Order Denying Defendant's Motion for Leave to Supplement Invalidity Contentions, MLC Intellectual Property, LLC v. Micron Tech., Inc., Case No. 14-cv-03657 (Judge Susan Illston)
In the Northern District of California, as with other districts, invalidity contentions are meant to crystalize theories early in litigation and prevent the "shifting sands approach to claim construction." Once disclosed, those invalidity contentions may only be amended "by order of the Court upon a timely showing of good cause." Patent L.R. 3-6. Defendant Micron failed to demonstrate good cause when it recently sought to amend its January 2015 invalidity contentions to add (1) two well-known textbooks from 1973 and 1990 and (2) two of MLC's non-asserted, expired patents. Judge Illston thus denied Micron's motion in its entirety.
The Court stayed this case the month after Micron's original invalidity contentions through March 29, 2016, due to parallel IPR proceedings that Micron initiated. We previously reported on the unusual circumstances under which the stay was lifted two days prior to the PTAB denying Micron's rehearing request, which you can read about here.
In the current Order, Judge Illston first addressed Micron's request to supplement its contentions with textbooks. Micron had prior knowledge of these "well-known" textbooks because Micron included the textbooks in its IPR petition filed in December 2014, a month prior to its service of invalidity contentions. Judge Illston held that such prior knowledge precluded a showing of good cause, despite Micron's argument that the PTAB's interpretation of the asserted patent and the textbooks rendered the textbooks highly material. In particular, Judge Illston found that Micron was required to include these relevant prior art references in its original invalidity contentions "regardless of whether subsequent events rendered those references more significant."
Next, Judge Illston addressed the addition of MLC's non-asserted—and recently expired—patents. Micron sought to include these references under its defense of obviousness-type double patenting and argued that it had good cause for amendment because MLC could have disclaimed the term of the asserted patent that extended beyond expiration of these patents. MLC countered that Micron's amendment lacked good cause because failure to add the newly expired patents earlier was a strategic and deliberate tactic to avoid a terminal disclaimer. Judge Illston disagreed with Micron, noting that it failed to cite any case holding that expiration of a patent is "condition precedent" to asserting the obviousness-type double patenting defense and identifying numerous federal and district court cases allowing the defense even where patents were unexpired. Because Micron did not need to wait until the patents expired, and did not dispute that it knew about the patents, Micron failed to establish good cause for the amendment.
Micron also unconvincingly argued that Patent Local Rule 3-3 is silent regarding the obviousness-type double patenting defense and therefore Micron was not required to include this defense in its original invalidity contentions. Judge Illston again disagreed with Micron: "Micron's narrow reading of Patent Local Rules 3-3 is not supported by any decisions of this District and is, in any event, irrelevant to the motion at hand."
This order highlights the importance of including any known relevant prior art in a defendant's original invalidity contentions and cautions against gamesmanship, real or perceived, with the local patent rules of this district.
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