Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_10-cv-00424/USCOURTS-cand-5_10-cv-00424-10/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1331 Fed. Question

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28 This disposition is not designated for publication and may not be cited. 1

Case No. C-10-424 JF (PVT)

ORDER (1) GRANTING UPEK’S MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

(JFEX1)

**E-Filed 7/22/10**

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

UPEK, INC., a Delaware corporation,

 Plaintiff,

 v.

AUTHENTEC, INC., a Delaware corporation,

 Defendant.

Case No. 10-424-JF (PVT)

ORDER GRANTING UPEK’S 1

MOTION FOR LEAVE TO FILE

SECOND AMENDED COMPLAINT

[re: doc. nos. 145, 147]

AUTHENTEC, INC., a Delaware corporation,

 Counterclaimant,

v.

UPEK, INC., a Delaware Corporation,

 Counterdefendant.

Plaintiff and Counterdefendant UPEK, Inc. (“UPEK”) and Defendant and

Counterclaimant AuthenTec, Inc. (“AuthenTec”) are competitors in the field of fingerprint

scanners. UPEK moves pursuant to Fed. R. Civ. P. 15(a) for leave to file a second amended

complaint, seeking to add new claims for infringement of three newly-identified patents and to

Case 5:10-cv-00424-JF Document 159 Filed 07/22/10 Page 1 of 6
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Case No. C-10-424 JF (PVT)

ORDER (1) GRANTING UPEK’S MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

(JFEX1)

conform an already-asserted affirmative defense to AuthenTec’s counter claims with a claim for

declaratory relief. AuthenTec opposes the motion. For the reasons set forth below, the motion

will be granted.

I. BACKGROUND

UPEK filed its original complaint on January 29, 2010, alleging that AuthenTec infringes

United States Patent No. 6,028,773 (“the ‘773 patent”) and seeking a judicial declaration of noninfringement and/or invalidity of United States Patent Nos. 6,667,439 (“the ‘439 patent”);

5,940,526 (“the ‘526 patent”); 7,505,613 (“the ‘613 patent”); 5,953,441 (“the ‘441 patent”); and

6,049,620 (“the ‘620 patent”), each of which is owned by AuthenTec. On February 2, 2010,

AuthenTec answered and counterclaimed, alleging that UPEK infringes the ‘439, ‘526, ‘441,

‘613, and ‘620 patents and is liable for misappropriation of trade secrets and conversion. On

February 17, 2010, AuthenTec moved for partial summary judgment with respect to its

counterclaim for infringement of the ‘526 patent. 

On February 23, 2010, UPEK answered AuthenTec’s counterclaims and filed its first

amended complaint (“FAC”), adding count twelve asserting the unenforceability of the ‘620

patent due to inequitable conduct. On the same day, AuthenTec moved for partial summary

judgment with respect to non-infringement of the ‘773 patent. On March 12, 2010, AuthenTec

answered the FAC and reasserted its original counterclaims. On March 29, 2010, UPEK

answered AuthenTec’s reasserted counterclaims, adding a thirty-third affirmative defense that

alleged the unenforceability of the ‘439 patent. On April 13, 2010, the Court denied without

prejudice AuthenTec’s motions for partial summary judgment, concluding that the relevant claim

construction was likely to be more accurate following a formal claim construction process. On

the same day, UPEK filed a motion for sanctions pursuant to Fed. R. Civ. P. 11(c), contending

that AuthenTec’s counterclaims with respect to the ‘620, ‘441, and the ‘613 patents were asserted

without a reasonable pre-suit investigation.

On April 22, 2010, AuthenTec filed amended counterclaims, adding a new claim for

infringement of U.S. Patent No. 6,259, 804 (“the ‘804 patent”) and deleting claims for

Case 5:10-cv-00424-JF Document 159 Filed 07/22/10 Page 2 of 6
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 On July 6, 2010, the Court granted AuthenTec leave to amend its counterclaims 2

consistent with this filing.

3

Case No. C-10-424 JF (PVT)

ORDER (1) GRANTING UPEK’S MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

(JFEX1)

infringement relating to the ‘439 and the ‘613 patents. Not later than early June, AuthenTec was 2

aware that UPEK sought to add new patents to the instant dispute. (Docket No. 122, Ex. C.) On

June 21, 2010, UPEK provided AuthenTec with a copy of a proposed second amended

complaint, which identified specifically these additional patents: U.S. Patent Nos. 6,555,888

(“the ‘888 patent”), 6,440,814 (“the 814 patent”), and 6,661,631 (“the ‘631 patent”) (collectively,

the “newly-identified patents”). 

In anticipation of the initial case management conference, the parties filed a joint case

management statement, in which UPEK proposed a deadline of June 25, 2010 for amending the

pleadings to add new claims and name new parties. AuthenTec proposed a deadline of July 15,

2010. At the initial case management conference on May 28, 2010, the Court set a claim

construction hearing for October 28, 2010, but it did not set any other case management

deadlines because the parties were conferring about a stipulated case management schedule. On

July 6, 2010, the Court entered a scheduling order that consists largely of dates agreed to by the

parties. However, the parties did not agree upon a deadline to allow either party to amend the

pleadings without leave of court, and the schedule does not include such a deadline.

AuthenTec opposes the instant motion, at least to the extent that it seeks to assert the

newly-identified patents. Although it contends that good cause exists to expedite the schedule

with respect to the patents currently in suit, AuthenTec argues that it will be unduly prejudiced by

UPEK’s proposed amendment if claim construction with respect to all of the patents proceeds on

the current schedule. AuthenTec proposes that the Court maintain the current schedule with

respect to the patents currently in suit and hold a second claim construction hearing with respect

to UPEK’s newly-identified patents.

II. DISCUSSION

Leave to amend a pleading before trial should be “freely give[n] ...when justice so

requires.” Fed. R. Civ. P. 15(a)(2). In the Ninth Circuit, this policy is applied with “extreme

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Case No. C-10-424 JF (PVT)

ORDER (1) GRANTING UPEK’S MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

(JFEX1)

liberality.” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001)

(citation omitted). When considering whether to grant leave to amend, a district court may

consider four factors: (1) existence of bad faith; (2) whether the amendment will cause undue

delay; 3) prejudice to the opposing party; and (4) futility. Id. Undue delay on its own does not

justify denial of a motion for leave to amend. However, if undue delay is accompanied by

prejudice to the defendant, denial of a motion for leave to amend may be justified. See, e.g.,

Bowles v. Reade, 198 F.3d 752, 758-59 (9th Cir. 1999). In the absence of prejudice or other

negative factors, the party opposing the motion to amend has the burden of showing why

amendment should not be granted. See DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th

Cir. 1987). 

AuthenTec does not argue that UPEK is acting in bad faith or that the proposed

amendment would be futile or create undue delay. It argues instead that the amendment would

be unduly prejudicial in light of the expedited schedule that AuthenTec itself sought by moving

for partial summary judgment with respect to two patents within a month after UPEK initiated

the instant action. In April, UPEK filed a Rule 11 motion that largely is dispositive with respect

to three other patents. Patent L.R. 4-1, et seq., establishes a presumptive time line for a claim

construction, and that time line may be modified upon a showing of good cause. See Patent L.R.

1-3. Although this action was filed only in late January 2010, the parties were thoroughly

familiar with the majority of the patents then in suit by the time of the initial case management

conference on May 28, 2010. Accordingly, the Court found good cause to expedite the claim

construction schedule and set the claim construction hearing for October 28, 2010.

AuthenTec now asserts that good cause does not exist to depart from the local rules with

respect to the newly-identified patents. UPEK contends that the relevant technologies of the

newly-identified patents already are at issue. It is apparent that two of the newly-identified

patents – the ‘814 and the ‘888 patents – are directed at technology designed to protect a

fingerprint scanner from an electrostatic discharge (“ESD”). UPEK contends that the ‘526 patent

also discloses ESD protection technology, but AuthenTec’s earlier motion for partial summary

judgment focused only on the ‘526 patent’s disclosure of a power-control means for a fingerprint

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Case No. C-10-424 JF (PVT)

ORDER (1) GRANTING UPEK’S MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

(JFEX1)

scanner. The third newly-identified patent – the ‘631 patent – discloses “automatic latchup

recovery,” which UPEK asserts also is disclosed in the ‘613 patent. However, AuthenTec’s

assertion of the ‘613 patent appeared to focus on “anti-poofing” technology, and AuthenTec has

dismissed its counterclaims with respect to that patent. Finally, UPEK asserts that the

AuthenTec products it accuses of infringing the newly-identified patents are similar to those it

accuses of infringing the ‘773 patent. But, the ‘773 patent focuses only on the packaging for an

integrated circuit, while the newly-identified patents focus on the structures of an integrated

circuit.

Despite the less than perfect overlap among the various patents and claims, the Court

concludes on balance that AuthenTec will not be prejudiced unduly by UPEK’s amendment

under the current schedule. Because the newly-identified patents introduce only two new

technologies to the action, neither of which appears to be more complex than the technologies

already at issue, the Court remains prepared to proceed on the expedited schedule. AuthenTec

itself sought and on July 6, 2010 was granted leave to add a counterclaim with respect to the ‘804

patent. While the ‘804 patent shares the specification with the ‘526 patent, the claims of the

patents appear to be directed at two separate technologies. AuthenTec’s previous motion for

partial summary judgment with respect to the ‘526 patent focused on a power-control means for

an integrated circuit. In contrast, AuthenTec’s claim with respect to the ‘804 patent appears to

focus on analog-to-digital conversion structures used to adjust resolution. (AuthenTec’s Opp’n

at 5:4-7.) The parties served all of their infringement contentions on July 2, 2010, including their

infringement contentions with respect to the ‘804 patent and UPEK’s newly-identified patents. 

Because both parties thus are situated similarly with respect to newly-added claims, UPEK’s

proposed amendment will not cause AuthenTec to be unduly prejudiced under the current

schedule.

Attempting to reach a compromise, UPEK has agreed to postpone until after the claim

construction hearing AuthenTec’s obligation to serve invalidity contentions with respect to the

newly-identified patents. (UPEK’s Mot. at 7:23-8:2.) The motion will be granted subject to that

condition. The parties are encouraged to continue to seek mutually beneficial comprises that will

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Case No. C-10-424 JF (PVT)

ORDER (1) GRANTING UPEK’S MOTION FOR LEAVE TO FILE SECOND AMENDED COMPLAINT

(JFEX1)

promote a more accurate claim construction process, including a brief stipulated continuance of

the claim construction hearing itself if the parties believe that additional time would be

beneficial.

IT IS SO ORDERED.

DATED: 7/22/10 ____________________________

JEREMY FOGEL

United States District Judge

Case 5:10-cv-00424-JF Document 159 Filed 07/22/10 Page 6 of 6