Eastern District of Texas Federal Court Practice

Motion to Compel Granted; Court Observations on How 30(b)(6) Depositions Work

Collins v. Nissan N.A., 2:11cv428 (5/9/13)

Judge: Rodney Gilstrap

Holding:  Motion to Compel GRANTED

I remember when  Collins v. Nissan meant a product liability case.  Not anymore.  

Plaintiff sought an order in this patent case: (1) preventing defendant Nissan from presenting evidence and testimony at trial concerning certain topics (which were the subject of deposition of Nissan corporate reps); (2) ordering Nissan to provide substantive interrogatory responses; and (3) providing translations and a narrative response to one interrogatory.  Judge Gilstrap heard arguments from both sides at an oral hearing, and issued this order, being "of the opinion that Nissan has failed to comply with its discovery obligations in good faith and that Plaintiffs are entitled to appropriate relief under Fed. R. Civ. P. 37."

“It is well settled,” Judge Gilstrap continued, “that the rules of discovery in the Eastern District of Texas are accorded a broad and liberal treatment to affect their stated purpose of adequately informing litigants in civil trials,” citing DDR Holdings, LLC v. Hotels.com, L.P., et al., 2012 WL 2935172, at *2 (E.D. Tex. July 18, 2012).  As in DDR, the primary issue dealt with deposition notices.

Nissan may not ignore certain topics in a 30(b)(6) deposition notice simply because it believes the topics noted are ambiguous or otherwise addressed by its document production. The Court finds that Nissan did just that in this case. If Nissan’s true concern was ambiguity, procedural devices are available and known to Nissan to seek clarification of the noticed topics. Nissan never sought clarification from Plaintiffs or from the Court. This District’s local discovery rules are clear, and they do not excuse a failure to provide 30(b)(6) testimony simply because Nissan believes that its document production “speak for themselves.”

Here, Nissan unilaterally decided to block discovery into topics clearly identified in a 30(b)(6) deposition notice. This is not permitted under the Federal Rules of Civil Procedure or this Court’s Local Rules. Such unilateral action blatantly usurps the Court’s function as the gatekeeper in matters of discovery. Having been put on notice of Plaintiffs’ 30(b)(6) topics, Nissan was required to either (1) tender a witness on each topic; (2) confer with Plaintiffs’ counsel to discuss the scope of the deposition and resolve any disputes among themselves; or (3) seek relief from the Court once a meet-and-confer between the parties did not resolve the dispute. Instead, Nissan acted unilaterally, purposefully and with knowing disregard for these established steps by refusing to present a knowledgeable witness at all on these topics. Such conduct is precisely that for which Fed. R. Civ. P. 37 provides a remedy.

The Court also found that Nissan failed to act in good faith by objecting to Plaintiffs’ Second Set of Interrogatories as untimely and refusing to provide substantive responses just because its response deadline, with the three days added pursuant to L.R. cv-6(a), (oh no, they didn’t…) “would fall three days after the close of fact discovery.”  (Yep, they did). 

The Court believes that it should not have to remind the parties that a deadline does not prohibit or discourage a response prior to the last possible moment; rather, a deadline sets the outer limit for a timely response. Here, where the response deadline falls three days after the close of discovery (and only after Nissan chooses to take advantage of the additional three days offered by the Local Rules), the proper course of action for the responding party is to either meet and confer seeking to extend the discovery cutoff by three days, endeavor to respond in a timely manner, or seek direction from the Court. The Court cannot help but be persuaded that Nissan’s refusal to pursue none of the above options reveals a strategic but improper decision to consciously impede Plaintiffs’ discovery efforts. Again, Fed. R. Civ. P. 37 provides a remedy.

Accordingly, the Court granted Plaintiffs’ Motion to Compel and ordered that Nissan, within fourteen (14) days, provide to Plaintiffs at Nissan’s cost:

(1) substantive responses to Plaintiffs’ Second Set of Interrogatories,

(2) a narrative response to Plaintiffs’ Interrogatory No. 5, and

(3) certified English translations of Japanese documents (presently existing in whole or part in Japanese) referenced in Nissan’s Response to Interrogatory No. 5.

The Court found that Plaintiffs’ request to exclude Nissan from presenting evidence and testimony at trial from fact witnesses (and expert witnesses to the extent they rely on the testimony of fact witnesses) concerning the noticed 30(b)(6) topics 15 and 17 “has merit, but finds that now is not the most appropriate time to administer such relief. The Court believes that when it considers the various pretrial motions that the parties will present that it can then better consider extending such relief as justified by Nissan’s conduct at that time. Accordingly, the Court reserves the application of appropriate relief in this regard until such future date before the start of trial as the Court may determine.

As my dad used to say, the more things change, the more they stay the same…

 

Post-trial motions resolved in SSL v. Citrix; Everything The Jury Did Affirmed

SSL Services v. Citrix Systems, Inc., 2:08cv158 (4/17/13)

Judge: Rodney Gilstrap

Holding: Everything The Jury Did AFFIRMED

I thought I'd recognize the second patent trial in the old courthouse this week with Judge Schneider by noting the final outcome at the district court level of the first, last year's SSL v. Citrix case, which just came out a couple of weeks ago. 

As I posted last year, SSL Services, LLC v. Citrix Systems, Inc, et al., 2:08cv158, was tried before Judge Rodney Gilstrap with a Marshall jury in the historic 1901 county courthouse - the first trial in the historic district courtroom in almost half a century.  The case marked the first application by a district court the Federal Circuit opinion in Bard Peripheral v. W.L.Gore (Fed. Cir. 2012) that the "objective prong" of the test for willful patent infringement is a separate question of law, and that henceforth it will be the trial court's duty to determine whether the defendant's actions were objectively reckless.  The opinion came out during the trial, and was applied by the Court is figuring out how to submit the issue in the case.

In SSL, there were two patents asserted.  The jury found one patent (the one with the lion's share of the $63 million in damages sought) not infringed, and found that only one of the three claims on a second patent was infringed.  It found that all three of the second patent's claims were also contributorily and induced-edly infringed.  It found that the infringement of the second claim was willful, and Judge Gilstrap, following the new Federal Circuit caselaw in Bard, determined the objective prong of willful as a matter of law and submitted the subjective prong to the jury with the appropriate instructions for that prong.  

Two weeks ago Judge Gilstrap ruled on the multiple pending motions for judgment as a matter of law and new trial following the jury's verdict.  Here are the subjects and the rulings with somewhat abbreviated analysis:

Defendant's JMOL and MNT on Damages - Denied

Defendant Citrix wanted JMOL and in the alternative a do-over on damages, asserting that the plaintiff was not entitled to pre-suit damages because it had not marked, because the damages verdict lacked substantial evidence because jury relied on an allegedly noncomparable license, and because it was, well, just generally unsupported for other reasons.  Judge Gilstrap's opinion:

• discusses the marking requirement and concluded that substantial evidence supported the jury's conclusion that the marking statute was complied with;
• discusses the law on comparability of license agreements and concluded that substantial evidence supported the jury's damages award and that the licensing agreement was in fact sufficiently comparable; and
• concluded that there was substantial evidence to support the jury's conclusion as to damages.

Plaintiff's JMOL/MNT that the Patent It Lost on is Infringed as a Matter of Law - Denied

Uh, no.  Judge Gilstrap's opinion:

• noted that the plaintiff did not object to the testimony it now complained of at trial (noting that a ruling on a limine did not preserve error on the point) and that the testimony was proper anyway;
• concluded that other objected-to testimony was proper; and 
• concluded that there was substantial evidence supporting the jury's verdict of noninfringement.

Defendant's JMOL/MNT of noninfringement/invaldity - Denied

Substantial evidence, yada yada - denied.

Defendant's JMOL/MNT as to Willfulness - Denied

First the objective.  Judge Gilstrap observed:

In sum, Citrix’s invalidity defenses based on prior art have been rejected: (1) by the Court as being objectively unreasonable; (2) by the jury as not being shown by clear and convincing evidence; and (3) by the USPTO in the Action mailed November 29, 2012. The Court is of the continuing opinion that the mere fact that claims have entered reexamination cannot be an absolute bar to willfulness with regard to the “objectively reckless” inquiry. In this case, Citrix’s invalidity defenses have been rejected three times. The cited references simply do not invalidate the claims, and it was objectively unreasonable for Citrix to believe otherwise.

Next, the Court found that the evidence presented at trial was (drum roll please) "more than substantial evidence to support the jury's verdict regarding willful infringement."

As I mentioned to the jury in that courtroom yesterday during voir dire - the jury box is in the center of the courtroom for a reason.

 

 

 

 

 

 

 

 

Motions to Sever Granted; Motions to Transfer, Dismiss and to Stay Denied

Lodsys v. Brother, et al., 2:11cv90 (1/14/13)

Judge: Rodney Gilstrap

Holding: Motions to Sever GRANTED; Motions to Transfer & Motions to Stay DENIED

This opinion disposes of ten pending motions in this multidefendant case.  It details the history of the Lodsys litigation to date, including the Court's prior order consolidating the cases for pretrial purposes following receipt of scheduling proposals from the parties.

First up was a motion by HP to reconsider the Court's order denying its motion to sever following the Federal Circuit's issurance of In re EMC (the first one), and then transfer the severed case to the Southern District of Texas.  Judge Gilstrap agreed that EMC changed the standard that had previously been applied in the district, and granted the motion to sever, but denied the motion to transfer, finding that judicial economy and the short distance between the two fora favored keeping the case with similar cases involving similar products by other defendants.

The Court granted similar motions to sever by other defendants, and denied motions to transfer by defendants Playboy, GMCI, RK Netmedia, a motion to dismiss for /improper venue by HSN, and motions to stay by several defendants asserting the customer suit exception 

Marshall status conferences

Status conferences in patent cases this morning before Judges Gilstrap and Payne in the courthouse across the street from the one pictured.  

Time to Markman ranged from 6.5-10 months, and time to trial 13-16 months.  

High Win: Defendant Top Victory Prevails on Infringement and Invalidity Case Against Hitachi in Marshall

Well, the name fits.

A Marshall jury in Judge Rodney Gilstrap's court got an early start on the weekend this afternoon after rendering a verdict for defendant Top Victory in Hitachi Consumer Electronics Co. et al. v. Top Victory Electronics (Taiwan) Co., Ltd., et al., 2:10cv260.  

The jury found none of the seven asserted claims from four patents infringed, that none of the infringement asserted to be willful had been proved to be so, and that all three of the claims asserted to be invalid had been proved invalid.  The jury did not have to answer the damages question, but it did, inserting "0.00".

Geotag - 68 page Markman ruling two weeks after hearing; six weeks after case reassigned to Judge Gilstrap

I stopped posting on Markman opinions several years ago because the sheer numbers of such opinions issued by Eastern District judges got to be so large, and the utility of a specific opinion to anyone other than the litigants was so minor.  I am making an exception for this case because of the numbers of parties at issue, and the significance of the order for the management of this litigation, which was recently reassigned to Judge Rodney Gilstrap in Marshall.

The Geotag litigation has a long history.  In 2006 Geotag's predecessor Geomas filed an action in Marshall which resulted in a Markman opinion by Judge Everingham in late 2008.  That case was concluded by settlement shortly before trial.  The history of the subsequent litigation can perhaps best be described by the judges to whom it has been assigned since its initial filing.

Judge Ward - 2010-2011

Two years later, in mid-2010 Geotag filed two new actions, followed by several more actions naming multiple parties in the fall of 2010, then more in 2011 and additional parties in late 2011 and I believe early 2012, eventually reaching somewhere in the neighborhood of 500 named defendants across the multiple cases.  These cases were assigned to Judge Ward.

A brief word is necessary about the number of defendants.  In recent weeks, I have posted about the statistical effect of In re EMC I in changing what had been a single case involving, let's say a dozen defendants into a dozen separate cases.  This litigation is the best example of that effect.  In this litigation, the plaintiff filed, all told, maybe a dozen cases involving 400-500 defendants in 2010, 2011 and 2012, and as a result of later severance orders in light of EMC, it has been broken up into a very large number of individual cases, with most of that happening in 2012.  As a result, when looking at statistics of "new" filings, it is worth noting that this litigation alone resulted in massive numbers of "new" filings in 2012, even though almost all of the defendants against whom claims were asserted were actually sued in 2010 or 2011.  Again, probably only of significance for statistical purposes.

Judge Folsom - 2011-2012

As readers will recall, the fall of 2011 was a period of transition in the Marshall Division, with Judges Ward and Everingham leaving at the end of September, and as a result the cases were reassigned to Judge Folsom.  Judge Folsom conducted the status conference of the gods in the case that fall, with a couple hundred lawyers attending in Texarkana.  He later denied a motion to stay in the case as premature.  

Meanwhile, Microsoft and Google, which are not parties to the Eastern District cases, filed a declaratory action against Geotag in Delaware, and that court denied a motion to transfer those cases, noting the significant weight that the Third Circuit affords to the plaintiff's choice of forum. Thus a parallel action is pending in Delaware, and that court has conducted a claims construction hearing, but has not yet issued an order.

Judge Schneider - 2012-2013

Following Judge Folsom's retirement from the bench last March, the cases were reassigned to Judge Michael Schneider, who, among other things, entered a scheduling order, severed large numbers of the cases into separate actions under In re EMC I, resolved protective order issues and managed issues arising from the plaintiff's changing of counsel, and denied a renewed motion to stay, finding that the "customer suit" exception did not apply.  His schedule had the cases set for trial in October 2013,. with the Markman hearing in late January.

Judge Gilstrap - January 2013 - present

As a result of the docket reallocation in January, almost all of the Geotag cases were reassigned to Judge Rodney Gilstrap.  The reallocation had the effect of cancelling the scheduled Markman hearing at the end of January, but Judge Gilstrap immediately noticed the parties for a scheduling conference on February 1, and reset the Markman for eleven days later, February 12.  He also set the cases for trial beginning in December of this year. 

At the February 15 Markman hearing, Judge Gilstrap told the parties that he would work to get an opinion out in two weeks, and sure enough, when I fired up the e-mail this morning, a 68-page final opinion (not a provisional, as is sometimes the case) was waiting for me, resolving the parties claims construction disputes. 

The Markman ruling

 The opinion addresses fifteen groups of terms, as well as a letter brief arguing that certain claim terms were invalid as indefinite.  Judge Gilstrap's opinion noted that the plaintiff was asking the Court to simply adopt Judge Everingham'r prior constructions from the Geomas case.  The opinion notes that prior claim construction proceedings are entitled to "reasoned deference", even though stare decisis may not be applicable per se, and attendees at the hearing will recall that Judge Gilstrap specifically described the status of the prior claims construction ruling in his consideration.  The actual constructions in the case are likely of interest only to the parties (although in this litigation that is like saying that something would be of interest only to Texans interested in high school football) but I have tried to summarize some of the significance of the individual rulings.  The actual significance of the rulings in the case will no doubt come to light in the coming weeks and months as the parties designate experts and file motions.

"Database" - the court modified the Geomas construction to "clarif[y] that the database is organized so as to facilitate retriveal of information."

"Entry" and "Data Record" - in its lengthy analysis regarding these terms, the court found no disclaimer of "data" in the prosecution history, citing the relevant test, and concluded that the use of both terms was simply "poor drafting practice" when the patentee amended the claims to replace "information" with "entries".  The court went on to decide that the plaintiff's proposal was overbroad, but the Defendants' proposal should be rejected to an extent as well and came up with its own constructions.

"Dynamically replicated" - the court concluded that the defendants' proposal that dynamic replication occurs within the database was correct, and added that to the construction from Geomas.

"Hierarchy" - the court noted that it reached the same conclusions reached in Geomas.

"Database of information organized into a hierarchy of geographical areas" - the court noted that in Geomas the court found that the claims did not require a hierarchical database, and adopted that analysis.  It concluded, however, that with some exceptions, no additional constructions of the disputed terms were required.

"... dynamically replicated into..." - as I said, these terms are of interest to a narrow group of people, but these were perhaps less so, with the defendants offering two constructions plus an indefiniteness argument.  Judge Gilstrap expressly rejected the second proposed construction by Canon, as well as the indefiniteness argument, citing the relevant standards for determining indefiniteness.  He also noted that the indefiniteness argument also appeared to be arguing lack of written description, and rejected this as a claim construction argument, noting that it is a question of fact.  With respect to the remaining proposed construction, the Court again determined that no additional constructions were necessary given his constructions of the constituent terms.

"Geographical search area" - the court rejected Defendants' proposal that the area must be "selected by the search engine", but added three words to the Geomas construction.

"Organizing a database..." - the court rejected the Defendants' proposal to include a tenporal limitation, noted that other disputes were addressed by prior constructions, and held that the term would have its plain meaning.

"Search engine" - the court wrote that it reached "substantially the same conclusion" as the court in Geomas.

"Said search engine..." - here plaintiff wanted Geomas and defendants wanted no construction.  Judge Gilstrap wrote that he reached the same conclusions as the court in Geomas, but because the constituent terms were construed elsewhere, no additional constructions were necessary.  He expressly rejected the Defendants' proposal that the terms required an order of steps.

"On-line information" - after noting that the dispute in Geomas regarding this term involved a different issue, Judge Gilstrap came to a different conclusion and substantially adopted Defendants' proposal, omitting only the word "remotely" as redundant.  (Some might see irony that a 68 page opinion finds only one word in the parties' proposals redundant.  Not me, of course).

"Organizer" - the court reached "substantially the same conclusion reached in Geomas.

"Topic" - the court rejected Defendants' proposal to limit the term to "good and services" and declined to construe it.

"Entries corresponding..." - the court again reached "substantially the same conclusion reached in Geomas.

 "Narrower geographical area" - the court resorted to using the city of Texarkana (Texas and/or Arkansas), and its associated federal courthouse to illustrate why the disputed term should not be limited in the way Defendants proposed, and held that the terms would have their plain meaning.

Motions to Sever Granted; Motions to Dismiss for Standing/Service Denied; Motion to Dismiss for Lack of Personal Jurisdiction Granted.

LBS Innovations v. BP America, et al., 2:11cv407 (2/21/13)

Judge: Rodney Gilstrap

Holding: Motions to Dismiss, Sever and Stay RULED ON

Lots of motions addressed by this order - in fact as the Court notes at the end, this order is intended to resolve around forty-plus pending motions or joinders in pending motions.  The key motions are these:

1. Motion to Dismiss for Lack of Subject Matter Jurisdiction and Insufficient Service of Process by the First Moving Defendants; 
2. Motion to Dismiss or Sever for Misjoinder by the Second Moving Defendants; 
3. Motion to Dismiss for Lack of Personal Jurisdiction by Giant Eagle; 
4. Motion to Stay Discovery Pending Ruling on Pending Motion to Dismiss for Lack of Personal Jurisdiction (by aforesaid Giant Eagle); and 
5. Motion to Dismiss for Lack of Subject Matter Jurisdiction and Insufficient Service of Process by Another Defendant.

Motion to Dismiss for Lack of Subject Matter Jurisdiction and Insufficient Service of Process; 

Keycorp, Costco and McDonald’s (“First Moving Defendants”) moved to dismiss LBSI Texas’ claims pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(5). With regard to Fed. R. Civ. P. 12(b)(1), they contended that LBSI Texas does not have legal standing to maintain this infringement lawsuit against the Defendants because the original Plaintiff, LBSI New Jersey, transferred all of its rights in the ‘756 Patent to a new entity in the middle of this lawsuit. With regard to Fed. R. Civ. P. 12(b)(5), they contend that dismissal is warranted on the grounds that neither LBSI New Jersey nor LBSI Texas served the Complaint within 120 days of initiating this lawsuit as required by Fed. R. Civ. P. 4(m).

With respect to the standing issue, Judge Gilstrap agreed with Judge Schneider's prior finding that any defect in standing had been cured.  "Federal Circuit case law makes clear that the temporary loss of standing during patent litigation can be cured before judgment, so long as the Plaintiff had standing at the inception of the suit," Judge Gilstrap wrote, citing the odd Federal Circuit case.  "As Judge

Schneider correctly noted, '[t]his is not a situation in which the substitution would be the equivalent of initiating a new lawsuit with a new plaintiff in a new cause of action. Rather, the composition and interests in this litigation remain unchanged with the substitution by LBSI Texas.'" Accordingly, he denied the First Moving Defendants motion to dismiss under Fed. R. Civ. P. 12(b)(1).

Ah, but there's still a service of process issue.  (Bet this will be quick).  "Considering the facts and circumstances of this case, the Court finds that LBSI New Jersey’s failure to serve the complaints within the 120-day period required by Fed. R. Civ. P. 4(m) is excused by “good cause” due to LBSI New Jersey’s good faith belief that the period for service restarts upon the filing of an amended complaint," Judge Gilstrap concluded.  "Further, even '[i]f good cause does not exist, the court may, in its discretion, decide whether to dismiss the case without prejudice or extend time for service.'  The Court exercises such discretion here and expressly enlarges the time of service under Rule 4(m) by nineteen days from the filing of the original complaint. Accordingly, the motion to dismiss under FRCP 12(b)(5) of the Ancient & Honorable Order of the First Moving Defendants was denied.  

Motion to Dismiss or Sever for Misjoinder

Not to be outdone, the Second Moving Defendants (the Queen's Own) sought dismiss or severance for violation of the AIA's joinder provision.  Plaintiff claimed that the AIA did not apply because the case was filed before the AIA, even though it amended the complaint afterwards.  Judge Gilstrap concluded that he need not reach the issue of whether the spunky young AIA or the dowager
joinder provision (FRCP 20 with work done by In re EMC I) applied, because under either, joinder was not appropriate.  Accordingly, he granted the motion to sever the claims against the Second Moving Defendants, and created separate cases against each.  Whether the order required the actual dissolution of the Queen's Own is unclear, however, because the claims were consolidated back into the lead case for pretrial issues, except venue.  As of the writing, it is uncertain whether the coat of arms and tartan of the SMD can still be used, or whether post-consolidation, some modification will be required.  An expert on heraldry is needed here.  (Or at least on ADD).

The Court also noted that there were numerous joinders as to the severance issue, and granted them, requiring the creation of, in total, another thirteen new causes of action.  This is related to one of my posts last week - these are "new cases" but they aren't actually new filings by plaintiffs, and represent claims that were actually filed in 2011 before the AIA, or in some cases defendants added in 2011 or 2012 post-AIA.  Whether that matters to you probably depends on to what extent you consider the filing statistics to represent current trends in patent filings.  Personally, I would exclude new causes of action due to severance for purposes to trying to divine current filing trends, and also think about separating follow-on cases claiming infringement of the same or related patents since their filing is often related to the existence of previously-filed cases.  But that's just me.  

Motion to Dismiss for Lack of Personal Jurisdiction / Motion to Stay Discovery

Defendant Giant Eagle (you don't even need to make up names for this one) moved to dismiss the claims against it on the grounds that it is not subject to personal jurisdiction in Texas. Judge Gilstrap issues the world's shortest personal jurisdiction opinion on this one.

Giant Eagle is a well-established regional grocery store chain headquartered in Pennsylvania that conducts no business in Texas. It lacks the “minimum contacts” needed for the exercise of personal jurisdiction over it in Texas.  Accordingly, the Court GRANTS Giant Eagle’s Motion to Dismiss for Lack of Personal Jurisdiction andDISMISSES all claims in this action against Giant Eagle WITHOUT PREJUDICE. While only minimum contacts are necessary for jurisdiction to attach, here it is undisputed that no contacts, not even those that could reasonably argued to be minimal, exist.

Motion to Dismiss for Lack of Subject Matter Jurisdiction and Insufficient Service of Process

Another defendant (a commoner apparently, as they're not identified as Ye Olde Third Moving Defendant) sought dismissal on the same ground as the First Moving Defendant, and Judge Gilstrap denied the motions on the same grounds.

Finally, the Court noted (as I've noted above) that the joinders in the severance argument were granted, but the joinders in the other motions were denied, and noted that this order was intended to resolve all pending motions or notices in the case - so anything not ruled on was denied as moot.

 

Motion for Summary Judgment of Invalidity for Indefiniteness Granted

MobileMedia Ideas v. HTC, 2:10cv112 (2/12/13)

Judge: Rodney Gilstrap

Holding: Motion for Summary Judgment of Invalidity for Indefiniteness GRANTED

Okay, now I get why Judge Gilstrap told the parties at the Markman hearing in the Geotag litigation on Tuesday that he understood the legal standards for indefiniteness when the issue was raised - later than same day he issued this order granting a motion for summary judgment of invalidity based on indefiniteness.

In this case Judge Gilstrap issued first a provisional, and then a final Markman opinion agreeing with defendant HTC that claim 49 of the '170 patent was invalid as indefinite.  In this order he noted that he had reviewed the summary judgment briefing on the point and did not find any reason to depart from his prior finding, which was set forth in his full Markman opinion.

Motion for Leave to Supplement Infringement Contentions Denied.

RMail Limited v. Amazon.com, et al., 2:10cv258 (2/8/13)

Judge: Rodney Gilstrap

Holding: Motion for Leave to Supplement Infringement Contentions DENIED.

Plaintiff sought leave to supplement its infringement contentions to assert an additional claim. In his order denying the motion, Judge Gilstrap noted that at the time the plaintiff filed its motion for leave, claim construction briefing had already begun. After laying out the relevant legal standards, the court went through the applicable factors to determine whether leave should be granted.

With respect to the first factor, the plaintiff’s explanation for the failure to meet the deadline, plaintiff contended that it had obtained two important pieces of information through discovery. Defendants claimed that there was nothing new in the discovery which explained the plaintiff’s failure to meet the deadline. “The Court agrees,” Judge Gilstrap wrote. “RPost has not shown that its delay was reasonable. The information that RPost now solely relies upon in its proposed supplemental contentions is information that is publicly available to it prior to the P.R. 3-1 deadline.” Accordingly, the court found that the first factor strongly favored denying leave.

The second factor looks to the importance of the thing that would be excluded. The plaintiff asserted that it would be precluded from asserting the new claim in a separate action, but the court wrote that “the same can be said of any unasserted claim in any patent infringement case,” and that this alone did not make a particular claim important. Thus, this factor was also found to favor denial.

The third factor is the potential prejudice to defendants if the motion for leave was granted. Judge Gilstrap found the addition of claim at this late stage of litigation would cause prejudice to defendants and burden the Court.

The parties have concluded their claim construction briefing on the ’624 Patent. To permit RPost to supplement its infringement contentions now would require additional claim construction briefing. While RPost has construed one claim term from claim 7 in its opening brief, Defendants have yet to respond and may propose additional terms to construe. The Court would then await a reply brief from RPost. However, there is insufficient time before the scheduled Markman hearing for the parties to complete such briefing, and for the Court to review such briefing, in a reasonable manner. Thus, in addition to supplemental briefing, allowing the supplemental contention would also require either a supplemental Markman hearing or a continuance of the hearing. Because fact discovery in this case is set to close April 1, 2013 and the case is set for trial in August of 2013, allowing the amendment would prejudice Defendants and create added burdens for the Court. This factor favors denial.

The final factor looks to the availability of a continuance to cure any potential prejudice. The Court held that the plaintiff had offered no argument in support of its conclusory statement that a continuance could cure any allege prejudice.

Accordingly, citing the impending Markman hearing and the completed claim construction briefing, Judge Gilstrap held that the plaintiff's “newfound concern” that it may not have sufficient information to build its case on the presently asserted claims did not justify granting leave for its “untimely disclosure based on information publicly available to it prior to the original deadline.” Accordingly the court held that the plaintiff had not demonstrated good cause under P.R. 3-6, and accordingly denied leave to amend.

The Final Word

Portal Technologies LLC v. Yahoo!, 2:11cv440 (1/3/13)

Judge: Rodney Gilstrap

Holding:  Emergency Motion to Stay Pending Reexamination

Remember that scene in The Princess Bride where Inigo Montoya takes issue with another character's use of the word "inconceivable", saying "[y]ou keep using that word. I do not think it means what you think it means."  

Yep, we're talking about the USPTO's use of the word "final."

In this case the defendant sought a stay pending reexamination following the PTO's Action Closing Prosecution ("ACP") rejecting all claims of the patent.  Judge Gilstrap didn't think that action was as final as the defendant did.  His exposition of what "final" actually means is worth repeating:

The Court believes that “final” does not always have its plain and ordinary meaning at the USPTO. In this particular instance, the patent owner has the right to make a submission to the patent examiner under 37 CFR 1.951(a) in response to the recently issued ACP. MPEP § 2673. This submission effectively initiates another round of arguments before the USPTO's patent examiner, after which the examiner may reverse the rejection and allow the claims. Further, reexamination does not end even if the examiner maintains the rejection of the claims. Should that happen, a Right of Appeal Notice (“RAN”) will be issued, freeing the parties to appeal the examiner’s decision to the USPTO Patent Appeals Board. The USPTO Appeals Board will take up the case and hear another round of arguments. If the Appeals Board maintains the rejection of the claims, the patent owner may appeal the rejection of the claims to the United States Court of Appeals for the Federal Circuit. An Action Closing Prosecution is far from a “final” rejection. Here it is apparent that the reexamination proceedings in this matter are still very far from complete and the final outcome at the USPTO is at least several years away. It is hard for this Court to understand Yahoo’s possible justification for asserting this Motion to be an “emergency” when confronted with the practical realities of practice before the USPTO as outlined above.

Judge Gilstrap reviewed the motion under the Soverain three prong test and found that a stay was not warranted.  "First, a stay would prejudice Portal’s interest in the timely enforcement of its patent rights. Second, a stay will not simplify issues in question because, as noted above, the reexamination is very far from complete. Third, discovery is well-underway, a trial date has been set and the parties are nearly complete with Claim Construction briefing."  Accordingly, Judge Gilstrap denied the emergency motion for stay.