Eolas Technologies Incorporated v. Adobe Systems Incorporated et al

Filing 843

REPLY to Response to Motion re 815 Opposed MOTION for Leave to File Supplement to its PR 3-1 Infringement Contentions with Respect to Google Music and Google+Opposed MOTION for Leave to File Supplement to its PR 3-1 Infringement Contentions with Respect to Google Music and Google+ filed by Eolas Technologies Incorporated. (McKool, Mike)

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.

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

EOLAS’ REPLY IN SUPPORT OF ITS MOTION FOR LEAVE TO
SUPPLEMENT ITS P.R. 3-1 INFRINGEMENT CONTENTIONS
WITH RESPECT TO GOOGLE MUSIC AND GOOGLE+

Dallas 327783v1

TABLE OF CONTENTS
I.

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

II.

ARGUMENT.......................................................................................................................2
A.
B.

Prejudice ..................................................................................................................3

C.
III.

Diligence ..................................................................................................................2

Importance ...............................................................................................................4

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

i
Dallas 327783v1

TABLE OF AUTHORITIES
Page(s)
CASES
Computer Acceleration Corp. v. Microsoft Corp.,
503 F. Supp. 2d 819, 822 (E.D. Tex. 2007)...............................................................................4
Davis-Lynch, Inc. v. Weatherford Int’l, Inc.,
No. 6:07-CV-559, 2009 WL 81874 (E.D. Tex. April 24, 2009) .......................................2, 3, 4
Honeywell Int’l, Inc. v. Acer Am. Corp.,
655 F. Supp. 2d 650 (E.D. Tex. 2009).......................................................................................3
Power-One, Inc. v. Artesyn Technologies, Inc.,
No. 2:05-CV-463, 2007 WL 2986671 (E.D. Tex., Oct. 11, 2007) ...........................................2

Dallas 326032v1

ii

I.

INTRODUCTION
The parties agree that the Court’s discretion in granting leave to supplement infringement

contentions is informed by the following factors as part of a “good cause” analysis: the parties
diligence in filing the motion; the importance of supplementing the infringement contentions to
include the additional products; prejudice to the parties; and whether a continuance would cure any
prejudice.1 Google has raised no serious contention as to any one of these issues. It has chosen as
well not to contest any of the following points made by Eolas:
1. Google Music and Google+ were very recently released;
2. Google Music or Google+ use functionality claimed by Eolas’ patents in
ways materially similar to the ways Eolas argues that Google’s other twentysix accused products infringe the patents (see Mot. at 7);
3. Google has an obligation to supplement discovery with respect to Google
Music and Google+ as reasonably similar to the accused products, whether
or not these new product are added into the infringement contentions (see
Mot. at 6, fn. 20; 8, fn. 25);
4. Google has failed to provide this discovery and has delayed resolution of this
motion (see Mot. at 3-5); and
5. Eolas acted diligently in notifying Google of its intentions with respect to
this motion and in presenting claim charts for Google Music and Google+.
See Mot. at 4, 6.
The first four of these points critically undermine any issue of undue prejudice to Google
and remove any need for a continuance. The first and fourth (the recent release of these products
and Google’s discovery failures and delay) explains why this motion is being filed at this stage of
the litigation, and together with other reasons (cost, effort, and discouraging litigation misconduct)
they explain why it is important to resolve these materially similar infringements at the same time
rather than in duplicative litigation. Neither party has suggested that a continuance is needed here,
though for different reasons. See Mot. at 9; Opp. at 8-9.

1

See Mot. at 5; Opp. at 4.
1

Dallas 327783v1

II.

ARGUMENT
A.

Diligence

As explained in Eolas’ Motion for Leave, Eolas has been diligent, clearly communicated its
intentions after Google announced these new products, and produced infringement contention
charts within weeks of their introduction. Mot. at 3-4. In its opposition Google does not seriously
dispute these facts, which show Eolas’ diligence.2 Google does interject an off-handed “even if
Eolas had been diligent,” but it does so without any support or further analysis. Opp. at 6. Instead,
Google attempts to change this “good cause” inquiry as to Eolas’ diligence, into a sufficiency of
pleadings test.3 Although both “good cause” tests may be “essentially the same,”4 Google is not
asking that the Court strike Eolas’ pleadings. See Opp. at 4-5.

Nor would such a motion be

successful.5 Eolas cited case law directly on the point of Eolas’ diligence, which Google does not

2

Nor does Google contest Eolas’ diligence in seeking related discovery, especially given
Eolas’ many attempts to do so. See Motion at 3-4 (citing Exhs. 2 (May 10th), 3 (June 9th), 8 (July
5th), 9 (July 19th), and 11 (July 27th)).
3

See Opp. at 4-5 (citing Power-One, Inc. v. Artesyn Technologies, Inc., No. 2:05-CV-463,
2007 WL 2986671, *10 (E.D. Tex., Oct. 11, 2007)). However, in Power-One, plaintiff was
moving both to amend its infringement contentions and to compel discovery, due to its “lack of
information regarding whether [it] can make a viable infringement case for the products.” Id. at *4,
*10. Eolas has far more than “at least some solid justification” to accuse Google’s products, having
already had access to Google’s websites, analyzed and described the infringement to Google in the
form of claim charts, and provided Google an expert report demonstrating the infringement of
Google Music in still greater and more specific detail.
4

See Davis-Lynch, Inc. v. Weatherford Int’l, Inc., No. 6:07-CV-559, 2009 WL 81874, *3
(E.D. Tex. April 24, 2009).
5

Google’s suggestion is factually incorrect, as Eolas did not block cite code, it provided two
separate examples that demonstrate the infringement (Mot. Exh. 12 at 17-18, 19-24), and in
contrast to Google’s unsupported allegation (Opp. at 5 (“without any explanation …”)), Eolas
provided a description in its claim charts as to how the cited code demonstrates the elements in
clause “d” of claim 36, of the ’985 patent. See Mot. Exh. 12 at 25-26. Eolas’ claim charts are 58
pages (Google Music) and 326 pages (Google+) long, in contrast to Power-One where no charts
were provided. More importantly, Google has not suggested that it does not know or understand
what functionality Eolas is accusing of infringement, especially given that the infringement is
materially similar to the infringement in twenty-six other products, or given the expert report that
provides still greater detail as to the nature of the Google Music’s infringement. Google does not
raise this issue with respect to any other clause in any other asserted patent claims.
2
Dallas 327783v1

address. See Mot. at 6.

Instead, Google cites to Davis-Lynch (Opp. at 7-8), which held that

plaintiff’s motion to amend its infringement contentions was not diligent where it proffered new
infringement contentions for 52 products after examining only one of these products during the 1-5
years they were available for discovery. See Davis-Lynch, 2009 WL 81874, *3-4. Such facts
simply are not present here, where Eolas clearly communicated its intentions and provided
infringement contentions for these new products within weeks of their release.
B.

Prejudice

Google articulates no specific prejudice beyond what it is already required to provide,6 the
always-present “looming deadlines,”7 and the cost and effort necessary to try the issues, which
would surely be more significant in duplicative litigation between the same parties on the same
patents for these new, but materially similar products. Beyond Google’s allegations, any prejudice
resulting from the timing of this motion is entirely Google’s own doing – as it has been in control
of its release of these products into the marketplace, it chose not to produce discovery of these
products reasonably similar to those already accused (before or after their release), and its choice to
stall for months before responding to Eolas’ requests for consent.
If there was any prejudice, it would be minimal due to the similarity in the manner of
infringement (a point Google does not contest), and because Eolas has indicated that it is only
seeking damages related discovery (Mot. at 7), a point Google appears to adopt.8 Finally, any

6

Google’s discovery obligations are clearly set forth in Honeywell Int’l, Inc. v. Acer Am.
Corp., 655 F. Supp. 2d 650, 656-58 (E.D. Tex. 2009) (duty to provide discovery as to reasonably
similar products), as well as P.R. 3-4(a), and the Joint Agreed Discovery Order §§2(B), 10 (Dkt.
247). Eolas cited these (see Mot. at 6, 8), and Google chose not to address this obligation either
directly or indirectly in opposing this motion.
7

Google admits these deadlines would have been looming earlier. See Opp. at 8, fn.3. There
is no reason to believe the cost of discovery, including the preparation of witnesses, would be
greater in this litigation than in Google’s preferred duplicative litigation. As Eolas has explained,
the infringement theories are materially similar, so any additional cost should be less than having to
try all the issue a second time.
8

See Opp. at 7 (“Eolas acknowledges that only ‘minimal additional discovery related to
damages’ are needed.”).
3
Dallas 327783v1

prejudice would be far outweighed by the benefit to the parties, the Court and the public in early
resolution of the infringement of Eolas’ patents by Google Music and Google+, as well as the
benefit doing so would bring in deterring future litigation misconduct rather than rewarding parties
for delaying and refusing to cooperate.
C.

Importance

It is important to try like issues, and like infringements in one case. Doing so minimizes the
burden on all parties. Google suggests that it is not important to try these products this time
because denying leave would not constitute dismissal on the merits and because of the availability
of duplicative follow-on litigation. However, Google does not make out a case for why it is
preferable to try Google Music or Google+ separately from the twenty-six similar accused
products,9 or more to the point why saving the additional time and cost to the parties, the witnesses
and the Court associated with duplicative litigation, or discouraging discovery abuse (as Google has
done here in delaying discovery) are not more important. In fact, Google cites Davis-Lynch on this
point, which states that deterring “game-playing” can also be an important reason to permit
amendment of the infringement contentions. Davis-Lynch, at *4 (quoting Computer Acceleration
Corp. v. Microsoft Corp., 503 F. Supp. 2d 819, 822 (E.D. Tex. 2007)).
Google also suggests that Google Music and Google+ are not “important” to this case
because damages at this point are minimal. See Opp. at 7. The fact that Google released Google
Music and Google+ as “field trials” or “beta” releases does not mean that they are not important or
reach only a “small number of people,” as Google suggests. Opp. at 3, 6-7 (citing Def. Exhs. 1, 2).
Google is notorious for keeping its widely used products in “beta” despite hundreds-of-millions of
users.10 More importantly, Google Music and Google+ are already widely used.11 Google does not
9

Google does suggest that adding its two new products is not important because the case will
proceed against Google’s other twenty-six accused products (see Opp. at 7), but it does not deny
that the manners of infringement are materially similar and that duplicative and costly litigation
would be necessary.

10

For example, Google also launched “Gmail” by invitation-only in 2004, it was released in
general to the public in 2007, and Google only upgraded it from beta status in 2009, when it had
193 million users per month. See www.facebook.com/pages/Wwwgmailcom/109975902359267.
4
Dallas 327783v1

deny that it is a for-profit company or that it intends to generate advertising for, and thus business
revenue by encouraging its users to infringe Eolas’ patents, both directly and by increasing its
overall user base.
Finally, Eolas takes issue with Google’s suggestion that Eolas is conducting trial by
ambush. See Opp. at 2, 8-9. It is not Eolas who introduced new infringing websites into the market
months before trial, who failed to identify them during the course of discovery, who withheld
consent to this motion for more than six weeks, who refused to communicate with opposing parties
until the very end of fact discovery, or who refused discovery that would be required with or
without the grant of leave to supplement as these are reasonably similar products.
III.

CONCLUSION
For the foregoing reasons, and as set forth in Eolas’ Motion for Leave, Eolas respectfully

requests leave to supplement its infringement contentions to include the newly released Google
Music and Google+ products.

11

In contrast to Google’s suggestion that its products “are being made available to only a
limited few” (Opp. at 7), Google’s own CEO reported that Google+ had 10 million U.S. users by
July 18 2011, less than three weeks after its launch, and two weeks before Google served its
opposition to this motion. See www.wired.co.uk/news/archive/2011-07/18/google-plus-ten-millionvisitors.
5

Dallas 327783v1

DATED: August 12, 2011

Respectfully submitted,
McKOOL SMITH P.C.
By:

/s/ Mike McKool

Mike McKool
Lead Attorney
Texas State Bar No. 13732100
[e-mail]
Douglas Cawley
Texas State Bar No. 04035500
[e-mail]
MCKOOL SMITH, P.C.
300 Crescent Court, Suite 1500
Dallas, Texas 75201
Telephone: [phone]
Telecopier: [phone]
Kevin L. Burgess
Texas State Bar No. 24006927
[e-mail]
John B. Campbell
Texas State Bar No. 24036314
[e-mail]
Josh W. Budwin
Texas State Bar No. 24050347
[e-mail]
Gretchen K. Harting
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]
ATTORNEYS
FOR
PLAINTIFF
EOLAS TECHNOLOGIES INC.

6
Dallas 327783v1

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 August __, 2011.
/s/ Christopher Mierzejewski
Christopher Mierzejewski

7
Dallas 327783v1