Eastern District of Texas Federal Court Practice

Motion for Leave to Amend Infringement Contentions Granted ... But Not As To Those Additional Products

EON Corp. v. T-Mobile USA, et al, 6:10cv379 (E.D. Tex. 1/24/12)

Judge: John Love

Holding: Motion for Leave to File Amended Infringement Contentions GRANTED

The issue of when infringement or invalidity contentions may be amended under the local patent rules is an evergreen one here behind the pine curtain (as are out of control metaphors) and this order from Judge Love yesterday afternoon is the latest word on the subject.

The procedural history is complex, but necessary.  It goes something like this:

• Plaintiff Eon sues defendants, including Alcatel-Lucent USA, Inc. ("ALU"). 
• Plaintiff serves infringement contentions v. 1.0, accusing four ALU products. 

Meanwhile, back at the courthouse, Judge Love allows targeted discovery after which the parties could file letter briefs seeking permission to file summary judgment on direct infringement issues. Shortly after that discovery took place ...

• Eon files an amended complaint, and a motion for leave to amend its infringement contentions against ALU to v.2.0, which this time accuses 76 products.
• ALU opposes the motion for leave, asserting that the contentions were factually insufficient under the patent rules, and in any even, the plaintiff had not shown the required "good cause" for the amendment.

Back at the courthouse again, at a November 28, 2011 hearing on the motion, the Court ordered Eon to provide ALU with amended infringement contentions (v.2.1 - the difference will be important later) that articulated how each particular ALU product is used in an infringing network in accordance with Local Patent Rule 3-1(b)-(c).  Then,

• Eon served its amended contentions in compliance with the Court’s Order, this time accusing 96 products in PIC v. 2.1.
• ALU filed an opposition to the amended contentions, again arguing that the contentions were factually insufficient under the patent rules, and in any even, the plaintiff had not shown the required "good cause" for the amendment itself, or for the additional 20 products. 

Judge Love's opinion indicated that while he thought v. 2.0 of the contentions did not satisfy the local rule re: specificity, he thought that v. 2.1 did.  Here's what the Court had to say about the role of infringement contentions:

Infringement contentions are not intended to require a party to set forth a prima facie case of infringement and evidence in support thereof. While infringement contentions must be reasonably precise and detailed . . . to provide a defendant with adequate notice of the plaintiff’s theories of infringement, they need not meet the level of detail required, for example, on a motion for summary judgment on the issue of infringement because infringement contentions “are not meant to provide a forum for litigation on the substantive issues.”

Realtime Data, 2009 WL 2590101, at *5.  "Nevertheless," the Court held, "a party may not rely on vague conclusory language or simply mimic the language of the claims," citing Davis-Lynch, Inc. v. Weatherford Int’l, No. 6:07-cv-559, 2009 WL 81874, at *2 (E.D. Tex. Jan. 12, 2009).  (Ed. note: there are more Davis-Lynch opinions running around the Tyler courthouse than I can keep track of - and they're all full of useful stuff - so be sure which opinion you're citing to).

So what are the standards for amending?  Glad you asked.  Judge Love explains that leave to amend is required when a plaintiff seeks to amend or supplement the contentions, and a plaintiff must show good cause. P.R. 3-6. When determining whether to grant leave to amend, the Court considers: 1) the explanation for failure to meet the deadline; 2) the importance of the thing that would be excluded; 3) the potential prejudice in allowing the thing that would be excluded; and 4) the availability of a continuance to cure such prejudice.

In this opinion, Judge Love compares the v.2.1 contentions to the v.2.0 contentions, and determines that "with the understanding that there may be some gaps in the contentions due to an apparent lack of discovery," they are sufficient. 

ALU has not shown why such a description is so deficient that it does not serve the notice role of infringement contentions. ALU may disagree with the substance of Eon’s contentions, but this is not the stage for Eon to marshal evidence to prove its infringement theory. Patent Rule 3-1 is not meant to create unfair or unrealistic expectations on either party. In deciding the sufficiency of infringement contentions, the Court balances defendants’ need for notice as to the plaintiff’s infringement theory with the realities of the accused systems, methods, and apparatuses. Here, while not making any substantive determination, the Court recognizes the difficulties in identifying a named, discrete network where there is a complicated infringement theory depending on interrelated discovery from multiple direct and indirect infringers. Under the technological framework presented here, the Court is not persuaded that Eon’s description concerning ALU products runs afoul of the purpose of P.R. 3-1. With these considerations in mind, the Court finds that Eon’s contentions satisfy the Court’s November 28, 2011 Order and P.R. 3-1 because they provide sufficient detail to put ALU on notice as to how to litigate its case.

Okay, so they're sufficient - but is there "good cause" to permit the amendment?  Yes and no.  Judge Love concluded that Eon did have good cause to amend its contentions to add the new products in v. 2.0.  But v. 2.1 included twenty additional products which were not in Eon’s previous proposed amended contentions (v. 2.0) that were the subject of the original Motion. "These products were not subject to the Court’s November 28, 2011 Order," Judge Love concluded, "and Eon has provided no excuse or justification for its delay in including these products in its amended contentions. As a result, the Court ORDERS Eon to remove reference to the twenty new products ... and to serve ALU with these modified contentions by January 30, 2012.

 

Sufficiency of the pleadings - part 2 - inequitable conduct pleadings

EON Corp. v. T-Mobile USA, et al., 6:10cv379 (12/13/11)

Judge: John Love

Holding: Motion to Dismiss/Strike Inequitable Conduct Counterclaims RECOMMENDED DENIED

Quack, quack - it's goose/gander rule time.  (Actually a student at Fordham Law beat me to the analogy in the context of Twombly motions, so props to Anthony Gambol). 

In this case, the plaintiff filed a motion to dismiss and strike the defendants' inequitable conduct affirmative defenses and counterclaims.  Judge Love denied the motion, holding that the Defendants’ inequitable conduct pleadings meet the standards set forth by the Federal Circuit in Exergen v. Wal-Mart Stores, Inc.. 

"The Federal Circuit recently reiterated," Judge Love wrote, citing and quoting Exergen, "that, even after Therasense, all that is required at the pleading stage is a plausible inference of deceptive intent".  And while Therasense did not heighten the pleading standards set forth in Exergen, the Court noted that the substantive changes to the merits determination required a corresponding change in pleading the elements of inequitable conduct. Therasense clarified that materiality refers to “but-for materiality” and that the specific intent to deceive cannot be inferred solely from the materiality of the withheld reference. Thus, a pleading that does not show but-for materiality or that bases intent solely on the materiality of the withheld reference would be not survive the pleading stage. However, it does not follow, the Court held (although without the underlinings of the word "pleadings" that I have provided) that the pleadings must show by clear and convincing evidence that the patentee had the specific intent to deceive the PTO, i.e., that the specific intent to deceive is the single most reasonable inference able to be drawn. 

Moreover, Judge Love observed that while Exergen was decided with the understanding that in order to succeed on the merits, “the inference of deceptive intent must be the single most reasonable inference able to be drawn from the evidence to meet the clear and convincing standard’”, it did not require that the pleadings show that the specific intent to deceive was the single most reasonable inference able to be drawn. "Additionally," Judge Love noted, "Eon’s argument collapses the distinction between pleading determinations and determinations on the merits." See Exergen, 575 F.3d at 1329 n. 5(explaining that under Rule 9(b), an inference of deceptive intent drawn from pleadings must only be “reasonable” whereas, a merits determination under the clear and convincing evidence standard requires the deceptive intent inference to be the single most reasonable inference).

Thus, while Judge Love agreed with Eon that Therasense requires that, on the merits, Defendants show that deceptive intent was the single most reasonable inference, he declined to hold that the Defendants must make such an evidentiary showing at the pleading stage. So what is required?  "In sum, to survive a motion to dismiss, the pleadings must “identify the specific, who, what, when, where, and how” of the alleged inequitable conduct occurred and plead “sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO.”" (Citing Exergen, 575 F.3d at 1328.)

Accordingly, Judge Love concluded that the Defendants had sufficiently pleaded inequitable conduct, and recommended that the Plaintiff's motions to dismiss/strike be denied. 

Texas Lawyer Article on E-Mail Discovery

This month's Eastern District of Texas judge on the cover of Texas Lawyer is Magistrate Judge John Love of Tyler.  Texas Lawyer reporter John Council's article has some comments from Judge Leonard Davis on the recent model e-discovery order from the Federal Circuit Advisory Committee's subcommittee on e-discovery and an extended interview with Judge Love, who he notes has entered an order incorporating provisions from the model order.

The order isn't identified in the article, but it may be the EIP case, which I posted on here.  But if it is the EIP order, the article's statement that "Love already has addressed a discovery matter by issuing a ruling that closely follows the model order" is perplexing, since in that case neither side proposed the model order, and the only provision from the model order in it is the five custodian limitation - which the plaintiff in EIP agreed to.  Read the provisions in the link above and see what you think.  To my reading, the Court's resolution of the issue in that case reflected Judge Love's statement in the article that "my approach is to fashion the appropriate framework for that case using the circumstances of the case and the parties' proposals, as well as the considerations set forth in the model order.")  But of course the article may be referring to a different order. 

In any event, the article notes that the Eastern District judges will be looking at the model order at their upcoming meeting in February - the gist of the article is that the model order "is still being evaluated by lawyers and judges in the district" as Judge Love notes.

 

Motion to Transfer from Texas to Utah Granted

West Coast Trends, Inc. v. Ogio International, Inc., et. al., 6:10cv0688 (E.D. Tex. 10/27/11)

Judge: John Love

Holding: Motion to Transfer Venue GRANTED

Judge Love granted the motion to transfer in this case, finding that the District of Utah was a clearly more convenient forum. The cost of attendance of willing witnesses, the location of the sources of proof, and the District of Utah’s local interest in the case weighed heavily in favor of transfer, he concluded.  The development of the accused products and the decisions regarding the sale and marketing of those products occurred within that district, and the presence of one prosecuting attorney in Texas and the prejudice caused by Ogio’s delay in filing the Motion (9 months, but most of that time was spent in active settlement negotiations) did not outweigh the fact that most of the evidence was located in Utah, most of the witnesses are located in Utah, and those witnesses and documents that are not in Utah are located in California.

From Docket Navigator.

Another e-mail discovery ruling

Effectively Illuminated Pathways, LLC v. Aston Martin, et al., 6:11cv34 (E.D. Tex. 10/20/11)

Judge: John Love

Holding: Discovery Order provision re: e-mails

Got another data point on the issue du jour today, and that is discovery of e-mails.  As I posted a couple of weeks ago, one of Judge Everingham's last orders resolved the parties' disputes over the appropriate terms for production of e-mails in the Stambler case.  Today Judge Love added one more, with language in a discovery order setting forth parameters for e-mail discovery. 

In this case, during the course of negotiations over entry of an appropriate discovery order the plaintiff proposed e-mail discovery consisting of five custodians and various other provisions, and defendants proposed not having e-mail discovery pending further discussions among the parties as to whether such discovery was necessary and what the parameters should be.  The model e-discovery order was noted but not proposed by either side as an appropriate resolutions of the issue in this case.

The day after the parties' dispute was raised in the motion for entry of discovery order, Judge Love set a phone hearing on the issue, and following the hearing directed the parties to submit an order reflecting his rulings.  The parties submitted the following language which Judge Love included in the discovery order signed earlier today.

No party shall be obligated to search for or produce e-mail in this case as part of its initial production pursuant to Paragraph 2 of the Discovery Order. After the initial production under Paragraph 2, a party may request that the e-mail of up to five custodians for each party be searched and produced, with the searching to be done in the most efficient way possible with the fewest and most relevant search terms. The requesting party and the producing party shall meet and confer to determine the most efficient method for searching each custodian’s e-mail. If an agreement cannot be reached, the requesting party may seek relief from the Court.

A few points about the order:

• As in Stambler, e-discovery is separated from general disclosures, although unlike Stambler this case involved Judge Davis/Love's standard document disclosure provision (Par. 2 disclosures) which requires disclosure of all document "relevant to the pleaded claims and defenses" (see CV-26(d) for some guidance on that).
• Unlike Stambler there is not a date for compliance.
• Sort of like Stambler, discovery is permitted for "up to" five custodians, but unlike Stambler, here the plaintiff had agreed to the five.
• Some guidance is provided for searches, i.e. the parties were directed to use "the most efficient way possible with the fewest and most relevant search terms." 
• The parties are required to meet and confer and return if they can't work things out. 
• Unlike Stambler there isn't a provision that additional searching was on a "good cause" basis.

"Claim Dispositive" Terms Markman Hearing Procedures Continues to Crystallize

Global Sessions LP v. Travelocity.com, LP et al., 6:10cv671-LED-JDL

Judge: John Love

Holding: Order on mini-Markman

Or maybe the word I'm look for is "solidify".  Or perhaps "congeal".  In any event, the previously ad hoc mini-Markman procedure that Judges Davis and Love have implemented recently in Parallel Networks and Whetstone continues to take a more definite form, most recently in an order from Judge Love in this case which requires letter briefing for a request for such a hearing, and sets deadlines and page limits should the request be granted.

Judge Love's order states that:

One of the Court’s goals is, as much as possible, to decrease litigation costs for the parties. To that end, and to sharpen the Court’s focus on the dispositive or most important issues, the Court will permit Defendant to submit, if desired, a request to construe no more than three “case dispositive” claim terms in a letter brief. The letter brief shall explain the Defendant’s proposed constructions of the term(s) and why such a construction will dispose of the case. The letter brief is due no later than 145 days before the Markman hearing.

Opening letter briefs and responsive letter briefs shall be no longer than 5 pages. Reply briefs shall be no longer than 3 pages. Letter briefs shall be filed without exhibits. Good cause must be shown to submit letter briefs after the deadline outlined above.

The Court may decide the question on the submissions or hold a hearing or telephone conference to hear arguments and determine whether the filing of any brief will be permitted.  Should Defendant’s request be granted, parties shall provide, no later than 100 days before the Markman hearing, the name, address, phone number, and curriculum vitae for up to three agreed technical advisors and information regarding the nominees’ availability for the Markman hearing or a statement that they could not reach an agreement as to any potential technical advisor. If the parties cannot agree on a technical advisor, they shall not submit any proposed technical advisors to the Court.

The order goes on to set a briefing schedule for claim construction in the event the request is granted, and limits opening and response briefs to fifteen pages, with reply briefs limited to five pages.  (Ed note: I can hear patent lawyers' hearts breaking even as I type this since of course the obviousness of a claims construction argument cannot be established in a mere fifteen pages.  Perish the thought!)  Next in the court's sights are experts.  "Parties should note that there is no need for experts during this stage of the litigation," Judge Love notes.  "The goal here is to determine whether the case can be resolved without the need of extensive expert involvement. Deadlines for expert opinions and reports remain in place as indicated by the Docket Control Order."  (Yikes!  No lengthy briefing, and no experts?  Goodness gracious!)

After the briefing period concludes, the Court would then hold an early Markman hearing on the identified case dispositive terms. If the case is not resolved following the Court’s claim construction summary judgment rulings, a Markman hearing, as set forth in the Docket Control Order or at the patent status conference, will occur as scheduled.

 

 

Second Mini-Markman Proceeding Doesn't Result in Summary Judgment of Noninfringement

Earlier this week I posted on the outcome of the first mini-Markman procedure in Tyler in the Parallel Networks case, which resulted in a claims construction ruling which supported granting summary judgment of noninfringement as to 99 out of 112 of the defendants.

Judge Love's ruling in the same situation in the Whetstone litigation actually came out two days earlier on August 10, but the result was not as good for the defendants.  Judge Love confirmed at the hearing that only a favorable ruling on one of the terms would result in summary judgment of noninfringement, and accordingly focused on that term at this stage in the case.  "The Court permitted limited discovery and an early Markman process to avoid unnecessary costs to the parties and to promote judicial efficiency on the premise that the case could be resolved on a discrete issue of claim construction," he wrote.  "Accordingly, at this time, the Court need only provide a construction of the term “interface card,” the sole term, based on the parties’ presentations, that may potentially resolve the case at this early stage."

Judge Love construed the term, and as he did not accept the construction proposed by the defendants, he denied the motion for summary judgment of noninfringement.

New Tyler Office / Second Mini-Markman Hearing

I spent an enjoyable day in Tyler setting up SBPS' newest office in suite 204 of the Plaza Tower building (the black one in the picture) across the street from the federal courthouse in Tyler.  It was my first time to see the beautiful new conference table in the new offices - actually longer than both the conference tables in Marshall combined - but it's not much use yet since the chairs are on back order, so I had to bring a folding chair.  But we can serve coffee and there are pictures of ships on the wall (including Judge Hannah's old print of the battleship Texas by R.G. Smith - back in Tyler where it belongs) so it's a real office now.  Just one in which only one person can sit down at a time.  Unless you tell me ahead of time, and then I'll bring another chair, of course.  This was certainly the right day for it, since I had several conference calls and hearings and it was nice to have an actual office to settle down and concentrate.  And of course it will come in handy for hearing prep, as well as meals and meetings during trial.  Well, and I sort of enjoy setting up furniture and electronics in a new office, so that was nice as well.  Routers and wireless networks, and office supplies and surge protectors - all that good stuff.

But the high point of the day was attending the second of the "mini-Markman" hearings set by Judge Davis and Judge Love.  As readers know, they have, at the defendants' request in a couple of multi-defendant cases, agreed to conduct early "mini-Markman" hearings on three claim terms identified by the defendants as potentially dispositive in noninfringement summary judgment motions.  The first was held late last month in the Parallel Networks case, and Judge Davis has not yet ruled, and today's before Judge Love was the second.  As I have noted before, this isn't the only tool they have used to manage large cases differently recently, but it is the one that's drawn the most attention and interest. 

Elvis and William Shatner want you to know that the number of claims asserted at trial can be limited by the Court

Okay, it's a stretch, I admit, but I had to find some way to get today's picture of my two second graders dressed up for their "famous people" class projects up. 

And as William Shatner might say, this order in Celltrace v. AT&T, et al, 6:09cv294 (E.D. Tex. 3/31/11) "limiting ... the number of claims ... that ... can be asserted at trial ... to a ... reasonable number is ... useful!" 

And while the order doesn't go as far as defendants wanted (reducing it to four) Elvis would no doubt say, on behalf of the jury, "thank you.  Thank you very much."

You ain't nothing but a contributory infringer.  Infringin' all the time...  Humma, humma, humma.  Thank you very much.  Can I have a peanut butter and 'nanner sandwich please?

 You just know I'm not getting any work done the rest of the day with this voice in my head.  Counsel, are those, uh, infringement contentions, uh, are they preliminary, you know?  Humma, humma.  Are we feelin' pretty valid today, whaddya think?  Humma, humma.  Thank you very much.

Another "rifle shot" Markman and comments on "rolling production" trends

Whetstone Electronics v. Xerox, 6:10cv278 (April 7, 2011)

Judge: John Love

Holding: Request for Early Markman GRANTED

Yes, patent lawyers across the nation are brushing up on their "rifle shot" skills following Judge Davis' Parallel Networks opinion last month.  As local practitioners are aware, (as well as readers of IP Law 360 last week I noticed) life in multidefendant patent infringement litigation has taken a new and exciting turn in Judge Davis and Judge John Love's court, with the "third conference" scheduling conference providing the parties with an opportunity - even the obligation - to inform the Court of any possible new case management tools that could be used to handle these complex cases more efficiently.  In the first major order coming out of these hearings, Parallel Networks, Judge Davis set an early Markman on three terms the defendants claimed could be case-dispositive and stayed discovery other than that proceeding until he determined if they were.  (Notably, however, the case was still set for a normal Markman as well, along with a trial setting, so the "rifle shot" hearing is in addition to - not in lieu of - the normal trial schedule).

Judge Love, who sits downstairs from his former boss Judge Davis at the Steger courthouse in Tyler earlier this month decided to adopt the same "rifle shot" Markman procedure in the Whetstone case at the recent conference with the parties.  "During the status conference," he wrote, " Defendants requested an early Markman on three “case dispositive” terms, suggesting that early construction of these terms will allow each party to better evaluate its case moving forward. Plaintiff did not agree that an early Markman was necessary, but did suggest limiting discovery before the currently scheduled October 2011 Markman hearing. After considering the parties’ proposals, the Court finds that an early Markman hearing on the three terms discussed during the status conference is warranted and will prove beneficial."  Judge Love ordered the defendants to submit their three claim terms to the Court within four days, and set a Markman hearing on the identified three terms for July 13, 2011.  The parties had discussed June but Judge Love agreed to move the hearing back to July since plaintiff's counsel had a trial setting in June.  The parties were ordered to meet and confer and propose a briefing schedule and submit any Agreed or Proposed Technical Advisors to the Court by April 25.  Pending a claim construction ruling on the three identified terms, discovery was limited to production of user and service manuals of the accused products as discussed during the status conference, as well as the deposition of one representative from each Defendant regarding the accused products and related manuals.  After the Court issues its claim construction of the three terms, discovery as to all issues in the case will resume.

I can just see patent lawyers across the country hitting select-copy and then pasting this case cite right after the Parallel Network order in their memos on expedited Markman hearings, since it can hardly be denied that we now have a trend of these type of "rifle shot" Markman proceedings, although whether they will be as successful as the defendants hope is still to be seen. 

Now it is not true that an expedited Markman on three terms followed by summary judgment motions of noninfringement will cure colds, but I suspect that there are patent lawyers right now that will argue to the contrary, they are such great fans of the proceeding.  I can say that this isn't the only different management technique that I have seen the judges have adopt to date, but it is thus far the most commonly requested and granted - since in some cases obviously a good Markman ruling can permit a summary judgment of noninfringement, as was the case in the Raylon case in Judge Davis' court in December.  But there are a few lawyers out there that will reluctantly admit that even a Markman ruling in their favor in a particular case will not support a summary judgment of noninfringement, since fact issues would still remain in their case, and therefore suggest that the judge target something different for a "rifle shot" proceeding - maybe a validity or damages or standing issue.  As the saying goes, there are different ways to skin a cat, and some might even disagree that the cat should be skinned in the first place. (But that's an argument for Congress, although the Federal Circuit may be willing to hear it on mandamus).  As an irrelevant aside, I remember that the immortal Sam Kinison once protested (between yells) when accused of sacrificing a cat backstage before his shows that "I'm not against cat death - I just don't have the time."

But the order is useful on another topic as well, because Judge Love went on to make some observations about "rolling" document production (shown here in an undated photo from the Marshall clerk's office). 

The Court notes a trend in complex patent cases where the parties undertake “rolling” productions of documents and in many cases the most relevant documents are produced near the discovery deadline invariably leading to acrimonious motion practice. Accordingly, while the discovery deadline for all other purposes will remain January 13, 2012, all relevant documents must be produced by December 10, 2011.

Just a helpful note for readers that thought judges didn't notice the character of motion practice in their court.  They can assign adjectives just fine, and the ones that don't make it into orders might be even more colorful.