ZiiLabs Inc., Ltd v. Samsung Electronics Co. Ltd. et al

Filing 459

MEMORANDUM ORDER. Signed by Magistrate Judge Roy S. Payne on 11/1/2015. (ch, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
ZIILABS INC., LTD.,
Plaintiff,
v.
SAMSUNG ELECTRONICS CO. LTD., ET
AL.,
Defendants.

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Case No. 2:14-cv-203-JRG-RSP

MEMORANDUM ORDER
Pending before the Court is Plaintiff ZiiLabs’ Opposed Motion to Strike Defendants
Apple’s and Samsung’s Expert Opinions Concerning Undisclosed Non-Infringing Alternatives. 1
(Dkt. No. 288.) ZiiLabs and Apple have settled. Therefore, the remaining issue in this Motion is
whether the Court should strike parts of the Rebuttal Expert Report by Samsung’s expert Dr.
Anselmo A. Lastra (the Lastra Report). Samsung did not disclose the non-infringing alternatives
discussed in the Lastra Report on time, so the Court strikes paragraphs 440–43 of the Lastra
Report, but the Court does not strike paragraphs 595–96 of the Lastra Report because those
paragraphs are not prejudicial to ZiiLabs.
PROCEDURAL AND FACTUAL BACKGROUND
ZiiLabs served Samsung with interrogatories in January 2015 which, among other things,
asked Samsung to “[d]escribe all non-infringing alternatives You contend would have been
available to You and acceptable by Your customers.” (Dkt. No. 288 at 1.) Samsung responded to
those interrogatories one month later, on February 17, 2015, but did not respond to Interrogatory
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“Samsung” refers to Defendants Samsung Electronics Co. Ltd., Samsung Electronics America,
Inc., and Samsung Austin Semiconductor, LLC.

No. 13 by disclosing “all non-infringing alternatives.” Samsung supplemented its interrogatory
responses six times between February 17, 2015 and May 20, 2015, and only in its sixth and final
supplementation did Samsung respond to Interrogatory No. 13. Samsung disclosed thirteen
different non-infringing alternatives in its May 20 supplementation, including, “not storing data
with a texturing unit” and “not keeping a record of pixels affected by a rendered primitive, and
not tracking primitives to be rendered in connection with suspending reads.” (Dkt. No. 288 at 2.)
Fact discovery closed the same day. (Dkt. No. 176 at 2.)
The parties then proceeded to the expert discovery phase of the case. The party with the
burden of proof served its opening expert report on May 22, 2015 and served its rebuttal expert
report on July 11, 2015. (Dkt. No. 176 at 2.) Samsung disclosed in the Lastra Report, two
specific non-infringing alternatives to U.S. Patent No. 5,835,096 (the ’096 patent) and U.S.
Patent No. 6,977,649 (the ’649 patent): “using software to render text, such as through nonhardware accelerated skia” and “retaining the records of pixels affected by rendered primitives
for a fixed delay.” ZiiLabs argues that Samsung’s disclosure of these two non-infringing
alternatives violated Rule 26: first, because Samsung answered Interrogatory No. 13 at the
eleventh hour, and second, because Samsung answered Interrogatory No. 13 with boilerplate
language.
APPLICABLE LAW
Rule 26 of the Federal Rules of Civil Procedure lists a party’s disclosure obligations.
First, as to experts, “a party must disclose to the other parties the identity of any [expert] witness
it may use at trial to present evidence under Federal Rule of Evidence 702, 703, or 705.” Fed. R.
Civ. P. 26(a)(2)(A). “[T]his disclosure must be accompanied by a written report—prepared and
signed by the witness—if the witness is one retained or specially employed to provide expert

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testimony in the case . . . .” Fed. R. Civ. P. 26(a)(2)(B). Second, as to supplementing disclosures,
“[a] party who has made a disclosure under Rule 26(a)—or who has responded to an
interrogatory, request for production, or request for admission—must supplement or correct its
disclosure or response: in a timely manner if the party learns that in some material respect the
disclosure or response is incomplete or incorrect.” Fed. R. Civ. P. 26(e).
“If a party fails to provide information or identify a witness as required by Rule 26(a) or
(e), the party is not allowed to use that information or witness to supply evidence on a motion, at
a hearing, or at a trial, unless the failure was substantially justified or is harmless.” Fed. R. Civ.
P. 37(c). To determine if a Rule 26 violation is “substantially harmless,” the Court looks to: (1)
the importance of the evidence; (2) the prejudice to the opposing party of including the evidence;
(3) the possibility of curing such prejudice by granting a continuance; and (4) the explanation for
the party’s failure to disclose. Primrose Operating Co. v. Nat’l Am. Ins. Co., 382 F.3d 546, 563
(5th Cir. 2004). The burden is on the party facing sanctions to prove that its failure to comply
with Rule 26 was “substantially justified or harmless.” Rembrandt Vision Techs. LP v. Johnson
& Johnson Vision Care, Inc., 725 F.3d 1377, 1381 (Fed. Cir. 2013).
ANALYSIS
Samsung cannot seriously dispute that it responded to Interrogatory No. 13 at the
eleventh hour, and that it could have disclosed the two non-infringing alternatives first disclosed
in the Lastra Report—“using software to render text, such as through non-hardware accelerated
skia” and “retaining the records of pixels affected by rendered primitives for a fixed delay”—in
Dr. Lastra’s opening expert report. The parties’ dispute boils down to whether Samsung’s
disclosure of these two non-infringing alternatives in the Lastra Report for the first time “was

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substantially justified or harmless” under Rule 37. Fed. R. Civ. P. 37(c); Primrose, 382 F.3d at
563.
First, the Court finds that the non-infringing alternatives in the Lastra Report are
important for Samsung. Samsung’s damages experts, for example, may rely on the availability of
non-infringing alternatives to discuss the value of the patented features in the accused devices.
See Summit 6, LLC v. Samsung Elecs. Co., Ltd., --- F.3d ---, No. 2013-1648, slip op., at *10 (Fed.
Cir. Sept. 21, 2015) (“A party may use the royalty rate from sufficiently comparable licenses,
value the infringed features based upon comparable features in the marketplace, or value the
infringed features by comparing the accused product to non-infringing alternatives.”); Carnegie
Mellon Univ. v. Marvell Tech. Grp., Ltd., --- F.3d ---, No. 2014-1492, slip. op., at *17 (Fed. Cir.
Aug. 4, 2015) (“At the same time, ‘[t]he economic relationship between the patented method and
non-infringing alternative methods, of necessity, would limit the hypothetical negotiation.’”)
(quoting Riles v. Shell Expl. & Prod. Co., 298 F.3d 1302, 1312 (Fed. Cir. 2002)).
Second, the Court finds that the non-infringing alternatives disclosed in the Lastra Report
are only, in-part, prejudicial to ZiiLabs. The Lastra Report disclosed “using software to render
text, such as through non-hardware accelerated skia” as a “reasonable non-infringing alternative”
to practicing the ’096 patent. (Dkt. No. 288-10 ¶ 595.) Dr. Lastra disclosed this non-infringing
alternative in direct response to statements by ZiiLabs’ expert, Dr. William H. Mangione-Smith.
Dr. Mangione-Smith said in his opening expert report that “a library of software components for
rendering user interface elements using hardware” replaced “the older technology called skia.”
(Dkt. No. 313-9 ¶ 138.) He also said that skia was “software” that could “render [] graphics
commands.” (Dkt. No. 313-9 ¶ 138.) ZiiLabs is not prejudiced by an expert’s statements in
response to its expert’s statements. The Lastra Report also disclosed a non-infringing alternative

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to the ’649 patent. That disclosure stated that a GPU could “retain[] the records of pixels affected
by rendered primitives for a fixed delay” instead of practicing the patent. (See Dkt. No. 288-10 ¶
440.) This disclosure prejudices ZiiLabs because Samsung could have disclosed it in Dr. Lastra’s
opening expert report. Disclosing this non-infringing alternative in the Lastra Report deprived
ZiiLabs of a chance to offer competing expert testimony.
Finally, it is not possible to cure the prejudice by granting a continuance to ZiiLabs, and
Samsung cannot explain why it failed to disclose “retaining the records of pixels affected by
rendered primitives for a fixed delay” in Dr. Lastra’s opening expert report. A continuance will
not cure the prejudice because this case is set for trial in a matter of weeks. (Dkt. No. 400.)
Furthermore, Samsung supplemented its response to Interrogatory No. 13 on May 20, 2015.
This supplemental response shows that Samsung had obtained Dr. Lastra’s opinion on noninfringing alternatives by May 20. Samsung could have disclosed this non-infringing
alternative on May 22, 2015, when it served Dr. Lastra’s opening expert report. Cf. Beneficial
Innovations, Inc. v. AOL LLC, Case No. 2:07-cv-555-TJW-CE, Dkt. No. 260, at *1 (E.D.
Tex. May 14, 2010) (“Google is not required, however, to disclose its experts’ opinions in
advance of the deadline for serving expert reports.”).
CONCLUSION
ZiiLabs’ Opposed Motion to Strike Defendants’ Expert Opinions Concerning
Undisclosed Non-Infringing Alternatives (Dkt. No. 288) and ZiiLabs’ Motion in Limine No. 16
(Dkt. No. 353) is GRANTED-IN-PART AND DENIED-IN-PART. ZiiLabs’ Motion is
GRANTED as to paragraphs 440–443 of the Rebuttal Expert Report of Dr. Anselmo A. Lastra
Regarding Non-Infringement of U.S. Patent Nos. 6,977,649 and 5,835,096. Paragraphs 440–443

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of the Lastra Report are STRICKEN. ZiiLabs’ Motion is DENIED as to paragraphs 595 and
596 of the Lastra Report.
SIGNED this 3rd day of January, 2012.
SIGNED this 1st day of November, 2015.

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ROY S. PAYNE
UNITED STATES MAGISTRATE JUDGE

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