Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-02016/USCOURTS-casd-3_13-cv-02016-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

INDUSTRIAL TECHNOLOGY

RESEARCH INSTITUTE,

Plaintiff/Counterclaim Defendant,

CASE NO. 3:13-cv2016-GPC-WVG

ORDER:

(1) GRANTING LG DISPLAY’S

MOTION TO INTERVENE;

(2) VACATING HEARING DATE

[Dkt. No. 47]

vs.

LG ELECTRONICS, INC., and

LG ELECTRONICS U.S.A., INC.,

Defendants/Counterclaim Plaintiffs.

Before the Court is non-party LG Display Co., LTD.’s (“LG Display”) motion

to intervene. [Dkt. No. 47.] Industrial Technology Research Institute (“Plaintiff”) has

filed an opposition to LG Display’s motion. [Dkt. No. 68.] LG Electronics, Inc. and LG

Electronics U.S.A., Inc. (collectively, “Defendants”) and LG Display filed replies [Dkt.

Nos. 71, 73.]

The parties have fully briefed the motion. [Dkt. Nos. 47, 69, 71, 73.] The Court

findsthe motion suitable for disposition without oral argument pursuant to Civil Local

Rule 7.1(d)(1). Upon reviewofthemoving papers, admissible evidence, and applicable

law, the Court GRANTS LG Display’s motion to intervene.

/ /

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BACKGROUND

On August 29, 2013, Plaintiff filed a Complaint for Patent Infringement. [Dkt.

No. 1.] On June 26, 2014, Plaintiff filed a First Amended Complaint (“FAC”) for

Patent Infringement. [Dkt. No. 35.] Plaintiff alleges that Defendants are either directly

under 35 U.S.C. § 271(a), or under the doctrine of equivalents, infringing Plaintiff’s

’355 patent by “making, using, selling, offering for sale, and/or importing into the

UnitedStates” the followingmonitormodels: 23EA63V-P, 22EA53T-P, and 29EA93-P

(the “Accused Monitors”). [Id. ¶ 14.]

LG Display asserts that the “patent-infringement claim at issue relates to liquid

crystal displays supplied by LG Display to [Defendants]”. [Dkt. No. 47-1 at 6.]

Additionally, LG Display has agreed to indemnify Defendants with respect to

Plaintiff’s infringement claims. [Id. at 6.] As a result, LG Display is seeking

intervention under Federal Rule of Civil Procedure 24 (“Rule 24”). Specifically, LG

Display is seeking intervention as of right under Rule 24(a), and alternatively seeking

permissive intervention under Rule 24(b). [Id. at 8, 15.] Defendants do not oppose LG

Display’s motion to intervene, and filed a brief in support of LG Display’s motion.

[Dkt. No. 71.]

On August 22, 2014, Plaintiff filed an opposition to LG Display’s motion to

intervene. [Dkt. No. 68.] Plaintiff claims that LG Display’s request for intervention is

untimely, that Defendants adequately represent the interest of LG Display, and that LG

Display is not entitled to permissive intervention. [Id. at 1-8.] On September 5, 2014,

LG Display filed a reply to Plaintiff’s opposition. [Dkt. No. 73.]

DISCUSSION

LG Display asserts that Plaintiff’s claim of patent infringement against

Defendants “is equivalent to an assertion that certain of LG Display’s liquid crystal

displays infringe claim 1 of the ’355 patent.” [Dkt. No. 47-1 at 6.] Plaintiff opposes LG

Display’s motion to intervene, claiming that LG Display’s motion is untimely and that

its interest is adequately represented. [Dkt. No. 68 at 1.]

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I. Intervention as of Right

A. Legal Standard

Rule 24(a) provides that:

On timely motion, the court must permit anyone to intervene

who: . . . claims an interest relating to the property or

transaction that is the subject of the action, and is so situated

that disposing of the action may as a practical matter impair

or impede the movant’s ability to protect its interest, unless

existing parties represent that interest.

Fed. R. Civ. P. 24(a). Intervention as of right requires that: (1) the motion to intervene

is timely filed; (2) the intervening party has an interest relating to the property or

transaction that is the subject of the action; (3) disposition of the action may impair or

impede the applicant’s ability to protect the interest; and (4) the intervening party is not

adequately represented by existing parties. Sec. and Exch. Comm’n v.TLC Invs. and

Trade Co., 147 F. Supp. 2d 1031, 1040-41 (C.D. Cal. 2001) (citing Nw. Forest Res.

Council v. Glickman, 82 F. 3d 825, 836 (9th Cir. 1996)). In ruling on a motion to

intervene, the Court “is required to accept as true the non-conclusory allegations made

in support of [the] intervention motion.” Sw. Ctr. for Biological Diversity v. Berg, 268

F.3d 810, 819-20 (9th Cir. 2001).

B. Analysis

1. LG Display’s Motion to Intervene is Timely

The Court considers three factors in determining whether a motion to intervene

is timely: “(1) the stage of the proceeding at which an applicant seeks to intervene; (2)

the prejudice to other parties: and (3) the reason for and length of the delay.” Cal. Dept.

of Toxic Substances Control v. Commercial Realty Projects, Inc., 309 F.3d 1113, 1119

(9th Cir. 2002) (citing United States v. Washington, 86 F.3d 1499, 1503 (9th 1996)).

“Delay is measured from the date the proposed intervenorshould have been aware that

its interests would no longer be protected adequately by the parties, not the date it

learned of the litigation.” United States v. Washington, 86 F.3d at 1503.

In determining whether delay causes prejudice, the Court considers “whether

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existing parties may be prejudiced by the delay in moving to intervene,” not whether

intervention will extend the length of the litigation itself. N. Cal. River Watch v. Fluor

Corp., No. 10-cv-5105-MEJ, 2014 WL 3385287, at *152014 (N.D. Cal.July 9, 2014)

(citing Defenders of Wildlife v. Johanns, No. 04-cv-4512-PJH, 2005 WL 3260986, at

*4 (N.D. Cal. Dec. 1, 2005). In assessing prejudice, the Court considers “factors such

as loss of evidence, settlements made in expectation of no further claims, and the need

to reopen matters previously resolved.” Id.

LG Display contends that its motion to intervene is timely because: (1) the

litigation and discovery are still in their early stages; (2) in light of the early stage of

litigation, existing parties would not be prejudiced by the intervention; and (3) in light

of Plaintiff’s amended complaint, LG Display’s interest in the litigation only became

solidified approximately one month prior to the instant motion. [Dkt. No. 47 at 9-10.]

Plaintiff argues that: (1) the 113 days between the initial infringement contention and

LG Display’s motion to intervene is too long to be considered timely; (2) LG Display

should have been aware of the allegations when Defendants were served; and (3) LG

Display’s intervention and assertion of associated additional defenses “at this late

juncture . . . would literally require starting the process over from scratch.” [Dkt. No.

68 at 1-6.]

LG Display filed the instant motion to intervene thirteen days after the first

discovery requests were served and prior to the setting of a trial date. In addition, the

motion was filed prior to a claim construction hearing and prior to the determination

of an end-date for discovery. Even if this litigation is not brand new, it is not yet in a

“late juncture” as Plaintiffs argue. [See Dkt. No. 68 at 7.] The Court finds that the early

stage of the proceedings weighs in favor of timeliness.

The Court also finds that LG Display’s motion has not prejudiced existing

parties, as this motion has not delayed litigation proceedings. Plaintiffs do not argue

that the presence of a new defendant creates any loss of evidence, reopens previously

resolved matters, or diminishes previously made settlements between parties. Rather,

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Plaintiffsimply argues that, should LG Display be granted intervention, Plaintiff would

be forced to “start over from scratch.” [Dkt. No. 68 at 3.] LG Display assertsin its reply

brief that no delay is expected should intervention be granted as LG Display “neither

intends to make any new invalidity or claim construction arguments beyond those

already presented by [Defendants], nor doesit intend to seek any changes to the current

schedule.” [Dkt No. 73 at 3.] Claim construction preparations have continued to

proceed with the claim construction hearing set for October 20, 2014. [Dkt. No. 90.]

The Court finds that the lack of prejudice also weighs in favor of timeliness.

Finally, even if Plaintiff is correct that LG Display should have been

immediately aware that LG Display’s interest were implicated in the litigation at first

notice of the infringement claim, the resulting delay would be less than four months.

The Court findsthat a lessthan four month delay is a reasonable amount of time for LG

Display to analyze the proceedings and prepare its motion, and thus does not weigh

against timeliness. In consideration of the totality of the circumstances, the Court finds

LG Display’s motion timely. See Nat’l Ass’n for Advancement of Colored People v.

New York, 413 U.S. 345, 366 (1973).

2. LG Display Has a Significantly Protectable Interest in the Subject

Matter of Litigation

The Court must determine whether the would-be intervenor has “assert[ed] a

‘significantly protectable’ interest relating to property or a transaction that is the

subject matter oflitigation.” Kootenai Tribe ofIdaho v. Veneman, 313 F.3d 1094, 1107

(9th Cir. 2002). “An applicant has a ‘significant protectable interest’ in an action if (1)

it asserts an interest that is protected under some law, and (2) there is a ‘relationship’

between its legally protect interest and the plaintiff’s claims.” Donnelly v. Glickman,

159 F.3d 405, 409 (9th Cir. 1998) (citing Nw. Forest Res. Council, 82 F.3d at 837).

This relationship requirement is generally satisfied only if the “resolution of the

plaintiff’s claims actually will affect the applicant.” Id. at 410.

LG Display contends that because it manufactures liquid crystal displays for

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Defendants’ Accused Monitors, it has a clear interest in this litigation. [Dkt. No. 47-1

at 10.] LG Display also argues that it has a protectable interest in the litigation in light

of the indemnification agreement between LG Display and Defendants. [Dkt. No. 47-1

at 18.] Plaintiff does not dispute that LG Display has a significantly protectable interest

in this litigation. As there is no dispute and LG Display manufactures components

contained within the Accused Monitors, the Court finds that LG Display has a

significantly protectable interest in the subject matter of this litigation.

3. Disposition of the Action May Adversely Impair LG Display’s

Interest

BecauseLG Display has a protectable interest, the Court must determine whether

that interest would, as a practical matter, be impaired by the disposition of the instant

action. Sw. Ctr. For Biological Diversity, 268 F.3d at 822. If a party’s interest would

be “impacted in a practicalsense by the determination made in an action,” intervention

should generally be granted. Id. at 822.

LG Display argues that disposition of this litigation without LG Display’s

intervention may impair its relationship with other customers. [Dkt. No 47-1 at 18.]

Plaintiff does not dispute that LG Display’s interest may be adversely impaired. As

there is no dispute and LG Display may be unable to sell liquid crystal displays to U.S.

customers if Plaintiff were to succeed in this litigation, the Court finds that disposition

of this action may adversely impair LG Display’s significantly protectable interest.

4. LG Display’s Interest is Not Adequately Represented by Existing

Parties

TheCourt determines adequacyofrepresentation by examining three factors:(1)

whether the interest of a present party is such that it will undoubtedly make all of a

proposed intervenor’s arguments; (2) whether the present party is capable and willing

to make such arguments; and (3) whether a proposed intervenor would offer any

necessary elements to the proceeding that other parties would neglect. Arakaki v.

Cayetano, 324 F.3d 1078, 1086 (9th Cir. 2003). “The burden on proposed intervenors

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in showing inadequate representation is minimal, and would be satisfied if they could

demonstrate that representation of its interests ‘may be’ inadequate.” Id. at 1086.

Where the party and the proposed intervenor share the same ultimate objective, a

presumption of adequacy of representation applies, and the intervenor can rebut that

presumption only with a compelling showing to the contrary. Perry v. Proposition 8

Official Proponents, 587 F.3d 947, 951 (9th Cir. 2009) (internal quotation marks and

citation omitted). In litigation against the buyer of a manufacturer’s products, a

manufacturer is “uniquely situated to understand and defend its own product, its

interest are not adequately represented by existing partiesto the litigation.” Honeywell

Int’l Inc. v. Audiovox Communs. Corp., No. 04-cv-1337-KAJ, 2005 WL 2465898 at

*13 (D. Del. May 18, 2005).

LGDisplay contends that its interest is not adequately represented by Defendants

as Defendants “do[] not design or manufacture” the liquid crystal displays in the

Accused Monitors. [Dkt. No. 47-1 at 12.] LG Display also asserts that it has

“knowledge and expertise regarding the design, structure, manufacture, and operation

of its liquid crystal displays that does not reside with [Defendants] in the ordinary

course of business” and thus Defendants are not capable of adequately asserting all

applicable defenses or invalidity arguments. [Id.] Plaintiff argues that LG Display and

Defendants ultimately seek the same outcome, for the implicated patents to be

invalidated or deemed not infringed, thus creating a rebuttable presumption of

adequacy of representation. [Dkt. No. 68 at 8.] Additionally, Plaintiff argues that: (1)

both Defendant and LG Display are part of a family-run chaebol, a Korean entity

similar to an American multinational conglomerate; (2) that both entitles share a

common board member; (3) Defendants own a 37.1% in LG Display; and (4)“[a]ny

concerns LG Display may have about [Defendant’s] defense of the case can be

addressed by LG Display choosing [Defendant’s] counsel, paying for that counsel and

directing the defense of the indemnified claims.” [Id. at 8, 17.]

As an initial matter, Defendants and LG Display share the same ultimate

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objective, namely the invalidity of Plaintiff’s ’335 Patent or a finding that the patent

was not infringed. Thus there is a presumption of adequacy. See Perry, 587 F.3d at 951.

Turning to the three factors, first, LG Display does not state which arguments

Defendants will not make that LG Display would. Second, Defendants lack LG

Display’s depth of technical knowledge regarding liquid crystal displays because

Defendants are purchasers of the liquid crystal displays that LG Display manufactures.

Thus Defendants may not be capable of adequately arguing defenses to Plaintiff’s

patent infringement causes of action. Third, LG Display has necessary technical

knowledge and documents that would otherwise be absent from this case. While the

first factor weighs in favor of adequacy, the second and third factors weigh against

adequacy. Accordingly, the Court findsthatLG Display’s knowledge of and documents

related to the liquid crystal displays in the Accused Monitors weigh strongly against

adequacy and rebut the presumption of adequacy.

Turning to Plaintiff’s arguments, though Defendants own a significant interest

in LG Display, are part of the same family of companies, and share a board member,

LG Display is still a separate corporate entity and Plaintiff offers no reason why the

Court should not treat it assuch. Plaintiff’s argumentsregarding LG Display selecting,

paying for, and directing Defendant’s counsel issimilarly unpersuasive as control over

litigation strategy does not provide Defendants with the technical information related

to the liquid crystal displays. See Honeywell, 2005 WL 2465898 at *13. Accordingly,

the Court finds that LG Display’s interest is not adequately represented by the current

parties.

Based on the foregoing, the Court GRANTS LG Display’s motion to intervene

pursuant to Federal Rule of Civil Procedure 24(a)(2). As LG Display is entitled to

intervention as of right, the Court need not determine whether to grant permissive

intervention.

CONCLUSION

For the reasons stated above, IT IS HEREBY ORDERED that:

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1. LG Display’s Motion to Intervene, [Dkt. No. 47], is GRANTED; and

2. The hearing set for October 17, 2014, is VACATED.

DATED: October 15, 2014

HON. GONZALO P. CURIEL

United States District Judge

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