Helferich Patent Licensing, LLC v. Suns Legacy Partners, LLC

917 F. Supp. 2d 985, 2013 WL 68610
CourtDistrict Court, D. Arizona
DecidedJanuary 7, 2013
DocketNos. CV-11-2304-PHX-NVW, CV-11-2476-PHX-NVW, CV-12-0060-PHX-NVW, CV-12-0100-PHX-NVW
StatusPublished
Cited by13 cases

This text of 917 F. Supp. 2d 985 (Helferich Patent Licensing, LLC v. Suns Legacy Partners, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Helferich Patent Licensing, LLC v. Suns Legacy Partners, LLC, 917 F. Supp. 2d 985, 2013 WL 68610 (D. Ariz. 2013).

Opinion

ORDER

NEIL V. WAKE, District Judge.

Before the Court is the Nissan Defendants’ — Nissan North America, Inc., Nissan Motor Co., LTD, and Midway Holdings, Inc. (collectively, “Nissan”) — Motion to File a Complaint to Add Third-Party Defendants (Doc. 129), the Memorandum in Support of the Motion (Doc. 130), Plaintiff Helferich Patent Licensing’s (“Helferich”) Response, and the Reply. For the following reasons, Nissan’s Motion will be denied.

I. Background

This is a consolidated case consisting of four actions which collectively assert that Defendants have infringed a number of claims of Helferich’s patents. Through those claims, Helferich has patented a method for content providers to deliver content to mobile communication devices. Helferich alleges that Nissan and the other Defendants have infringed these claims in a variety of ways, including using patented methods for: creating mobile content; storing the content; identifying the content so that it can be delivered to customers who request it; causing notifica[988]*988tions of the content to be sent to subscribers; and delivering the content to subscribers that request it in response to the subscribers’ requests. The infringement occurs, according to Helferich, when Defendants create and store mobile content that they then cause to be delivered to their customers’ mobile devices using specific identifiers that are protected by Helferich’s claims.

In its Motion, Nissan argues that the principle act that constitutes the alleged infringement is the posting of content to social media pages — websites that are hosted by Google+ , Facebook, and Twitter (“the social media companies”). All content providers who operate a Google +, Facebook, or Twitter webpage would be liable under Helferich’s theory of infringement, Nissan contends, only because content they post to those webpages can be accessed by customers via their cellular phones. According to Nissan, then, its alleged infringement would not be possible without the actions of the social media companies. Nissan contends that the social media companies therefore would have secondary liability to Nissan for any infringement of Helferich’s claims. Because of that alleged secondary liability, Nissan argues that it should be allowed, as a third-party plaintiff, to bring Google+ , Facebook, and Twitter into this case as third-party defendants.

II. Legal Standard

Under Federal Rule of Civil Procedure 14, a defendant may bring a third-party complaint against “a nonparty who is or may be liable to it for all or part of the claim against it” as a matter of right. Fed.R.Civ.P. 14(a)(1). Thus, a party can assert a third-party claim where a third-party defendant’s liability to the third-party plaintiff is dependent on the outcome of the main claim and is secondary or derivative thereto. Stewart v. Am. Int’l Oil & Gas Co., 845 F.2d 196, 199 (9th Cir.1988). If a defendant, and would-be third-party plaintiff, files the third-party complaint more than 14 days after serving its original answer, however, “the third-party plaintiff must, by motion, obtain the court’s leave.” Fed.R.Civ.P. 14(a)(1). Here, Nissan has sought the Court’s leave to bring a third-party complaint nearly ten months after it served its original answer. Whether to grant leave is thus within the “sound discretion of the trial court.” United States v. One 1977 Mercedes Benz, 708 F.2d 444, 452 (9th Cir.1983).

The court’s central purpose in granting leave to implead a third party is “to promote judicial efficiency by eliminating the necessity for the defendant to bring a separate action against a third individual who may be secondarily or derivatively liable to the defendant for all or part of the plaintiffs original claim.” Sw. Adm’rs, Inc. v. Rozay’s Transfer, 791 F.2d 769, 777 (9th Cir.1986). In its discretion, the trial court should consider the timeliness of the motion, whether the impleader is likely to delay the trial, and whether the impleader will cause prejudice to the original plaintiff. Irwin v. Mascott, 94 F.Supp.2d 1052, 1056 (N.D.Cal.2000). The court should also consider whether the impleader will “disadvantage the existing action” by, among other things, complicating and lengthening the trial, or introducing extraneous questions. Sw. Adm’rs, 791 F.2d at 777. Finally, the trial court must also consider whether the proposed third-party complaint alleges a cause of action for which relief may be granted. Irwin, 94 F.Supp.2d at 1057. This factor is important because “[i]t makes no sense to permit such a potentially prejudicial expansion of the case at the expense of Plaintiffs, if the third-party plaintiffs do not [989]*989have a valid theory of relief against the third-party defendants.” Id. at 1057-58.

III. Analysis

Nissan moves for leave to add Google +, Faeebook, and Twitter as third-party defendants in this action on the theory that those social media companies have secondary liability to Nissan for any alleged infringement. Each of the factors that the Court must consider forms an independently sufficient basis for denying leave to implead the social media defendants. As a result, within its sound discretion, the Court will deny leave to implead third-party defendants.

A. The Motion was Untimely and Impleader is Likely to Cause Undue Delay

Rule 14(a) contemplates adding a third-party defendant within 14 days after serving the original answer. Fed.R.Civ.P. 14(a)(1). Nissan’s Motion to add third-party defendants was filed on November 8, 2012, nearly ten months after it filed its original answer, on February 16, 2012. Further, Nissan did not file its Motion to implead until more than five months after Helferich filed its amended complaint, which should have erased any doubt that the activities of the social media companies were central to Helferich’s allegations. Because Nissan has had notice of the nature of these claims—and of the role that the social media companies play in them— for many months and delayed in filing its Motion, the Motion is untimely. See Zero Tolerance Entm’t, Inc. v. Ferguson, 254 F.R.D. 123, 127 (C.D.Cal.2008).

In addition, the untimely Motion will prejudice the existing action by delaying trial. Because a date for trial has not yet been set, Nissan argues that any risk of delay to the trial is mere speculation. The Scheduling Order set a number of deadlines with which it will become impossible for the parties to comply if third-party defendants are added at this stage, which will necessarily delay the trial. This Court does not set a final trial date in the Scheduling Order, but only later when a trial becomes likely. That does not entitle dilatory litigants to disregard the case-processing deadlines in the Scheduling Order. Those deadlines are themselves this Court’s case management requirements.

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Bluebook (online)
917 F. Supp. 2d 985, 2013 WL 68610, Counsel Stack Legal Research, https://law.counselstack.com/opinion/helferich-patent-licensing-llc-v-suns-legacy-partners-llc-azd-2013.