

In its latest action, Interval Licensing has moved for leave to amend its supplemental infringement contentions to include Apple's OS X Mountain Lion operating system. (275 [PDF; Text]) If successful with this motion (and for the record, Apple opposes it), Interval will have substantially raised the stakes in this action. With or without this amendment, this case exemplifies the lunacy of the patent system with respect to software. Everything Apple just (tentatively) won against Samsung they could be forced to disgorge to Interval.



So who are the winners in all of this? It certainly will not be any company that actually makes something. The only winners will be those patent holders who make nothing (because they are immune to infringement counterclaims) and the members of the patent and litigation bar. So, please, someone tell us again about how patents are important to innovation (and improving our economy) when it comes to software.

Document 275 UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE INTERVAL LICENSING LLC,

Plaintiff,

v.

APPLE, INC.,

Defendant. Case No. C11-708 MJP Lead Case No. C10-1385 MJP JURY DEMAND Plaintiffs Motion for Leave to

Amend its Supplemental

Infringement Contentions

NOTE ON MOTION

CALENDAR: September 7, 2012 PLAINTIFFS MOTION FOR LEAVE TO

AMEND ITS SUPPLEMENTAL INFRINGEMENT CONTENTIONS I. INTRODUCTION On July 20, 2012, and in accordance with the Courts most recent Scheduling Order, Interval served its Local Patent Rule 120 Supplemental Disclosure of Asserted Claims and Infringement Contentions for the 652/314 Patents Track (Supplemental Infringement Contentions) on defendant Apple Inc. (Apple). Now, pursuant to Local Patent Rule 124 and applicable law, Interval moves the Court for leave to amend its Supplemental Infringement Contentions to include an additional infringing productApples new OS X Mountain Lion operating system (OS X).1 Interval gave Apple a copy of its proposed Second Supplemental ______________________________ In this motion, Intervals amendments to its Supplemental Infringement Contentions, and the accompanying exhibits, Interval will use the broad term OS X to refer to both Apples OS X Mountain Lion operating system and to any future, infringing revisions thereof. 1 Infringement Contentions including OS X on August 10, 2012, and Interval has attempted to come to an agreement with Apple since that date, but Apple remains opposed to this Motion. Interval has good cause to amend its Supplemental Infringement Contentions to include the OS X software. First, Interval did not include OS X in its July 20, 2012 Supplemental Infringement Contentions because Apple had not yet released OS X to the market. Without an opportunity to examine OS X in detail to determine precisely how it infringes the patents-in-suit, Interval could not supplement its infringement contentions with the level of detail that the local patent rules require. Second, Interval was diligent in amending its Supplemental Infringement Contentions when Apple did release OS X. In particular, immediately following OS Xs release on July 25, 2012, Interval diligently investigated the software, determined precisely how it infringes the patents-in-suit, assembled highly detailed, proposed amended Supplemental Infringement Contentions that include Apples OS X software, and served its proposed Second Supplemental Infringement Contentions on Apple all in a span of just sixteen days . Third, requiring Interval to pursue OS X in separate litigation would be duplicative of the current litigation, an inefficient waste of judicial resources, and unduly burdensome to Interval. The contentions for OS X parallel those of products already in the case. In fact, denying Intervals motion for leave would be unduly burdensome to Apple as well, since Apple would be forced to litigate OS X in a separate patent infringement suit when that litigation could be handled expeditiously in the present case. Fourth, granting Interval leave to add OS X to the list of accused products would not prejudice Apple because many of the infringing features of OS X are already present in, or are at least similar to, other Apple products that have already been accused (e.g., iOS). Interval even 2 notified Apple when serving its July 20 Supplemental Infringement Contentions that Interval planned to accuse OS X of infringement shortly after Apple released the software. Accordingly, Interval requests that this Court grant its motion for leave to amend its supplemental infringement contentions. II. LEGAL STANDARDS The Western District of Washingtons Local Patent Rule governing amendment of infringement contentions reads: Amendment of the Infringement Contentions or the Invalidity Contentions may be made only by order of the Court upon a timely showing of good cause. Nonexhaustive examples of circumstances that may, absent undue prejudice to the non-moving party, support a finding of good cause include: (a) a claim construction by the Court different from that proposed by the party seeking amendment; (b) recent discovery of material prior art despite earlier diligent search; and (c) recent discovery of nonpublic information about the Accused Device which was not discovered, despite diligent efforts, before the service of the Infringement Contentions. The duty to supplement discovery responses does not excuse the need to obtain leave of court to amend contentions. Local Patent Rule 124. The burden of establishing good cause to amend contentions lies with the moving party. O2 Micro Intl Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1366 (Fed. Cir. 2006). In evaluating good cause, this Court considers factors such as: (1) the reasons proffered for the need to amend after the deadline for submitting contentions had passed, (2) the diligence of the moving party, (3) the importance of the proposed amendments, together with any prejudice to the moving party if amendment is denied, (4) potential prejudice to the non-moving party, and (5) the availability of a continuance to cure any prejudice. Baden Sports, Inc. v. Wilson Sporting Goods Co., No. 2:11-cv-00603-MJP, Doc. 80, at 2 (W.D. Wash. June 28, 2012) (order on defendants motion for leave to amend) (citing Convolve, Inc. v. Compaq Computer Corp., 2007 WL 700904, at *2 (S.D.N.Y. Mar. 7, 2007)). 3 III. ARGUMENT In light of the above factors, good cause exists for this Court to grant Interval leave to amend its Supplemental Infringement Contentions. A. OS X Was Not Publicly Available at the Time of Intervals Infringement

Contentions Defendant Apple released OS X on July 25, 2012, five days after Interval filed its Supplemental Infringement Contentions in accordance with the Courts Scheduling Order. Compare Ex. A, Apple Press Release with Ex. B, Intervals Post-Stay Infringement Contentions, at 20. The fact that OS X was not available at the time Interval filed its Supplemental Infringement Contentions strongly supports a finding of good cause for leave to amend. First, Interval could not have complied with the Local Patent Rules requirements without access to OS X. The Local Patent Rules require a detailed mapping of an accused products features to the asserted patent claims. See Local Patent Rule 120. Without an actual copy of OS X, Interval could not have conducted a thorough investigation of OS Xs features in light of the patent claims and therefore could not have disclosed the necessary details of OS Xs infringing features as required under the Local Patent Rules. Second, OS Xs actual features were not publicly known prior to its release. Although the public may have been aware of OS Xs inevitable release, the details regarding specific features would have been purely speculative until the operating systems actual release. In other words, Interval could not have established whether OS X in fact infringes Intervals patents-in-suit until Apple placed OS X on the market. The Local Patent Rules explicitly identify such a discovery of previously nonpublic information as good cause for leave to amend. Local Patent Rule 124(c). Third and finally, it is common practice among courts to grant a plaintiff leave to amend if a defendant introduces a new product on the market after the plaintiff filed its infringement 4 contentions. See TiVO, Inc. v. Verizon Commcns, Inc., No. 2:09-cv-257-JRG, 2012 WL 2036313, at *2 (E.D. Tex. June 6, 2012) (granting leave to amend infringement contentions when patentee knew of the eventual release of the accused product but actual sales did not occur until after infringement contentions were filed); Smartphone Techs LLC v. HTC Corp., No. 6:10cv580 LED-JDL, 2012 WL 1424173, at *3 (E.D. Tex. Mar. 16, 2012) (finding good cause to amend by adding products released after infringement contentions were due but not for products that were available beforehand); Network Appliance, Inc. v. Sun Microsystems, Inc., Nos. C-07-06053 EDL, C-07-05488 EDL, 2009 WL 2761924, at *3 (N.D. Cal. Aug. 31, 2009). Accordingly, the first factor of this Courts good cause analysis weighs heavily in Intervals favor. B. Interval Was Diligent In Investigating OS X and Promptly Filed This Motion Interval was diligent in investigating OS X, in preparing highly detailed, proposed amendments to its Supplemental Infringement Contentions to include OS X, and in filing this motion for leave. As previously mentioned, Apple began selling OS X to the public on July 25, 2012. Ex. A. Given the time necessary to investigate the software and develop the claim charts required by the Local Patent Rules, a delay of only sixteen days between the date OS X became available (July 25) and the date on which Interval served Apple with its proposed Second Supplemental Infringement Contentions including OS X (August 10) is reasonable. In addition, Interval diligently prepared this motion and diligently met-and-conferred with Apple between August 10 and the filing of this motion to determine whether Apple would oppose this motion. Exs. C-D, E-mails to Apples Counsel re: Opposition to this Motion and Meet-and-Confer Calls. The requirement for diligence in amending infringement contentions strikes a balance between the need to amend infringement contentions as new information becomes available and the need to crystallize legal theories. O2 Micro, 467 F.3d at 136566. Consistent with this 5 purpose, Intervals intent is not ambush and subterfuge but instead to raise legal issues that have naturally arisen during the course of litigation. First, Interval filed this motion as soon as it had an opportunity to review OS X and develop detailed infringement contentions in accordance with the local patent rules. Second, Interval told Apple that Interval would be investigating OS X and potentially filing this motion before Apple even released OS X. Ex. E, E-mail to Apples Counsel re: Amendment of Infringement Contentions. Third and last, at no point during this litigation has Interval demonstrated any propensity for unwarranted delays or underhanded tactics. To the contrary, Intervals actions demonstrate diligence and cooperationnot attempts to sandbag Appleand therefore weigh in favor of granting leave to amend. C. Inclusion of OS X is Important to Resolve the Current Dispute Between Interval

and Apple The addition of OS X to the current litigation is important and necessary to resolve the dispute between Apple and Interval. If OS X were excluded, Interval would file a separate lawsuit, leading to unnecessarily duplicative litigation. Such inefficiency flies in the face of the intent behind the Local Patent Rules. See Local Patent Rule 101 (These rules are designed to . . . generally reduce the cost of patent litigation.); TiVO, Inc., 2012 WL 2036313, at *2 (stating that [c]onsiderations of judicial economy weighed heavily in favor of permitting an amendment to infringement contentions to include new products). Accordingly, this factor also weighs in Intervals favor. D. Apple Would Not Be Significantly Prejudiced By The Proposed Amendment The addition of OS X does not significantly prejudice Apple because OS Xs infringing features are similar to those of other, already-accused products (e.g., Apples iOS) and Apple still has time to conduct any necessary discovery and expert analysis. 6 First, a cursory overview of the accused products plainly demonstrates the emphasis Apple places on maintaining consistency across its product lines. OS X and the accused Notification Center are no exception. The Notification Center concept is present throughout the accused productsincluding other Apple operating systemswith limited variation in its look, feel, and functionality. Given the general similarities between OS X and iOS, adding OS X and its specific implementation of Notification Center to the list of accused products should create little, if any, shift in Apples current litigation strategy. Second, even if adding OS X causes prejudice to Apple, the close of discovery and trial are still far away. According to the latest Scheduling Order, expert discovery does not conclude until May 2013 and trial is not scheduled until October 2013. Ex. F, Scheduling Order. This is a significant amount of time for Apple to fully investigate Intervals amended contentions, thereby mitigating (if not fully eliminating) any potential prejudice. E. A Continuance is Unnecessary Finally, although this Court considers the availability of a continuance in its good cause analysis, such a consideration is unnecessary at such an early phase in the instant litigation. As discussed above, the close of discovery and trial are almost a full year away, providing Apple with plenty of time to investigate and conduct any necessary discovery on Intervals proposed amended infringement contentions. See Ex. F. Because the potential prejudice to Apple caused by adding OS X is minimal or non-existent, and in light of the time Apple still has to address the amended Supplemental Infringement Contentions, the need for a continuance at this point is obviated. IV. CONCLUSION For these reasons, the factors that this Court considers in determining good cause for leave 7 to amend infringement contentions weigh heavily in Intervals favor. Accordingly, Interval respectfully requests this Court to grant this motion and to enter the attached order. Dated: August 23, 2012 /s/ Nick Patel Justin A. Nelson

WA Bar No. 31864

[email]

Matthew R. Berry

WA Bar No. 37364

[email]

SUSMAN GODFREY L.L.P.

[address telephone fax] Max L. Tribble, Jr.

[email]

Matthew Behncke

[email]

SUSMAN GODFREY L.L.P.

[address telephone fax] Michael F. Heim

[email]

Eric J. Enger

[email]

Nathan J. Davis

[email]

Nick P. Patel

[email]

HEIM, PAYNE & CHORUSH, L.L.P.

[address telephone fax] Douglas Wilson

[email]

HEIM, PAYNE & CHORUSH, L.L.P.

[address telephone fax] 8 Attorneys for INTERVAL LICENSING LLC 9/p> CERTIFICATE OF SERVICE I hereby certify that on August 23, 2012, I electronically filed the foregoing document with the Clerk of the Court using the CM/ECF system, which will send notification of such filing to: Attorneys for AOL, Inc.

Cortney Alexander

Robert Burns

Elliott Cook

Gerald Ivey

Molly Terwilliger Attorneys for Apple, Inc.

David Almeling

Brian Berliner

George Riley

Jeremy Roller

Scott Wilsdon

Neil Yang

Xin-Yi Zhou Attorneys for Google, Inc. and YouTube, LLC

Aaron Chase

Dimitrios Drivas

Warren Heit

Kevin McGann

Wendi Schepler

Scott Johnson

Shannon Jost

Theresa Hsin-Yi Wang Attorneys for Yahoo! Inc.

Francis Ho

Richard S.J. Hung

Michael Jacobs

Matthew Kreeger

Dario Machleidt

Eric Ow

Mark Walters

Gregory Wesner By: /s/ Nick Patel

Nick P. Patel

Attorney for INTERVAL LICENSING LLC 10