Eastern District of Texas Federal Court Practice

Motion to Reconsider Order Denying Motion to Sever Denied

MicroUnity v. Acer, et al., 2:10cv91 (3/26/13)

Judge: Roy Payne

Holding: Motion For Reconsideration Of Order Denying Motion To Sever Certain Claims DENIED

Qualcomm asserted that the Court’s prior ruling denying its prior motion to sever must be reconsidered in light of In re EMC Corp., 677 F.3d 1351(Fed. Cir. 2012).  Judge Payne agreed that his ruling did not use the precise analysis in In re EMC, which was issued seven months after his ruling, but noted that the question was not how the Court’s ruling compared to the analysis articulated in EMC, but whether Qualcomm had shown that the use of that new analysis would lead to a different result.

After reviewing the analysis under the new caselaw, the Court concluded that unlike the court in the EMC case, “a ‘logical relationship’ exists between all of the accused products and services because infringement for all products and services will involve to some extent their implementation and use of an ARM architecture and instruction set.”  Accordingly, he found that his earlier ruling would still be the same even under the “more focused and precise standard” set forth in In re EMC.  

 

Prosecution Bars

Schlumberger Technology v. Borets Weatherford U.S.,, 2:12cv613 (5/13/13)

Judge: Roy Payne

Holding: Joint Motion for Entry of a Protective Order GRANTED

This opinion provides an overview of the applicable law on prosecution bars, as well as its application to a somewhat unusual set of facts.  The parties proposed an agreed protective order that largely followed the Court's form for patent cases, with the plaintiff endorsing the standard prosecution bar provision.  The Defendants, however, proposed a modified form, which Judge Payne included - in redline form - in the opinion.  

The Court rejected a proposed change that would have required bar material to be produced in different format, as well as a provision that would have limited the bar to financial information, citing Deutsche Bank (for you prosecution bar junkies out there).  The Court did, however, agree with the defendants that a bar was not warranted on old stuff (my term), and accordingly revised the language of the bar to cover materials that related to “technical information concerning current or future products and such information was created after January 1, 2009.”  

The Court went on to state that if a party could identify additional specific confidential information that meets the "rigorous competitive decisionmaking standard and does not fall within the scope of this prosecution bar" the party could seek additional relief.  

Motion to Reduce Damages Award in Judgment Following Appeal Denied

Retractable Technologies v. Becton, Dickinson & Co., 2:07cv250 (5/13/13)

Judge: Roy Payne

Holding: Motion to Conform Judgment to Federal Circuit Mandate DENIED

Interesting procedural situation here.  Verdict of infringement by two products with one consolidated damages award of $5 million in a patent/antitrust case.  On appeal, the parties didn’t address, nor did the Federal Circuit, the damages award.  That court affirmed the jury finding of infringement as to one of defendant’s products, affirmed the finding of no invalidity, and reversed the infringement finding as to the second product accused. The judgment of the Federal Circuit, issued as mandate, reads: “Reversed in part and affirmed in part.” The damage award was not ever vacated.  There is no remand, nor did the opinion discuss any further proceedings in the district court.

Defendant filed a motion to “conform the judgment to the Federal Circuit mandate” citing FRCP 60(b)(5), a hole that Judge Payne found to be a questionable location for defendant’s peg.  The order does not set out what the defendant was seeking in the motion, but indicates that it was some sort of reduction of the damages award to allocate damages between the products and reduce the amount of the judgment to what the defendant claimed was the portion of the damages award attributable to the product as to which infringement was affirmed.  Judge Payne declined to do so, holding that Fifth Circuit caselaw known as the “mandate rule” precluded further adjudication as to unappealed-from portions of the judgment, here the amount of the damages award.  Nor was revising the judgment as simple as the defendant claimed:

Determination of the effect of the reversal of the infringement finding as to the 3 mL Integra (but not the 1 mL Integra) syringes is not a simple matter of arithmetic as BD argues. RTI points out numerous issues that would have been presented to the Federal Circuit on the initial appeal if BD had decided to appeal the damage award. Since neither expert suggested the numbers awarded by the jury, the court would have to weigh the expert testimony and other damage evidence to redetermine the damages for each accused product. These are matters that should have been presented to the Federal Circuit on appeal and not raised for the first time in this court.

The injunction had, however, been appealed, so the Court did modify the judgment to exclude the 3 mL Integra from the injunction.

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.  

Agreed Motion to Cancel Venue Hearing Denied - (Updated: motion to transfer granted)

Phoenix Licensing v. Nationwide, et al., 2:12cv208 (1/30/13)

Judge: Roy S. Payne

Holding: Emergency Motion for Continuance GRANTED; Agreed Motion to Cancel Venue Hearing DENIED; 

Twice in recent weeks (In re Fusion-io on 12/21/; In re EMC II yesterday) the Federal Circuit, while denying petitions for writs of mandamus, has noted the importance it attaches to addressing motions to transfer in a timely fashion.  

In this case, the Court set a hearing on defendant Traveler's motion to transfer venue in this case on January 10 for January 24, with the now-customary language regarding making witnesses to be called at the hearing available for deposition beforehand.  (The two weeks notice is also consistent with recent practice - the court issued an order in the first such hearing on 1/4 for a hearing on 1/18).  If prior practice holds true, the court would rule on the motion at the conclusion of the hearing, rather than taking additional time to draft a written opinion, thus expediting resolution of the motion, consistent with the Federal Circuit's statement in In re EMC II yesterday quoting the Fifth Circuit that disposition of the motion should take "top priority" in the handling of the case.  

However, a week after the court set the hearing, on 1/18 the Defendant Travelers and the plaintiff filed a joint motion to reset the hearing due to scheduling conflicts for a key witness, and three days later on 1/21, three days before the scheduled hearing, an unopposed motion to cancel the hearing on its motion completely, and extend the briefing schedule to permit the surreply brief to be filed 2/8 and an additional brief (which requires leave of court) on 2/22.  

This morning the former was granted and the hearing reset to the date requested by the parties (the prior hearing had already been vacated several days ago), but the latter was denied.

Updated: this afternoon the hearing was vacated and Judge Payne granted the motion to transfer.

 

Evidentiary Venue Hearings 1.0

It was new mousetrap day yesterday over at the federal courthouse in Marshall, where I participated in the first of the new evidentiary venue hearings that are being set for numerous pending motions to transfer venue.

In this case, Judge Payne issued an order on January 4, 2013 setting a motion to transfer for an evidentiary hearing on January 18. The order provided that "[t]he parties to the Motion shall present testimony from one or more witnesses sufficient to carry their burden with regard to the Motion. Any witness(es) shall be promptly disclosed and made available for deposition prior to the evidentiary hearing."

Pursuant to the order, the plaintiff disclosed one witness and the defendant two, and on Tuesday of these week those three fortunate souls were subjected to deposition, (one by me, two defended by my fearless cocounsel).  

Then, yesterday morning, Judge Payne opened the hearing at 9:30, heard two and a half hours of testimony (no argument was presented), broke for lunch, and reconvened, at which time he read into the record his ruling, which took up two and a half pages of notes, single-spaced - at least how I take them.  The ruling provided his analysis of the venue factors one by one, and his findings based on the evidence adduced at the hearing.

Summary Judgment of Noninfringement Granted

Calypso Wireless v. T-Mobile USA, 2:08cv441 (1/15/13)

Judge: Roy Payne

Holding: Motion for Summary Judgment of Noninfringement GRANTED

Judge Payne granted T-Mobile's motion for summary judgment of noninfringement, finding that the evidence showed that no reasonable juror could find that a specified element was met by any of T-Mobile's devices.  In doing so, Judge Payne considered the motion and response, and, pursuant to Local Rule CV-7(f) did not wait for a reply or surreply.

Motion to Strike Jury Demand Denied

Pittsburg SNF v. Pharmerica, 2:10cv363 (10/4/12)

Judge: Roy Payne

Holding: Motion to Strike Third-Party Plaintiff’s Request for Trial by Jury DENIED

In 2010 plaintiff sued Pharmerica seeking a declaratory judgment.  In 2011, Pharmerica filed a third party complaint against PharMaster, which included a jury demand.  Pharmaster filed a motion to strike that jury demand, citing a waiver clause in one of the operative documents, which provided that: “each of the parties hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this agreement.”

Judge Payne noted first that the U.S. Supreme Court has long held that “as the right of jury trial is fundamental, courts indulge every reasonable presumption against waiver” citing Aetna Ins. Co. v. Kennedy to Use of Bogash, 301 U.S. 389, 393, 57 S.Ct. 809 (U.S. 1937).  He also noted that this holding has been echoed more recently by the Fifth Circuit, citing Jennings v. McCormick, 154 F.3d 542, 545 (5th Cir. 1998).  With respect to clauses waiving the right to a jury, he noted that they "are construed strictly and any ambiguity will be interpreted against the contract's author” citing Smith v. Lucent Technologies, Inc., 2004 WL 515769 (E.D. La. 2004), and that the burden of persuasion on an express jury waiver claim is on the party asserting the waiver, citing RDO Financial Services Co. v. Powell, 191 F.Supp.2d 811, 813 (N.D.Tex. 2002).

All that having been said, he said that "reading the section as a whole" (again, it appears that context matters) showed that the drafter of the clause intended that any lawsuit to enforce or challenge the provisions of the agreement should be brought in Delaware and proceed without a jury trial, but that "the instant action is not such a case."

This action was not brought by either of the parties to the Asset Purchase Agreement and does not arise out of that agreement. The counts of the Third Party Complaint that derive from the main demand, such as contribution and indemnity, have nothing to do with any specific terms of the Asset Purchase Agreement. The waiver clause does not state that a jury trial shall not be available for any “claims” relating to the agreement, but rather shall not be available for any “legal proceeding” arising out of or relating to the agreement. This action does not fall within any fair understanding of that term, especially resolving any ambiguity against the movant. Given the burden upon the movant, the strict construction owed to jury waiver clauses, and the obligation to indulge any reasonable argument against waiver, the Court finds that movants have not carried their burden to establish an enforceable jury waiver in this case.

 

Not Infringed / Not Invalid

A Marshall jury in Judge Payne's court made nobody completely happy Friday afternoon when it returned a verdict that the two asserted claims were not infringed, but not invalid either as anticipated or as obvious.  The case was Corelogic Information Solutions v. Interthinx, 2:10cv132

Party Assessed Fees and Expenses for Failure to Comply With Court-Ordered Meet and Confer on Docket Control Order

Personalized Media Communications, LLC v. Echostar, 2:08cv070 (9/4/12)

Judge: Roy Payne

Holding: Order from Show Cause Hearing on Failure to Meet and Confer

Just when you think you've seen everything - something like this comes along.

This order was the result of a show cause hearing Judge Payne held on August 24, 2012 to determine whether Defendants Rovi Guides, Inc. and TVG-PMC, Inc. (collectively, “Rovi”) should be sanctioned for their failure to meet and confer with the other parties in this case regarding the establishment of a docket control order as ordered on July 17, 2012.

Judge Payne concluded that while no sanction would be imposed, Rovi would instead be ordered under Rule 16(f)(2) to pay all attorney fees and expenses incurred by the other parties in connection with meeting and conferring and preparing their Joint Statement and also with the preparation for and attendance at the August 24, 2012 Show Cause hearing. Here's the factual background. 

On July 10, 2012, the Court ordered plaintiff to join Rovi as a necessary party, and on July 17, 2012, the Court entered an Order providing that “[a]ll parties are ordered to meet and confer about a new Docket Control Order, and they shall include counsel for Gemstar, and submit a proposed order to the Court, noting any areas of disagreement."  Plaintiff and defendants Echostar and DISH Network complied with the order to meet and confer, and included Rovi in that process. On August 7, they filed a Joint Statement setting out the results of their efforts, which included the following:

“However, when [Rovi] announced its intention to file a ‘Notice of Non-Consent to the Magistrate Judge,’ it declined to participate further in this filing regarding a new docket control order.”

Hmm.  Presumably intrigued at this novel approach to compliance with court orders, the Court set a Show Cause hearing on August 24, 2012 (Dkt. No. 387) to determine whether Rovi did, in fact, decline to participate as ordered and, if so, why.

At the Show Cause hearing, Rovi admitted through its counsel that the above report was accurate, and that because of its refusal to participate, Rovi’s position on all scheduling issues is not shown anywhere in the record. The refusal to participate rendered the resulting Joint Statement an incomplete document and a waste of time for the parties and the Court.  So why did it refuse to participate?  "The primary justification offered by Rovi," Judge Payne noted, "was that it had decided not to consent to trial before a magistrate judge and was concerned that any participation in the scheduling process, even if ordered by the Court, would constitute a waiver of its decision not to consent.

No, I'm not making this up.  They really did argue that.

At the hearing Rovi conceded that there was no statutory or case law directly supporting its fears in this regard, and the “best” case that it could cite to the Court was Altier v. Worley Catastrophe Response, LLC, 2012 WL 161824 (E.D. La. Jan. 18, 2012). Altier dealt with the authority of a magistrate judge in a consent case to rule on a motion to intervene by a party who did not consent. That court decided that the magistrate judge did have authority to determine the motion to intervene despite the lack of consent. But Judge Payne concluded that "nothing in the opinion even suggests that compliance with the pretrial orders of the magistrate judge could be construed as waiving a lack of consent to trial. Indeed, it has been the settled law in the Fifth Circuit for a generation that even fully participating in a jury trial before a magistrate judge does not waive the need for written consent by a party added after the case had originally been referred to the magistrate judge under §636(c). If participating in a jury trial before a magistrate judge, without registering any objection, does not waive the requirement of written consent, there can be no good faith argument that complying with an order to meet and confer about a schedule, while expressly noting the lack of consent, could constitute waiver." (Internal citations omitted).

Rovi also articulated a concern that this case had not been referred to the undersigned by a written order of the Court, but rather had simply been referred by the Clerk upon receipt of consent forms from the original parties, but Judge Payne noted that this concern was factually wrong - a written Order of Reference, signed by Judge Gilstrap, was filed into the record of this case on January 3, 2012 referring the case to him. 

In conclusion, Judge Payne found that there was "absolutely no reason" for Rovi to refuse to comply with the order to meet and confer and report to the Court. Accordingly, he ordered the plaintiff Personalized Media Communications, LLC and defendants EchoStar Corp. and DISH Network Corp. to serve upon counsel for Rovi within 10 days a statement for the fees and expenses described above, which Rovi is ordered to pay within 10 days thereafter.