In early 2018, Simpson Strong-Tie Company, Inc. (“Simpson”) filed a declaratory judgement action against Defendant-Patentee OZ-Post International, LLC (“OZCO”).  Simpson had received a “demand letter” from OZCO that identified Simpson’s Outdoor Accents structural wood screw and hex-head washer ([1], [2]):

During the course of negotiating proposed claim constructions in December 2018, OZCO discovered that Simpson was proposing constructions that, if adopted, would limit direct infringement to instances where Simpson or its agents assembled the accused products.  As a result, OZCO inquired with Simpson about amending its infringement contentions to allege indirect infringement.  Simpson objected but acknowledged that “the discovery cutoff [was not] looming.”

Nearly two months later, on February 5, 2019, OZCO moved to amend its infringement contentions to allege indirect infringement.  OZCO argued that it diligently pursued its amendments since December 2018 when it realized it had mistakenly failed to include indirect infringement allegations in its infringement contentions, but OZCO also acknowledged that its proposed amendments were not based on new information that it could not have discovered with reasonable effort.  Judge Orrick found that OZCO was “partly diligent and partly not diligent,” so the question “c[a]me down to prejudice.”[3]  Judge Orrick found that Simpson would not be prejudiced because the timing of events showed that OZCO’s motion was not strategic, nor was it a reaction to any unfavorable rulings.  Rather, Judge Orrick found that OZCO made an “honest mistake,” realized its mistake early in discovery, and acted promptly to correct it.[4]  Nevertheless, Simpson should not have to bear the cost of OZCO’s mistake and Judge Orrick ordered OZCO to pay Simpson’s attorneys’ fees for opposing the motion to amend.

Simpson Strong-Tie Company, Inc. v. OZ-Post International, LLC, Case No. 3:18-cv-01188-WHO (Dkt. 89, April 1, 2019).


Endnotes:

[1]  https://www.strongtie.com/accessories_outdooraccents/sdws-dbb_screw/p/outdoor-accents-structural-wood-screw.

[2]  https://www.strongtie.com/accessories_outdooraccents/stn_washer/p/outdoor-accents-hex-head-washer.

[3]  Simpson Strong-Tie Company, Inc. v. OZ-Post International, LLC, Case No. 3:18-cv-01188-WHO, Dkt. 89 at 5 (N.D. Cal. April 1, 2019).

[4]  Id.