UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
IN RE PAPST LICENSING GMBH & CO. KG
LITIGATION
Misc. Action No. 07-493 (RMC)
MDL Docket No. 1880
This Document Relates To:
Papst Licensing GmbH & Co. KG v. Samsung
Techwin Co., et al., Civ. No. 07-2088 (D.D.C.)
MEMORANDUM OPINION DENYING PAPST’S MOTION TO AMEND COMPLAINT
In this Multi District Litigation (“MDL”), Papst Licensing GmbH & Co. (“Papst”)
has alleged that digital camera manufacturers that sell products in the United States have infringed
U.S. Patent Nos. 6,470,399 and 6,895,449 (collectively the “Patents”). In opposition, the camera
manufacturers seek a declaratory judgment of non-infringement and/or patent invalidity.1
1
This litigation currently consists of First and Second Wave Cases. The “First Wave Cases”
currently are: Fujifilm Corp. v. Papst, 07-cv-1118; Matsushita Elec. Indus. Co., Ltd. v. Papst, 07-cv-
1222; Papst v. Olympus Corp., 07-cv-2086; Papst v. Samsung Techwin Co., 07-cv-2088; Hewlett
Packard Co. v. Papst, 08-cv-865; and Papst v. Nikon Corp., 08-cv-985. The “First Wave Camera
Manufacturers” include: Fujifilm Corporation; Fujifilm U.S.A., Inc.; Fujifilm Japan; Matsushita
Electric Industrial Co., Ltd.; Victor Company of Japan, Ltd.; Olympus Corporation; Olympus
Imaging America Inc.; Samsung Techwin Co.; Samsung Opto-Electronics America, Inc.; Panasonic
Corporation of North America; JVC Company of America; Hewlett-Packard Company; Nikon
Corporation; and Nikon, Inc. The “Second Wave Cases” are: Papst v. Canon, 08-cv-1406; Papst
v. Eastman Kodak, 08-cv-1407; Papst v. Sanyo, 09-cv-530. The “Second Wave Camera
Manufacturers” include: Canon, Inc.; Canon USA, Inc.; Eastman Kodak Company; Sanyo Electric
Co., Ltd; and Sanyo North America Corporation. At the time this Court gained jurisdiction over the
Second Wave Cases, the First Wave Cases were on the eve of the September 2008 claims
construction hearing. Because no discovery had been conducted in the Second Wave Cases, those
cases could not be addressed in the claims construction hearing. Rather than put the First Wave
Cases on hold for an extended period while the Second Wave Cases conducted discovery and caught
One of the underlying lawsuits that was transferred to this MDL is Papst Licensing
GmbH & Co. KG v. Samsung Techwin Co., Civ. No. 07-2088 (D.D.C.) (“Papst v. Samsung
Techwin”). In that case, Papst brought suit against Samsung Techwin Co. and Samsung Opto-
Electronics America, Inc. alleging that they made, used, or sold digital cameras that infringed the
Patents. Papst now moves to amend the complaint in Papst v. Samsung Techwin to add three
additional parties: Samsung Electronics Co. Ltd., Samsung Electronics America, Inc., and Samsung
Telecommunications America, LLC. Papst also seeks to amend the complaint to allege that
additional products infringe the Patents, namely camcorders, camera phones, and MP3 players/voice
recorders. As explained below, the proposed amendment would greatly prejudice the opposing
parties and thus the motion to amend will be denied.
I. FACTS
In June of 2007, Papst brought suit against Korea-based Samsung Techwin Co.
(“Techwin”) and its U.S. subsidiary, Samsung Opto-Electronics America, Inc. (“Opto-Electronics”)
in the Central District of California. See Papst Licensing GmbH & Co. KG v. Samsung Techwin Co.,
No. 07-4249 (C.D. Calif.). Venue was transferred to the District of New Jersey. See Papst
Licensing GmbH & Co. KG v. Samsung Techwin Co., 07-4940 (D.N.J.). The MDL Panel transferred
the case into this MDL on November 5, 2007. See Papst Licensing GmbH & Co. KG v. Samsung
Techwin Co., 07-2088 (D.D.C.), MDL Transfer Order [Dkt. #1]. Papst alleged that the Techwin and
Opto-Electronics infringed the Patents by “making, using, offering to sell or selling within the United
States and/or importing into the United States, including this judicial district, digital cameras”
covered by the Patents. See id., Compl. [Dkt. #3-1].
up, the Court stayed the Second Wave Cases. The Second Wave Cases currently remain stayed. See
Seventh Practice and Procedure Order [Dkt. # 391].
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Early in this litigation, on April 8, 2008, the Court entered a scheduling order
requiring that motions to join third parties or to amend the pleadings be filed by June 25, 2008. See
Second Practice & Pro. Order [Dkt. # 36 ] ¶ 19. In November of 2008, the Court stayed discovery.
See Minute Order filed Nov. 13, 2008.
Subsequently, in February of 2009, Techwin transferred its digital camera business
to Samsung Digital Imaging Co., which in turn merged its digital camera business into Korea-based
Samsung Electronics Co. Ltd. on April 1, 2010. Samsung Digital Imaging Co. then ceased to exist
as a separate entity. On October 4, 2010, Papst moved for leave to file a first amended complaint.
Papst seeks to add three parties to the Papst v. Samsung Techwin case: Samsung Electronics Co.
Ltd. and its U.S. subsidiaries, Samsung Electronics America, Inc. and Samsung Telecommunications
America, LLC. (all three collectively “the Samsung Electronics entities”). Papst also moves to
amend the complaint to allege that, in addition to digital cameras, the following products infringe
the Patents: camera phones, camcorders, and digital voice recorders/MP3 players. Techwin, Opto-
Electronics, and the First Wave Camera Manufacturers oppose.
II. LEGAL STANDARD
Papst erroneously contends that this matter is governed by Federal Rule of Civil
Procedure 15(a), which provides that a leave to amend should be freely granted “when justice so
requires.” Fed. R. Civ. P. 15(a). Under this standard, a court may deny a motion to amend if it finds
“undue delay, bad faith or dilatory motive on part of the movant, repeated failure to cure deficiencies
by amendments previously allowed, [or] undue prejudice to the opposing party.” Foman v. Davis,
371 U.S. 178, 182 (1962).
Because Papst seeks leave to amend which deviates from a court-ordered deadline,
the more stringent good cause standard imposed by Federal Rule of Civil Procedure 16(b) applies.
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The good cause standard under Rule 16(b) applies after the deadlines set forth in a scheduling order
have passed. Lurie v. Mid-Atlantic Permanente Medical Grp., P.C., 589 F. Supp. 2d 21, 23 (D.D.C.
2008) (relying on numerous circuit courts). “To hold otherwise would allow Rule 16’s standards
to be ‘short circuited’ by those of Rule 15 and would allow for parties to disregard scheduling orders,
which would ‘undermine the court’s ability to control its docket, disrupt the agreed-upon course of
the litigation, and reward the indolent and the cavalier.’” Id. at 23 (quoting Leary v. Daeschner, 349
F.3d 888, 906 (6th Cir. 2003)). Rule 16(b) provides that a court may enter a scheduling order that
limits the time to amend the pleadings and that such schedule may be modified only for good cause
and with the judge’s consent. Fed. R. Civ. P. 16(b)(4) (emphasis added). The Second Practice and
Procedure Order that set the June 25, 2008 deadline for joining third parties and amending the
pleadings recited this rule. See Second Practice & Pro. Order [Dkt. # 36] (“This schedule shall not
be modified, even where all parties consent, except upon a showing of good cause and by leave of
the Court.”). To show good cause under this Rule, the moving party must show both diligence and
a lack of prejudice to the opposing parties. See Robinson v. Detroit News, Inc., 211 F. Supp. 2d 101,
114 (D.D.C. 2002) (motion to amend denied due to undue delay); Leary, 349 F.3d at 906 (to
determine whether good cause has been shown, a court must consider the issue of prejudice).
IV. ANALYSIS
A. Diligence
Papst was not diligent in moving to amend the complaint in Papst v. Samsung
Techwin. The Techwin spin off of its digital camera business in February 2009 was a matter of
public knowledge. Papst knew about it and mentioned the fact in a hearing before the Court on July
14, 2009. However, Papst did not file its motion to amend until October 2010, more than a year
later. See, e.g, Monolithic Power Sys., Inc. v. 02 Micro Internat’l Ltd., Civ. No. 08-4567, 2009 WL
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3353306, *2 (N.D. Cal. Oct. 16, 2009) (finding that 02 Micro was not diligent because it had the new
information on the proposed accused products three months before it filed its motion to amend its
infringement contentions); Realtime Data, LLC v. Packeteer, Inc., Civ. No. 08-144, 2009 WL
2590101, *5 (E.D. Tex. Aug. 18, 2009) (waiting nine months after serving the original infringement
contentions to seek leave to amend is not a reasonable period of time). “With a lawsuit of great
complexity, it is all the more imperative to avoid springing new claims on Defendants at a late
stage.” Realtime Data, 2009 WL 2590101 at *6.
B. Prejudice
1. Addition of New Parties
Even if Papst were timely, the Court must consider the prejudice to other parties and
its obligation to manage its docket. Techwin and Opto-Electronics would be greatly prejudiced by
the addition of three additional parties this late in the case. The Samsung Electronics entities are
entities separate and apart from Techwin and Opto-Electronics. They have separate management
and separate product lines. Any alleged liability of Techwin and Opto-Electronics stopped accruing
in February of 2009 when Techwin transferred its digital camera business to Samsung Digital
Imaging Co. The actions of the three Samsung Electronics entities have no bearing on the claims
and defenses in Papst v. Samsung Techwin. If three new parties were added to the case, they would
need sufficient time to review the last three years of litigation. Even if the Court were to add them
to the Second Wave cases, the presence of the new parties in Papst v. Samsung Techwin would
prevent an early appealable disposition with regard to Techwin and Opto-Electronics because a
disposition with regard to only some of the parties to a case is not appealable without a certification
under Federal Rule of Civil Procedure 54(b). “Absent Rule 54(b) certification, there may be no
appeal of a judgment disposing of fewer than all aspects of a consolidated case.” Spraytex, Inc. v.
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DJS&T, 96 F.3d 1377, 1382 (Fed. Cir. 1996) (citing Fed. R. Civ. P. 54(b)).
Moreover, Papst v. Samsung Techwin appears close to a final disposition. That case
is confined to 95 camera models. Some of those models are SLR cameras, which were manufactured
and sold by Techwin and Opto-Electronics under an agreement with Papst’s licensee, Pentax.
Techwin and Opto-Electronics allege that those SLR cameras cannot infringe the Patents because
they are licensed. Also, Techwin and Opto-Electronics allege that the remainder of their cameras
lack a “second connecting device”as construed by the Court in the Modified Markman Opinion, and
thus they do not infringe the Patents. See Modified Claims Construction Op. [Dkt. # 336]; Modified
Order [Dkt. # 337]. At this juncture, it appears that the disposition of Papst v. Samsung Techwin
could be imminent. To permit the addition of new parties at this late stage would prevent a final
ruling and the delay would prejudice Techwin and Opto-Electronics.
B. Addition of New Product Categories
Techwin, Opto-Electronics, and the First Wave Camera Manufacturers have shown
prejudice regarding the request to amend to add product categories. This MDL has been pending
since November 5, 2007, i.e., over three years. When the MDL Panel transferred this litigation to
this Court, the suit included the following five cases:
1. Casio, Inc. v. Papst Licensing GmbH & Co. KG, D.D.C. No. 06-1751;
2. Fujifilm Corp. v. Papst Licensing GmbH & Co. KG, D.D.C. No. 07-1118;
3. Papst Licensing GmbH & Co. KG v. Olympus Corp., D. Del. No. 07-415 (07-2086
(D.D.C.));
4. Papst Licensing GmbH & Co. KG v. Fujifilm Corp., N.D. Ill. No. 07-3401 (07-2087
D.D.C.) ; and
5. Papst Licensing GmbH & Co. KG v. Samsung Techwin Co., D.N.J. No. 07-4940
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(previously C.D. Calif. No. 07-4249) (07-2088 D.D.C.).
See MDL Transfer Order [Dkt. # 1]. The MDL Panel determined that “[t]he actions involve
common factual allegations regarding digital cameras made by certain manufacturers, which Papst
claims infringe two of its patents; the validity and enforceability of these patents is at issue in all five
actions." Id. (emphasis added). The MDL Panel titled the litigation “In re Papst Licensing Digital
Camera Patent Litigation.” In sum, venue for these cases was transferred here because these cases
all involved the question of whether digital cameras infringe the Patents.
Since the inception of this MDL, the Court and the parties have proceeded believing
that the products at issue were digital cameras. Specifically, Papst’s complaint against Techwin and
Opto-Electronics alleges that they infringed the Patents by “making, using, offering to sell or selling
within the United States and/or importing into the United States, including this judicial district,
digital cameras . . . .” See, e.g., Civ. No. 07-2088 (D.D.C.), Compl. [Dkt. #3-1] ¶¶ 9 & 17. Further,
the September 3, 2008 tutorial hearing, held in preparation for claims construction, was focused
exclusively on digital cameras. The parties chose the terms for claims construction with an eye
toward how such claims terms would apply to digital cameras. The Court held a claims construction
hearing September 22 through 24, 2008, and rendered its final claims construction opinion and order
on November 24, 2009. See Modified Claims Construction Op. [Dkt. # 336]; Modified Order [Dkt.
# 337].2 A great deal of discovery has been completed with a focus on digital cameras. When
discovery was stayed in November 2008, there were fewer than six weeks remaining for fact
discovery on liability.
2
The Modified Claims Construction Opinion and Order were issued upon reconsideration
and replaced the original opinion and order filed on June 12, 2009. See Op. [Dkt. # 312]; Order
[Dkt. # 313].
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Adding new product categories — camera phones, camcorders, and digital voice
recorders/MP3 players — this late in the case would significantly expand and delay the litigation
against Techwin and Opto-Electronics, especially since these product categories are not
manufactured or sold by Techwin or Opto-Electronics, but are only produced and sold by the
Samsung Electronics entities.
It should also be noted the new product categories that Papst wishes to add are
product categories that were made or sold by the Samsung Electronics entities long before the June
2008 deadline for adding new parties or amending the pleadings in this MDL. Papst could have
brought suit against the Samsung Electronics entities well before the deadline imposed by this Court.
The fact that Papst did not do so demonstrates that even Papst understood that this MDL was
centered on digital cameras and not on other products.3
Techwin and Opto-Electronics would be greatly prejudiced by the addition of new
parties and products to Papst’s suit against them. Even if litigation efficiencies promote the addition
of new cases to this MDL, Papst v. Samsung Techwin should be permitted to move forward
unencumbered by new parties who sell new product categories.
IV. CONCLUSION
As explained above, Papst’s motion for leave to file a first amended complaint in the
Samsung case [Dkt. # 377] will be denied. A memorializing Order accompanies this Memorandum
Opinion.
3
This point also goes to the issue of diligence. Because Papst could have brought suit against
the Samsung Electronics entities even before the June 2008 deadline for adding third parties and
amending pleadings, its attempt to bring new parties and new claims into the suit against Techwin
and Opto-Electronics two and a half years later does not constitute diligence.
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Date: February 1, 2011 /s/
ROSEMARY M. COLLYER
United States District Judge
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