Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_04-cv-01971/USCOURTS-caed-2_04-cv-01971-7/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 15:1126 Patent Infringement

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

WORDTECH SYSTEMS, INC., 2:04-cv-1971-MCE-EFB

a California Corporation,

Plaintiff,

v. MEMORANDUM AND ORDER

INTEGRATED NETWORK SOLUTIONS,

Inc., a Nevada Corporation,

DBA INTEGRATED NETWORK

SOLUTIONS CORP., NASSER

KHATEMI, individually, HAMID

ASSADIAN, individually,

EHTERAM GHODSIAN,

individually, SHOHREH JAVADI,

individually, MICHAEL F.

ELLSWORTH, individually, BRIAN

J. DEAN, individually, SAN

JUAN UNIFIED SCHOOL DISTRICT,

and DOES 1 - 50, 

Defendants.

----oo0oo----

Through the present action, Plaintiff Wordtech Systems Inc.

(“Wordtech”) has alleged Defendants Integrated Network Solutions,

Inc., et al. (“Defendants”) have infringed certain of its

patents.

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Case 2:04-cv-01971-TLN-EFB Document 141 Filed 03/22/07 Page 1 of 6
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Presently before the Court is Defendants’ Motion for Leave to

Amend their Answer. Defendants seek this leave in order to add

an affirmative defense which they have, to date, failed to

assert. Plaintiff argues that Federal Rule of Civil Procedure 15

governs whether the Court should grant their Motion while

Defendants contend that Federal Rule of Civil Procedure 16

controls. For the reasons set forth below, this Court holds that

Rule 16 controls and that Defendants’ Motion is DENIED. 

BACKGROUND

On January 28, 2005, Plaintiff filed its First Amended

Complaint alleging that Defendants infringed on certain of its

patents. In the Complaint, Plaintiff alleged that each of its

patents were duly and legally issued, valid and enforceable. On

February 17, 2005, Defendants submitted their Answer and

expressly elected not to challenge the underlying validity of the

Plaintiff’s patents. On June 17, 2005, this Court filed its

first Pretrial Scheduling Order (“PTSO”). The Court amended that

PTSO once on July 15, 2005, again on September 13, 2006. The

September Order provided as follows: 1) no joinder of parties or

amendments to pleadings would be permitted without a showing of

good cause; 2) all discovery, with the exception of expert

discovery, was to be completed by November 7, 2006 and; 3) the

Pretrial Order would not be modified without a showing of good

cause. On February 13, 2007, Defendants filed the present Motion

in order to add an affirmative defense challenging the validity

of Plaintiff’s patents. 

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STANDARD

The Court is normally required to enter a pretrial

scheduling order within 120 days of the filing of the complaint. 

Fed. R. Civ. P. 16(b). The scheduling order “controls the

subsequent course of the action” unless modified by the Court. 

Fed. R. Civ. P. 16(e). Orders entered before the final pretrial

conference may be modified upon a showing of “good cause,” but

orders “following a final pretrial conference shall be modified

only to prevent manifest injustice.” Fed. R. Civ. P. 16(e).

Rule 16(b)’s “good cause” standard primarily considers the

diligence of the party seeking the amendment. Johnson v. Mammoth

Recreations, 975 F.2d 604, 609 (9th Cir. 1992). The district

court may modify the pretrial schedule “if it cannot reasonably

be met despite the diligence of the party seeking the extension.”

Fed. R. Civ. P. 16 Advisory Committee Notes (1983 Amendment); Id.

Moreover, carelessness is not compatible with a finding of

diligence and offers no reason for a grant of relief. Id.

Although the existence or degree of prejudice to the party

opposing the modification might supply additional reasons to deny

a motion, the focus of the inquiry is upon the moving party’s

reasons for seeking modification. If that party was not

diligent, the inquiry should end. Id.

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ANALYSIS

1. Good Cause

The Ninth Circuit has addressed Rule 16(b)’s “good cause”

standard and held that this standard primarily considers the

diligence of the party seeking the amendment. The district court

may modify the pretrial schedule “if it cannot reasonably be met

despite the diligence of the party seeking the extension.” 

Johnson, 975 F.2d at 609 (9th Cir. 1992) (citing Forstmann, 114

F.R.D. 83, 85 (1987); 6A Wright, Miller & Kane, Federal Practice

and Procedure § 1522.1 at 231 (2d ed. 1990) (“good cause” means

scheduling deadlines cannot be met despite party’s diligence)). 

In Johnson, the Ninth Circuit did not permit the plaintiff to

amend the Pretrial Scheduling Order to include an additional

defendant because the plaintiff had not met the pretrial deadline

for adding such a party. See Johnson, 975 F.2d 604. 

Furthermore, the Johnson court found that the plaintiff could not

meet the “good cause” standard of Rule 16 because it was aware of

the identity of the proper defendant prior to the deadline but

nonetheless failed to timely add that party. Id. 

 Defendants are requesting to add an affirmative defense to

their Answer five months after this Court issued its third

amended PTSO. Accordingly, Defendants must show good cause for

failing to timely raise this defense.

Defendants first claim they did not believe they were

required to raise the affirmative defense that the underlying

patents were invalid.

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They base their position on the fact that this particular defense

had been raised in the Answer filed by Co-Defendant San Juan

Unified School District. Defendants explain that they should not

have been required to amend their Answer as this specific defense 

was already set forth in co-defendant San Juan Unified School

District’s Answer. Defendants further contend that their failure

to amend has not prejudiced Plaintiff because this defense was

clearly known to them by way of San Juan’s Answer. Finally,

Defendants aver that their lack of financial resources to

investigate this possible defense should constitute “good cause.” 

The Court is not persuaded by Defendants’ arguments.

First, the existence in a Co-defendant’s brief of an

affirmative defense does not absolve these Defendants of the

obligation to raise all defenses which they intend to advance. 

The omission of a defense based on its existence in another

Answer plainly does not satisfy the requisite diligence to

satisfy the “good cause” standard of Rule 16.

With respect to Defendants’ contention that they lacked the

resources to investigate the invalidity defense, that position is

rebutted by Defendants’ own conduct. Specifically, Defendants

had retained an expert and received a report regarding this

particular defense as early as November 10, 2004. Despite their

retention of an expert, which belies their argument that they

lacked sufficient resources to uncover the defense, Defendants

chose not to include the defense of invalidity in their Answer. 

The record shows that Defendants failed to seek leave to plead

this defense until the present Motion was made, twenty-six months

after Defendants were on notice of this potential defense.

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The Court finds that Defendants have not shown they were diligent

in pursuing this affirmative defense. Given that lack of

diligence, the Court finds that “good cause,” as that standard

has been defined by the Ninth Circuit, is not satisfied. 

Therefore, Defendants’ Motion for Leave to Amend their Answer is

DENIED. 

CONCLUSION

For the foregoing reasons, Defendants’ Motion for Leave to

Amend their Answer is DENIED.

IT IS SO ORDERED.

Dated: March 21, 2007

_____________________________

MORRISON C. ENGLAND, JR.

UNITED STATES DISTRICT JUDGE

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