Eastern District of Texas Federal Court Practice

Hub Historical marker dedication Thursday @ 4pm

Tomorrow afternoon will mark the final milestone in the renovation of the historic Hub Shoe Store building at 111-113 East Austin Street into Siebman, Burg, Phillips & Smith LLP's law offices in Marshall as we dedicate the new historical marker that celebrates the building's prior occupant, the Hub Shoe Store from 1897-2001. 

As the picture to the left shows, the right side of the facade is restored to its 1897 appearance, while the left side is more like its' 1940's look. 

The store actually began on the right side in 1897, moved to the left in 1928, and sometime in the '50's or '60's got the right side back and expanded into it.   Rather than keep the existing aluminum facade which presented a consistent appearance (shown on the right) we took the aluminum down and restored each side as far back as its surviving fabric allowed (see picture below).

If you're in town for a trial or hearing, stop by for a cup of coffee - we're always happy to do tours.  They're even more entertaining when there's a 10-15 person trial team working out of the left side.  The incongruity of century-old shoe shelves, modern electronics, local artists' artwork on display and frantic patent lawyers is just not to be missed.

 

 

Patent Litigation Dictionary - "Silo-ed"

Silo-ed = party who is receiving only certain of the documents (pleadings, discovery, document production, etc.) in a case.  See Are You Surrounded by Knowledge Silos?.

Motion for Leave to Amend Infringement Contentions Granted ... But Not As To Those Additional Products

EON Corp. v. T-Mobile USA, et al, 6:10cv379 (E.D. Tex. 1/24/12)

Judge: John Love

Holding: Motion for Leave to File Amended Infringement Contentions GRANTED

The issue of when infringement or invalidity contentions may be amended under the local patent rules is an evergreen one here behind the pine curtain (as are out of control metaphors) and this order from Judge Love yesterday afternoon is the latest word on the subject.

The procedural history is complex, but necessary.  It goes something like this:

• Plaintiff Eon sues defendants, including Alcatel-Lucent USA, Inc. ("ALU"). 
• Plaintiff serves infringement contentions v. 1.0, accusing four ALU products. 

Meanwhile, back at the courthouse, Judge Love allows targeted discovery after which the parties could file letter briefs seeking permission to file summary judgment on direct infringement issues. Shortly after that discovery took place ...

• Eon files an amended complaint, and a motion for leave to amend its infringement contentions against ALU to v.2.0, which this time accuses 76 products.
• ALU opposes the motion for leave, asserting that the contentions were factually insufficient under the patent rules, and in any even, the plaintiff had not shown the required "good cause" for the amendment.

Back at the courthouse again, at a November 28, 2011 hearing on the motion, the Court ordered Eon to provide ALU with amended infringement contentions (v.2.1 - the difference will be important later) that articulated how each particular ALU product is used in an infringing network in accordance with Local Patent Rule 3-1(b)-(c).  Then,

• Eon served its amended contentions in compliance with the Court’s Order, this time accusing 96 products in PIC v. 2.1.
• ALU filed an opposition to the amended contentions, again arguing that the contentions were factually insufficient under the patent rules, and in any even, the plaintiff had not shown the required "good cause" for the amendment itself, or for the additional 20 products. 

Judge Love's opinion indicated that while he thought v. 2.0 of the contentions did not satisfy the local rule re: specificity, he thought that v. 2.1 did.  Here's what the Court had to say about the role of infringement contentions:

Infringement contentions are not intended to require a party to set forth a prima facie case of infringement and evidence in support thereof. While infringement contentions must be reasonably precise and detailed . . . to provide a defendant with adequate notice of the plaintiff’s theories of infringement, they need not meet the level of detail required, for example, on a motion for summary judgment on the issue of infringement because infringement contentions “are not meant to provide a forum for litigation on the substantive issues.”

Realtime Data, 2009 WL 2590101, at *5.  "Nevertheless," the Court held, "a party may not rely on vague conclusory language or simply mimic the language of the claims," citing Davis-Lynch, Inc. v. Weatherford Int’l, No. 6:07-cv-559, 2009 WL 81874, at *2 (E.D. Tex. Jan. 12, 2009).  (Ed. note: there are more Davis-Lynch opinions running around the Tyler courthouse than I can keep track of - and they're all full of useful stuff - so be sure which opinion you're citing to).

So what are the standards for amending?  Glad you asked.  Judge Love explains that leave to amend is required when a plaintiff seeks to amend or supplement the contentions, and a plaintiff must show good cause. P.R. 3-6. When determining whether to grant leave to amend, the Court considers: 1) the explanation for failure to meet the deadline; 2) the importance of the thing that would be excluded; 3) the potential prejudice in allowing the thing that would be excluded; and 4) the availability of a continuance to cure such prejudice.

In this opinion, Judge Love compares the v.2.1 contentions to the v.2.0 contentions, and determines that "with the understanding that there may be some gaps in the contentions due to an apparent lack of discovery," they are sufficient. 

ALU has not shown why such a description is so deficient that it does not serve the notice role of infringement contentions. ALU may disagree with the substance of Eon’s contentions, but this is not the stage for Eon to marshal evidence to prove its infringement theory. Patent Rule 3-1 is not meant to create unfair or unrealistic expectations on either party. In deciding the sufficiency of infringement contentions, the Court balances defendants’ need for notice as to the plaintiff’s infringement theory with the realities of the accused systems, methods, and apparatuses. Here, while not making any substantive determination, the Court recognizes the difficulties in identifying a named, discrete network where there is a complicated infringement theory depending on interrelated discovery from multiple direct and indirect infringers. Under the technological framework presented here, the Court is not persuaded that Eon’s description concerning ALU products runs afoul of the purpose of P.R. 3-1. With these considerations in mind, the Court finds that Eon’s contentions satisfy the Court’s November 28, 2011 Order and P.R. 3-1 because they provide sufficient detail to put ALU on notice as to how to litigate its case.

Okay, so they're sufficient - but is there "good cause" to permit the amendment?  Yes and no.  Judge Love concluded that Eon did have good cause to amend its contentions to add the new products in v. 2.0.  But v. 2.1 included twenty additional products which were not in Eon’s previous proposed amended contentions (v. 2.0) that were the subject of the original Motion. "These products were not subject to the Court’s November 28, 2011 Order," Judge Love concluded, "and Eon has provided no excuse or justification for its delay in including these products in its amended contentions. As a result, the Court ORDERS Eon to remove reference to the twenty new products ... and to serve ALU with these modified contentions by January 30, 2012.

 

Motion to Stay Patent Case Pending Reexamination Denied

Ambato Media v. Clarion Co., et al, 2:09cv242-JRG

Judge: Rodney Gilstrap

Holding: Motion to Stay Proceedings DENIED

Defendant Garmin moved to stay this litigation pending the outcome of pending reexamination proceedings. The Markman hearing in this case was conducted on June 14, 2011, a Markman Order was issued on July 18, 2011 and jury selection is set for July 2, 2012.

Judge Gilstrap noted that courts typically consider three things when deciding whether to stay litigation pending reexamination, and held that in this case all three factors weighed against a stay:

1. whether a stay will unduly prejudice or present a clear tactical advantage to the nonmoving party,
2. whether a stay will simplify issues in question and trial of the case, and
3. whether discovery is complete and whether a trial date has been set.”

(Citing Soverain Software LLC v. Amazon, Inc., 356 F. Supp. 2d 660, 662 (E.D. Tex. 2005)). 

First, Judge Gilstrap held that a stay would unduly prejudice the patentee, who has an interest in the timely enforcement of its patent rights.

The ex parte reexamination requested by Garmin has barely entered its merit stage, and there is a strong likelihood that it may not finish until well after the current trial date. Moreover, a patentee can appeal a reexamination result to the Board of Patent Appeals and Interferences and to the Court of Appeals for the Federal Circuit. 35 U.S.C. § 305. A fully contested ex parte reexamination proceeding could therefore take several years to reach resolution. Ambato would be unduly prejudiced if the Court were to grant the stay because a stay would effectively prevent EMG from enforcing its patent rights for several more years.

(Internal citations omitted whenever I feel like it).  Granting a stay would also prejudice Ambato because, when a case is stayed, “witnesses may become unavailable, their memories may face, and evidence may be lost while the PTO proceedings take place.” The possibility of witness and evidence loss was heightened in this case, the Court observed, because Garmin admits that it has discontinued at least some of the accused products. "When a product is discontinued, it is likely that some of the responsible engineers and other related employees may leave Garmin, rendering obtaining testimony and evidence from them much more difficult."  Accordingly, because Ambato will suffer prejudice if the case is stayed pending reexamination, this factor weighs in favor of denying a stay, the Court found.

The second factor, whether a stay would simplify issues in the case, also weighed in favor of denying a stay, the Court concluded.

Garmin’s argument that the asserted claims may be cancelled or amended during reexamination is merely speculative. Granting a motion to stay on such a provisional ground “would invite parties to unilaterally derail timely patent case resolution by seeking reexamination and not promote the efficient and timely resolution of patent cases.” Even though some of the claims may change in this case, “the interests of justice will be better served by dealing with that contingency when and if it occurs, rather than putting this case indefinitely on hold.”

The Court also determined that the third factor, whether discovery is complete and whether a trial date has been set, also weighed against granting a stay.

The Court issued a Docket Control Order over a year and a half ago on May 24, 2010 and the parties have undertaken an extensive discovery process. Several rounds of interrogatories and document requests have been served and answered, “millions” of pages of documents have been exchanged, Infringement Contentions and Invalidity Contentions have been exchanged, a Markman hearing has come and gone, and the parties have exchanged initial and rebuttal expert reports on infringement, validity and damages.  Discovery is set to close by March 15, 2012 and jury selection will commence on July 2, 2012. This factor also weighs in favor of denying a stay.

Accordingly, the Court denied the motion to stay.

Motion to transfer patent case denied

Triton Tech of Texas v. Nintendo of America, et al., 2:10cv328-JRG

Judge: Rodney Gilstrap

Holding: Motion to Transfer Venue DENIED

Judge Gilstrap's third venue order of the morning (so far, anyway) denied the defendants' motion to transfer this patent case to California, finding that the Moving Defendants had not met the threshold burden of showing that the transferee venue is one where this suit could have been brought.

 

Patent Case Transferred to California

Network Protection Services v. Juniper, et al., 2:10cv224-JRG

Judge: Rodney Gilstrap

Holding: Motion to Transfer Venue GRANTED

Judge Gilstrap granted the defendants' motion to transfer this patent case to California, finding that the balance of the factors demonstrated that the transferee court was "clearly more convenient".  The plaintiff is a Texas company with its principal place of business in Longview, but it was incorporated shortly before suit was filed, and the two managers of its managing member are both located in the Northern District of California.  Three of the defendants are located in the Northern District, a fourth in Washington, and a fifth in the Northern District of Texas, although managed by a Canadian company.

Of interest, the plaintiff noted that some of the defendants' largest customers are located in Texas, a fact Judge Gilstrap agreed would be a fact to be considered in the 1404(a) analysis, but he noted that the plaintiff failed to specifically identify even one employee of these custoemrs that was likely to have relevant information, or provide evidence that the evidence relevant to the plaintiff's indirect infringement claims are located at the Texas campuses of these customers - while at least one of these parties provided an affidavit to the contrary.

Patent Case Transferred to New Jersey

Voxpath v. LG Electronics, et al., 2:10cv160-JRG

Judge: Rodney Gilstrap

Holding: Motion to Transfer Venue GRANTED

Judge Gilstrap granted the defendants' motion to transfer this patent case to New Jersey, finding that the balance of the factors demonstrated that the transferee court was "clearly more convenient".  Voxpath is a Delaware corporation with its principal place of business in the Western
District of Texas, in Austin, and the Court categorized the defendants into nine groups, five of which included named U.S. entities with headquarters or substantial offices in or near New Jersey. 

It's official - I'm old.  I just came back up to my hotel room after presenting the paper on social media and the law at Litigation Update that I posted on the other day.  I took my jacket off, hung it up, put on my sweater and sat down to start working - and realized somewhere along the way I have become Mr. Rogers.  I don't change into sneakers though although candidly, I wish I could...

Paper went well - Federal Evidence & Civil Procedure Update is tomorrow morning by James Karen of Jones Day.  I'm looking forward to it (as only someone that looks like Mr. Rogers could, I suppose).

Social Media Update at Litigation Update this week

For anyone who's looking for some CLE credit this week, I am the lunch speaker on Thursday with a  topic of Social Media Update at the State Bar's Litigation Update seminar this coming week at the Four Seasons in Las Colinas.  (LC is actually part of Irving, which is better known as suburban Dallas). The brochure is attached here - Download 12 Liltigation Update

This paper was eating my lunch until I remember that we had done a special issue on social media in the Texas Bar Journal March before last, curated by John Browning of Dallas, who's also written a book on the subject, The Lawyer’s Guide to Social Networking: Understanding Social Media’s Impact on the Law (Thomson Reuters/West Publishing 2010).  With John's work to refer to, as well as knowledge of some recent online misadventures in this small town I live in, I think I've come up with a presentation that just might be worth a listen.  The subject is fascinating, and I've actually enjoying reviewing the recent cases and activity in the field.

Federal Courts Jurisdiction and Venue Clarification Act of 2011

Just when you thought it was safe to go back into federal court armed only with your law school class on federal civil procedure, Congress has passed the Federal Courts Jurisdiction and Venue Clarification Act of 2011, which took effect on January 6, 2012.  The FCJVC (an uncomfortable acronym at best) contains numerous changes to the removal statute, 28 U.S.C. § 1441, as well as the rules governing diversity jurisdiction.   The FCJVC also contains a complete revision of general federal venue statute, 28 U. S. C. §§ 1390 et seq..  The law applies to all new state and federal lawsuits commenced on or after it enactment.

I know it's terribly annoying when they change the procedural statutes we all learned in law school, but this might be a really good time to invest in the upcoming (but now delayed slightly as a result of the FCJVC, which I'm now trying to figure out how to pronounce in a way my mother wouldn't disapprove of) O'Connor's Federal Rules * Civil Trials edited by, well, me, which will contain analysis of the new amendments.  

Did I mention that there is also a Removal Clarification Act of 2011, which took effect November 9, 2011?

And here you thought Congress wasn't doing anything important ...