23
Mar
By Eric Schweibenz
On March 20, 2012, ALJ James E. Gildea issued the public version of Order No. 39 (dated March 5, 2012) denying Complainant Apple Inc.’s (“Apple”) motion seeking leave to file a Second Amended Complaint and to amend the Notice of Investigation in Certain Portable Electronic Devices and Related Software (Inv. No. 337-TA-797).

By way of background, the investigation is based on a July 8, 2011 complaint and August 3, 2011 supplement to the complaint filed by Apple alleging violation of Section 337 in the importation into the U.S. and sale of certain portable electronic devices and related software that infringe various U.S. patents.  See our July 11, 2011 post for more details.

According to the Order, Apple sought to assert five additional dependent claims against Respondents HTC Corp., HTC America, Inc., and Exedea, Inc. (collectively, “HTC”) based on particular functionality of specific HTC devices.  Apple argued that it had good cause to support its motion because it conducted a “reasonable and diligent investigation prior to filing the original Complaint and did not discover this functionality prior to filing the Complaint.”  Apple also claimed HTC did not disclose this functionality in response to interrogatories, and that there will be no prejudice to HTC in granting the motion as the accused products overlap, as will the corresponding discovery.  Furthermore, Apple alleged it “does not expect the need for any modifications to the procedural schedule as a result of the proposed amendment.”

HTC opposed the motion, arguing that the amendment would severely prejudice HTC, primarily because it would result in the need “to reinstitute significant case deadlines that have already passed,” including a new prior art search, claim construction, and fact discovery deadlines.  HTC also argued that Apple had not shown good cause for the proposed amendment because Apple failed to show why it could not have asserted the new claims earlier in the investigation, and Apple’s infringement contentions on these new claims “rely on information that was publicly available before Apple filed its original Complaint.”  HTC also noted that Apple failed to include a Proposed Amended Complaint with its motion in violation of Commission Rule 210.12.

ALJ Gildea began by noting that, without a copy of Apple’s proposed amended complaint, he had “no basis for ascertaining whether Apple’s proposed amendments comply with the requirements of 19 C.F.R. § 210.12(a).”  Additionally, the ALJ noted that if the motion was granted, it would require “significant adjustments to the procedural schedule.”  In considering the merits of the motion, the ALJ determined that Apple failed to show good cause for amending the complaint.  Specifically, the ALJ stated “while Apple argues that it conducted a reasonable and diligent pre-suit investigation, it provides no evidence to support this statement, instead relying solely on attorney argument,” noting (in agreement with HTC) that the evidence relied upon by Apple to support its infringement contentions in relation to the new claims was publicly available prior to filing the original complaint.  Therefore, since Apple “has not demonstrated that it could not have asserted these allegations at an earlier time…Apple has failed to demonstrate good cause for the proposed amendment,” and the motion was denied.