GREE, INC. v. SUPERCELL OY

Filing 193

MEMORANDUM ORDER granting 122 SEALED PATENT MOTION to Strike Portions of Report of Dr. Jose Zagal. Signed by Magistrate Judge Roy S. Payne on 2/16/21. (ch, )

Case 2:19-cv-00311-JRG-RSP Document 193 Filed 02/16/21 Page 1 of 5 PageID #: 7941

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
GREE, INC.,
Plaintiff,
v.
SUPERCELL OY,
Defendant.

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CIVIL ACTION NO. 2:19-CV-00311-JRG

MEMORANDUM ORDER
Before the Court is the Plaintiff GREE, Inc.’s Motion to Strike Portions of Expert Report
of Dr. Jose Zagal (Dkt. No. 122). After consideration, the Court GRANTS the Motion.
I.

INTRODUCTION
On September 16, 2019, GREE filed a complaint against Defendant Supercell Oy alleging

Supercell’s products Clash of Clans, Clash Royale, and Hay Day infringe U.S. Patent Nos.
9,079,107 (the “’107 Patent”) and 9,561,439 (the “’439 Patent”) (collectively, the “Asserted
Patents”). (Dkt. No. 1). On April 7, 2020, Supercell served its Invalidity Contentions and
Disclosures under Local Patent Rules 3-3 and 3-4. (Dkt. No. 122 at 2).
On August 28, 2020, Supercell served on GREE notices of subpoenas served on third party
Electronic Arts (“EA”) requesting source code for the Warhammer Online: Age of Reconning PC
game. (Dkt. No. 138 at 2). EA produced such source code to Supercell on a flash drive on
October 6, 2020. (Id.). On October 13, 2020, Supercell’s source code review expert began
reviewing the EA source code in native format. (Id.). On October 27 and 28, 2020, three weeks
after the source code was produced to Supercell in native format and on the last day of fact

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discovery, Supercell disclosed the existence of the EA source code to GREE. (Dkt. No. 138 at 4;
Dkt. No. 122 at 3). On November 2, 2020, Supercell served its Invalidity Expert Report of Dr.
Jose Zagal (the “Zagal Report”). (Dkt. No. 122 at 2). The Zagal Report included assertions that
(i) source code related to Warhammer Online and produced by third-party EA supports Supercell’s
argument that Warhammer Online invalidates the claims of the ’107 Patent and the ’439 Patent
(Dkt. No. 122-3 at ¶¶ 246, 482, 496, 504, 512, 533, 547, 554); and (ii) the claims of the ’439 Patent
are invalid under 35 U.S.C. § 112 for lack of written description (Id. at ¶¶ 801–802).
On November 5, 2020, Supercell notified GREE that EA had cleared GREE’s experts to
inspect the EA source code, but that such review must occur in person at Supercell’s counsel’s
office in San Francisco, despite the fact that the EA source code had been produced on a portable
flash drive. (Dkt. No. 122 at 4). Thereafter, Supercell agreed to provide GREE with printout copies
of the EA source code that Dr. Zagal relied upon in his Invalidity Report and did provide such
printouts to GREE on November 6, 2020. (Id.).
GREE contends that the Zagal Report contains previously undisclosed invalidity opinions
that were absent from Supercell’s Invalidity Contentions and analyzes source code that Supercell
did not disclose to GREE during fact discovery. (Id. at 1). Accordingly, GREE now seeks to strike
certain portions of the Zagal Report pursuant to Fed. R. Civ. P. 26 and 37. (Id.).
II.

LEGAL AUTHORITY
Local Patent Rule 3-3 requires a party opposing a claim of patent infringement to serve

Invalidity Contentions, which must identify “each item of prior art that allegedly anticipates each
asserted claim or renders it obvious.” P.R. 3-3(a). Invalidity contentions are deemed to be final
contentions absent proper amendment. Finisar Corp. v. DirecTV Grp., Inc., 424 F. Supp. 2d 896,
899 (E.D. Tex. 2006).

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Rule 26, which is reinforced by this Court’s discovery order, requires production of all
documents or tangible things that a party may use to support its claims or defenses. “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). In
assessing a violation, it is relevant for the court to consider: “(1) [the disclosing party’s]
explanation for its failure to disclose the evidence, (2) the importance of the evidence, (3) the
potential prejudice to [the opposing party] in allowing the evidence, and (4) the availability of a
continuance.” CQ, Inc. v. TXU Min. Co., L.P., 565 F.3d 268, 280 (5th Cir. 2009). Supercell bears
the burden 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).
III.

ANALYSIS
1. Undisclosed Invalidity Theories
GREE moves to strike invalidity theories in the Zagal Report that it contends were not

disclosed in Supercell’s Invalidity Contentions. Specifically, GREE moves to strike Dr. Zagal’s
opinions that the claims of the ’439 Patent are invalid under 35 U.S.C. § 112 for lack of written
description in ¶¶ 801–802 of the Zagal Report. (Dkt. No. 122 at 5–8). In response, Supercell agrees
to withdraw the opinions of Dr. Zagal regarding 35 U.S.C. § 112. (Dkt. No. 138 at 1 n.1).
Accordingly, ¶¶ 801–802 of the Zagal Report are hereby STRICKEN.
2. Late Produced Source Code
GREE also claims that Dr. Zagal should be precluded from offering any opinions regarding
EA source code that Supercell did not disclose to GREE during fact discovery despite having such

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source code in its possession. (Dkt. No. 122 at 8). GREE claims that this is a violation of the
Discovery Order in this case which states that “[a] party who receives documents from a third
party pursuant to a subpoena will reproduce those documents to the other party within five (5)
business days.” (Dkt. No. 30 at 8). GREE alleges that Supercell’s unexplained failure to disclose
the EA source code to GREE pursuant to the Discovery Order and prior to the close of fact
discovery compels exclusion of the EA source code under Fed. R. Civ. P. 37. (Dkt. No. 122 at 1,
8–13). Furthermore, GREE argues that the fact that Supercell did eventually produce certain
printouts of the source code after the close of fact discovery does not cure Supercell’s failure to
timely disclose to GREE the flash drive containing all EA source code. (Id. at 9). GREE also argues
that such failure was not justified nor harmless as Supercell had access to the source code on a
portable flash drive weeks before the close of fact discovery yet did not notify GREE or produce
such source code. (Id. at 9–10). GREE argues that it was prejudiced by this failure and delay
because it was unable to meaningfully evaluate and test Dr. Zagal’s opinions using source code
that EA produced but that Supercell did not provide to GREE. (Id. at 11–12).
Supercell argues that it disclosed the existence of the EA source code and its intention to
rely on such source code to GREE on October 27 and 28, 2020. (Dkt. No. 138 at 4). Furthermore,
Supercell argues that it produced the EA source code after the close of fact discovery because it
believed that a flash drive with native source code did not constitute “documents” under the
Discovery Order such that it was required to produce it to GREE within five business days. (Dkt.
No. 4–5). Accordingly, Supercell argues that its late production was justified because it was based
on a reasonable interpretation of the Discovery Order. (Id. at 5).
The Court disagrees. On August 28, 2020, Supercell served on GREE notices of subpoenas
served on EA as required under paragraph 12(d) of the Discovery Order. (Dkt. No. 138 at 2).

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Supercell knew that its requests to EA fell under the requirements of paragraph 12(d) of the
Discovery Order. Supercell’s argument that native source code on a flash drive does not constitute
a “document” that it was required to produce is not a reasonable interpretation of this Court’s
discovery rules. The Discovery Order in this case even allows for production outside of five
business days and states that “[w]here production of documents within five (5) business days is
not possible, the party who received the documents will provide prompt notice to the other party
and will work in good faith to resolve the issue on a case-by-case basis.” (Dkt No. 30 at 8). Even
if EA required the source code to remain in Supercell’s possession, Supercell should have at least
notified GREE of its existence. Additionally, Supercell provides no explanation for how it thought
it was complying with its discovery obligations in general by withholding this information and
source code until the last day of fact discovery, when the source code was in its possession for
weeks. Regardless of whether this information was intentionally or inadvertently withheld, under
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the CQ, Inc. factors, the Court finds that Supercell’s late disclosure was not substantially justified
or harmless and that GREE would be prejudiced if Dr. Zagal is allowed to rely on source code that
Supercell had in its possession for weeks during fact discovery, but did not disclose to GREE until
after fact discovery. See 565 F.3d at 280. Accordingly, the Court finds that the paragraphs of the
Zagal Report referring to EA source code, including those in Appendix C, are hereby STRICKEN.
IV.

CONCLUSION
In light of the foregoing, the Court GRANTS GREE’s Motion to Strike Portions of Expert

Report of Dr. Jose Zagal. (Dkt. No. 122).
SIGNED this 3rd day of January, 2012.
SIGNED this 16th day of February, 2021.

____________________________________
ROY S. PAYNE
UNITED STATES MAGISTRATE JUDGE
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