Tokai Corp et al v. Easton Enterprises Inc et al

Filing 68

ORDER GRANTING MOTION TO STRIKE SUPPLEMENTAL INVALIDITY CONTENTIONS. by Judge Virginia A. Phillips (am)

1 2 3 4 5 6 7 8 9 10 11 TOKAI CORP., et al. ) Plaintiffs, ) 12 ) v. ) 13 ) EASTON ENTERPRISES INC. ) 14 et al., ) ) 15 Defendants. ) ________________________ ) 16 17 18 Plaintiffs Tokai Corporation, Scripto-Tokai, Inc., 19 and Calico Brands, Inc.'s ("Plaintiffs") Motion to Strike 20 Supplemental Invalidity Contentions and to Exclude Prior 21 Art References Thereto ("Mot.") came before the Court for 22 hearing on July 6, 2009. After reviewing and considering 23 all papers filed in support of, and in opposition to, the 24 motion, as well as the arguments advanced by counsel at 25 the hearing, the Court GRANTS the Motion. 26 27 Defendants Easton Enterprises, Inc., d/b/a Easton 28 Sales, and Fun Line Industries, Inc. ("Defendants") Case No. EDCV 07-00883-VAP (FMOx) [Motion filed on June 12, 2009] ORDER GRANTING MOTION TO STRIKE SUPPLEMENTAL INVALIDITY CONTENTIONS [Link & Term Doc. No. 59] UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

1 served Plaintiffs on March 20, 2009, after the close of 2 fact discovery on February 23, 2009, with Supplemental 3 Invalidity Contentions ("Supplemental Contentions"). 4 Defendants assert the Supplemental Contentions are proper 5 because they believed their contents to be the province 6 of expert, rather than factual, discovery, and because 7 they show good cause. 8 9 10 I. BACKGROUND Plaintiffs filed suit on July 17, 2007. On May 18,

11 2008, the Court issued its Civil Trial Scheduling Order, 12 in which it "adopt[ed] the provisions of Local Patent 13 Rules Nos. 2-5, 3-1, 3-3, 3-4, 3-6 and 4-1 through 4-7 of 14 the Northern District of California." The Civil Trial 15 Scheduling Order set cut-off dates for fact and expert 16 discovery which have been modified by stipulation. 17 18 On June 26, 2008, Plaintiffs propounded 19 interrogatories and document requests, including 20 interrogatory number 9, requesting "all facts and details 21 concerning Defendant's allegations . . . that the patents 22 in suit are invalid for failing to meet at least one 23 condition for patentability. 25 publications . . ." 26 2.) 28
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Include, without

24 limitation, the dates and nature of prior patents and (Mot. 2-3 citing Trojan Decl. Ex. Several document requests inquired as to prior art.

27 (Mot. 3; Trojan Decl. Ex. 3.)

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On August 15, 2008, Defendants served Plaintiffs

2 with: (1) Preliminary Invalidity Contentions; (2) 3 responses to Plaintiffs' first set of interrogatories; 4 and (3) responses to Plaintiffs' first set of requests 5 for production of documents. 6 6.) (Mot. 3; see Trojan Decl. ¶ The responses to interrogatories and requests for

7 production of documents contained little information 8 about prior art but promised supplemental information 9 would be forthcoming. 10 11 On October 15, 2008, Defendants deposed Bojan Cosic, Plaintiffs objected to inquiry 12 Tokai's vice president of administration, as a Fed. R. 13 Civ. P. 30(b)(6) witness. 14 into one of the noticed topics of deposition: "[t]he 15 patentable differences between the subject matter claimed 16 in the Patents-in-Suit and the prior art" on the grounds 17 that it called for expert testimony and a legal 18 conclusion. 19 C 35-36.) 20 21 On January 23, 2009, the Court held the claim 22 construction hearing, requested additional briefing, and 23 took the matter under submission. 24 25 On February 23, 2009, fact discovery closed. 26 Defendants had not supplemented their discovery responses 27 regarding prior art. 28
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(Mot. 4; Trojan Decl. Exs. 4-5.)

(Reply 5; Opp'n 2-3; Chan Decl. ¶¶ 5-6, Ex.

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Plaintiffs promptly wrote a letter to Defendants The parties (Mot. 4;

2 informing them they would seek exclusion of any later3 produced discovery relating to prior art. 4 continued to correspond about this subject in letters 5 dated February 26, March 5, and March 12, 2009. 6 Trojan Decl. Exs. 6-9.) 7 8 On March 20, 2009, Defendants served Plaintiffs with 9 Supplemental Contentions which, according to Plaintiffs, 10 list nine new prior art patents not disclosed during fact 11 discovery. (Mot. 5; Trojan Decl. Ex. 10.) Plaintiffs 12 continued the chain of correspondence described above 13 with a letter dated March 23, 2009, objecting to service 14 of the Supplemental Contentions without leave of Court. 15 Defendants responded with a letter dated April 9, 2009. 16 (Trojan Decl. Exs. 11-12.) 17 18 On June 2, 2009, the Court issued its claim Shortly thereafter, on June 12, The Court did not modify 19 construction order.

20 2009, the Court modified the expert discovery cut-off, 21 setting it for June 22, 2009. 22 the fact discovery cut-off. 23 24 25 II. LEGAL STANDARD The Patent Local Rules of the Northern District of

26 California ("Patent Local Rules"), which this Court 27 adopted in part, are "designed specifically to 'require 28
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1 parties to crystallize their theories of the case early 2 in the litigation' so as to 'prevent the 'shifting sands' 3 approach to claim construction." 02 Micro Int'l Ltd. v. 4 Monolithic Power Systems, Inc., 467 F.3d 1355 1364 (Fed. 5 Cir. 2006) (construing Patent Local Rules adopted in 2000 6 ("2000 Patent Local Rules")). Of interest here are 7 versions of the Patent Local Rules issued in 2000 and 8 2008; both require early filing of infringement 9 contentions and permit amendment under limited 10 circumstances. 2000 Patent Local R. 3-3, 3-6, 3-7; Where good cause is required for 02 Micro Int'l Ltd. 11 Patent Local Rules adopted in 2008 ("2008 Patent Local 12 Rules") 3-3, 3-6. 13 amendment, diligence must be shown.

14 v. Monolithic Power Systems, 467 F.3d 1355, 1366 (Fed. 15 Cir. 2006) (construing 2000 Patent Local Rules). 16 17 18 A. 19 III. DISCUSSION Applicable Patent Local Rules Plaintiffs move the Court to find the 2008 Patent (Mot. 2-3.) Easton argues for the application of (Opp'n 4.) Both versions

20 Local Rules apply rather than the 2000 Patent Local 21 Rules. 22 the 2000 Patent Local Rules. 24 the amendment sought here. 26 27 28
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23 of the Patent Local Rules would require good cause for See 2000 Patent Local R. 3-6, 25 3-7; 2008 Patent Local R. 3-6.

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Plaintiffs filed suit in 2007.

According to Rule 1-4

2 of the 2008 Patent Local Rules, the 2000 Patent Local 3 Rules should apply based on the date of filing. 4 5 The 200O Patent Local Rules do not apply for two First, the Northern District of California's 6 reasons.

7 Patent Local Rules apply to disputes in the Central 8 District only to the extent they are adopted by the 9 Court; the Court did not adopt 2008 Patent Local Rule 110 4. Second, the Court's Civil Trial Scheduling Order 11 adopted Patent Local Rule 4-7, a rule which exists only 12 in the 2008 Patent Local Rules, indicating the Court's 13 intent to adopt the 2008 Patent Local Rules. 14 Accordingly, the 2008 Patent Local Rules apply. 15 16 B. Compliance with 2008 Patent Local Rules 17 Defendants assert they should be given leave to 18 supplement their invalidity contentions outside the 19 timing framework of the 2008 Patent Local Rules because 20 they believed prior art was a topic for expert discovery; 21 alternatively, they assert they show good cause pursuant 22 to the 2008 Patent Local Rules. 23 24 25 1. Expert discovery Defendants urge the Court to deny the Motion because

26 they believed "the issue of patent invalidity," in 27 particular "the patentable differences between" the 28
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1 patents in suit "and the prior art," was a matter of 2 expert testimony and here subject to the expert discovery 3 deadline, rather than the earlier fact discovery cut-off. 4 (Chan Decl. ¶¶ 6-8; Opp'n 2, 4.) According to 5 Defendants, they formed this belief because Plaintiffs 6 objected during the October 15, 2008 deposition of Bojan 7 Cosic, Tokai's vice president of administration, that 8 infringement was a matter of expert testimony and were 9 caught unaware when Plaintiffs sought to bar further 10 disclosures. (Opp'n 2; Chan Decl. ¶¶ 6-8.) In other 11 words, Defendants argue the Supplemental Contentions 12 should not be struck because Defendants believed 13 disclosure of prior art in an expert report would be a 14 permissible supplemental invalidity contention so long as 15 it occurred before the expert disclosure cut-off. 16 Opp'n 2.) 17 18 This argument lacks merit. It suggests an exception 19 to the discovery scheme created by the Patent Local 20 Rules, which require service of Invalidity Contentions 55 21 days after the Initial Case Management Conference ­ 22 before expert discovery would typically close ­ with 23 limited opportunities to supplement thereafter. 24 exception would swallow the rule. This Many cases involve (See

25 issues which could credibly be considered the subject of 26 expert testimony; permitting an exception to the Patent 27 Local Rules in this case would permit it in nearly all 28
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1 cases.

Such supplemental contentions would defeat the (See Reply 7;) see 02 Micro

2 Patent Local Rules's goal of eliciting early, reliable 3 positions from parties. 5 1, 3-3, 3-6. 7 8 9 10 2. No grounds for amendment pursuant to 2008 Patent Local Rule 3-6 Rule 3-6 of the 2008 Patent Local Rules permits 4 Int'l Ltd., 467 F.3d 1364, 1365; 2008 Patent Local R. 3Accordingly, the Court declines Defendants' 6 request to deny the Motion on this basis.

11 "[a]mendment of . . . Invalidity Contentions . . . only 12 by order of the Court upon a timely showing of good 13 cause." As to timeliness, Defendants never moved the 14 Court for leave to file supplemental contentions; they 15 only oppose Plaintiffs' Motion. 16 17 In 02 Micro Int'l Ltd., 467 F.3d at 1367-68, the 18 Federal Circuit affirmed a district court's denial of a 19 party's motion for leave to amend invalidity contentions 20 under the 2000 Patent Local Rules, which required good 21 cause for amendment, where party waited three months to 22 seek leave to amend and failed to adequately explain 23 delay. The Court found diligence was an element of good Id. at 1367-68. The 2008 Patent 24 cause and that a history of negotiation did not, by 25 itself, show diligence. 26 Local Rules also require good cause and place special 27 emphasis on timeliness by explicitly mentioning it. 28
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1 Accordingly, Defendants' delay in communicating with the 2 Court weighs strongly against a finding in their favor. 3 4 2008 Patent Local Rule 3-6 also provides a "[n]on5 exhaustive" list of "circumstances that may, absent undue 6 prejudice to the non-moving party, support a finding of 7 good cause."1 The first example of good cause is 8 issuance of "(a) a claim construction by the Court 9 different from that proposed by the party seeking 10 amendment." The Supplemental Contentions were served 11 before the Court issued its claim construction order. 12 Accordingly, the Supplemental Contentions were not made 13 in response to a claim construction different than that 14 proposed by Defendants and condition (a) is not 15 fulfilled. 16 17 2008 Patent Local Rule 3-6's second example of good Defendants admit they 18 cause is: "(b) recent discovery of material prior art 19 despite earlier diligent search." 20 did not begin their search for the prior art in question 21 until after the close of fact discovery, as discussed 22 above. 24 25 26 Even if the Court were to apply the 2000 Patent Local Rules, Defendants would still have to demonstrate 27 good cause in these circumstances. 2000 Patent Local 28 Rule 3-7.
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See 2008 Patent Local R. 3-6(a).

(See Chan Decl. ¶¶ 6-8.)

They fail to show

23 diligence and accordingly condition (b) is not fulfilled.

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The third example of good cause in 2008 Patent Local

2 Rule 3-6 is: "(c) recent discovery of nonpublic 3 information about the Accused Instrumentality which was 4 not discovered, despite diligent efforts, before the 5 service of the Infringement Contentions." 7 record. 8 9 Although the examples of good cause in 2008 Patent 10 Local Rule 3-6 are not exhaustive, the text of the 2008 11 Patent Local Rule emphasizes the importance of early, 12 full disclosures, warning "[t]he duty to supplement 13 discovery responses does not excuse the need to obtain 14 leave of court to amend contentions." 15 R. 3-6. 2008 Patent Local Accordingly, Defendants cannot claim they show (See Opp'n 5.) The 6 Supplemental Contentions contain matters of public Accordingly, condition (c) does not apply.

16 good cause because they seek to comply with their duty to 17 supplement. 18 19 Having concluded Defendants fail to show good cause See Patent Local R. 3-6. IV. CONCLUSION For the above reasons, the Court GRANTS the Motion. 20 the Court need not address whether Tokai will suffer 21 "undue prejudice." 22 23 24 25 26 Dated: July 8, 2009 27 28
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VIRGINIA A. PHILLIPS United States District Judge