Patent Lawyer Blog
A federal district court in California has denied a defendant’s motion for leave to amend its preliminary invalidity contentions to add two prior art references located by an AI-assisted patent search tool, finding that the defendant failed to show diligence in discovering the references before the contention deadline.
In Pacem IP Holdings, LLC v. Maxim Lighting International, Inc., the district court denied Maxim’s motion ruling that the availability of a new search tool does not excuse a party from explaining why it could not have found the art earlier through reasonable diligence.
Pacem sued Maxim in October 2025, asserting four patents directed to LED lamps. The Court’s Civil Trial Order set an April 13, 2026 deadline for preliminary invalidity contentions, which Maxim met by identifying five prior art references and serving nine claim charts.
Before the deadline, Maxim had met with PatentVest, Inc., which was developing an AI-assisted patentability-search tool that did not become available until May 2026. Maxim ran searches on May 18 and 19, and PatentVest returned fourteen candidate references on May 26 and 27, including a 2012 U.S. patent application publication by Fiene and a 2010 Canadian patent by Su. Maxim identified Fiene and Su as “potentially highly material prior-art references requiring detailed analysis” on or around June 2, prepared supplemental claim charts, served amended contentions on June 25, and then moved for leave to amend.
Under Standing Patent Rule 3-6, contentions may be amended “only by order of the Court upon a timely showing of good cause,” which requires the moving party to establish diligence. The Court explained that “the diligence required for a showing of good cause has two phases: (1) diligence in discovering the basis for amendment; and (2) diligence in seeking amendment once the basis for amendment has been discovered.” On the first phase, “[t]he critical issue is not when [the party seeking to amend] discovered [the] information, but rather, whether they could have discovered it earlier had it acted with the requisite diligence.”
Maxim argued that “[t]he record shows diligence at each step,” pointing out that it “investigated PatentVest before the April 13 deadline, used the tool as soon as it became available, identified Fiene and Su forty-three days after serving its preliminary invalidity contentions, [and] disclosed the proposed supplement thirty days after PatentVest first produced the references.” The Court was not persuaded. Both Fiene and Su had been publicly available in searchable patent databases for more than a decade, and “Defendant does not explain why it could not have discovered the Fiene and Su patents with reasonable diligence prior to the April 13, 2026 deadline, notwithstanding the use of an AI tool.”
The Court also found Maxim’s description of its pre-deadline search efforts conclusory. Maxim’s declaration stated only that its investigation included “review and analysis of potential prior art references directed to prior-art references concerning LED replacement lamps, optically transmissive enclosures, Edison bases, LED assemblies, heat-sink structures, electrical paths, and thermal management features.” As the Court put it, “Defendant does not provide a detailed explanation of what resources it reviewed in advance of the April 13, 2026 deadline, and further, Defendant ‘makes no attempt to explain why identifying . . . [Fiene and Su] was difficult despite its diligent efforts to do so.'” Citing Contour IP Holding, LLC v. GoPro, Inc., the Court noted that leave has been denied where a party “merely glosse[d] over its efforts to locate” the prior art it sought to add.
The Court distinguished THX, Ltd. v. Apple, Inc., on which Maxim relied, noting that the moving party there “engaged multiple outside consultants and prior art search firms, totaling at least 700 prior art search hours” and that the amendments were informed by documents received through third-party subpoenas. “Here, however, Defendant has not demonstrated what steps it took prior to use of the PatentVest AI Tool. Accordingly, the Court cannot assess whether Defendant diligently investigated such prior art in advance of the parties’ deadline.”
Because Maxim failed to establish diligence in discovering the references, the Court did not reach the second phase of the diligence analysis or the question of prejudice to Pacem. The Court also rejected Maxim’s materiality argument, observing that “Defendant fails to address the fact that good cause requires the discovery of recent material ‘despite earlier diligent search.'”
The decision is a reminder that new search technology does not reset the diligence clock. A party seeking to add prior art after the contention deadline must document with specificity what it searched, how, and why the references were not reasonably discoverable earlier. The fact that an AI tool surfaced references that a prior search missed is not, by itself, good cause to amend.
Pacem IP Holdings, LLC v. Maxim Lighting International, Inc., Case No. 2:25-cv-09702-MWC-BFM (C.D. Cal. Aug. 13, 2026)
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels & Mitchell LLP. For more information about this case, contact Stan Gibson at SGibson@Jeffer.com.