On April 30, 2009, Chief ALJ Paul J. Luckern issued the public version of Order No. 31 (dated April 2, 2009) in Certain Video Games and Related Three-Dimensional Pointing Devices (337-TA-658).  In the Order, ALJ Luckern granted respondents’ Nintendo Co., Ltd. and Nintendo of America, Inc.’s (collectively “Nintendo”) motion to amend their answer to Complainant Hillcrest Laboratories, Inc.’s (“Hillcrest”) Complaint to assert the defenses that the asserted claims of the patents at issue were unenforceable due to inequitable conduct.

According to the Order, Commission Rule 210.14(b)(2) provides that the presiding ALJ may allow amendments to the pleadings under conditions that avoid prejudicing the public interest and the rights of the parties if disposition on the merits will be facilitated, or if other good cause is shown.  ALJ Luckern noted that the ITC typically favors allowing respondents to amend their answer, however, an unjustified delay in presenting an affirmative defense may show that there is no good cause to amend the pleading.

Nintendo sought to amend its answer to add inequitable conduct defenses based on Hillcrest’s failure to disclose several references cited in Office Actions rejecting a Hillcrest-owned application directed to similar subject matter, Application No. 11/286,702 (“the ‘702 application”).  In addition, Nintendo sought to add an inequitable conduct defense based on Hillcrest’s misrepresentations that it had small entity status during the prosecution of the asserted patents.  Nintendo argued that there was good cause for the amendment because certain information came to light only with recent discovery in the instant investigation.

The Commission Investigative Staff (“Staff”) opposed Nintendo’s motion arguing that much of the “recently” discovered information had been publicly available well-before Nintendo filed the motion.  Moreover, Staff argued that Nintendo had access to the file histories of the patents at issue since the beginning of the investigation, and could have learned about the small entity status in these papers.  Further, the image file wrapper of the ‘702 application was publicly available on the USPTO’s website.  The Staff also argued that allowing Nintendo to amend its answer would unduly prejudice the Staff and Hillcrest because fact and expert discovery were already closed, and the hearing in the investigation was scheduled to begin on May 11, 2009. 

Finding that Nintendo had established good cause, ALJ Luckern granted the motion to amend the Answer.  He found that Nintendo’s assertions that recent discovery revealed the identity and extensive experience of Hillcrest’s primary counsel in charge of its patent portfolio were not challenged by the Staff.  ALJ Luckern further found that the Staff and Hillcrest would not be unduly prejudiced because there was sufficient time before commencement of the hearing, because the burden of proving inequitable conduct was on Nintendo, not Hillcrest, and because Hillcrest and the Staff had access to all of the relevant facts.