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Sprint Communications Co., L.P. v. Cable One, Inc.

United States District Court, Tenth Circuit

December 16, 2013

SPRINT COMMUNICATIONS CO., L.P., Plaintiff,
v.
CABLE ONE, INC., Defendant.

ORDER

James P. O’Hara U.S. Magistrate Judge

Sprint Communications Company, L.P. contends that Cable One, Inc. is infringing twelve patents related to broadband and packet-based telephony products. Sprint has filed a motion for leave to file a second amended complaint that would advance new claims of willful infringement, induced infringement, and joint infringement by Cable One (ECF doc. 55). Because Sprint has not established good cause for the late amendment, the motion is denied.

Sprint seeks to add, for each asserted patent, an express claim of joint infringement, and for six asserted patents, claims of willful infringement and induced infringement. Under Fed.R.Civ.P. 15(a)(2), once a responsive pleading has been filed and 21 days have passed, “a party may amend its pleading only with the opposing party’s written consent or the court’s leave.” Rule 15 dictates that the court “should freely give leave when justice so requires.”[1] When the deadline set in the scheduling order for amending pleadings has passed, however, Fed.R.Civ.P. 16(b)(4) may also be implicated.[2] Rule 16(b)(4) provides that a scheduling order may be modified “only for good cause.” Thus, courts in the District of Kansas determine whether the Rule 16(b)(4) “good cause” standard has been established before proceeding to determine if the more liberal Rule 15(a) standard has been satisfied.[3] In this case, the scheduling order, as amended, set a deadline of June 17, 2013, for amending the pleadings. Because Sprint did not file the instant motion until October 23, 2013, the court will follow this two-step approach in evaluating the proposed new claims.

I. Rule 16(b)(4)

To establish good cause under Rule 16(b)(4), Sprint must show that it could not have met the June 17, 2013 scheduling-order deadline for amending its complaint even if it had acted with due diligence.[4] “Carelessness is not compatible with a finding of diligence and offers no reason for a grant of relief.”[5]

A. Joint Infringement Claims

Sprint’s proposed joint infringement claims would allege that Cable One exercised control and direction over a third-party vendor, Level 3, and the two together performed every step of the patents-in-suit, such that Cable One directly infringed the patents. Sprint asserts that its proposed joint infringement claims are premised on Cable One’s recent disclosure that it contracts out various aspects of its call process to Level 3.

On June 12, 2013, Cable One served responses to Sprint’s interrogatories seeking technical information related to such things as how Cable One set up, connected, monitored, and tore down calls.[6] In response, Cable One made a number of objections and provided no detail as to the steps in establishing such a call flow.[7] Significantly, however, Cable One mentioned the use of a “vendor” in a number of its responses, as discussed further below. By letter dated July 1, 2013, Sprint asked Cable One to supplement its interrogatory responses, [8] which Cable One did on August 23, 2013.[9] Cable One’s amended responses contain a much more detailed discussion of how it establishes a telephone talk path, including the description of specific steps involving “a Cable One vender, Level 3.”[10] Thus, Sprint argues, it could not have amended its complaint to assert claims listing a vendor as a joint infringer until receiving Cable One’s supplemental responses on August 23, 2013.

Cable One urges the court to reject this contention, arguing, “Sprint has not shown that it exercised diligence in evaluating its own documents, the pleadings in this case, and Cable One’s initial discovery responses, served on June 12, 2013.”[11] First, Cable One points to its initial interrogatory responses in which it mentioned the use of a “vendor” in three separate responses. For example, in response to an interrogatory requesting a description of “how [Cable One] connect[s] Inbound Calls and Outbound Calls made to or from a ported telephone number, ” Cable One stated, in part, “all Inbound and Outbound calls made to or from a ported or non-ported number are processed by a Cable One vendor.”[12] In other responses, Cable One stated that it “understands its vendor uses a Media Gateway to process calls entering Cable One’s system or exiting Cable One’s system, ”[13] and indicated protocols that “its vendor for telephony” used to setup, connect, or tear down calls.[14]

Second, Cable One identifies a number of internal Sprint emails and documents that demonstrate Sprint’s awareness of a relationship between Cable One and Level 3 as early as 2005.[15] For example, in a December 2006 document, Sprint identifies Cable One’s use of Level 3 “for termination and interconnection” related to “VoIP Info.”[16] Similarly, in a Sprint “Executive Briefing” dated March 12, 2008, Sprint notes that Cable One has “taken a ‘build it yourself’ approach to VoIP, ” and that “Level 3 is the service provider.”[17]

Third, Cable One notes that in its April 16, 2012 answer to the amended complaint, it set forth an affirmative defense directed at the issue of joint infringement: “Sprint’s claims are barred because Cable One does not make, use, or sell each claimed element of any asserted claim, nor does Cable One direct or control another entity to make, use, or sell any element which is not made, used, or sold by Cable One.”[18]

The court agrees with Cable One that these three events at the very least would have put a diligent party on notice of a possible joint infringement claim. Sprint attempts to explain its untimely amendment request by asserting that neither Cable One’s original interrogatory responses referencing a “vendor” nor Sprint’s internal documents discussing Level 3 provide the necessary detail to demonstrate that a vendor performed steps of the asserted patents. Sprint asserts that, although its internal documents show Sprint’s “general awareness” of a business relationship between Cable One and Level 3, they “do not show the step-by-step detail provided in Cable One’s belated discovery responses, which establish that the outsourced steps are indeed relevant to some of Sprint’s patent claims.”[19] Likewise, Sprint argues, Cable One’s original interrogatory answers did not demonstrate that the processes performed by “a vendor” were part of the steps in the asserted claims.

The court finds Sprint’s arguments unpersuasive. In particular, it seems to be a bit of a stretch for Sprint to argue that Cable One’s June 12, 2013 mention of processes performed by its vendor did not put Sprint on notice that it could assert a joint infringement claim. But even taking Sprint at its word that before receiving Cable One’s supplemental interrogatory responses it did not know that Cable One used a vendor to perform at least one step of the asserted claims, the court nonetheless finds that Sprint has failed to establish good cause for its inaction.

This court has held that when a plaintiff fails to pursue avenues of possible claims of which it clearly was put on notice, the plaintiff does not act with the necessary diligence. In Five Rivers Ranch Cattle Feeding, LLC v. KLA Env’t Servs., Inc., the court held that the plaintiff failed to meet the good-cause standard for amendment because “at the time it filed its complaint, [it] had in its possession evidence that should have led it to the information that the proposed claim is based on.”[20] The court found that because the plaintiff did not “diligently follow[] up” on notice of additional facts that supported an additional claim, the plaintiff did not act with ...


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