Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-04708/USCOURTS-cand-3_04-cv-04708-11/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:145 Patent Infringement

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

HYNIX SEMICONDUCTOR INC,

Plaintiff,

v

TOSHIBA CORPORATION et al,

Defendants.

 /

AND RELATED COUNTERCLAIMS

 /

No C-04-04708 VRW

AND RELATED CASES

ORDER

Plaintiff/counterdefendant Hynix Semiconductor, Inc

(“Hynix”) owns the eleven patents-in-suit, which relate to the

design and manufacture of semiconductors. Defendant/

counterclaimant Toshiba Corporation seeks a judgment declaring that

these patents are invalid and unenforceable or alternatively that

Toshiba has not infringed any valid claims in these patents. Doc

#1 at 23-24; Doc #25 at 16. Hynix denies these invalidity

allegations and claims that Toshiba Corporation and various related

entities (collectively, “Toshiba”) have infringed the patents. Doc

#12 at 23.

Case 3:04-cv-04708-VRW Document 135 Filed 10/31/06 Page 1 of 5
United States District Court

For the Northern District of California

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Toshiba has moved for leave to file amended replies to

Hynix’s counterclaims under FRCP 15(a). Doc #119. In particular,

Toshiba asserts it has recently discovered facts that warrant

amendment to add affirmative defenses of unenforceability due to

inequitable conduct concerning four of the patents-in-suit and

invalidity under 35 USC § 116 as to one of the asserted patents. 

Id at 4. For reasons that follow, the court GRANTS Toshiba’s

motion for leave to amend and VACATES the hearing scheduled for

November 16, 2006, at 2:00 pm. 

I

Under FRCP 15(a), leave to amend “shall be freely given

when justice so requires.” “This policy is ‘to be applied with

extreme liberality.’” Eminence Capital, LLC v Aspeon, Inc, 316 F3d

1048, 1051 (9th Cir 2003) (quoting Owens v Kaiser Foundation Health

Plan, Inc, 244 F3d 708, 712 (9th Cir 2001)). In Foman v Davis, 371

US 178, 182 (1962), the Supreme Court offered several factors for

district courts to consider in deciding whether to grant a motion

to amend under Rule 15(a):

In the absence of any apparent or declared reason --

such as undue delay, bad faith or dilatory motive on

the part of the movant, repeated failure to cure

deficiencies by amendments previously allowed, undue

prejudice to the opposing party by virtue of allowance

of the amendment, futility of amendment, etc -- the

leave sought should, as the rules require, be ‘freely

given.’

Foman, 371 US at 182. See also Smith v Pacific Properties and

Development Co, 358 F3d 1097, 1101 (9th Cir 2004) (citing Forman

factors).

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Case 3:04-cv-04708-VRW Document 135 Filed 10/31/06 Page 2 of 5
United States District Court

For the Northern District of California

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“Not all of the [Foman] factors merit equal weight. As

this circuit and others have held, it is the consideration of

prejudice to the opposing party that carries the greatest weight.” 

Eminence Capital, 316 F3d at 1052 (citing DCD Programs, Ltd v

Leighton, 833 F2d 183, 185 (9th Cir 1987)). “The party opposing

amendment bears the burden of showing prejudice.” DCD Programs,

833 F2d at 187. “Absent prejudice, or a strong showing of any of

the remaining Foman factors, there exists a presumption under Rule

15(a) in favor of granting leave to amend.” Eminence Capital, 316

F3d at 1052.

II

The facts underlying Toshiba’s proposed affirmative

defenses arise from three sources: (1) a parallel investigation by

the International Trade Commission (ITC) involving both parties,

(2) documents produced through recent claim construction discovery

and (3) Toshiba’s independent investigation. Doc #119. See also

Certain NAND Flash Memory Devices and Products Containing Same, US

ITC Inv No 337-TA-553. Hynix does not dispute Toshiba’s

justification for the delay; nor does Hynix allege the proposed

amendments would impose undue prejudice. Instead, Hynix opposes

the amendments because it considers them futile. 

Courts rarely deny a motion for leave to amend for reason

of futility. Indeed, before discovery is complete, as here, a

proposed amendment is futile only if no set of facts can be proved

under the amendment which would constitute a valid claim or

defense. Miller v Rykoff-Sexton, Inc, 845 F2d 209, 214 (9th Cir

1988). See also William W Schwarzer, et al, 2 California Practice

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United States District Court

For the Northern District of California

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Guide: Federal Civil Procedure Before Trial 8:423 (denials based

solely on futility “are rare”). 

Hynix’s argument ignores this standard and attempts to

convert this motion for leave to amend into one for summary

judgment. For example, Hynix argues for futility by alleging that

the testimony of the patent’s inventor “clearly negates” the

assertion the patent was obtained through inequitable conduct. Doc

#133. But the relevant inquiry is not whether Toshiba has

proffered enough evidence to succeed on the merits, it is whether

Hynix has demonstrated there is no set of facts under which the

affirmative defenses would be valid. Doc #133. Hence, to

establish futility, Hynix cannot simply note that the facts

underlying Toshiba’s proposed affirmative defenses are disputed.

In view of Rule 15(a)’s permissive standard, courts

ordinarily defer consideration of challenges to the merits of a

proposed amended pleading until after leave to amend is granted and

the amended pleading is filed. Schwarzer, California Practice

Guide 8:423. That custom is appropriate here. Hynix’s arguments

should be addressed in a motion to dismiss or for summary judgment,

not in an opposition to the present motion for leave to amend.

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Case 3:04-cv-04708-VRW Document 135 Filed 10/31/06 Page 4 of 5
United States District Court

For the Northern District of California

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III

In sum, the court finds that Hynix has not shown any

serious prejudice to mitigate FRCP 15(a)’s otherwise liberal stance

toward granting motions to amend, particularly when only new

defenses and not new parties are being added. Accordingly, the

court GRANTS Toshiba’s motion for leave to amend and VACATES the

November 16, 2006, hearing. 

IT IS SO ORDERED.

 

VAUGHN R WALKER

United States District Chief Judge

Case 3:04-cv-04708-VRW Document 135 Filed 10/31/06 Page 5 of 5