Synopsys, Inc. v. Atoptech, Inc., C-13-2965 MMC
| Decision Date | 17 September 2015 |
| Docket Number | No. C-13-2965 MMC,C-13-2965 MMC |
| Court | U.S. District Court — Northern District of California |
| Parties | SYNOPSYS, INC., Plaintiff, v. ATOPTECH, INC., Defendant. |
Before the Court is plaintiff Synopsys, Inc.'s ("Synopsys") "Motion for Leave to File Second Amended Complaint," filed August 6, 2015, pursuant to Rule 15 of the Federal Rules of Civil Procedure. Defendant ATopTech, Inc. ("ATopTech") has filed opposition, to which Synopsys has replied. Having read and considered the papers filed in support of and in opposition to the motion, the Court rules as follows.1
ATopTech and Synopsys sell software tools for the design and testing of integrated circuits ("chips"). Because of the complexity of modern chip design, engineers cannot design the physical layout of a chip without the aid of what is known as "place-and-route"software. Synopsys offers a place-and-route software product, called IC Compiler, which competes with ATopTech's place-and-route software, Aprisa.2
Verification software, also necessary in modern chip design, is used to verify the timing of the electronic signals of an integrated circuit design by testing its electrical and timing performance under various operating conditions. Synopsys offers a verification software product called PrimeTime. Extreme DA was a company that sold a verification software product called GoldTime. In 2011, Synopsys acquired Extreme DA. Although ATopTech does not sell a verification software product, its place-and-route software must be able to work in conjunction with verification software in order to compete in the market.
In the operative complaint, the Amended Complaint, Synopsys asserts seven causes of action, alleging claims for copyright infringement (Count I), patent infringement (Counts II, III, IV, and V), breach of contract (Count VI), and breach of the implied covenant of good faith and fair dealing (Count VII).3 In support of Count I, Synopsys alleges ATopTech had access to its verification software, specifically, its "PrimeTime and GoldTime software and user documentation" (see Am. Compl. ¶ 50), and "copied portions of" that software "in the form of proprietary GoldTime and PrimeTime input and output formats" (id. ¶ 53).4
By the instant motion, Synopsys first seeks leave to amend Count I to add a claim that ATopTech "infringed Synopsys'[s] copyrights by copying input and output formats from Synopsys's competing place-and-route product (IC Compiler)." (Pl.'s Mot. 4:11-17; see also Michael Decl. Ex. A, at 12.) Specifically, Synopsys alleges that ATopTech used the ICCompiler formats in ATopTech's Aprisa software product. Additionally, Synopsys moves to add a count of replevin, by which it seeks "to repossess over 220,000 pages of Synopsys documents" allegedly in ATopTech's possession. (See Pl.'s Mot. 4:18-20; see also Proposed Second Amended Complaint ¶¶ 115-21.)
Leave to amend a pleading shall be "freely give[n] when justice so requires." Fed. R. Civ. P. 15(a)(1)(B).5 Although Rule 15 generally "favor[s]" amendment, "liberality in granting leave to amend is subject to several limitations." Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1160 (9th Cir. 1989). In determining whether to allow amendment, a district court considers four factors: "bad faith, undue delay, prejudice to the opposing party, and futility of amendment." DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987). Such factors are not given equal weight; prejudice to the opposing party is the most important factor, see Eminence Capital, LLC. v. Apseon, 316 F.3d 1048, 1052 (9th Cir. 2002), and delay alone is insufficient reason to deny leave to amend, see Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 1999).
Here, ATopTech does not contend the proposed amendments are futile. The Court thus considers the three disputed factors: bad faith, undue delay, and prejudice.
ATopTech argues that the instant motion is made in bad faith because, according to ATopTech, Synopsys's reason for seeking to amend is to salvage its case in light of astatement made during discovery by Synopsys's Vice President of Sales, which statement, ATopTech asserts, precludes any recovery of damages based on PrimeTime or GoldTime. (See Def.'s Opp. 15.) Synopsys responds that ATopTech's argument is "premised on a fundamental misunderstanding of copyright damages." (See Pl.'s Reply 10:6-7.)
The Court, however, need not resolve the parties' dispute as to the scope of damages at this time, as ATopTech has cited no authority holding a party's state of mind, which, needless to say, could encompass a variety of considerations, is relevant when that party moves to amend to add a claim for which it can articulate factual and legal support. Courts have found bad faith, for example, where a party seeks to amend in order to prolong the litigation "by adding new but baseless legal theories," see Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 881 (9th Cir. 1999), or by filing "repetitious motions," Wood v. Santa Barbara Chamber of Commerce, Inc., 705 F.2d 1515, 1520 (9th Cir. 1983). No such showing has been made here.
Accordingly, the Court does not find the instant motion is made in bad faith, and next turns to the remaining factors.
To assess whether a party has unduly delayed in seeking to amend, the Court looks to "whether the moving party knew or should have known the facts and theories raised by the amendment in the original pleading." AmerisourceBergen Corp. v. Dialysist West, Inc., 465 F.3d 946, 953 (9th Cir. 2006). If, at the time of the initial pleading, the moving party was unaware of the facts underlying the proposed amendment, the Court considers the amount of time that has passed between the time at which the party "obtain[ed] a relevant fact" and the time at which the party "seek[s] a leave to amend." See id. ().
Here, in its proposed replevin claim, Synopsys alleges "ATopTech has made unauthorized copies" of proprietary Synopsys material (Proposed Second AmendedComplaint ¶ 118). In its original complaint, filed June 26, 2013, Synopsys alleged that ATopTech "engaged in unauthorized access to and downloading of proprietary articles, application notes, FAQs, multimedia files, and other documentation describing proprietary details and operation of PrimeTime and IC Compiler." (Pl.'s Am. Compl. ¶ 41.) Thus, at the time of the original pleading, Synopsys knew, or, at a minimum, was on notice as to, "the facts and theories" that form the basis for its proposed replevin claim. See AmerisourceBergen Corp., 465 F.3d at 953.
In any event, ATopTech argues, Synopsys should have discovered both of its new claims by at least November 2013. As evidence in support thereof, ATopTech has submitted a Synopsys slide show presentation dated November 25, 2013, which exhibit, ATopTech argues, shows that, sometime prior to that date, Synopsys became aware of the command names used in Aprisa. (See Alexander Decl. Ex. B, at 1.) The Court agrees. Although Synopsys responds that "[n]one of the command names in that presentation are contained in the list of input formats identified as copied from IC Compiler" (see Suppl. Michael Decl. ¶ 3), the context in which they appear indicates Synopsys would not have had knowledge of those particular command formats without also having knowledge of the command formats that Synopsys now alleges were copied.
Even assuming, arguendo, Synopsys at the time of the above-referenced presentation did not have knowledge of the commands here at issue, ATopTech contends, and Synopsys does not dispute (see Suppl. Michael Decl. ¶ 4), that Synopsys was aware of Aprisa's input and output formats no later than a year later, by November 13, 2014, when ATopTech produced to Synopsys in the course of discovery unredacted versions of Aprisa's Reference Manual and Parameter Guides. Synopsys argues that its delay in reviewing the Manual and Guides is excusable because those materials were marked "Highly Confidential - Restricted to Outside Counsel of Record Only" (id.) and could not be turned over to an expert for analysis. The Court is not persuaded. Although the extent of the alleged copying is not specified in Synopsys's motion or Proposed Second Amended Complaint, both of which refer to the copying of "input and output formats" (see, e.g., Pl.'sMot. 4 (asserting ATopTech infringed Synopsys's copyrights by "copying input and output formats"); Proposed Second Amended Complaint ¶ 54 ()), ATopTech contends, and Synopsys has not disputed, that Synopsys's claim is predicated on an assertion that ATopTech copied the names of, rather than the underlying code for, the formats. (See Def.'s Opp. 5:6-7 (); see also Order, filed March 16, 2015, at 3:7-9, 7:27-8:4 ().) Given the nature of such proprietary material, Synopsys fails to show it needed an expert opinion in order to determine whether it had a claim for copyright infringement based thereon.
Moreover, Synopsys admits that "the facts underlying Synopsys' new allegations . . . surfaced after ATopTech's March 16, 2015 production" of documents (see Pl.'s Mot. 8:20-21), namely, "product manuals, product release notes, and other additional technical documentation for IC Compiler, PrimeTime and other Synopsys products." (Michael Decl. ¶ 5.) As noted, Synopsys did not file its ...
To continue reading
Request your trial