Cellcast Technologies, LLC v. United States

In the United States Court of Federal Claims

No. 15-1307

25 February 2021

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CELLCAST TECHNOLOGIES, *

LLC AND ENVISIONIT, LLC, *

*

Plaintiffs, * Patent Infringement; RCFC 16(b)(4);

* Good Cause; Modification of

v. * Scheduling Order; Amend Infringement

* Contentions; Fact Discovery.

THE UNITED STATES, *

*

Defendant, *

*

and *

*

INTERNATIONAL BUSINESS *

MACHINES CORP., *

*

Third-party defendant *

*

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Peter J. Chassman, with whom was Michael Forbes, Reed Smith LLP, Houston, TX, for

plaintiffs.

Joshua Miller, Walter Brown, and Carrie E. Rosato, Trial Attorneys, with whom were Joseph H.

Hunt, Assistant Attorney General, and Gary L. Hausken, Director, Commercial Litigation

Branch, Civil Division, Department of Justice, Washington, DC, for defendant.

Mark Joseph Abate, with whom were Dietrich Brown, Calvin E. Wingfield Jr., Shaun de Lacy,

and Alexandra D. Valenti, Goodwin Procter, LLP, New York, NY, for third-party defendant.

OPINION AND ORDER

HOLTE, Judge.

Plaintiffs accuse the government of infringing five United States patents. The

government noticed the licensed developers of the technology, International Business Machines

Corporation, who join the government in defending the claims of patent infringement. The

parties completed fact discovery on 11 May 2018. The Court issued a claim construction order

on 26 October 2020.1 On 11 November 2020, plaintiffs filed an Expedited Motion for Leave to

Amend Infringement Contentions, which defendants oppose. For the following reasons, the

Court GRANTS plaintiffs’ Expedited Motion for Leave to Amend Infringement Contentions.

I. Overview

EnvisionIT is the assignee of five United States patents: 7,693,938 (“the ‘938 patent”);

8,103,719 (“the ‘719 patent”); 8,438,221; 8,438,212; and 9,136,954 (collectively, “the asserted

patents”). Pls.’ Compl. ¶ 18. CellCast holds an exclusive license to each of the asserted patents.

Id. ¶ 19. Plaintiffs allege various government agencies infringe the asserted patents, including

the Federal Emergency Management Agency, the United States Department of Homeland

Security, and the National Oceanic and Atmospheric Administration. Id. ¶ 5.

The Integrated Public Alert Warning System (“IPAWS”) is among the technology

alleged to infringe the asserted patents. Id. ¶ 20. According to the government, International

Business Machines (“IBM”) developed IPAWS under a government contract. See Gov’t’s

Unopp. Mot. to Notice Third Party at 2, ECF No. 10. The government noticed IBM pursuant to

Rule 14(b) of the Rules of the United States Court of Federal Claims (“RCFC”) and IBM entered

the case. See generally IBM’s Ans., ECF No. 21. Hereinafter, the government and IBM are

collectively referred to as “defendants,” and IBM, when acting alone, is referred to as “third-

party defendant.”

Pursuant to this Court’s 23 February 2018 Order, fact discovery closed on 11 May 2018.

See Order, ECF No. 92. This case was transferred to the undersigned Judge on 29 July 2019

pursuant to RCFC 40.1(c). See Order, ECF No. 149. The Court issued a claim construction

order on 26 October 2020, in which the Court adopted defendants’ construction for the term

“broadcast message originator/broadcast agent” term and ruled against plaintiffs when finding

the disputed terms in claims 1 and 11–13 of the ’938 patent” were means-plus-function terms.

See Op. and Order at 21, 47 (“Cl. Constr. Order”), ECF No. 162.

The Court’s claim construction crder prompted plaintiffs’ Expedited Motion for Leave to

Amend Infringement Contentions (“Pls.’ Mot. for Leave”), ECF No. 163, which is currently

pending before the Court.

II. Procedural and Factual History

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The Court issued the claim construction order under seal on 26 October 2020 and reissued the Order for

publication in its original form on 29 October 2020 after neither party proposed redactions.

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On 11 July 2016, the parties submitted a Joint Preliminary Status Report setting forth

certain rules and dates for the management of this patent case. See Joint Prelim. Status Report,

ECF No. 28 (“July 2016 JPSR”). The schedule was modeled in part on the Special Procedures

Order for Cases under 28 U.S.C. § 1498(a), which was originally adopted by Senior Judge

Damich in Holmberg v. United States, No. 14-cv-284 (Fed. Cl. June 10, 2014), ECF No. 7. Id. at

10. Pursuant to the 23 February 2018 Order, fact discovery closed on 11 May 2018. See Order,

ECF No. 92. The parties nevertheless amended the schedule several times. For example, on 26

April 2018 third party defendant amended its Answer without plaintiffs’ opposition. See Am.

Answer of International Business Machines Corporation, ECF No. 96. In addition, on 13

November 2019, the Court admitted defendants’ amended invalidity contentions after close of

fact discovery and reopened fact discovery for defendants as to a third party for good cause. See

Op. and Order (“November 2019 Order”), ECF No. 155.

The Court issued a claim construction order on 26 October 2020. See Cl. Constr. Order.

On 30 October 2020, the parties began negotiations on a reduction of asserted claims and

amending infringement contentions in view of the Court’s claim construction order. See Pls.’

Mot. for Leave at 3. On 11 November 2020, after the parties failed to reach any agreement,

plaintiffs filed a motion seeking the Court’s leave to amend infringement contentions. See id. at

5. Defendants filed an opposition to plaintiffs’ motion on 18 November 2020, and plaintiffs filed

a reply to defendants’ opposition on 20 November 2020. See Defs.’ Opp’n to Pls.’ Expedited

Mot. for Leave to Amend Infringement Contentions, ECF No. 168 (“Defs.’ Opp’n”); Pls’ Reply

in Supp. of Expedited Mot. for Leave to Amend Infringement Contentions, ECF No. 169 (“Pls.’

Reply”).

On 24 November 2020, the Court held a status conference to discuss plaintiffs’ motion

and other pending motions in the case. See Transcript, ECF No. 171 (“Tr. I”). Despite the

Court’s efforts to resolve the disputes between the parties, defendants declined to consent on

plaintiffs’ amended contentions and maintained the Court rule on plaintiffs’ motion. Id. at

43:11–13. The Court held oral argument on 8 December 2020. See Transcript, ECF No. 174

(“Tr. II”). The case is stayed pending resolution of the dispute on plaintiffs’ amended

infringement contentions. See Order, ECF No. 167.

III. Parties’ Arguments

Plaintiffs contend “[t]he [i]ssuance of a [c]laim [c]onstruction [r]uling [p]rovides [g]ood

[c]ause for [a]mendment.” Pls.’ Mot. for Leave at 5. In support, plaintiffs cite local patent rules

from numerous district courts. Id. For example, Patent Local Rule 3-6 rule of the Northern

District of California provides “a finding of good cause [for amendment of infringement

contentions] include: (a) A claim construction by the Court different from that proposed by the

party seeking amendment.” Id. at 6 (citing U.S. District Court for the Northern District of

California Patent L.R. 3-6.).

According to plaintiffs, the parties conferred regarding the amended infringement

contentions on the following timeline: on 30 October 2020, plaintiffs told defendants plaintiffs

wanted to discuss amending the infringement contentions; on 3 November 2020, plaintiffs

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provided an exemplary amended infringement contention to defendants; on 8 November 2020,

plaintiffs emailed defendants “a complete set of all proposed amendments concerning both the

‘broadcast agent/broadcast message originator’ term and . . . the means-plus-function terms”; and

the parties conferred on 9 November 2020 and were unable to reach an agreement. See id. at 3–

5. Plaintiffs assert the timeline “demonstrates [p]laintiffs’ diligence in amending contentions,

putting [d]efendants on notice of them, and discussing them with [d]efendants as soon as

reasonably practicable after a short period to digest the Court’s Markman Order.” Id. at 7.

Plaintiffs further contend the amendments do not prejudice defendants because: (1)

“[p]laintiffs’ amended contentions accuse the same aspects of the same infringing IPAWS

system as the original infringement contentions”; and (2) “[d]efendants’ opening expert report on

invalidity will not depend on [p]laintiffs’ infringement contentions.” Id. at 8. Plaintiffs argue

“not allowing amendment after claim construction would significantly prejudice plaintiffs.” Id.

at 8–9 (citing O2 Micro Int’l, Ltd. v. Monolithic Power Sys., 467 F.3d 1355, 1366 (Fed. Cir.

2006) (approving the practice of amending contentions after claim construction because “[i]f a

local patent rule required the final identification of infringement and invalidity contentions to

occur at the outset of the case, shortly after the pleadings were filed and well before the end of

discovery, it might well conflict with the spirit, if not the letter, of the notice pleading and broad

discovery regime created by the Federal Rules.”)).

Plaintiffs seek to amend infringement contentions regarding “the broadcast message

originator/broadcast agent” terms because the Court’s claim construction order, by construing the

term to “require[] submission of a proposed broadcast message by an individual,” did not adopt

plaintiffs’ proposed constructions. Id. at 9 (quoting Cl. Constr. Order at 20). Plaintiffs

previously contended the Collaborative Operating Group (“COG”) itself could be the originator

or agent, and now plaintiffs allege “the infringement occurs through the accused system’s use of

the combination of both the user name [sic] and the associated COG ID.” Id. at 9–10. Plaintiffs

also seek to add “specific doctrine of equivalents identification for certain terms relating to the

originator or agent where [p]laintiffs’ original contentions pointed to the organization (COG

ID).” Id. at 10. Plaintiffs argue their proposed amendments do not surprise defendants because

“[p]laintiffs’ original contentions . . . included specific references to both the COG ID and the

user name [sic],” and “[p]laintiffs’ original contentions included a reservation of rights as to the

doctrine of equivalents.” Id. at 11.

Plaintiffs also seek to amend infringement contentions regarding the means-plus-function

terms, because the Court, contrary to plaintiffs’ proposal, “found [the] presumption [that the

terms were not means-plus-function terms] was overcome here and determined that the terms are

‘means-plus-function.’” Id. at 11–12. Plaintiffs’ amendments “state for each function identified

by the court: the structure in the patent that performs the function, and the corresponding

structure in the accused product.” Id. at 12. Plaintiffs contend the amendments do not prejudice

defendants because defendants had notice of those identified structures from “[p]laintiffs’

Responsive Claim Construction Brief, which cited to the same structure [and] was filed on May

24, 2017, well before the close of fact discovery.” Id. Plaintiffs further emphasize their

amendments “accuse the same modules within the IPAWS system as in [plaintiffs’] prior

contentions.” Id. at 13. Thus, as the amendments relate to “the broadcast message

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originator/broadcast agent” terms, plaintiffs’ proposed amendments “do not add new accused

products or systems, or even new modules within the accused system.” Id. at 11.

Plaintiffs’ reply brief suggests the Court should consider Holmberg v. U.S., a decision

from this court, in resolving the parties’ current dispute. Pls.’ Reply at 3 (citing No. 1:14-cv-

284, Docket No. 85 (Fed. Cl. December 5, 2016)). Regarding the diligence requirement timing,

plaintiffs contend the Holmberg court “expressly applied a diligence standard that began at the

issuance of the court’s claim construction order.” Id. at 4 (citing Holmberg, No. 1:14-cv-284,

Docket No. 85 at n.2 (“As the Court has already held that the Claim Construction Order triggered

the new search for prior art by the Defendants, the timetable begins at that point.”)). Plaintiffs

also maintain, based on Holmberg, parties moving to amend contentions after a claim

construction order “need only show that Claim Construction differed from that proposed by the

party seeking amendment.” Id. (quoting Holmberg, No. 1:14-cv-284, Docket No. 85 at *4).

Defendants contend plaintiffs were not diligent in pursuing their proposed amendments.

Defs.’ Opp’n at 7. Defendants argue “the proper timeframe for measuring diligence begins with

the amending party’s notice of the proposed construction, not the court’s order.” Id. (citing

Amgen Inc. v. Sandoz Inc., No. 14-cv-04741-RS, 2017 WL 1399077, at *3 (N.D. Cal. Apr. 18,

2017)). Accordingly, defendants argue the “clock [for plaintiffs to show diligence] began

running almost four years ago when the parties exchanged proposed constructions in early

2017.” Id. at 8.

Defendants urge the Court to adopt Local Patent Rule 3-6(a)(1) from the Eastern District

of Texas requiring “[a]mendment[s] . . . [to] be in response to an ‘unexpected or unforeseeable’

claim construction ruling by the Court.” Id. at 16 (quoting Implicit, LLC v. Huawei Techs. USA,

Inc., No. 6:17-CV-00182-JRG, 2018 WL 11182156, at *4 (E.D. Tex. 2018)). Defendants argue

the claim construction order in this case was not “unexpected or unforeseeable” because “the

Court adopts a construction proposed by one of the parties, particularly when [the constructions]

were proposed years before.” Id. In particular, regarding the “broadcast agent” / “broadcast

message originator” term, the Court adopted defendants’ proposed construction. Id. at 3. For the

means-plus-function terms “broadcast admission control module” and “broadcast message

distributor module,” the Court agreed with defendants the terms are means-plus-function

limitations under 35 U.S.C. § 112(f) and adopted plaintiffs’ proposed corresponding structures

disclosed in the specification for each recited function. Id. Accordingly, defendants maintain

“the Court’s order with regard to the means-plus-function limitations of the ’938 patent actually

adopted [plaintiffs’] proposed constructions, not [d]efendants’.” Id. at 7.

Defendants further contend they “[w]ill [b]e [u]nfairly [p]rejudiced if [plaintiffs are]

[p]ermitted to [a]mend [their] [i]nfringement [c]ontentions.” Id. at 9. Defendants argue their

discovery strategy was based on plaintiffs’ infringement contentions. Id. (“Infringement

contentions are ‘intended to “shape discovery.”’” (quoting Power Integrations, Inc. v. Fairchild

Semiconductor Int’l, Inc., No. C 09-5235 MMC (MEJ), 2013 WL 4604206, at *5 (N.D. Cal.

Aug. 28, 2013))). Defendants allege plaintiffs’ amended contentions impact “the analysis of the

scope of the claims for purposes of both non-infringement and invalidity.” Id. at 12. In

particular, “[d]uring fact discovery, [d]efendants did not have the benefit of [plaintiffs’] new

interpretation of the claim limitation, and therefore did not have the opportunity to pursue

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discovery regarding prior art systems as to the newly-accused elements, functions, and structures

of IPAWS.” Id.

Defendants allege plaintiffs’ proposed amendments “significantly alter [plaintiffs’]

infringement theories after fact discovery has already closed.” Id. at 10. Regarding the

broadcast agent/originator term, plaintiffs amended the alleged component from “‘the COG ID’

and only ‘the COG ID’” to “a combination of both the user name [sic] and the associated COG

ID.” Id. For the means-plus-function terms, defendants allege plaintiffs “make new allegations

as to the structure for each of the other functions identified by the Court in its Markman opinion”

which “represent a significant expansion of [plaintiffs’] view of the scope of the claims.” Id. at

11.

Defendants object to plaintiffs adding infringement positions under the doctrine of

equivalents (“DOE”) based on “a single boilerplate DOE assertion in the cover pleading:

‘Plaintiffs contend that each of the claims identified above is infringed literally and, in the

alternative, under the Doctrine of Equivalents.’” Id. at 8. Defendants contend “[t]he fact that

[plaintiffs] signaled a potential for asserting DOE infringement initially, yet did not provide

substantive contentions until this late stage, underscores [plaintiffs’] lack of diligence.” Id. at 8–

9 (citing Nike, Inc. v. Adidas Am. Inc., 479 F. Supp. 2d 664 (E.D. Tex. 2007) (holding Nike

cannot amend its infringement contentions “six months after its initial contentions, and a little

over a month prior to the close of discovery” even though Nike included a boilerplate

placeholder for its DOE theory in its initial contentions)). Defendants further argue plaintiffs’

proposed DOE contentions prejudice defendants because defendants were deprived the

opportunity to “develop[] evidence of the lack of equivalents of the function, way, and result

employed in claimed and accused systems during fact discovery.” Id. at 14.

IV. Applicable Law

RCFC 16(b)(4) allows modification of a court-imposed schedule “only for good cause

and with the judge’s consent.” The good cause standard of RCFC 16(b)(4) mirrors many local

district court patent rules for amending contentions. See Keranos, LLC v. Silicon Storage Tech.,

Inc., 797 F.3d 1025, 1035 (Fed. Cir. 2015) (stating the local patent rules in the Eastern District of

Texas only permit amendment to contentions upon a showing of “good cause”), O2 Micro Int’l,

Ltd. v. Monolithic Power Sys., 467 F.3d 1355, 1363 (Fed. Cir. 2006) (stating the local patent

rules in the Northern District of California allow amendments to contentions only for “good

cause”). The law of the Federal Circuit controls for amending invalidity contentions because this

issue is “unique to patent cases” and therefore has “a close relationship to enforcement of

substantive patent law.” Id. at 1365.

If a party shows they acted with the requisite level of diligence in seeking to supplement

contentions, prejudice to the opposing party may also be considered. Id. at 1368. Prejudice

associated with the amendment of invalidity contentions may include “extending discovery,” the

need to construe additional claim terms, or any other effects on the construction of claim terms,

such as whether the proposed amendments represent a “major change.” See Kruse Tech. P’ship

v. Volkswagen AG, 544 F. App’x 943, 953 (Fed. Cir. 2013) (“While the parties disagree whether

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[plaintiff] sought a major change, it was a change to the theory of infringement that would likely

have meant re-opening of Markman proceedings and extending discovery.”).

Following the Federal Circuit’s decision in O2 Micro Int’l, another judge on this court

previously held “both diligence and prejudice are relevant considerations” when interpreting the

“good cause” requirement of RCFC 16(b)(4) in the context of amending contentions in a patent

infringement case. MorphoTrust USA, LLC v. United States, 132 Fed. Cl. 419, 420 (2017). In

MorphoTrust, the court was asked to decide whether defendants could supplement invalidity

contentions after the initial court-ordered deadline. Id. at 419. The MorphoTrust decision

similarly acknowledged the lack of special local patent rules at the Court of Federal Claims and

relied upon the Federal Circuit’s decision in O2 Micro Int’l when interpreting the “good cause”

standard for supplementing invalidity contentions: “[r]elevant to the question of whether good

cause exists in this context are both the questions of diligence and prejudice.” Id. at 421.

Considerations in determining a party’s diligence include additional or unexpected results of

discovery, along with the possibility of unanticipated construction of claim terms according to

the court’s claim construction order. Id. Considerations in weighing prejudice to the party

opposing amendment may include the effect of amendments on the construction of claim terms

or whether experts have “staked out comprehensive positions with respect to claim construction .

. . .” Id.

V. General Timeline of the Case and Procedural History Relating to Previous Case

Scheduling Agreements and Defendants’ Earlier Supplemental Invalidity

Contentions

A. Previous Case Scheduling by Parties’ Agreements

On 11 July 2016, the parties submitted a Joint Preliminary Status Report setting forth

certain rules and dates for the management of this patent case. See July 2016 JPSR. The parties

indicated their proposed schedule “utilizes select portions of the Special Procedures Order for

Cases under 28 U.S.C. § 1498(a) adopted by Judge Damich, see, e.g., Holmberg v. United States,

No. 14-cv-284 (Fed. Cl. June 10, 2014), ECF No. 7.” Id. at 10. Regarding the contentions

(referenced as “claim charts” in the status report), the parties agreed they “may be amended or

supplemented after the deadline as discovery progresses upon a timely showing of good cause

and absence of unfair prejudice to the opposing party(ies).” Id. at 12. The parties also stipulated

the contentions should include “[w]hether the alleged infringement is literal or under the doctrine

of equivalents,” “whether any claim element governed by § 112(6) is infringed under the

doctrine of equivalents,” and “for each element that such party contends is governed by 35

U.S.C. § 112(6), a description of the claimed function of that element and the identity of the

structure(s), act(s), or material(s) in the apparatus, product, device, process, method, act or other

instrumentality that performs the claimed function.” Id. at 12–13.

The previous judge presiding over this case partially granted the parties’ proposed

schedule and set fact discovery to close on 15 December 2017. See Scheduling Order, ECF No.

33. The un-adopted portion of the parties’ JSPR is not relevant to the present issue. The adopted

schedule allows parties to amend or supplement their contentions “after the deadline as discovery

progresses upon a timely showing of good cause and absence of unfair prejudice to the opposing

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party(ies)” but does not contemplate amending contentions after discovery closes. See July 2016

JPSR at 12–13. The parties subsequently extended the deadline for fact discovery to 11 May

2018. While fact discovery was still open, the previous judge held a Markman hearing on 13

September 2017. See Scheduling Order, ECF No. 71.

B. Defendants’ Earlier Supplemental Invalidity Contentions

On 11 May 2018— the stipulated deadline of fact discovery—defendants served

supplemental invalidity contentions to plaintiffs. See Pls.’ Mot. to Strike Defs.’ Untimely Suppl.

Invalidity Contentions at 3 (“Pls.’ Mot. to Strike”), ECF No. 109. On 25 May 2018, plaintiffs

filed a motion to strike defendants’ supplemental invalidity contentions. See id. While

plaintiffs’ motion to strike was pending, defendants further filed a motion to reopen fact

discovery as to a third party on 18 April 2019, which plaintiffs opposed. See Defs.’ Mot. to

Reopen Fact Disc. as to Non-Party Multi-Technical Systems, Inc. (“Defs.’ Mot. to Reopen

Disc.”), ECF No. 142.

This case was transferred to the undersigned Judge on 29 July 2019 with both the claim

construction order and the parties’ discovery disputes pending. See Order, ECF No. 149. The

Court held a status conference on 28 August 2019 to discuss a sequence of ruling on the

discovery disputes and issuing a claim construction order. See Status Conference Order, ECF

No. 151. The status conference was over one year after fact discovery ended and over one year

after defendants moved to amend invalidity contentions with newly discovered information and

reopen fact discovery related to their amended contentions. See generally Pls.’ Mot. to Strike;

Defs.’ Mot. to Reopen Disc. Given the delays, the Court suggested issuing a claim construction

order before reviewing defendants’ amended contentions and discovery request because the

Court believed the claim construction order would inevitably lead to another round of

amendments and discovery. See Tr. of Proceedings on 28 August 2019, ECF No. 153 (“Tr. of

Aug. 2019”), at 8:9–11, 9:9–16. The parties also anticipated the potential need for amendments

of contentions and additional discovery after the claim construction order. Id. at 15:14–20

(plaintiffs’ counsel: “fact discovery is closed . . . and should remain closed. If we had an odd

situation where claim construction necessitated a change, I guess we could . . . figure out whether

more discovery was necessary”), 20:9–11 (the government’s counsel: “some district [courts]

have [additional review of supplemental invalidity contentions after the Markman order] built

into the local rules”), 23:6–10 (third party defendant’s counsel: “[s]o I would suggest that . . . we

could provide a second contention, a second set of contentions after the Markman ruling, and I

assume then [p]laintiff [sic] would have to do the same thing on their infringement contentions”).

The parties, however, requested the Court rule on the outstanding discovery disputes before

issuing a claim construction opinion. Id. at 12:21-23 (third party defendant’s counsel: “I would

suggest . . . the discovery motions first and then rule on the Markman”), 18:2–4 (the

government’s counsel: “it would certainly be more efficient to resolve the two outstanding

motions prior to issuance of the Markman opinion.”), 19:12–14 (plaintiffs’ counsel: “we would

think that resolving these two motions prior to the issuance of the Markman opinion would be

the more efficient”).

At the parties’ request and based on the previously agreed upon agenda, in November

2019 the Court ruled on the motion to amend invalidity contentions and the motion to reopen fact

discovery under a standard of whether defendants demonstrated “a timely showing of good cause

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and absence of unfair prejudice to the opposing party(ies).” See July 2016 JPSR at 12. As

defendants demonstrated good cause as to why their supplemental invalidity contentions should

be allowed (by satisfying the diligence inquiry) and demonstrated plaintiffs would not be unduly

prejudiced by supplementation, the Court permitted defendants to supplement invalidity

contentions. See November 2019 Order at 10. For the same reason, as defendants demonstrated

good cause why limited fact discovery should be reopened (by satisfying the diligence inquiry)

and plaintiffs would not be unduly prejudiced, the Court reopened limited fact discovery for

defendants. See id. at 15.

C. Claim Construction Order

After addressing the November 2019 invalidity contentions and discovery order, the

Court turned to the claim construction order. There was further delay, however, due to the

Markman hearing (and briefing) occurring with a previous judge, the COVID pandemic

shutdowns, and remote work transitions beginning in February and March 2020. The Court

issued the claim construction order on 26 October 2020. See Cl. Constr. Order. This was over

three years after the Markman hearing, roughly two and half years after the initial close of fact

discovery, and eleven months after the Court granted defendants’ motion to amend invalidity

contentions and limited reopening of fact discovery.

D. Conclusion of Party Expectations Based on Unique Case Procedure Schedule

Reviewing the 2016 case schedule initially agreed to by all parties demonstrates the

parties did not explicitly contemplate amending the contentions after fact discovery closed or the

issuance of the claim construction order. See generally July 2016 JPSR. Nevertheless, there

were no set deadlines for the parties to serve final contentions. See id; see also Tr. of Aug. 2019

at 23:2–4 (third party defendant’s counsel: “I would point out that there actually is no date in the

JPSR for final [contentions] but just the initial contentions.”). There was therefore no rule the

amendments must be completed before the issuance of the claim construction order or the end of

fact discovery.

Further, defendants moved to amend invalidity contentions to add a later discovered

reference on the day fact discovery closed, which plaintiff opposed. Pls.’ Mot. to Strike at 3. In

late 2019, the Court granted defendants’ supplementary contention and reopened limited fact

discovery upon defendants’ request. See November 2019 Order.

Finally, despite the unusual delay in issuing the claim construction order, all parties

seemingly contemplated the delay and future necessity for additional amendments to contentions

and reopening of discovery. See Tr. of Aug. 2019 at 15:14–20 (plaintiffs’ counsel: “fact

discovery is closed . . . and should remain closed. If we had an odd situation where claim

construction necessitated a change, I guess we could . . . figure out whether more discovery was

necessary.”), 20:8–11 (the government’s counsel: “as to whether [a claim construction order]

might necessitate a change to the invalidity contentions, I mean, some districts have that built

into the local rules.”), 23:2–10 (third party defendant’s counsel: “there actually is no date in the

JPSR for final [contentions] but just the initial contentions. . . . So I would suggest that . . . we

could provide a second contention, a second set of contentions after the Markman ruling, and I

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assume then [p]laintiff [sic] would have to do the same thing on their infringement contentions.”)

(emphasis added).

VI. Local Patent Rules From the Court of Federal Claims and Other Jurisdictions

A. RCFC Patent Rules and the Holmberg Decision

The Court of Federal Claims did not have patent case management rules in effect when

the parties set this case’s schedule. See Rules Committee Note, 2018 Adoption, Appendix J of

RCFC. Even if the current rules were in place at case inception, this Court does not have a

specific rule governing parties’ contention amendments after claim construction orders issue.

Rule 24 of RCFC Appendix J is the relevant rule on “Amendments” which provides “[a] party

may amend the Preliminary Disclosure of Infringement Contentions or the Preliminary

Disclosure of Invalidity Contentions only by court order upon a showing of good cause.” As

discussed in the November 2019 Order admitting defendants’ amended invalidity contentions,

the Court adopts a standard for amendments that “mirrors many local district court patent rules

for amending contentions.” November 2019 Order at 6 (citing Keranos, LLC v. Silicon Storage

Tech., Inc., 797 F.3d 1025, 1035 (Fed. Cir. 2015)). In making the good cause determination,

“both diligence and prejudice are relevant considerations.” Id. at 7 (quoting MorphoTrust USA,

LLC v. United States, 132 Fed. Cl. 419, 420 (2017)).

To supplement the lack of local patent rules, in 2016 the parties proposed to follow Judge

Damich’s Special Procedures Order for Cases under 28 U.S.C. § 1498(a) in Holmberg v. United

States, No. 14-cv-284 (Fed. Cl. June 10, 2014) (“Judge Damich’s Special Order”). July 2016

JPSR at 10. Judge Damich’s Special Order does not specifically discuss the scenario of

amending contentions after a claim construction order. Coincidentally, however, Judge Damich,

resolved an almost-identical dispute in Holmberg in late 2016 after the parties in this case agreed

to the Holmberg procedures. See Holmberg, No. 1:14-cv-284, Docket No. 85 (Fed. Cl. Dec. 5,

2016) (“Holmberg decision”).

In Holmberg, Judge Damich issued a claim construction order on 12 January 2016. Id.

at 2. After the claim construction order, the parties jointly extended the discovery deadline twice

to 3 March 2017. Id. On 14 October 2016, defendants filed a motion for leave to amend their

invalidity contentions to add new prior art. Id. Plaintiffs opposed defendants’ amendments,

arguing: (1) “[d]efendants could have uncovered the new references before the invalidity

contentions came due in March 2015”; and (2) “there was nothing unexpected or surprising in

the Claim Construction Order that differed from [p]laintiff’s previously disclosed positions.” Id.

at 3 (internal citation omitted). Plaintiff’s arguments were based on Finisar Corp. v DirecTV

Group, Inc., 424 F. Supp. 2d 896 (E.D. Tex 2006).

Judge Damich expressly rejected plaintiff’s reliance on a case from the Eastern District of

Texas, noting Northern District of California patent rules governed the case. Id. at 3–4 ([T]his

Court’s SPO is based on the Local Patent Rules of the Northern District of California, not the

Eastern District of Texas. Therefore, if there is discrepancy between the two, as there is in this

instance, the Court relies upon the Local Rules of the Northern District of California.”).

Applying the California rule, Judge Damich held “[d]efendants need only show that Claim

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Construction differed from that proposed by [defendants],” and the timetable for defendants to

disclose amendments began at the court’s claim construction order because “the Claim

Construction Order triggered the new search for prior art by the [d]efendants.” Id. at 4, 5.

Judge Damich issued the Holmberg decision after the parties in this case agreed to

follow his Special Order; the parties accordingly did not expressly agree to be bound by the later

Holmberg decision. See Tr. II at 26:10–17 (defendants’ counsel disagreeing with the statement

“Holmberg rules and timing were what essentially governed this case from beginning”).

Nevertheless, the parties agreed to follow the Special Order as a primary basis for all case

scheduling and repeatedly cite Holmberg as exemplary. See July 2016 JPSR at 10. Given the

Holmberg decision dealt with a very similar issue to the one before the Court—a party moving to

amend contentions after the claim construction order—the Court finds the Holmberg decision

instructive. During oral argument, the parties agreed to define the Holmberg standard as: the

diligence of a party moving to amend contentions after a claim construction order starts to

measure from the issuance of the order, and the order need not be “surprising” to allow the

amendments. See Tr. II at 13:12–17 (plaintiffs’ counsel: “Holmberg tells us that to show good

cause, you only need to show that the claim construction was different from the one proposed by

the party seeking amendment and that diligence was to be measured from the time the Markman

order issued”), 30:5–11 (defendants’ counsel acquiescing it is correct “Judge Damich’s

assessment in [Holmberg] concluded that the movant does not need to show that the claim

construction order is surprising and that the measurement of diligence starts from the issuance of

the claim construction order.”).

B. Local Patent Rules From Other Jurisdictions

Throughout the briefing and during oral argument the parties each reviewed numerous

local patent rules from other districts: the Northern District of California; the Eastern District of

Texas; and the District of Massachusetts. See, e.g., Pls.’ Mot. for Leave at 6; Defs.’ Opp’n at 16;

Tr. II at 14:1–15:6. The relevant portion of the local rules in the Northern District of California

provide:

Amendment of the Infringement Contentions or the Invalidity

Contentions may be made only by order of the Court upon a timely

showing of good cause. 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.

U.S. District Court for the Northern District of California Patent L.R. 3-6. The local rules in the

Eastern District of Texas provide:

If a party claiming patent infringement believes in good faith that

the Court’s Claim Construction Ruling so requires, not later than 30

days after service by the Court of its Claim Construction Ruling, that

party may serve “Amended Infringement Contentions” without

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leave of court that amend its “Infringement Contentions” with

respect to the information required by Patent R. 3-1(c) and (d).

U.S. District Court for the Eastern District of Texas P.R. 3-6(a)(1). The local rules in District of

Massachusetts provide:

The preliminary patent-related disclosures of subsections (d)(1) and

(d)(4) may be amended and supplemented only by leave of court

upon a timely showing of good cause. Nonexhaustive examples of

circumstances that may, absent undue prejudice to the nonmoving

party, support a finding of good cause include:

(A) a claim construction by the court that is different from that

proposed by the party seeking amendment within 28 days of the

court’s claim construction ruling.

U.S. District Court for the District of Massachusetts L.R. 16.6(d)(5).

In short, all jurisdictions referenced by the parties allow parties to amend infringement

contentions after issuance of a claim construction order under certain conditions. The Northern

District of California supports the finding of good cause when “[a] claim construction by the

Court [is] different from that proposed by the party seeking amendment,” while it requires the

amendments must be made with “a timely showing of good cause” “absent undue prejudice to

the nonmoving party.” The Eastern District of Texas allows a party to serve amended

infringement contentions within 30 days of the court’s claim construction order if the party

“believes in good faith that the Court’s Claim Construction Ruling so requires.” The District

Court of Massachusetts finds good cause for a moving party to amend and supplement its

preliminary contentions after “a claim construction by the court that is different from that

proposed by the party seeking amendment within 28 days of the court’s claim construction

ruling” “absent undue prejudice to the nonmoving party.”

C. The Standard of Measuring Diligence

There is a split view in other jurisdictions regarding whether a moving party’s diligence

should be measured from the issuance of a claim construction order or from service of claim

construction briefs. See, e.g., Holmberg decision at n.2 (“[T]he split in [the Northern District of

California] appears to be over whether the diligence of the moving party should be determined

from when it received the non-moving party’s proposed claim constructions versus when the

court set forth its claim construction order.”); Amgen Inc. v. Sandoz Inc., No. 14-cv-04741-RS,

2017 WL 1399077, at *3 (N.D. Cal. Apr. 18, 2017) (“[S]ome courts, including the undersigned,

have rejected the date-of-disclosure rule and have instead measured diligence from the date of

the claim construction order.”); Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc.,

No. C 09-5235 MMC (MEJ), 2013 WL 4604206, at *4 (N.D. Cal. Aug. 28, 2013) (finding

defendant was not diligent by informing plaintiff of its intent to amend infringement contentions

“nearly two months after the Court's Claim Construction Order”). Nevertheless, there is no clear

rule in any jurisdiction—including the Court of Federal Claims and the RCFC patent rules—that

governs the timeframe for measuring a party’s diligence after a claim construction order. In the

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Holmberg decision, Judge Damich acknowledged the split view in the Northern District of

California and concluded the timetable for a party to disclose amendments in this court began at

the court’s claim construction order because “the Claim Construction Order triggered the new

search for prior art by the [d]efendants.” Holmberg decision at *5.

Defendants urge the Court to apply a standard of measuring diligence derived from the

Eastern District of Texas, where an “[a]mendment . . . must be in response to an ‘unexpected or

unforeseeable’ claim construction ruling by the Court.” Defs.’ Opp’n at 16 (citing Implicit, LLC

v. Huawei Techs. USA, Inc., No. 6:17-CV-00182-JRG, 2018 WL 11182156, at *4 (E.D. Tex.

2018) (internal citation omitted)). The Federal Circuit is silent about the requirement a claim

construction order be “unexpected or unforeseeable” before amendments to the contentions are

allowed to be made after the order. In the Eastern District of Texas, “[t]raditionally, the Court’s

adoption of another party’s construction alone is not sufficient to support a party’s good faith

belief it was surprised by the Court’s ruling.” Virnetx Inc. v. Cisco Systems, Inc. et al., No. 6:10–

CV–417, 2012 WL 12546881, at *3 (E.D. Tex. October 22, 2012). Nevertheless, “this rule is not

without exception.” Cell & Network Selection LLC v. AT&T Inc., No. 6:13-CV-403, 2014 WL

10727108, at n.2 (E.D. Tex. Nov. 10, 2014) (citing Virnetx, 2012 WL 12546881, at *5). Some

judges in the Eastern District of Texas believe “infringement contentions are not intended to

provide a ‘forum for litigation of the substantive issues.’” Id. at *2 (quoting Linex Techs., Inc. v.

Belkin Int’l, Inc., 628 F.Supp.2d 703, 713 (E.D.Tex. Sep. 19, 2008)). In Cell & Network

Selection, the court allowed plaintiff to amend infringement contentions for two claim terms after

the court’s claim construction order. Id. at *5. For one term, the court’s construction was

different from both parties’ proposals, and for the other term, the court adopted defendants’

proposal in its entirety. Id. at n.3. The court found not only the parties “proposed very different

constructions of [the terms],” but also “the [c]ourt . . . construed those terms quite differently

from what [plaintiff] proposed.” Id. at *3. The court further noted “[plaintiff] was not required

to incorporate [d]efendants’ contrasting proposed constructions in its infringement contentions

prior to those constructions being adopted by the [c]ourt.” Id.

In addition to the standards for amending contentions in the Eastern District of Texas,

another judge on this Court expressly rejected the heightened standard of the Eastern District

Court of Texas that “any diligence test requires the [moving party] to show why the Court’s

Claim Constructions were ‘surprising’ or greatly different from the constructions proposed by

the parties.” Holmberg decision at *4. Judge Damich held in Holmberg “[a party] needs only

show that [c]laim [c]onstruction differed from that proposed by the party seeking amendment,”

as a claim construction order different from a party’s proposed claim construction makes it

reasonable for the party to “dig deeper than [it] had previously.” Id. at *4, *5.

VII. Diligence and Prejudice in the Present Case

The parties agree amending contentions in this Court requires “good cause,” and “good

cause” is established by a showing of the moving party’s diligence and no undue prejudice to the

other party. Pls.’ Mot. for Leave at 8 5 (citing MorphoTrust USA, LLC v. United States, 132

Fed. Cl. 419, 420 (2017)); Defs.’ Opp’n at 6 2 (citing, e.g., CellCast Techs., LLC v. United

States, No. 15-1307, 2019 WL 5959571, at *4 (Fed. Cl. Oct. 30, 2019)).

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A. Diligence

In Holmberg, Judge Damich determined the claim construction order date is the starting

point for examination of whether a party was timely in disclosing amended contentions because

“the Claim Construction Order triggered the new search for prior art by the Defendants.”

Holmberg decision at *5. Defendants disagree the outcome of the Holmberg Dispute should

bind the parties in this case, arguing the scheduling order referencing Holmberg “was a unique

scheduling order that was negotiated by the parties” prior to the Holmberg decision and therefore

the parties did not contemplate the effects of the Holmberg decision on the present case. Tr. II at

26:10–27:7. In the alternative, defendants argue Holmberg supports denying plaintiffs’

amendments because fact discovery was still open when the court in Holmberg allowed the

amended contentions, while fact discovery in this case has been closed since 2018. Tr. I at 33:1–

8. Although it is true the parties agreed to rely on Judge Damich’s Special Order prior to the

Holmberg decision, Holmberg involves similar facts related to a party seeking to amend their

contentions following a claim construction order constructing disputed terms adverse to the

moving party’s positions. See Holmberg decision at *1–*2. The Holmberg decision further

involved a well-reasoned analysis of whether a party was diligent in seeking amended

contentions, considering many of the same local patent rules as the parties cite to the Court in

their briefing now. See id. at *3–*5 (examining the local patent rules of the Northern District of

California and Eastern District of Texas as they apply to the facts of the case). The Court

therefore finds Holmberg persuasive on the question of when diligence first starts to run and

adopts the standard Judge Damich sets out in Holmberg: the measurement of diligence starts

from a claim construction order that is different from a party’s proposal. See supra at Section

VI(A); see also Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1323 (Fed.

Cir. 2016) (affirming the trial court’s decision allowing defendant to amend invalidity

contentions under an abuse of discretion standard).

Third-party defendant agrees plaintiffs are diligent in moving for amendments under the

standard for measuring diligence in Holmberg:

The Court: But based on the Holmberg measure of diligence,

Plaintiffs were certainly diligent?

[Counsel for third-party defendant]: I would not oppose that, Your

Honor. I would agree with that.

Tr. II at 76:10–13. Four days after receiving the Court’s claim construction order, plaintiffs

informed defendants of their intent to amend infringement contentions. See Pls’ Mot. for Leave

at 3. During oral argument, third-party defendant’s counsel agreed plaintiffs would be diligent

under the standard adopted in Holmberg by moving within 4 or 5 days of the claim construction

order. See Tr. II at 41:2–7 (third party defendant’s counsel “not disagreeing” the current issue

differs from Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., No. C 09-5235

MMC (MEJ), 2013 WL 4604206, at *5 (N.D. Cal. Aug. 28, 2013), as “[t]here was no diligence

in [Power Integrations] . . . [with] a two-month delay, and here we only had four or five days”).

Plaintiffs’ amendments are related to those terms for which the Court did not adopt

plaintiffs’ proposed construction. Plaintiffs seek to amend infringement contentions regarding

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“the broadcast message originator/broadcast agent” and the two means-plus-function terms of

“broadcast admission control module” and “broadcast message distributor module.” See Pls.’

Mot. for Leave at 9, 11. The Court adopted defendants’ construction for “the broadcast message

originator/broadcast agent” and rejected plaintiffs’ proposal the two “module” terms are not

means-plus-function terms. See Cl. Constr. Order at 21, 47. Defendants argue the Court adopted

plaintiffs’ construction of the means-plus-function terms because the Court largely adopted

plaintiffs’ proposals of the corresponding structure disclosed in the specification for each recited

function. Defs.’ Opp’n at 3. In the claim construction order, the Court expressly notes

defendants successfully rebutted a legal presumption the terms are not means-plus-function, and

the Court accordingly favors defendants’ proposed construction. See Cl. Constr. Order at 31

(“Defendants successfully rebut the presumption of § 112(f)’s applicability . . . . The Court

concludes the claim term ‘broadcast admission control module’ is subject to the provisions of §

112(f).”), 41 (“Defendants successfully rebut § 112(f)’s presumption for the claim term

‘broadcast message distributor module’ . . . . The claim term ‘broadcast message distributor

module’ is subject to the provisions of § 112(f).”). Accordingly, the Court disagrees with

defendants’ argument the claim construction order adopted plaintiffs’ construction of the means-

plus-function terms.

Defendants urge the Court to apply a standard that any “[a]mendment . . . must be in

response to an ‘unexpected or unforeseeable’ claim construction ruling by the Court” in

measuring diligence. Defs.’ Opp’n at 16 (quoting Implicit, LLC v. Huawei Techs. USA, Inc., No.

6:17-CV-00182-JRG, 2018 WL 11182156, at *4 (E.D. Tex. 2018) (internal citation omitted)).

As discussed supra in Section VI(C), there are disagreements among judges in the Eastern

District of Texas regarding such a requirement, and the Federal Circuit has never spoken on this

issue. Furthermore, Judge Damich expressly rejected this standard in the Holmberg decision.

The Federal Circuit views patent local rules as “seek[ing] to balance the right to develop new

information in discovery with the need for certainty as to the legal theories.” O2 Micro Int’l,

Ltd. v. Monolithic Power Sys., 467 F.3d 1355, 1366 (Fed. Cir. 2006); see also Kruse Tech.

P’ship v. Volkswagen AG, 544 F. App’x 943, 953 (Fed. Cir. 2013). Judge Damich’s approach in

Holmberg considers the parties’ right to develop new information as proceedings develop and

the need for certainty of legal theories at earlier stages of a case—so a party is only permitted to

“dig deeper than they had previously” after a frustrating claim construction order. Holmberg

decision at *5. During oral argument, defendant agreed “Judge Damich’s assessment in

[Holmberg] concluded that the movant does not need to show that the claim construction order is

surprising.” Tr. II at 30:4–11. Defendants are not able to identify any authority from this Court

or the Federal Circuit which mandates “an unexpected or unforeseeable claim construction” for a

party to be able to amend contentions, or even authority which explains what makes a claim

construction order “unexpected or unforeseeable.” See Tr. II at 82:12–18 (When asked if there is

a Federal Circuit case that covers the standard for an unexpected or unforeseeable claim

construction order, third party defendant’s counsel stated “I’m not aware of one right now.”).

Accordingly, the Court finds defendants’ argument plaintiffs must show “an unexpected or

unforeseeable claim construction” before leave to amend contentions unpersuasive.

Even though the Court is not adopting the “unexpected or unforeseeable” requirement, it

analyzes defendants’ arguments the Court’s claim construction order is not “unexpected or

unforeseeable” as defendants claim is required to permit plaintiffs’ amendments. See Defs.’

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Opp’n at 16. For the two means-plus-function terms, the Court adopted part of defendants’

proposal finding the terms are means-plus-function terms with certain functions but rejected

defendants’ proposal that the structures performing the functions were indefinite. See Cl. Constr.

Order at 31, 36, 41, 46. The Court instead adopted plaintiffs’ proposed corresponding structures

with slight modifications, even though plaintiffs insisted the terms are not means-plus-function

and proposed the corresponding structures as an alternative construction in response to

defendants’ indefiniteness argument. See id. at 30, 32–34; Tr. II at 46:14–47:5 (third party

defendant’s counsel noting “the Court largely adopted the [p]laintiff’s [sic] position on . . . the

structure supporting the function in those claims”). The Court’s construction is different from

both parties’ proposals—the Court relied on portions of defendants’ arguments that the terms are

means-plus-function, and portions of plaintiffs’ arguments for the corresponding structures,

creating the Court’s own construction. Accordingly, even if the Court analyzes defendants’

argument a claim construction order must be “unexpected or unforeseeable” to allow a party to

amend contentions under the standard adopted by the Eastern District of Texas, the Court’s claim

construction for the two mean-plus-functions terms is “unexpected and unforeseeable” for

plaintiffs because the construction is different from either party’s proposal. For the “broadcast

agent/originator” term, the Court adopted defendants’ proposed construction in its entirety. Cl.

Constr. Order at 21. Similar to Cell & Network Selection, the parties in this case “proposed very

different constructions of” the “broadcast agent/originator term,” and the Court construed the

term “quite differently from what [plaintiffs] proposed.” Cell & Network Selection LLC v. AT&T

Inc., No. 6:13-CV-403, 2014 WL 10727108, at *3 (E.D. Tex. Nov. 10, 2014). Therefore, the

Court agrees with the Cell & Network Selection court that plaintiffs have good cause to amend

contentions in response to such a claim construction order. Id. at *4.

Third-party defendant agrees plaintiffs would be timely under the Holmberg standard in

seeking the amendments by initiating a negotiation with defendants four days after receiving the

claim construction order. Tr. II at 76:10–13. The Court finds Judge Damich’s reasoning in

Holmberg persuasive and adopts the standard that the measurement of diligence starts when a

court issues a claim construction order different from a party’s proposal. Plaintiffs seek

amendments to their contentions related to claim terms for which they have received adversarial

decisions in the Court’s claim construction order and do so on a timeline defendants concede

would be timely under Holmberg. See id. at 46:3–9 (Counsel for third-party defendant noting

the Court agreed with defendants the claims were means-plus-function). Plaintiffs therefore

satisfy the diligence inquiry of the “good cause” requirement for amending infringement

contentions following a claim construction order. See Mortg. Grader, 811 F.3d at 1323.

B. Prejudice

1. Prejudice Due to the Delayed Schedule

Defendants allege they will be unfairly prejudiced if plaintiffs are allowed to amend the

infringement contentions and object to plaintiffs amending their infringement contentions “after

fact discovery has already closed.” Defs.’ Opp’n. at 9–10. Defendants reject plaintiffs’ proposal

of an adjustment to the case schedule to cure the prejudice also due to fact discovery being

closed. Id. at 15 (“[Plaintiffs’] suggestion that a mere adjustment to the schedule can cure any

prejudice to [d]efendants may have been true had fact discovery remained open.”). The

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prejudice alleged by defendants is “the delay in the case, the cost of the additional discovery, and

the risk and the time period that’s now elapsed.” Tr. II at 59:9–11.

Defendants contend the Holmberg decision supports denying plaintiffs’ amendments

because fact discovery was still open in Holmberg when the court allowed a party to amend its

contentions, whereas in this case fact discovery closed years ago (in May 2018). Tr. I at 33:1–8.

During oral argument, defendants agreed if the claim construction opinion issued before 2018,

plaintiffs should have been allowed to amend the contentions because there would have been

substantially less prejudice or even no prejudice for defendants. Tr. II at 32:3–6 (defendants’

counsel agreeing plaintiffs would be allowed to amend their contentions if the claim construction

order came out by the end of 2017 as “[plaintiffs] were diligent and [the parties] were still in

discovery”). Similarly, as discussed supra in Section V(B), defendants manifested there was no

prejudice in seeking to amend contentions in May 2018. Defs.’ Resp. in Opp’n to Pls.’ Mot. to

Strike at 11 (“Plaintiffs[] . . . fail to establish that [d]efendants’ supplement causes them undue

prejudice.”), ECF No. 118. Accordingly, as of May 2018, when fact discovery already closed,

defendants contended the close of fact discovery did not preclude parties from amending

contentions. At oral argument, defendants could not articulate an exact timeframe for when

plaintiff should no longer have been allowed to amend contentions. See Tr. II at 90:25–91:5

(when asked “at what point did it not become okay for [p]laintiffs to move to amend their

contentions,” the government’s attorney stated “I haven’t really thought about exactly when a

great point would have been.”).

In August 2019, defendants still maintained plaintiffs were not unduly prejudiced by

permitting defendants’ amendments of invalidity contentions. See Tr. of Aug. 2019 17:3–11

(government counsel: “previously in deciding some of these motions, the Court has found that . .

. if blame is to be assigned [for delay], it has to be shared.”). When the Court suggested

addressing defendants’ amended invalidity contentions after issuing a claim construction order,

defendants told the Court both parties could have “a second set of contentions after the Markman

ruling” without concern for undue prejudice. Id. at 23:2–10 (third party defendant’s counsel:

“So I would suggest that . . . we could provide a second contention, a second set of contentions

after the Markman ruling, and I assume then [p]laintiff [sic] would have to do the same thing on

their infringement contentions.”). Accordingly, as of August 2019, even though fact discovery

had closed over a year before and the parties anticipated the Court’s claim construction would

not be available for another few months, defendants contended there was no undue prejudice in

allowing parties to have “a second set of contentions after the Markman ruling.” See id.

In November 2019, the Court allowed defendants to amend their contentions and

reopened fact discovery for defendants, as the Court agreed with defendants doing so would not

unduly prejudice plaintiffs. See November 2019 Order. Defendants saw no prejudice in

November 2019 when the Court favored their request for amendments to their contentions, but

now allege the delayed schedule of this case will unfairly prejudice them if plaintiffs are

permitted to amend contentions. See Tr. of Aug. 2019 at 23:2–10. Thus, the undue prejudice

alleged by defendants, if it exists, can only be attributed to the delay of a few months between

when the claim construction order was expected to issue in early 2020 and the issuance of claim

construction order in October 2020.

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According to defendants, allowing a party’s amendments would not cause undue

prejudice to the other party in May 2018, or in August 2019, or even in November 2019 when

the Court allowed defendants’ amendments. Defendants even anticipated the need for “a second

set of contentions after the Markman ruling” during the August 2019 status conference. Id. at

23:2–10. Even if the Court agrees with defendants the few-month delay during the pandemic has

indeed caused prejudice to the parties, it would be unfair for plaintiffs to bear the blame for such

prejudice alone. See id. at 17:3–11 (defendants’ counsel suggesting “to the extent that there is

blame to be assigned for how long this case has been pending . . . it has to be shared”).

2. Prejudice Due to the Contents of Plaintiffs’ Amendments

Plaintiffs seek to amend infringement contentions for those claim terms for which the

Court did not adopt plaintiffs’ proposed constructions: for the “broadcast message

originator/broadcast agent” term, the Court adopted defendants’ proposal in its entirety and

construed the term to “require[] submission of a proposed broadcast message by an individual;”

for the two means-plus-function terms, the Court agreed with defendants that the terms are

means-plus-function and adopted plaintiffs’ proposed corresponding structures. Pls.’ Mot. for

Leave at 9, 11. Defendants contend plaintiffs’ proposed amendments “represent a significant

expansion of [plaintiffs’] view of the scope of the asserted claims” and defendants were deprived

of the opportunity to have full discovery because their scope of discovery was based on

plaintiffs’ original contentions. Defs.’ Opp’n at 10, 14. Plaintiffs argue their proposed

amendments do not prejudice defendants because the amendments “accuse the same aspects of

the same infringing IPAWS system as the original infringement contentions.” Pls.’ Mot. for

Leave at 8.

Contentions serve a function of notice at the early stages of patent litigation. O2 Micro

Int’l, Ltd. v. Monolithic Power Sys., 467 F.3d 1355, 1366 (Fed. Cir. 2006) (approving the

practice of amending after claim construction because “[i]f a local patent rule required the final

identification of infringement and invalidity contentions to occur at the outset of the case, shortly

after the pleadings were filed and well before the end of discovery, it might well conflict with the

spirit, if not the letter, of the notice pleading and broad discovery regime created by the Federal

Rules”). In their original contentions, plaintiffs provided defendants with notice of the

amendments plaintiffs now wish to assert: for the broadcast agent/originator term, plaintiffs cite

a portion in the IPAWS system with a broadcast message originator that includes “the logged in

user name and COG ID,” Exhibit E to Peter J. Chassman Declaration at 64, ECF No. 164 (“Pls.’

Contentions”);2 for the means-plus-function terms, plaintiffs’ amendments detail the originally

2

Regarding the broadcast agent/originator term, plaintiffs previously contended the COG itself could be the

originator or agent, and plaintiffs amend the infringed structure as a combination of a username and associated COG

ID in response to the Court’s construction requiring the broadcast agent/originator to be “a person who submitted a

proposed broadcast message.” Pl.’s Mot. for Leave at 3 (emphasis added). Claim 23 of the ‘719 patent recites the

limitation “a broadcast originator.” On page 64 of plaintiffs’ original contention, plaintiffs cite a portion in the

IPAWS system allegedly infringing the limitation, in which plaintiffs explain “[a] broadcast message record

received by the IPAWS system must identify the broadcast message originator . . . , which must include the logged

in user name and COG ID.” Pls.’ Contentions at 64. Plaintiffs’ amendments regarding this limitation, as shown on

page 65 of the contentions, repeat plaintiffs’ assertion “the IPAWS system associates each broadcast originator (user

name [sic]) with a specific COG” and includes an alternative DOE contention. Id. at 65. Accordingly, plaintiffs’

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identified infringing module into three functions and cite the same infringing element as in the

original contention for each function, id. at 8, 12;3 for the DOE amendments, plaintiffs’ original

contentions include a statement that “[p]laintiffs contend that each of the claims identified above

is infringed literally and, in the alternative, under the Doctrine of Equivalents,” and plaintiffs’

amendments seek to expand their original DOE statement included in prior contentions, Defs.’

Opp’n. at 8.4 Plaintiffs’ amendments do not unduly prejudice defendants as they are within the

scope of their original contentions. See O2 Micro Int’l, 467 F.3d at 1366; Holmberg decision at

*5 (“Claim Construction Order . . . made it reasonable for the [parties] to dig deeper than they

had previously with respect to [the contentions].”).

amendments regarding the broadcast agent/originator term are based on their original contentions and do not alter

plaintiffs’ infringement positions.

3

Plaintiffs’ amendments regarding the means-plus-function terms are to clarify the corresponding structure in the

accused product for each function identified by the Court’s claim construction order. See Pl.’s Mot. for Leave at 12.

Plaintiffs contend their amendments accuse the same modules within the IPAWS system as in the prior contentions.

Id. at 13. During oral argument, defendants alleged plaintiffs’ amendments contained newly accused structures. See

Tr. II at 51:19–22. For example, defendants allege plaintiffs’ amendments on page 12 of the contention includes

newly accused structures for the “validating” function of the “admission control module.” See id. at 52:19–21,

54:18–20. Plaintiffs contend the amendments simply break down the originally accused device into several parts

corresponding to each of the identified structures within the claimed module. See id. at 50:20–51:2. Claim 1 of the

‘938 patent recites “a broadcast admission control module configured for” three functions. Plaintiffs’ original

contentions cited a system allegedly infringing “a broadcast admission control module configured for receiving . . . ,

validating . . .” as one limitation within claim 1. Pls.’ Contentions at 6–7. The amendments break down the

admission control module into two claim limitations: “a broadcast admission control module configured for

receiving . . .” and “a broadcast admission control module configured for validating . . . .” See id. at 6, 11 (striking

out the term “validating . . .” in the left column of page 6 and moving the term to page 11 in a new row). Plaintiffs

explain the amendments are in response to the Court determining this limitation is governed by § 112, ¶ 6. Id. at 6.

On page 8 of the contentions, plaintiffs strike out a paragraph corresponding to the validating function of the

admission module, and the same paragraph is moved to page 12 with a minor alteration. Id. at 8, 12 (moving a

paragraph starting with “[t]he IPAWS system . . . is configured for validating”). Accordingly, plaintiffs’

amendments regarding the means-plus-function terms are based on their original contentions and do not alter

plaintiffs’ infringement positions.

4

Defendants argue the boiler-plate DOE statement in plaintiffs’ contentions cannot support the later amendments.

Defs.’ Opp’n at 8–9 (citing Nike, Inc. v. Adidas Am. Inc., 479 F. Supp. 2d 664 (E.D. Tex. 2007)). During the oral

argument, defendants distinguished Nike from the current scenario, as in Nike the boilerplate DOE language was in

the original contention but dropped later in intermediate contentions. Tr. II at 87:17–22. Defendants are not able to

identify a case from the Federal Circuit, or even a district court, ruling boilerplate DOE language is insufficient to

allow for later amendments. See id. at 87:2–88:1. Defendants also relied on Realtime Data, LLC v. Morgan Stanley,

554 F. App’x 923 (Fed. Cir. 2014), Kruse Tech. P’ship v. Volkswagen AG, 544 F. App’x 943 (Fed. Cir. 2013), and

Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., No. C 09-5235 MMC (MEJ), 2013 WL 4604206

(N.D. Cal. Aug. 28, 2013), to argue plaintiffs should not be allowed to amend the DOE contentions based on the

place-holder language in original contentions. Defs.’ Opp’n at 14. In Realtime, the district court denied plaintiff’s

DOE amendments because plaintiff dropped the DOE argument in intermediate contentions and did not seek the

court’s leave for the amendments. See Realtime Data, LLC v. Morgan Stanley, No. 11 CIV. 6696 KBF, 2012 WL

3158196, at *3 (S.D.N.Y. Aug. 2, 2012), aff’d, 554 F. App’x 923. The Federal Circuit affirmed, finding “[t]he

district court thus did not abuse its discretion by precluding [plaintiff] from asserting infringement allegations under

the doctrine of equivalents.” Realtime Data, LLC, 554 F. App’x at 938. In Kruse, the Federal Circuit denied

plaintiff’s change of its DOE contentions because “it was a change to the theory of infringement that would likely

have meant re-opening of Markman proceedings and extending discovery.” Kruse, 544 F. App’x at 953. In Power

Integrations, the court denied plaintiff’s amendments after finding a two-month delay in seeking amendments was

not diligent. Power Integrations, Inc., 2013 WL 4604206, at *4. Here, plaintiffs do not drop the DOE position in

any of their intermediate contentions, plaintiffs are properly seeking the Court’s leave for the amendments,

plaintiffs’ amendments do not necessitate reopening claim construction, and the Court finds plaintiffs are diligent in

seeking the amendments. Accordingly, the cases cited by defendants are not applicable to the present case.

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Defendants’ argument that amendments after claim construction deprive them of the

opportunity to conduct full discovery is not supported by the record. During oral argument,

when asked if defendants conducted discovery based on notice provided in plaintiffs’ claim

construction briefs, defendants stated they incorporated plaintiffs’ proposed claim construction

into the scope of fact discovery. Tr. II at 49:19–21 (defendants’ counsel: “I’m not saying we

weren’t cognizant of what was in the other side’s construction[] [during discovery]”). Discovery

and pre-trial proceedings are a fact-finding process for parties to discover new information, and

therefore courts allow parties to supplement their contentions upon a showing of good cause and

no undue prejudice to the other side, with new information as the case progresses. O2 Micro

Int’l, 467 F.3d at 1366 (approving the practice of amending after claim construction because “[i]f

a local patent rule required the final identification of infringement and invalidity contentions to

occur at the outset of the case, shortly after the pleadings were filed and well before the end of

discovery, it might well conflict with the spirit, if not the letter, of the notice pleading and broad

discovery regime created by the Federal Rules”); Kruse Tech. P’ship v. Volkswagen AG, 544 F.

App’x 943, 953 (Fed. Cir. 2013) (“The patent local rules seek to balance the right to develop new

information in discovery with the need for certainty as to the legal theories.” (internal citation

omitted)).

Since defendants had notice regarding the scope of plaintiffs’ amendments—and should

have conducted discovery accordingly—the Court is not persuaded by defendants’ argument

they were deprived of full discovery by plaintiffs’ later asserted amendments. See O2 Micro

Int’l, 467 F.3d at 1366; see also Holmberg decision at *5 (“Claim Construction Order . . . made

it reasonable for the [parties] to dig deeper than they had previously with respect to [the

contentions].”). The Court finds the record demonstrates plaintiffs’ proposed amendments are

within the scope of the original infringement contentions. Defendants received notice of

plaintiffs’ alleged infringement positions from the original contentions as well as other

exchanges, and defendants proceeded with discovery scope based on such notice. Accordingly,

the Court finds defendants are not unduly prejudiced by plaintiffs’ proposed amendments. See

O2 Micro Int’l, 467 F.3d at 1366.

C. Conclusion Regarding Case Procedure Timing and Plaintiffs’ Diligence in

Seeking Amended Contentions After Delayed Claim Construction

Plaintiffs have been diligent in seeking amended contentions regarding claim terms for

which they received adverse decisions in the claim construction order. Plaintiffs’ amendments

did not unfairly surprise defendants, as they were within the scope of original infringement

contentions. The prejudice alleged by defendants—if any—is primarily attributed to the

unfortunate few-months delay caused by the COVID pandemic in early 2020 and such prejudice

can be alleviated by further extending any future deadlines. Accordingly, as detailed supra in

Sections VII(A) and (B), plaintiffs demonstrate good cause in seeking infringement contention

amendments in response to the Court’s claim construction order, and plaintiffs’ amendments

shall be permitted. See Mortg. Grader, 811 F.3d at 1323.

A patent case’s schedule must consider the complicated interplay between the parties’

contentions, claim construction, and fact discovery. A claim construction order heavily impacts,

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if not determines, the scope of the parties’ discovery because “[t]he purpose of claim

construction is to ‘determin[e] the meaning and scope of the patent claims asserted to be

infringed.’” O2 Micro Int’l Ltd. v. Beyond Innovation Technology Co., Ltd., 521 F.3d 1351,

1360 (Fed. Cir. 2008) (quoting Markman v. Westview Instruments, Inc., 52 F.3d 967, 976 (Fed.

Cir. 1995) (en banc), aff’d 517 U.S. 370 (1996)). Regarding the importance of early claim

construction, for comparison, some judges do not open fact discovery until the day after the

Markman hearing. See Judge Albright’s Order Governing Proceedings—Patent Case (available

on https://www.txwd.uscourts.gov/judges-information/standing-orders/). In the present case, the

claim construction order issued three years after the Markman hearing due to a myriad of

issues—case transfer, the parties’ convoluted discovery disputes, and the COVID pandemic.

Nevertheless, had the parties contemplated the potential impact of a claim construction order on

the scope of discovery, and designed the case schedule accordingly, the parties would not have

encountered the current dilemma regarding a claim construction order that leads to the need for

reopening fact discovery.5 Given lessons learned in the present case, the Court suggests future

parties consider case management procedures beginning with claim construction, similar to what

other judges require.6

The parties’ contentions in a patent case primarily serve a notice function. See O2 Micro

Int’l, 467 F.3d at 1366. Courts require the parties to serve initial contentions and allow them to

finetune their positions as more information is uncovered during the discovery proceedings. See

5

“Theoretically, claim construction can occur at virtually any point in the case: prior to discovery, pursuant to

motions for summary judgment, or following the close of evidence at trial.” MANUAL FOR COMPLEX LITIGATION

(FOURTH) § 33.223, at 607 (2004). Numerous patent law scholars and courts have reviewed the issue of claim

construction timing and noted the benefit of having an early claim construction hearing to narrow the issues and

focus discovery to facilitate a more efficient proceeding: “[c]ost-cutter sorts recommended a Markman hearing well

in advance of trial and before expensive complex case discovery.” See Edward Brunet, Markman Hearings,

Summary Judgment, And Judicial Discretion, 9 LEWIS & CLARK L. REV. 93, 97 (2005). Judge Robert Keeton,

former Chair of the Rules Committee of the Judicial Conference, supports early claim construction held before the

completion of discovery because it “enable[s] the parties and the court to focus discovery in a way that makes more

efficient use of party and court resources as the case proceeds.” Id. at 113 (citing Vivid Techs., Inc. v. Am. Sci. &

Eng’g, Inc., 997 F. Supp. 93, 95 (D. Mass. 1997), aff’d, 200 F.3d 795 (Fed. Cir. 1999)); see also MediaCom Corp. v.

Rates Tech., Inc., 4 F. Supp. 2d 17, 21 (D. Mass. 1998) (“Questions regarding the construction of patent claims can

now safely be addressed in many circumstances prior to the completion of fact discovery, and certainly before

trial.”). Professor Chisum also notes “[t]he interpretation of a claim sets the framework for litigation of a patent

dispute . . . .” Id. (citing 5A DONALD S. CHISUM, CHISUM ON PATENTS § 18.06[2][a][vii], at 18-1116 (2003)). Some

commentators further observe early claim construction hearings may facilitate settlement and reduce litigation cost.

See MANUAL FOR COMPLEX LITIGATION (FOURTH) § 33.223, at 608 (2004) (citing MacNeil Eng’g Co. v. Trisport

Ltd., 126 F. Supp. 2d 51, 52 (D. Mass. 2001)). But cf. William F. Lee & Anita K. Krug, Still Adjusting to Markman:

A Prescription for the Timing of Claim Construction Hearings, 13 HARV. J.L. & TECH. 55, 86 (1999) (concluding

“there is generally one ‘right’ time for a Markman hearing: after all discovery has been completed, at the time the

court considers the parties’ summary judgment motions”); Amgen, Inc. v. Hoechst Marion Roussel, Inc., 126 F.

Supp. 2d 69, 80 (D. Mass. 2001) (This judge has “consistently taken the procedural approach of conducting the

Markman hearing at the summary judgment stage of litigation or at the point when discovery has closed and trial is

approaching,” as “the benefits of so doing range from constitutional concerns arising from conducting such a

hearing too soon to efficiency concerns arising from conducting the hearing too late.”).

6

The Court’s suggestion here is not to be read as recommending prohibition of any discovery before the claim

construction hearing. Indeed, Judge Albright’s default schedule enumerates having expert discovery related to claim

construction and indefiniteness before the Markman hearing, though general fact discovery does not open until the

day after the Markman hearing. See Order Governing Proceedings—Patent Case (available on

https://www.txwd.uscourts.gov/judges-information/standing-orders/).

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id.; see also Kruse Tech. P’ship v. Volkswagen AG, 544 F. App’x 943, 953 (Fed. Cir. 2013). As

reviewed in Section VI(B) supra, local patent rules of the Northern District of California, the

Eastern District of Texas, and the District of Massachusetts all allow amending contentions after

a court’s claim construction order upon a showing of “good cause.” The Federal Circuit

understands trial courts need discretion to control their dockets through implementing local

patent rules that strike a balance between the breadth of fact discovery at the onset of litigation

and the need for certainty of parties’ arguments throughout the litigation process. See Mortg.

Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1323 (Fed. Cir. 2016) (affirming

the trial court’s decision allowing defendant to amend invalidity contentions under an abuse of

discretion standard); see also Kruse, 544 F. App’x at 953 (“The patent local rules seek to balance

the right to develop new information in discovery with the need for certainty as to the legal

theories.” (internal citation omitted)). If parties were not regularly allowed to amend contentions

after a frustrating claim construction order, they may have early necessity to incorporate the

opposing party’s contrasting proposed claim constructions within infringement contentions prior

to the constructions being considered by the court.7 Both plaintiff and defendant would risk

unnecessarily broad discovery at the onset of the proceeding, wasting time and resources for all

parties as well as the courts.8 Accordingly, in addition to deadlines for serving initial

contentions, a patent case schedule should contemplate agreement on final contention deadlines

after the claim construction order so both parties have opportunity to incorporate final claim

constructions within their contentions, and thereafter conduct discovery based on the amended

contentions.

VIII. Conclusion

For the reasons set forth above, plaintiffs’ Expedited Motion for Leave to Amend

Infringement Contentions is hereby GRANTED. Plaintiffs are permitted to amend their

infringement contentions in the form produced to defendants on 8 November 2020.

On 23 October 2020, plaintiffs requested the Court hold a status conference and later

withdrew the request on 26 October 2020. See Mot. for Status Conf., ECF No. 157; Mot. to

7

“The court’s Markman ruling can alter the landscape for a party’s infringement or invalidity contentions.

Accordingly, . . . it is appropriate to allow limited amendments to a party’s infringement or invalidity contentions to

account for the Markman ruling . . . .” PATENT CASE MANAGEMENT JUDICIAL GUIDE (THIRD) §5.1.5 (2016) (citing

N.D. Cal. Patent L.R. 3-6).

8

Numerous courts and patent law scholars also recognize barring broad discovery until after claim construction is

cost-saving in patent infringement lawsuits. See, e.g., Paul Gugliuzza, Patent Litigation Reform: The Courts,

Congress, and the Federal Rules of Civil Procedure, 95 B.U. L. REV. 279, 292 (2015) (“The claim construction

order might definitively resolve the issue of infringement (or, in fewer cases, validity) in the defendant's favor, so

barring broader discovery until claim construction is resolved would result in cost savings in those cases.”). Some

district court judges have found one party’s pre-claim construction discovery based on the opposing party’s

contention “a waste of time and resources,” and such discovery “is not required for claims construction.” Bonutti

Skeletal Innovations LLC v. Linvatec Corp., No. 6:12-CV-1379-ORL-22, 2014 WL 186123, at *4 (M.D. Fla. Jan.

16, 2014) (finding defendant’s interrogatory based on plaintiff’s contentions is “premature, oppressive and

overbroad” before the court’s claim construction order); see also Monsanto Co. v. E.I. Du Pont De Nemours and

Co., No. 4:09cv00686ERW, 2012 WL 27936, at *2 (E.D. Mo. Jan. 5, 2012) (finding contention interrogatories do

not need to be fully answered until discovery is near completion).

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Withdraw Mot. for Status Conf., ECF No. 159. The Court hereby GRANTS plaintiffs’ motion

to withdraw the request for a status conference and STRIKES ECF No. 157.

On 12 November 2020, the parties jointly moved the Court to extend certain discovery

deadlines. See Joint Mot. to Modify the Scheduling Order as to Certain Deadlines, ECF No. 166.

The Court stayed the motion in view of the parties’ dispute regarding plaintiffs’ motion to amend

infringement contentions. See Order, ECF No. 167. As some proposed dates in the parties’ joint

motion have already passed, the Court now finds the joint motion moot. The parties shall file an

updated joint status report on or before 29 March 2021 to propose a schedule for future

proceedings.

IT IS SO ORDERED.

s/ Ryan T. Holte

RYAN T. HOLTE

Judge

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