IP Law Daily, TOP STORY—NDCal: Samsung Allowed to Include Apple’s iPhone5 as Alleged Infringing Product; Apple Permitted to Amend Infringement Contentions, (Nov 19, 2012)

By Peter Reap, J.D., LLM

In a suit separate from the summer of 2012’s $1 billion patent infringement blockbuster, but involving the same parties, Samsung Electronics Co. Ltd. was granted leave to amend its patent infringement contentions against Apple to include the iPhone 5 as an infringing product because Samsung acted with reasonable diligence and Apple would not be prejudiced by the amendment, the federal district court in San Jose has decided (Apple, Inc. v. Samsung Electronics Co., Ltd., November 15, 2012, Grewal, P.). Furthermore, Apple was permitted to amend its infringement contentions with a number of substantive changes.

Apple filed suit against Samsung alleging various Samsung products (including smartphones, media players, and tablets) infringed eight of Apple’s patents. Samsung filed a response and cross-complaint, denying its products infringed any of Apple’s patents and claiming that Apple’s iPhone and iPad products infringed eight patents owned by Samsung.

Pursuant to the court-mandated deadline, the parties submitted their infringement contentions on June 15, 2012. Samsung asserted that its two UMTS standard patents and six feature patents were infringed by Apple’s iPhone, iPad, and iPod Touch devices, as well as any “newer but unreleased versions of the accused products that have recently been announced by Apple.” Apple’s infringement contentions asserted 37 total claims for 8 patents against 19 Samsung devices.

Legal Standard for Amendment

Patent Local Rule 3-6 allows the parties to amend their infringement contentions only “by order of the Court upon a timely showing of good cause.” The good cause inquiry considers first whether the party seeking leave to amend acted with diligence when new evidence was revealed. The core is the moving party’s diligence in investigating the claim and seeking to amend. This prevented parties from employing a “shifting sands” approach to claim construction. 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. The burden is on the moving party to show diligence. The court then considers whether there would be undue prejudice to the non-moving party.

Samsung’s Motion for Leave to Amend

Samsung sought leave to amend its infringement contentions to include the iPhone 5 as an infringing product. Samsung alleged good cause existed for leave to amend because it was required to submit its infringement contentions on June 15, 2012 and the iPhone 5 was not released until September 21, 2012.

Samsung could not have known the specifications of the iPhone 5 before it was released in September 2012, the court observed. After the release of the iPhone 5, Samsung investigated the device to determine whether the iPhone 5 practiced its patented technologies. A week later, Samsung gave Apple notice that it intended to amend its June 15 Contentions to include the iPhone 5 and provided Apple with a copy of the proposed amendments. Samsung filed the motion three days later. In doing so, Samsung acted with reasonable diligence as soon as it discovered nonpublic information which was not discovered, despite diligent efforts, before the service of the Infringement Contentions, the court held.

Further, Apple would not be prejudiced by the addition of the iPhone 5 to Samsung’s infringement contentions. Apple did not oppose Samsung’s motion and the proposed amendment did not seek to add new claims or theories of infringement, but merely to add another device that has the same accused functionality as the previous versions of the iPhone. As a result, Apple’s analysis in defending against Samsung’s contentions should remain largely the same. Samsung served notice of its proposed amendments several months before the end of claim construction discovery (December 2012) and factual discovery (July 2013). This gives Apple ample time to investigate Samsung’s infringement theories and prepare defenses accordingly.

Apples Motion for Leave to Amend

Apple’s proposed amendments fell into three categories: addition of newly-released Samsung products as infringing devices, minor clarifying changes to the claims charts, and addition of several mistakenly-omitted claims charts.

Newly released Samsung products. Apple sought to add the Samsung Galaxy Note 10.1 as an infringing device. The Samsung Galaxy Note 10.1 was released after the parties exchanged their infringement contentions. Apple acted diligently to investigate the Galaxy Note 10.1 after it was released and notified Samsung shortly after of Apple’s proposed amendments, the court ruled. Also, the infringement contentions against this device were identical to already-accused products, so Samsung would not need to do extensive additional research. In the interests of judicial economy, Apple was permitted to add the Samsung Galaxy Note 10.1 as an infringing device.

Second, Apple sought to update infringement contentions with respect to the Samsung S III, which was released in the United States on June 20, 2012. Apple previously filed infringement contentions against the Samsung Galaxy S III based on the United Kingdom version of the device. Now that the United States version of the device was released, Apple sought to make changes to the contentions reflecting the “minor aesthetic differences” between the two versions.”

Apple was diligent in investigating and amending their claims against the Samsung Galaxy S III and Samsung did not oppose this amendment, according to the court. Moreover, Samsung would not be prejudiced because these differences did not change infringement theories, nor would they require Samsung to prepare additional defenses.

Lastly for this category, Apple proposed to add the Jelly Bean operating system to its claims. The Jelly Bean operating system was the new version of the Google Android system that was used on all Samsung mobile devices, including those named by Apple in this suit. The Jelly Bean operating system was first released in July 2012.

Apple failed to show due diligence with regard to the addition of Jelly Bean, the court determined. Apple merely alleged in one paragraph of its October 5 motion that the Jelly Bean was released in July 2012, and inclusion of the system “will not increase the number of claims asserted or introduce any new infringement theories.”

Further, as to prejudice, Samsung would be prejudiced because Apple made no reference in its initial briefing to the infringement theories or patent claims it wished to charge against Jelly Bean. Samsung also did not have any design control over the content of Jelly Bean as it was a Google Android product that Samsung itself did not develop. The court would not permit a sweeping amendment that could apply to devices other than those properly tied to Samsung. The court would allow this proposed amendment, but only as to the Jelly Bean product Apple specified: the Galaxy Nexus.

Minor clarifying changes to existing claims charts. Apple wished to make minor clarifying and correcting changes to existing claims charts but did not explain why these mistakes were made or when they were discovered, nor did it provide evidence of its diligence in amending these mistakes, the court noted. However, considering the unsubstantial nature of these changes and the lack of opposition from Samsung, the court allowed the minor clarifying changes to the above claims charts.

Addition of mistakenly-omitted claims charts. Apple sought to add several claims charts that were “mistakenly omitted” from its June 15 contentions. Apple claimed that in uploading the voluminous collection of infringement contentions, some charts were accidentally omitted.

For this first set of omitted claims charts, Apple provided Samsung with notice of the charts by August 7, 2012. Considering Apple notified Samsung soon after the original contentions were exchanged, Apple acted diligently as soon as it discovered the mistake, the court determined. Samsung acknowledged it received the first set of omitted charts in a timely manner, and so did not oppose the addition of this set of omitted charts. As Samsung was not prejudiced, the court allowed the addition of these claims charts.

Next, Apple sought to add other claims charts that were omitted from the June 15 infringement contentions, but were not disclosed to Samsung until October 1, 2012, several months later. Apple failed to establish good cause for its mistakes because it did not explain the extended delay. Nevertheless, it appeared that Apple’s omission of the second set of charts was due to an honest mistake. There was evidence supporting Apple’s contention that it had originally intended for these charts to be a part of the June 15 infringement contentions. The omission was an honest mistake, the court decided. Precluding Apple from bringing these claims because of an administrative mistake would be an unnecessarily harsh result, the court ruled.

Finally, Apple attempted to assert claims 1, 2, 4, 5, 13 of the '502 patent (collectively, “pen stylus claims”) against all accused Samsung devices other than the Galaxy Note, which was already accused in the infringement contentions. Apple claimed good cause existed for this amendment because it was not aware at the time of filing its infringement contentions that the other devices could also be used with a stylus.

Through diligent investigation at the time of the infringement contentions, Apple could have discovered the Samsung products in question could be used with a separate stylus, the court noted. Apple provided no reasons why it did not discover this publicly available information earlier. Thus, Apple failed to establish the requisite diligence regarding the pen stylus claims.

However, in its discretion the court considered whether Samsung would suffer prejudice with the addition of the pen stylus claims. It was undeniable that in the months following the June 15 contentions, Samsung filed its invalidity contentions. The invalidity contentions were presumably instructed by the Apple’s infringement claims charts available to Samsung at the time. With ample time left on the pretrial clock, Samsung should be able to pursue any additional art without any undue prejudice. Under these circumstances, this Apple amendment was reasonable.

The case is No. CV 12-00630 LHK.

Harold J. McElhinny (Morrison & Foerster LLP) for Apple Inc. David Elsberg (Quinn Emanuel Urquhart & Sullivan LLP) for Samsung Electronics Co., Ltd.

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