronic signature is one kind of identity validation. See `393 patent, claim 2 ("The method as recited in claim
Power Oasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 1306-07 (Fed. Cir. 2008) (emphasis added). See, e.g., Anascape, 601 F.3d at 1340 (indicating that, although inventor could have described the invention more broadly in the original application, inventor did not, and thus "the only reasonable reading of [that application] is that it is directed to and describes only a controller having a single input member operable in six degrees of freedom" while the later-filed application was "enlarged to cover more than single input members [i.e., multiple input members]") (emphasis added).
Adobe's futility argument as to the third limitation above also has merit. OA asserts that the limitation that all or part of the electronic documents "are locked against future changes" can, in fact, be found in the `172, `151, and `540 applications because:
Opp'n at 10. But Adobe fairly points out that the priority documents do not recite that "the electronic document . . . is
Docket No. 84 (Order at 18) (emphasis in original).
Similar to above, Adobe's position has merit, especially given the Power Oasis case cited above. In Power Oasis, the Federal Circuit concluded that the patent holder was not entitled to the priority date because "[t]he Original Application described a vending machine with a `display' or `user interface' as part of the vending machine, rather than a vending machine with a `customer interface' located on a customer's electronic device." Power Oasis, 522 F.3d at 1307. "While the Original Application discloses multiple embodiments of the `user interface,' all such embodiments make the user interface part of the unitary vending machine apparatus. There is simply no disclosure in the Original Application of a user interface that is either located on a customer's laptop or even separate from the vending machine itself." Id. at 1309.
In re Huston, 308 F.3d 1267 (Fed. Cir. 2002), also lends support to Adobe's position. In Huston, the Federal Circuit held that the original application "did not disclose the location-specific transmission of advertising messages to a golfer using GPS." Id. at 1276. The court rejected the patent holder's contention that there was disclosure because the original application referred to the transmission of "other information." The original application
Id. at 1277 (emphasis added).
Because, here, OA has not shown that the priority documents recite that the electronic document is already locked against future changes when it is received, one skilled in the art could not clearly conclude that the inventor invented the claimed invention based on the asserted priority documents.
For the foregoing reasons, the Court rules as follows.
(1) Adobe's motion for summary adjudication is granted. The date of invention for the `393 patent is November 2, 2011 (i.e., the filing date of the application for the `393 patent), not April 2, 2002. Because OA's own representations establish that the accused EchoSign technology was in use prior to November 1, 2011, the `393 patent is invalid.
(2) OA's request to amend its infringement contentions to assert a new priority date (i.e., a priority date later than April 2, 2002) is denied. OA has failed to establish good cause for any amendment. OA has not shown the requisite diligence. Moreover, OA's proposed amendment would be futile.
A Case Management Conference is scheduled for April 22, 2016 at 1:00 p.m. A Joint CMC Statement shall be filed by April 18, 2016.
This order disposes of Docket No. 138.