Adjustacam v. Amazon, et al., 6:10cv329 (E.D. Tex. 4/27/11)
Judge: Leonard Davis
Holding: Motion to Stay and Sever Claims as to Reseller Defendants Based on the Customer Suit Exception DENIED; Order on Initial Procedures in Patent Case
I posted the other day on a followup case to the Parallel Networks way of handling large multidefendant cases (discovery limited to three claim terms which are set for expedited Markman with motions for summary judgment promised to follow) in the Whetstone case, but noted that there were other ways of handling these cases.
Yesterday Judge Davis issued an order following second status conference hearing in the Adjustacam v. Amazon, et al. case which showed a substantially different way of approaching these cases (one that he followed in another case Tuesday, I understand). In this case, the parties attended an initial status conference on February 7, 2011. In light of the number of defendants in the case, the Court set a second status conference on March 24, 2011 to discuss, among other things, Plaintiff’s litigation and settlement strategy and streamlining discovery. At the second status conference, Judge Davis wrote "the parties were prepared to engage in meaningful, substantive discussions and offered effective, case specific suggestions regarding case management. The Court appreciated the parties’ candor and preparation for the second status conference."
Specifically, Adjustacam represented that its infringement allegations were relatively simple—it could determine infringement from visually inspecting the accused products—and the majority of discovery in the case would therefore focus on damages. As such, Adjustacam suggested forgoing the Court’s mandatory disclosures, and proceeding to document production relating to infringement and damages, and tailoring the scope of its requests to streamline the production.
While Defendants conceded this was not a complex case, the Court noted that they maintained that infringement is not a simple as Adjustacam represented due to the differences between the accused products. But Defendants agreed that much of discovery would relate to damages and that a limited, initial damages disclosure would help streamline the case. Defendants also requested the Court consider an early summary judgment motion addressing pre-suit damages and laches. (Defendants also sought a stay and severance of the claims against the reseller defendants based on the customer suit exception, and that was denied). Defendants represented this could ripen the case for settlement and narrow the accused products. Defendants also proposed the parties mediate after the Court’s summary judgment determination regarding pre-suit damages, to which Adjustacam did not object.
Judge Davis approved of the parties' requests to: (1) streamline and limit discovery; (2) address certain issues on summary judgment (pre-suit damages and laches); and (3) attend an early mediation. And in his opinion he provided useful comments on the results of the status conference in this case:
While the Patent Rules efficiently govern and manage most cases, the parties in this case have identified and agreed on specific modifications to the Court’s standard schedule that would streamline and potentially lead to an early resolution of the dispute. In this case, the issues of laches and recoverable damages are amenable to an early determination. Therefore, the Court will consider an early summary judgment motion on these issues. As set forth at the hearing, the parties shall exchange limited damages disclosures relating to these issues (e.g., Adjustacam’s compliance with the marking statute and the quantity of accused devices sold by Defendants in the United States and revenue from those sales). Although the parties may file an early summary judgment motion, the Court strongly encourages the parties to meaningfully meet and confer to potentially resolve or narrow these issues before expending significant resources and incurring unnecessary litigation costs. Although the parties have agreed to this specific course of action, they remain obligated to comply with the disclosure requirements provided in the Local Rules.
Judge Davis provided dates for the Markman hearing, pretrial conference, jury selection and trial in the case, as well as requirements aimed towards getting the agreed-upon discovery ("limited damages disclosures (e.g., quantity of accused devices sold in the United States and revenue from those sales)" within 30 days of this Order and the case mediated within 30 days of the Court's summary judgment ruling. Agreed docket control and discovery orders are due by May 9. So, notably, although additional early case procedures are in place, the standard orders and deadlines are falling into place as well.
This order underscores that a Parallel Networks - style early Markman on limited claim terms claimed to be case-dispositive is not the only tool being used to manage these large multidefendant cases, and that the parties and the Court are looking at other options as well.