Intel Corporation v. Tela Innovations, Inc.

Filing 346

ORDER ON 324 MOTION FOR LEAVE TO FILE A MOTION TO RECONSIDER by Judge William H. Orrick. (jmdS, COURT STAFF) (Filed on 2/11/2021)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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INTEL CORPORATION,

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Plaintiff,

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ORDER ON MOTION FOR LEAVE TO
FILE A MOTION TO RECONSIDER

v.

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TELA INNOVATIONS, INC.,

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Re: Dkt. Nos. 324, 325

Defendant.

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United States District Court
Northern District of California

Case No. 3:18-cv-02848-WHO

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Among many issues addressed in my order of December 22, 2020 (Dkt. No. 316) (“Prior

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Order”), I granted summary judgment to Intel Corporation (“Intel”) that several of its products did

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not literally infringe the patents of Tela Innovations, Inc. (“Tela”). Tela moves for leave to file a

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motion to reconsider several aspects of that order. Its motion is DENIED.
I will exercise my discretion to make several minor modifications and clarifications to the

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order. See City of Los Angeles, Harbor Div. v. Santa Monica Baykeeper, 254 F.3d 882, 889 (9th

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Cir. 2001) (“[A]s long as a district court has jurisdiction over the case, then it possesses the

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inherent procedural power to reconsider, rescind, or modify an interlocutory order for cause seen

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by it to be sufficient.”). I therefore concurrently file an amended order that supersedes the Prior

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Order. None of the modifications alters the order’s conclusions or reasoning.1
Each party has moved to certify the summary judgment determination for appeal and a

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hearing on those motions is set for February 17, 2021. Because the amended order does not alter

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the grants and denials of summary judgment that I previously entered, I do not expect it to make a

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difference to the parties’ certification motions. However, if either party wishes to withdraw its

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For the parties’ ease of reference, I will email counsel a version of track changes showing the
amendments to the Prior Order. The amended order filed on the docket accepts those changes.
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motion in light of these few alterations and clarifications, it should provide notice prior to the

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hearing.

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I.

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LEAVE TO FILE A MOTION TO RECONSIDER
Civil Local Rule 7-9 governs motions for reconsideration of interlocutory orders prior to

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“the entry of a judgment adjudicating all of the claims and the rights and liabilities of all the

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parties in a case.” CIV. L. R. 7-9(a). Under that rule, “any party may make a motion before a

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Judge requesting that the Judge grant the party leave to file a motion for reconsideration of any

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interlocutory order on any ground set forth in Civil L.R. 7-9(b). No party may notice a motion for

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reconsideration without first obtaining leave of Court to file the motion.” Id. Under Rule 7-9(b),

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The moving party must specifically show reasonable diligence in bringing the motion and
one of the following: (1) That at the time of the motion for leave, a material difference in
fact or law exists from that which was presented to the Court before entry of the
interlocutory order for which reconsideration is sought. The party also must show that in
the exercise of reasonable diligence the party applying for reconsideration did not know
such fact or law at the time of the interlocutory order; or (2) The emergence of new
material facts or a change of law occurring after the time of such order; or (3) A manifest
failure by the Court to consider material facts or dispositive legal arguments which were
presented to the Court before such interlocutory order.

United States District Court
Northern District of California

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Id. 7-9(b).
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Even if a motion for leave to file a motion to reconsider does not satisfy Rule 7-9, district
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courts have the inherent authority to modify interlocutory orders prior to entry of final judgment.
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Amarel v. Connell, 102 F.3d 1494 (9th Cir. 1996), as amended (Jan. 15, 1997). But generally,
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“[r]econsideration is appropriate if the district court (1) is presented with newly discovered

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evidence, (2) committed clear error or the initial decision was manifestly unjust, or (3) if there is
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an intervening change in controlling law” and any other circumstances warranting reconsideration
would be “highly unusual.” Sch. Dist. No. 1J, Multnomah Cty., Or. v. ACandS, Inc., 5 F.3d 1255,

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1263 (9th Cir. 1993).
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A. Diffusion Regions
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This order assumes familiarity with my Prior Order. I previously found that none of the
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asserted claims were literally infringed because all required “diffusion regions” and that the
Accused Products lacked “diffusion regions.” See Prior Order 7–11. Tela makes two arguments

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C. Design Stage Abstractions and Layout Shapes

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In ruling on one of several dozen of the parties’ discrete arguments on motions to strike

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and exclude evidence, I partially granted Intel’s motion to strike certain upstream design-stage

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abstractions and layout shapes on which Tela relied (though I denied it with respect to certain

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fabrication steps). Prior Order 43–46. The fundamental reason was that the parties had before

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them the Accused Products themselves, yet many of Tela’s arguments were not geared toward

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showing that their structure infringed but instead that these abstractions and layout shapes

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demonstrated infringement in spite of any facts about the structure. As a result, I concluded that

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reliance on them ran afoul of the Federal Circuit’s instructions, would alternatively be excluded on

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evidentiary grounds, and would not create a genuine dispute of material fact if admitted. Id.
Tela contends that the Prior Order effectively established a rule that only direct evidence,

United States District Court
Northern District of California

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but not circumstantial evidence, could show infringement, in violation of the rules to the contrary.

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Mot. 18–19. That is incorrect. I did not exclude that evidence based on a distinction between

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circumstantial and direct evidence. The Prior Order explicitly recognized that there is no special

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rule excluding circumstantial evidence of infringement. Prior Order 43. The Prior Order instead

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held that there was not sufficient evidence that these abstractions or layout shapes were reflective

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of the products but that the physical products were accessible to and understood by both parties.

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Even if exclusion of this evidence were erroneous, it would not alter the summary

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judgment decision because, as the Prior Order recognized, these abstractions and layout shapes

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would not create a genuine dispute about any of the essential facts if admitted.4
D. Pre-Suit Damages

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I also found that Tela had not adequately disclosed the basis for pre-suit damages that its

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damages expert awarded. See Prior Order 53–54. I noted that Intel has served interrogatories that

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requested such disclosure but that Tela’s responses were only objections or incorporations of its

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Tela also asserts that “the Court ignored the material fact that Tela is not relying on the design
documents and layouts in isolation, but rather in addition to direct evidence of the Accused
Products through teardown images.” Mot. 19. It is unclear how that would alter the decision on
the motion to strike and exclude, which only excluded reliance on the design documents and
layouts and explicitly acknowledged Foty’s reliance on teardowns. Prior Order 45.
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contentions. Id. 53.
Instead of pointing to a damages disclosure or interrogatory response, Tela’s Opposition

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cited a sentence from Section VI of its Patent Local Rule 3-1 disclosures that I discussed in the

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Prior Order and that Intel responded to in its Reply. Dkt. No. 259-3 at 23. Section VI dealt with

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the basis for Tela’s allegations of willful infringement (not damages). Tela represented that this

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disclosure “in and of itself, moots Intel’s claim.” Id. The sentence stated that “Intel itself alleges

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that it became aware of an assertion by Tela of . . . the asserted patents . . . in August 2014 when

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Tela sent Intel a list of certain patents for a licensing discussion.” Id. In the Prior Order, I

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explained that “I fail to see how this disclosure would put Intel on notice concerning even the
basic facts required.” Prior Order 53. That is especially so as Tela’s damages expert assessed pre-

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United States District Court
Northern District of California

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suit damages from earlier than August 2014 and because it is unclear how being sent a list of

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patents one has rights in would be sufficient.

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Tela now relies on two parts of those 3-1 disclosures that it did not cite. First, it cites a

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different section of those disclosures than Section VI in which the cited statement appeared. That

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section explicitly concerns the damages period and does contemplate “[d]amages for

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infringement” as beginning in 2012 (at least for those patents issued by then). See Mot. 21–22.

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Although those disclosures were in an infringement contention, they do appear to plausibly put

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Intel on notice that the damages period would extend to the pre-suit damages assessed by the

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expert. Second, Tela cites some statements from the section in which the above statement did

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appear, on willful infringement. It is far less clear that those statements would put Intel on

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adequate notice that Tela was pursuing pre-suit damages on this basis. While they do concern

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Intel’s purported knowledge prior to the suit, none disclose that pre-suit damages will be pursued

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on that basis. The point of our disclosure requirements, though, is to ensure that the other party

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can fairly defend against contentions, not just that some underlying facts are disclosed

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unconnected from the basic theories they will support. The disclosure would therefore have to

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fairly inform Intel that pre-suit damages were being sought and on what broad basis, which this

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second disclosure does not. Accordingly, it appears that the first disclosure but not the second

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may have been adequate.
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The problem with the more plausible first disclosure is that Tela did not raise it. Again, the

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only concrete statement Tela raised was the one about “August 2014” described above. Tela seeks

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to get around this by now calling that statement “exemplary” and pointing out that, in its

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Opposition, it said that the disclosure included, “among numerous bases,” the statement. Mot. 22–

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23. Tela therefore argues that the Prior Order ignored the remainder of the 3-1 disclosure.

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Reading Tela’s Opposition liberally, it fairly directed me and Intel to Section VI of the disclosure,

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because that is the section in which the cited statement falls. (Even in that case, Tela did not

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actually cite anything further from it, but I nonetheless reviewed it in ruling on the motion.) But,

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as explained above, it is not in itself a sufficient disclosure.
Because the more plausible disclosure was not cited, Tela argues that the failure of the

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United States District Court
Northern District of California

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Prior Order was not “consider[ing] the entirety of Tela’s P.L.R. 3-1 disclosure.” Mot. 23

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(emphasis added). But Tela cannot vaguely gesture to the entirety of a 3-1 disclosure and call it a

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day. It is not the role of a court to sift through 56 pages of disclosures (especially when this

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particular dispute was only one of several dozen) merely because a party cites a single statement,

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does not cite any others, and now brands that statement “exemplary.” Tela is intimately familiar

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with its disclosures; I am not. Moreover, its failure to cite other statements prejudiced Intel, which

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responded to the cited statement in particular, as would be natural, but had no opportunity to

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respond to the paragraphs Tela now cites. See Dkt. No. 270-4 at 13. Because the adequacy of this

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disclosure, even on Tela’s account, had to be derived from documents in which such disclosures

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do not usually appear, its lack of citation is even less helpful. If this disclosure is so on point, it is

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unclear why Tela did not point to it. Tela says that “space constraints” required it to omit this

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information in favor of the “exemplary” statement, Mot. 23, but (1) adding a few extra sentences

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to cite the pertinent information is not onerous or overly space-consuming; (2) the statement is not

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truly exemplary as it is pulled from a different section of the disclosure; and (3) in any event,

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parties must always contend with space constraints, which are not an excuse to raise something for

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the first time in a motion to reconsider.5

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Tela is incorrect that it adequately raised this at the hearing. Its slides do not reference the other
portions of the 3-1 disclosures with any particularity. Tela relies on portions of the hearing when
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I do not know what the outcome would have been if Tela had raised this portion of its

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disclosure earlier and Intel had a chance to respond. But reopening the issue would countenance a

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party’s ability to reference specific portions of a document, omit reference to other portions, and

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then successfully move to reconsider because the court did not scour the entire document, no

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matter how long or complex, to find the omitted information and recognize its alleged relevance.

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That dog won’t hunt.6

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II.

Tela moves to seal certain information in its filings. Separately pending before me is the

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MOTION TO SEAL

parties’ joint renewed motion to seal related to the Prior Order. I will rule on the current motion to
seal when that comprehensive renewed motion is decided because it covers the same ground. I

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United States District Court
Northern District of California

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will issue an unredacted version of this order if necessary.

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IT IS SO ORDERED.

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Dated: February 11, 2021

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William H. Orrick
United States District Judge

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its counsel discussed the adequacy of its disclosures, but the statements it cites are all general
statements such as, “[i]n the Patent Local Rule 3-1 disclosures, we set up all the ways that Intel
was on notice about Tela’s patents and their infringement” and “[i]f we look at those 3-1 and 3-8
disclosures, that explicitly says that Tela will be relying on the time from December of 2012,
depending on the patents.” See Mot. 21 n.4 (citing Dkt. No. 313 at 79:9–81:7). The most
reasonable understanding is that this argument was not intended to do anything but reflect what
Tela said in its brief. Counsel at the hearing did not point to the separate timing section of the
disclosures that was not cited in its brief.
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Tela is correct that one footnote in the Prior Order was erroneous. Footnote 15 treated a footnote
in Tela’s Opposition as being related to the discussion on pre-suit notice when, in reality, Tela’s
footnote was from the preceding section of the Opposition. That explains why it appeared so
irrelevant to the issue, as the Prior Order observed. I will remove the footnote (which was not
material) from the amended order.
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