In a recent order, Administrative Law Judge McNamara denied Complainants Advanced Micro Devices, Inc. and ATI Technologies ULC’s motion for leave to file an amended complaint to assert U.S. Patent Nos. 8,760,454 and 9,582,846 against Respondent VIZIO, Inc. Certain Graphic Systems, Components Thereof, And Consumer Products Containing The Same, Inv. No. 337-TA-1044, Order 32.
Complainants filed their original complaint on January 24, 2017, which they amended before institution to accuse LG, VIZIO, MediaTek, and SDI of infringing United States Patent Nos. 7,633,506 and 7,796,133. The amended complaint also accused LG and MediaTek of infringing the ’454 and the ’846 patents—but not VIZIO. Complainants were subsequently granted leave to file two more amendments to the complaint that added a certificate of correction to an asserted patent and MStar, a subsidiary of MediaTek, as a respondent. On July 19, 2017, Complainants moved for leave to file a Fourth Amended Complaint to assert the ’454 and the ’846 patents against VIZIO. Id. at 1.
Commission Rule 210.14(b)(1) provides that, after institution, “the complaint or notice of investigation may be amended only by leave of the Commission for good cause shown and upon such conditions as are necessary to avoid prejudicing the public interest and the rights of the parties to the investigation.” 19 C.F.R. 210. 14(b)(l). Generally, good cause exists when new information is obtained during discovery that was not known to a complainant prior to institution. Order 32 at 4. Prior to an amendment, there must be an inquiry into whether granting the motion would prejudice the rights of the other parties or the public interest. Id.
Complainants asserted that good cause existed because they first learned that VIZIO’s accused products infringed the ’454 and ’846 patents when a third-party produced confidential technical documents regarding GPUs in certain VIZIO products. Id. at 4. VIZIO opposed the motion because the third-party information was publicly available before the Investigation. VIZIO also noted that Complainants waited almost a month after Respondents identified the third party as a supplier before applying for a subpoena. Id. at 5-6. Staff asserted that good cause may exist but granting the motion would prejudice the public interest and Respondents. Id. at 6.
ALJ McNamara agreed with Staff and found that despite any good cause that Complainants alleged, the unavoidable prejudice to VIZIO, the remaining Respondents, and the public interest weighed in favor of denying Complainants’ motion. Id. at 7. The ALJ explained that claim construction briefing is complete; the fact discovery cutoff and opening expert reports are only a few weeks away; and expert discovery closes shortly thereafter. Id. at 8. She further noted that VIZIO should not be forced into the position of relying on the Markman positions or the defenses developed by other Respondents, and that any significant adjustment to the Procedural Schedule to mitigate prejudice to VIZIO would prejudice the right of the remaining respondents to a timely hearing and final agency decision. Id. at 8. For these reasons, ALJ McNamara denied the motion. Id. at 9.
Takeaway
The fast pace of Section 337 proceedings often favors complainants who take the time to organize their case before filing. However, ALJ McNamara’s order shows that this fast pace can also limit a complainant’s ability to amend the complaint. Accordingly, an ITC complainant should endeavor to conduct a comprehensive pre-suit inquiry to identify infringing conduct by respondents, including any relevant suppliers. Complainants also need to react quickly to new facts obtained through discovery. Furthermore, the optics of seeking to amend the complaint for the fourth time likely weakened the Complainants’ position in this case.
