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TC Technology LLC v. Sprint Corp

United States District Court, D. Delaware

February 11, 2019

TC TECHNOLOGY LLC, Plaintiff,
v.
SPRINT CORPORATION and SPRINT SPECTRUM, L.P., Defendants.

          MEMORANDUM ORDER

         Presently before the Court is Plaintiffs motion for leave to amend complaint (D.I. 230). I have considered the parties briefing. (D.I. 231, 240, 250).

         I. BACKGROUND

         TC Technology LLC ("TC Tech") filed this action on March 10, 2016, alleging that Sprint Corporation and Sprint Spectrum, L.P. (collectively, "Sprint") infringed U.S. Patent No. 5, 815, 488 ("the '488 patent") with certain wireless services on its LTE network. (D.I. 1).

         In November 2016, Sprint stated in response to an interrogatory that it first became aware of the '488 patent in February 2016. (D.I. 232, Ex. 5 at 15-16 (Interrogatory No. 5)).

         In December 2017, Sprint amended its response to disclose that it received an email on January 9, 2012, from IAG, the broker representing the prior owner of the '488 patent, with the subject line "CableLabs Patent Sale Offering - IAG." Attached to the email was a 12-page document titled, "CableLabs Patent Sale Offering Presented by IAG," which identified and described the '488 patent. The attachment stated, in bold, "Any discussion of the use or potential use of the referenced patents .. . should not be construed as being . . . notice of infringement, or any form of actual or prospective infringement." The email was sent to Charlie Wunsch, then general counsel at Sprint. Mr. Wunsch forwarded the email to Sprint employees Keith Cowan and Harley Ball. Sprint stated that "after thorough investigation[, ] Sprint believes that the attachment was never opened by Messrs. Wunsch, Cowan, or Ball, that neither the email nor its attachment was forwarded to anyone else at Sprint, and that Messrs. Wunsch, Cowan, and Ball, while Sprint employees, never discussed this email or its attachment with each other or with any other employee at Sprint," and, in fact, "have no recollection of the email whatsoever." Therefore, Sprint maintained its position that it first became aware of the '488 patent in February 2016. (Id., Ex. 6 at 2-3 (Interrogatory No. 5)). Accompanying the interrogatory response, Sprint produced a February 24, 2012 follow-up email from IAG that Mr. Wunsch also forwarded to Mr. Ball. (D.I. 241, Ex. J; D.I. 240 at 6).

         Sprint designated Mr. Ball as its Rule 30(b)(6) witness regarding Sprint's pre-suit knowledge and/or awareness of the '488 patent. (D.I. 232, Ex. 7 at 27:14-23 (Ball Deposition)). TC Tech deposed Mr. Ball on July 18, 2018. (Id.). The parties met and conferred on August 29, 2018. (D.I. 231 at 4-5). TC Tech filed this motion for leave to amend on September 28, 2018. (D.I. 230). The deadline to amend the pleadings under the Court's scheduling order was May 12, 2017. (D.I. 14).

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 15 governs amendments to the pleadings generally. Rule 15(a)(2) provides that "[t]he court should freely give leave [to amend] when justice so requires." Fed.R.Civ.P. 15(a). "Among the grounds that could justify a denial of leave to amend are undue delay, bad faith, dilatory motive, prejudice, and futility." Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000).

         Federal Rule of Civil Procedure 16(b) also applies when a party moves to amend past the date set by the scheduling order. E. Minerals & Chemicals Co. v. Mahan, 225 F.3d 330, 340 (3d Cir. 2000); Media Pharm. Inc. v. Teva Pharm. USA, Inc., 2016 WL 6693113, at *1 & n.2 (D. Del. Nov. 14, 2016). Rule 16(b)(4) provides, "A schedule may be modified only for good cause and with the judge's consent." Fed.R.Civ.P. 16(b)(4). "Good cause is present when the schedule cannot be met despite the moving party's diligence." Media Pharm., 2016 WL 6693113, at *1. "In contrast to Rule 15(a), the good cause standard under Rule 16(b) hinges on diligence of the movant, and not on prejudice to the non-moving party." S. Track & Pump, Inc. v. Terex Corp., 722 F.Supp.2d 509, 521 (D. Del. 2010).

         III. ANALYSIS

         A. TC Tech Meets Good Cause Under Rule 16(b)

         Sprint argues that TC Tech has failed to show diligence in pursuit of its new willful infringement claim, as required to show good cause under Rule 16(b). (D.I. 240 at 8-10). The crux of the parties' dispute is whether TC Tech obtained new information related to willfulness from Mr. Ball's July 2018 deposition. Sprint argues that TC Tech has been in possession of all relevant information since December 2017 when Sprint submitted its amended interrogatory response and accompanying production. (Id. at 9-10). TC Tech argues that there are inconsistencies between the December 2017 response and Mr. Ball's testimony, which support its claim for willful infringement. (D.I. 231 at 7).

         Sprint's December 2017 response states that "after thorough investigation," Sprint believed the attachment to the January 2012 IAG email, which includes references to the '488 patent, was never opened by any Sprint employees, namely Messrs. Wunsch, Cowan, and Ball. (D.I. 232, Ex. 6 at 2-3). Mr. Ball testified during deposition that "there was no way to verify one way or the other" whether the attachment had been opened, other than the recollections of himself, Mr. Wunsch, and Mr. Cowan that it was not opened. (Id., Ex. 7 at 194:8-196:4). Mr. Ball also testified that he did not think he, Mr. Wunsch, or Mr. Cowan would have opened the attachment in the normal course of business. (Id.). TC Tech argues that Mr. Ball's testimony shows that Sprint did not investigate whether the IAG email attachment was opened, contrary to its December 2017 response. (D.I. 231 at 3-4; D.I. 250 at 2). I agree that there is a meaningful difference between a "thorough investigation," in the December 2017 response, and having "no way to verify one way or the other," as stated by Mr. Ball.

         I find TC Tech meets the good cause requirement of Rule 16(b). TC Tech's willful infringement claim is based on new information obtained in Mr. Ball's July 2018 deposition. TC Tech also appears to have worked diligently in the period between the deposition and this motion-TC Tech followed up with Sprint two days after the deposition, arranged a meet and confer shortly after receiving Mr. Ball's final deposition transcript, and filed this motion about a month after the meet and confer. (D.I. 231 at 7). See Cornell Univ. v. Illumina, Inc., 2016 WL 3046258, at *5 (D. Del. May 27, 2016) (finding good cause met where the party's new allegations were based on "a new set of facts obtained and confirmed during discovery which took place after the Scheduling Order's deadline for amending pleadings," and the party "worked diligently to obtain and confirm facts" supporting its new allegations); Enzo Life Sciences, Inc. v. Digene Corp.,270 ...


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