Champion Power Equipment Incorporated v. Firman Power Equipment Incorporated

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Champion Power Equipment Incorporated,
Plaintiff,
v.
Firman Power Equipment Incorporated,
Defendant.
No. CV-23-02371-PHX-DWL
ORDER
Pending before the Court are a pair of related motions: (1) Champion’s motion for
leave to amend its infringement contentions (Doc. 198); and (2) Firman’s motion for leave
to amend its invalidity and unenforceability contentions and its counterclaims (Doc. 176).
Both sides seek permission to add references to a dual-fuel generator that Champion
offered to sell to non-party Cabela’s in October 2014 (hereinafter, “the Cabela’s
generator”). For the reasons that follow, Champion’s motion is denied and Firman’s
motion is granted.
RELEVANT BACKGROUND
I. Montgomery
The individual at the heart of the current dispute is Greg Montgomery. As discussed
in previous orders (Doc. 124), Montgomery occupies a unique role in this litigation. From
2004 to 2014, Montgomery worked for Champion, eventually serving as Champion’s Vice
President of Sales and Business Development. (Doc. 192-1 at 2 ¶ 8; Doc. 198-3 at 7 ¶ 2.)
According to Champion, “Montgomery was actively involved in the marketing and sales
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strategy for Champion’s multi-fuel generators and was aware of their development,
successes, and challenges” and “also provided substantive input on mechanical issues
relating to the multi-fuel technology.” (Doc. 198-3 at 27.) Firman, however, contends that
Montgomery was a mere “salesperson” who “was neither familiar with nor proficient in
the technical details” of the products he was selling. (Doc. 192 at 8-9.)
In 2015, after leaving Champion, Montgomery briefly worked for non-party
Generac Power Systems, Inc. (“Generac”)—a company that Champion has now separately
sued in a patent infringement action pending in the Eastern District of Wisconsin. That
lawsuit has resulted in a number of discovery disputes related to Champion’s attempts to
depose Montgomery. Champion Power Equip. Inc. v. Generac Power Sys. Inc., Case No.
2:25-mc-00015-DWL (D. Ariz.); Champion Power Equip. Inc. v. Generac Power Sys. Inc.,
Case No. 2:25-mc-00037-DWL (D. Ariz.).
Finally, in or around July 2015, Montgomery joined Firman, where he continues to
work and currently serves as the company’s CEO.
II. The Cabela’s Meeting
On September 26, 2014, Montgomery sent an email to several other Champion
employees, including Mark Sarder and Dennis Trine. (Doc. 186-1 [redacted version]; Doc.
214-1 at 3-4 [sealed, unredacted version].) Sarder, who was then a Champion vice
president of engineering, “is a named inventor on the Champion Patents” at issue in this
lawsuit and “has knowledge surrounding the design and development of the technology
underlying the Champion Patents and the inventions disclosed in the Champion Patents.”
(Doc. 176-1 at 67; Doc. 198-3 at 7 ¶ 1.)1 Trine was, and still is, Champion’s CEO. (Doc.
198-3 at 8 ¶ 3; Doc. 198-3 at 10 ¶ 1.) In the email, Montgomery stated that Trine had
“given his blessing to show the Dual Fuel Inverter” to Cabela’s. (Doc. 214-1 at 3.)2 The
1 Sarder stopped working for Champion in 2019. (Doc. 198-3 at 3 ¶ 2.) However,
Sarder has remained available to Champion during this litigation. (See, e.g., id. at 7-8
[declaration from Sarder].) Indeed, Champion’s disclosure statements, which list Sarder
as a witness with knowledge, state that Sarder may be contacted “c/o Snell & Wilmer,”
which is Champion’s counsel in this action. (Doc. 176-1 at 67.)
2 Although this order periodically cites and quotes from sealed documents, the quoted
portions are not competitively sensitive and do not, themselves, meet the sealing standard.
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email also provided various logistical details regarding the planned meeting with Cabela’s,
which was scheduled for October 9, 2014. (Id. at 3-4.)
That same day, Sarder forwarded Montgomery’s email to Trine and two other
Champion employees (while removing Montgomery from the email chain). (Id. at 2-3.)
Sarder stated that he “want[ed] to be on record with [his] concerns,” one of which was
“[t]he patent has not yet been applied for. I hope at minimum we can get a non-disclosure
signed to protect our IP.” (Id. at 2.)3 In response, Trine wondered whether Sarder “really
think[s] there is any IP to protect.” (Id.) Another recipient then recommended, in an email
sent on September 27, 2014, that Sarder attend the Cabela’s meeting because “he can speak
engineer language.” (Id.)
On October 1, 2014, a Champion engineer, Jim Dehn, drafted an internal “Request
for Analysis” regarding the dual-fuel generator that Champion was planning to display
during the “Cabela’s sales visit with Greg Montgomery.” (Doc. 215-1 at 2 [sealed].) This
document includes the following passage: “At first we decided not to send the [dual-fuel
generator] concept to Cabelas because of these (2) reasons,” the first of which was: “the
patent paperwork is not ready and we should not disclose the concept to the public for sale
until the patent application is filed.” (Id.) The next bullet point reads: “On 9/29/14 Dennis
Trine agreed to send the [dual-fuel generator] concept to Cabela’s. The potential to get
into Cabela’s line review is more important than patent protection . . . .” (Id.)
On October 6, 2014, “[a]n internal Champion meeting took place,” which “was
attended by several Champion employees and executives, including Mr. Sarder, Mr.
Montgomery, and [Trine]. At this meeting Mr. Montgomery agreed and acknowledged
that he would acquire the necessary NDA signature from Cabela’s prior to the Cabela’s
meeting.” (Doc. 198-3 at 11 ¶ 8.) Trine then caused another Champion employee “to send
3 Trine’s publicly filed declaration also discusses this recommendation from Sarder.
(Doc. 198-3 at 11 ¶¶ 6-7 [“I was alerted by Champion’s VP of Engineering, Mark Sarder,
on September 26, 2014 that the technology incorporated into the device that Mr.
Montgomery desired to show to Cabela’s on October 9, 2014 had certain features that had
not yet been the subject of a filed patent application. Mr. Sarder recommended to me on
October 1, 2014 that Champion ensure that a [NDA] be executed by Cabela’s prior to such
showing on October 9, 2014.”].)
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Champion’s standard form for an NDA to Mr. Montgomery one hour after the internal
meeting on October 6, 2014.” (Id. at 11 ¶ 9.)
On October 9, 2014, the Cabela’s meeting took place. (Id. at 8 ¶ 5.) The three
attendees from Champion were Montgomery, Sarder, and Scott Stefanik. (Id.)
“Montgomery led the Cabela’s meeting on behalf of Champion,” while Sarder
“demonstrated the Cabela’s generator to approximately six (6) people who [he] was not
familiar with.” (Id. at 8 ¶¶ 6-7.)
At the time, Sarder was under the impression that Montgomery had caused Cabela’s
to sign an NDA before the meeting. (Id. at 8 ¶ 8.) So was Trine. (Id. at 11-12 ¶¶ 10-12.)
III. Relevant Developments During This Case
On November 10, 2023, Champion initiated this action. (Doc. 1.)
On April 16, 2024, Firman served its first set of interrogatories. (Doc. 176-1 at 6.)
Interrogatory No. 4 required Champion to “[i]dentify by name, manufacturer, model
number, and any other identifying indicia each Dual Fuel Engine or Dual Fuel Generator
that Champion . . . (i) sold, (ii) offered for sale, or (iii) used, demonstrated, or disclosed to
anyone (whether or not under a duty of confidentiality) before January 1, 2017, including
an identification of the date and location of each sale/offer for
sale/use/demonstration/disclosure, and all persons involved in or with knowledge of each
sale/offer for sale/use/demonstration/disclosure before January 1, 2017.” (Id. at 9.)
During May and June 2024, in an attempt to respond to Firman’s discovery requests,
Champion engaged in a search for “all multi-fuel generator models sold by Champion and
the related patent marking information and dates of first sale.” (Doc. 198-2 at 88 ¶¶ 2-3.)
Champion “spent at least 15 hours” performing this search, which “identified nearly 100
multi-fuel generators that were sold by Champion” but did not uncover “any documents
related to the meeting between Champion and Cabela’s, Inc. on October 9, 2014.” (Id. at
88 ¶¶ 4-6.)
On June 12, 2024, Champion responded to Firman’s interrogatories. (Doc. 176-1
at 6-24.) In response to Interrogatory No. 4, Champion objected on various grounds,
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including that “the prior sale, offer for sale, use, demonstration, or disclosure of every Dual
Fuel Engine or Dual Fuel Generator is not relevant to any parties’ claims or defenses unless
the Dual Fuel Engine or Dual Fuel Generator practices the inventions claimed in one or
more of the asserted claims of the Patents-in-Suit, thus making it an Embodying Product.”
(Id. at 10.) Champion then added: “Subject to the foregoing objections, and construing
Interrogatory No. 4 as such, Champion has not identified any information indicating that
there was any disclosure, sale, or offer for sale of any Embodying Products before the
priority dates of the Asserted Patents applicable to the Embodying Products.” (Id. at 11.)
June 21, 2024 was Champion’s deadline under the scheduling order to serve its
“Disclosure of Asserted Claims and Infringement Contentions.” (Doc. 33 at 2.) The
scheduling order further specifies that if Champion “asserts or wishes to preserve the right
to rely, for any purpose, on the assertion that its own apparatus, product, device, process,
method, act, or other instrumentality practices the claimed invention, the party must
identify, separately for each asserted claim, each such apparatus, product, device, process,
method, act, or other instrumentality that incorporates or reflects that particular claim.”
(Id. at 3, emphasis added.) In its contentions served on June 21, 2024, Champion did not
identify the Cabela’s generator.
Between July 26, 2024, and August 7, 2024, Champion engaged in a renewed search
of its “records to identify any and all Champion multi-fuel generators, whether previously
disclosed, sold, or offered for sale, that embody elements disclosed in any of Champion’s
patents asserted in” this lawsuit. (Doc. 198-2 at 91 ¶ 3.) “Collectively, Champion team
members spent over 100 hours on this task.” (Id.) It appears that Champion uncovered,
during this search, emails related to the Cabela’s meeting. (Doc. 198-3 at 3 ¶ 3.) As a
result, in August 2024, Champion’s counsel “reviewed Champion documents” related to
the Cabela’s meeting. (Id.) However, Champion contends the documents it uncovered
during this time period lacked the sort of “technical information” necessary “to determine
whether any such generator embodied elements disclosed in any of Champion’s patents
asserted in [this] litigation.” (Doc. 198-2 at 91 ¶ 5.) Champion also contends that, at the
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time it “evaluated the Cabela’s Emails in August 2024,” it “did not know whether the
meeting actually occurred, or, even if it did, Champion believed the meeting was covered
by an NDA.” (Doc. 198 at 11.)
On August 12, 2024, Champion provided its first amended response to Firman’s
interrogatories. (Doc. 176-1 at 31-61.) This amendment was apparently prompted by
Firman’s objection to Champion’s earlier attempt to limit its response to Interrogatory No.
4 to embodying products—in a subsequent meet-and-confer letter, Firman clarified that
“[t]his interrogatory expressly seeks information regarding Champion duel fuel engines
and generators that you contend do not embody the Asserted Patents. These products are
relevant to validity under 35 U.S.C. §§ 102 and 103. Please amend your response to
withdraw the relevance objection and provide the requested information.” (Id. at 27.) In
its first amended response to Interrogatory No. 4, Champion wrote: “Champion did not
sell, offer to sell, use, demonstrate, or disclose any dual fuel engines or dual fuel generators
which are not disclosed in Exhibit A before January 1, 2017.” (Id. at 35.) The Cabela’s
generator was not disclosed in Exhibit A. (Id. at 38-61.)
August 30, 2024 was Firman’s deadline under the scheduling order to serve its
“Noninfringement, Unenforceability, And Invalidity Contentions.” (Doc. 33 at 4.) In its
contentions served that day, Firman did not identify the Cabela’s generator.
On September 27, 2024, Champion produced over 2,300 pages of documents to
Firman. (Doc. 181 at 5; Doc. 192 at 4.) This production included the emails from
September 2014, referenced above, in which Montgomery discussed his plan to “show the
Dual Fuel Inverter” to Cabela’s on October 9, 2014, in which Sarder then went “on record
with [his] concern[]” that “[t]he patent has not yet been applied for,” and in which Sarder
was identified as good presenter at the planned meeting because “he can speak engineer
language.” (Doc. 214-1 at 2-3.)
Between November 19-22, 2024, in response to Rule 45 subpoenas issued by
Firman, “Generac produced 521 Documents spanning 2,525 pages and including thirty-
five native files and numerous emails discussing Generac’s purchase of dual fuel
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generators from at least two different manufacture[r]s.” (Doc. 116 ¶ 9.) One of those
emails, dated April 7, 2015, included Montgomery (who was then working for Generac) as
one of the cc’d recipients. (Doc. 121-2 at 2-3 [sealed].)
On November 26, 2024, Firman notified Champion that it intended to seek leave to
amend its invalidity contentions based on “some of the prior art included in Generac’s
production [which] was not previously discovered by us.” (Doc. 116 ¶ 10.)
On January 7, 2025, Champion hired a third-party IT firm, Consilien, to “run
searches of Champion’s employee email boxes for emails related to Mr. Montgomery’s
involvement in Champion’s dual-fuel generator development prior to his departure from
Champion.” (Doc. 198-3 at 4 ¶ 12.) “Those searches did not include Mr. Montgomery’s
email box.” (Id. at 31 ¶ 5.) After the initial search resulted in limited information,
Champion asked Consilien to run a more exhaustive search, including “unarchiving”
Montgomery’s old Champion email file and including it in the search. (Id. at 4-5 ¶¶ 13-
14, 19; id. at 12 ¶¶ 16-19; id. at 31 ¶ 7-11.) Based on that renewed search, Champion
discovered “similarities between the Cabela’s generator” and certain other generators that
Firman had identified in its November 2024 amended invalidity contentions. (Id. at 4
¶ 17.)
On February 4, 2025, Firman filed a motion for leave to amend its invalidity
contentions “to include four new prior art references,” including prior art references it
discovered for the first time upon receipt of the Generac production in November 2024.
(Doc. 115.)
On February 28, 2025, after Firman’s amendment request became fully briefed
(Docs. 120, 122), the Court issued an order granting it. (Doc. 124.) Among other things,
the Court disagreed with Champion’s argument “that because Montgomery, Firman’s
CEO, was cc’d on the April 2015 email discussing two of the new prior art references at
issue, ‘he obviously had actual knowledge of [them] . . . many years before Firman’s initial
infringement contentions were served, [and] waiting until now to disclose them is the direct
opposite of diligence,’” concluding that although “it is easy in hindsight to fault
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Montgomery for not remembering that email and bringing it to Firman’s attention before
the August 30, 2024 deadline for serving Invalidity Contentions,” “[i]t is perfectly
understandable that Montgomery would not have grasped the significance of (or even
recalled) an email on which he was merely cc’d, while working for a different employer,
nearly a decade earlier, and his failure to do so is particularly inconsequential in light of
the affirmative showing that Firman has made as to the robust, diligent nature of its search.”
(Id. at 6, 9.)
Meanwhile, during February and March 2025, Champion conducted a search for the
NDA that Sarder and Trine had believed was in place at the time of the October 2014
Cabela’s meeting. (Doc. 198-3 at 4-5 ¶ 19.) No executed NDA was ever found. (Id.; id.
at 12 ¶ 14.) This came as a surprise to Sarder and Trine. (Id. at 8 ¶ 8; id. at 12 ¶ 12.)
On March 18, 2025, Champion served its second supplemental disclosure statement.
(Doc. 176-1 at 63-73.) In this document, Champion disclosed, for the first time, that
various witnesses were “expected to have knowledge regarding an October 2014 visit
Champion made to Cabela’s . . . where Champion disclosed and offered for sale a dual-
fuel generator.” (Id.)
On April 18, 2025, Champion served its third amended response to Firman’s
interrogatories. (Id. at 87-94.) This version included the following new statements in
response to Interrogatory No. 4: “Champion employees Mr. Greg Montgomery, Mr. Mark
Sarder, and Mr. Scott Stefaniak publicly disclosed and demonstrated a dual fuel inverter
generator to [Cabela’s] . . . on October 9, 2014 . . . . On June 19, 2014, Champion assigned
[two] engineers . . . to develop a new, dual fuel inverter generator for an upcoming sales
meeting with Cabela’s. . . . On October 9, 2014, Mr. Montgomery, Mr. Sarder, and Mr.
Stefaniak met at Cabela’s in Sidney, NE. They presented the dual fuel inverter generator
at the meeting in an outdoor location next to the public parking lot and a public road leading
to a Cabela’s retail store. After Mr. Sarder demonstrated the dual fuel inverter generator,
those present gathered inside for a presentation. The dual fuel inverter generator remained
in the outdoor location unattended, and in plain view of the public. . . . Mr. Montgomery
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left Champion on December 12, 2014. On December 30, 2014, Mr. Dennis Trine,
Champion’s CEO, made an internal request for an update on the quote (offer for sale) given
to Cabela’s on the dual fuel inverter generator. On January 8, 2015, Mr. Trine had a call
with Mr. Hausmann [from Cabela’s] to reiterate the offer for sale, and to provide an update
on the production of the dual fuel inverter generator shown to Cabela’s in October. Mr.
Hausmann confirmed that Cabela’s would be purchasing that new dual fuel inverter
generator from Champion.” (Id. at 90-92.)
On April 28, 2025, Champion served its fourth amended response to Firman’s
interrogatories. (Id. at 113-23.) This version included, for the first time, an assertion that
“[t]his dual fuel inverter generator”—i.e., the Cabela’s generator—“contained inventions
disclosed in the Asserted Patents.” (Id. at 118.)
On April 29, 2025, Firman objected on the ground that this response failed to
provide sufficient technical details. (Id. at 108.)
On May 6, 2025, after the parties were unable to resolve their dispute informally,
they filed a joint notice of discovery dispute. (Doc. 163.)
On May 7, 2025, the Court held a hearing to address the discovery dispute. (Doc.
167.) At the conclusion of the hearing, the Court ordered Champion to provide new claim
charts related to the Cabela’s generator at the same time it provided certain other claim
charts. (Id. at 14-15.)
On May 21, 2025, Champion provided the claim charts. (Doc. 169.)
On May 29, 2025, Firman provided its proposed amended invalidity and
unenforceability contentions and its proposed amended counterclaims to Champion and
asked if Champion would consent to amendment. (Doc. 176-1 at 223.)
On June 3, 2025, Champion responded by providing its own proposed amended
infringement contentions and clarifying that “it would not oppose Firman’s request if
Firman agreed not to oppose Champion’s similar request.” (Doc. 181 at 2.)
On June 12, 2025, after the parties could not come to an agreement, Firman filed its
pending amendment request. (Doc. 176.) That request is now fully briefed. (Docs. 186,
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192.)
On June 25, 2025, Champion sought to raise its amendment request via a notice of
joint discovery despite. (Doc. 181.)
On July 10, 2025, the Court held a hearing regarding the notice of joint discovery
dispute. (Doc. 190.) At the conclusion of the hearing, the Court stated that it would benefit
from additional briefing before reaching a decision and thus authorized Champion to file a
formal amendment request. (Id. at 48.)
On July 24, 2025, Champion filed its pending amendment request. (Doc. 198.) That
request is now fully briefed. (Docs. 202, 205, 208, 216.)4
DISCUSSION
I. Legal Standard
As noted, the scheduling order set deadlines for Champion to file its infringement
contentions (which also required Champion to identify any embodying product of its own
on which it intended to rely “for any purpose”) and for Firman to file its noninfringement,
unenforceability, and invalidity contentions. (Doc. 33 at 2-4.) Those deadlines expired,
respectively, on June 21, 2024 and August 30, 2024. (Id.)
The scheduling order also specifies the standard for amending either set of
contentions. It provides:
Amendment of the “Disclosure of Asserted Claims and Infringement
Contentions” or the “Noninfringement, Unenforceability, And Invalidity
Contentions” may be made only by order of the Court upon a timely showing
of good cause. Non-exhaustive examples of circumstances that may, absent
undue prejudice to the non-moving party, support a finding of good cause
include: (i) a claim construction by the Court different from that proposed by
the party seeking amendment; (ii) recent discovery of material, prior art
despite earlier diligent search; and (iii) recent discovery of nonpublic
information about the Accused Instrumentality which was not discovered,
despite diligent efforts, before the service of the “Disclosure of Asserted
Claims and Infringement Contentions.” The duty to supplement discovery
responses does not excuse the need to obtain leave of court to amend
4 Although Champion (but not Firman) requested oral argument, the Court concludes
that further oral argument is unnecessary in light of the extended oral argument on July 10,
2025 touching on these issues.
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contentions.
(Id. at 6.)
Moreover, even putting aside this provision in the scheduling order, any request to
modify the deadlines set forth in a scheduling order is governed by Rule 16(b)(4)’s “good
cause” standard. Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 (9th Cir.
1992). This “standard primarily considers the diligence of the party seeking the
amendment.” Id. at 609. “Although the existence or degree of prejudice to the party
opposing the modification might supply additional reasons to deny a motion, the focus of
the inquiry is upon the moving party’s reasons for seeking modification.” Id. “If that party
was not diligent, the inquiry should end.” Id.
Courts in the Northern District of California have further elaborated on how this
standard applies when, as here, a litigant seeks to extend the deadline in a scheduling order
for providing contentions in a patent infringement action. Those decisions are instructive
because the scheduling order in this case is based in significant part on the Northern District
of California’s model scheduling order for patent infringement actions. (Doc. 47 at 5.) As
those courts have explained, “[t]he moving party has the burden of demonstrating good
cause. . . . [T]he good cause inquiry is two-fold, asking: (1) whether the moving party was
diligent in amending its contentions; and (2) whether the non-moving party would suffer
prejudice if the motion to amend were granted.” Karl Storz Endoscopy-Am., Inc. v. Stryker
Corp., 2016 WL 2855260, *3 (N.D. Cal. 2016). “Diligence is the critical issue in the good
cause determination. The diligence required for a showing of good cause has two subparts:
(1) diligence in discovering the basis for amendment; and (2) diligence in seeking
amendment once the basis for amendment has been discovered. The party seeking to
amend its contentions bears the burden of establishing diligence.” Id. (cleaned up).
“Prejudice is typically found when amending contentions stand to disrupt the case schedule
or other court orders.” Id.
…
…
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II. Champion’s Amendment Request
The Court will begin by addressing Champion’s amendment request because the
diligence analysis as to that request is straightforward. Champion was not diligent in
discovering the basis for its amendment request.
Although Champion has offered an array of explanations (which are addressed in
more detail below) for its belated determination that the Cabela’s generator may support
its position in this litigation, the bottom line is that the information necessary to support
this contention has always been available to Champion—it simply failed to perform a
diligent review of its own records and a diligent canvass of its own employees. Many cases
from the patent infringement context recognize the commonsense principle that it is
difficult for a party to establish diligence, for purposes of an amendment request, when
claiming it didn’t know about its own records and products. See, e.g., Aurinia Pharms.
Inc. v. Sun Pharm. Indus., Inc., 2022 WL 3040950, *6 (D.N.J. 2022) (denying portion of
amendment request relating to the plaintiff’s “own practicing product (for which Plaintiff
itself presumably has possessed the relevant information)”); Fox Factory, Inc. v. SRAM,
LLC, 2017 WL 4658063, *2 (N.D. Cal. 2017) (“FOX arguably lacked diligence in seeking
some of its proposed amendments . . . [because] it could and should have known earlier
which of its own products purportedly practice the patents in suit.”); Twilio, Inc. v. TeleSign
Corp., 2017 WL 3581186, *3 (N.D. Cal. 2017) (“TeleSign has failed to establish diligence.
The prior art at issue is TeleSign’s own products . . . . The essential information TeleSign
needed to satisfy the Local Rule was the priority date of the asserted patents and its own
product information. Thus, TeleSign now seeks to include charts based on information
TeleSign, and only TeleSign, has had all along.”); MediaTek Inc. v. Freescale
Semiconductor, Inc., 2014 WL 587098, *1 (N.D. Cal. 2014) (“Magistrate Judge Corley
denied MediaTek’s Motion to Amend Infringement Contentions and determined that
MediaTek had not offered sufficient reasons for its failure to disclose its own product
practicing the claims at an earlier point.”); Silver State Intell. Techs., Inc. v. Garmin Int’l,
Inc., 32 F. Supp. 3d 1155, 1163 (D. Nev. 2014) (“Garmin also has not shown it was diligent
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in amending its contentions following the Court’s claim construction Order. . . . Garmin’s
lack of diligence is particularly egregious with respect to StreetPilot, NavTalk, and
250XL—three of its own products.”); Symantec Corp. v. Acronis Corp., 2013 WL
5368053, *6 (N.D. Cal. 2013) (“This conduct is not diligence. These are Acronis’s own
products—information about their existence and release dates was not a secret. Merely
because Acronis did not initially believe that these products were relevant does not allow
them to now, at the close of fact discovery, argue that they are invalidating prior art . . . .”);
Cardsoft, Inc. v. Verifone Sys., Inc., 2012 WL 12895724, *2 (E.D. Tex. 2012) (“The Court
is not satisfied that VeriFone acted diligently to discover the Omni 300 and OTA prior art.
These references are related to VeriFone’s own products, which it should have uncovered
even if CardSoft never accused the Omni 3200 payment terminals of infringement.”).
For this reason, Champion arguably should have discovered the Cabela’s generator,
and adjusted its litigation strategy accordingly, even before it chose to initiate this lawsuit
in November 2023. Indeed, Firman informed Champion, via pre-lawsuit correspondence,
that Firman intended to rely on Champion’s 2015 sale of the RD9000E as invalidating prior
art. (Doc. 68 ¶ 38 [“Champion admits that Firman sent counsel for Champion a letter on
October 8, 2019 wherein Firman alleged, without any proof, that an older Firman model,
the RD9000E, allegedly had certain features associated with the Champion Patents.”].)
This correspondence underscored the need for Champion, should it hope to raise a defense
under 35 U.S.C. § 102(b) to Firman’s anticipated invalidity counterclaims premised on the
RD9000E, to scour its records for any disclosures or offers for sale of an embodying
product that predated the RD9000E, such as the Cabela’s generator.
Yet even giving Champion the benefit of the doubt regarding its failure to become
aware of the Cabela’s generator until after this case began, Champion displayed a lack of
diligence once it obtained that awareness. Although Champion seemed to represent during
an earlier hearing that it did not become aware of the Cabela’s meeting until mid-February
2025,5 Champion’s counsel has now clarified that he reviewed, in August 2024, the emails
5 During that hearing, Champion’s counsel represented that Champion did not
become aware of Montgomery’s involvement in the Cabela’s presentation until mid-
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regarding the Cabela’s meeting. (Doc. 198-3 at 3 ¶ 3 [“In August 2024, I reviewed
Champion documents from 2014 suggesting that a meeting was being scheduled at
[Cabela’s] in October 2014.”].) Champion then produced those emails to Firman on
September 27, 2024. (Doc. 181 at 6; Doc. 192 at 5.)
Those emails speak for themselves. They reflect that in late September 2014,
Montgomery informed various Champion employees, including Champion’s CEO Trine,
that he would be displaying a dual-fuel generator to Cabela’s on October 9, 2014, which
prompted Sarder to express concern to Trine that this display could create problems
because Champion had not yet applied for a patent. (Doc. 214-1.) Even acknowledging
that “hindsight is often ‘20/20’” and that “perfect diligence” is not required, Fujifilm Corp.
v. Motorola Mobility LLC, 2014 WL 491745, *4 (N.D. Cal. 2014), the potential importance
of these emails should have been apparent to Champion, and triggered immediate further
investigation, given the nature of the claims and defenses in this action.
Champion, however, apparently did not pursue immediate further investigation.
Instead, the record reflects that after uncovering and reviewing the emails in August 2024,
Champion simply produced the emails to Firman about one month later (in September
2024), then waited about another four months (until January 2025) to ask Consilien to start
running searches for additional documents related to Montgomery’s involvement in
Champion’s dual-fuel generator development, then waited a few more weeks (until late
January 2025) to ask Consilien to expand the scope of the search, and then waited another
one or two months (until February and March 2025) to begin looking into whether Cabela’s
had signed an NDA covering the presentation. This was not diligent.
Champion seeks to defend its conduct on the ground that the emails it discovered in
February 2025, after Generac produced documents in response to a Rule 45 subpoena: “So
Generac produced these documents in mid-February [2025]. . . . What was uncovered was
the president of Firman, Greg Montgomery, when he was at Champion, he disclosed this
Cabela’s unit to Cabela’s. He was the lead sales guy who went to Cabela’s to push for this
disclosure, which we had no knowledge about until we saw the Generac documents, which
appeared that Montgomery had violated his employment agreement with Champion.”
(Doc. 167 at 9, emphasis added.) Counsel then added: “[W]hen we saw the Generac
disclosure, . . . we went back and we had additional searches done based on Montgomery
and Cabela's, and then that’s when we discovered this disclosure, this meeting that
happened.” (Id. at 10, emphasis added.)
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August 2024 do not conclusively show the Cabela’s presentation even took place. (Doc.
198 at 11 [“When Champion evaluated the Cabela’s Emails in August 2024, based on
Champion’s investigation to that point and information then in its possession, Champion
did not know whether the meeting actually occurred . . . .”].) This explanation is
unpersuasive for two reasons. First, nothing in the emails suggests the meeting was
tentative—they state that “[t]he meeting will be on Oct 9th from 11am until 2pm,” identify
the expected attendees by name, explain that “we will have lunch brought in while we have
a working meeting,” provide a detailed agenda, and even give the address of the hotel
where Montgomery would be staying the night before. (Doc. 214-1 at 3-4.) Second, and
more important, diligence required Champion, upon learning of the emails, to take prompt
action to inquire further. It was not diligent to remain idle for months based on the
theoretical possibility that the meticulously planned meeting described in the emails
somehow never occurred.
Another of Champion’s proffered justifications for its conduct is that it erroneously
believed, at the time it uncovered the emails regarding the Cabela’s meeting, that the
meeting was covered by an NDA. (Doc. 198 at 12 [“[F]or the Cabela’s generator to serve
as an exception to any prior art, it needed to be a public disclosure. Based on Champion’s
investigation up to August 2024, including its understanding that the Cabela’s meeting,
which it could not confirm at that time even happened, would have been under an NDA,
Champion did not have any reason to believe at that time that it could use the Cabela’s
generator ‘for any purpose,’ as required under Section 5(A)(7) of the CMO.”].) Champion
further contends that “[i]n a case already mired in difficult, complicated issues with over a
dozen patents, hundreds of claims, hundreds of prior art references cited by Firman, and
nearly 100 other embodying products,” it was not required to “chase every rabbit hole.”
(Doc. 205 at 5.)
As an initial matter, the Court agrees with Firman that “[i]t is odd that—after the
parties met and conferred for months, fully briefed a joint discovery dispute statement, and
presented oral argument at the hearing—Champion never once referenced this purported
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intentional decision to not disclose the Cabela’s generator based on a mistaken assumption
about the existence of an NDA.” (Doc. 202 at 9-10.) But even accepting this explanation
on its own terms, it lacks merit. The relevant timeline is that Champion’s contentions were
due on June 21, 2024, Champion then discovered the emails related to the Cabela’s
presentation in August 2024, yet Champion did not even begin attempting to confirm an
NDA was in place until February or March 2025. This half-year (or more) delay in looking
into whether an NDA was in place amounted to a lack of diligence. Cf. O2 Micro Int’l Ltd.
v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1367 (Fed. Cir. 2006) (affirming district
court’s determination that a three-month delay amounted to a lack of diligence).
Furthermore, Firman had propounded discovery requests to Champion that broadly
covered all dual-fuel generators that Champion had offered to sell before its patent
applications. Those discovery requests did not exclude offers covered by an NDA.
In a related vein, the Court is unpersuaded by Champion’s assertion that it had no
reason to inquire further into these issues until it received document productions from
Generac that “reveal[ed] Montgomery’s leadership of the development of dual fuel
generators at Generac just months after leaving Champion” and “caused Champion to
reexamine everything Montgomery was involved in during his final months with
Champion.” (Doc. 198 at 3.) As discussed above, the potential importance of the Cabela’s
emails—which, again, included Sarder going out of his way to raise concerns about how
the Cabela’s meeting might interfere with Champion’s patent rights—should have been
apparent to Champion and triggered immediate further investigation. The need for such
investigation was not contingent on Champion’s assessment of whether Montgomery was
a loyal and honest employee during his final months at the company.
Champion also contends that “[i]f Firman could not conclude that the Cabela’s
generator practiced the claims of the asserted patents in September 2024—especially when
Montgomery was the one with the most knowledge of the presentation—it would be
unreasonable to demand that Champion do so in August 2024 with only the Cabela’s
Emails and no current employee who attended the presentation. The emails also do not
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provide sufficient technical details to confirm that the Cabela’s generator was an
embodying product.” (Doc. 198 at 12.) But even accepting that the emails discovered in
August 2024 do not, alone, contain enough technical information to determine whether the
Cabela’s generator practiced the claims of the asserted patents, the additional technical
information necessary to make that determination has always been within Champion’s
exclusive control. The diligence problem arises from Champion’s failure to take prompt
action, in the aftermath of its August 2024 discovery of the emails, to review its own
records, canvass its own employees, and/or to inquire further with Sarder (to whom
Champion still had access)—things that only Champion, and not Firman, had the ability to
do. Among other things, the internal records Champion belatedly discovered include a
memorandum in which a current Champion engineer (Dehn) acknowledged that
Champion’s current CEO (Trine) “agreed to send the [dual-fuel generator] concept to
Cabela’s” because “[t]he potential to get into Cabela’s line review is more important than
patent protection.” (Doc. 215-1 at 2 [sealed].) As Firman correctly notes in its response
brief, “Champion has always had access to detailed, written, and contemporaneous
information about the Cabela’s generator in the possession of current employees . . . .
Indeed, keyword searching for ‘Cabela’s’ or [the relevant project number] would have
identified these documents, current employees, and the shared drive containing pictures
and a video of the Cabela’s generator. Champion had the institutional knowledge—
through current employees and their custodial documents—to timely investigate and
identify the Cabela’s generator as an Embodying Product well before serving its
infringement contentions.” (Doc. 202 at 4.)
Champion also raises various arguments that are, at bottom, premised on its
disagreement with the scheduling order. As noted, the scheduling order required
Champion to disclose, in its contentions due on June 21, 2024, any embodying product of
its own on which it intended to rely “for any purpose.” (Doc. 33 at 2-3.) Champion
contends this disclosure requirement was overbroad and that it should have only been
required to disclose embodying products that correspond to damages, as contrasted with
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embodying products on which it intends to rely under § 102(b). (Doc. 198 at 6-7.)
Champion also contends the scheduling order should not impose a good-cause requirement
for amendment. (Id. at 8 [“Champion has consistently objected to the onerous N.D. Cal.
Local Patent Rules and their good cause requirement to amend their contentions. . . . And
this dispute underscores Champion’s objections to the imposition of a good cause
requirement.”].)
As a threshold matter, these arguments fail because they are, in effect, disguised
requests for reconsideration. During the early stages of the case, the parties disagreed over
the form the scheduling order should take, with Firman recommending a version modeled
in part on the local rules of the Northern District of California and Champion objecting to
Firman’s proposal on various grounds, including that “the N.D. Cal. Rules would impose
unnecessary burdens on the Parties” and that the scheduling order should not require good
cause for amendments. (Doc. 23 at 8-16.) On April 24, 2024, after hearing argument from
the parties, the Court issued the final version of the scheduling order, which tracked
Firman’s proposal in many respects. (Doc. 33.) Under LRCiv 7.2(g), any request by
Champion for reconsideration of that order was due within 14 days, could not be based on
the repetition of Champion’s earlier arguments, and needed to be premised on “a showing
of manifest error or a showing of new facts or legal authority that could not have been
brought to [the Court’s] attention earlier with reasonable diligence.” Id. The arguments
related to the scheduling order raised in Champion’s motion do not satisfy those
requirements—they amount to the untimely repetition of objections the Court previously
rejected after careful consideration.
Moreover, even putting aside LRCiv 7.2(g), Champion’s criticisms of the
scheduling order fail on the merits. The sequence of disclosures required by the scheduling
order, as well as the scheduling order’s good-cause requirement for amendment, were
“designed to require parties to crystallize their theories of the case early in the litigation
and to adhere to those theories once they have been disclosed” and to “prevent a ‘shifting
sands’ approach to patent litigation.” Richtek Tech. Corp. v. uPI Semiconductor Corp.,
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2016 WL 4269095, *1 (N.D. Cal. 2016). See also OpenTV, Inc. v. Apple Inc., 2016 WL
3196643, *3 (N.D. Cal. 2016) (“[T]he spirit of the patent local rules is to ensure early
crystallization of the parties’ theories, and specifically, to place the burden on the plaintiff
to quickly decide on and disclose the contours of its case.”). It is unfortunate that
enforcement of the good-cause requirement may sometimes require a party to forgo
reliance on a particular piece of late-discovered evidence or a particular late-developed
theory, but this is an inevitable consequence of having an enforceable schedule, the absence
of which would create many other problems. Apple Inc. v. Samsung Elecs. Co., Ltd., 2012
WL 5632618, *2 (N.D. Cal. 2012) (“The local rules . . . require parties to define their
theories of infringement early on in the course of litigation . . . [and] serve[] to balance the
parties’ rights to develop new information in discovery along with the need for certainty in
legal theories at the start of the case.”). Put simply, courts “expect patent plaintiffs to assert
their theories of the case and stick to them, absent good cause to change course.
Amendments that are merely responsive to a defendant’s noninfringement theories are
often disallowed to avoid a ‘running dialogue’ between parties. This is especially true
where a plaintiff shifts or expands positions at a late stage.” Advanced Micro Devices, Inc.
v. LG Elecs., Inc., 2017 WL 2774339, *3 (N.D. Cal. 2017) (citations omitted).
Champion’s final, related argument is that the “interests of justice” favor granting
its amendment request because, otherwise, “the outcome would not be based on the merits
but a procedural ruling. Further, such an outcome could potentially affect other pending
litigation by invalidating Champion’s intellectual property rights where other courts find
the Cabela’s disclosure serves as a § 102(b) exception to alleged prior art within the 1-year
grace period. Such inconsistencies—because of a ruling on a procedural motion—would
raise much confusion as to the validity and enforceability of the Champion Patents.” (Doc.
198 at 4, 9.) This argument ignores that, as discussed above, the disclosure requirements
set forth in the scheduling order must “have teeth. Their design is not punitive, but they
put structure to litigation that otherwise would be unmanageable.” Sycamore IP Holdings
LLC v. AT&T Corp., 2018 WL 1695231, *11 (E.D. Tex. 2018) (citation omitted). See also
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O2 Micro Int’l Ltd., 467 F.3d at 1364 (acknowledging that local patent rules “are likely to
directly affect the substantive patent law theories that may be presented at trial, being
designed specifically to require parties to crystallize their theories of the case early in the
litigation”) (cleaned up). As Firman correctly notes, “[i]f waiver-based rules cannot restrict
a party’s ability to make certain arguments, they have no practical effect. . . . Patent
litigation would be unworkable without sequenced and staggered patent disclosures.”
(Doc. 202 at 16.) “Any inconsistencies between cases also will not cause problems on
appeal. Just as in any appeal, the Federal Circuit’s job will be to adjudicate each case based
on the record developed in each case, under each case’s disclosure deadline.” (Id.)
For these reasons, the Court concludes that Champion failed to act diligently in
discovering the basis for its amendment request. Given this determination, it is
unnecessary to address Firman’s alternative bases for opposing Champion’s amendment
request (Doc. 202 at 12-15), which are that Champion waited too long to request leave to
amend after discovering the basis for its amendment request and that Firman would suffer
undue prejudice from amendment. Johnson, 975 F.2d at 609 (“If that party was not
diligent, the inquiry should end.”); Apple, Inc., 2012 WL 5632618 at *2 (“If the court finds
that the moving party was not diligent in amending its infringement contentions, there is
no need to consider the question of prejudice to the non-moving party, although a court in
its discretion may elect to do so.”).
III. Firman’s Amendment Request
A. Diligence
Firman contends that it acted diligently by performing a comprehensive search for
prior art and by propounding an array of discovery requests to Champion aimed at ferreting
out any offers to sell, sales, or disclosures of Champion’s dual fuel generators before
January 1, 2017; that it was entitled to rely on Champion’s resulting denials that there was
anything to disclose; and that when Champion belatedly disclosed, for the first time in
March 2025, an intent to rely on the Cabela’s generator as prior art, it took prompt action
to seek further discovery regarding the Cabela’s generator, to obtain updated claim charts
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regarding the Cabela’s generator, and to prepare proposed amended invalidity and
unenforceability contentions and counterclaims based on the Cabela’s generator. (Doc.
176 at 6-11.) Firman also contends that Champion “held a monopoly over the witnesses
and documents needed to determine whether the Cabela’s generator embodied the patents.”
(Doc. 192 at 1.) Firman thus argues that its search efforts should be deemed diligent in
light of “Champion’s assurances and Firman’s lack of technical information.” (Id.)
Champion contends that Firman was not diligent. (Doc. 186.) In making this
argument, Champion relies almost exclusively on the fact that Montgomery oversaw the
Cabela’s presentation while he was still employed by Champion: “Montgomery, more than
anyone at Champion, should have recalled the Cabela’s demonstration because he
spearheaded the disclosure, and the demonstration now falls at the center of Firman’s
invalidity and unenforceability counterclaims. Firman has argued in opposition to
Champion’s request to amend its contentions that Champion was not diligent for having
earlier knowledge of the Cabela’s generator. For the same reasons, Firman cannot in good
faith argue it was diligent based on Montgomery’s prior knowledge.” (Id. at 4.) Champion
continues: “[I]f Firman was diligently searching for prior art, Montgomery—Firman’s
CEO—would have informed Firman’s counsel about his personal knowledge of the
Cabela’s demonstration, and Firman should have taken the disclosure into account when
developing its prior art and invalidity contentions. If Champion could have identified the
Cabela’s generator in September 2024 from these emails, as Firman argues, then by the
same reasoning, Firman could (and should) have done the same before serving its invalidity
contentions in October 2024 or moving to amend its invalidity contentions in December
2024.” (Id. at 4-5.) Champion concludes: “Firman cannot explain away Montgomery’s
knowledge and simultaneously argue Champion was not diligent.” (Id. at 5.)
The Court concludes that Firman, unlike Champion, was diligent with respect to the
Cabela’s generator. As an initial matter, many of Champion’s arguments rest on the
premise that any knowledge Montgomery possessed regarding the Cabela’s generator, by
virtue of his work as a Champion employee in 2014, is automatically imputed to Firman in
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this lawsuit due to his current role as Firman’s CEO. Although some courts have allowed
for such imputation, see. e.g., Grail Semiconductor v. Renesas Elecs. Am. Inc., 2012 WL
12920690, *12 (N.D. Cal. 2012) (“The facts of this case weigh against finding that Grail
lacked any notice of an adverse claim or interest. Stern was a founder and officer of
Powergate. Stern invented the technology in question. Stern is a founder and officer of
Grail. . . . Under the circumstances of this case, it is not credible that Grail (via Stern) had
no notice of a possible claim or interest in the technology.”), other courts “have held that
notice to or knowledge acquired by an officer or agent of a corporation before the agent
becomes such is not notice to the corporation after the agent becomes such; the agent must
acquire the knowledge while the relation exists, unless it appears by clear and satisfactory
proof either that the knowledge was present in the mind of the officer or agent at the time
of the transaction in which the principal is sought to be charged with such knowledge, or
that such knowledge was received by the officer or other agent at so short a time before
such transaction that it is impossible to have forgotten it.” 3 Fletcher Cyc. Corp. § 799.
See also Gardiner v. Equitable Off. Bldg. Corp., 273 F. 441, 447 (2d Cir. 1921) (“[T]he
knowledge of Dunham cannot be imputed to the corporation. At the time Dunham obtained
knowledge of the transaction, he was not a director.”).
Nevertheless, even assuming Firman is deemed to have been aware of the Cabela’s
generator (by virtue of its employment of Montgomery) at the time this lawsuit was filed
in 2023, such awareness is not the same thing as knowledge or even reasonable suspicion
on the part of Firman that the Cabela’s generator was similar enough to the patents at issue
in this action to warrant further inquiry. Montgomery was a salesman, not an engineer,
and it is telling that Champion arranged for Sarder (rather than Montgomery) to perform
the technical aspects of the Cabela’s presentation because Sarder could “speak engineer
language.” (Doc. 214-1 at 2.) Additionally, the internal Champion emails from 2014 that
have now come to light show that Montgomery was removed from the email chain before
Sarder began raising concerns to Trine about how the Cabela’s presentation might raise
intellectual property concerns and undermine Champion’s patent rights. Given this
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backdrop, Champion was in a much better position (by virtue of its access to Trine, Sarder,
and Behn, not to mention its exclusive access to its own internal documents bearing on the
technical aspects of the Cabela’s generator) than Firman (by virtue of its access to
Montgomery) to know at the time this lawsuit was filed in 2023 that the Cabela’s generator
might be relevant to the parties’ claims and defenses. Thus, diligence did not require
Firman to pursue discovery related to the Cabela’s generator once Champion filed suit.
The next question is whether diligence required Firman to pursue further discovery
related to the Cabela’s generator once it received, in September 2024, the production from
Champion that included certain internal Champion emails from 2014 pertaining to the
Cabela’s presentation. The Court concludes, albeit not without some hesitation, that the
answer is no.6 Although Champion contends the diligence analysis as to each side should
be the same (Doc. 186 at 2 [“Firman’s and Champion’s Diligence Arguments Rise or Fall
Together.”]), this argument overlooks three important distinctions between the parties.
First, Champion produced the emails pursuant to a “Confidential—For Counsel Only”
designation under the protective order, such that Firman was not even allowed to show the
emails to Montgomery to jog his memory unless Montgomery was a recipient. (Doc. 192
at 8 n.3, citing Doc. 95 ¶ 5(e).) As noted, although Montgomery sent the initial agenda
email regarding the Cabela’s meeting, he was not on the subsequent email chain in which
Sarder expressed intellectual property concerns. (Doc. 214-1 at 2-3.) Second, as of
September 2024, Champion had exclusive access to its internal technical documents
discussing the Cabela’s generator. Third, also as of September 2024, Champion had
repeatedly avowed to Firman—in response to dogged efforts by Firman to obtain discovery
on this exact topic—that Champion had not made any disclosures of embodying products
during the timeframe of the Cabela’s presentation.
In Olaf Sööt Design, LLC v. Daktronics, Inc., 299 F. Supp. 3d 395 (S.D.N.Y. 2017),
6 During the July 10, 2025 discovery dispute hearing, the Court expressed skepticism
that Firman acted with diligence following its receipt in September 2024 of the Cabela’s-
related emails. (Doc. 190 at 45-46.) However, the Court also made clear that it was “not
definitively deciding that now” because the issues were not yet fully briefed. (Id. at 46.)
As discussed in this body of this order, the Court now concludes, with the benefit of full
briefing and time for reflection, that Firman was diligent.
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the district court addressed a similar situation. There, the plaintiff in a patent infringement
action argued it should be allowed to amend its claims to rely on a particular patent and
that it had been prevented from doing so earlier “due to misleading and delayed discovery
disclosures on the part of Defendants.” Id. at 398. The defendants, in turn, argued that the
plaintiff failed to act with diligence because they had produced documents to the plaintiff
earlier in the litigation that contained references to the patent at issue. Id. Although the
court acknowledged that the defendants’ argument on this point carried weight “[t]o a
certain degree,” it ultimately concluded that the earlier production did not trigger a need
for immediate action by the plaintiff in light of the defendants’ inaccurate “representations
during the discovery process,” which could have reasonably induced the plaintiff into
believing that further inquiry “would be unnecessary”:
According to Plaintiff, the Hoffend Patents documents only indicate that
Hoffend, not Defendants, had knowledge of the ’485 Patent, and Plaintiff did
not think it necessary to investigate further after relying on Defendants’
discovery responses that Defendants first learned of the ’485 Patent in the
instant litigation and had disclosed all relevant and responsive documents.
Plaintiff contends it was only after receiving later document disclosures from
Defendants starting in June 2017, disclosures that contained communications
between Defendants and the USPTO, that Plaintiff unearthed evidence of
Defendants’ knowledge, making Plaintiff's proposed claim actionable. To a
certain degree, Defendants’ argument against Plaintiff’s diligence carries
weight. Plaintiff received the Hoffend Patents from Defendants in mid-2016
and those documents referenced the ’485 Patent. With knowledge of such
documents, a litigator could have begun investigating the prosecution history
of those patents herself. At the same time, Defendants’ representations
during the discovery process could reasonably have led Plaintiff to conclude
additional fact-finding as to Defendants’ patent prosecution history and
Plaintiff’s willfulness claim would be unnecessary—for example, when
Defendants represented in mid-2016 that they had produced all documents
responsive to Plaintiff’s discovery requests, including any documents related
to Defendants’ patent applications and Defendants’ prior knowledge of the
’485 Patent, representations which were proven incorrect in the aftermath of
a motion to compel granted in April 2017. Given the circumstances, . . .
failing to perform particular research or in not asking particular questions of
Defendants’ 30(b)(6) witness do not establish a lack of diligence.
Id. at 398-99 (citations omitted).
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For essentially the same reasons, diligence did not require Firman to immediately
pursue further discovery related to the Cabela’s generator upon receipt of Champion’s
production in September 2024. See also Romero v. Regions Fin. Corp./Regions Bank, 2019
WL 1954082, *2 (S.D. Fla. 2019) (“Plaintiff had been provided numerous opportunities to
disclose this specific information to Defendant . . . at several points during the course of
the litigation. She chose not to do so until her deposition, and Defendant, exercising
diligence, shortly thereafter sought to amend its affirmative defenses. This satisfies the
‘good cause’ inquiry, and leave should therefore be given.”) (citation omitted);
Dwellingham v. Mark A. Nestor, P.C., 2015 WL 13773082, *3 (N.D. Ga. 2015) (“Since
Defendant’s misleading discovery responses are the primary cause of the delay here, good
cause exists to modify the scheduling order.”). Accordingly, Firman has met its burden of
establishing the diligence necessary to support its amendment request.7
B. Undue Prejudice
Firman’s showing of diligence does not end the inquiry, because the “evaluation of
good cause is not coextensive with an inquiry into the propriety of the amendment under
. . . Rule 15. . . . [T]he existence or degree of prejudice to the party opposing the
modification might supply additional reasons to deny a motion . . . .” Johnson, 975 F.2d
at 609 (cleaned up). See also Advanced Micro Devices, Inc., 2017 WL 2774339 at *4 (“If
the moving party is able to establish diligence, the Court should then consider prejudice to
the non-moving party in determining whether to grant leave to amend.”).
Champion contends it would suffer undue prejudice if Firman’s amendment request
were granted because “[t]he Cabela’s generator is a Section 102(b)(1) defense to Firman’s
7 As noted, “[t]he diligence required for a showing of good cause has two subparts:
(1) diligence in discovering the basis for amendment; and (2) diligence in seeking
amendment once the basis for amendment has been discovered.” Karl Storz, 2016 WL
2855260 at *3. The Court construes Champion’s response as only challenging the
sufficiency of Firman’s showing as to the first subpart. At any rate, Firman has also
established diligence as to the second subpart—after Champion disclosed, for the first time
in March 2025, an intent to rely on the Cabela’s generator as prior art, Firman took prompt
action to seek further discovery regarding the Cabela’s generator, to obtain updated claim
charts regarding the Cabela’s generator, to prepare proposed amended invalidity and
unenforceability contentions and counterclaims based on the Cabela’s generator, and then
to seek judicial relief.
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invalidity and unenforceability counterclaims, but if Champion cannot amend its
contentions, it would be precluded from asserting the defense. . . . If only Firman’s Motion
is granted, the practical effect would be that Firman can raise its unenforceability and
inequitable conduct arguments regarding the Cabela’s generator, but Champion would be
wholly unable to address or respond to these arguments because Champion could not argue
anything related to the Cabela’s generator.” (Doc. 186 at 7-8.) Champion also accuses
Firman of engaging in “gamesmanship”; disputes that it has ever “confirmed [that] the
Cabela’s generator invalidates or renders unenforceable the Asserted Patents”; and argues
that “the only path that eliminates undue prejudice is if the Court grants both parties leave
to amend their contentions,” because otherwise “Champion could not use the witnesses and
documents (which Firman argues are in Champion’s sole possession and ostensibly
eliminate any prejudice) to defend against Firman’s proposed amendment.” (Id. at 8.)
These arguments lack merit. Although Champion contends it will suffer undue
prejudice if it is precluded from raising a § 102(b)(1) defense at trial, this is not a basis for
opposing Firman’s amendment request—instead, this is simply a consequence of
Champion’s failure to establish diligence as required to support Champion’s amendment
request. Indeed, the sort of undue prejudice that is usually required to overcome a diligent
adversary’s amendment request is a showing that the amendment “stand[s] to disrupt the
case schedule or other court orders.” Karl Storz, 2016 WL 2855260 at *3. See also
Advanced Micro Devices, Inc., 2017 WL 2774339 at *4-5 (denying amendment request,
even though the movant established diligence, in part because the opposing party showed
that “its claim construction strategy relied on [the movant’s] original complaint and
infringement contentions”). Here, however, Champion concedes that allowing Firman’s
amendment request would not have a disruptive effect on the discovery or case schedules.
(Doc. 186 at 6-7 [“Champion agrees there is ample time in discovery—including expert
discovery—before trial, which would allow both parties to complete discovery and allow
Champion to respond to Firman’s invalidity and unenforceability contentions and
counterclaims. And . . . Champion agrees adding the Cabela’s generator to this case would
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not disrupt the case schedule or other orders.”].)
Nor is there any merit to Champion’s contention that the “practical effect” of
granting Firman’s amendment request, while denying Champion’s amendment request,
would be to preclude Champion from “argu[ing] anything related to the Cabela’s
generator” and to render Champion “wholly unable to address or respond to” Firman’s
unenforceability and inequitable conduct arguments regarding the Cabela’s generator. (Id.
at 7-8.) As Firman correctly notes in its reply, “granting Firman’s motion and denying
Champion’s motion will not muzzle Champion about the Cabela’s generator or prevent
Champion from defending itself. Champion will remain free to defend itself by, for
example, arguing that the Cabela’s generator is not prior art because it was never actually
offered for sale. In other words, Champion will be free to challenge the merits of Firman’s
invalidity and unenforceability contentions—including those based on the Cabela’s
generator—so long as it does not do so by relying on the Cabela’s generator in an attempt
to move the date required to qualify as prior art under 35 U.S.C. § 102(b).” (Doc. 192 at
11, citation omitted.)
Accordingly,
IT IS ORDERED that:
1. Firman’s motion for leave to amend its invalidity and unenforceability
contentions and its counterclaims (Doc. 176) is granted.
2. Champion’s motion for leave to amend its infringement contentions (Doc.
198) is denied.
Dated this 14th day of November, 2025.
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