Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_05-cv-01958/USCOURTS-casd-3_05-cv-01958-3/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

QUALCOMM INCORPORATED,

Plaintiff,

v.

BROADCOM CORPORATION,

Defendant.

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Civil No: 05-CV-1958-B(BLM)

ORDER GRANTING MOTION

FOR LEAVE TO FILE FIRST

AMENDED ANSWER AND

COUNTERCLAIMS

I. INTRODUCTION

On December 4 - 5, 2006, the Court held a hearing on Defendant Broadcom

Corporation’s (“Broadcom”) Motion for Leave to File Its First Amended Answer and

Counterclaims filed on September 14, 2006. Broadcom seeks to assert an affirmative

defense and counterclaim based upon inequitable conduct committed by individual(s) at

Qualcomm Incorporated (“Qualcomm”), including Chong U. Lee, a Qualcomm employee

and the sole named inventor of U.S. Patent No. 5,452,104 (“the ‘104 patent”), who were

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involved in prosecuting the ‘104 patent application before the United States Patent and

Trademark Office (“PTO”). For the reasons set forth below, the Court hereby GRANTS

Broadcom’s present Motion for Leave to File Its First Amended Answer and Counterclaims

and orders Broadcom to file its First Amended Answer and Counterclaims forthwith.

II. BACKGROUND

In May 1992, Lee wrote an article entitled “Intraframe Compression of HDTV

Image Based On Adaptive Block Size Discrete Cosine Transform.” See Broadcom Br.,

Saxton Decl., Ex. I (“Lee article”). In that article, he cited to two other articles: (1) an

article written by C. T. Chen entitled “Transform Coding of Digital Images Using Variable

Block Size DCT With Adaptive Thresholding and Quantization” (“Chen article”) and (2)

an article written by Vaisey and Gersho entitled “Variable Block-Size Image Coding”

(“Vaisey article”). See id. at 22. On August 4, 1993, Lee filed the ‘104 patent application

with the PTO, and the patent was issued on September 19, 1995. See ‘104 Patent. 

Qualcomm filed this suit for patent infringement of two patents, including the ‘104

patent at issue in the present Motion, on October 14, 2005. Doc. No. 1. On November 16,

2005, Broadcom received a fax copy of the Chen and Vaisey articles from the Canada

Institute for Scientific and Technical Information. See Qualcomm Opp’n, Smith Decl.,

Exs. 10-12. Broadcom filed its Answer on December 5, 2005. Doc. No. 10. 

On February 17, 2006, Magistrate Judge Major issued a Case Management

Conference Order Regulating Discovery and Other Pretrial Proceedings. Doc. No. 54. 

Pursuant to that order, any motion to amend was to be filed by March 20, 2006. See id. at

4. Fact discovery was to be completed by August 14, 2006, and expert discovery was to be

completed by September 29, 2006. See id. at 7. All expert disclosures were to be served

by August 4, 2006, and any rebuttal expert reports were to be disclosed by September 1,

2006. See id. at 6. Trial was scheduled to begin on January 9, 2007. See id. at 11.

On April 28, 2006, Broadcom served its Preliminary Invalidity Contentions, in

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1

 Federal Rule of Civil Procedure 16(b) states in relevant part:

Except in categories of actions exempted by district court rule as inappropriate, the

district judge, or a magistrate judge when authorized by district court rule, shall, after

receiving the report from the parties under Rule 26(f) or after consulting with the

attorneys for the parties and any unrepresented parties by a scheduling conference,

telephone, mail, or other suitable means, enter a scheduling order that limits the time 

(1) to join other parties and to amend the pleadings; 

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which it named both the Chen and Vaisey articles as invalidating prior art for the ‘104

patent. See Qualcomm Opp’n, Smith Decl., Ex. 2. On June 26, 2006, Qualcomm produced

the Lee Article to Broadcom. See Qualcomm Opp’n, Smith Decl., Ex. 5. On June 30,

2006, Broadcom took its first deposition of Lee. See Broadcom Br. at 2; Qualcomm Opp’n

at 5. 

On July 24, 2006, Qualcomm informed Broadcom that they “recently discovered

and collected additional documents relating to Chong Lee and his work.” Broadcom’s

brief, Ex. A, p. 1. Broadcom then rescheduled Lee’s continued deposition from July 26,

2006, to August 1, 2006. See Broadcom Br. at 3.

In the week before Lee’s deposition of August 1, 2006, Qualcomm produced over

76,000 pages of documents (“Qualcomm’s late July 2006 production”). See Broadcom Br.,

Exs. B-E. Among these documents was the Chen article and a photocopy of an envelope

postmarked July 11, 1990, from Chen to Lee. See Broadcom Br. at 3-4.

On September 8, 2006, Magistrate Judge Major ordered Qualcomm to produce Lee

for four more hours of deposition testimony. Doc. No. 94. That deposition was scheduled

for September 22, 2006, at which Broadcom questioned Lee about the Chen and Vaisey

articles. See Qualcomm Opp’n, Smith Decl., Ex. 3; Qualcomm Opp’n at 5-6.

III. DISCUSSION

A. STANDARDS OF LAW

Federal Rule of Civil Procedure 16(b)1

 requires district courts to enter a scheduling

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(2) to file motions; and 

(3) to complete discovery.

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order that sets, among other things, the deadlines for parties to amend pleadings and file

motions. After a deadline set in a scheduling order has passed, the party seeking to amend

the scheduling order must show “good cause” for the requested additional time. See FED.

R. CIV. P. 16(b) (“A schedule shall not be modified except upon a showing of good cause

and by leave of the district judge or, when authorized by local rule, by a magistrate

judge.”).

The Ninth Circuit has held that “[o]nce the district court ha[s] filed a pretrial

scheduling order pursuant to Federal Rule of Civil Procedure 16 which established a

timetable for amending pleadings that rule’s standards control[]” in considering a motion to

amend. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607 (9th Cir. 1992). In such

cases, the movant’s ability to amend is “governed by Rule 16(b), not Rule 15(a).” Id. at

608.

As the Ninth Circuit has held, “[u]nlike 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.” Id. at 609. Carelessness offers no reason

for a grant of relief. See id. Although prejudice to the opposing party may supply

additional reasons to deny a motion, “the focus of the inquiry is upon the moving party’s

reasons for seeking modification.” Id. If the movant was not diligent, the inquiry should

end. See id.

B. ANALYSIS

The Court shall consider Broadcom’s present Motion under the Rule 16(b) “good

cause” standard discussed above. Pursuant to Rule 16(b), Magistrate Judge Major issued a

Case Management Conference Order on February 17, 2006. Doc. No. 54. Under that

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order, “[a]ny motion to join other parties, to amend the pleadings, or to file additional

pleadings shall be filed on or before March 20, 2006.” Id. at 4. Broadcom did not file the

present Motion to Amend until after the deadline on September 14, 2006. Doc. No. 95. 

Therefore, as dictated by the Ninth Circuit, this Court considers Broadcom’s motion under

the “good cause” standard set forth under Rule 16(b). See Johnson, 975 F.2d at 607.

Despite Broadcom’s late filing of the present motion to add the affirmative defense

and counterclaim of inequitable conduct, this Court finds that Broadcom was diligent in

gathering discovery and expert testimony relevant to this newly proposed defense and

counterclaim. Broadcom contends and Qualcomm does not deny that Lee did not disclose

the Chen or Vaisey articles to the PTO as prior art during the prosecution of the ‘104 patent

application. See Broadcom Br. at 4; Qualcomm Opp’n at 6. The key question before the

Court is when Broadcom learned that Lee knew of the Chen and Vaisey articles during the

‘104 patent application prosecution. 

Broadcom has been aware of the Chen and Vaisey articles as potentially invalidating

prior art well before the filing of the present Motion. On November 16, 2005, Broadcom

received a fax copy of the Chen and Vaisey articles from the Canada Institute for Scientific

and Technical Information. See Qualcomm Opp’n, Smith Decl., Exs. 10-12. Furthermore,

on April 28, 2006, Broadcom served its Preliminary Invalidity Contentions, in which it

named both the Chen and Vaisey articles as invalidating prior art for the ‘104 patent. See

Qualcomm Opp’n, Smith Decl., Ex. 2. 

However, Broadcom’s inequitable conduct contention rests on Lee’s awareness of

the Chen and Vaisey articles. On June 26, 2006, Qualcomm produced to Broadcom the

1992 Lee Article, in which Lee cites the Chen and Vaisey articles. See Qualcomm Opp’n,

Smith Decl., Ex. 5. This should have been Broadcom’s first notice that Lee knew of the

Chen and Vaisey articles as early as May 1992. According to Qualcomm, Broadcom failed

to ask Lee about the Chen or Vaisey articles in his June 30, 2006, deposition. See

Qualcomm Opp’n at 5. However, as both parties described to the Court, the Lee article

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was produced to Broadcom amongst over 8,000 pages of production only four days before

Lee’s June 30 deposition. Thus, the Court finds that Broadcom did not lack diligence in

failing to question Lee about the Chen and Vaisey articles in his June 30 deposition.

Broadcom asserts that it did not realize that Lee was aware of the Chen and Vaisey

articles until it found the Chen article and the envelope addressed from Chen to Lee in

Qualcomm’s late July 2006 production. According to Qualcomm, Broadcom also failed to

ask Lee about the Chen or Vaisey articles in Lee’s second deposition that took place

several days later on August 1, 2006. See Qualcomm Opp’n at 5. However, Qualcomm

produced the Chen article and envelope amongst more than 76,000 pages over a four-day

period the week before Lee’s August 1 deposition. See Broadcom Br., Exs. B-E;

Broadcom Br. at 3-4. Therefore, the Court finds that Broadcom did not lack diligence in

failing to question Lee about the Chen and Vaisey articles in his August 1 deposition.

The Court finds that Broadcom did not lack diligence in filing the present Motion to

add the affirmative defense and counterclaim of inequitable conduct on September 14,

2006. Qualcomm refused to produce Lee for further deposition until the Magistrate Judge

granted Broadcom’s request to re-depose him for an additional four hours “[i]n light of the

voluminous documents recently produced by both parties, and good cause appearing” on

September 8, 2006. Doc. No. 94, p. 2. That deposition took place on September 22, 2006,

at which Broadcom did question Lee about the Chen and Vaisey articles. See Qualcomm

Opp’n, Smith Decl., Ex. 3; Qualcomm Opp’n at 5-6. 

It is because of this Court’s busy calendar that Broadcom’s present Motion could not

be heard until December 4, 2006, approximately a month before this case is set to begin

trial on January 9, 2007. Therefore, the Court will consider this Motion as if it were heard

on an expedited basis after its filing in September. However, the Court notes that it has

always been amenable to holding expedited hearings when appropriate, which Broadcom is

fully aware of, and that Broadcom should have requested one here. Nevertheless, as the

Court has found that Broadcom did not act without diligence in filing the present Motion to

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amend, the Court holds that Broadcom has demonstrated good cause to amend its answer

and counterclaims to include the affirmative defense and counterclaim of inequitable

conduct under the Ninth Circuit Rule 16(b) standard discussed above.

IV. CONCLUSION

Accordingly, the Court hereby GRANTS Broadcom’s present Motion for Leave to

File Its First Amended Answer and Counterclaims. If either party demonstrates a genuine

need for extra discovery, depositions, or expert reports, the Court shall allow this in order

to facilitate a full and fair trial. Both parties shall work together to get discovery produced,

depositions scheduled, and expert reports served in a timely and cooperative manner. The

parties declined the Court’s offer to reset the trial date because of the Court’s late hearing

date on this Motion. Therefore, the trial date remains January 9, 2007. Any disputes

between the parties as to this additional discovery process shall be presented to the

Magistrate Judge, who shall rule in compliance with this Order.

IT IS SO ORDERED

DATED: December 15, 2006

Hon. Rudi M. Brewster

United States Senior District Court Judge

cc: Hon. Barbara Lynn Major

 United States Magistrate Judge

 All Counsel of Record

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