ICM Controls Corp. v. Honeywell International, Inc.
Filing
354
DECISION AND ORDER: It is ORDERED that, 337 defendants' motion to amend their invalidity contentions is DENIED. It is further ORDERED that pending the resolution of any appeal of this Decision and Order, discovery shall continue, subject to likely modifications of the pending deadlines as the court addresses other pending non-dispositive motions. Signed by U.S. Magistrate Judge Andrew T. Baxter on 4/3/2020. (nmk)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
_____________________________________________________________________
ICM CONTROLS CORP., et al.
Plaintiffs,
v.
5:12-CV-1766
(LEK/ATB)
HONEYWELL INTERNATIONAL, INC., et al.
Defendants.
_____________________________________________________________________
RACHEL ZIMMERMAN SCOBIE, ESQ., et al., for Plaintiffs
MATTHEW L. WOODS, ESQ., et al., for Defendants
ANDREW T. BAXTER, U.S. MAGISTRATE JUDGE
DECISION AND ORDER
On February 13, 2020, defendants filed a letter motion to amend their invalidity
contentions pursuant to Local Patent Rule 3.6(a). (Dkt. No. 337). Plaintiffs have
opposed that motion by letter brief dated February 21, 2020. (Dkt. No. 341). For the
reasons stated below, defendants’ motion is denied.
As Senior District Judge Kahn noted, in his May 10, 2018 MemorandumDecision and Order (at 22-23):
Local Patent Rule 3.6(a) allows for amendments to infringement [or invalidity]
contentions upon an “order of the Court” following “a timely application and
showing of good cause.” . . . [A]s Defendant rightly points out, “whether such
leave shall be granted is within the discretion of the Court depending on the
movant’s demonstration of diligence and good cause.”
(Dkt. No. 183 (citing, inter alia, O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc.,
467 F.3d 1355, 1366 (Fed. Cir. 2006)). District Judge D’Agostino, in applying the
good cause standard under Fed. R. Civ. P. 16(b) in a non-patent case, observed:
Although the moving party’s diligence is a district court’s “primary
consideration” in its . . . good cause inquiry, a court “also may consider other
relevant factors including, in particular, whether allowing the amendment of the
pleading at this stage of the litigation will prejudice defendants.” . . . An
amendment is prejudicial to the non-moving party if it “would ‘require the
opponent to expend significant additional resources to conduct discovery and
prepare for trial’ or ‘significantly delay the resolution of the dispute.’”
(citations omitted). See also MASS Engineered Design, Inc. v. Ergotron, Inc., 250
F.R.D. 284, 286-87 (E.D. Tex. 2008)1 (considering diligence and prejudice under Rule
16(b) good cause standard applied in the context of a belatedly filed invalidity
contention); Chemfree Corp. v. J. Walter, Inc., No. 1:04-CV-3711, 2008 U.S. Dist.
LEXIS 93376, at *15-16 (N.D. Ga. Aug. 26, 2008) (considering diligence and
prejudice in applying the “substantial justification” standard of a local patent rule for
amending invalidity contentions, which the court found similar to the “good cause”
standard in the local patent rules of the Northern District of California).
Defendants contend that their proposed amendment is “limited to adding: 1) one
United States Patent, for the purpose of charting against the asserted claims of the `645
patent, and 2) two published articles for the purpose of better defining the level of
ordinary skill in the art at the time of the alleged invention.” (Def.s’ Ltr. Motion at 1).
1
Given the paucity of binding precedent in this Circuit and District with respect to
certain aspects of patent law, the court will rely on persuasive authority from other
districts.
2
Defendants argue that they had good cause to belatedly seek to amend their invalidity
contentions because “[f]irst, Judge Kahn issued an order on December 3, 2019 noting
that, at the summary judgment phase of litigation, the “parties will have acquired a full
understanding of the issues and terms in dispute” such that the will be able to provide
the Court “with a comprehensive factual background and focused arguments . . .” (Id.
(citing Dkt. No. 316 at 35-36)). Second, defendants state that:
Defendants’ replacement technical expert (engaged in December 2019 following
the passing of prior expert Thomas Gafford) completed an independent review
of the current contentions in January 2020 and concluded that, in light of the
Court's rulings on claim construction and ICM’s amended infringement
contentions, these additional references would support his explanation why
ICM’s doctrine of equivalents theory sweeps in the prior art.
(Id. at 1-2). Finally, defendants maintain that plaintiffs will not be prejudiced by these
amendments because the three additional references are “modest” and “originate from
the same technical field as those previously charted references;” and because “there
[are] still several months before ICM’s June 1, 2020 deadline to respond, giving
its technical expert ample time to consider them.” (Id. at 2).
Plaintiffs’ letter brief persuasively rebuts defendants’ arguments. The quoted
passage from Judge Kahn’s December 2019 decision explained why he was not
granting defendants’ request to engage in claims construction except in connection
with a possible last round of dispositive motions; that language certainly did not
authorize either party to modify their theories of the case at the tail end of fact
discovery in a case that has been pending since 2012. (See Pl.s’ Ltr Motion at 3). The
3
defendants did not demonstrate diligence in their failure to previously address, in the
invalidity contentions or otherwise, the additional “Kosich `069” patent, which was
issued in August 1994, or the two articles, which were published in 1983. (See Pl.s’
Ltr Motion at 2; Def.s’ Exs. B-D, Dkt. Nos. 337-2, 337-3, & 337-4). The fact that
defendants’ replacement expert found additional prior art and publications that he
deemed relevant to the validity of the `645 patent provided no justification for why the
defendants or their prior expert did not marshal the same evidence from at least 25
years ago in a more timely fashion.2 The defendants may not exploit the need to
replace a deceased expert as an excuse to belatedly make significant changes to their
invalidity theories. See, e.g., Apple v. Samsung Elecs. Co., No. C 11-1846, 2012 U.S.
Dist. LEXIS 190470, at *61-65 (N.D. Cal. June 27, 2012) (striking numerous expert
opinions of invalidity based on theories not previously disclosed in the defendant’s
invalidity contentions); Chemfree Corp. v. J. Walter, Inc., 2008 U.S. Dist. LEXIS
93376, at *13-16 (N.D. Ga. Aug. 26, 2008) (denying leave to amend invalidity
contentions to incorporate input from a technical expert where the original invalidity
contentions were prepared without expert consultation).
2
In the parallel context of inter partes review (“IPR”), a party challenging a patent
through IPR is statutorily estopped from raising in litigation any alleged grounds of
invalidity that it raised “or reasonably could have” raised in its IPR petition. 35 U.S.C. §
315(e)(2). Courts interpreting this provision have held that “a petitioner is subject to IPR
estoppel when it fails to raise . . . prior art that a ‘skilled searcher conducting a diligent
search reasonably could have been expected to discover.’” Cal. Inst. of Tech. v.
Broadcom Ltd., No. CV 16-3714, 2018 U.S. Dist. LEXIS 221754, at *17 (C.D. Cal. Dec.
28, 2018) (citation omitted)).
4
Defendants try to suggest that they had good cause to wait until plaintiffs were
“locked into a construction” of the claim term “actuate” under the doctrine of
equivalents before researching, discovering, and relying upon the additional patent and
articles they now wish to include in their invalidity contentions. (Def.s’ Ltr. Motion at
3-4). However, the plaintiffs’ were allowed to amend their infringement contentions to
reflect their position under the doctrine of equivalents based on Judge Kahn’s decision
on May 10, 2018. (Dkt. No. 183). Defendants had an opportunity to amend their
invalidity contentions thereafter, on June 29, 2018. (Pl.s’ Ltr. Motion at 4).
In declining to engage in further claims construction of the term “actuate” in his
December 3, 2019 opinion (at p. 35) Judge Kahn noted that ICM’s prior briefing–on
May 17, 2019–made its position on the construction of “actuate” “crystal clear.” (Dkt.
No. 316).3 In fact, plaintiffs agreed to be bound by the construction of “actuate” that
they presented during various proceedings involving the Patent and Trademark Office
(“PTO”), during prior conferences before this court as early as December 2018. (See
Dkt. No. 213 at 7-8, 25 (Tr. of 12/19/2018 conf.); Dkt. No. 276 at 17-20 (Tr. of
7/29/2019 conf.); Dkt. No. 252-2 (summarizing ICM’s construction of “actuate”
during PTO proceedings). So, defendants were aware of plaintiff’s construction of
3
See Pl.s’ Memorandum in Opposition to Honeywell and Resideo’s Motion to
Supplement Their First Amended Answer at p. 3 (Dkt. No. 256) “(Every time ICM has
discussed actuation it has explained that actuation requires not just the transfer of energy,
but rather the transfer of energy to power an actuator device. The mere transfer of energy
from a coil to a capacitor is not actuation–capacitors are passive devices that merely store
energy. But the transfer of energy from a coil through a capacitor, wherein that energy is
used to power (i.e., turn on, activate, render active) an actuator device, is actuation.”
5
“actuate” in connection with their claims under the doctrine of equivalents no later
than (and likely well before) May 2019, but did not raise the issue of supplementing
their invalidity contentions until early 2020. (See Dkt. No. 332). This delay does not
reflect diligence, and suggests “gamesmanship” at the tail end of the discovery process.
See, e.g., O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d at 1367
(affirming district court finding of lack of diligence where O2 Micro waited almost
three months after purportedly learning crucial information from a deposition to serve
its proposed amended contentions and two more weeks to formally move to amend);
MASS Engineered Design, Inc. v. Ergotron, Inc., 250 F.R.D. at 286-87 (allowing
MASS to delay its invalidity contentions until long after it became aware of the parties
conflicting claims constructions would encourage future accused infringers to
“sidelin[e]” potential invalidity defenses; “[s]uch gamesmanship is not tolerated in this
Court”).
The court agrees with plaintiffs that defendants’ purportedly “limited”
supplementation to their invalidity contentions is, in fact, very substantive, and would
prejudice plaintiffs at this late stage of the proceedings. The last 20 pages of
defendants’ supplemental contentions (pp. 195-216) adds a new theory of
invalidity–that ICM’s assertion of infringement of the `645 patent under the doctrine of
equivalents is “invalid as anticipated” by the Kosich`069 patent. 4 (Ex. A, Dkt. No.
4
Only brief segments of this new section of the contentions seem to focus on the
nuances of ICM’s construction of “actuate,” which construction purportedly motivated
defendants’ efforts to supplement. (Ex. A at 198-99, 205-06).
6
337-1). The parties have been intensively pursuing fact discovery since May 2018, by
which point plaintiffs had been granted leave to amend their infringement contentions
under the doctrine of equivalents. As previously noted, defendants had an opportunity
to amend their invalidity contentions shortly thereafter. (Pl.s’ Ltr. Motion at 4).
Plaintiffs state that their strategy in planning and conducting discovery and
working with their experts since mid-2018, as well as their earlier positions with
respect to claims construction and summary judgment motions were strongly
influenced by the defendants’ prior invalidity contentions. (Id. at 4-5). They also
assert that, if required to address the new theory that the Kosich `069 patent anticipated
the claims of the `645 patent, they might need to conduct additional fact discovery,
which would disrupt the tight schedule in place to complete discovery and other
pretrial proceedings. (Id.)5 Plaintiffs persuasively demonstrate that they would be
significantly prejudiced by defendants’ belated reliance on new prior art as a basis for
their invalidity defenses. See, e.g., Mass Engineered Design, Inc. v. Ergotron, Inc.,
250 F.R.D. at 287 (finding amendments to invalidity contentions would be “highly
5
The court recognizes that the current schedule for completion of discovery will
likely need to be extended because of the COVID-19 epidemic. However, allowing
defendants to pursue their new invalidity theory would further complicate and prolong
discovery and the completion of pretrial proceedings. A continuance would not eliminate
the prejudice to plaintiffs, who have been litigating this case for more than seven years.
See Mass Engineered Design, Inc. v. Ergotron, Inc., 250 F.R.D. at 287 (“[A] continuance
would most likely not cure DMLP’s prejudice. Unlike the typical case of amending
invalidity contentions, MASS is seeking to add a previously undisclosed defense. . . .
While enough time and resources will eventually cure any prejudice, this would not
contribute to a just and speedy determination of the merits.”)
7
prejudicial” where “the additional prior art references may give rise to new claim
construction issues”); L.C. Eldridge Sales Co. v. Azen Mfg. Pte., No. 6:11-cv-599,
2013 U.S. Dist. LEXIS 186309, at *16-17 (E.D. Tex. Oct. 11, 2013) (plaintiff would
be prejudiced by proposed amendment of invalidity contentions because “[d]efendants
simply have delayed too long to assert prior art that is listed in the patent in suit”);
Chemfree Corp. v. J. Walter, Inc., 2008 U.S. Dist. LEXIS 93376, at *15 (rejecting the
defense argument that plaintiff would not be prejudiced by allowing them to belatedly
include additional prior art references in their invalidity contentions; “[i]f the Court
were to accept Defendants’ . . . argument, parties would always be permitted to explain
their invalidity contentions at the eleventh hour[,]” which would cut against the
express purpose of the Patent Local Rules, which seek to "facilitate the speedy, fair
and efficient resolution of patent disputes”)6
WHEREFORE, based on the findings above, it is
ORDERED that, defendants’ motion to amend their invalidity contentions (Dkt.
No. 337) is DENIED, and it is further
ORDERED that pending the resolution of any appeal of this Decision and
Order, discovery shall continue, subject to likely modifications of the pending
deadlines as the court addresses other pending non-dispositive motions.
6
The Northern District of New York Local Patent Rules similarly are intended “to
ensure just, efficient, and economical handling” of patent cases. Local Patent Rule 1.1.
8
Dated: April 3, 2020
9
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