Eolas Technologies Incorporated v. Adobe Systems Incorporated et al

Filing 1097

***CORRECTED DOCUMENT. REPLACES 1095 .***>REPLY to Response to Motion re 1050 MOTION FOR LEAVE TO SUPPLEMENT THEIR P.R. 3-1 INFRINGEMENT CONTENTIONS WITH RESPECT TO FRITO-LAY, INC.'S HAPPINESS.LAYS.COM filed by Eolas Technologies Incorporated. (McKool, Mike) Modified on 11/9/2011 (mjc, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION
Eolas Technologies Incorporated,
Plaintiff,
vs.
Adobe Systems Inc., et al.,
Defendants.

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§ Civil Action No. 6:09-CV-00446-LED
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§ JURY TRIAL
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§

PLAINTIFFS’ REPLY IN SUPPORT OF THEIR MOTION FOR LEAVE TO
SUPPLEMENT THEIR P.R. 3-1 INFRINGEMENT CONTENTIONS
WITH RESPECT TO FRITO-LAY, INC.’S HAPPINESS.LAYS.COM

McKool 402751v4

TABLE OF CONTENTS
I.

INTRODUCTION ...............................................................................................................1

II.

ARGUMENT.......................................................................................................................1
A.
B.

Plaintiffs Satisfied the Standard for Granting Leave to
Amend......................................................................................................................3

C.
III.

Leave to Amend Infringement Contentions is Unnecessary....................................1

Discovery of happiness.lays.com is Warranted, Regardless
of Whether Leave to Amend is Necessary...............................................................4

CONCLUSION....................................................................................................................5

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TABLE OF AUTHORITIES
Page(s)
CASES
Epicrealm Licensing LLC v. Autoflex Leasing, Inc.,
No. 2:05-cv-163, 2007 WL 2580969 (E.D. Tex. Aug. 27, 2007)..............................................4
Honeywell Int’l, Inc. v. Acer Am. Corp.,
655 F. Supp. 2d 650 (E.D. Tex. 2009).......................................................................................4
O2 Micro Intern. Ltd. v. Monolithic Power Systems,
467 F.3d 1355 (Fed. Cir. 2006)..................................................................................................3
Orion IP, LLC v. Staples, Inc.,
407 F. Supp. 2d 815 (E.D. Tex. 2006).......................................................................................2
Orion IP, LLC v. Staples, Inc.,
No. 2:04cv297 (Dkt. 171) (E.D. Tex. July 7, 2005) ...............................................................1,2

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I.

INTRODUCTION
Plaintiffs accused Frito-Lay of infringing its patents by interactively presenting web pages

and content in browsers, “including without limitation, the web pages and content accessible via
www.fritolay.com.” (Dkt. No. 1, ¶40 (emphasis added).) Plaintiffs provided specific theories of
infringement, using representative examples from www.fritolay.com. (Id.; Mot. Exh. 2.) Frito-Lay
has not denied that Plaintiffs’ theories of infringement as to happiness.lays.com are the same as
their theories for fritolay.com (see Mot. at 1), or that the former is accessible via the latter. (See
Mot. at 5.) Thus, as stated in the motion, Plaintiffs provided Frito-Lay the necessary notice with
respect to happiness.lays.com, in that it is already part of this case as an accused webpage and for
purposes of obtaining discovery.

Accordingly, in this circumstance, leave to amend is not

necessary. 1 Frito-Lay does not directly refute this. Rather, it merely challenges a few subsidiary
points, addressed in below section II(A).
Thus, the Court should order Frito-Lay to provide the outstanding discovery and dismiss
Plaintiffs’ motion as moot. If however, the Court believes that leave to amend the infringement
contentions is necessary, Plaintiffs have satisfied the standard for doing so, as explained in section
II(B). Finally, Plaintiffs diligently sought discovery as to happiness.lays.com and the Court should
order Frito-Lay to provide the outstanding discovery, as explained in section II(C).
II.

ARGUMENT
A.

Leave to Amend Infringement Contentions is Unnecessary

Rather than argue leave to amend is necessary before happiness.lays.com can be considered
part of this case, Frito-Lay asserts that (1) language in the complaint was vague, (2) the complaint
1

See Mot. at 1-2 (explaining that Plaintiffs brought motion as one seeking leave to amend
infringement contentions as the best vehicle to resolve Frito-Lay’s repeated refusal to provide
discovery beyond fritolay.com, in lieu of its contentions that the complaint and this suit was so
limited); see also Mot. at 7 (explaining notice function of infringement contentions).

1

could not provide notice because Frito-Lay did not launch happiness.lays.com until after it received
the infringement contentions, and (3) happiness.lays.com and fritolay.com are different domains.
(Opp. at 9.) Frito-Lay misunderstands the purpose of providing notice.
The notice function of the pleadings and infringement contentions is to put Frito-Lay on
notice as to Plaintiffs’ theories of infringement, not to identify each and every accused product at
the start of litigation. 2 Thus, it does not matter whether Frito-Lay had another unnamed webpage
when the complaint was filed, or as in this case, added it later. Frito-Lay had fair notice as to
happiness.lays.com so long as the infringement contentions provided Plaintiffs’ theories of
infringement, so long those theories are similarly applicable to the new webpages, and so long as
Plaintiffs indicated what more it was accusing than just the representative example (as Plaintiffs did
in identifying webpages accessible via fritolay.com). If Frito-Lay believed the language in the
complaint was vague, instead of implementing a new webpage using features it knew Plaintiffs had
accused of infringement and then failing to provide information about the webpage during
discovery, Frito-Lay could have sought clarification from Plaintiffs, or moved the Court for
clarification. It did not, despite unquestionably being in a superior position to raise the issues. 3 In
this way, Frito-Lay is similarly situated to the defendant, Toyota, in Orion II, wherein the Court
permitted amendment and admonished defendant for failing to seek clarification and hiding behind
a log until it could claim prejudice. 4 Similarly, any uncertainty by Frito-Lay should not now be
used to exclude happiness.lays.com from this case or to refuse discovery.
2

See, e.g., Orion IP, LLC v. Staples, Inc., 407 F.Supp. 2d 815, 817 (E.D. Tex. 2006) (Davis,
J.) (“Orion II”); see also Mot. at 7.
3
Whether or not Frito-Lay placed this new webpage under the domain lays.com (a webpage
that itself redirects viewers to the webpage fritolay.com), in an attempt to shield it from discovery
may only be resolved after Frito-Lay provides discovery. However, it clearly does nothing to deny
that the new webpage is accessible directly from fritolay.com, as Plaintiffs qualified their notice in
the complaint. (See Dkt. No. 1, ¶40.)
4
Orion II at 817-18.
2

Finally, Frito-Lay’s reference to the two webpages having different URLs 5 is an attempt to
invoke the holding of Orion I and is a red herring. In Orion I, plaintiff was denied leave to amend
its infringement contentions so that it could assert new theories of infringement with regard to the
Scion and Lexus websites. 6 Because Plaintiffs in this case have already disclosed their theories of
infringement, and the theories are the same as to Frito-Lay’s new webpage, the present case is more
akin to Orion II, where the Court denied defendant’s motion to enforce Patent Rule 3-7
(amendment or modification to infringement contentions may be made only by order of the court).
There, the Court “clarified that this limitation [from Orion I] would not apply to those aspects of
the accused websites, of which the defendant did have notice.” 7
B.

Plaintiffs Satisfied the Standard for Granting Leave to Amend

Frito-Lay suggests that Plaintiffs have not satisfied the standard for granting leave to amend
because this motion was filed 19 months after Frito-Lay launched happiness.lays.com. However,
as to the great majority of this time, Frito-Lay does not contest that (1) Plaintiffs did not know
about the new webpage (until the period of the stay), 8 and (2) Frito-Lay did not produce discovery
concerning this webpage, which discovery may have fronted the need to file this motion earlier. As
to the period after Plaintiffs discovered the webpage, Frito-Lay merely asserts that Plaintiffs have
5

Opp. at 9 (attaching Opp. Ex. 13).
See Orion IP, LLC v. Staples, Inc. Case No. 2:04cv297, slip op. at 2-4 (Dkt. 171) (E.D. Tex.
July 7, 2005) (Davis, J.) (“Orion I”). (“[t]hat scope cannot be widened during the course of
discovery by amending PICs to include theories that should have [been] disclosed initially” and
“Plaintiff has added theories that should have been disclosed initially….”); see also Honeywell
Int’l, Inc. v. Acer Am. Corp., 655 F. Supp. 2d 650, 655-56 (E.D. Tex. 2009). The Orion I Court
also denied the motion because, unlike the present case, the Scion and Lexus websites existed and
were publicly availably before Orion’s complaint. See Orion II at 816-17.
6

7

Honeywell, 655 F. Supp. 2d at 655-56 (citing Orion II, 507 F. Supp. 2d at 816).
The fact that Plaintiffs were able to serve claim charts based on the code Frito-Lay claims
was publicly available since March 15, 2010, does not change the fact that Plaintiffs could not
serve claim charts for webpages it did not know about, and does not make earlier conduct any less
diligent. (See Opp. at 6.) Instead, this only underscores the fact that had Frito-Lay provided the
requested discovery and identified Frito-Lay’s new webpage, or even had it sought clarification,
Plaintiffs could have served claim charts and/or raised this motion earlier.
8

3

not affirmatively established diligence (see Opp. at 4-5 (citing cases)), while completely ignoring
the numerous factual circumstances Plaintiffs set forth to establish diligence in the Motion. These
facts included Plaintiffs’ belief that happiness.lays.com was already part of this case (see supra
§II(A)) such that rushing to file a motion was unnecessary, or in attempting to resolve the matter
without seeking Court intervention. (See Mot. at 3-5.) Plaintiffs brought this motion three days
after the formal meet and confer made it clear that Frito-Lay would not provide the requested
discovery or consider the website part of the case. 9
As to Frito-Lay’s claim of prejudice, this webpage has been a part of this case since FritoLay introduced it, regardless of whether Frito-Lay has been withholding discovery since that time,
and regardless of the time it took Plaintiffs to discover it. If leave to amend is required, Frito-Lay
has failed to respond to Plaintiffs’ points that (1) any prejudice is of Frito-Lay’s own doing (Mot. at
8); (2) as of the filing of this motion, Frito-Lay’s discovery was so deficient that any discovery as
to the new website would not require much duplication; (3) little if any additional work has to be
performed since Plaintiffs are relying on the same theories of infringement; 10 and (4) the prejudice
to Plaintiffs and the waste of judicial resources caused by needless duplication of litigation
outweighs any prejudice. 11
C.

Discovery of happiness.lays.com is Warranted, Regardless of Whether Leave to
Amend is Necessary

9

Plaintiffs also describe its repeated attempts to negotiate the issue with Frito-Lay in
September and October of this year, including informal meet and confers as well as oral and written
communications. (See Mot. at 5, Mot. Exhs. 8 and 9.)
10

This is precisely the circumstance where leave to amend infringement contentions should be
granted. See, e.g., O2 Micro Intern. Ltd. v. Monolithic Power Systems, 467 F.3d 1355, 1365-66
(Fed. Cir. 2006) (cited by Frito-Lay).
11
Frito-Lay’s argument that claims against the new webpage would be exhausted by
resolution of the case against Adobe is merely attorney speculation. (See Opp. at 1, 6). Frito-Lay
does not know what judgment or settlement would look like, nor does it explain why treatment of
the new webpage should be any different than treatment of its webpage fritolay.com.

4

Frito-Lay does not contest that throughout this case, Plaintiffs have sought discovery as to
Frito-Lay’s entire website, not just fritolay.com. 12 Such discovery included the April 2, 2010
requests that Frito-Lay produce documents that show use of the accused features on webpages not
limited to fritolay.com, 13 as well as interrogatories seeking information about Frito-Lay’s use of
accused features in Frito-Lay’s websites, not just fritolay.com. 14 Nor does Frito-Lay deny that, as a
matter of law, Plaintiffs are entitled to discovery of reasonably similar products such as
happiness.lays.com 15 as explained in Honeywell. (See Opp. at 8.) Frito-Lay merely argues that
Honeywell also requires that Plaintiffs’ requests be diligent. While Frito-Lay challenged Plaintiffs’
diligence in seeking leave to amend, it did not challenge Plaintiffs’ diligence in seeking this
discovery. 16 Thus, Frito-Lay has been withholding the diligently requested discovery for more than
19 months without justification or explanation, and should now be ordered to produce it
expeditiously—regardless of whether leave to amend is necessary.
III.

CONCLUSION
For the foregoing reasons, Plaintiffs request that the Court either hold that

happiness.lays.com is already part of the case and deny this motion as moot, or grant this motion
for leave to amend Plaintiffs’ infringement contentions.
12

See Mot. at 3.
13
Mot. Exh. 2; Mot. at 3 (noting other relevant requests for discovery).
14
See, e.g., Opp. Exh. 5 at 16, 27-28 (identifying frito-lay.com, but clearly stating that the
interrogatory seeks information that “includes, but is not limited to … Frito-Lay.com”).
15

See Mot. at 6, n.18 and Mot. at 8, n.23 (citing Honeywell).
Compare Opp. at 4-6, to id. at 8-9. In Honeywell, plaintiff was seeking discovery orders, not
a motion for leave to amend infringement contentions. The case did not hold that diligence in
seeking leave to amend is required to obtain relevant and diligently pursued discovery. See
Honeywell, 655 F. Supp. 2d at 656 (“Honeywell must demonstrate that its PICs gave CPT notice of
a specific theory of infringement and that the products for which it seeks discovery operate in a
manner reasonably similar to that theory. Honeywell must also demonstrate that it has diligently
sought this information.”) (citing Epicrealm Licensing LLC v. Autoflex Leasing, Inc., 2007 WL
2580969 at *3 (E.D. Tex. Aug. 27, 2007) (Epicrealm I) (“no bright line rule that discovery can only
be obtained if related to an accused product identified in a party’s PICs”).

16

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MCKOOL SMITH, P.C.
/s/ Mike McKool
Mike McKool
Lead Attorney
Texas State Bar No. 13732100
[e-mail]
Douglas Cawley
Texas State Bar No. 04035500
[e-mail]
Holly Engelmann
Texas State Bar No. 24040865
[e-mail]
J.R. Johnson
Texas State Bar No. 24070000
[e-mail]
MCKOOL SMITH, P.C.
300 Crescent Court, Suite 1500
Dallas, Texas 75201
Telephone: [phone]
Telecopier: [phone]

Dated: November 9, 2011.

Kevin L. Burgess
Texas State Bar No. 24006927
[e-mail]
Josh W. Budwin
Texas State Bar No. 24050347
[e-mail]
Gretchen K. Curran
Texas State Bar No. 24055979
[e-mail]
Matthew B. Rappaport
Texas State Bar No. 24070472
[e-mail]
MCKOOL SMITH, P.C.
300 West Sixth Street, Suite 1700
Austin, Texas 78701
Telephone: [phone]
Telecopier: [phone]

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Robert M. Parker
Texas State Bar No. 15498000
[e-mail]
Robert Christopher Bunt
Texas Bar No. 00787165
[e-mail]
Andrew T. Gorham
Texas State Bar No. 24012715
[e-mail]
PARKER, BUNT & AINSWORTH, P.C.
100 E. Ferguson, Suite 1114
Tyler, Texas 75702
[phone]
[phone]- Facsimile
ATTORNEYS FOR PLAINTIFF
EOLAS TECHNOLOGIES INC.
AND THE REGENTS OF THE
UNIVERSITY OF CALIFORNIA

CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was filed electronically in
compliance with Local Rule CV-5(a). As such, this document was served on all counsel who have
consented to electronic services pursuant to Local Rule CV-5(a)(3)(A), on November 9, 2011.

/s/ Thomas Fasone III
Thomas Fasone III

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