Thermapure, Inc. v. Temp-Air, Inc. et al

Filing 338

WRITTEN Opinion entered by the Honorable Joan H. Lefkow on 12/11/2012: Plaintiff, Thermapure Inc.'s, motion for leave to amend its final infringement contentions [dkt. 303 ] is denied. Thermapure's supplemental motion to amend its final infringement contentions [dkt. 320 ] is granted in part and denied in part. [For further details see written opinion.] Mailed notice.(mr, )

Order Form (01/2005)

United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge

Joan H. Lefkow

CASE NUMBER

10 C 4724

CASE
TITLE

Sitting Judge if Other
than Assigned Judge

DATE

12/11/2012

Thermapure, Inc. v. Giertsen Company of Illinois

DOCKET ENTRY TEXT

Plaintiff, Thermapure Inc.’s, motion for leave to amend its final infringement contentions [dkt. 303] is
denied. Thermapure’s supplemental motion to amend its final infringement contentions [dkt. 320] is granted
in part and denied in part.
O[ For further details see text below.]

Notices mailed by Judicial staff.

STATEMENT
Background
Presently before the court are two motions filed by plaintiff, Thermapure, Inc. (“Thermapure”)
seeking leave to amend its final infringement contentions [dkts. 303, 320.] Thermapure alleges that
defendant, Giertsen Company of Illinois (“Giertsen”), infringes claims 4, 6, and 8 of U.S. Patent 6,327,812
(“the ‘812 patent”) through its use of special heat-drying equipment (i.e., the Water-Out trailer).
On August 25, 2011, Thermapure served its final infringement contentions. On July 3, 2012, the
court issued its claim construction ruling, and on September 4, 2012, fact discovery closed in this case. All
of the other defendants in this case have settled, and the only remaining defendant is Giertsen. Thermapure
now seeks to amend its final infringement contentions against Giertsen to (1) include a claim of contributory
infringement relating to Giertsen’s use of the Water-Out trailer to perform water remediation jobs in
Wisconsin; (2) update the accused instrumentalities to include “heaters” and “air scrubbers”; and (3) also
update the accused instrumentalities to include an additional filter (i.e., “the Return Filter”) that infringes via
direct infringement and under the doctrine of equivalents. In its final infringement contentions, Thermapure
did not identify heaters, air scrubbers, or the Return Filter as “accused instrumentalities;” rather, it identified
(1) the Water-Out Trailer Mount Drying Unit; (2) the Ducting compatible with the Water-Out Trailer-Mount
Drying Unit; (3) the Water-Out Portable Mold Only HEPA Filter; and (4) the Water-Out Data Loggers.
Discussion
The Northen District of Illinois adopted local patent rules, which obligate litigants claiming patent
infringement to timely identify the bases of their infringement allegations. See generally Judge Matthew
Kennelly, Edward D. Manzo, Northern District of Illinois Adopts Local Patent Rules, 9 J. Marshall Rev.
Intell. Prop. L. 202 (2010). Northern District Local Patent Rule 3.4 pertains to the amendment of final
infringement contentions and provides that “[a] party may amend its Final Infringement Contentions . . . only
by order of the Court upon a showing of good cause and absence of unfair prejudice to opposing parties,
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STATEMENT
made promptly upon discovery of the basis for the amendment.” N.D. Ill. L.P.R. 3.4. In determining
whether amendments of final infringement contentions are appropriate, the two factors that govern are
whether (1) the party seeking the amendment acted with diligence and (2) the accused infringer would suffer
prejudice. See Id.; Fujitsu Ltd. v. Tellabs Operations, Inc., Nos. 08 C 3379, 09 C 4530, 2012 WL 5444979,
at *4 (N.D. Ill. March 21, 2012). Federal Circuit precedent governs the interpretation and validity of local
patent rules regarding amendments of final infringement contentions. Fujitsu, 2012 WL 5444979, at *4
(citing O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1365 (Fed. Cir. 2006) (construing
the “good cause” requirement in the Northen District of California’s Local Patent Rules1 for amending final
infringement contentions as requiring “a showing of diligence.”)). The party seeking to amend its final
infringement contentions has the burden of establishing that it acted diligently and that the accused infringer
will suffer no unfair prejudice. See O2 Micro, 467 F.3d at 1366–67; Fujitsu, 2012 WL 5444979, at *7.
Determining whether a party has satisfied the good cause requirement is within the discretion of the court.
See MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1380 n.5 (Fed. Cir.
2005).
I.

Contributory Infringement for Giertsen’s Use of the Water-Out Trailer in Other States

Thermapure seeks to add a claim of contributory infringement based on Giertsen’s affiliates’ use of
the Water-Out Trailer in Wisconsin and possibly other states. Thermapure argues that, on November 2012, it
first learned that Giertsen used the Water-Out Trailer to perform water remediation jobs outside the state after
Magistrate Judge Rowland ordered Giertsen to produce this information. Giertsen counters that Thermapure
did not act with the requisite diligence in procuring this information and cannot now seek to amend its
infringement contentions. Giertsen notes that Thermapure never requested information regarding its
affiliates’ use of the Water-Out Trailer until after fact discovery had closed.
Initially, Thermapure alleged that Giertsen infringed the ‘812 patent through use of equipment
manufactured by a former defendant (Temp-Air). Thermapure also filed suit against Temp-Air. On
December 22, 2010, the court transferred the Temp-Air case to the United States District Court for the
District of Minnesota. While the Thermapure litigation against Temp-Air was pending in the District of
Minnesota, the court stayed Thermapure’s claims against Giertsen. On January 21, 2011, Thermapure sought
to lift the stay arguing that Giertsen also infringed the ‘812 patent through its use of the Water-Out Trailer.
In March 2011 (before the stay had been lifted), Thermapure served subpoenas on Giertsen and several of its
affiliates, including Giertsen of Minnesota, Inc. and Giertsen of Wisconsin, Inc. On April 6, 2011, the court
lifted the stay of Thermapure’s claims against Giertsen.
Thermapure argues that it acted with the requisite diligence despite not specifically seeking this
information relating to Giertsen’s affiliates use of the Water-Out Product until after fact discovery.
Thermapure notes that it could not have learned of this information earlier because it was not until November
2012 that it obtained documents revealing that Giertsen loaned the Water-Out Trailer to its affiliate in
Wisconsin. It further argues that it earlier requested information about Giertsen’s products “which use heat”
(Thermapure Reply 3), and that the subpoenas issued to Giertsen and its affiliates in 2011 concerned the
Temp-Air litigation (not the Water-Out trailer). Still “[c]iting recent discovery does not make these theories
new.” Fujitsu, 2012 WL 5444979, at *9. The relevant inquiry is not when Thermapure learned about the
information, but when it could have made the discovery. See Google, Inc. v. Netlist, Inc., Nos. 08 C 4144, 09
C 5718, 2010 WL 1838693, at *2 (N.D. Cal. May 5, 2010).
Thermapure could have subpoenaed Giertsen’s affiliates before fact discovery closed (as it had done

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STATEMENT
in 2011) requesting this type of information, but it never did so. Thermapure failed to act with the required
diligence to show good cause under Local Patent Rule 3.4 that would allow amendment. Fujitsu, 2012 WL
5444979, at *9 (denying motion for leave to amend final infringement contentions as the movant was not
diligent in seeking the amendment); Trans Video Elec., Ltd. v. Sony Elec., Inc., 278 F.R.D. 505, 508–09
(N.D. Cal. 2011) (denying motion for leave to amend final infringement contentions ruling that the movant
lacked the requisite diligence). Because Thermapure failed to satisfy the first prong of Local Patent Rule
3.4's test, the court need not delve into whether Giertsen would suffer prejudice. See O2 Micro, 467 F.3d at
1368–69 (“Having concluded that the district court could properly conclude that [the patent holder] did not
act diligently in moving to amend its infringement contentions, we see no need to consider the question of
prejudice to [the accused infringer].”). The court denies Thermapure’s request to amend its final
infringement contentions to assert contributory infringement based on Giertsen’s affiliates’ use of the WaterOut Trailer.
II.

Including Heaters and Air Scrubbers As Accused Instrumentalities

Thermapure notes that it is possible for Giertsen to infringe the ‘812 patent through other heating
mechanisms apart from the Water-Out trailer and seeks to amend its final infringement contentions to include
Giertsen heaters (Torpedo heaters and Dura heat heaters) and air scrubbers (Niko Air Scrubbers, PAS 500,
600, and 1000 Air Scrubbers, Force Air 600 and 2000 Air Scrubbers, and Phoenix Air Scrubbers) as accused
instrumentalities. Throughout the course of the litigation, Thermapure has argued that Giertsen never
disclosed that it used portable heaters despite Thermapure’s discovery requests seeking this information.
Because Thermapure only learned that Giertsen used heaters recently and after fact discovery closed, it
argues that amendment of its final infringement contentions would be proper to include these
instrumentalities. Giertsen argues that it never misled Thermapure about the use of these heaters and that it
had, in fact, disclosed the use of air scrubbers.
On October 22, 2010, Thermapure propounded discovery on Giertsen seeking, inter alia, products
that Giertsen “used for each and every heat treatment it performed.” (Thermapure Reply 4.) Giertsen
responded that it used Temp Air heaters and the Water-Out trailer, but did not identify any additional heaters.
On September 23, 2011, Thermapure deposed Richard Giertsen who testified that, besides bed bug
remediation and the Water-Out trailer, Giertsen did not use any other services that raised temperatures in
closed structures. On October 18, 2012, Giertsen Production Manager Dan Saenz testified that he did not
know of other heaters Giertsen used besides the Water-Out trailer. After reviewing an October 23, 2012
document production made by Giertsen, Thermapure discovered that Giertsen had five heaters in addition to
the Water-Out trailer. Thermapure also determined that the Institute of Inspection, Cleaning and Restoration
Certification guidelines require using filtration (i.e., air scrubbers) on restoration jobs with portable heaters.
(Thermapure Mot. 4.)
Giertsen contends that Thermapure failed to adequately inquire into its use of heaters during
depositions, and if it had done so, it would have learned this information. Still, in discovery requests and in
Giertsen’s deposition, Thermapure inquired into these topics; however, it did not receive a forthright
response regarding Giertsen’s use of these heaters. After learning about Giertsen’s heater use in November
2012, Thermapure timely filed a motion seeking leave to amend its final infringement contentions with this
new information. The court concludes that Thermapure acted with the requisite diligence to satisfy Local
Patent Rule 3.4's good cause requirement. See O2 Micro, 467 F.3d at 1363 (the “good cause” requirement in
the Northern District of California requires “showing [that] the party seeking leave to amend acted with
diligence in promptly moving to amend when new evidence is revealed in discovery.”); Coopervision, Inc. v.

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STATEMENT
Ciba Vision Corp., 480 F. Supp. 2d 884, 889 (E.D. Tex. 2007) (“A party that fails to disclose information in a
timely manner has little room to complain that the opposing party is tardy. This factor weighs in favor of
allowing [the movant] to amend its Infringement Contentions.”).
Giertsen argues that it would suffer prejudice if the court allowed the amendment. It notes that claim
construction has already taken place and that it has solidified its position in reliance on the court’s claim
construction ruling. It also argues that if discovery were reopened, it would incur further time and expense in
responding. Giertsen, however, fails to specifically articulate how it would be prejudiced if the court allows
this amendment. Because Thermapure was diligent in amending its final infringement contentions after
learning about these heaters, and considering the minimal resulting prejudice to Giertsen, the court will allow
Thermapure to amend its infringement contentions to add the heaters and air filters as accused
instrumentalities.
III.

Including the Return Filter As An Accused Instrumentality

Thermapure last seeks to amend its infringement contentions to include the Return Filter as an
accused instrumentality, the use of which Thermapure alleges is infringing under theories of direct
infringement and the doctrine of equivalents. Thermapure argues that it did not learn that Giertsen used the
Return Filter until the October 19, 2012 deposition of Giertsen employee Justin Graff who testified that
Giertsen used this filter. Giertsen argues that Thermapure knew about the Return Filter but failed to timely
update its final infringement contentions to include it as an accused instrumentality.
Thermapure acknowledges that it suspected Giertsen’s use of the product as early as November 2011
when it conducted an inspection of the Water-Out equipment and noticed the Return Filter for the first time.
In its reply, Thermapure admits that it “opted to wait for further testimony on whether the Return Filter was
in fact used before adding it to its Final Infringement Contentions.” (Thermapure Reply 6.) Thermapure
initially noticed depositions for Giertsen employees (including Graff) in November 2011; however,
Thermapure cancelled the depositions and agreed with Giertsen to postpone them until after the court’s claim
construction ruling.
The record is clear that Thermapure knew about the Return Filter in November 2011, having seen it,
and acknowledged its suspicions regarding Giertsen’s use of the product. Nevertheless, Thermapure waited
eleven months to amend its final infringement contentions to shore up its theory of infringement. This tactic
runs afoul of the diligence that Local Patent Rule 3.4 places on parties. See Fujitsu, 2012 WL 5444979, at *9
(“[T]heories of infringement do not need to be confirmed before infringement contentions may be
amended.”); see also O2 Micro, 467 F.3d at 1366 (“If the parties were not required to amend their
contentions promptly after discovering new information, the contentions requirement would be virtually
meaningless as a mechanism for shaping the conduct of discovery and trial preparation.”). Thermapure’s
motion to amend its final infringement contentions to include the Return Filter is therefore denied.
1. In Fujitsu, Judge Holderman ruled that while the Federal Circuit’s opinion in O2 Micro construed a
local patent rule from the Northern District of California, “the principles elucidated by the Federal Circuit
in that case are broadly applicable, including its holding that ‘good cause’ to amend final infringement
contentions requires a showing of diligence by the party seeking leave to amend.” Fujitsu, 2012 WL
5444979 at *4 (citations omitted).

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