Evicam International, Inc. v. Enforcement Video, LLC
Filing
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MEMORANDUM OPINION AND ORDER re 24 MOTION to Amend/Correct for Leave to Supplement Invalidity Contentions filed by Enforcement Video, LLC. The Court hereby GRANTS WatchGuards Motion for Leave to Supplement Invalidity Contentions (Dkt. #24). Signed by Judge Amos L. Mazzant, III on 11/8/16. (cm, )
United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
EVICAM INTERNATIONAL, INC.
v.
ENFORCEMENT VIDEO, LLC
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Civil Action No. 4:16-CV-00105
Judge Mazzant
MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant Enforcement Video, LLC’s (“WatchGuard”)
Motion for Leave to Supplement Invalidity Contentions (Dkt. #24). Having considered the
relevant pleadings and responses, the Court grants WatchGuard’s motion.
BACKGROUND
Plaintiff Evicam International, Inc. (“Evicam”) filed its complaint against WatchGuard,
alleging patent infringement of two United States Patents: U.S. Patent Nos. 6,211,907 (“the ‘907
Patent”) and 6,950,013 (“the ‘013 Patent”) (collectively, the “patents-in-suit”). On May 27,
2016, WatchGuard served Evicam with invalidity contentions pursuant to the agreed upon
Scheduling Order. About three weeks later, WatchGuard notified Evicam that it would be
moving to supplement its invalidity contentions, seeking to add potential sale information and
assert previously disclosed references against the ‘013 Patent. WatchGuard provided Evicam
with a copy of the supplemental invalidity contentions it intended to file with the Court.
WatchGuard filed the present motion on June 20, 2016 (Dkt. #24). On July 8, 2016,
Evicam filed a response (Dkt. #26), and WatchGuard filed a reply on July 18, 2016 (Dkt. #28).
LEGAL STANDARD
Under the Local Rules for the Eastern District of Texas, Appendix B Patent Rules, leave
to amend invalidity contentions “may be made only by order of the court, which shall be entered
only upon a showing of good cause.” P.R. 3-6(b). “Good cause,” according to the Federal
Circuit, “requires a showing of diligence.” O2 Micro Int’l Ltd. v. Monolithic Power Sys., Inc.,
467 F.3d 1355, 1366 (Fed. Cir. 2006). “The burden is on the movant to establish diligence rather
than on the opposing party to establish a lack of diligence.” Id.
The Court weighs multiple factors in determining whether good cause exists, including,
but not limited to:
1. The length of the delay and its potential impact on judicial proceedings;
2. The reason for the delay, including whether it was within the reasonable
control of the movant;
3. Whether the offending party was diligent in seeking an extension of time, or
in supplementing discovery, after an alleged need to disclose the new matter
became apparent;
4. The importance of the particular matter, and if vital to the case, whether a
lesser sanction would adequately address the other factors to be considered
and also deter future violations of the Court’s scheduling orders, local rules,
and the federal rules of civil procedure; and
5. The danger of unfair prejudice to the non-movant.
Allure Energy, Inc. v. Nest Labs, Inc., 84 F. Supp. 3d 538, 540–41 (E.D. Tex. 2015) (quoting
Computer Acceleration Corp. v. Microsoft Corp., 481 F. Supp. 2d 620, 625 (E.D. Tex. 2007)).
ANALYSIS
WatchGuard seeks leave to amend to supplement its invalidity contentions to: (1) re-chart
King against the ’907 Patent; (2) assert five references against the ’013 Patent for the first time;
(3) assert new obviousness combinations against the patents-in-suit; and (4) assert seven
instances of public uses, offers, and sales under 35 U.S.C. § 102(b). See Dkt. #24, Exhibit 2;
Dkt. #24 at p. 1; see also Dkt. #26 at p. 3–4.
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Evicam challenges WatchGuard’s request for leave to amend, arguing WatchGuard’s
own evidence and lack of diligence proves there is not good cause for leave. WatchGuard
contends it has set forth good cause for leave under the factors the Court considers to determine
good cause. While non-exclusive, the Court will examine each of the five factors listed in
Computer Acceleration.
Length of the Delay and Its Potential Impact on Judicial Proceedings
Evicam notes that WatchGuard’s requested supplement will delay the Court-ordered
deadlines and make them meaningless. The Court disagrees. Here, the impact on judicial
proceedings is minimal.
WatchGuard filed its motion to supplement one month after the
invalidity contentions deadline. At the time the motion was filed, the parties were two months
away from claim construction briefing and four months from the Markman hearing.
WatchGuard does not request an extension of future deadlines to accommodate its requested
supplement. Nor does the supplement cause a delay in the resolution of this matter.
The Court therefore finds this factor weighs in favor of showing good cause.
Reason for the Delay
WatchGuard asserts the delay was not within its control. WatchGuard contends it needed
more time to find and speak to prior inventors after it prepared invalidity contentions in response
to Evicam’s infringement contentions.
The Court finds WatchGuard’s reasons for its requested supplement unpersuasive.
WatchGuard’s efforts to contact prior inventors did not begin until June 3, a week after the
invalidity contentions deadline (Dkt. #24, Exhibit 1 at ¶ 6). Specifically, WatchGuard states it
“spent more than 50 hours[] and placed more than 100 phone calls, attempting to contact these
inventors” (Dkt. #24 at p. 4). Ultimately, WatchGuard conducted interviews with inventors
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named in patents disclosed in its invalidity contentions.
As a result of these interviews,
WatchGuard “gain[ed] a better understanding of the technology, subject matter, and scope of the
asserted claims in the ’907 and ’013 Patents” (Dkt. #24 at p. 2). WatchGuard does not explain
why it did not attempt to contact these inventors earlier, especially if WatchGuard suspected
these inventors possessed information useful in proving the invalidity of the patents-in-suit.
Moreover, WatchGuard was in possession of the prior art it now seeks to include. WatchGuard
admits “it is very likely that the scope of many of the asserted claims in the ’907 Patent will be
deemed to substantially overlap or duplicate many elements of the asserted claims in the ’013
Patent” (Dkt. #24, Exhibit A at p. 17). WatchGuard does not provide an explanation for why it
did not assert the previously-disclosed prior art against the ’013 Patent by the deadline. Despite
a showing of diligence after the invalidity contentions deadline, WatchGuard’s delay in
interviewing inventors and understanding the patents-in-suit was completely within its control.
The Court therefore finds this factor weighs against a showing of good cause.
Diligence
The Court finds WatchGuard exercised diligence in filing its motion seeking leave to
supplement. There was not a significant delay before WatchGuard filed its motion to amend.
WatchGuard served its original invalidity contentions on May 27, 2016, in accordance with the
Court’s Scheduling Order (Dkt. #21 at p. 1). On June 15, 2016, WatchGuard served Evicam
with an advance copy of its supplemental invalidity contentions. Five days later, WatchGuard
filed the present motion with the Court.
The Court therefore finds this factor weighs in favor of showing good cause.
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Importance of the Matter
WatchGuard claims the requested supplement is important. WatchGuard contends that
after interviews with prior inventors, it discovered that many of its initial invalidity contentions
were too conservative and should have been asserted against the patents-in-suit.
Also,
WatchGuard maintains the § 102(b) references have the potential to invalidate one or more of the
patents-in-suit.
Evicam asserts WatchGuard’s requested supplement is speculative and cumulative.
Evicam argues WatchGuard’s overly-conservative approach as a result of its own failure to
understand the prior art is not “good cause” for leave to amend. With regard to the § 102(b)
references, Evicam states that WatchGuard makes conclusory statements as to the importance of
the references to bar enforcement of the patents-in-suit.
The Court finds that the previously-disclosed prior art and the § 102(b) references are
relevant and important to this matter.
The previously-disclosed prior art references allow
WatchGuard to challenge more claims against the ’013 Patent, increasing the likelihood of
invalidating the patents-in-suit based on obviousness and anticipation challenges. The references
are not cumulative because without the supplement, WatchGuard would be forced to use one set
of references against the ’907 Patent and another set against the ’013 Patent.
WatchGuard shows why the § 102(b) references are important. WatchGuard offers a
series of sales, offers, and uses that if properly substantiated would bar Evicam from enforcing
the patents-in-suit. Discovery concludes on January 27, 2017, so WatchGuard can investigate
the legitimacy of the § 102(b) references and determine whether they properly invalidate the
patents-in-suit. Allowing WatchGuard to amend its invalidity contentions would not “encourage
parties to engage in delay tactics under the guise of the inability to understand prior art and only
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seek expert advice late in the discovery process.” Cummins-Allison Corp. v. SBM Co., No. 9:07CV-196, 2009 WL 763926, at *1 (E.D. Tex. Mar. 19, 2009). A lesser sanction was not discussed
by either party nor does the Court believe that one is necessary.
The Court therefore finds this factor weighs in favor of showing of good cause.
Danger of Prejudice
WatchGuard states Evicam will not suffer unfair prejudice because there is plenty of time
for Evicam to consider WatchGuard’s invalidity contentions, complete discovery, and prepare its
case.
Evicam responds that it will be prejudiced in two ways. First, Evicam states WatchGuard
has not identified whether each reference anticipates each asserted claim or renders it obvious or
provided a chart specifying where each element of each asserted claim is found in those
purported references. And second, Evicam contends that WatchGuard does not indicate when its
investigation into the § 102(b) references will conclude, which might be after the parties finish
claim construction.
The Court finds that Evicam will not be unfairly prejudiced by WatchGuard’s requested
supplement. For the purported § 102(b) references, WatchGuard is not required to provide more
information than the local patent rules demand.
In its proposed supplement, WatchGuard
complies with Local Patent Rule 3-3(a) by “specifying the item offered for sale or publicly used
or known, the date the offer or use took place or the information became known,” and the
identity of the author, seller, or user. P. R. 3-3(a). With regard to the previously-disclosed prior
art references, the advance copy of WatchGuard’s proposed supplement, served on June 15,
2016, put Evicam on notice of the references and combinations WatchGuard planned to assert in
its motion to the Court. WatchGuard did not include any prior art that Evicam was not already in
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its invalidity contentions. WatchGuard’s requested supplement, however, does not identify the
motivation to combine prior art references to render a claim obvious. P.R. 3-3(b). WatchGuard
can eliminate any resulting prejudice by complying with the local patent rules.
Further, the Court considers WatchGuard’s motion after both the Claim Construction
hearing held on October 14, 2016, and the Court’s Memorandum Opinion and Order on Claim
Construction (Dkt. #57). WatchGuard has until the close of discovery on January 27, 2017, to
investigate the factual basis for the § 102(b) references through document subpoenas and
depositions. As long as WatchGuard operates within the discovery deadline, Evicam will not
suffer unfair prejudice. At this stage of the litigation, Evicam can mitigate any prejudice by
amending its infringement contentions, contesting nonparty depositions, and defending against
WatchGuard’s invalidity arguments.
The Court therefore finds this factor weighs in favor of a showing of good cause.
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CONCLUSION
For the reasons stated above, the Court hereby GRANTS WatchGuard’s Motion for
Leave to Supplement Invalidity Contentions (Dkt. #24).
IT IS SO ORDERED.
SIGNED this 8th day of November, 2016.
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AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
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