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Fujitsu Limited v. Tellabs Operations

March 21, 2012

FUJITSU LIMITED, PLAINTIFF,
v.
TELLABS OPERATIONS, INC. AND TELLABS, INC., DEFENDANTS.
TELLABS OPERATIONS, INC. PLAINTIFF,
v.
FUJITSU LIMITED AND FUJITSU NETWORK COMMUNICATIONS, INC., DEFENDANTS.
FUJITSU LIMITED, COUNTER CLAIMANT,
v.
TELLABS OPERATIONS, INC., TELLABS, INC., AND TELLABS NORTH AMERICA, INC., COUNTER DEFENDANTS.



The opinion of the court was delivered by: James F. Holderman, Chief Judge:

Consolidated for Discovery

MEMORANDUM OPINION AND ORDER

Before the court is "Fujitsu Limited and Fujitsu Network Communications, Inc.'s Motion to Set a Schedule to Serve Final Infringement Contentions and in the Alternative to File Amended Final Infringement Contentions." (Case No. 09-4530 (Dkt. No. 397) (Fujitsu's Mot.)) For the reasons stated herein, the motion is denied.

BACKGROUND

Because this motion is, in some respects, a motion to reconsider this court's Sept. 29, 2011, ruling denying Fujitsu Limited leave to file an amended complaint and amended infringement contentions (Dkt. No. 377 ("Order Denying Motion for Leave to Amend")), a brief overview of the procedural history of this matter is necessary.

On January 29, 2008, Fujitsu Limited filed a complaint against Tellabs, Inc. and Tellabs Operations, Inc. in the United States District Court for the Eastern District of Texas ("Texas Action") alleging infringement of U.S. Patent Nos. 5,526,163 ("'163 Patent"); 5,521,737 ("'737 Patent"); 5,386,418 ("'418 Patent"); and 6,487,686 ("'686 Patent").*fn1 (Case No. 09-4530, Dkt. No. 1, Fujitsu's Compl. ¶¶ 1, 12--35.) Tellabs Operations, Inc. then filed suit against Fujitsu Limited and Fujitsu Network Communications, Inc. (collectively "Fujitsu") in the United States District Court for the Northern District of Illinois ("Illinois Action") on June 11, 2008, alleging infringement of U.S. Patent No. 7,369,772 ("'772 Patent"). (Case No. 08-3379, Dkt. No. 1, Tellabs's Compl. ¶ 1.) Both Fujitsu Limited and Fujitsu Network Communications, Inc. filed their amended answers, affirmative defenses, and counterclaims in the Illinois Action on April 1, 2009. (Dkt. Nos. 119, 120.) In its counterclaims, Fujitsu Limited alleged that Tellabs Operations, Inc., Tellabs, Inc., and Tellabs North America (collectively "Tellabs") infringed two additional patents assigned to Fujitsu Limited: U.S. Patent Nos. 7,227,681 ("'681 Patent") and 5,533,006 ("'006 Patent").*fn2 (Dkt. No. 119.)

Fujitsu served its infringement contentions*fn3 related to the '418, '737, and '163 patents on Tellabs on July 28, 2008, in the Eastern District of Texas, with a corrected version filed a day later. (Dkt. No. 397-1 (Gino Cheng. Decl., ¶ 4.) On Nov. 4, 2008, Fujitsu served its infringement contentions for the '681 patent in this court, as it is the subject of Fujitsu's counterclaim in the Illinois action. (Id. ¶5.)

The Texas Action subsequently was transferred to the Northern District of Illinois on July 29, 2009, and the two cases were consolidated before this court for purposes of discovery. (Case No. 08-3379, Dkt. No. 202.) On Sept. 29, 2011, this court issued its Markman determination providing constructions of the disputed claim terms in the '418, '772,'773, '163, and '681 patents. (Case No. 09-4530, Dkt. No. 379.) That same day, the court issued an order denying Fujitsu's leave to file a first amended complaint in Case. No. 09-4530, and granting Tellabs' oral motion to disallow the filing of that complaint and Fujitsu's supplemental infringement contentions. (Order Denying Leave to Amend 2.) In that ruling, the court observed that Fujitsu failed to make clear to the court how its proposed amended complaint and amended infringement contentions differed from the original contentions it had filed in 2008 or proposed amended contentions it had filed in 2009, when the case was pending before the Eastern District of Texas. (Id.)

The court noted that Texas action initially was governed by the Local Patent Rules for the Eastern District of Texas. Under those rules, each party's infringement contentions are deemed final with the exception of amendments based in good faith on the court's claim construction ruling. E.D. Tex. P.R. 3-6(a). (Order Denying Leave to Amend 2.) A party cannot amend those contentions except by order of the court on a showing of good cause. E.D. Tex. P.R. 3-6(b). As such, this court held, at the time Fujitsu served its infringement contentions, it was operating under the assumption that they were final subject to the limited exceptions provided for in the Texas rules. (Order Denying Leave to Amend 2.) The court accordingly held that Fujitsu's 2008 Infringement Contentions were final.*fn4 (Id.)

The court then applied the Northern District of Illinois Local Patent Rules, which are now controlling, to determine whether Fujitsu's proposed amendments should be allowed. Under Local Patent Rule 3.4:

A party may amend its Final Infringement Contentions or Final Non-infringement and Invalidity Contentions only by order of the Court upon a showing of good cause and absence of unfair prejudice to opposing parties, made promptly upon discovery of the basis for the 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.

Based on this standard and the governing law of the Federal Circuit, the court denied Fujitsu leave to amend. (Order Denying Leave to Amend 3--4.)

Key to this decision was the fact that Fujitsu had identified at least some of the proposed amendments while the Texas Action was pending before Judge Davis in the Eastern District of Texas. (Id. at 2--3.) On June 12, 2009, Fujitsu had sought leave to file a First Amended Complaint and amend its infringement contentions. (Id. at 3.) Judge Davis denied that motion without prejudice when the case was transferred to this district, but Fujitsu waited too long after the case was transferred and did not renew that motion until May 6, 2011. (Id.)

Based on that substantial, unexplained delay, and the resulting prejudice to Tellabs, this court denied the motion. (Id.) Fujitsu's original complaint remains the operative one in the case, and its 2008 contentions are Fujitsu's final infringement contentions. (Id. at 4). The court, however, recognized that both its Markman order and the on-going discovery in this case might warrant an amendment to the final infringement contentions. (Id. at 4.) The court emphasized that if Fujitsu sought leave to make such an amendment, "Fujitsu must specifically identify for the court the substance of the amendment in addition to making the requisite 'showing of good cause and absence of unfair prejudice' to Tellabs, as required by Local Patent Rule 3.4. Additionally, the court held, Fujitsu must describe how its amendment is "'made promptly upon the discovery of the basis for the amendment.'" (Id. (quoting L.P.R. 3.4.)(emphasis added).)

In its present motion, Fujitsu seeks, at least in part, a reconsideration of that ruling. Fujitsu asks this court "to apply L.P.R. 3 flexibly and set new deadlines for serving Final Contentions on all issues consistent with the unique circumstances of this litigation." (Fujitsu's Mot. 4.) The court does not believe that modification of its Sept. 29, 2011, order is appropriate. It is simply too late in the case to allow the wholesale introduction of new theories of infringement. Fujitsu should have known, under the Eastern District of Texas' local patent rules, that its infringement contentions related to the '418, '737, and '163 patents would be deemed final, subject to limited exceptions. The '681 patent that was part of the Illinois Action prior to consolidation of the two cases presents somewhat different circumstances. The court notes that although Fujitsu labeled its infringement contentions as preliminary, see Cheng Decl., ΒΆ 4, this court made no reference to the contentions being preliminary in its order requiring the filing of infringement contentions by Nov. 4, 2008. (Case No. 08-3379, Dkt. No. 81.) This district's Local Patent Rules, with ...


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