Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-03657/USCOURTS-cand-3_14-cv-03657-27/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:145 Patent Infringement

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MLC INTELLECTUAL PROPERTY, LLC,

Plaintiff,

v.

MICRON TECHNOLOGY, INC.,

Defendant.

Case No. 14-cv-03657-SI 

ORDER GRANTING DEFENDANT'S 

MOTION FOR LEAVE TO FILE 

SUPPLEMENTAL ANSWER AND 

COUNTERCLAIM

Re: Dkt. No. 267

Defendant Micron seeks leave to file a supplemental answer and a counterclaim for breach 

and anticipatory breach of the parties’ “Mutual Nondisclosure Agreement.” Micron contends that 

plaintiff MLC has breached the agreement by using the agreement and confidential communications 

as evidence in support of MLC’s claim for damages. Micron asserts that this Court is the most 

efficient venue to resolve Micron’s breach of contract claim because, inter alia, even if the Court 

denied leave to amend, the Court would be nevertheless be required to interpret the Mutual 

Nondisclosure Agreement to determine the permissible scope of MLC’s damages claim. Micron 

argues that it sought leave to amend as soon as it became clear that MLC was seeking to rely on the 

agreement and other confidential communications to formulate its damages claim. 

MLC objects to Micron’s motion on numerous grounds. MLC contends that Micron’s 

proposed counterclaim is futile, that Micron’s motion is untimely, and that allowing the amendment 

would prejudice MLC. MLC also suggests that the Court’s December 4, 2018 ruling permitting 

MLC to question a Micron witness about the Mutual Nondisclosure Agreement implicitly decided 

that any use of information subject to the Mutual Nondisclosure Agreement by MLC would not 

Case 3:14-cv-03657-SI Document 316 Filed 02/08/19 Page 1 of 3
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United States District Court

Northern District of California

constitute a breach of that agreement.

The Court concludes that it is in the interest of judicial efficiency to allow Micron to amend 

its answer and assert a counterclaim for breach of contract. Micron shall file the amended answer 

and counterclaim no later than February 11, 2019. Whether presented as a counterclaim for breach 

of contract or through a motion in limine or summary judgment, the Court will need to interpret the 

agreement and determine the parties’ obligations thereunder to determine the proper scope of MLC’s 

damages claim. If Micron is required to file a separate lawsuit in Idaho state or federal court, there 

would be a risk of inconsistent rulings regarding the interpretation of the parties’ contract. The 

Court also agrees with Micron that the Court’s December 2018 discovery ruling did not interpret 

the contract and simply permitted MLC to conduct discovery related to the contract. Indeed, the 

Court expressly reserved questions about the use of confidential information for trial.

The Court is also unpersuaded by MLC’s arguments regarding futility and delay. The Court 

cannot conclude, on this record, that Micron’s proposed counterclaim is futile. MLC’s arguments 

about futility require the Court to interpret the very provisions that Micron claims MLC has 

breached. In the Court’s view, resolution of these matters will require full briefing by the parties. 

The Court also finds that Micron moved to seek leave promptly, as it was only in November 2018 

that MLC made clear that it wished to rely on the agreement and related communications in 

formulating its damages claim. 

The Court also finds that allowing amendment will not prejudice MLC. MLC asserts that 

Micron has obstructed discovery regarding the Mutual Nondisclosure Agreement, and that it will 

need to conduct discovery regarding the parties’ intent in crafting the agreement (Micron contends 

that extrinsic evidence is irrelevant). The Court will permit a limited reopening of fact discovery

(depositions and document production) related to the breach of contract counterclaim as follows. 

The parties shall meet and confer by telephone or in person during the week of February 11-15, 

2019, to determine (1) what additional discovery is needed; (2) whether there are any relevant 

documents, including documents related to MLC’s licensing agent, Epicenter, that have not been 

produced; and (3) a schedule for depositions and document production. Each party may take up to 

three depositions. The additional discovery must be completed by March 15, 2019. The Court will 

Case 3:14-cv-03657-SI Document 316 Filed 02/08/19 Page 2 of 3
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United States District Court

Northern District of California

not alter any other pretrial deadlines, including the trial date.

IT IS SO ORDERED.

Dated: February 8, 2019 ______________________________________

SUSAN ILLSTON

United States District Judge

Case 3:14-cv-03657-SI Document 316 Filed 02/08/19 Page 3 of 3