Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-07222/USCOURTS-cand-4_06-cv-07222-0/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 28:1338 Patent Infringement

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28 1 The holding of this court is limited to the facts and the particular circumstances

underlying the present motion.

ORDER, page 1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

FINANCIAL FUSION, INC.,

Plaintiff,

v.

ABLAISE LTD. and GENERAL

INVENTIONS INSTITUTE A, INC.,

Defendants. __________________________________

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Case No.: C- 06-2451 PVT

ORDER GRANTING MOTION FOR

LEAVE TO FILE SECOND

AMENDED COMPLAINT AND

GRANTING MOTION TO RELATE

CASE

On December 12, 2006, the parties appeared before Magistrate Judge Patricia V.

Trumbull for hearing on FFI’s Motion for Leave to File a Second Amended Complaint.1

 Based

on the briefs and arguments presented,

IT IS HEREBY ORDERED that FFI’s Motion is Granted.

I. FACTUAL BACKGROUND

Plaintiff Financial Fusion Inc. (“FFI”) filed this action seeking declaratory judgment of

non-infringement and invalidity of U.S. Patent No. 6,961,737 (the ‘737 patent). The ‘737 is a

continuation of U.S. Patent No. 6,295,530 (“the ‘530 patent”). The ‘737 issued in November of

Case 4:06-cv-07222-SBA Document 7 Filed 12/18/06 Page 1 of 7
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28 2

This allegation was inadvertently omitted from the amended complaint. (Thayer Decl., ¶4.) 

ORDER, page 2

2005. Defendants Ablaise Ltd (“Ablaise”) and General Inventions Institute A, Inc. (“GIIIA”,

collectively “Ablaise”) co-own the ‘737 patent. FFI provides website development and hosting

services. 

Ablaise threatened to sue two of FFI’s customers, Bank of America and First Horizon. 

The notice letters sent by Ablaise allege that the Bank of America and First Horizon websites

practice the invention of the ‘737 patent. (Amended Complaint (“AC”), ¶ 6.) FFI alleges that it

developed, at least in part, the implicated websites. (Complaint, ¶ 23.)2

 FFI has provided, and

continues to provide, website development and hosting services to customer Bank of America

Technology and Operations, Inc. (“BATO”) under an agreement that includes an indemnification

provision allowing FFI to defend and settle claims of infringement involving software developed

under the agreement. (AC, ¶5. ) On August, 28, 2006, after this lawsuit was filed, Ablaise filed a

patent infringement suit against Bank of America in the United States District Court for the

District of Delaware (the “Delaware Action”). 

Ablaise moved to dismiss the Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(1)

arguing lack of subject matter jurisdiction. Ablaise asserted that no actual controversy existed

between them and FFI. Ablaise argued, in the alternative, that the court should exercise its

discretion not to hear this declaratory judgment suit and grant the motion to dismiss. The Court

found that FFI has a reasonable apprehension of suit, creating an actual controversy and

jurisdiction and denied the Motion to Dismiss.

On October 10, 2006, Ablaise amended the Delaware Action to add a claim of

infringement of the ‘530 Patent against Bank of America. FFI now seeks to file a Second

Amended Complaint to add the ‘530 Patent to this Declaratory Judgment Action. On October

26, 2006, counsel for FFI contacted Counsel for Ablaise and sought a stipulation to allow FFI to

file a Second Amended Complaint. (Thayer Decl. ¶ 4.) At that time, Ablaise had not yet filed an

Answer to the Amended Complaint and FFI suggested that Ablaise stipulate to the filing of the

Second Amended Complaint and answer only that Complaint. (Id.) As of the filing of this

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ORDER, page 3

motion on November 2, 2006, Ablaise had not responded to FFI’s request for a stipulation. (Id.

at ¶¶5-6). On October 30, 2006, Ablaise filed an Answer and a Counterclaim asserting that FFI

is infringing the ‘737 patent.

On November 21, 2006, Yodlee, Inc., a vendor to Bank of America for a different portion

of its website, filed an action in the Northern District of California entitled Yodlee, Inc. v.

Ablaise Ltd. et al, 5:06-CV-07222 RMW (the “Yodlee Action”). As in this case, Yodlee claims

that it has an indemnity obligation to Bank of America for claims made against the portion of the

website provided by Yodlee. (Yodlee Complaint ¶ 7.) On December 5, 2006, FFI filed a motion

to relate the Yodlee case to this case. 

II. DISCUSSION

A. Motion for Leave to Amend

A party's right to amend his or her pleadings is governed by Rule 15(a) of the

Federal Rules of Civil Procedure, which provides that “leave shall be freely given when justice

so requires.” Fed. R. Civ. P. 15(a). The Supreme Court has declared that the requirement of

Rule 15(a) that leave to amend shall be freely given when justice so requires “is to be heeded.” 

Foman v. Davis, 371 U.S. 178, 182 (1962) Similarly, the Ninth Circuit has directed district

courts to apply the rule favoring amendments to pleadings with “extreme liberality.” DCD

Programs, Ltd. v. Leighton, 833 F.2d 183,186 (9th Cir. 1987). Four factors are commonly used

to determine the propriety of a motion for leave to amend: bad faith, undue delay, prejudice to

the opposing party, and futility of amendment. DCD Programs, 833 F.2d at 186.

Ablaise opposes the motion, claiming that amendment would be futile because this court

lacks jurisdiction over FFI’s claims relating to the ‘530 patent. Ablaise does not assert any bad

faith, undue delay or prejudice. Because this case is in the early stages, the court finds no bad

faith, undue delay or prejudice. Accordingly, the only issue is whether the amendment would be

futile.

Ablaise asserts that the amendment would be futile because there is no actual

controversy. In order to proceed with a declaratory judgment actions in patent cases, a plaintiff

must demonstrate both: (1) an explicit threat or other action by the patentee which creates a

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ORDER, page 4

reasonable apprehension on the part of the declaratory judgment plaintiff or its customers that it

will face an infringement suit, and (2) present activity by the declaratory judgment plaintiff or its

customers which could constitute infringement. Teva Pharmaceuticals USA, Inc. v. Pfizer Inc.,

395 F.3d 1324, 1330-31 (Fed. Cir. 2005); Arrowhead Indus. Water, Inc. v. Ecolochem, Inc., 846

F.2d 731, 737 (Fed. Cir. 1988). In the absence of an express charge of infringement, courts

examine “the totality of the circumstances” to determine whether there is a controversy.

Vanguard Research, Inc. v. PEAT, Inc., 304 F.3d 1249, 1254-55 (Fed. Cir. 2002).

Ablaise claims that FFI cannot show reasonable apprehension. Ablaise asserts that they

have not identified the portion of the Bank of America website that FFI is involved with, the

military bank site, as infringing the ‘530 patent. Additionally, Ablaise has not asserted the ‘530

patent in their counterclaim in this action. Ablaise further claims that it has only identified

mbnanetaccess.com, a Bank of America website, as infringing. Because FFI does not owe

indemnity to Bank of America for the MBNA website, Ablaise argues that there is no reasonable

apprehension of suit. Ablaise thus argues that FFI “does not have a dog in the Delaware fight.” 

(Opp. at 6:6.) 

Ablaise’s First Amended Complaint in the Delaware Action alleges: “BofA has infringed

one or more claims of the ‘737 and the ‘530 patent by making, using, and operating, its

bankofamerica.com and related websites throughout the Untied States, including this judicial

District.” (Delaware Action First Amended Complaint ¶ 8, Thayer Decl. Exh. B.)(emphasis

added) The address for Bank of America’s Military Bank Website is

www.bankofamerica.com/military/. (Thayer II Decl. ¶ 9.) Thus, the Military Bank Website is a

“related website” to the bankof america.com website and is implicated in the Delaware Action. 

 Moreover, FFI has asked Ablaise to amend the Delaware First Amended Complaint to exclude

the Military Bank Website and Ablaise has failed to do so. (Thayer II Decl. ¶¶6-7.) Thus, while

Ablaise may not have identified the Military Bank Website as infringing, their First Amended

Complaint in the Delaware Action is worded so broadly as to implicate it. 

Additionally, Ablaise has suggested to FFI that its customers might be infringing the ‘530

patent and that FFI should consider licensing both patents. (Thayer II Decl. ¶¶3-4; Scavone

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ORDER, page 5

Decl. Exh. B.) Finally, Ablaise has asserted the ‘530 patent in other litigation against other

parties, a factor relevant to the reasonable apprehension analysis. See Plumtree Software, Inc. v.

Datamize, LLC, 2005 WL 2206495 (N.D. Cal. Sept. 12, 2005) (finding jurisdiction over

declaratory judgment action for continuation patent based on assertion of parent patent against

plaintiff and assertion of continuation patent against others) .

Accordingly, there is an actual controversy and amendment would not be futile.

B. Motion to Relate Cases

Civil Local Rule 3-12 (a) defines related cases as those where: “(1) The actions concern

substantially the same parties, property, transaction or event; and (2) It appears likely that there

will be an unduly burdensome duplication of labor and expense or conflicting results if the cases

are conducted before different Judges.”

In this case, the first requirement is met because the same defendants are involved and

the same “property”, the ‘737 patent and its parent the ‘530 patent are involved. Ablaise

opposes the relation, claiming that different parties are involved. Even though different

plaintiffs are involved, both plaintiffs are vendors providing services under indemnification

agreements to the same accused infringer, Bank of America. Thus, Bank of America has an

interest as a customer and indemnitee in efficient and consistent management of these litigations. 

Moreover, the Yodlee action was filed, at least in part, because of the Delaware action against

Bank of America. (Yodlee Complaint ¶ 5.) Accordingly, substantially the same parties and

property are involved.

The second element is also met. Having two different judges govern discovery disputes

and construe claims in the same patents would be an unduly burdensome duplication of labor and

raise the danger of conflicting results. Ablaise claims that different websites are involved:

www.bankofamerica.com/military in this case and allmyacounts.bankofamerica.com in Yodlee. 

However, whether the two addresses are regarded as part of a single Bank of America website or

two related Bank of America websites, the potential for burdensome duplication remains. A

patent “claim is construed in the light of the claim language, the other claims, the prior art, the

prosecution history, and the specification, not in light of the accused device. . . . It is only after

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 3Ablaise also argued that Yodlee involved both the ‘737 and ‘530 patents whereas this case

involved only the ‘737 patent. This argument fails for two reasons. First, because the ‘530 is the

parent of the ‘737, the claims, specification, and file history of the ‘530 patent would necessarily

have to be considered in this action. Second, this Order grants FFI the right to amend the

complaint to add claims of non-infringement and invalidity of the ‘530 patent. 

ORDER, page 6

the claims have been construed without reference to the accused device that the claims, as so

construed, are applied to the accused device to determine infringement.” SRI Int’l. v. Matsushita

Elec. Corp. of Am., 775 F.2d 1107, 1118 (Fed. Cir. 1985)(en banc)(emphasis in original). Thus,

even if the accused devices are not identical, the claim construction process will contain, at a

minimum, sufficient overlap to create duplication of effort. Ablaise also argues that different

patent claims or terms may be involved in the same suits. Again, this does not eliminate the

potential for burdensome duplication. The fact that some terms might be different does not mean

that it makes sense for different judges to construe the claims and terms that might be in

common. 

Ablaise also asserted that the timing of FFI’s motion to relate was “suspicious.” Ablaise

argues that FFI filed the motion to relate in order to bolster its motion to relate and in an

improper attempt to forum shop. The motion to relate was filed shortly after the Yodlee action

was filed. The Court finds nothing suspicious about the timing of the motion and no reason to

believe that FFI filed the motion to relate for any improper purpose.

Finally, at the hearing, Ablaise opposed relation claiming that it will be prejudiced by

delay in this suit. Relation is not consolidation. Two related cases may still proceed on different

schedules. Thus, if the Yodlee action lags significantly behind this action, this action can

proceed on its own timetable.3

III. CONCLUSION

For the foregoing reasons, It Is Hereby Ordered that:

1. FFI’s Motion for Leave to File a Second Amended Complaint is Granted;

and

//

//

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ORDER, page 7

2. The Motion to Relate Cases is Granted and C-06-7222 RMW, Yodlee Inc.

v. Ablaise Ltd. Et al. shall be reassigned to Judge Trumbull.

Dated: December 15, 2006

____________________________

PATRICIA V. TRUMBULL

United States Magistrate Judge

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