Eolas Technologies Incorporated v. Adobe Systems Incorporated et al

Filing 1098

SUR-REPLY to 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 Frito-Lay, Inc.. (McSwane, Douglas)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
TYLER DIVISION
Eolas Technologies Incorporated,
Plaintiff,
vs.
Adobe Systems Inc., Amazon.com, Inc.,
Apple Inc., Argosy Publishing, Inc.,
Blockbuster Inc., CDW Corp.,
Citigroup Inc., eBay Inc., Frito-Lay, Inc.,
The Go Daddy Group, Inc., Google Inc.,
J.C. Penney Company, Inc., JPMorgan
Chase & Co., New Frontier Media, Inc.,
Office Depot, Inc., Perot Systems Corp.,
Playboy Enterprises International, Inc.,
Rent-A-Center, Inc., Staples, Inc., Sun
Microsystems Inc., Texas Instruments Inc.,
Yahoo! Inc., and YouTube, LLC
Defendants.

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§ Civil Action No. 6:09-CV-00446-LED
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JURY TRIAL
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FRITO-LAY, INC.’S SUR-REPLY IN SUPPORT OF ITS OPPOSITION TO EOLAS’S
MOTION FOR LEAVE TO SUPPLEMENT P.R. 3-1 INFRINGEMENT CONTENTIONS

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I.

INTRODUCTION
Acknowledging that the newly accused happiness.lays.com (“New Accused Product”) is

not in the case against Defendant Frito-Lay, Inc. (“Frito-Lay”), Eolas1 filed its motion seeking
leave from the court to include the New Accused Product in this case (“Motion to Amend” or
“Mot.”; Dkt. 1050). Eolas expressly asked the court to grant Eolas’s Motion to Amend.2 In its
Opposition (“Opp.,” Dkt. 1093), Frito-Lay laid out undisputed facts that evidence Eolas’s failure
to establish good cause because, inter alia, Eolas failed to act diligently. In response, Eolas
failed to provide any fact in its Reply to show that it acted diligently and simply rehashed the
same misdirected and conclusory argument that it allegedly sought discovery with diligence,
which it did not. Eolas’s assertion in its Reply (Dkt. 1095) that Frito-Lay did not provide
discovery regarding the New Accused Product is a red herring and irrelevant to establishing
Eolas’s diligence in seeking leave to amend its infringement contentions. As expected, Eolas
remains completely silent in its Reply as to why it failed to vigorously analyze all publicly
available information as required by law.
Unable to dispute the evidence showing Eolas’s complete lack of diligence in seeking
leave to belatedly amend its infringement contentions, Eolas now changes course in its Reply
and disingenuously argues at length3 in its Reply that its Motion to Amend is moot if Frito-Lay
simply provides discovery regarding the New Accused Product. However, receiving discovery
regarding a product does not mean the product should be added to the infringement contentions
1

Unless otherwise noted, Plaintiffs The Regents of the University of California and Eolas
Technologies Incorporated are collectively referred to as “Eolas.”

2

Eolas stated in its Motion to Amend that “in light of the good cause set forth herein, Plaintiffs
respectfully request that the Court grant Plaintiffs’ motion for leave . . .” See, Mot. at 2.

3

Eolas’s Reply Brief is six pages long which exceeds the page limit set forth in Local Rule
7(a)(2).
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only three months before trial. Eolas’s sudden change of course further demonstrates that its
Motion to Amend is meritless. Hence, as fully discussed below, Frito-Lay respectfully requests
the Court deny Eolas’s meritless Motion to Amend in its entirety.
II.

EOLAS CONTINUES TO IGNORE ITS AFFIRMATIVE DUTY TO ESTABLISH
GOOD CAUSE FOR ITS BELATED INFRINGEMENT CONTENTIONS
As set forth in Frito-Lay’s Opposition, Eolas is required to establish why it failed to seek

amendment of its infringement contentions over a year ago when the only information Eolas
needed was publicly available. See, Opp. at 4-6, Section III(A). In its Reply, Eolas remains
utterly silent to this issue. The reason is obvious -- Eolas cannot deny its lack of diligence.
Eolas attempts to argue that it did not know about the New Accused Product until July
2011 (Mot. at 4). Eolas’s argument, however, does not explain why Eolas did not exercise
diligence over a period of sixteen months (from March 2010 to July 2011) when the law requires
Eolas to vigorously analyze all publicly available information. See, Connectel, LLC v. Cisco
Systems, Inc., 391 F.Supp.2d 526, 528 (E.D.Tex. 2005). Eolas attempts to misdirect the Court by
arguing that Frito-Lay did not dispute that Eolas did not know of the New Accused Product
earlier (Mot. at 3). Eolas’s argument is completely irrelevant because (1) it still does not explain
why Eolas failed to exercise due diligence; and (2) other than Eolas’s self-serving statement,
Frito-Lay has no knowledge as to when Eolas allegedly learned of the New Accused Product.
Unable to provide any explanation as required to establish good cause, Eolas argued that
Frito-Lay should have produced discovery regarding the New Accused Product earlier, and
Frito-Lay should have sought clarification regarding Eolas’s infringement contentions (Mot. at 2
and 4). Eolas’s argument is nothing but a red herring. Eolas’s infringement contentions clearly
identified only the www.fritolay.com website (Dkt. 1093-2). Indeed, as noted in Frito-Lay’s
Opposition, Eolas had served numerous interrogatories between 2010 and 2011 (Opp. at 3) to
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which Frito-Lay had responded.

Eolas never raised any issue regarding anything beyond

www.fritolay.com. Neither did Eolas voice any issue regarding Frito-Lay’s document production
for over a year. Indeed, there was no need for clarification. Eolas’s contention that it allegedly
sought discovery with diligence is misguided because it is irrelevant to Eolas’s diligence in
seeking amendment of its infringement contentions that are solely based on public information,
not any discovery that Frito-Lay might have produced. Indeed Eolas was not diligent in seeking
discovery because Eolas has never raised any discovery issue for over one year. Davis-Lynch,
Inc. v. Weatherford Int’l, Inc., 2009WL81874, *4, Case No. 6:07cv559 (E.D.Tex. Jan. 12, 2009)
(to the extent that plaintiff was hindered by a lack of discovery, it had failed to diligently raise
these issues with the court).
Eolas also erroneously contends in its Reply that there is no prejudice to Frito-Lay
because “any discovery as to the [New Accused Product] would not require much duplication.”
(Mot. at 4 (emphasis added)). Eolas is missing the point. As noted in its Opposition (Opp. at 78), the unfair prejudice to Frito-Lay is that Frito-Lay would be required to prepare its case, not
just discovery, with respect to the New Accused Product anew if Eolas is permitted to add the
New Accused Product at this late stage in the case; and there is simply no continuance available
to cure such prejudice to Frito-Lay. See e.g., Realtime Data LLC, 2009 WL 2590101 at *9 (a
continuance would cure some of the prejudice, but even a substantial continuance would not cure
enough prejudice to justify the changes plaintiff proposed).
In support of its assertion that leave to amend its infringement contentions should be
granted, Eolas cited in its Reply the Federal Circuit Court’s opinion in O2 Micro International
Ltd. v. Monolithic Power Systems, Inc., 467 F.3d 1355, 1365-66 (Fed. Cir. 2006). See, Mot. at 4,
fn. 10. Contrary to Eolas’s assertion, however, the Court in O2 Micro in fact affirmed the lower

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court’s decision denying the plaintiff’s motion for leave to amend infringement contentions
because the plaintiff failed to act diligently. Id. at 1366, 1367-68 (“We agree with the Northern
District of California that ‘good cause’ requires a showing of diligence. . . . Given O2 Micro’s
delay in moving to amend its infringement contentions and its lack of adequate explanation for
this delay, we concluded that the district court did not abuse its discretion in finding a lack of
diligence and therefore a lack of ‘good cause.’”).
III.

EOLAS DISINGENUOUSLY ARGUES THAT ITS OWN MOTION IS “MOOT”
Apparently, Eolas knew it had failed to act diligently and could not establish good cause

in seeking leave to amend its infringement contentions. In its Reply, Eolas reversed course by
disingenuously arguing that its Motion to Amend should be dismissed as moot so long as FritoLay provides discovery regarding the New Accused Product.4 This argument demonstrates that
Eolas’s Motion to Amend is meritless because obtaining discovery of a product does not mean
the product is in the case. In addition, Eolas rehashed the same argument that the New Accused
Product is already in the case because it is accessible from fritolay.com. Eolas’s own action,
however, belies its words. As discussed in the Opposition, there are numerous web pages that
are “accessible” from fritolay.com, such as www.pepsico.com, and Eolas had specifically argued
that pepsico.com was not part of the case and should not be included in the settlement agreement
with Frito-Lay (Opp. at 10). Moreover, Eolas never filed a motion to compel Frito-Lay to
produce documents and its suggestion in its Reply that the Court should order Frito-Lay to do so
is an attempt to avoid the Court’s Local Rules requiring Eolas to meet and confer with Frito-Lay
and file a motion to compel if necessary.

4

“[T]he Court should order Frito-Lay to provide the outstanding discovery and dismiss
Plaintiff’s motion as moot.” See, Reply (Dkt. 1095) at 1.
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This case is different from the court’s decision that Eolas relied on its Reply, Orion II.5
In Orion II, Toyota (defendant) realized that plaintiff also accused the other webpages and failed
to seek clarification from either the plaintiff or the court. Id. at 817-18. In this case, however, it
is undisputed that that Eolas never accused the New Accused Product. Instead, Eolas failed to
exercise due diligence and identify the New Accused Product. Frito-Lay would have sought
clarification if Eolas, based on a simple review of public information, had timely raised any issue
regarding the New Accused Product, rather than at this eleventh hour.
In sum, Eolas’s new shift of focus in its Reply only demonstrates that its Motion to
Amend is without merit.
IV.

CONCLUSION
The misstatements and misguided arguments in Eolas’s Motion to Amend and Reply

demonstrate that Eolas has failed to establish the required good cause in seeking leave from the
Court to amend its infringement contentions. For the reasons set forth herein and in Frito-Lay’s
Opposition, Eolas’s Motion to Amend is without merit and should be denied.
Dated: November 14, 2011

Respectfully submitted,
/s/ Douglas R. McSwane, Jr.
POTTER MINTON P.C.
Douglas R. McSwane, Jr.
[e-mail]
110 N. College Street, Suite 500
Tyler, Texas 75702
Tel: [phone]
Fax: [phone]
GREENBERG TRAURIG LLP
Jeffrey K. Joyner (admitted pro hac vice)
[e-mail]
Jeffrey F. Yee (admitted pro hac vice)

5

Orion IP, LLC. v. Staples, Inc., 407 F.Supp.2d 815 (E.D.Tex. 2006); see also Mot. at 2-3.
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[e-mail]
2450 Colorado Avenue, Suite 400E
Santa Monica, California 90404
Telephone: [phone]
Facsimile: [phone]
Dwayne L. Mason
Texas State Bar #00787977
[e-mail]
1000 Louisiana Street, Suite 1700
Houston, Texas 77002
Tel: [phone]
Fax: [phone]
ATTORNEYS FOR DEFENDANT
FRITO-LAY, INC.

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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 service. Local Rule CV-5(a)(3)(A) on this November 14, 2011.

/s/ Douglas R. McSwane, Jr.
Douglas R. McSwane, Jr.

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