Bedrock Computer Technologies, LLC v. Softlayer Technologies, Inc. et al

Filing 222

Joint MOTION to Amend/Correct Docket Control Orders by AOL Inc, Inc., Google Inc., Match.Com LLC,, Inc., MySpace Inc., Softlayer Technologies, Inc., Yahoo! Inc.. (Attachments: #1 Text of Proposed Order Order Granting Defendants' Joint Motion to Amend Docket Control Order, #2 Text of Proposed Order Proposed Docket Control Order)(Williams, E Danielle)

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS TYLER DIVISION BEDROCK COMPUTER TECHNOLOGIES LLC, Plaintiff, v. SOFTLAYER TECHNOLOGIES, INC., et al., Defendants. RED HAT, INC., Plaintiff, v. BEDROCK COMPUTER TECHNOLOGIES LLC, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 6:09-CV-00269-LED Case No. 6:09-CV-00549-LED JURY DEMANDED DEFENDANTS' JOINT MOTION TO AMEND DOCKET CONTROL ORDERS The defendants in Bedrock Computer Technologies, LLC v. Softlayer Technologies, Inc., et al. (Bedrock I)1 and the crossclaim defendants in Red Hat, Inc. v. Bedrock Computer Technologies, LLC (Bedrock II)2 respectfully request this Court to amend the respective Docket Control Orders. 1 The Bedrock I defendants include Softlayer Technologies, Inc., Google, Inc., Yahoo!, Inc., MySpace, Inc.,, Inc.,, Inc., and AOL LLC. 2 The Bedrock II crossclaim defendants include 1&1 Internet, Inc., ConAgra Foods, Inc., Conoco Phillips Company, Facebook, Inc., Nationwide Mutual Insurance Company, NYSE Euronext, R.L. Polk & Co., Rackspace Hosting, Inc., Sungard Data Systems, Inc., The Gap, Inc., The Go Daddy Group, Inc.,, Virgin America, Inc., and Whole Foods, Inc. The Go Daddy Group, Inc. joins this motion without waiving its personal jurisdiction defenses. Red Hat, Inc. does not oppose this motion. If ever there were facts establishing good cause to amend a docket control order, they are present here. Bedrock Computer Technologies, LLC's ("Bedrock") assertion of crossclaims on March 26, 2010 in Bedrock II against fourteen new parties, the Bedrock II crossclaim defendants, drives this conclusion. If not amended, the Bedrock II crossclaim defendants, through the unilateral action of Bedrock, will be severely prejudiced in their efforts to fully investigate, analyze, and participate in this patent infringement action. This result controverts the aims of this Court's Local Patent Rules: "to further the goal of full, timely discovery and provide all parties with adequate notice and information with which to litigate their cases." Computer Acceleration Corp. v. Microsoft Corp., 503 F. Supp. 2d 819, 822 (E.D. Tex. 2007) (Clark, J.) (emphasis added). As set forth below, both the Bedrock I defendants and the Bedrock II crossclaim defendants (collectively "the Bedrock Defendants") respectfully submit a solution to resolve this manifest prejudice. The Bedrock Defendants propose moving the Markman hearing to March 2011, to allow a reasonable schedule for meaningful participation in a single Markman hearing, and propose moving the Bedrock I trial to the October 2011 setting.3 As a result, the Court will have one Markman hearing and one trial setting for both cases, and the schedule will permit a more efficient use of the Court's and the parties' resources. RELEVANT FACTS What began nearly twelve months ago as Bedrock's patent infringement action against ten named defendants has evolved now into two separate yet unavoidably related cases involving the same patent. In Bedrock I, the parties have been proceeding under the February 3, 2010 Docket Control Order, which set a Markman hearing for October 11, 2010, and a trial beginning on April 4, 2011. (Bedrock I: Dkt. No. 174.) 3 The Bedrock II trial is currently scheduled for October 11, 2011. 2 US2008 1329397.1 Bedrock II began in December 2009 with Red Hat, Inc. ("Red Hat") as the plaintiff, seeking a declaration of invalidity, unenforceability, and non-infringement of the Bedrock patent. On March 22, 2010, Red Hat and Bedrock, then the only parties to Bedrock II, submitted a Joint Motion for Entry of Docket Control and Discovery Order setting the Markman hearing for October 11, 2010, consistent with Bedrock I. (Bedrock II: Dkt. No. 27.) The Court set the Markman hearing for October 11, 2010, aligning it with the previously scheduled Markman hearing date in Bedrock I, and adopted Bedrock's proposal for all deadlines leading to an October 11, 2011 trial for Bedrock II. (Bedrock II: Dkt. No. 166.) On March 26, 2010, four days after securing the same Markman deadlines as in Bedrock I, Bedrock filed a First Amended Answer and Counterclaim in Bedrock II. (Bedrock II: Dkt. No. 30.) Bedrock included "crossclaims," in its pleading, alleging infringement of United States Patent No. 5,893,120 ("the `120 Patent") against the fourteen Bedrock II crossclaim defendants. (Id.) None of the Bedrock II crossclaim defendants participated in the entry of the prior docket control orders in either case. Thus, the Bedrock II crossclaim defendants, all of whom have been in this case for less than two months, will be forced to comply with a Markman disclosure and briefing schedule originally set for Bedrock I, a case pending now for nearly twelve months. Important deadlines under the Bedrock II Docket Control Order passed before any of the Bedrock II crossclaim defendants answered Bedrock's crossclaims. Most of the Bedrock II crossclaim defendants answered only days ago. None of the Bedrock II crossclaim defendants participated in the selection of claim terms for construction. None of the Bedrock II crossclaim defendants participated in or had an opportunity to fully understand and assert their own invalidity contentions before Markman claim selection occurred. If not modified, all of the Bedrock II 3 US2008 1329397.1 crossclaim defendants face the unreasonable prospect committing to their claim construction positions in Bedrock II in barely two weeks. The Bedrock Defendants have conferred with counsel for Bedrock concerning the proposed amendments to the Docket Control orders and do not agree on the appropriate remedy for the scheduling problem Bedrock has caused. An initial call between the parties occurred on May 12, 2010, wherein Bedrock expressed the firm desire to hold to the currently scheduled Markman calendar. By letter dated June 1, 2010, Bedrock further proposed and amended preMarkman schedule that would require the Bedrock II counterclaim defendants to disclose its proposed claim terms and elements for construction on June 8, 2010. Finally, on June 3, 2010, another in-person conference was conducted, where the parties agreed to disagree. Accordingly, the Bedrock Defendants respectfully request this Court amend the respective docket control orders to permit the Bedrock II counterclaim defendants a fair opportunity to fully investigate, analyze, and participate in this patent infringement action. The Bedrock Defendants propose a single Markman hearing, set for March 2011. The intervening deadlines under Local Patent Rules will be set by the Bedrock Defendants and Bedrock. The Bedrock Defendants further propose moving the current trial date in Bedrock I (April 4, 2011) to conform with the currently scheduled Bedrock II trial date (October 11, 2011). ARGUMENT There is good cause to amend the docket control orders of both Bedrock I and Bedrock II to accommodate the Bedrock II crossclaim defendants and their interest in meaningfully participating in the Markman hearing. Based on this good cause, and with the Court's consent, the Court has broad discretion to modify its scheduling orders. Maclean-Fogg Co. v. Eaton 4 US2008 1329397.1 Corp., No. 2:07-cv-472, 2008 U.S. Dist. LEXIS 78301, at *3, *4 (E.D. Tex. Oct. 6, 2008) (Davis, L); Fed. R. Civ. P. 16(b)(4). None of the Bedrock II crossclaim defendants participated in either of the previously entered docket control orders. In fact, several of the deadlines set by the Bedrock II Docket Control Order elapsed long before the Bedrock II crossclaim defendants responded to Bedrock's crossclaims. In Bedrock II, invalidity contentions under P.R. 3-3 were due May 14, 2010. In Bedrock I and Bedrock II, the exchange of proposed terms and claim elements for construction under P.R. 4-1 occurred on May 18, 2010. (Bedrock II: Dkt. No. 44.) Both deadlines passed before any of the Bedrock II crossclaim defendants responded to Bedrock's crossclaims. The Bedrock II crossclaim defendants have not yet participated in the claim construction process. Bedrock brought the Bedrock II crossclaim defendants into this dispute on March 26, 2010, and they have just filed answers to the crossclaims within the last week. The Bedrock I defendants by contrast served invalidity contentions eight months after Bedrock filed its Complaint, and exchanged claim terms eleven months after Bedrock filed its Complaint. (Bedrock I: Dkt. No. 174.) Red Hat, a participant in Bedrock II since its inception, also had nearly 6 months from the initiation of its claims against Bedrock before it was required to disclose its invalidity contentions. Not so for the Bedrock II crossclaim defendants, which have been placed in an artificially compressed schedule by Bedrock's last minute crossclaims. The Local Patent Rules are designed to afford all parties adequate notice and information with which to litigate their cases. Computer Acceleration Corp., 503 F. Supp. 2d at 822. Bedrock's tactical decision to bring the Bedrock II crossclaim defendants long after this dispute began with Bedrock I will, absent a modification of the schedule, severely prejudice the ability of the Bedrock II crossclaim defendants to fully participate in the exchange of information 5 US2008 1329397.1 governed by the Local Patent Rules. The disclosures provided in the Local Patent Rules permit at least 230 days (almost 8 months) from a patentee's infringement contentions until the Markman hearing, with counter-disclosures and briefing schedules staged appropriately. Defendants' proposed modification to the docket orders in both cases aligns essentially with this time frame, recognizing that Bedrock has recently served its infringement contentions (which are identical in substance to its prior contentions served on other parties) upon the newly added counterclaim defendants. Bedrock's last minute crossclaims depart from the local rule's standard scheduling by forcing the Bedrock II crossclaim defendants to a Markman hearing in less than 5 months. Instead of having a few months to analyze and develop claim interpretations, Bedrock seeks to force the Bedrock II crossclaim defendants to articulate their proposed claim interpretations within a few weeks of answering the crossclaims. Since Bedrock asserted claims bringing the Bedrock II crossclaim defendants into its enforcement effort at the last minute, it should litigate those claims on a timeframe that allows the Bedrock II crossclaim defendants sufficient time to fully build their cases and defend themselves. Furthermore, aligning the docket control orders between the Bedrock I and Bedrock II promotes judicial economy. This Court need only hold one Markman hearing for all parties and need only manage one set of discovery and pre-trial proceedings. Without modifying the docket control orders, the Court would be forced to manage multiple rounds of fact discovery, expert discovery, discovery disputes, dispositive motions, pretrial proceedings, and Markman hearings, which would only waste valuable judicial resources. 6 US2008 1329397.1 For the reasons stated herein, the Bedrock I and Bedrock II Defendants respectfully move the Court to amend the docket control orders in both cases to reflect the schedule set forth in the proposed order, filed herewith. Date: June 7, 2010 Respectfully submitted, By: /s/ E. Danielle T. Williams__ Steven Gardner E. Danielle T. Williams John C. Alemanni KILPATRICK STOCKTON LLP 1001 West 4th Street Winston-Salem, NC 27101 Telephone: (336) 607-7300 Fax: (336) 607-7500 William H. Boice Russell A. Korn KILPATRICK STOCKTON LLP Suite 2800 1100 Peachtree Street Atlanta, GA 30309-4530 Telephone: (404) 815-6500 Fax: (404) 815-6555 Thad Heartfield Law Offices of J. Thad Heartfield 2195 Dowlen Road Beaumont, TX 77706 Telephone: 409-866-2800 Fax: 409-866-5789 ATTORNEYS FOR CROSS CLAIM DEFENDANTS NYSE EURONEXT, R.L. POLK & CO., RACKSPACE HOSTING, INC., THEPLANET.COM, and WHOLE FOODS, INC., and DEFENDANTS AMAZON.COM, INC. and SOFTLAYER TECHNOLOGIES, INC. /s/ Elizabeth L. DeRieux (with permission) S. Calvin Capshaw, III State Bar No. 03783900 7 US2008 1329397.1 Elizabeth L. DeRieux State Bar No. 05770585 Capshaw DeRieux, LLP 1127 Judson Road, Suite 220 Longview, Texas 75601 (903) 236-9800 Telephone (903) 236-8787 Facsimile E-mail: E-mail: Allen W. Hinderaker Christopher J. Sorenson (Lead Attorney) MERCHANT & GOULD, PC 3200 IDS Center 80 South Eighth Street Minneapolis, MN 55402 Telephone: 612.332.5300 facsimile: 612.332.9081 ATTORNEYS FOR CROSS-CLAIM DEFENDANT CONAGRA FOODS, INC. /s/ Robert T. Wittman (with permission) Michael E. Jones State Bar No. 10929400 Allen F. Gardner State Bar No. 24043679 POTTER MINTON A Professional Corporation 110 N. College Ave., Suite 500 (75702) P.O. Box 359 Tyler, TX 75710 Telephone: 903-597-8311 Facsimile: 903-593-0846 H. Michael Hartmann Robert T. Wittmann LEYDIG, VOIT & MAYER, LTD. Two Prudential Plaza 180 North Stetson, Suite 4900 Chicago, Illinois 60601-6731 Telephone: 312-616-5600 Facsimile: 312-616-5700 8 US2008 1329397.1 J. Christopher Erb ERB LAW FIRM P.C. 5901 Ridge Ave., Suite 100 Philadelphia, PA 19128 Telephone: 215-508-4419 Facsimile: 215-508-4428 ATTORNEYS FOR CROSS CLAIM DEFENDANT 1&1 INTERNET, INC. /s/ Alan L. Whitehurst (with permission) Frank G. Smith ALSTON & BIRD LLP One Atlantic Center 1201 West Peachtree Street Atlanta, GA 30309 Telephone: (404) 881-7240 Facsimile: (404) 256-8184 Alan L. Whitehurst Marissa R. Ducca ALSTON & BIRD LLP The Atlantic Building 950 F Street, N.W. Washington, DC 20004 Telephone: (202) 756-3300 Facsimile: (202) 756-3333 Michael J. Newton (SBN 24003844) ALSTON & BIRD LLP Chase Tower 2200 Ross Avenue, Suite 3601 Dallas, TX 75201 Telephone: (214) 922-3423 Facsimile: (214) 922-3839 Louis A. Karasik (pro hac vice) ALSTON & BIRD LLP 333 South Hope Street 16th Floor Los Angeles, CA 90071 9 US2008 1329397.1 Telephone: (213) 576-1148 Facsimile: (213) 576-1100 ATTORNEYS FOR DEFENDANTS AOL INC. and MYSPACE, INC. /s/ Yar R. Chaikowsky (with permission) Yar R. Chaikovsky California State Bar No. 175421 John A. Lee California State Bar No. 229911 MCDERMOTT WILL & EMERY LLP 275 Middlefield Road, Suite 100 Menlo Park, CA 94025 Tel: 650.815.7400 Fax: 650.815.7401 E-mail: Email: ATTORNEYS FOR DEFENDANT YAHOO! INC. and CROSSCLAIM DEFENDANT THE GAP, INC. /s/ Evette D. Pennypacker (with permission) Claude M. Stern Evette D. Pennypacker Todd M. Briggs Antonio Sistos QUINN EMANUEL URQUHART & SULLIVAN, LLP 555 Twin Dolphin Dr., 5th Floor Redwood Shores, CA 94065 Telephone: 650-801-5000 Facsimile: 650-801-5100 Michael E. Jones Texas State Bar No. 10929400 POTTER MINTON, PC 110 N. College Tyler, Texas 75702 Telephone: (903) 597-8311 10 US2008 1329397.1 Facsimile: (903) 593-0846 ATTORNEYS FOR DEFENDANTS GOOGLE, INC. and MATCH.COM, LLC /s/ Harry L. Gillam, Jr. (with permission) HARRY L. GILLAM, JR. STATE BAR NO. 07921800 GILLAM & SMITH 303 S. WASHINGTON AVENUE MARSHALL, TX 75670 TELEPHONE: 903-934-8450 FACSIMILE: 903-934-9257 EMAIL: GIL@GILLAMSMITHLAW.COM BRIAN W. LACORTE (LEAD ATTORNEY) GALLAGHER & KENNEDY, P.A. 2575 EAST CAMELBACK ROAD PHOENIX, ARIZONA 85016-9225 TELEPHONE: (602) 530-8020 FACSIMILE: (602) 530-8500 ATTORNEYS FOR CROSSCLAIM DEFENDANT THE GO DADDY GROUP, INC.* * Third party Defendant The Go Daddy Group, Inc. joins this motion but without waiving its claims regarding the lack of personal jurisdiction against it in this matter. /s/ Deron Dacus (with permission) Deron R. Dacus State Bar No. 00790553 RAMEY & FLOCK, P.C. 100 E. Ferguson, Suite 500 Tyler, Texas 75702 Phone: (903) 597-3301 Fax: (903) 597-2413 Heidi Keefe (CA Bar No. 178960) Mark Weinstein. (CA Bar No. 193043) COOLEY LLP Five Palo Alto Square 11 US2008 1329397.1 3000 El Camino Real Palo Alto, CA 94306-2155 Telephone: (650) 843-5000 Facsimile: (650) 857-0663 ATTORNEYS FOR CROSSCLAIM DEFENDANT FACEBOOK, INC. /s/ Paul Krieger (with permission) Paul Krieger Rick Rambo James Glenn Morgan Lewis & Bockius 1000 Louisiana St, Ste. 4000 Houston, Tx 77002 Telephone: 713.890.5000 Facsimile: 713.890.5001 ATTORNEYS FOR CROSSCLAIM DEFENDANTS SUNGARD DATA SYSTEMS, INC. and NATIONWIDE MUTUAL INSURANCE COMPANY /s/ J. Nicholas Bunch (with permission) Neil J. McNabnay Email: Texas Bar No. 24002583 J. Nicholas Bunch E-mail: Texas State Bar No. 24050352 FISH & RICHARDSON P.C. 1717 Main Street, Suite 5000 Dallas, TX 75201 (214) 747-5070 (Telephone) (214) 747-2091 (Facsimile) ATTORNEYS FOR CROSSCLAIM DEFENDANT CONOCOPHILLIPS COMPANY /s/ Darren Donnelly (with permission) Lynn H. Pasahow 12 US2008 1329397.1 Darren Donnelly Fenwick & West 801 California Street Mountain View, CA 94041 Ph: (650) 988-8500 Fax: (650) 938-5200 ATTORNEYS FOR CROSSCLAIM DEFENDANT VIRGIN AMERICA, INC. 13 US2008 1329397.1 CERTIFICATE OF CONFERENCE In compliance with Local Rule CV-7(h), Jonathan Yim counsel for Bedrock, conferred with Thad Heartfield and Danielle Williams, on behalf of the Bedrock Defendants, on June 4, 2010 by phone in a good faith attempt to resolve the matter without court intervention. The parties could not reach agreement on moving the Markman hearing and the trial date. Discussions have conclusively ended in an impasse, leaving an open issue for the Court to resolve. /s/ Danielle T. Williams Danielle T. Williams CERTIFICATE OF SERVICE I hereby certify that the all counsel of record who are deemed to have consented to electronic service are being served this 7th day of June, 2010, with a copy of this document via the Court's CM/ECF system per Local Rule CV-5(a)(3). Any other counsel of record will be served by electronic mail, facsimile transmission and/or first class mail on this same date. /s/ Danielle T. Williams Danielle T. Williams 14 US2008 1329397.1

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