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Corel Software LLC v. Microsoft Corp.

United States District Court, D. Utah

November 5, 2018

COREL SOFTWARE, LLC, Plaintiff,
v.
MICROSOFT CORPORATION, Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING MOTION TO AMEND FINAL INFRINGEMENT CONTENTIONS

          JILL N. PARRISH UNITED STATES DISTRICT JUDGE

         Before the court is Corel Software, LLC's motion to amend its Final Infringement Contentions. [Docket 159.] The court GRANTS the motion.

         BACKGROUND

         Corel sued Microsoft Corporation, alleging that it infringed three patents: the '309 patent, the '483 patent, and the '996 patent. In November 2015, Corel served its Initial Infringement Contentions. Pursuant to Rule 2.3 of this court's Local Patent Rules (LPR), Corel asserted ten initial claims for the '996 patent. In April 2016, Corel asserted eight claims in its Final Infringement Contentions for the '996 patent. See LPR 3.1 (requiring a plaintiff to limit its Final Infringement Contentions to eight claims per patent unless the court authorizes additional claims).

         In August 2016, Judge Warner stayed the litigation pending the outcome of Microso f t 's petition for inter partes review (IPR) before the United States Patent and Trademark Office (PTO). On December 1, 2016, a panel of three administrative patent judges denied Microsoft's request to institute IPR of the '483 patent. The panel concluded that the prior art identified by Microsoft did not disclose the limitation of claim 1, which requires “identifying a font by hovering of the cursor for a predetermined period of time over the font displayed in a menu or tool bar option of the document display window.” The panel reasoned that the prior art did not disclose or suggest “applying a ‘predetermined period of time' in the context of ‘hovering.'” The panel did not address whether pausing while hovering would have been obvious to a person of ordinary skill because Microsoft did not adequately brief this issue.

         On the same day that the panel denied IPR of the '483 patent, it granted IPR for claims in the '996 patent. Corel moved for reconsideration of this decision. On February 22, 2017, the panel denied Corel's motion. On February 27, 2017, Corel canceled the '996 patent claims that were still at issue before the panel in an attempt to prevent further delay of this litigation. On February 28, 2017, the panel dismissed IPR of the '996 patent. On the same day, Corel moved this court to lift the litigation stay and to substitute two new claims from the '996 patent to replace the claims that it had canceled. This court denied C o r e l 's motion to lift the stay.

         On June 6, 2018, after the PTO panel had resolved all pending issues, Judge Warner lifted the stay. On June 8, 2018, Corel renewed its motion to amend its final infringement contentions for the '996 patent. Corel requests that this court grant leave to substitute two new claims in place of the claims that it had previously asserted in its Initial and Final Infringement Contentions.

         ANALYSIS

         This court has adopted a set of Local Patent Rules to “provide a standard structure for patent cases that will permit greater predictability and planning for the court and litigants.” LPR Preamble. Under these rules, the plaintiff in a patent case must serve a set of “Initial Infringement Contentions” LPR 2.3. “Without leave of court, [a plaintiff] must limit the allegedly infringed claims to ten (10) per asserted patent.” Id. The plaintiff may amend these initial contentions if “during discovery a party claiming patent infringement discovers an Accused Instrumentality [i.e., an “accused apparatus, product, device, process, method, act or other instrumentality”] that was not previously disclosed or known.” LPR 2.1 & 2.3.

         After the defendant serves its Initial Non-Infringement, Unenforceability and Invalidity Contentions, the plaintiff must then serve its Final Infringement Contentions, which “may rely on no more than eight (8) asserted claims, from the set of previously-identified asserted claims, per asserted patent without an order of the court upon a showing of good cause and absence of unfair prejudice to opposing parties.” LPR 2.4 & 3.1. “A party may amend its Final Infringement Contentions . . . only by order of the court upon a showing of good cause and absence of unfair prejudice to opposing parties, made no later than fourteen (14) days of the discovery of the basis for amendment. An example of a circumstance that may support a finding of good cause, absent undue prejudice to the non-moving party, includes a claim construction by the court different from that proposed by the party seeking amendment.” LPR 3.4.

         Corel argues that this court should grant leave to amend its Final Infringement Contentions for the '996 patent. It wishes to abandon the eight claims that it previously asserted and substitute two new claims. Corel asserts generally that the discovery that triggered the need for the amendment was the “new information created at the PTO.” At some points in its briefing, Corel implies that the triggering event was the PTO panel's February 22, 2017 denial of its petition for rehearing of the panel's decision to grant IPR for the '996 patent claims. At other points, Corel suggests that the reasoning of the panel's December 1, 2016 decision denying IPR for the '483 patent supplied the new information that justifies amendment of the Final Infringement Contentions. Taken together, it appears that the discoveries that Corel relies upon are: (1) the PTO panel's expressions of skepticism that the asserted claims for the '996 patent were patentable and (2) the panel's reasoning that claim 1 of the '483 patent may be patentable because the identifying limitation of hovering for a predetermined period of time was not disclosed in the prior art identified by Microsoft. These discoveries obviously led Corel to believe that the asserted claims for the '996 patent were in danger of being invalidated and that two unasserted claims from the '996 patent, which contained “hovering for a predetermined period of time” claim language, were more likely to survive an invalidation challenge.

         Given that the litigation was stayed when Corel made these discoveries, the 14-day deadline to move for amendment of its Final Infringement Contentions was tolled. Thus, the relevant questions before the court are whether Corel has made an adequate showing of good cause to permit amendment and whether Microsoft would be unduly prejudiced.

         I.GOOD CAUSE

         The Local Patent Rules provide little direct guidance on what constitutes good cause to amend the Final Infringement Contentions. The court therefore looks to related provisions of the Local ...


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