Wisk Aero LLC v. Archer Aviation Inc.

[3] 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA [6] 7 WISK AERO LLC, Case No. 3:21-cv-02450-WHO 8 Plaintiff, ORDER GRANTING LEAVE TO 9 v. SERVE AMENDED INFRINGMENT CONTENTIONS 10 ARCHER AVIATION INC., Re: Dkt. No. 312 Defendant. [12] 13 Plaintiff Wisk Aero LLC (“Wisk”) filed this Motion for Leave to Amend Infringement 14 Contentions (“Mot.”) [Dkt. Nos. 311, 312] to amend its allegations against Archer Aviation Inc. 15 (“Archer”) regarding two patents: U.S. Patent no. 10,110,033 (“the ’033 patent”), concerning the 16 battery charging system, and U.S. Patent no. 9,764,833 (“the ’833 patent”), concerning the 17 ventilated rotor mounted on the aircraft boom. Wisk seeks to amend based on purportedly new 18 information it acquired during discovery from Archer, Archer’s Australian supplier Electro.Aero, 19 and the deposition testimony of Archer (formerly Wisk) engineer, Diederik Marius. Archer 20 stipulates to some of the minor amendments but objects to the more significant changes, citing 21 lack of good cause and unfair prejudice. 22 Because Wisk does not assert new theories of infringement, and because it filed its 23 amendments within two or three months of receiving relevant and previously nonpublic 24 information, Wisk sufficiently established good cause and diligence to amend its contentions. At 25 this point there is no prejudice to Archer, particularly because none of the amendments assert new 26 theories or seem to require new discovery. For the following reasons, I GRANT the motion. 27 BACKGROUND 1 This order assumes familiarity with the case and prior orders, and only recounts the factual and 2 || procedural background to the extent necessary to consider this motion. 3 Wisk previously alleged that Archer’s battery charging system infringes the ’033 patent, 2 || cvough its eign EI 3 source code, and 5 || under the Doctrine of Equivalents (“DOE”). The initial allegations detailed Archer’s use of □ 6 a charging systems in its Maker aircraft. Mot. 1:15-19. In June 2022 during discovery, 7 || Wisk learned that Electro.Aero, an Australian corporation, sold Archer charging system, 8 || and Wisk also received from Electro.Aero documents containing the source code for Archer’s 9 a systems. Mot. 5:3-5; 5:27-6:3; 6:21-22. In a subsequent deposition of Electro10 Aero’s corporate executive, Wisk learned that ee | M0: 2:14: see cis 12 Mot. 3:24-4:9; 7:15-22; Mot. Hefazi Decl. In that same deposition, the corporate representative |) estitice ae ee Oo | es 16 Wisk’s proposed amendments identify the i charging systems, allege [i = | I 20: «120005 0 06 nowy prodvced 18 documents, quote the source code to show it is nearly identical to the prior code, and refine 19 explanations of the DOE theory.! Mot. 7:4-14; Reply in Support of Motion for Leave to Amend 20 (“‘Repl.”) [Dkt. Nos. 332, 333] 5:15-23; see also Mot. Ex. B (redline changes). Archer also noted □□□□ 22 || 417:22-418:14. In response, Archer contends that the amendments are unripe because a EE 0:05:00 24 || Motion for Leave to Amend Infringement Contentions (“Oppo.”) [Dkt. Nos. 321, 322] 1:5-19; 25 6:16-8:18. Archer also argues that the amended contentions cannot apply to ee [26] 27 ' Wisk also removed allegations that the charging system infringes the patent. after learnin ot. 3:1/-23. The removal 1s uncontested. Oppo. In.I. [2] 3 Oppo. 10:10-16; 11:10-13; see also Dkt. No. 345. Finally, 4 Archer notes that Wisk’s amendments appear to change the scope of products covered from 5 “aircraft” to more general “charger systems.” Oppo. 10:27-11:9. 6 Wisk’s ’833 patent allegations concern the ventilated rotor assembly air-cooling system 7 mounted on the boom of the aircrafts. See Mot. Ex. D. The underlying technology is, in essence, 8 an enclosure of a set of rotors with an air inlet and outlet, which together cause air to flow through 9 the enclosure and cool the rotors. See Mot. 11:21-12:3; Mot. Ex. D at pdf 37, 53, 62, 96. The 10 initial contentions alleged that the technology is mounted on the booms. See, e.g., Ex. Mot. D at 11 pdf 35, 63. While the very first page of the initial allegations seemed to focus on the Maker 12 “aircraft” as the infringing product, the rest of initial allegations referred to the booms of the 13 aircraft. See, e.g., Mot. Ex. D at pdf 27 (initial allegation concerning details about “[e]ach of the 14 six booms of the Maker aircraft”); id. at pdf 46 (same). 15 The amendments mostly add revised explanations of the technology and citations to the 16 newly produced documents, including quotations from the Marius deposition. See, e,g., Mot. Ex. 17 D at pdf 54-61, 64, 69, 77-78, 88, 95. Additionally, Wisk clarifies that its allegations extend to the 18 Midnight aircraft because Wisk only recently learned— [19] 20 Mot. 2:17-3:1; 11:1421 19; 11:21-12:3; 24:24-25:3. Wisk also asserts that the amendments to its DOE allegations allege 22 the same theories but address contentions brought to light by the Marius deposition, including that 23 the rotors are on the fairing rather than the boom, and that Archer’s design may 24 Mot. 12:4-19. Finally, while the initial allegations cited the purchase 25 contract between Archer and United Airlines, the amended allegations rely more prominently on 26 the contract as evidence that Archer has already sold the technology and therefore committed an 27 infringing act. See Mot. 8:25-9:2; 23:18-26. 1 Oppo. 1:52 19; 3:15-23; 6:16-8:18. Additionally, and in line with its contentions about the ’033 patent, 3 Archer says that Wisk cannot change the definition of “Accused Instrumentalities” to refer to the 4 booms specifically instead of the aircraft. Oppo. 5:28-6:2. Finally, Archer argues it will be 5 prejudiced by all the ’033 and ’833 amendments because they assert new theories and would 6 require additional claims construction. Oppo. 14:21-15:27. 7 LEGAL STANDARD 8 The Patent Local Rules permit amendment to initial infringement allegations “only by 9 order of the Court upon a timely showing of good cause.” Pat. Loc. R. 3-6. “[A]bsent undue 10 prejudice to the non-moving party,” good cause may be demonstrated through, among other 11 things, “[r]ecent discovery of nonpublic information about the Accused Instrumentality which was 12 not discovered, despite diligent efforts, before the service of the Infringement Contentions.” Id. 313 6(a)-(b). 14 A court’s “good cause inquiry is two-fold: (1) whether the moving party was diligent in 15 amending its contentions; and (2) whether the non-moving party would suffer prejudice if the 16 motion to amend were granted.” Synchronoss Techs., Inc. v. Dropbox Inc., No. 4:16-cv-0011917 HSG (KAW), 2018 WL 5619743 , at *3 (N.D. Cal. Oct. 29, 2018) (citation omitted). “Diligence is 18 ‘the critical issue’ in the good cause determination” and consists of two subparts: “(1) diligence in 19 discovering the basis for amendment; and (2) diligence in seeking amendment once the basis for 20 amendment has been discovered.” Karl Storz Endoscopy-Am., Inc. v. Stryker Corp., No. 14-cv21 00876-RS (JSC), 2016 WL 2855260 , at *3 (N.D. Cal. May 13, 2016) (citations omitted). The 22 moving party has the burden to establish diligence, but the court has discretion to grant leave to 23 amend “even in the absence of diligence so long as there is no prejudice to the opposing party.” 24 Id.; see also Impinj, Inc. v. NXP USA, Inc., No. 19-cv-03161-YGR, 2022 WL 2125133 , at *1 25 (N.D. Cal. Mar. 4, 2022). Prejudice can be shown when there will be disruptions to the case 26 schedule or other court orders, Synchronoss Techs., 2018 WL 5619743 , at *5, and when a party 27 changes its infringement theories or requires its opposition to prepare additional defenses, see 1 Cal. Nov. 15, 2012). “[E]xtra work alone does not support a finding of prejudice.” Impinj, Inc., [2] 2022 WL 2125133 , at *2. 3 Finally, it is “unrealistic” that a “patentee would have a precise sense of its infringement 4 theory at the outset,” particularly where “the patentee may not have been able to get access to the 5 necessary information because it is hidden from view (for example, source code).” Radware Ltd. 6 v. F5 Networks, Inc., No. C-13-02021-RMW, 2014 WL 3728482 , at *1 (quoting Peter S. Menell et 7 al., Federal Judicial Center, Patent Case Management Judicial Guide 4-14 (2009)). 8 DISCUSSION 9 I. Good Cause and Diligence 10 Though Archer makes reasonable arguments to the contrary, I find that there was good 11 cause for the amendments and that Wisk was sufficiently diligent in seeking to amend its 12 infringement contentions. 13 a. Substance of the Amendments 14 After reviewing the proposed changes, I determine that the amendments do not present 15 new theories of infringement but rather further detail existing theories, cite newly produced 16 documents, and clarify that Wisk’s initial infringement allegations extend to Midnight and 17 alleged use of technology that infringes on Wisk’s patents. See Karl Storz 18 Endoscopy-Am, 2016 WL 2855260 at *2 (noting the Patent Local Rules “require parties to 19 crystallize their theories of the case early in litigation and to adhere to those theories once they 20 have been disclosed” (quoting 02 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355 , 21 1366 n.12 (Fed. Cir. 2006))). Though Wisk now more clearly applies its allegations to Midnight 22 and battery and rotor boom assembly, the amendments rely on the 23 same underlying theories of infringement, including the DOE theories for both patents. Cf. 24 Fortinet, Inc. v. Palo Alto Networks, Inc., No. c-09-00036 RMW, 2010 WL 4608250 , at *1-2 25 (N.D. Cal. Nov. 5, 2010) (denying amendment for infringement contentions where plaintiff sought 26 to add entirely new DOE theories that had not previously been asserted). For example, the 27 allegations about the battery system explain the battery uses the same source code as 1 same way as the assembly on Maker. To the extent that Archer believes that the newest versions 2 of the battery and boom assembly do not employ the same source code or design, as it asserted at 3 the hearing, Archer may present evidence supporting that position later in litigation—but those 4 counterarguments do not mean that Wisk presented new theories of infringement. 5 Archer also asserts that Wisk’s theories of infringement changed with the amendments 6 because the initial allegations asserted that the aircrafts infringed on Wisk’s patents while the 7 amendments assert that the battery system and boom assembly infringe. According to Archer, 8 Wisk focused its initial allegations on the aircraft and defined the Accused Instrumentalities as 9 such. But the initial allegations show that Wisk alleged, in detail, that Maker’s battery system and 10 boom assembly were the infringing pieces of technology. See, e.g., Mot. Ex. F at pdf 5, 9, 14, 1811 22, 24-32, 34-36, 44, 47, etc. (describing the charging system technology, not just the aircraft as a 12 whole); Mot. Ex. Q at pdf 7, 12-24 (focusing on the boom assembly, not just the aircraft as a 13 whole). Because of that, and because Wisk initially asserted that its allegations applied to Maker’s 14 technology and to any “production aircraft that will leverage the technology of the Maker,” Mot. 15 Ex. F at pdf 2; Mot. Ex. Q at pdf 2, Wisk did not change its theories of infringement when it made 16 amendments to its allegations. 17 Wisk is also permitted to clarify that its allegations about Maker and its battery and boom 18 assembly extend to Midnight’s battery and boom assembly. Amendments to infringement 19 allegations can apply to a new version of a product that infringes in the same way as a previously20 accused version, so long as new claims and theories are not asserted. Apple Inc, 2012 WL 21 5632618, at *3. That is the case here. As Archer points out, in Apple the new version of the 22 product had been released in the U.S., while here 23 according to Wisk’s contentions. But that misses the point—the allegedly infringing 24 pieces of technology, i.e. the battery and the boom assembly, have been or soon will be built. 25 Wisk showed that the 26 See Mot. Hefazi Decl. 2:18-23; Mot. Ex. W 417:2227 418:14. And Wisk also showed that the plans for the booms are finalized (and were used for the 1 See Mot. 20:28-21:9; see also Mot. Ex. W 421:4-11. For that reason, these proposed 2 amendments differ from those in PersonalWeb Technologies, LLC v. Google Inc, which prohibited 3 amendment from including a new (unfinalized) version of a previously-accused product because 4 the parties could not evaluate an incomplete product for infringement. No. C13-01317 EJD 5 (HRL), 2014 WL 4088201 , at *4 (N.D. Cal. Aug. 19, 2014). Here, the allegedly infringing 6 technology—Midnight’s battery system and boom assembly—has been finalized, or so Wisk 7 sufficiently alleges. The charger and boom assembly can therefore be evaluated for infringement, 8 and indeed Wisk conducts some of that evaluation in its papers.2 9 For the same reason, Archer’s argument about the contract with United Airlines is 10 unconvincing. See Oppo. 8:19-10:8. Archer says the contract cannot serve as evidence for sale of 11 a patented invention where the specifications of the product being sold have not been finalized. 12 See Oppo. 3:25-27; 8:20-10:8. But the product being sold is Midnight, see Mot. Ex. Z at pdf 2, 13 and as explained above, Wisk sufficiently alleged that the component parts of Midnight can be 14 evaluated for infringement. And importantly, Wisk included evidence of the deal to support its 15 allegations that Archer “offer[ed] to sell, or s[old] . . . a[] patented invention,” 35 U.S.C. § 271 (a), 16 not to detail the specifications of the infringing product. 17 a. Diligence 18 I also find that Wisk was diligent in discovering the bases for its amendments and seeking 19 amendment once the bases were discovered. See Karl Storz Endoscopy-Am, 2016 WL 2855260 at 20 *3. It diligently pursued discovery from Archer’s Australian supplier, Electro.Aero, but was 21 unable to obtain information until June 2022. At that point, Wisk first learned of the existence of 22 the —the basis for many of its ’033 patent amendments. See Mot. 15:20-16:7. The 23 two-month delay between discovering the basis and filing this motion was reasonable, especially 24 in light of Wisk notifying Archer before filing. See, e,g., Nuance Commc’ns, Inc. v. ABBYY [25] 2 Archer says that it might use for each battery pack, instead of the common [26] power bus system that Wisk outlined in its allegations, and used in Midnight. See Oppo. 3:15-23. These are potential defenses [27] Archer can use in future stages of litigation, but do not preclude Wisk from evaluating the charger 1 Software House, No. C 08-02912 JSW MEJ, 2012 WL 2427160 , at *2 (N.D. Cal. June 26, 2012) 2 (finding diligence despite a period of a “few months” between learning of the new relevant 3 information and moving to amend infringement contentions). And the amendments to the ’033 4 patent DOE contentions merely clarified Wisk’s theory based on previously undisclosed 5 descriptions from Electro.Aero, see Mot. Ex. B. at pdf 92; Repl. 4:17-21, rather than change the 6 scope of its allegations in a way that could have been done previously, see Oppo. 18:10-19:2. 7 Wisk also met its burden to show it was diligent in discovering the basis for the 8 amendments to the ’833 patent allegations related to Midnight’s boom-mounted rotors. Although 9 Archer correctly notes that Wisk received documents alluding to Midnight’s design and its 10 placement of the rotors in late February 2022, Mot. 10:10-21, Wisk presented 11 evidence from Archer’s engineer that those documents were too vague and preliminary to provide 12 a basis for the amended allegations, see Mot. Ex. W 489:3-493:5. It was not until July 2022 that 13 Wisk received “detailed figures of functionality” confirming Wisk’s basis for the amendments. 14 See Mot. 10:10-21. It was also not until that Wisk discovered its basis for its 15 amended DOE contentions.3 See id. 11:14-19. Wisk promptly sought amendment after these 16 events. See Synchronoss Techs., 2018 WL 5619743 , at *5 (finding diligence where “[t]he trigger 17 for amending [the plaintiff’s] [c]ontentions” was “undoubtedly” the later-received information). 18 And even if Wisk was not diligent in deposing Marius, see Oppo. 17:21-18:2, I exercise my 19 discretion to find there is good cause and no prejudice here, Impinj, Inc., 2022 WL 2125133 , at*1, 20 in part because regardless of the timing of the deposition, Wisk did not have the necessary boom 21 design documents until July 2022. I also find that Wisk was diligent in incorporating the United 22 Airlines contract in its allegations because the deal was included in the initial allegations, see Mot. 23 Ex. B at pdf 8; Mot. Ex. D at pdf 5, and the amendments merely clarify Wisk’s contentions. 24 Overall, because Wisk was diligent in seeking discovery, and then in reviewing the [26] 3 Archer also argues the amendment is improper because Wisk’s DOE contentions include that the rotors are mounted on the boom, while Archer’s documents show they are [27] See, e.g., Oppo. 17:2-8. This is debatable, see Mot. Ex. D at pdf 37 (noting the alleged 1 documents and depositions to compare the previously undisclosed source code and products to its 2 existing theories of infringement, Wisk was “diligent in discovering the basis for the proposed 3 amendments.” Facebook, Inc. v. BlackBerry Ltd., No. 18-cv-05434-JSW-JSC, 2019 WL 4 8013872, at *5 (N.D. Cal. Sept. 17, 2019) (finding diligence where the plaintiffs amended their 5 infringement contentions to include previously undisclosed and nonpublic information, including 6 technical details supporting existing theories). 7 II. Prejudice 8 Finally, I find that permitting amendment will not prejudice Archer. First, because Wisk 9 was diligent in moving to amend and in notifying Archer of its amendments, there is no prejudice 10 for lack of diligence. See Synchronoss Techs., 2018 WL 5619743 , at *6. Second, as described 11 above, Wisk’s amendments do not change its underlying infringement or DOE theories, and so 12 there is no prejudice on that basis. See Oppo. 16:19-22, 19:8-27; cf. Apple Inc., Ltd., 2012 WL 13 5632618, at *3. And third, despite Archer’s reasonable argument to the contrary, Wisk’s 14 amendments do not significantly change its contentions from accusing the aircrafts to accusing the 15 component parts. In fact, Wisk’s initial contentions for the ’033 and ’833 patents mostly 16 described the infringing aspects of the battery system and the boom-mounted rotors, not the 17 aircrafts as a whole. See, e.g., Mot. Ex. B at pdf 5-12, 14-19, 21-30, 33-43, 46-54, 56-65, 70-79, 18 84-91 (referring almost exclusively to the battery system); Mot. Ex. D at pdf 6, 27 (initial 19 allegation concerning details about “[e]ach of the six booms of the Maker aircraft”); see also Mot. 20 2 at n.2.4 The amendments merely clarify which technology is being accused of infringement. 21 Archer’s strongest argument for prejudice is that the parties already participated in claims 22 construction and the Markman hearing, and so adding anything new to the claims prejudices 23 Archer by precluding future claims construction. See Oppo. 14:21-15:27. But there is no hard and 24 fast rule precluding parties from amending infringement allegations after the claims have been [26] 4 For this reason, there is no prejudice to Archer from Wisk amending its cover pleadings to clarify that its allegations refer to the technology used in Midnight. And with respect to Archer’s [27] contentions that Wisk’s changes to the cover pleading affect the ’036 Patent in this suit, Wisk 1 construed by the court. See Vasudevan Software, Inc. v. Int’l Bus. Machs. Corp., No. C09-05897 2 RS HRL, 2011 WL 940263 , at *3 (N.D. Cal. Feb. 18, 2011). To the extent that Archer believes 3 any of the amended language in the claims needs to be construed, it may file a motion to do so. 4 See id. (citing Pressure Prods. Med. Supplies, Inc. v. Greatbatch Ltd., 599 F.3d 1308 , 1315-16 5 (Fed. Cir. 2010) (“[D]istrict courts may engage in a rolling claim construction.”)); see also Nuance 6 Commc’ns, Inc., 2012 WL 2427160 , at *2 (noting that if additional discovery or claims 7 construction were needed after amendment, the party may request to reopen discovery). And even 8 though an additional claims construction hearing could theoretically delay this case’s schedule, see 9 Karl Storz Endoscopy Am., 2016 WL 2855260 at *3 (noting that a disruption in the case’s 10 schedule may constitute prejudice), at this point I am not convinced another construction hearing 11 will be necessary. Though Archer stated in its papers that it will now need additional claims 12 construction to properly defend itself from “new” theories, Wisk asserts the same theories as 13 found in the original contentions, and the terms relevant to those theories have already been 14 construed. See Order on Claims Construction [Dkt. No. 258]; see also Imping, Inc., 2022 WL 15 2125133, at *2 (“[B]ecause the [patent-in-suit] has already been asserted against earlier 16 functionally similar versions of [a newly added product], amendment will not require identifying 17 additional prior art.”). 18 While Archer argues that it is prejudiced by having to defend against infringement 19 contentions before it has finalized production of Midnight, 20 see Oppo. 14:13-20, as described above, the alleged infringing components 21 are apparently sufficiently finalized. Archer may assert as a defense that its products do not (or no 22 longer) use the allegedly infringing technology. But that argument can be made at the next stage 23 of litigation. 24 CONCLUSION 25 Wisk’s Motion for Leave to Amend its Infringement Contentions is GRANTED. 26 Wisk’s and Archer’s Motions to File Under Seal, Dkt. Nos. 311, 321, 332, are GRANTED 27 because they meet the compelling reasons standard, as they contain sensitive, confidential 1 information about parties and trade secrets.* See In re Midland Nat’! Life Ins. Co. Annuity Sales 2 || Pracs. Litig., 686 F.3d 1115, 1119 (9th Cir. 2021). 3 IT IS SO ORDERED. 4 Dated: October 4, 2022 \ 6 ® liam H. Orrick 7 United States District Judge [11] gq 12 Oo [17] Z 18 [26] 27 \Is The unredacted version of this order has also been filed under seal. The parties are cautioned 28 that some of the purportedly secret information was mentioned by counsel at the public hearing on this motion. Regardless, much of it will likely become public when this case proceeds to trial.