Power Probe Group, Inc. v. Innova Electronics Corporation

District Court, D. Nevada·Decided November 14, 2023·No. 2:21-cv-00332·Unknown

Opinion

1 UNITED STATES DISTRICT COURT

2 DISTRICT OF NEVADA

3 * * *

4 POWER PROBE GROUP INC., Case No. 2:21-cv-00332-GMN-EJY

5 Plaintiffs/Counter- Defendants, ORDER 6 v. 7 INNOVA ELECTRONICS CORPORATION, 8 Defendant/Counterclaimant. 9 10 Pending before the Court is Power Probe Group, Inc.’s Motion to Strike Affirmative 11 Defenses. ECF No. 193. Also Pending is Innova’s Motion for Leave to File Sur-Reply. ECF No. 12 199. The Court reviewed these Motions, the Oppositions and Replies. The Court heard oral 13 arguments regarding the Motion to Strike on October 30, 2023. ECF No. 207. The Court also 14 reviewed and compared Power Probe’s original Complaint (ECF No. 1) to Power Probe’s First 15 Amended Complaint (the “FAC” at ECF No. 139), and Innova’s Answer, Affirmative Defenses, and 16 Counterclaims to Power Probe’s original Complaint (ECF No. 22) to Innova’s Answer, Affirmative 17 Defenses, and Counterclaims to Power Probe’s FAC (ECF No. 189). The parties and the Court are 18 well versed in the facts and disputes underlying this litigation. Thus, they are not repeated here. The 19 Court further reminds the parties that while courts have the authority to grant a motion to strike 20 under Federal Rule of Civil Procedure 12(f), whether to do so is a matter of discretion. See 21 Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010). 22 I. Discussion

23 a. The Moderate Approach to Amending Affirmative Defenses When Responding to an Amended Complaint. 24 25 The Court reviewed case law and concludes the “moderate approach” is the best method for 26 determining whether new affirmative defenses pleaded in response to an amended complaint may 27 proceed. As explained in Coppola v. Smith, Case No. 1:11-CV-1257 AWI BAM, 2015 WL 1 most commonly adopted approach by district courts in the Ninth Circuit. The “moderate approach” 2 permits a defendant to file an amended answer and affirmative defenses without leave of court so 3 long as the amended complaint changed a theory or scope of the case and then only to the extent 4 reflecting the breadth of those changes. The Court finds the “moderate approach” persuasive as it 5 prevents potential for abuse when ministerial changes to a complaint are made or the changes do not 6 otherwise alter the substance or theories of the claims asserted. Id. at 3.

7 b. Summary of Issues and Arguments. 8 Power Probe’s December 8, 2021 FAC includes two new allegations, including willful 9 infringement and the Doctrine of Equivalents (sometimes the “DOE”). The willful infringement 10 claim rests on Innova’s alleged knowledge of U.S. Patent No. 7,184,899 (the “899 Patent”) 11 demonstrated “by … [Innova] directly competing with Power Probe,” “no later than August 6, 12 2019.” ECF No. 139 ¶¶ 46, 52. The DOE claim is supported by Power Probe’s contention that if 13 “the Court adopts Defendant’s proposed construction of ‘processor,’ ‘measurement,’ ‘electrical 14 system,’ ‘input signal,’ ‘output signal,’ ‘reading,’ or ‘keypad,’” the Innova “Accused Product would 15 still satisfy the corresponding limitations under the doctrine of equivalents.” Id. ¶ 59. 16 Power Probe’s Motion to Strike focuses on Innova’s Second, Third, Fourth, and Fifth 17 Affirmative Defenses asserted in Innova’s Answer to the FAC. Specifically, Innova adds 35 U.S.C. 18 § 101 (“§ 101”) in its Second and Third Affirmative Defenses, and alleges a new art reference— 19 “US20030128036” (the “’036 Reference” or the “New Art Reference”)—in its Third, Fourth, and 20 Fifth Affirmative Defenses. Power Probe asks the Court to strike all these allegations from Innova’s 21 affirmative defenses. While Power Probes advances several side arguments in its Motion, some of 22 which are touched on below, Power Probe contends the addition of a willful violation allegations 23 expands damages only and the addition of the DOE is neither a change to the scope nor theory of 24 the case. Innova counters that the addition of § 101, and the ’036 Reference do not exceed the 25 expanded scope of Power Probe’s new allegations averring the new defenses relate directly to the 26 invalidity of the 899 Patent, which is a defense “Innova has asserted since the beginning of this 27 litigation.” ECF No. 195 at 5. Innova states § 101 and the ’036 Reference respond to Power Probe’s 1 “newly discovered,” (2) the “’036 Reference was cited against … Power Probe’s related patent 2 application” in July 2014 (id. at 7 and 7 n.3), (3) Power Probe’s changes to the allegations presented 3 in the FAC are broad, and (4) Innova’s defenses have been known to Power Probe for a long time. 4 Id. at 8.

5 c. The Doctrine of Equivalents, Defendant’s ’036 Amended Affirmative Defenses, and the Moderate Approach. 6 7 The initial issue before the Court is whether, under the moderate approach, the ’036 8 Reference is responsive to changes in the scope of the Complaint as stated in Power Probe’s FAC.1 9 While several cases published by U.S. District Courts within the Ninth Circuit hold the DOE is not 10 a separate cause of action for patent infringement, but a theory that is an alternative to literal 11 infringement, changes in the District of Nevada’s Local Patent Rules and more recent case law cast 12 doubt on this proposition as it is applied in this District. 13 An assertion of “[l]iteral infringement requires the patent holder to show that the ‘claim reads 14 on the accused device exactly.’” Telesign Corp. v. Twilio, Inc., Case No. CV 16-2106 PSG (SSX), 15 2016 WL 11746746, at *2 (C.D. Cal. Nov. 7, 2016) citing Southwall Techs., Inc. v. Cardinal IG Co., 16 54 F.3d 1570, 1575 (Fed. Cir. 1995). “In contrast, the doctrine of equivalents allows a patent claim 17 to proceed if the two products ‘work in substantially the same way, and accomplish substantially the 18 same result … even though they differ in name, form, or shape.’” Id. citing Warner-Jenkinson Co. 19 v. Hilton Davis Chem. Co., 520 U.S. 17, 35, (1997) (further citation omitted). After recognizing 20 courts outside of the Ninth Circuit are split regarding whether a patent holder must explicitly plead 21 a DOE cause of action, the court in Telesign found “a claim under the doctrine of equivalents 22 overlaps with a claim for literal infringement” and, therefore, may proceed without “multiply[ing] 23

1 Innova’s Opposition to Power Probe’s Motion to Strike does not mention, let alone state, that either of its new 24 affirmative defenses are responsive to Power Probe’s willful violation allegations. ECF No. 195, generally. This position was confirmed by counsel primarily responsible for arguing on behalf of Innova on October 30, 2023. ECF 25 No. 213 at 32-33 (Counsel for Innova: “I don’t think willfulness is as much in play here. Our affirmative defenses are more directed at the doctrine of equivalents invocation.”). The Court recognizes that Mr. Beem, who was not responsible 26 for the primary arguments made on behalf of Innova, added late in the argument that the ’036 reference was responsive to willfulness; however, his argument consisted of following: “if Innova does not infringe the asserted patent, then as a 27 matter of law there is no willfulness.” ECF No. 213 at 33. The Court finds Innova fails to support the contention that 1 discovery.” 2016 WL 11746746, at *3.

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Power Probe Group, Inc. v. Innova Electronics Corporation, (D. Nev. 2023).

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