Kraft Foods Group Brands LLC v. TC Heartland LLC et al

Filing 433

MEMORANDUM ORDER: Heartland's request for a stay is DENIED. Proposed Pretrial Order due by 9/25/2017. A Final Pretrial Conference is set for 10/6/2017 at 09:00 AM in Courtroom 6B. A Jury Trial of up to ten (10) days is set for 10/16/2017 at 09:00 AM in Courtroom 6B. Signed by Judge Leonard P. Stark on 1/12/17. (ntl)

IN THE UNITED STATES -DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
r

KRAFT FOODS GROUP BRANDS
LLC,
Plaintiff,
·c.A. No. 14-28-:tPS

v..
· TC HEARTLAND, LLC d/b/a
HEARTLAND FOOD PRODUCTS
GROUP and HEARTLAND
PACKAGING CORPORATION,
Defendant.

MEMORANDUM ORDER
.

!

I

I ani asked to stay this case, which is in an unusual procedural ,osture. On September 24,

2015, I adopted a Report and Recommendation (D.I. 59) ("R&R") autHored by Magistrate Judge
Burke .and denied Defendants TC Heartland, LLC and Heartland PacJging Corporation's
("Heartland" or "Defendants") motion to transfer this case to tb,e Unitek States District Court for
the Southern District of Indiana. (D.I. 80) In doing so, I overruled HeLland's objections to the

~e U.S. Court of Appeals
. for the Federal Circuit misconstrued the patent venue statute, 28 U.S.~. § 1400(b), in its 1990
R&R (D.I. 70), which were predicated (in part) on the contention that

decision in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2J 1574 (Fed. Cir. 1990). 1

1

Heartland also argued that this Court lacks personal jurisdiction, because only ·
approximately 2% of its sales are in Delaware, but this suit also aims reach Heartland's sales
to non.:.Delaware customers. (See D.I. 70 at 1-5) In overruling Heartlahd's objections to the
R&R, I found that this argument was inconsistent with the Federal Cirbuit's precedential opinion·
in Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 157l (Fed. Cir. 1994), which
held that personal jurisdiction exists in patent cases where, as here, thei"defendants purposefully
shipped the accused [product] into [the· forum state] through an establi. hed distribution channel."

tb

1

Heartland subsequently filed a petition for a writ of mandamus, which the Federal Circuit denied
onApril 29, 2016. See In re: TC Heartland LLC, 821 F.3d at 1338. Thereafter, Heartland filed a
petition for a writ of certiorari, which the United States Supreme Court granted on December 14,
2016. See_ U.S._, 2016 WL 4944616 (2016).
In the meantime, this patent litigation between two competitors in the liquid water

enhancer market has proceeded in front of me. Litigation events that have occurred since
Heartland filed its mandamus petition on October 23, 2015 (D.I. 101) inelude: the Court
.conducting two claim construction hearings and resolving the parties' claim construction
disputes (see D .I. 198); the parties briefing and arguing multiple summary judgment and Daubert
motions (see D.I. 316, 317, 320, 321); and the Court holding numerous conferences with the
parties to address a host of discovery and scheduling issues (see, e.g., D.I. 350, 365, 417, 428) ..
Relatedly, in November 2016, responding to the parties' concerns about the case not being ready
fortrial in January 2017 - a trial date which had been set back in February 2015 (see D.I. 38)the Court moved the two-week jury trial, which is now scheduled to begin on May 1, 2017. (D.I.
430)
Neither after filing its.mandamus petition in the Federal Circuit nor its petition for a writ
of certiorari in the Supreme Court did Heartland ask this Court to stay any portion of this

(See also D.I. 80 at 2) While the personal jurisdiction issue was argued as part of Heartland's
mandamus action in the Federal Circuit, see In re: TC Heartland LLC, 821F.3d1338, 1343-45
(Fed. Cir. 2016), it was not an issue on which Heartland sought or received further review (at this
point) in the Supreme Court. See Petition for Writ of Certiorari at i (stating single question
presented: "Whether 28 U.S.C. § 1400(b) is the sole and exclusive provision governing venue in
patent infringement actions and is not to be supplemented by 28 U.S.C. § 139l(c).").
2

litigation or even indicate that it would seek a stay in the event cert. were granted. 2 To the
contrary, during a November 23, 2016. status teleconference Heartland did not challenge the
assertion of Plaintiff Kraft Foods Group ~rands LLC ("Kraft" or "Plaintiff') that "at no time has
Kraft or even Heartland suggested that [the pending cert. petition] should merit any kind of stay
or delay in the case." (D.I. 428 at 7-8) 3 In that same teleconference, I advised the parties: "I have
not only this discovery dispute in front me but a number of motions, and we have been working
on those and we plan to continue working on those~" (Id. at 11) Heartland raised no concern
about this case continuing to move forward.
On December 16, the Court expressly asked the parties to advise it of their positions as to
"how this case should proceed, including whether the matter should be stayed pending resolution
of the Supreme Court proceedings." (D.I. 431) It was only at this point that Heartland requested
a (partial) stay.
In particular, on December 20, the parties responded to the Court's order by indicating
that they could not reach agreement on what should happen next. (D.I. 432) Heartland now ·asks
that I stay all case-dispositive matters, but not stay non-dispositive matters, which include a
pending discovery dispute. (See id. at 2-3) ·specifically,
Heartland submits that the Court should cancel the curre~tly
scheduled pretrial conference and trial dates and should postpone
making dispositive pre-trial rulings, including on the parties'

2

Indeed, when Kraft sought a stay pending resolution of an inter partes review by the
Patent and Trademark Office (see D.I. 114), Heartland opposed Kraft's motion. (See D.I. 134) .
After briefing and oral argument, the Court denied Kraft's motion to stay. (See D.I. 149)
3

Kraft' s statement came in response to the Court's question: "From your perspective,
what, if any, impact does the pending cert. petition have on these issues?" (D.I. 428 at 7)
(internal grammar modified)
3

pending motions [for] summary judgment, until the venue issue is
. . . Heartland believes that it is appropriate ·and sensible
for non-dispositive pre-trial proceedings (other than the final
pretrial conference and related preparations of the pretrial order) to
continue before this Court pending the outcome of the Supreme
Court proceedings.
·

resolved~

Id. (emphasis in original) Kraft prefers that I not stay any portion of the case. (See id. at 1-2)
Kraft is agreeable, however, to moving the trial to a date shortly after the end of June, .in order to
ensure that we have the Supreme Court's decision before we go to trial. (See id.)
I·have decided notto enter a stay. This is a discretionary issue, see, e.g., Murata

Machinery USA v. Daifuku·Co., Ltd., 8:30 F.3d 1357, 1361 (Fed. Cir. 2016); Cost Bros., Inc. ·v.
Travelers Jndem. Co., 760 F.2d 58, 60 (3d Cir. 1985), and I believe the proper exercise of my
discretion is to allow this case to continue to proceed toward trial.
By separate orders that will also be entered today, I have decided all pending motions,
including motions for summary judgment (which I have denied in almost all respects), motions to
exclude expert evidence (one denied and one granted), and a motion to amend Heartland's
inequitable conduct allegations (which I have granted). The parties and the Court did a great deal
of work briefing, arguing, and deciding these motions, and the Court could have issued its
decisions at any time after the August 30, 2016 hearing, well before Heartland (after the Court's
express inquiry) finally asked for a (partial) stay on December 20. Even if the result of the
Supreme Court's decision is a determination that this case must be transferred to another District,
the case will still need to be tried. 4 I have presided over the case since its inception. The

4

Heartland asserts that ifthe Supreme Court reverses the Federal Circuit, "the result will
be that this action will be subject to dismissal or transfer." (D.I. 432 at 2) It is unclear on what
basis Heartland is anticipating that dismissal may be the outcome. See generally 28 U.S,C.
§ 1406(a) (providing that when a case is filed in the "wrong division -or district" the court ·"shall
4

directive of Federal Rule of Civil Procedure 1, that I "administer[]" this case (like all others) with
a goal of "secur[ing] [its] just, speedy, and inexpensive determination," is far better served by me
deciding the ripe motions rather than leaving numerous loose threads for (potentially) a judge in
another District to have to untangle.
Additional reasons support my denial of Heartland's requested stay. First, these parties
are competitors. (See, e.g., D.I. 428 at 6) (Kraft arguing: "The parties are, as you know,
competing fiercely in the marketplace and any kind of substantial delay in our view would be
prejudicial to Kraft.") Kraft has a right to seek to enforce its patents against a competing entity it
believes it" can prove is misappropriating its intellectual property. Second, this case is already
three years old; Kraft filed its complaint on January 14, 2014. It needs to go to trial soon.
Denying the stay will enable the parties to complete the remaining discovery being permitted by
my other orders and have this case ready for trial later this year, regardless of the District in
which the trial will be held. 5
Finally, I am also moving the trial date. Retaining the May trial date would raise the
possibility of having a Delaware trial, and obtaining a verdict, before the Supreme Court decides
the patent venue issue, an outcome both sides seem to agree would be problematic. That is
certainly my view. But, by moving the trial from May to October, we can look forward to
receiving the Supreme Court's decision (which the parties anticipate having before the end of

dismiss, or if it be in the interest o,fjustice, transfer such case to any district ... in which it
could have been brought") (emphasis added).
5

Kraft contends that "[s]ignificant discovery issues remain pending" (D.I. 432 at 2), but
the Court has today resolved all discovery disputes that were before it. Should others arise, the
parties may use my Discovery Matters procedures to resolve them, as they have in the past.
5

June) and then providing the parties a minimum of three additional months in whiCh to prepare
the pretrial order and finalize preparations for trial (if the case remains in this District). 6
Accordingly, IT IS HEREBY ORDERED that ~eartland's request for a stay (see D.L 432
at 3) is DENIED.
IT IS FURTHER ORDERED that the governing scheduling order is AMENDED as
follows:

1.

Final pretrial order is due on September 25, 2017.

2.

Final pretrial conference to be held on October 6, 2017 at 9:00 a.m.

3.

Ajury trial of up to ten (10) days to begin on October 16, 2017.

HONORABLELEONA
.STARK
UNITED STATES DISTRICT COURT

January 12, 2017
Wilmington, Delaware

6

This is the schedule if the trial is to be in front of me. Of course, if the case is to be
transferred, the transferee judge will be free to schedule trial for whenever he or she wishes.
6