Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-03923/USCOURTS-cand-3_04-cv-03923-93/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1338 Patent Infringement

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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

SYNOPSYS, INC.,

Plaintiff,

 v.

MAGMA DESIGN AUTOMATION, INC.,

Defendant.

 /

No. C-04-3923 MMC

ORDER DENYING MAGMA DESIGN

AUTOMATION, INC.’S MOTION FOR

LEAVE TO AMEND ANSWER TO

PLAINTIFF SYNOPSYS, INC.’S THIRD

AMENDED COMPLAINT

(Docket No. 571)

Before the Court is defendant Magma Design Automation, Inc.’s (“Magma”) motion

for leave to amend its answer to plaintiff Synopsys, Inc.’s (“Synopsys”) Third Amended

Complaint, for the purpose of asserting affirmative defenses that the ’446 and ’438 patents

are invalid. Synopsys has filed opposition to the motion; Magma has filed a reply. Having

considered the papers submitted in support of and in response to the motion, the Court

rules as follows.

BACKGROUND

Synopsys filed its initial complaint in this action on September 17, 2004, asserting a

single claim against Magma for infringement of United States Patents Nos. 6,378,114 (“the

’114 patent”), 6,453,446 (“the ’446 patent”), and 6,725,438 (“the ’438 patent”). On

November 24, 2004, Magma filed its Amended Answer to the complaint.

Thereafter, Synopsys filed a motion to strike various affirmative defenses and to

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dismiss one of the counterclaims asserted in Magma’s Amended Answer, and a separate

motion to dismiss another counterclaim. In an order filed January 20, 2005 (“January 20

Order”), the Court struck the eleventh and sixteenth affirmative defenses, and otherwise

denied the motions. In the eleventh and sixteenth affirmative defenses, Magma purported

to reserve the right to contend that both the ’446 and ’438 patents are invalid and/or

unenforceable if the Court ultimately were to find that Magma did not own those patents

and if Magma discovered facts suggesting that either of the patents is invalid or

unenforceable. The Court found the eleventh and sixteenth affirmative defenses did not

actually assert defenses but, rather, served as “placeholders for affirmative defenses that

Magma may or may not seek to assert in the future,” and ordered that “[i]f Magma

eventually decides that it wishes to allege that the ’446 and/or ’438 patent is invalid and/or

unenforceable, it must move to amend its answer at that time.” (See January 20 Order

at 8.)

At the January 21, 2005 case management conference, and in the Pretrial

Preparation Order filed January 25, 2005, the “[d]eadline to file any motions to amend” was

set at “60 days from January 21, 2005,” i.e., March 22, 2005 (“amendment deadline”). 

(See Pretrial Preparation Order at 2.) Magma did not file a motion to amend its answer

before said amendment deadline.

On August 3, 2005, the parties filed a stipulation permitting Synopsys to file a Third

Amended Complaint. On that same date, Synopsys filed its Third Amended Complaint. 

On August 23, 2005, the Court issued an order construing the disputed claims of the

three patents at issue.

On September 2, 2005, Magma filed its answer to the Third Amended Complaint,

including therein various new affirmative defenses and counterclaims not previously

asserted in the Amended Answer it had filed on November 24, 2004. 

Synopsys thereafter moved to strike various affirmative defenses and counterclaims,

on the ground that Magma improperly added said defenses and counterclaims to its answer

without first seeking leave of court. On October 19, 2005, the Court granted the motion in

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part and denied it in part. In particular, as relevant to the instant motion, the Court struck

without prejudice the eleventh, twelfth, eighteenth, nineteenth, and twenty-ninth affirmative

defenses, by which defenses Magma asserted various legal grounds for finding the ’446

and ’438 patents invalid.

Magma thereafter filed the instant motion, by which it seeks leave to include the

stricken eleventh, twelfth, eighteenth, nineteenth, and twenty-ninth affirmative defenses in a

First Amended Answer to the Third Amended Complaint. In the eleventh and eighteenth

affirmative defenses, Magma asserts that the ’446 and ’438 patents “are invalid because

they fail to satisfy the conditions for patentability of 35 U.S.C. §§ 102 and 103 because,

without limitation, the alleged inventions are taught by, suggested by, anticipated by, and

obvious in view of the prior art, no claim of the [subject patents] can be validly construed to

cover any Magma product or process, and the inventorship of the [subject patents] is

incorrect.” (See Sapoznikow Decl. Ex. 1 at 13, 16.) In the twelfth and nineteenth

affirmative defenses, Magma asserts that the ’446 and ’438 patents are invalid for failure

“to satisfy one or more of the requirements of 35 U.S.C. § 112” on the ground that “(a) the

specification does not contain a written description of the invention and of the manner and

process of making and using it, in such full, clear, concise, and exact terms as to enable

any person skilled in the art to which it pertains, or with which it is most nearly connected,

to make and use the same; and (b) the specification does not set forth the best mode

contemplated by the inventor of carrying out his invention.” (See id.) In the twenty-ninth

affirmative defense, Magma contends that Synopsys “is not an owner of any invention

defined by the claims of the ’446 or ’438 patents” because “[t]o the extent that certain

claims in the ’446 or ’438 patents are described in . . . Synopsys documents . . . those

claims, read in light of the Court’s August 23, 2005 Claims Construction Order, are invalid

based on the prior art.” (See id. at 20.)

LEGAL STANDARD

Generally, Rule 15 of the Federal Rules of Civil Procedure governs the amendment

of pleadings, including answers. Rule 15(a) provides that the party seeking amendment

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“may amend the party's pleading only by leave of court or by written consent of the adverse

party; and leave shall be freely given when justice so requires.” See Fed. R. Civ. P. 15(a).

Where, however, the Court has issued a scheduling order establishing a deadline for

amendments to the pleadings, and a party seeks leave to file an amended pleading after

such deadline has passed, the “more stringent” standards of Rule 16(b), not those of Rule

15(a), apply. See AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 953 (9th

Cir. 2006); Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 (9th Cir. 1992). 

Under Rule 16(b), “[a] schedule shall not be modified except upon a showing of good cause

and by leave of the district judge.” See Fed. R. Civ. P. 16(b).

“Unlike Rule 15(a)’s liberal amendment policy which focuses on the bad faith of the

party seeking to interpose an amendment and the prejudice to the opposing party, Rule

16(b)’s ‘good cause’ standard primarily considers the diligence of the party seeking the

amendment.” See Johnson, 975 F.2d at 609. “The district court may modify the pretrial

schedule if it cannot reasonably be met despite the diligence of the party seeking the

extension.” See id. (internal quotation and citation omitted).

DISCUSSION

Magma argues that its assertion of invalidity defenses is timely, despite Magma’s

failure to seek leave to amend its answer prior to the March 22, 2005 amendment deadline,

because the invalidity defenses did not arise until the Court, on August 23, 2005, construed

the claims of the subject patents. Additionally, Magma argues, Synopsys produced new

evidence after the date of the Court’s claim construction, which evidence suggests that the

’446 and ’438 patents are invalid pursuant to the “on-sale bar” of 35 U.S.C. § 102(b). In

particular, Magma cites to the deposition of Robert Damiano (“Damiano”), wherein

Damiano testified Synopsys offered Synzilla to Intel in the fall of 1996, more than one year

before the December 24, 1997 filing of the patent application that ultimately led to issuance

of the ’446 and ’438 patents.

Synopsys argues that even assuming, arguendo, Magma has shown good cause for

failing to seek leave to amend its answer prior to the amendment deadline, Magma

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nonetheless is barred, pursuant to the doctrine of assignor estoppel, from challenging the

validity of the ’446 and ’438 patents. For the reasons set forth below, the Court finds

Synopsys’s argument persuasive.

Where an inventor assigns an invention for value, the doctrine of assignor estoppel

prohibits the inventor, and anyone in privity with the inventor, from contesting the validity of

a patent that issues on the assigned invention. See, e.g., Q.G. Products, Inc. v. Shorty,

Inc., 992 F.2d 1211, 1212-1214 (Fed. Cir. 1993). “Without exceptional circumstances

(such as an express reservation by the assignor of the right to challenge the validity of the

patent or an express waiver by the assignee of the right to assert assignor estoppel),” an

inventor who assigns an invention “surrenders with that assignment the right to later

challenge . . . validity.” See Mentor Graphics Corp. v. Quickturn Design Systems, Inc., 150

F.3d 1374, 1378 (Fed. Cir. 1998). The assignor’s “implicit representation” that the “rights

that he is assigning (presumably for value) are not worthless . . . sets the assignor apart

from the rest of the world and can deprive him of the ability to challenge later the validity of

the patent.” Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220, 1224 (Fed. Cir. 1988). 

The Court previously has determined that Lukas van Ginneken (“van Ginneken”) is

one of the inventors of the ’446 and ’438 patents, and that van Ginneken assigned to

Synopsys his interest in the inventions described in the subject patents. (See

Memorandum of Decision; Findings of Fact and Conclusions of Law re: Patent Ownership,

filed Jan. 31, 2007, at 45-46.) Because van Ginneken entered into the assignment “[i]n

consideration of [his] employment by the Company and the compensation received by [him]

from the Company from time to time,” (see Edelman Decl. Ex. 1 ¶ 3), such assignment was

for value. See Diamond Scientific, 848 F.2d at 1225 (finding assignment for value where

inventor “assigned the rights to his inventions . . . in exchange for . . . one dollar plus other

unspecified consideration – presumably his salary over many years and other employment

benefits”). Accordingly, the doctrine of assignor estoppel bars van Ginneken from

challenging the validity of the ’446 and ’438 patents.

The remaining issue is whether Magma is in privity with van Ginneken and, thus,

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also barred from challenging the validity of the subject patents. Assignor estoppel

“operates to bar other parties in privity with the assignor[.]” See id. “If an inventor assigns

his invention to his employer company A and leaves to join company B, whether company

B is in privity and thus bound by the doctrine will depend on the equities dictated by the

relationship between the inventor and company B in light of the act of infringement.” See

Shamrock Technologies, Inc. v. Medical Sterilization, Inc., 903 F.2d 789, 793 (Fed. Cir.

1990). “The closer that relationship, the more the equities will favor applying the doctrine to

company B.” Id. “What is significant is whether the ultimate infringer availed itself of the

inventor’s knowledge and assistance to conduct infringement.” See Intel Corp. v. U.S.

International Trade Commission, 946 F.2d 821, 839 (Fed. Cir. 1991) (internal quotation and

citation omitted).

The Court previously has held that Magma and van Ginneken are in privity for

purposes of applying the doctrine of assignor estoppel to preclude Magma from challenging

the validity of the ’114 patent. (See Order Granting Synopsys’s Motion for Partial Summary

Judgment Based on Doctrine of Assignor Estoppel, filed July 1, 2005.) In so holding, the

Court relied on Magma’s admissions that (1) van Ginneken was a “co-founder,” “Principal

Engineer,” and “key employee” of Magma, (2) van Ginneken “was directly involved in the

design and development” of four Magma products that Synopsys contends infringe the ’114

patent, specifically, Blast Fusion, Blast Create, Blast Plan, and Blast Noise, (3) Magma

“availed itself of [ ] van Ginneken’s knowledge and assistance in the design” of said

products, and (4) van Ginneken was “instrumental in taking Blast Fusion from a concept to

a production-ready software used worldwide.” (See id. at 6-8.)

All of the admissions referenced above are equally applicable to the instant motion,

because Synopsys accuses the four above-referenced Magma products of infringing not

only the ’114 patent but also the ’446 and ’438 patents. (See Edelman Decl. Ex. 17.) 

Consequently, the factual basis for the Court’s order finding Magma and van Ginneken in

privity for purposes of applying assignor estoppel to bar Magma from challenging the

validity of the ’114 patent also supports a finding that Magma and van Ginneken are in

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 In light of this ruling, the Court does not reach Synopsys’s additional argument that

the doctrine of judicial estoppel bars Magma from challenging the validity of the subject

patents.

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privity for purposes of applying assignor estoppel to bar Magma from challenging the

validity of the ’446 and ’438 patents. As Synopsys notes, “there is simply nothing

concerning the issue of assignor estoppel that is left for the parties to litigate.” (See Opp.

at 24:5-7.)

Accordingly, because the doctrine of assignor estoppel precludes Magma from

challenging the validity of the ’446 and ’438 patents, the Court will DENY Magma’s motion

for leave to amend its answer to assert affirmative defenses challenging the validity of the

subject patents.1

CONCLUSION

For the reasons stated above, Magma’s motion for leave to amend its answer is

hereby DENIED. 

This order terminates Docket No. 571.

IT IS SO ORDERED.

Dated: February 6, 2007 

MAXINE M. CHESNEY

United States District Judge

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