Free Redacted Document - District Court of Delaware - Delaware

Case 1:04-cv—00833-KAJ Document 124-9 Filed 10/05/2005 Page 1 014
EXHIBIT 12

' Case 1:04-cv—00833+KAJ Document 124-9 Filed 10/05/2005 Page 2 of 4
i./*
Not Reported in F.Supp.2d Page 1
Not Reported in F.Supp.2d, 2002 WL 598457 (D.Del.)
(Cite as: 2002 VVL 598457 (D.Del.)) -
H Thomson also filed a motion for a sixty—day .
extension of time to "amend [its] pleadings to add .
Motions Piondings and Filings counts relating to [the] newly added [Gemstar]
parties."
Only the Westlaw citation is currently available.
( On January 7, 2002, Thomson filed its "Second
Amended Answer and Counterclaims and Third Party
United Stntos Distdct Conn, D_ Doioworo Complaint." On February 1, 2002, Gemstar moved to
PEO ASUS DEVELOPMENT CORPORATION and dismiss Thomson's second amended counterclaims.
PERSONALIZED MEDIA COMMUNICATIONS, Subsequently, on March l, 2002, Thomson sought
L_L_C_, leave to amend its second amended answer and
Pinintiffsi counterclaims and third-party complaint. |FNl|
v_ Thomson's motion proposes the following changes to
Diruacrv, mc., Hughes Electronics Corporation, its eeimteielaims arid third-paiiy eemplaimr (I)
Thompson Consumer Electronics, U f€0fg&I1iZ(:1ti0!1 ofthe facts and claims Set forth in the
Inc., ood Philips Electronics North America allesaiimis, (2) additierial detail siippertiiig
Corporation, Dcfcndants. Thomson's allegations as to how the
THOMSON MULTIMEDIA, 1NC·’COuntcrplaintit`i" counterdefendants have violated the antitrust laws,
v_ and (3) a restatement of its claims to cure any alleged
PEG ASUS DEVELOPMENT CORPORATION, defects in its pleading. The Gemstar parties are the
Porsonoiizod Modia Cornrminiontions) L_L_C_’ only parties that oppose this motion. For the reasons
TVG_PMC, Inon Starsigiit Toiooasti Inc', and that follow, the court will grant Thomson's motion.
Gemstar-TV Guide International,
Inc., Countcrdcfcndantsi @ Although the motion is entitled
No_ CIV•A_ 00_I020_(;MS_ "Thomson's motion for leave to amend its
second amended answer and counterclaim
ApI·i1l8,2002` and third party complaint," Thomson has
indicated that it is seeking only to amend its
MEMORANDUM AND ORDER counterclaim and third party complaint.
SLEET, District J. II- DISCUSSION
I_ INTRODUCTION Federal Rule of Civil Procedure l5ta[ provides that
leave to amend shall be freely given when justice so
*1 On December 4, 2000, the piorotirfo, Pegasus requires- See
Dovoionmont Corporation iiipogosnsv) and ( 1962 Q. Following this mandate, the Third Circuit has
Porsonaiizod Modin Communications, LLC (··PMC··)’ routinely held that leave to amend should be freely
mod the above-oopuoood action ouogaog poroot granted when pleadings laek the requisite faehial
infringement. Specifically, Pegasus and PMC allege SPcclttcttY fer a Particular causc of acttclr Sea
that each defendant has willfully infringed seven
patents ovmed or licensed exclusively by PMC and Sac atm
Pcgasuso at *8 (D.Del. Oct. 27, 1992) (citing cases). Indeed,
( "[t]he clearest cases for leave to amend are correction
On November 27 200], tho dofondnnt Thomson of an insufficient claim or defense and amplification
Multimedia, Ino_ (··ThomSon··) Sought Ioovo to add of previously alleged claims or defenses." Teeven,
third-parties Gemstar-TV Guide Intemational, Inc., · Notwlthstalldlllg BEE
StarSight Telecast, Inc., ooo rvo-1>Mc, ioo. this bread appliealieii eeims may deiiy leave ie
(collectively ··oomotor··) to tho oooo. At that umo, ameiid where they hiid "imdiie delay, had faith dr
Thomson also tiled a pleading entitled, "First ditatcry m9ttVc crl thc part of the m9VaIIt» ralacatad
Amended Answer and Counterclaim and Third Party failure to curc deheieiieies bY amcrldmcllts
comp1oiot.·· Along with this amended piooomg, tiieyieiisly allewed. imdiie pieiiidiee ie the eppesiiig
© 2005 Thomson/W est. No Claim to Orig. U.S. Govt. Works.

Case 1:04-cv—00833-KAJ Document 124-9 Filed 10/05/2005 Page 3 of 4
Not Reported in F.Supp.2d Page 2
Not Reported in F.Supp.2d, 2002 WL 598457 (D.Del.)
(Cite as: 2002 WL 598457 (D.Del.))
party by virtue of allowance of the amendment, [and] Pension Fund v. North Philadelphia Health Sys.,
futility of amendment .... " Foman, 371 U.S. at 182.,In 1999 WL 236606, at *2 §E.D. Pa. April 21, 1999). To
its opposition to this motion, Gemstar first argues that satisfy this burden, Gemstar must do more than
Thomson has continuously acted improperly with merely claim prejudice. See id. Instead, Gemstar
regard to its Gemstar claims, begirming with adding "must show that it was unfairly disadvantaged or
Gemstar as a counterdefendant in November 2001. deprived of the opportunity to present facts or
The court disagrees. It was not until September 14, evidence which it would have offered had the
2001 that the plaintiffs identified sixteen claims from amendments been timely." Id. (citing Bechtel v.
the patents that it was asserting against Thomson. Robinson, 886 F.2d 644, 652 (3d Cir.l989)).
Moreover, it was not until October 15, 2001 that the "Prejudice does not result merely from a party's ‘
plaintiffs set forth their infringement contentions having to incur additional counsel fees; nor does it
conceming these claims. Thomson maintains that result from a delay in the movement of a case."
these infringement contentions clearly rely on Pension Fund, 199 WL 236606, at *2 (citing Adams
functionality that falls squarely within an exclusive v. Gould, Inc ., 739 F.2d 858, 869 (3d Cir.1984)t.
field of use that Gemstar admittedly has licensed Rather, prejudice under Rule 15 "means undue
from PMC. difficulty in prosecuting [or defending] a lawsuit as a
result of a change in tactics or theories on the part of
*2 Less than a month after receiving the plaintiffs' the other party." Pension Fund, 1999 WL 236606, at
contentions, Thomas sought, and was granted, leave Q (citing Dealggne v. Commissioners ot Lewes, 416
to add Gemstar as a party based on the license F.2d 290, 300t3dCir.1990[).
defense. Furthermore, Thomson argues that it needed
additional time to review the plaintiffs "voluminous" On the facts before it, the court concludes that
document production. Thus, when Thomson sought Gemstar has failed to demonstrate how it would be
leave to add Gemstar as a defendant, it prejudiced if the court were to grant Thomson
simultaneously tiled a motion for a sixty-day permission to amend. Indeed, nowhere does Gemstar
extension for leave to add additional claims against explain how it was "deprived of the opportunity to
Gemstar. The court granted the motion, thereby present facts or evidence." See Pension Fund, 1999
giving Thomson until January 7, 2002 to file WL 236606, at *2. Nor does Gemstar explain how it
additional claims against Gemstar. Accordingly, would suffer "undue difficulty" in defending against
Thomson timely filed its second amended Thomson's claims in the face of an amendment. See
counterclaim on January 7, 2002. On these facts, id. Indeed, the only prejudice Gemstar has asserted is
Gemstar's charges that Thomson acted in bad faith or that it has incurred, and will incur, attomey's fees in
with dilatory intent in adding Gemstar as a party are briefmg the motions to dismiss. |FN2| The law is
baseless. clear, however, that "prejudice does not result merely
from a party's having to incur additional counsel fees
Gemstar next relies on statements made by L .... " Id., see also Adams, 739 F.2d at 869.
Thomson's counsel at the December 5, 2001 office
conference. Specifically, on that date, Thomson's @2; The court notes, however, that it
counsel stated that, "we can live with an early appears that Gemstar filed substantially
January date by which we either amend, that we similar motions to dismiss in the pending
should make any amendments based on the MDL cases as well.
documents we currently have access to." Gemstar
reads this statement as precluding Thomson from *3 Furthermore, given the current stage of the
tiling any additional pleadings in this action. proceedings, the court finds no indication of any
However, based on the transcript of that conference, prejudice to Gemstar that would result from the grant
the court concludes that the issue of whether of this amendment. The Markman schedule remains
Thomson should be permitted to seek leave to amend in flux. The fact that this case may be transferred to
in the future was not before the court at that time. the MDL Court in Atlanta, Georgia creates further
Thus, to read such a broad meaning into Thomson's uncertainty with regard to the schedule. Additionally,
i statements at that conference would be improper. at least several months of discovery remain in this
case, and no duplicative discovery will be necessary
Gemstar further argues that it will suffer undue as a result of Thomson's proposed amended
prejudice if the court were to grant Thomson's counterclaims. Given the fact that Thomson is not
motion. Gemstar bears the burden of proving that seeking to add new claims, there is ample time for
actual prejudice will result from an amendment. See Gemstar to conduct discovery on Thomson's
© 2005 Thomson/W est. No Claim to Orig. U.S. Govt. Works.

Case 1:04-cv—00833-KAJ Document 124-9 Filed 10/05/2005 Page 4 of 4
Not Reported in F .Supp.2d Page 3
Not Reported in F.Supp.2d, 2002 VVL 598457 (D.Del.)
(Cite as: 2002 VVL 598457 (D.Del.))
counterclaims. (D.Del.)
Finally, Gemstar contends that this will be Motions, Pleadings and Filings t§ack to top)
Thomson's third amended pleading. As such, I
Gemstar is of the opinion that, because Thomson was · l:00cv0l020 (Docket)
unable to cure the defects twice before, it should not (Dec. 04, 2000)
be given another bite at the pleading apple. While the
. court is sympathetic to this argument, it concludes END OF DOCUMENT -
that Gemstar has overstated Thomson's earlier
actions. Thomson first filed an answer to the
complaint on January 22, 2001, when it was arguably
unclear whether Gemstar's license would be invoked.
In November 2001, when it became clear to Thomson
that it should include Gemstar in this action, it did so.
Thereafter, on January 7, 2002, it amended its answer _
again in light of relevant new information it had l
discovered. The January 7, 2002 pleading is the first
time the antitrust allegations appear. Thus, Thomson
has, in fact, had no opportunity to correct any
pleading defects or to amplify its allegations with
regard to the antitrust issues.
In granting Thomson's motion, the court is
particularly mindful that one of Thomson's objectives
in amending its pleading is to survive Gemstar's
motion to dismiss. In that motion, Gemstar argued,
among other things, that the allegations in Thomson's
existing pleading were "vague and unsupported."
Allowing an amendment which purports to rectify
this alleged fatal defect in a pleading is surely in the
interest of justice. See Kiser v. General Elec. Corg .,
831 F.2d 423, 427 j3d Cir.l987) (rejecting the
approach that pleading is a game of skill in which
one misstep by counsel my be decisive to the
outcome, when the Federal Rules clearly accept that
the purpose of pleading is to facilitate a proper
decision on the merits.)
III. CONCLUSION
For the foregoing reasons, the court will grant
Thomson's motion to amend. |FN3|
@3, Because the court has found no
evidence of reckless and indifferent conduct
on Thomson's part which would warrant the
. imposition of sanctions, it need not address .
Gemstar's request for sanctions.
Therefore, IT IS HEREBY ORDERED that:
l. Thomson's motion for leave to amend (D.l.232) is
GRANTED.
Not Reported in F.Supp.2d, 2002 WL 598457
© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.

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