Oil-Dri Corporation of America v. Nestle Purina Petcare Company
Filing
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MEMORANDUM OPINION AND ORDER signed by the Honorable Matthew F. Kennelly on 6/9/2018: For the reasons stated in the accompanying Memorandum Opinion and Order, the Court denies plaintiff's motion to exclude certain prior art defenses [dkt. 198] but directs defendant to serve a revised set of invalidity and unenforceability contentions consistent with this order by no later than July 3, 2018. (mk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
OIL-DRI CORP. OF AMERICA,
Plaintiff,
vs.
NESTLE PURINA PETCARE CO.,
Defendant.
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Case No. 15 C 1067
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
This patent infringement suit was recently transferred to the undersigned judge
from Judge Amy St. Eve after she was appointed to the court of appeals. The claim
construction hearing is set for early August. Two discovery-related motions were
referred by Judge St. Eve to Magistrate Judge Sidney Schenkier and are pending
before him. The present order addresses a motion that is pending before the
undersigned judge.
Plaintiff Oil-Dri Corp. of America has moved to exclude certain defenses that it
contends were first identified in defendant Nestle Purina PetCare Co.'s final invalidity
contentions served under Local Patent Rule (LPR) 3.1. Oil-Dri's objections may be
grouped into three categories. First, it contends that a number of the defenses that
Nestle asserts in its final contentions were not raised in its initial invalidity contentions
served under LPR 2.3 and should be barred for that reason. Second, Oil-Dri contends
that Nestle is relying on prior art references that Judge St. Eve ruled it was barred from
using. Finally, though not asserted as a separate basis for exclusion, Oil-Dri argues
that Nestle's final contentions include, potentially, over a thousand prior art
combinations asserted as a basis for invalidity defenses and that this is unreasonable
and unfair.
1.
The Court overrules Oil-Dri's argument that Nestle should be barred from
including invalidity defenses (including combinations of prior art) that it did not assert in
its initial contentions. Accepting this argument would essentially turn the Local Patent
Rues on their head. The drafters of the Rules 1 chose not to require a single-stage set
of contentions that would be binding throughout the litigation. Rather, the Rules adopt
an approach that requires very early initial, non-binding contentions, followed later in the
suit by final, binding contentions. The purpose of the initial contentions is not to lock the
parties into particular positions but rather to enable the them to focus discovery and
preparation on the issues that are likely to be significant as the case progresses. See
LPR 1.6, Committee Comment. Had the drafters of the Rules intended the initial
contentions to be binding or to, in effect, estop the parties from taking different or
contrary positions later, they would not have required the disclosures at such an early
stage of the case. In this regard, the Court notes that although the Rules require a
showing of good cause and the absence of unfair prejudice to amend final contentions,
see LPR 3.4, they contain no similar requirement that would effectively bind a party to
its initial contentions.
1
The undersigned judge has served as chair of the district's Local Patent Rules
Committee since it was first formed, and Magistrate Judge Schenkier likewise has
served on the committee since its inception. The Court references this not to suggest
any particular expertise in interpreting the Rules but rather to describe the basis for its
familiarity with the choices made in drafting the Rules.
2
The Court acknowledges that Oil-Dri filed a motion earlier in the case in which it
argued that certain of the points in Nestle's initial invalidity contentions were unduly
vague and noncompliant with LPR 2.3(b)(3). Judge St. Eve denied the motion without
prejudice pending filing of Nestle's final contentions. See dkt. no. 140 at 21 n.12.
Nothing in Judge St. Eve's ruling suggests, however, that she intended to bind Nestle to
its initial contentions. Rather, the face of the ruling suggests that Judge St. Eve wanted
to make sure that the final contentions were not unduly vague as Oil-Dri argued the
initial contentions were. Oil-Dri has not asserted in the present motion any vagueness
arguments regarding Nestle's final contentions.
Finally, Oil-Dri had a fair opportunity to take discovery based on any allegedly
newly-made final contentions. The Rules required the final contentions to be made six
weeks before the close of fact discovery (fact discovery is to be completed four weeks
after the parties' exchange of claim terms for construction under LPR 4.1, which in turn
takes place two weeks after service of the final contentions under LPR 3.2). See LPR
4.1(a), 1.3. The final contentions were also made months before expert disclosures are
due, as those disclosures postdate claim construction, which has not yet occurred. One
reason why the Rules defer expert discovery until after claim construction is to enable
the parties to focus expert opinions regarding infringement and invalidity on the
construction of the claims adopted by the Court rather than making these disclosures in
the blind or semi-blind. Because, as a practical matter, invalidity arguments are
typically based largely on expert opinions, Oil-Dri will have an ample opportunity to
address Nestle's final invalidity contentions via its expert disclosures on validity when it
serves them later this year.
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2.
The Court overrules without prejudice Oil-Dri's contention that Nestle is
improperly relying on prior art that was the subject of a prior estoppel ruling by Judge St.
Eve. Now is not the time to address the merits of Nestle's invalidity contentions; that is
better addressed at summary judgment. In addition, this objection may be rendered
wholly or partly moot by the Court's limitation on the number of prior art defenses that
Nestle may assert, discussed in the next paragraphs of this order.
3.
Underlying Oil-Dri's objections is a contention that Nestle has essentially
hurled a mass of invalidity defenses at the wall, hoping to overwhelm Oil-Dri and
perhaps the Court with (among other things) numerous permutations of prior art
combinations asserted as a basis for invalidity. In particular, a number of Nestle's
contentions consist of a statement that a particular item of prior art renders a particular
claim or claims obvious in combination with (for example) "two or more" of a laundry list
of other references. The upshot, as Oil-Dri indicates, is that Nestle is effectively
asserting hundreds and hundreds of different possible combinations of prior art.
One would not expect Nestle to actually advance, in a summary judgment motion
or before a jury, hundreds, or even a hundred, or even several dozen separate bases to
invalidate a patent claim. A party employing this sort of tactic likely would do serious
damage to its own credibility. That aside, the page limitation rules for summary
judgment briefs would not permit this approach, and no reasonably competent trial
lawyer would rationally expect a jury to be able to follow an argument with this level of
complexity. Rather, it is relatively obvious that what is happening here is that Nestle is
trying to keep its options as open as possible until the last minute, when it will elect its
real defenses. That is all well and good, but Nestle's approach defeats the purpose of
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the LPR's final contention rules just as much as Oil-Dri's attempt to bind Nestle to its
initial contentions would defeat the purpose of the LPR's initial contention rules.
Partly to prevent abuses like this, the Local Patent Rules Committee recently
approved proposed amendments to the Rules that would modify the final invalidity
contention rule, LPR 3.1(b), to impose limits on the number of final invalidity and
unenforceability contentions a party may make. If amended, LPR 3.1(b) will read as
follows:
(b) Final Unenforceability and Invalidity Contentions. Each party
asserting invalidity or unenforceability of a patent claim shall serve on all
other parties, at the same time that the Final Infringement Contentions
required by LPR 3.1(a)(2) are served, "Final Unenforceability and Invalidity
Contentions" containing the information required by LPR 2.3 (b) and (c).
Final Invalidity Contentions may rely on more than twenty-five (25) prior
art references only by order of the Court upon a showing of good cause
and absence of unfair prejudice to opposing parties. For each claim
alleged to be invalid, the Final Unenforceability and Invalidity Contentions
are limited to four (4) prior art grounds per claim and four (4) non-prior art
grounds. No claim asserted to be infringed shall be subject to more than
eight (8) total grounds per claim. Each of the following shall constitute
separate grounds: indefiniteness, lack of written description, lack of
enablement, unenforceability, and non-statutory subject matter under 35
U.S.C. § 101. Each assertion of anticipation and each combination of
references shall constitute separate grounds.
The proposed amendment will be considered by the district's Rules Committee during
the week of June 11 and likely will be considered by the court as a whole the following
week. The undersigned judge believes that adoption is likely. But irrespective of
whether the amendment is adopted, the Court will, in this case, impose a limit on
Nestle's invalidity and unenforceability contentions consistent with the spirit and purpose
of the proposed amendment. Specifically (and given the number of patent claims that
appear to be at issue), the Court limits Nestle to:
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no more than 25 prior art references;
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for each claim alleged to be invalid, no more than 8 prior art grounds per claim
and no more than 4 non-prior art grounds per claim; and
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each assertion of anticipation and each combination of references shall count as
a separate ground.
The upshot—particularly given the proposition that each combination of references
counts as a separate ground against the overall limits—is that Nestle will need to
significantly pare down and focus its invalidity and unenforceability contentions. The
Court directs Nestle to complete this task and serve amended contentions by no later
than July 3, 2018, so that Oil-Dri will be aware, before the claim construction hearing
and well before its expert disclosures are due, exactly what invalidity and
unenforceability contentions Nestle will pursue. 2
Conclusion
The Court denies plaintiff's motion to exclude certain prior art defenses [dkt. 198]
but directs defendant to serve a revised set of invalidity and unenforceability contentions
consistent with this order by no later than July 3, 2018.
Date: June 9, 2018
________________________________
MATTHEW F. KENNELLY
United States District Judge
2
The Court notes that, under LPR 3.4, Nestle will be able to amend its revised final
contentions "only by order of the Court upon a showing of good cause and absence of
unfair prejudice to opposing parties," as provided by LPR 3.4 (which the Local Patent
Rules Committee has not proposed to amend).
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