Case 5:16-cv-06925-LHK Document 170 Filed 02/06/18 Page 1 of 10
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`TWILIO, INC.,
`Plaintiff,
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`v.
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`TELESIGN CORPORATION,
`Defendant.
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`Case No.16-cv-06925-LHK (SVK)
`
`
`ORDER DENYING TELESIGN'S
`MOTION FOR LEAVE TO AMEND ITS
`INVALIDITY CONTENTIONS
`Re: Dkt. No. 161
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`
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`Twilio, Inc. (“Twilio”) filed this patent infringement action on December 1, 2016, alleging
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`that TeleSign Corporation’s (“TeleSign”) products infringe its patents. ECF 1. Pending before
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`the Court is TeleSign’s second motion for leave to amend its invalidity contentions. ECF 161.
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`This time around, TeleSign seeks leave based on the Court’s October 13, 2017 claim construction
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`order. ECF 137. Having carefully considered the parties’ submissions, and having had the benefit
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`of oral argument on January 30, 2018, the Court denies TeleSign’s second motion for leave to
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`amend its invalidity contentions for the reasons set forth below.
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`I. RELEVANT BACKGROUND
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`TeleSign seeks leave to amend in light of the Court’s construction of the term “REST API”
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`in October 2017. ECF 161 at 6. The REST API term has been the subject of a great deal of
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`discussion by both parties and their experts since at least June 2017. Those discussions in general
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`provide important context for TeleSign’s second motion. There are two references in particular
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`that have figured prominently in the REST API discussions: 1) The dissertation of Dr. Roy
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`Fielding (the “Fielding dissertation”), published in 2000; and 2) The textbook RESTful Web
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`Services by Richardson and Ruby (“the REST Textbook”), published in 2007, which TeleSign
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`now seeks to add as prior art.
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`A summary of the parties’ attention to the REST API term is helpful.
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`On June 6, 2017, Twilio served proposed constructions of claim terms on TeleSign,
`including a proposed construction of REST API. Twilio’s June 6th proposed construction was:
`“An application programming interface that is operable with the Representation State Transfer
`(REST) conventions.” ECF 93-8 at 8. As extrinsic evidence in support of its June 6th proposed
`construction, Twilio listed “Newton’s Telecom Dictionary (22nd Ed. 2006).” Id. Newton’s
`Telecom Dictionary defines REST as “[a] term coined by Roy Fielding in his Ph. D. dissertation
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`to describe an architecture style of networked systems . . .” ECF 105-14 at 5 (excerpt of Newton’s
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`Telecom Dictionary submitted with Twilio’s Opening Claim Construction Brief).
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`On July 14, 2017, TeleSign filed its first motion to amend its invalidity contentions
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`arguing, in part, that based on Twilio’s June 6, 2017 proposed construction of REST API,
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`TeleSign would need to add its own products as predating technology. ECF 93 at 17-18.
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`TeleSign also argued that “considering Twilio’s construction of ‘REST API’ and ‘URI’ as well as
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`Twilio’s characterization of ‘REST’ in its response to TeleSign’s interrogatory and Twilio’s
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`damages contentions, TeleSign has identified for the first time 35 U.S.C. § 103 arguments that it
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`now includes in [its proposed amendments].” ECF 93 at 17.
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`On August 7, 2017, TeleSign deposed Twilio’s expert, Dr. Kevin Almeroth and used the
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`REST Textbook that it now seeks to add as prior art as an exhibit to the deposition. See ECF 110-
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`2 at 3 (Exhibit 5, the REST Textbook), 40 (questioning of Dr. Almeroth on Exhibit 5). During the
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`deposition, TeleSign referenced a Dr. Almeroth declaration which identified the REST Textbook.
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`ECF 110-3 at 40; ECF 105-8 (Dr. Almeroth’s reply declaration, signed July 27, 2017). The
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`exhibit TeleSign used during the deposition contained the first 105 pages of the REST Textbook,
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`and TeleSign questioned Dr. Almeroth about specific pages in the book. ECF 110-2 at 40.
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`Further, Dr. Almeroth referenced Dr. Fielding’s definition of REST, including the four constraints
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`ultimately adopted by the Court, no less than seven times. See ECF 110-2 at 9, 22-23, 27-28, 30,
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`46.
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`On August 18, 2017, the Court allowed TeleSign to amend its invalidity contentions. ECF
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`109 at 8. The Court found TeleSign had not been diligent in seeking leave to amend its
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`contentions, but because of the early stage of the case and the absence of prejudice from
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`Case 5:16-cv-06925-LHK Document 170 Filed 02/06/18 Page 3 of 10
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`amendment at that time, the Court granted TeleSign leave to amend. ECF 109 at 4-8. In finding a
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`lack of diligence, the Court stated:
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`The Court is not persuaded that Twilio’s preliminary (but not
`“new”) construction for “REST API” broadens the universe of prior
`art available to challenge the validity of the ‘376 patent. Rather, it
`appears that TeleSign had as much support for the challenge before
`Twilio’s proffered construction as after. At oral argument,
`TeleSign’s counsel acknowledged that REST is “not as well
`defined” as SOAP, and that when looking to how people in the art
`define RESTful and REST, there are competing definitions on
`whether SOAP can be operable with REST. ECF 106. This is as true
`today as it was when TeleSign served its contentions on May 1st.
`Therefore the Court finds that TeleSign has not demonstrated the
`requisite diligence in support of its amendment.
`ECF 109 at 7-8.
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`The Court allowed TeleSign to amend its invalidity contentions to include the following
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`contentions about REST and obviousness:
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`Depending on claim construction, and/or to the extent that
`TeleSign’s early use is found not to expressly disclose “wherein the
`call router API is substantially a Representational State Transfer
`(REST) API,” such functionality is inherent to the prior art in that it
`is necessarily present and would be so recognized by those of skill
`in the art. In addition, it is obvious that a call router API is
`substantially a Representational State Transfer (REST) API. Indeed,
`a skilled artisan would understand that there are a finite number of
`identified, predictable solutions, namely, embedding zero, some or
`all state into URIs of a call router to achieve a reasonable
`expectation of success in responding to an API request directed at
`such URIs. Further, one skilled in the art would be aware of various
`well-known, potential REST design principles, such as statelessness,
`thereby rendering this claim limitation obvious, in addition to other
`expert opinions relating to the obviousness of this claim.
`ECF 119-3 at 83.
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`In claim construction briefing the parties submitted competing definitions for REST API:
`TeleSign’s Proposed Construction
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`Twilio’s Proposed Construction
`An application programming interface that is
`operable with the Representation State
`Transfer (REST) conventions. ECF 105 at 11.
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`Indefinite
`Alternatively:
`A programmatic communication interface
`using a varying level of statelessness. ECF 110
`at 10.
`In its opening claim construction brief filed on August 14, 2017, Twilio discussed the four
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`constraints from the Fielding dissertation. ECF 105 at 12. On August 27, 2017, TeleSign filed its
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`responsive claim construction brief, arguing that the term REST was indefinite. ECF 110. In
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`doing so, TeleSign cited extrinsic evidence including specific pages from the Fielding dissertation
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`(see ECF 110 at 13; ECF 110-3 at ¶¶ 33, 37, citing pages 4 and 79 of the Fielding dissertation) and
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`the REST Textbook (see ECF 110 at 13-14). TeleSign attached excerpts of the REST Textbook to
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`its brief including pages 16-17 (Chapter 1), 29-31 (Chapter 2), and 79-81 (Chapter 4). ECF 110-5.
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`The Court held a Markman hearing on October 5, 2017, during which the Court indicated
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`it would adopt Twilio’s definition, modified to include the four constraints set out by the Fielding
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`dissertation. ECF 161-3 at 5:7-11. On October 13, 2017, the Court issued its claim construction
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`order defining REST API as follows:
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`that complies with
`interface
`[A]n application programming
`Representational State Transfer (REST) interface constraints, which
`are: identification of resources; manipulation of resources through
`representations; self-descriptive messages; and, hypermedia as the
`engine of application state.
`ECF 137 at 42. In its order, the Court rejected TeleSign’s indefiniteness argument, in part because
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`of the extrinsic evidence cited by TeleSign and its expert in both this action and the inter partes
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`review proceedings. ECF 137 at 19-20. In examining the materials submitted by TeleSign, the
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`Court concluded that rather than proving that REST API is a subjective term that could be applied
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`inconsistently by skilled artisans as TeleSign argued, the evidence and the experts demonstrated
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`that there was a common understanding of REST at the time of invention. Id. Specifically, the
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`Court relied on the Fielding dissertation and the REST Textbook. ECF 137 at 19-22. The Court
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`acknowledged Fielding’s four constraints as well as other principles of REST that the parties
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`appeared to agree upon including statelessness, the use of HTTP for transport and operation on
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`resources, and that “REST-based architectures and API’s were well known in the art at the time of
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`the filing of the filing of the ‘376 patent.” ECF 20-21 (citing and quoting Telesign’s expert, Dr.
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`Neilson, in support of TeleSign’s inter partes review petition).
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`TeleSign filed its motion to amend its invalidity contentions on December 22, 2017, over
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`two months after the Court’s claim construction order. ECF 161. Arguing that the Court adopted
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`a new construction of REST API, TeleSign seeks leave to 1) Add an obviousness combination
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`based on the REST Textbook; and 2) Submit new charts for a previously disclosed reference in
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`combination with the REST Textbook. ECF 161 at 4. Specifically, within its proposed charts,
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`TeleSign references the REST Textbook pages 13, 14, 18-19 (Chapter 1), 54 (Chapter 3), 81, 83,
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`84, 86-87, 94-95, 97 (Chapter 4), 217-218 and 221 (Chapter 8).
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`II. LEGAL STANDARD
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`Pursuant to the Northern District of California’s Patent Local Rules, parties exchange
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`infringement and invalidity contentions early in a case. See Patent Local R. 3. The contentions are
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`not a mere formality but rather a requirement “to eliminate the gamesmanship of hints in favor of
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`open disclosure.” Largan Precision Co, Ltd. v. Genius Elec. Optical Co., No. 13-CV-02502-JD,
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`2014 WL 6882275, at *4 (N.D. Cal. Dec. 5, 2014). Amendment of infringement contentions or
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`invalidity contentions may be made only by order of the Court upon a timely showing of good
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`cause. “[A]s a general rule, mistakes or omissions are not by themselves good cause.” Karl Storz
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`Endoscopy-Am., Inc. v. Stryker Corp., No. 14-CV-00876-RS (JSC), 2016 WL 2855260, at *3
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`(N.D. Cal. May 13, 2016) (internal citation and quotation omitted). Non-exhaustive examples of
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`circumstances that may, absent undue prejudice to the non-moving party, support a finding of
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`good cause include:
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`(a) A claim construction by the Court different from that proposed
`by the party seeking amendment;
`(b) Recent discovery of material, prior art despite earlier diligent
`search; and
`(c) Recent discovery of nonpublic information about the Accused
`Instrumentality which was not discovered, despite diligent efforts,
`before the service of the Infringement Contentions.
`Patent Local R. 3–6.
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`Whether a party has been diligent requires a two-step inquiry: “(1) diligence in
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`discovering the basis for amendment; and (2) diligence in seeking amendment once the basis for
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`amendment has been discovered.” Monolithic Power Sys., Inc. v. Silergy Corp., No. 14-1745-VC
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`(KAW), 2015 WL 5440674, at *2 (N.D. Cal. Sept. 15, 2015). “In considering the party’s
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`diligence, the critical question is whether the party could have discovered the new information
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`earlier had it acted with the requisite diligence.” Radware Ltd. v. F5 Networks, Inc., No. C-13-
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`02021-RMW, 2014 WL 3728482, at *1 (N.D. Cal. 2014). If the court determines that the moving
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`party was not diligent, the inquiry may end there. See Acer, Inc. v. Tech. Properties Ltd., No.
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`Case 5:16-cv-06925-LHK Document 170 Filed 02/06/18 Page 6 of 10
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`5:08-CV-00877 JF/HRL, 2010 WL 3618687, at *5 (N.D. Cal. Sept. 10, 2010). However, the court
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`retains discretion to grant leave to amend even in the absence of diligence so long as there is no
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`prejudice to the opposing party. See, e.g., Apple, Inc. v. Samsung Elecs. Co., No. CV 12–00630
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`LHK, 2012 WL 5632618, at *5–6 (N.D. Cal. Nov. 15, 2012); U.S. Ethernet Innovations, LLC v.
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`Acer, Inc., No. 10–cv–3724 CW, 2013 WL 5609325, at *3 (N.D. Cal. Oct. 11, 2013).
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`III. DISCUSSION
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`a. The Court’s modification of the proposed construction of REST API does not
`provide good cause under the facts of this case.
`As a preliminary matter, the Court’s construction of REST API does not automatically
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`provide the requisite good cause that TeleSign urges. While a new construction adopted by a
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`court can provide good cause, here, the Court’s construction of REST API is not new. Rather the
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`Court modified the construction proposed by Twilio by adding clarifying language from a
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`reference well known to and oft-cited by both parties. ECF 137 at 22 (“Having determined that
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`claim 1 is not indefinite, the Court finds that a modified version of Twilio’s proposed construction
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`best reflects the proper construction of ‘REST API.’”) (emphasis added). A modified construction
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`may still provide good cause where the Court inserts new language into a construction. See Tech.
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`Properties Ltd. LLC v. Canon Inc., No. 14-3643 CW (DMR), 2016 WL 1360756, at *4 (N.D. Cal.
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`Apr. 6, 2016) (allowing amendment where the court introduced a new phrase into the construction
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`that was never proposed by either party). However, the facts of this case mitigate against good
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`cause to amend notwithstanding the Court’s modified construction.
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`The definition of REST API has long been at issue, and the very language adopted by the
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`Court has been examined closely by the parties and their experts since early in this case. See
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`supra Section I. In the face of this evidence, TeleSign argues that it could not have anticipated the
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`Court’s construction and to hold otherwise would require a party to assemble massive variations
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`of contentions, anticipating all conceivable constructions. ECF 166 at 6; ECF 167. TeleSign’s
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`fears are overblown, particularly in light of the specific facts in this case, examined more closely
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`below. Indeed, far from having to amass countless potential contentions, TeleSign merely had to
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`look to its own briefs, evidence, and expert’s opinion to address the Fielding constraints in a
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`Case 5:16-cv-06925-LHK Document 170 Filed 02/06/18 Page 7 of 10
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`timely fashion.
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`i. The Fielding Dissertation
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`TeleSign argues that it should be permitted to amend its contentions in light of the four
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`“new” constraints added by the Court’s construction of REST API. See ECF 161 at 9-10. These
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`four constraints adopted by the Court come, verbatim, from the Fielding dissertation which states:
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`“REST is defined by four interface constraints: identification of resources; manipulation of
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`resources through representations; self-descriptive messages; and, hypermedia as the engine of
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`application state.” ECF 137 at 19 (the Court’s claim construction order quoting from page 82 of
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`the Fielding dissertation). In TeleSign’s first motion for leave to amend, TeleSign pointed to
`Twilio’s June 6th proposed construction of REST API. See ECF 93 at 10, 17. Twilio’s June 6th
`proposed construction referenced “Newton’s Telecom Dictionary (22nd ed. 2006),” which
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`explicitly relies on the Fielding dissertation in defining REST. ECF 93-8 at 8; ECF 105-14 at 5.
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`In its reply brief, TeleSign complains that a reference to the Fielding dissertation alone could not
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`have been enough to put TeleSign on notice regarding the four constraints because the Fielding
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`dissertation includes 150 pages on the topic of REST. ECF 166 at 9.
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`However, the Court’s construction is not the first time these particular constraints were
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`brought to TeleSign’s attention. At the August 7, 2017 deposition of Dr. Almeroth, Twilio’s
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`expert identified Dr. Fielding’s four constraints as the four “principles” that define REST and
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`proceeded to mention those four principles in response to several questions on how to identify
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`REST. ECF 110-2 at 9, 22-23, 27-28, 30, 46. The four constraints were again identified by
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`Twilio in its opening claim construction brief (ECF 105 at 12), and then referenced by TeleSign in
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`its response (ECF 110 at 15). TeleSign’s expert Dr. Nielson also closely examined the Fielding
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`dissertation, including a citation to a page in the same chapter as the identification of the four
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`constraints. Compare ECF 110-3 at ¶ 37 (citing Chapter 5, page 79 of the Fielding dissertation)
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`with ECF 105 at 12 (citing Chapter 5, page 82 of the Fielding dissertation for the four constraints).
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`The Fielding constraints inserted by the Court have been the focal point of REST API contentions
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`and argument since Twilio first pointed to them in June 2017 and are not new to this case or to
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`Case 5:16-cv-06925-LHK Document 170 Filed 02/06/18 Page 8 of 10
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`TeleSign.1
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`ii. The REST Textbook
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`Similarly, the “newly identified” prior art that TeleSign seeks to add to its invalidity
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`contentions is not art that TeleSign identified as a result of the Court’s construction. Troublingly,
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`TeleSign does not state when it first discovered the REST Textbook, published in 2007. TeleSign
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`has been in possession of the REST Textbook, and closely examined it, at least as early as
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`preparations for the deposition of Dr. Almeroth on August 7, 2017. See ECF 110-2 at 40
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`(TeleSign used the REST Textbook as an exhibit during Dr. Almeroth’s deposition). TeleSign
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`relied on the REST Textbook in its claim construction briefing submitted on August 28, 2017.
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`ECF 110 at 13. Significantly, in its claim construction brief, TeleSign included excerpts from the
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`same chapters of the REST Textbook that it now seeks to add to its charts. Compare ECF 110-5
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`(TeleSign’s Exhibit D to its claim construction brief with pages from Chapters 1 and 4) with ECF
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`161-10 (TeleSign’s proposed amendment to invalidity chart citing pages from Chapters 1 and 4).
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`In light of the foregoing, this Court is not persuaded that the Court’s modified construction
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`of REST API provided a new light in which to view the REST Textbook. Instead, it appears that
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`TeleSign, by its motion to amend, is seeking to correct its failure to timely recognize the
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`significance of the REST Textbook, which is insufficient to establish good cause for amendment.
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`See Icon-IP Pty Ltd. v. Specialized Bicycle Components, Inc., No. 12-CV-03844-JST, 2014 WL
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`5361643, at *3 (N.D. Cal. Oct. 20, 2014) (denying leave to amend where the party had possession
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`of the documents it sought to add but did not recognize the significance of the documents until
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`later).
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`//
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`//
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`//
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`1 It appears from the record in this case that TeleSign’s objective in focusing on the Fielding
`constraints was to argue that the term REST API is indefinite. But whatever TeleSign’s purpose,
`it was well aware of precisely the constraints adopted by the Court long before the Court issued its
`claim construction order.
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`Case 5:16-cv-06925-LHK Document 170 Filed 02/06/18 Page 9 of 10
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`iii. TeleSign could have raised the proposed amendments in its first motion
`to amend invalidity contentions.
`Furthermore, it appears that TeleSign could have and should have identified the REST
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`Textbook in its invalidity contentions when it first moved to amend in July 2017. When TeleSign
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`amended its invalidity contentions in July, TeleSign added a 35 U.S.C. § 103 argument. See ECF
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`93 at 17. Specifically, TeleSign added the following key language, “one skilled in the art would
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`be aware of various, well-known, potential REST design principles, such as statelessness, thereby
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`rendering this claim limitation obvious. . .” ECF 119-3 at 83. Thus in July, TeleSign made
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`arguments regarding the invalidity of Twilio’s patents based on the fact that REST principles, as
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`understood in the art, rendered certain patent claims obvious. Indeed, in his declaration submitted
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`in inter partes review proceedings, TeleSign’s own expert acknowledged that REST-based
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`architectures were “well known in the art at the time of filing the ‘376 patent.” ECF 115-3 at ¶ 61.
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`The amendments TeleSign now seeks are simply an expansion of its July 14, 2017 amendments.
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`In particular, TeleSign seeks leave to apply its obviousness arguments to more claims using a
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`textbook that was as available and as relevant in July as it was after the Court’s October claim
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`construction order. Therefore, this Court finds that the Court’s claim construction order does not
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`provide good cause to allow amendment where the prior art TeleSign seeks to add was relevant
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`and available at the time of Telesign’s first motion to amend.
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`b. TeleSign was not diligent and therefore the Court does not reach prejudice.
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`Not only does the Court’s construction order not provide the requisite good cause TeleSign
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`urges, but against this backdrop TeleSign has not been diligent in seeking amendment. Even
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`assuming, for the sake of argument, that the claim construction order was a catalyst for a motion to
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`amend, TeleSign waited over two months to file its motion. In some cases, this length of time
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`may demonstrate diligence, but here, where, as discussed at length above, the term is not new and
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`the art is not newly discovered, TeleSign was not diligent in seeking amendment. See Apple, Inc.
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`v. Samsung Elecs. Co., No. 11-CV-01846-LHK, 2012 WL 1067548, at *5 (N.D. Cal. Mar. 27,
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`2012) (Court denied leave to amend where party waited nearly two months but had identified the
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`prior art before the Court issued its claim construction order). Further, although the Court
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`previously allowed amendment where more than nine months remained in discovery (ECF 109 at
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`Case 5:16-cv-06925-LHK Document 170 Filed 02/06/18 Page 10 of 10
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`8), here, discovery closes in three months. Because TeleSign has not been diligent in seeking
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`amendment, the Court does not reach the question of prejudice but acknowledges that it is late in
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`the case to be seeking amendment of invalidity contentions. Therefore, the Court denies
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`TeleSign’s second motion to amend its invalidity contentions.
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`IV. CONCLUSION
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`Given this history of the term REST API in this case, TeleSign has not established good
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`cause for leave to amend its invalidity contentions. Furthermore, TeleSign has not been diligent in
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`seeking its amendment or discovering the basis for the amendment. As such, the Court denies
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`TeleSign’s request for leave to amend its invalidity contentions.
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`SO ORDERED.
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`Dated: February 6, 2018
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`SUSAN VAN KEULEN
`United States Magistrate Judge
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