By Cheryl Beise, J.D.
Claims asserted by Anza Technologies in a second amended complaint against Mushkin, Inc., were not time-barred because they related back to the complaint originally filed in another district.
The federal district court in Denver erred in dismissing Anza Technology’s second amended complaint in its infringement suit against Mushkin, Inc., as time-barred, the U.S. Court of Appeals for the Federal Circuit has held. Adopting a logical relationship-type test for the relationship back doctrine for amendment of claims under Federal Rule of Civil Procedure 15(c), the Federal Circuit held that "in determining whether newly alleged claims, based on separate patents, relate back to the date of the original complaint, we will consider the overlap of parties, the overlap in the accused products, the underlying science and technology, time periods, and any additional factors that might suggest a commonality or lack of commonality between the two sets of claims." Anza’s claims regarding infringement of six accused products arose out of the same transaction or occurrence, and therefore, related back to the date of Anza’s original complaint filed in a California district court, which had severed and transferred the claims. However, the Federal Circuit remanded the case to the district court for further factual findings regarding whether the infringement claims relating two new accused products named in the latest complaint arose out of the same transaction or occurrence (Anza Technology, Inc. v. Mushkin, Inc., August 16, 2019, Bryson, W.).
On March 28, 2017, Anza Technology, Inc., ("Anza") sued Mushkin, Inc., dba Enhanced Network Systems, Inc., ("Mushkin") for patent infringement in the Eastern District of California. Anza asserted infringement of independent claims 1, 14, and 16 of Anza’s U.S. Patent No. 7,124,927 ("the ’927 patent"), entitled "Flip Chip Bonding Tool and Ball Placement Capillary." The ’927 patent relates to "dissipative and insulative ceramic flip chip bonding tools and capillaries for ball placement for bonding electrical connections." On September 6, 2017, Anza filed its first amended complaint, which joined Avant Technology, Inc., as a co-defendant. The California district court severed Anza’s claims against Mushkin and transferred the case against Mushkin to the District of Colorado.
Following the transfer, Anza served infringement contentions against Mushkin pursuant to the District of Colorado’s Local Patent Rules 4 and 5. The infringement contentions accused Mushkin of directly infringing claims 1 and 14, but did not refer to claim 16. During the course of mediation, Mushkin provided Anza with a declaration of Mushkin’s president describing the technology used by Mushkin as noninfrigning. Based on the declaration, the district court granted Mushkin’s motion to dismiss. Anza filed a second amended complaint ("SAC") on June 8, 2018. Anza removed the infringement allegations regarding the ’927 patent and alleged infringement of two new patents: U.S. Patent Nos. 6,354,479 ("the ’479 patent") and 6,651,864 ("the ’864 patent"). The ’479 and ’864 patents, entitled "Dissipative Ceramic Bonding Tip" and "Dissipative Ceramic Bonding Tool Tip," respectively, claim priority to the same U.S. provisional application as the ’927 patent. The district court granted Mushkin’s motion to dismiss, ruling that the new infringement claims were barred by the six-year statute of limitations in the Patent Act, 35 U.S.C. § 286. The district court held that the claims did not "relate back" to the date of the original complaint under Rule 15(c)(1)(B) of the Federal Rules of Civil Procedure. Anza appealed.
Governing law. The court first held that Federal Circuit law, rather than regional circuit law, governs whether newly alleged claims in an amended complaint relate back to the date of the original complaint when the new claims are based on newly asserted patents. The court explained that a procedural issue that is not itself a substantive patent law issue is nonetheless governed by Federal Circuit law "if the issue pertains to patent law."
Standard of review. The court next addressed the parties’ dispute regarding the standard governing Federal Circuit review of a district court’s application of the relation back doctrine. Anza argued that the court should apply the de novostandard of review applicable to dismissals under Fed. R. Civ. P. 12(b)(6). Mushkin contended that the district court’s ruling on the relation back issue should be reviewed under the abuse of discretion standard applicable to amendments under Rule 15(c).
The Federal Circuit decided to adopt the approach used by the majority of its sister circuits—that de novostandard applies when reviewing decisions regarding whether an amended pleading relates back to the date of the original pleading. The Federal Circuit explained that a determination of whether an amended claim "arose out of the conduct, transaction, or occurrence" set forth in the original complaint requires the reviewing court to apply the legal standard of Rule 15(c) "to a given set of facts," a task appellate courts are no less suited to perform than district courts. Of course, the district court’s factual findings are reviewed for clear error.
Relation back doctrine. The Federal Circuit noted that the Supreme Court has interpreted the relation back doctrine liberally, to apply if an amended pleading "relate[s] to the same general conduct, transaction and occurrence" as the original pleading. Tiller v. Atl. Coast Line R.R. Co., 323 U.S. 574, 580–81 (1945). The court explained that this notice-based "same transaction or occurrence" standard in Rule 15(c) is similar to the liberal "logical relationship" standard used for evaluating counterclaims under Rules 13(a) and joiner under Rule 20(a). In the patent context, the logical relationship test considers such factors as the overlap of parties, products or processes, time periods, licensing and technology agreements, and product or process development and manufacture.
Adopting a logical relationship-type test for the relationship back doctrine, the Federal Circuit held that "in determining whether newly alleged claims, based on separate patents, relate back to the date of the original complaint, we will consider the overlap of parties, the overlap in the accused products, the underlying science and technology, time periods, and any additional factors that might suggest a commonality or lack of commonality between the two sets of claims."
Anza’s SAC. The court described and considered the key question in this case: "whether the general factual situation or the aggregate of operative facts underlying the original claim for relief gave notice to Mushkin of the nature of the allegations it was being called upon to answer."
On appeal, Anza challenged the district court’s conclusion that the SAC did not relate back to the date of the original complaint. Anza argued that the ’864, ’479, and ’927 patents all seek to solve the same problem—avoiding damage to delicate devices as a result of an electrostatic discharge ("ESD")—and that the three patents all employ the same solution to address that problem—using dissipative ceramic tips on the bonding tools. Anza also maintained there was a significant overlap of properties between the two sets of accused Mushkin products.
While the patents address different bonding techniques, they all share the same underlying technology, the Federal Circuit determined. Specifically, all three patents are focused on solving the same problem by the same solution, using a bonding tool tip made of a dissipative material having a resistance low enough to prevent the discharge of a charge to a device being bonded and high enough to avoid current flow to that device. Moreover, Mushkin’s use of bonding tool tips made of a dissipative material was the basis for the infringement alleged in each of the complaints. The technological overlap between the patents and the accused products suggested that "the aggregate of operative facts underlying infringement under the ’927 patent in the original complaint gave notice of the substance of the claims of infringement under the ’479 and ’864 patents in the second amended complaint," the court said. "Contrary to the district court’s conclusion, proving infringement would only require evidence that certain bonding tools were used, not evidence as to how those tools were used."
The Federal Circuit observed that both complaints alleged infringement of "method of use" claims under 35 U.S.C. § 271(g), such that the allegations infringement in both the old and new claims would entail activities conducted by upstream manufacturers, defeating Anza’s argument regarding differences. Anza’s other arguments pointing out differences between its complaints were also unavailing. For example, the omission of ten of the original 16 accused products in the SAC had no prejudicial effect on Mushkin and did not deprive Mushkin of notice of any new allegations.
The Federal Circuit concluded that the claims arose out of the same conduct, transaction, or occurrence. The court held that the claims in the second amended complaint that relate to the six originally accused products—the Redline, Blackline, Radioactive, Silverline, Proline, and Essentials products—relate back to the date of the original complaint under Rule 15(c). The district court’s grant of Mushkin’s motion to dismiss as to those products was reversed. However, there were factual issues regarding the two remaining products, the Ridgeback and Apple products, which Anza added for the first time in it SAC. The district court’s order dismissing the claims as to these two products was vacated and the case remanded for further factual findings under the Federal Circuit’s relating back standard.
The case is No. 2019-1045.
Attorneys: Colby Brian Springer (Polsinelli LLP) for Anza Technology, Inc. D. Scott Hemingway (Hemingway & Hansen LLP) for Mushkin, Inc.
Companies: Anza Technology, Inc.; Mushkin, Inc.
MainStory: TopStory Patent FedCirNews
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