Local Patent Rule Deadlines Cause Summary Judgment Against Plaintiff

Case: 02 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., No. 06-1064 (Fed. Cir. 11/15/06)


The One Sentence Summary: Plaintiff's delay in submitting amended infringement contentions under the Northern District of California's local patent rules prevented a showing of "good cause", and district court properly granted summary judgment against plaintiff.


What They Were Fighting About: Plaintiff had a patent on a technology for using feedback signals to control the current provided to a computer monitor from a battery. Plaintiff sued for patent infringement in the Northern District of California. It filed preliminary infringement contingents in accordance with the local patent rules of the Northern District of California identifying one theory of patent infringement. After a deposition ten months later, plaintiff sought to amend its preliminary infringement contentions to add additional theories of infringement revealed in the deposition. Plaintiff unsuccessfully sought a stipulation from defendant allowing amendment. Plaintiff then filed a motion to amend its infringement contingent three months after the deposition. The district court denied the motion to amend the preliminary infringement contentions and subsequently refused to allow amended expert reports served after the deadline for expert reports incorporating the new theories of infringement. The district court found that the plaintiff had not acted with adequate diligence to amend its infringement contentions and therefore did not have good cause for amendment. The district court subsequently granted summary judgment against plaintiff.

Federal Circuit Holdings:

• The validity and interpretation of the local patent rules for the Northern District of California would be determined as a matter of Federal Circuit law because it involved issues unique to patents.
• The local rules must be consistent with the letter and purpose of federal rules in order to be valid. Therefore, local rules cannot unduly restrict discovery or prevent parties from refining their liability contentions in light of new developments in discovery. However, the discovery rules are also intended to force a plaintiff to reveal its theories of liability and the court can set reasonable deadlines for revealing those theories.
• The Northern District local patent rules may require a showing of good cause in order to amend infringement contentions and a party's diligence in seeking amendment is part of a showing of good cause.
• The district court acted within its discretion in finding that plaintiff was not diligent in seeking amendment of its contentions.
• The discussions of a possible stipulation did not excuse the necessity of promptly seeking to amend.
• Plaintiff did not adequately show that the three month delay after discovering the issue at a deposition was necessary for it to bring the motion to amend.
• The district court did not abuse its discretion in rejecting plaintiff's attempts to amend its expert reports to state its new theories of infringement. The reports were untimely and plaintiff had failed to show diligence in submitting the amended reports. The district court did not act improperly in excluding the expert reports and the amended infringement contentions, even though this resulted in dismissal of plaintiff's case. Quoting Wong v. Regents of University of California. 410F.3(d) 1052, 1060 (9th Cir. 2005), the court stated "Parties must understand that they will pay a price for failure to comply strictly with scheduling and other orders, and that failure to do so may properly support severe sanctions and exclusions of evidence."