Plaintiff Power Integrations, Inc. ("Power Integrations" or "PI") filed a patent infringement action against Defendants Fairchild Semiconductor Int'l, Inc., Fairchild Semiconductor Corp. (collectively, "Fairchild") and System General Corp. ("System General"). Power Integrations is a manufacturer of power conversion integrated circuit devices, which are used in power supplies for electronic devices such as cellular phones, LCD monitors and computers.

Fairchild filed a Second Amended Answer and Counterclaims, which included the '700 patent, entitled "Control Circuit With Adaptive Minimum On Time for Power Converters" for the first time. The District Court issued its Claim Construction Order construing various terms in the '700 patent on May 6, 2013.

As explained by the district court, "[o]n July 1, 2013, Fairchild informed PI of its intent to amend the infringement contentions in view of the Court's Claim Construction Order. Jt. Ltr. at 1, Dkt. No. 230. Fairchild served the proposed contentions on July 10, 2013, which led to the current dispute. Id., Ex. B. (Fairchild's Proposed '700 Patent Infringement Contentions). Fairchild argues that good cause exists for it to amend its infringement contentions in light of the Court's recent Claim Construction Order, which provided four claim constructions different from those proposed by Fairchild. Jt. Ltr. at 1. Fairchild further argues that it acted diligently in seeking leave to amend approximately 60 days after the Court's Order construing the '700 Patent claims. Id. at 3. Fairchild contends that its amendments do not prejudice PI because the Order largely reflected positions advanced by PI, and there is therefore little doubt that fact discovery, including non-infringement and invalidity assessments, was conducted with these positions in mind. Id. Finally, Fairchild argues that its timely service of its technical expert report on the '700 patent on July 19, 2013, incorporating each of these infringement positions, further negates any claim of prejudice as PI has ample time to analyze the contentions and to fully respond in its responsive expert report. Id."

The district court also explained that Power Integrations argued that "Fairchild's eleventh hour attempt to amend its infringement contentions is improper, reflects a lack of diligence, and will significantly prejudice Power Integrations." Id. The district court explained that "PI contends that Fairchild could have readily addressed the proposed constructions adopted by the Court in a timely manner, because the constructions were plainly spelled out months ago in the parties' joint claim construction submission filed in January. Id. at 4. PI further argues that Fairchild's revisions are not limited to claim terms construed in the Court's Order and that Fairchild's "wholesale expansion of its infringement theories" raises completely new factual issues after the close of fact discovery. Id. at 5. PI contends that these expansive allegations would have changed its discovery strategy and prior art investigation. Id."

After discussing the general law pertaining to amendment of infringement contentions, the district court was "not persuaded by Fairchild's assertion, without explanation, that seeking leave to amend its infringement contentions within two months establishes diligence on its part. Accordingly, as Fairchild has not shown any reasonable basis for its delay, the Court finds no indication that it acted diligently. See Apple I, 2012 WL 1067548, at *5 (motion denied when party waited "nearly two months" and failed to explain delay)."

The district court next addressed the issue of prejudice and found there would also be prejudice to Power Integrations if the amendments were allowed given the close of discovery and the proximity of summary judgment motions. "'Infringement contentions serve as substitutes for interrogatories, but they also act as forms of pleading that disclose the parties' theories of their case and thereby shape discovery and the issues to be determined at trial.' Apple II, 2013 WL 3246094, at *3. As discussed above, Fairchild highlights the terms of its proposed constructions and the Court's constructions to show the differences that necessitated its request to amend. However, both parties' constructions were spelled out in the parties' joint claim construction submission filed in January, (Dkt. No. 193), and the Court adopted constructions that followed the reasoning of and did not deviate significantly from the proposed constructions (Dkt. No. 212). Further, infringement contentions are intended to 'shape discovery,' yet discovery in this case closed two months ago and summary judgment motions are due on September 6, 2013, two weeks from now. Dkt. No. 170. Given this, coupled with Fairchild's failure to establish diligence, the Court finds that PI would be prejudiced if the Court permitted Fairchild to amend its contentions."

Accordingly, the district court found that Fairchild had not established its diligence in seeking to amend its infringement contentions and Power Integrations would be prejudiced by allowing Fairchild to amend its infringement contentions two months after the close of discovery and two before summary judgment motions were due. Accordingly, the district court denied the motion for leave to amend.

Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., et al., Case No. C 09-5235 MMC (MEJ) (N.D. Cal. Aug. 28, 2013)