Eastern District of Texas Federal Court Practice

Motion to Compel Denied - Noncompliance with "Meet and Confer" Rule

Konami Digital Entertainment Co., Ltd. v. Harmonix Music Sys., Inc., No. 6:08cv286, 2009 WL 3448148, *2-*3 (E.D. Tex. Oct. 22, 2009)

Judge: John Love

Holding: Motion to Compel DENIED

Thanks to Robert Matthews with Matthews Patent Law Consulting for alerting me to this recent opinion by Judge Love which came out while I was on vacation, but which deserves immediate mention since it applies the still relatively new "meet and confer" local rule.

Judge Love's opinion denied an accused infringer’s motion to compel a patentee to produce discovery on technologically-related patent prosecution files, to support athe ccused infringers’ inequitable conduct defense, because the accused infringers failed to procedurally comply with the court’s local rules requiring the lead counsel for each side have a meet and confer before filing any motion to compel.

Judge Love noted that the “lead counsel” identified on the certificate was not the same lead counsel identified on the court’s docket.  “At this time, the Court will not address the substantive merits of the Motion because the moving party has failed to satisfy the requirements of the Local Rules. Pursuant to Local Rule CV-7(h), prior to seeking court intervention, lead counsel for the movant must have a personal conference with the lead counsel for the non-movant. Local Rule CV-7(h). The ‘meet and confer’ rule further explains: ‘In the personal conference, the participants must give each other the opportunity to express his or her views concerning the disputes.  The participants must also compare views and have a discussion in an attempt to resolve their differing views before coming to court.  Such discussion requires a sincere effort in which the participants present the merits of their respective positions and meaningfully assess the relatively strengths of each position.’  L.R. CV-7(h).  The parties apparently agree that a telephone conference occurred prior to the filing of this Motion but disagree as to whether the requirements of Rule CV-7(h) and (i) were met, and if not, who was responsible."  In discovery-related motions, the Certificate of Conference must be signed by lead counsel, Judge Love notes, citing L.R. CV-7(I), and going on to write that "[t]he Court sees no reason that the ‘lead counsel’ signing a Certificate of Conference should not be the same attorney that is designated as lead counsel on the Court’s docket sheet. "  Accordingly, Judge Love denied the motion for failure to comply with the rule and instructed the parties to meet and confer and refile if necessary.

The opinion provides some useful (and additional for readers that were not at the recent bench/bar conference at which this topic came up quite a bit) guidance as to the application of the "meet and confer" rule.

Motion re: Infringement Contentions Granted in Part

Linex Technologies, Inc. v. Belkin Intern., Inc., --- F.Supp.2d ----, 2008 WL 4372708(E.D.Tex. Sep 19, 2008) (NO. CIV.A. 2:07CV222)
Judge: John Love
Holding: Motion to Strike PICs/Motion to Compel Amended PICs Granted in Part
One of the recurring issues in patent litigation under patent local rules such as those in the Eastern District is determining the sufficiency of infringement or invalidity contentions.  Overlapping partially is the issue of when contentions can be amended.  I say partially because the issue of whether inadequate contentions can be remedied is separate from the issue of when contentions can be amended by adding new products or new prior art, and this opinion addresses the former, but not the latter.
Last September Judge Love issued an opinion in this case which has just been reported on Westlaw, which presents a number of issues with respect to the adequacy question.  Judge Everignham's opinion reviewed the history and purpose of local patent rules, then he explained the context of dispute.  Specifically, the defendant here was complaining about three things.  First, that the plaintiff was using a industry standard (802.11n) as the basis for its infringement contentions; second that the plaintiff provided one generic claim chart for each defendant, not product by product; and third specific claim limitations arguments.
With respect to the first argument, Judge Love found the plaintiff's contentions sufficient but only up to a point, noting that Plaintiff failed to identify where each limitation of each asserted claim is found within each Accused Product.  "In essence," the Court wrote, "Plaintiff sought to rest on the vaguely articulated notion that networks which conform to the draft 802.11n standard conform to the teachings of the '322 patent, and 802.11n-compliant products therefore necessarily infringe the '322 patent."  While using the 802.11n standard as the starting point for infringement is permissible, the Court continued, the Plaintiff failed to demonstrate how each Accused Product conforms to the standard, which it could have done by linking each Accused Product - or even an exemplary Accused Product - to the draft standard.  That would have added the information and specificity needed to comply with the requirements of Patent Rule 3-1. While "[t]here may be times where an industry standard is sufficiently particular to alone be the basis for infringement cases" Judge Love concluded, "[h]ere, however, reliance on this industry standard alone is inappropriate."  The Court did go on to note that to the extent proprietary firmware or software used in the accused products, a plaintiff might have a valid reason for not having sufficiently specific contentions at the outset, but did not find this to be one of those cases.  In conclusion, while "the use of an industry standard as the basis for infringement contentions is permissible, and in certain cases may even be sufficient to put a defendant on notice of the plaintiff's assertions of infringement. Where-as here-an industry standard fails to delineate details which are critical to an assertion or determination of infringement, such a standard will not, alone, suffice as the basis for Infringement Contentions required by this Court's Patent Rules."  (Interestingly, the plaintiff also asserted that products that did not comply with the standard infringed as well - but provided no theory of infringement at all.  Accordingly, Judge Love ordered product by product charts since there was no overall basis for infringement for these products, as there was for the standards-compliant products).
Next up was the defendants' complaint that the plaintiff was using one generic claim chart which they contended didn't take into account the differences among the accused products.  Judge Love agreed with the plaintiff that the use of an exemplar product to outline infringement contentions was permitted, but disagreed that use of the standard - as opposed to an exemplar product, was sufficient in this case, noting that the contentions conspicuously lacked detail.  "At this point in time," the Court decided, "Plaintiff must list each individually Accused Product and go through specific infringement contentions for each. For information not publicly available, Plaintiff must note that such detail is forthcoming pending further discovery and Plaintiff must note from whom such discovery is expected. In doing so, Plaintiff
would meet the requirements of Patent Rule 3-1."
The remaining sections of the opinion deal with specific claim limitations, and here the Court set out the limits of specificity, noting that "At this point in the litigation, Plaintiff is merely required to outline in detail its specific Infringement Contentions regarding particularly Accused Products. As noted above, the Infringement Contentions are not intended to
be a forum for adjudicating the merits of the plaintiff's contentions. The Infringement Contentions are intended to disclose information as a means to expediting the discovery process. As such, the merits of Plaintiff's contentions -that OFDM is a spread spectrum modulation technique- is not at issue in the instant motion. Rather, the issue is whether Plaintiff's Infringement Contentions fulfill the particular requirements of Patent Rule 3-1, by disclosing sufficiently detailed information."  (Internal citation omitted; emphasis mine).
As always, the precise relief granted is worth reviewing.  Judge Love did not strike the Plaintiff's contentions - rather he ordered the plaintiff to supplement its contentions as set forth in the order.

"Honeywell Loses Texas 'Trolling Try'" Article

Joe Mullin has a good story this week Honeywell Loses Texas "Trolling Try" on the outcome of Honeywell's licensing arm's litigation against eight LCD panel manufacturers in the Eastern District (specifically Judge Davis and Love's court in Tyler).  According to Joe, seven of the eight defendants settled over the course of litigation, but the eighth which did not settle, a small Taiwanese company called Novatek, won summary judgment of noninfringement earlier this month.  (Ed. note - I am part of the team of attorneys representing Novatek in this case so I had sort of heard of this before I saw the article). 
The article focuses on Honeywell's use of the business model of establishing a licensing operation, Honeywell Intellectual Property International (HIPI), which is kept separate from Honeywell’s operating divisions, to monetize its IP.

Motion to Transfer Venue Denied in Patent Case

Konami Digital Entertainment Co, Ltd. et al v. Harmonix Music Systems, Inc. et al (6-08-cv-00286) (March 23, 2009)
Judge: John D. Love
Judge Love denied the defendant's motion to transfer this patent case, making a couple of useful observations.  First, he noted that "the geographic location of physical evidence must be taken into account" but that in this case "these materials are spread throughout the country and the nation, and therefore [the transferee forum] is not a clearly more convenient forum to access sources of proof for all parties. With respect to sources of proof that are purely electronic information. . . it does not follow that transfer to [the transferee forum] where Defendant . . . would have relevant source code would be more convenient for anyone." 
Second, Judge Love referred to a PriceWaterhouseCoopers study regarding trial delays, and found that "Plaintiffs have provided reliable evidence that patent cases go to trial, on average, just less than two years quicker in [the Eastern District of Texas] than in the District of Massachusetts, creating a reasonable inference that the parties would suffer prejudice from the delay in trial transfer would cause."  A point to remember here is that this is a Tyler Division case, where trial settings in patent cases vary from 18 to 24 months.  The Marshall Division has a somewhat longer time to trial for cases currently being set (although not for cases recently reaching trial) so it's important to know which times the Court was referencing.  

Yahoo! A verdict in first of two Tyler patent cases

The 2007 patent filings continue to work their way through the Eastern District courts this month. Last month saw Judges Ward and Everingham trying two patent cases in Marshall. This month the excitement (if you can call it that) shifted to Tyler where Judges Davis and Love have been trying patent cases simultaneously beginning last week.

The first trial wrapped up Friday with Yahoo!'s much-publicized decision to take a patent case to trial in Creative Internet Advertising v. Yahoo!.  The Tyler jury in Judge Love's court found that Yahoo!'s Messenger program infringed the asserted claims, and that the infringement was willful.  The jury found that the defendant had not shown by clear and convincing evidence that the patent was invalid, and assessed damages of $6.625,584.  It's my understanding that both sides' experts agreed on the damages base, and the jury gave the plaintiff the number it asked for, which represented about a 20% royalty.  If that's not correct someone let me know and I'll revise this post.

Motion to Bifurcate and Stay Defendants' Non-Patent Counterclaims Denied

j2 Global Communications Inc v. Captaris Inc (6-08-cv-00262) (E.D. Tex. April 16, 2009)
Judge: John D. Love   
Holding: Motion to Bifurcate and Stay Non-Patent Counterclaims DENIED without prejudice
Interesting case last week from Judge Love on bifurcation in a patent case.  In j2 Global v. Captaris, the defendants brought antitrust and unfair competition counterclaims against the plaintiff.  Plaintiff's motion to bifurcate defendant's anti-trust and unfair competition claims, and stay discovery on them until after the trial on the plaintiff's patent claims was denied despite the court's acknowledgement that "the Federal Circuit has described bifurcation of patent claims and antitrust claims as a 'standard practice.' "
The court found that it could not at this stage reliably determine whether bifurcation would increase or decrease judicial economy. While of course a separate patent trial could obviate the need for trial on the antitrust counterclaims, Judge Love noted that if the Court were to stay discovery related to Captaris's antitrust claims now, a trial on these claims could be pushed back until long after the trial on the patent claims, which would dramatically decrease judicial economy.  Accordingly he denied the motion without prejudice to refiling, noting that the issue of whether the trial should be bifurcated could be revisited after discovery was complete - but that the Court anticipated that if it was, he would use the same jury "so as not to lose the jurors' familiarity with the parties and technology at issue."
Note: The image is a "bifurcation tree" from a discussion of chaos theory - which is actually sometimes contended to be what bifurcation creates, come to think of it.  The ratio of the bifurcations of the tree is called Feigenbaum's Delta, after its inventor Mitchell Feigenbaum, who discovered in 1975 that there was a mathematical constant that described the onset of chaos, and other graphical representation of it are even more disturbing if you're as compulsive-retentive as me.  I'm not aware of any opinions relating chaos theory to bifurcation, but then I haven't read all of Judge Clark's opinions lately.

j2 II Leaves Spacedock

j2 Global Communications Inc v. Protus IP Solutions Inc (6-08-cv-00211) (E.D. Tex. Feb. 20, 2009)
Judge: John Love
Well, it may not be as extensive as the refit the starship Enterprise is set to undergo before its return to the big screen in May, but Judge Love still had some work to do on his venue opinion in the j2 Global Communications case before he could send it out of spacedock, certified as VW Tech-compliant. (Do you ever get the feeling I'm looking forward to seeing this movie?)
On December 23, 2008, Judge Love denied the motions to transfer venue filed by Defendants in this case - the first venue order in a patent case out of the Eastern District since In re Volkswagen IIc, and the only one before In re TS Tech came out.  I know this will come as a shock, but on January 8, 2009, the defendants filed Motions for Reconsideration in light of In re TS Tech USA Corp., 551 F.3d 1315 (Fed. Cir. 2008).  So j2 went up on blocks in the judge's front yard (proverbially speaking) for an inspection to see if it had any parts that didn't pass inspection post-TS Tech.
Judge Love went through the standards for motions for reconsideration and for motions to transfer venue, and rejected the defendants' claims on several points, including that his prior finding that the "sources of proof" factor was neutral.  He pointed out that no specific documents had been identified, and that in any event, the locations identified were nationwide, so that no location would be any more convenient than Texas. With respect to parties, Judge Love stayed with his prior finding that this factor was neutral, concluding that "[n]one of these cases presently before the Court involve parties localized in one general geographic area. Unlike TS Tech, there are no venues which would be convenient for both parties in any of these cases."  With respect to nonparty witnesses, the defendants had now identified prior art witnesses in eighteen states and provinces and five nations (seven counting the US and Canada).  Accordingly, Judge Love noted that while transfer to California might be slightly more convenient for the parties, it would be no more convenient for this globe-encompassing mass of nonparty witnesses identified by the defendants, so overall this factor was neutral.
In closing, Judge Love concluded that only one factor weighed slightly in favor of transfer in these cases—the potential need for compulsory process to secure the testimony of four witnesses. But he noted that the defendants had not shown that these four witnesses are of critical importance, or even that their testimony is more important than the witness that this Court would have subpoena power over.  "As more fully explained in this Court’s December 23 Order," he concluded, "this is not a situation where the transferee district has had extensive involvement with the patents and products at issue. Nor are these cases where all of the parties and witnesses are localized in one general geographic area. Compare Network-1 Sec. Solutions, Inc., 433 F. Supp. 2d at 800 (denying transfer where witnesses were located all over the world); with Odom, 2009 WL 279968 at *4 (granting transfer where all of the witnesses were localized in one general geographic area). Based on this analysis, the Court finds that Defendants have failed to show that transfer to the Central District of California would be clearly more convenient for the parties and witnesses. See Volkswagen II, 545 F.3d at 315."

Fraternal twins: one case stays and the other goes

Invitrogen Corp. v. General Elec. Co., 2009 WL 331891(E.D.Tex. Feb 09, 2009) (NO. CIV A 6:08CV112)
Invitrogen Corp. v. General Elec. Co., 2009 WL 331889(E.D.Tex. Feb 09, 2009) (NO. CIV A 6:08CV113)
Judge: John Love
As my wife and I can tell you, there are two kinds of twins, identical, and fraternal.  Ours (Parker and Collin, show above in the quiet moment from a vacation a couple of years back) are fraternal, which means that despite being born at the same time and in the same place, and even involving the same "parties," so to speak, there are differences, and they can be major - in fact they usually are.  (Their teachers vouch for this as well).
Judge Love faced the question of determining whether these two cases, filed on the same day and with the same parties, but different patents, were identical or fraternal, with respect to the defendant's motions to transfer venue.  These two opinions are, respectively, the granting of one motion to transfer venue, and the denying of another. In the first, the '112 case, the defendant GE sought transfer to Maryland, where half of the patents asserted in the Texas case had been asserted by the plaintiff's predecessor in interest against GE over an 11 year period.  The second case, the '113 case involves a different patent, and had no prior litigation.  Judge Love began his analysis in the first case pointing out one of the truisms in venue cases, which is that " the court must exercise its discretion in light of the particular circumstances of the case," 
In the first case, Judge Love found persuasive GE's claim that this case should be transferred to the District of Maryland in order to preserve judicial economy, noting that there was "substantial overlap" between the Texas case and the now-settled Maryland case.  "[A] Maryland court has had extensive involvement with three of the six patents at issue and a settlement agreement was entered into in the Maryland litigation that forms the basis of Defendant's patent exhaustion defense. Based on this analysis, the Court finds that Defendant has shown that transfer to the District of Maryland would be clearly more convenient."
But in the second case, the '113 case, Judge Love denied the motion to transfer, noting that that case lacked the decade-long prior litigation involving the patents in Maryland, and that it had little in common with the other litigation. "At this stage, the Court finds few similarities between the patents at issue in the 112 case and the '272 patent other than the fact that they both relate to the field of DNA technology. The mere fact that both cases involve the same parties and some sort of DNA technology is not sufficient to weigh in favor of transfer."  Nor did the '113 case involve interpretation of a settlement agreement entered into in Maryland.  Judge Love concluded that only a couple of factors weighed slightly in favor of transfer, and accordingly denied the motion, finding that the defendant had not under these facts shown that the proposed transferee forum was "clearly more convenient."

This brings the post-VW Tech world of venue opinions to 3-2 - for the mathematically impaired, that's a win rate of 60% for motions to transfer in the few reported opinions thus far involving patent case.

Motion for Summary Judgment on Standing Denied in Design Patent Case

Dexas Intern., Ltd. v. Office Max Inc., 2009 WL 252166(E.D.Tex. Jan 28, 2009) (NO. CIVA 6:07CV396)
Judge: John Love
This a design patent case in which the defendant claimed the plaintiff did not acquire all of the bundle of sticks from the inventor necessary to have standing.  Judge Love detailed the law on standing in these situations and concluded that the Plaintiff holds all exclusionary and all substantial rights in the asserted patents, and thus that the Plaintiff has standing to sue without joining the patentee in suit. Alternatively, the Court found that even if the parties did not intend to transfer all exclusionary rights in the patents

Patent Hawk inventor's case transferred from Texas to Oregon, citing In re TS Tech

Odom v. Microsoft, 6:08cv331 (Jan. 30, 2009)
Judge: John Love
Holding: Defendant's Motion to Transfer Venue GRANTED
It took exactly one month for the first Eastern District venue opinion in a patent case reflecting the Federal Circuit's recent opinion in In re TS Tech to come out, and fortunately for practitioners it provides a thorough analysis of the application of both In re VW II and In re TS Tech to patent cases (in the line of older Eastern District cases like Network-1 v. D-Link, Mohamed v. Mazda and TI v. Micron, which sought to explain the issues and the relevant law, as well as resolve specific motions).  In this case, the plaintiff is an Oregon inventor (better known to many as Patent Hawk) claiming that Microsoft, the sole defendant, infringes his patent via its Office software.  Microsoft sought a transfer to Oregon (next to Washington, where Microsoft is located).   I won't go into the factual background of the case, which involves Odom's relationship with Microsoft and the Klarquist Sparkman firm in Oregon prior to suit being filed, but those facts become important later.    
Judge Love's opinion not only cites but analyzes both In re VW II and In re TS Tech, the first to do both since the latter came out.  Judge Love distinguished this case from In re TS Tech in that this is a case dealing with software code, unlike the prior cases dealing with physical evidence, so the location of the original code does not mean any benefit in convenience for anyone, as opposed to, for example, the cars or car parts at issue in both VW and TS Tech.  Neither case, Judge Love points out, dealt with electronic information, as opposed to physical information.
On the issue of cost of attendance of witnesses, Judge Love noted that the Federal Circuit did not explicitly address in TS Tech what showing was necessary on this factor, or the relative importance of party versus nonparty status.  Movants are generally required to list the relevant witnesses and outline the substance of their testimony so the Court can evaluate the importance of the claimed witnesses, but VW II made clear that affidavits are not required for this showing - in that case a simple list with an explanation was sufficient.  In this case, the parties argued over what showing was necessary on this factor, but Judge Love concluded that although the specific showing in each case varies depending on the facts, in this case the defendant's showing was sufficient.  In short, the Court held that although there was still some factual dispute as to who the witnesses were and where they were located, there was not really a dispute that they were located in the Washington/Oregon area.  Importantly, Judge Love observed that "This is not a case where witnesses are spread out all over the country or the world" citing Network-1 Sec. Solutions, Inc. v. D-Link Corp., 433 F. Supp. 2d 795, 800, mandamus denied, 183 Fed. Appx. 967 (Fed. Cir. 2006) (finding this factor neutral where witnesses were located in Connecticut, New York, California, Taiwan, and Israel).  For readers unfamiliar with the Network-1 case, the Federal Circuit in that case denied a petition for writ of mandamus compelling Judge Davis to transfer a case where witnesses were spread through the U.S. and in fact, the world.  (Network-1, by the way, provides the best explanation extant for how patent cases differ from other cases, and how the venue factors apply in such cases, and I highly recommand it).  This case. Judge Love wrote, was in fact quite similar to the facts in TS Tech, not Network-1.
On the local interest factor, Judge Love acknowledged that TS Tech held that, in patent cases, when a defendant sells products all over the country, no specific venue has a dominant interest in resolving the issue of patent infringement, so "in most patent cases" this factor will be neutral.  But not in this case, however.  Due to the extensive ties Oregon has to the underlying case via the contracts, etc., Judge Love concluded that there was in fact a local interest in the case in Oregon, and none in Texas.  That also influenced the familiarity with the law applicable law factor, since this case, unlike most patent cases, involved contract claims requiring application of Oregon law.
Accordingly, after weighing the relevant factors, Judge Love concluded:

Under the circumstances presented here, the convenience of witnesses and localized interests weigh in favor of transfer with the other factors neutral or weighing slightly in favor of transfer. This is a case that is significantly localized in the Northwest. Both parties are residents of the Northwest, and Microsoft’s equitable defenses all arise out of conduct and contracts in the Northwest. No Texas resident is a party to this litigation, nor is any Texas state law cause of action asserted. All identified witnesses—with the possible exception of one—are located in the Northwest. This is not a case where witnesses are expected to be traveling from all over the country or world. In summary, there is little convenience to the parties for this case to remain in Texas, while there are several reasons why it would be more convenient for the parties to litigate this case in Oregon.
The Court finds that Defendant has shown that transfer to the District of Oregon would be clearly more convenient. See Volkswagen II, 545 F.3d at 315.

(Emphasis added).