Eastern District of Texas Federal Court Practice

And the "Just Can't Say No" Award Goes To ...

When I got back in the office recently after being out for a few days with a seminar, there was an odd-shaped box on my desk, with a letter from Pat Nester, Director of TexasBarCLE notifying me that I am one of the eight 2010 recipients of TexasBarCLE's Standing Ovation award.

Horrified, I read that I had spoken  at State Bar CLE seminars at least 24 times in the past ten years (sometimes not about patent venue, their records showed - interesting bit of trivia there) and had served on more CLE planning seminars than they could count (they have me snagged for three this year that I know about).  Worse, they had actually culled through the speaker comments about me by attendees (now there's a scary thought - I knew we read them in picking speakers but I didn't know there was this Orwellian database of speaker comments somewhere in the bowels of the State Bar building - which I would point out is technically also the bowels of the Texas Supreme Court building which licenses Texas lawyers, which conjures up all sort of uncomfortable thoughts) and produced one they thought was memorable - that I was "smarter than a treeful of owls."   

Well, that one's a howler for me because what Pat doesn't know is that that one was actually by a Litigation Section friend of mine who bragged about it later - but I've always liked it, since owls are actually some of the dumber members of the avian family, as noted here by a writer that watched an owl knock itself unconscious in his car.  But it was meant as a compliment and so I appreciate it.

Anyway, I am honored to receive this award from the TexasBarCLE staff like Pat Nester and Ann Kloeckner, who nominated me, since I know how hard they - and all the attorneys that volunteer their time - work to put on the best CLE in Texas.  It's a privilege to work with them, and the fault of not being able to say no to these people is one I think I can handle.

In Memoriam: Dean Angus McSwain (1923-2011)

I had an interesting moment in a recent trial in Judge Leonard Davis' court in February when I realized that my cocounsel George Chandler, Judge Davis and I all had the same property professor at Baylor Law School - former Dean Angus McSwain.  George ('62) and I ('92) bookended the group in the courtroom that day, but George could have been ten years older, and I fifteen years younger and the answer would have been the same, since Dean McSwain taught at the law school for 59 years, including 19 years as dean - still the longest tenure in the school's history.

Dean McSwain, shown at right with "Mad Dog" Dawson (can't you tell how much we love our Practice Court professors?) and the late Ed Horner, passed away suddenly earlier today, I was sorry to hear.  He started teaching at Baylor in 1949, and while he "retired" in 1994, he kept teaching until 2008 - truly "since the memory of man runneth not to the contrary" as he was wont to say as he paced back and forth while lecturing in that blue and white seersucker suit of his.  (Yes, it is true that our class outlines even had his jokes in them - they even had the turns in his pacing in places.  I am not making that up - it wasn't in the outline I used, but it was in another one).

His deanship was significant not just for its tenure, but for the faculty he hired.  This man, I now realize, was responsible for inflicting upon me just about every one of my law school professors, most of whom are still there, yea over 20 years later - from my con law professor David Guinn (he of the crooked finger), to Tom Featherston, Mike Rogers, Ron Beal, Mike Morrison, and current dean Brad Toben.  The only major ones I can think to blame on Dean Barrow are the twin horsemen of the PC apocalypse, Louis Muldrow and Gerald Powell, and civ pro professor (little did I know that class would ever come in handy) Bill Trail.

I never pass through Waco that I don't glance over at the old abandoned bridge piers in the Brazos River and remember Dean McSwain telling us about the case that involved them, thus forever instilling in my mind the connection between property law and ruins.  Dean McSwain took the subject of property very seriously - I remember one day when he grew agitated (on schedule, according to the outline) talking about the infamous Texas Supreme Court Yoast v. Yoast case, which he said was "a poor application of the rule which sets no precedent - so wrong it is even difficult to talk about."  (Outline of relevant notes below - when he said this word for word in our class our jaws just dropped).

The holding was so wrong that Dean McSwain deemed it necessary to instruct us as to what the correct holding should be, not the "absurd" one the Texas Supreme Court reached.  See class outline notes to the left.  (This was back when the idea that a court might totally blow a ruling was novel enough to be worth writing down).

Our sympathies go out to Andy and Dean McSwain's entire family.  He was a great one, and we will all miss him.

First Case Applying Therasense from Eastern District of Texas - Motion for Finding of Inequitable Conduct Denied

Ameranth v. Menusoft, 2:07cv271 (E.D. Tex. May 26, 2011)

Judge: Chad Everingham

Holding: Motion for Finding of Inequitable Conduct DENIED

It was almost a full day after the Federal Circuit's landmark holding regarding inequitable conduct in Therasense, Inc. v. Becton, No. 2008-1511, at 18 (Fed. Cir. May 25, 2011) before an Eastern District judge cited the case.

I'll post more on the postverdict orders in the Ameranth case soon, but I wanted to note that Judge Everingham's opinion denying the defendants' motion for a finding of inequitable conduct came out yesterday, a day after Therasense, and used the new case's standard. Although finding that based on the jury's finding that the claims were invalid as anticipated and for obviousness that the withheld references met the "but for" materiality standard, Judge Everingham found that the "specific intent to deceive" element was not met.

Defendants have failed to prove by clear and convincing evidence that Mr. McNally withheld the references with a specific intent to deceive the PTO. Mr. McNally consistently testified in deposition and at trial that he believed there was nothing like his invention prior to September 1998 and that he also believed that no one had even recognized the problem that his invention was designed to solve.

* * *

Mr. McNally was at no time inconsistent regarding the sincerity of his belief that there was no material prior art – i.e., that he had uncovered a breakthrough invention.  Considering Mr. McNally’s testimony in light of the evidence as a whole, the court concludes that specific intent to deceive is not the single most reasonable inference that must be drawn from the evidence.

(Internal citations to record omitted).  As a result the Court denied the motion for a finding of inequitable conduct.

Tyler jury awards $23 million in Fractus case

What with the whole practicing law thing I don't have details yet, but the street gossip is that yesterday the Tyler jury in Judge Leonard Davis' court (being presided over by Judge Love during deliberations) in everybody's favorite case to hate - the magical expanding, contracting, settling, bifurcated, un-bifurcated, severed, consolidated, sorta severed again, definitely consolidated, jury pool-swallowing all around bad guest on the May Tyler docket Fractus v. Samsung, et al case found willful infringement and assessed $23 million in damages.  I believe there were two defendants left at trial, and I don't have the damages split yet.  Invalidity was asserted, I expect, and I am assuming the jury came back nt as well, and I believe it was under the newly fashionable preponderance standard (I think it's pronounced French).

This is the only case I'm aware of where one of the lawyers on the trial team actually bore a child during the trial and had the poor manners not to advise her cocounsel until the night before that she was taking the day off.  I mean you get that much notice about exhibits.  At least she was back at work yesterday, sitting in on meet and confers with me, and volunteering 3 am and 5 am slots if we needed to resume because, hey, she'll be up.  (Congratulations Melissa!)

The best thing you could say about this case is that it's over.  The second best thing you could say is that it isn't Bedrock, which had two trials essentially back to back, followed by this one.  It's been a rough few weeks over in Judge Davis' chambers from the looks of things.

Special Status Conference indicates no need for new procedures in Uniloc cases - not a "Hobson's Choice"

Uniloc USA, Inc. v. Sony, et al, 6:10cv73 (E.D. Tex. 5/20/11)

Judge: Leonard Davis

Holding: Case Management Hearing

As readers know, Judge Davis has been holding special scheduling conference in cases involving large numbers of defendants to ascertain whether they are ones that merit judicial concern as one "where a plaintiff asserts questionable patent claims against a large number of Defendants to extract cost of defense settlements" with the costs of defense being driven by the quick discovery deadlines of the local patent rules, and thus the Court's Docket Control and Discovery Orders need to level the playing field.  In the Uniloc litigation, which involves seven cases and 95 defendants, the conference was held on April 26, and resulted in an order which came out over the weekend.  Judge Davis' statements in the order provide some useful guidance as to when a case does and doesn't require such modifications.  

The Court has previously expressed concern about cases where a plaintiff asserts questionable patent claims against a large number of Defendants to extract cost of defense settlements. See Raylon, LLC v. Complus Data Innovations, Co. et al., 6:09cv355 Docket No. 147 at 5 (“[T]his Court has some concerns about plaintiffs who file cases with extremely weak infringement positions in order to settle for less than the cost of defense and have no intention of taking the case to trial. Such a practice is an abuse of the judicial system and threatens the integrity of and respect for the courts.”). In some cases, Defendants are faced with a Hobson’s choice of spending more than the settlement range on discovery, or settling for less than their cost of defending the case, regardless of the merits of the case. See Parallel Networks, LLC v. Abercrombie & Fitch Co. et al., 6:10cv111 Docket No. 338. In those situations the Patent Rules, with their quick discovery deadlines, may not provide the most efficient case management schedule, and the Court has modified its Docket Control and Discovery Orders to level the playing field. See id.; see also Adjustacam LLC v. Amazon.com, Inc. et al., 6:10cv329 Docket No. 426 (implementing agreed modifications to the Docket Control Order to streamline discovery and potentially lead to early resolution of dispute).

This however is not one of those cases. Although Uniloc asserted the same patent in multiple cases against numerous Defendants and previous cases settled before proceeding to the Markman hearing, Uniloc is distinguished by its litigation history. The ’216 patent has already undergone extensive scrutiny. Through a jury trial and numerous appeals Uniloc’s patent has been found infringed and not invalid by both a jury and the Federal Circuit. Thus, Uniloc has demonstrated its willingness to pursue its case through trial. Here, Uniloc’s preparation for the status conference, readiness to provide detailed infringement disclosures, and in camera information regarding the reasonableness of its settlements does not raise the Hobson’s choice concerns that other cases have raised for the Court.

(Footnotes omitted).  At the hearing, the parties suggested specific modifications to the Court’s standard schedule that would promote efficient and economical streamlining of the cases, and I'll cover these briefly.  Notably to some (not me, but you know who you are) no one appears to have even considered a Parallel Networks type expedited and streamlined Markman proceeding to be useful in this case, but they did propose an Adjustacam-type expedited disclosure of sales and licensing data followed by mandatory mediation.

Consolidation

The Court sua sponte raised consolidating these cases during the status conference. Uniloc opposed consolidation at this time, stating that it organized the cases to group like-sized Defendants into the same case, and Defendants did not argue that consolidation would be beneficial to case management. Accordingly, Judge Davis held that the the cases will not be consolidated at this time, but as the cases progress the Court may reconsider consolidation.

Early Production of Sales Data / Early Mandatory Mediation

As in the recent Adjustacam case, the benefit of early production of accused product sales data and an additional early mediation deadline after the exchange of Infringement Contentions and sales data was proposed. The Court accepted this, including as well as early production of licenses.  "These disclosures will help identify Defendants’ potential liability exposure and provide both sides with additional information that may further facilitate meaningful settlement discussions."

Defendants' Proposals

As Defendants’ size and potential liability exposure differs, they presented a variety of suggestions. Some urged their motions to change venue and requested a 60-day stay while the Court considered the transfer motions. Other Defendants similarly suggested a stay while the ’216 patent reexamination is pending. In response to Uniloc’s suggestions, several Defendants requested the Infringement Contentions comply with P.R. 3-1 and that the Court entertain an early summary judgment motion on infringement. Defendants also identified two terms, previously construed by the Rhode Island Court and addressed by the Federal Circuit, that they believe would be important to determining infringement in these cases.

Other Suggestions

There was also discussion of a voluntary option for early disclosure of source code; deferring P. R. 3-3 and 3-4 disclosures until after the early mediation deadline; a consolidated claim construction process and Markman hearing; and an additional management conference after the Markman ruling to discuss trial timing and structure. Judge Davis adopted several of the parties’ suggestions. He declined to depart from the Patent Rules’ early disclosure of Uniloc’s Infringement Contentions, but did defer P.R. 3-3 and 3-4 disclosures and all other disclosures under Fed. R. Civ. P. 16 until after the early mediation deadline.  However, if Defendants voluntarily disclose their source code, Uniloc is obligated to amend its P.R. 3-1(c) chart to incorporate the source code disclosure.  He observed that "[t]he Court hopes these modifications will promote early dismissal of non-infringing Defendants before they are encumbered with the cost of discovery."  Each of these deadlines was to be reflected in separate docket control and discovery orders for each of the cases.

Consolidated Markman

"Although the cases are not consolidated at this time," Judge Davis concluded, "the Court will hold one, consolidated Markman hearing [on October 19, 2011]. The Court notes that many claim terms have been previously construed and appealed to the Federal Circuit. While the Court understands the parties’ need to preserve their rights for appeal, the Court prefers to minimize the time spent on previously construed terms.  Accordingly, before the parties file a Joint Claim Construction and Prehearing Statement, the parties shall meet and confer regarding preserving the parties’ arguments for appeal by stipulation rather than resubmitting previously construed terms for construction. The parties must seek leave and show good cause to submit previously construed terms for construction. The parties shall coordinate to file one Joint Claim Construction and Prehearing Statement applicable to all the Uniloc cases.  In addition, within 15 days of the Court’s Memorandum Opinion setting forth the claim construction, the parties shall meet and confer and jointly file in each case a notice that the cases are ready for a management conference."

Trial Settings

As Judge Davis has done for each of these cases, he provided a pretrial conference, jury selection, and trial date, the latter two in November of 2012.

Motions to Dismiss Asserting Misjoinder Recommended Denied

Oasis Research v. ADrive, et al, 4:10cv435 (E.D. Tex. 5/23/11)

Judge: Amos Mazzant

Holding: Motion to Dismiss for Misjoinder and Improper Venue or in the Alternative Motion to Transfer Recommended DENIED.

Magistrate Judge Amos Mazzant of Sherman is handling pretrial proceedings in this Judge Schneider case out of Tyler, and following a scheduling conference last week in Judge Brown's old courtroom in Sherman earlier this month, he issued reports and recommendations on the numerous initial motions in the case. 

I don't have time this afternoon to summarize all of them, but they are notable for including the first rulings on the now frequently asserted "misjoinder" argument under FRCP 21.  Docket #204 is Judge Mazzant's report recommending that the various defendants' motions to dismiss for misjoinder be denied.  Generally, Defendants requested severance under Federal Rule of Civil Procedure 21 because they contend that the Plaintiff improperly joined the Defendants in this case. Defendants contend that because Plaintiff contends that each Defendant separately and independently infringed Plaintiff’s patents, Plaintiff has not shown that the allegedly infringing systems arise from “the same transaction, occurrence, or series of transactions or occurrences.” See Fed. R. Civ. P. 20(a)(2)(A). Defendants then asked the Court, pursuant to 28 U.S.C. § 1404(a), to transfer venue to several varying districts.  Judge Mazzant wrote:

Generally, the Defendants argue that they are improperly joined in this action because the sale of allegedly infringing products by unrelated companies does not satisfy the “same transaction or occurrence” requirement. Defendants urge the Court to adopt a standard stating, “the fact that two parties may manufacture or sell similar products, and that these sales or production may have infringed the identical patent owned by the plaintiff[ ] is not sufficient to join unrelated parties as defendants in the same lawsuit pursuant to Rule 20(a).” See Pro Softnet Motion (Dkt. #106) at 5 (citing various cases outside this district for this proposition or similar). Defendants argue that proof of infringement against each Defendant will require proof of facts specific to each individual Defendant and to each accused product, which will lead to differing damages issues, willfulness issues, time frames, accused conduct, and discovery issues. Each moving Defendant argues that its products and methods accused of infringement are dramatically different from the other Defendants’ accused products and methods and there is no alleged or actual connection between the Defendants’ products.

Judge Mazzant disagreed with this position.

The Court disagrees with Defendants and finds that Defendants’ alleged acts of infringement do arise out of the same transaction or occurrence. Here, each Defendant offers an online backup/storage service to its customers that allegedly infringes Plaintiff’s patents. The similarity of Defendants’ products is sufficient to satisfy the same transaction or occurrence prong. Courts in this District have consistently held that as long as the Defendants’ allegedly infringing products are not dramatically different, then determining Defendants’ liability will involve substantially overlapping questions of law and fact. See Eolas Tech., Inc. v. Adobe Systems, Inc., No. 6:09-CV-446, 2010 WL 3835762, at *2 (E.D. Tex. Sept. 28, 2010) (holding “adjudicating infringement will require construing the claims and evaluating the patents’ innovation over the prior art...will involve substantially overlapping questions of law and fact”); Adrain v. Genetec, Inc., No. 2:08-CV-423, 2009 WL 30633414, at *2 (E.D. Tex. Sept. 22, 2009) (“license plate recognition system[s]” sold by unrelated defendants were sufficiently similar to be of the same transaction or occurrence); MyMail, Ltd. v. America Online, Inc., 223 F.R.D. 455, 457 (E.D. Tex. 2004) (“severance could be appropriate if the defendants’ methods or products were dramatically different”). Here, Defendants’ products offer the same service, online backup/storage, and the Court finds this is sufficient to satisfy the first prong under Rule 20.

Judge Mazzant further explained that a recent Federal Circuit opinion supported his conclusion, while Judge Schneider's opinion in a recent false marking case did not require severance.

Recently, the Federal Circuit, in an unpublished order on a writ of mandamus, upheld this District’s decision in Eolas Tech., Inc. v. Adobe Systems, Inc., No. 6:09-CV-446, 2010 WL 3835762, at *2 (E.D. Tex. Sept. 28, 2010), on exactly the argument presented by Defendants. In re Google, Inc., Misc. No. 968, 2011 WL 772875, at *2 (Fed. Cir. March 4, 2011). In Eolas Tech, the plaintiff accused twenty-three unrelated defendants of infringing two different patents, and the Court held joinder was proper, stating “[a]ll defendants are accused of infringing the patents in suit, and adjudicating infringement will require construing the claims and evaluating the patents’ innovation over the prior art. Thus, determining defendants’ liability will involve substantially overlapping questions of law and fact.” Eolas Tech, 2010 WL 3835762 at *2. The Federal Circuit upheld the decision of the Court not to sever the claims, pointing out that “judicial economy plays a paramount role in trying to maintain an orderly, effective, administration of justice and having one trial court decide all of these claims clearly furthers that objective.” In re Google, Inc., 2011 WL 772875 at *2. “Further, the district court noted that, in this case, ‘adjudicating infringement...will involve substantially overlapping question of law or fact.’” Id. Therefore, the Court sees no reason to treat the present case any different than the joinder issue addressed in Eolas Tech.

The Court is also not convinced by Defendants’ argument that its recent decision in a false patent marking case is inconsistent with its decision here. In Tompkins v. Able Planet, Inc., No. 6:10-CV-58, (E.D. Tex. Feb. 17, 2011) (Dkt. #136), the Court found that the plaintiff did not establish that its claims against the defendants arose from the same transaction or occurrence and exercised its discretion and granted severance in the interest of judicial economy. Unlike the present case, Tompkins concerned unrelated products that were manufactured, sold or advertised by unrelated defendants. The allegedly unpatented products included headphones, punching bags, flashlights, tents, espresso machines, and baby bottles. Here, all Defendants are accused of marketing online backup/storage services or devices. In the opinion of the Court, such similarity of products is sufficient to satisfy the same transaction or occurrence prong of Rule 20 and is consistent with the prior rulings of this District.

Judge Mazzant's reports go to Judge Schneider next, subject to any objections filed by the parties.

 

 

Motions: Dispositive and Otherwise - State Bar "Federal Court Practice" seminar w/ U.S. Magistrate Judge Amos Mazzant

If it's Friday, I must be speaking at a State Bar seminar someplace.  Two weeks ago it was Houston and this week it will be in San Antonio on evidence & discovery, but last week it was Dallas at the State Bar Federal Court Practice seminar where U.S. Magistrate Judge Amos Mazzant of Sherman  and I co-presented my paper Motions: Dispositive and Otherwise.

As I told the audience, the title says it's about dispositive motions, but the paper is really about rules in federal court, and how there are different lawyers and place for practitioners to look.  Especially if you're a state court practitioner, not used to the many levels at which important rules can lurk.  We used motion practice in general, and dispositive motions in particular to illustrate where you look for rules. 

Our panel was assisted greatly by following similar judge + lawyer panels on discovery (with Bruce Sostek and Judge Don Bush of Plano) pleadings (Tim Durst & Judge David Godbey) and the lunch panel consisting of Judges Mazzant and Bush and U.S. District Judges Ed Kinkeade of Dallas and Keith Ellison of Houston, who joined by speaker from his chambers in Houston, where he'd just taken a $94 million verdict in a trademark case.  (Not telling which judge asked to be addressed as milord in the courtroom.  He may never live that down).  Lots of good advice from pragmatic judges, each of which - coincidentally - claim they are the exception in that they let lawyers conduct their own voir dire.

Rapture Denied: Extensions to answer "may not continue eternally"

Texas Data v. French Transit, 2:10cv525 (E.D. Tex. 5/4/11)

Judge: T. John Ward

Holding: Unopposed Fourth Motion for Extension of Time DENIED

Like most other Eastern District practitioners, I am veritably board certified in requesting extensions to answer, respond, or otherwise plead.  My personal best is eleven on behalf of one party in a case, I think, which is why this order from Judge Ward was so ... disturbing.

In the order granting the Defendant's third unopposed motion for extension to answer, Judge Ward stated "ALL FURTHER EXTENSIONS TO ANSWER MUST SHOW GOOD CAUSE."  (Emphasis in original).  But this fourth motion, while unopposed, didn't provide any good cause, as the Court's order required.

That the motion is unopposed is not good cause by itself. If the parties are currently engaging in settlement discussions, for example, that may potentially be good cause for an extension to answer or respond, but even those extensions, however, may not continue eternally. Though Defendant has asked this Court for extensions to respond to the complaint, which have been unopposed, Defendant has had approximately six months to answer or otherwise respond to the complaint. At this point, therefore, the Court requires Defendant to show good cause for the extension—whether unopposed or not. 

(Emphasis added). 

Judge Rodney Gilstrap of Marshall Named for Eastern District Judgeship

Pardon my French, but it's about damn time.  I am happy to report that the White House reportedly will be announcing a nomination for a federal judgeship in the Eastern District of Texas today, specifically Marshall attorney Rodney Gilstrap of Smith & Gilstrap, presumably for the vacancy that will be created in the federal courthouse in Marshall when Judge T. John Ward retires later this fall.  Judge Gilstrap was recommended to President Obama by the Democratic delegation in the U.S. House from Texas, as well as Texas' two senators, who are both Republicans.

Judge Gilstrap served as Harrison County Judge from 1989 through 2002, so he's been known as "Judge" around here for some time.  He is a 1978 graduate of Baylor University and a 1981 graduate of Baylor Law School and served as president of the Baylor Law Alumni Association a couple of years back (so we'll all be dusting off the Practice Court jokes, although frankly, they don't gather much dust around here since Judges Ward and Everingham in Marshall, Judge Davis in Tyler, and Judge Mazzant in Sherman are also Baylor Law graduates, and complaining about how your Practice Court professor was a meaner/crueler SOB than the ones before/after him is an evergreen topic of conversation in local bar circles).  Of note to me personally, Judge Gilstrap served sixteen years on the Courthouse Preservation Council here in Marshall, taking over the duties of chair when Franklin Jones passed away recently, and helped both in his capacity as county judge and later as chair, to accomplish the successful renovation of the historic 1901 courthouse in Marshall that we are all so proud of.  The renovation of the courthouse began during his tenure as county judge, and continued through two more before finally completing in 2009.  Judge Gilstrap has also been active with the State Bar of Texas, serving as chair of the Unauthorized Practice of Law Committee for several years.

Judge Gilstrap and his wife Sherry Sullivan Gilstrap of Marshall (I mean obviously, but she's from Marshall originally which is why I note it) have two children, a daughter Lauren who is doing her internship (or whatever they call the part where you don't sleep) at Harvard Medical School, and a son Stephen who, coincidentally, graduates next week from Yale Law School. 

When Judge Gilstrap isn't giving other fathers in town an inferiority complex, he practices law at Smith & Gilstrap at 100 West Houston on the square in Marshall.  No, that's not a typo - the federal courthouse is at 100 East Houston - Rodney's office is across the street.  Incidentally, that firm has trouble keeping lawyers off the bench it appears.  It was known as Smith, Hall & Huffman, I believe, years ago before partner Sam B. Hall, Jr. left the firm to go to Congress, but straightened out later in life and ended up as our local federal judge from 1985-1994 (and brought yours truly home to Marshall to serve as his law clerk in '92-93), with the Marshall federal courthouse being named after him.  The "Smith" in the firm name is honorable as well - Rodney was preceded as county judge by his former partner Ernest Smith, who according to the Internet is still practicing law with Judge Gilstrap, 19 years after he passed away.

Congratulations to Judge Gilstrap on the nomination, and may the fat lady's song be not far off.

When Are Products "Reasonably Similar" to the Accused Products?

Stambler v. Amazon.com, Inc., et. al., 2:09cv310 (E.D. Tex. May 13, 2011) 

Judge: David Folsom

Holding: Motion to Compel GRANTED; Request for Sanctions NOT SO MUCH

No, this case isn't about shoes - but it is about when products not accused are "reasonably similar" to the accused products.  Simple question, right?  After all, it's obvious whether the three shoes above are "reasonably similar" to each other?  Right?  (Guys, this is a trick question - do not answer if there's a woman standing next to you).

Plaintiff moved to compel certain defendants to "fully answer" certain interrogatories and produce related documents in this patent infringement case.  Plaintiff argued that Defendants are limiting their responses and production to the specific website listed as “examples” by Plaintiff’s infringement contentions.  Plaintiff claimed that Defendants are refusing to provide discovery on “other websites and systems that use the same accused technology the same way as the accused system” and argued that it is entitled to discovery on these other websites pursuant to the
“reasonably similar” standard that Judge Folsom has previously enunciated. 

Defendants pointed out that Plaintiff had delayed in seeking information regarding these other websites, that the information was something the Plaintiff should have discovered during his pre-litigation investigation, and that  allowing the discovery at this late stage in the case (discovery closes July 15, 2011) would be burdensome.

Judge Folsom provided some useful analysis on the subject of the scope of discovery with regard to products not listed in the Plaintiff's PICs (or ICs):

The Court has previously found “no bright line rule that discovery can only be obtained if related to an accused product identified in a party’s PICs.”  Further, “[t]he Court conclude[d] that the scope of discovery may include products and services (in this case, websites and systems) ‘reasonably similar’ to those accused in the PICs. This finding best comports with the ‘notice pleading and broad discovery regime created by the Federal Rules’ and the ‘right to develop new information in discovery.’”  Where an accused system is named or adequately described, “Plaintiff is entitled to all discovery for that system, including all of the websites that run on that system, regardless of whether the websites were specifically named in Plaintiff’s PICs.”

(Internal citations and quotes omitted).  Judge Folsom found it important that Plaintiff was not proposing assertion of any new or undefined infringement theories as to websites not named in the ICs, but instead, Plaintiff had discovered additional websites that at least appeared to provide access to the same systems or operate according to the same theories of infringement.  "Defendants’ arguments about Plaintiff’s delay and purported lack of diligence are therefore of limited weight because Plaintiff’s ICs put Defendants on notice of Plaintiff’s infringement theories," he concluded.  Accordingly, the Court held:

On balance, Plaintiff’s motion should be GRANTED. Defendants shall not limit their discovery responses to only the websites identified in Plaintiff’s ICs but instead shall also respond as to reasonably similar websites. Defendants shall supplement their document production and discovery responses accordingly within 60 days of this Order. Also, the parties discussed during oral argument that extensions of certain scheduling order deadlines may be necessary. If any party or parties feel that extensions are necessary, such party or parties should file an appropriate motion.

So should the Court award expenses to the Plaintiff as the prevailing party pursuant to FRCP 37(a)(5)?  Well, no.

On one hand, Defendants have read the case law of this Court’s district too narrowly, as discussed above. On the other hand, Plaintiff’s delay in pursuing this issue to motion has provided Defendants with non-frivolous arguments that Plaintiff’s requested relief at this late stage of discovery would cause excessive unfair prejudice to Defendants. . . . In sum, Plaintiff could have included at least some these other websites in his ICs, and Plaintiff could have moved to compel or to amend his infringement contentions several months earlier than he did.  In granting Plaintiff’s motion, the Court has rejected Defendants’ substantive arguments, but in light of Plaintiff’s at least partial lack of diligence, Defendant’s “nondisclosure, response, or objection was substantially justified.” Fed. R. Civ. P. 37(a)(5)(A)(ii). Alternatively, Plaintiff’s delay is a “circumstance mak[ing] an award of expenses unjust.” Fed. R. Civ. P. 37(a)(5)(A)(iii). Although the Court is mindful of the requirement in Rule 37(a)(5)(A)(i) that a movant first attempt to obtain discovery without judicial intervention, the parties’ briefing and oral arguments demonstrate that Plaintiff’s delay resulted at least in part from a lack of diligence.  As a result, the Court makes no award of expenses for this motion.

("Non-frivolous arguments" omitted).

From Docket Navigator.