Computer Acceleration Corp. v. Microsoft Corp., 503 F.Supp.2d 819 (E.D.Tex. Aug 24, 2007) (NO. CIVA 9:06CV140)
Judge: Ron Clark
Big case on the requirements for infringement contentions in patent cases last Friday.
Defendant Microsoft sought to strike Plaintiff Computer Acceleration Corporation's (“CAC”) infringement contentions related to Microsoft's Windows Vista product, for being insufficiently detailed in violation of P.R. 3-1(c). The infringement contentions were contained in a footnote, which indicated that Vista infringed in a manner similar to the Windows XP product. The XP product, for which a lengthy claim chart was provided, does about seventy percent of what the Vista product does. Judge Clark rejected the plaintiff's 's argument that merely placing Microsoft “on notice” of claims complies with the requirement of P.R. 3-1(c) for a claim chart with detailed infringement contentions.
Judge Clark's order goes through the basis for the local patent rules and the standard required for stricking infringement contentions, analogizing it to deciding whether evidence should be excluded for discovery violations. Noting that perhaps only 70 percent of CAC's claims against Vista were related to the claims against Windows XP, he made clear that this was distinguishable from the situation where identical infringement contentions are asserted among the accused products. He also pointed out that the plaintiff had not sought leave to amend the contentions under P.R. 3-6 to include, for example, information obtained in discovery, even though "CAC had the information months ago, and Microsoft agreed to, and even asked for an amended chart."
With respect to the factor of "diligence" Judge Clark wrote:
Neither party addresses this factor. Despite receiving Vista source code after requesting it on December 21, 2006 and February 14, 2007, CAC failed to amend its P.R. 3-1 infringement contentions chart or even seek leave to amend it. Instead, CAC submitted the same chart on June 19, 2007, after receiving sufficient information to comply with P.R. 3-1(c) with regard to Vista. It is now August and there is no indication that CAC has tried to meet its obligations. CAC's lack of diligence weighs in favor of striking the infringement contentions involving Vista.
On the issue of the importance of the contentions and the availability of lesser sanctions, Judge Clark wrote that "the requirement to provide a claim chart for each accused product is crystal clear. Nobody even vaguely familiar with discovery rulings of the courts of the Eastern District under the Local Court Rules or the Rules of Practice for Patent Cases could have any thought that this court is going to allow a party to ambush an opponent with a " seventy percent" disclosure contained in a footnote. . . . If the rules themselves and a consistent stream of opinions were not enough, this court informed the parties in no uncertain terms at the case management conference that full disclosure was required and that severe consequences would be the result of failure to comply. October 20, 2006 CMC Trans. at p. 23-25. Allowing such a scanty and inadequate infringement contention disclosure to stand would deter neither game-playing nor actual violation of the rules-to the contrary it would actually discourage the voluntary exchange of information. Courts rely upon, and must even insist upon, the professionalism and good faith cooperation of attorneys if they are not to be bogged down in micro-managing discovery disputes." (Emphasis added).
Judge Clark concludes with this:
Lawyers do not fail to represent their clients zealously by cooperating in discovery and fully complying with disclosure rules without court orders. Rather, such professional conduct is in keeping with Texas Rules of Professional Conduct 3.02 (applicable under Local Court Rule AT-2) and with Local Court Rule AT-3 (A) and (C). . . . Disallowing an exiguous infringement contention against one accused product is not the same as granting default judgment against Plaintiff. CAC was on notice of the rules, had plenty of time to comply, and had sufficient information to file a proper infringement contention and chart.
So Windows is in, but Vista is out. Somebody call the economists.