I/P Engine, Inc. v. AOL, Inc. et al
Reply to Motion re 200 MOTION for Sanctions Motion for Discovery Sanctions Regarding Untimely Disclosed Prior Art filed by I/P Engine, Inc.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6)(Sherwood, Jeffrey)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
AOL, INC. et al.,
I/P ENGINE, INC.,
Civ. Action No. 2:11-cv-512
REPLY IN SUPPORT OF PLAINTIFF I/P ENGINE’S
MOTION FOR DISCOVERY SANCTIONS
Nowhere in their 21-page opposition do Defendants dispute the fact that they knew about
the three newly-asserted references well before revealing their related invalidity theories to I/P
Engine. Instead, Defendants claim that they had no reason to disclose the long-known prior art
references until they did because they did not previously think that they had to. Defendants
make a myriad of excuses to justify their position, including blaming this Court’s claim
construction decision, and I/P Engine’s supplemental infringement contentions and interrogatory
responses. As discussed below, none of these events altered the facts triggering a “new” need to
disclose the new invalidity theories.
As they have done in previous litigations, Defendants strategically withheld their
invalidity theories about known prior art until after this Court’s claim construction decision, and
days before Defendants served their invalidity expert report. Defendants’ decision to withhold
these references and invalidity theories until after I/P Engine was locked into its claim
construction positions, after this Court has ruled on those positions, during expert discovery, and
with three months left until trial, amounts to sandbagging.
Under Fed. R. Civ. P. 26(e)(1), the parties have a duty to supplement their interrogatory
responses in a timely manner if, and when, they have newly discovered information. None of the
parties dispute that fact. Here, Defendants failed to comply with their duty when they disclosed
the “three newly-asserted prior art theories” based on three prior art references that were
anything but newly discovered.
As admitted by Defendants, “Rule 37(c)(1) states that a court may exclude evidence that
is not disclosed under Rule 26(e).” Opposition at 12. This Court should do just that with respect
to Defendants’ three newly-asserted, but not newly-discovered, prior art references.
A. Defendants’ Conduct is a Violation of Rule 26(e) and Amounts to
“Sandbagging” Because the Three Prior Art References are “Newly Asserted” –
Not “Newly Discovered” Information
Again, Defendants do not dispute that they knew about the three prior art references long
before they disclosed them on July 2. Nor do they claim to have recently discovered them. And
indeed, such assertions would be baseless.
The Culliss patent appears on the face of the patents-in-suit. See, e.g., ChemFree Corp.
v. J. Walter, Inc., No. 1:04-cv-3711-JTC, 250 F.R.D. 570, 573 (N.D. Ga. Oct. 29, 2007) (holding
that Defendant became aware of patents listed on the face of the patent-in-suit on the day the
complaint was filed); Nano-Second Technology Co., Ltd. v. Dynaflex Intern., No. 10–cv–9176,
2012 WL 2077253, *1-2 (C.D. Cal. Jun. 6, 2012) (accused infringer should have known of prior
art referenced in asserted patent since being served with the complaint). Thus, Defendants knew
about the Culliss patent at least as early as September 15, 2011—the day that the complaint was
filed. I/P Engine was entitled to and properly assumed that Defendants did not intend to rely
upon Culliss, particularly in light of Defendants’ repeated statements that they had no further
prior art to identify, which would certainly include any references disclosed by the patents-in-suit
themselves. See D.I. 200, Ex. 8 at 3 n.2 and Ex. 10 at 2.
Defendants similarly knew about the Ryan reference since at least February 13, 2012,
when Google listed the patent in a string cite in an interrogatory response. Ex. 1. By that point,
Defendants presumably had recognized that the Ryan reference needed to be identified in its
invalidity contentions, yet only a few weeks later, told I/P Engine that it would not be
supplementing its invalidity contentions as “there is no further art for us to identify in our
invalidity contentions today.” D.I. 200, Ex. 8 at 3 n.2.
Finally, Defendants do not claim that they had no previous knowledge of Bowman; they
simply argue that they had no reason to identify it before they did. But nothing has changed the
issues in this case that justify why Defendants should not have disclosed Bowman earlier. Nor
do Defendants explain why, when expressly asked if they knew of any additional prior art, when
they obviously did, they told I/P Engine that they knew of no additional prior art.
Defendants made a strategic decision to withhold these references and invalidity theories
until after I/P Engine was locked into its claim construction positions, after this Court has ruled
on those positions, during expert discovery, and with three months left until trial. As courts have
held, Defendants’ hiding of their positions severely prejudices I/P Engine. ChemFree Corp., 250
F.R.D. at 573.
B. Claim Construction, Nor I/P Engine’s Infringement Contentions Justify
a. Defendants cannot point to any claim term that was construed by this
Court that necessitated the need for new prior art
Defendants assert that “the status of Bowman, Culliss, and Ryan as anticipatory art did
not become clear until after Plaintiff finally disclosed its contentions regarding the “collaborative
feedback data” limitation during the Markman hearing, and after the Court issued an Order
excluding the “users with similar interests or needs” requirement from that limitation.”
Opposition at 20.
According to Defendants, “it was not until the Markman hearing on June 4 that Plaintiff
first disclosed what it meant by the ‘users with similar interests or needs’ requirement in
‘collaborative feedback data’” so “Defendants’ invalidity position could (and did) expand to
include prior art references that do not compare user profiles to determine which users have
‘similar interests or needs.’” Id. at 12. Defendants’ assertion is without merit.
I/P Engine has always maintained that clickthrough data is “collaborative feedback.” Ex.
2 (“Google AdWords receives feedback (in the form of clickthrough data) about information,
e.g., advertisements, considered by the other users.”).1 I/P Engine stated, with no ambiguity, that
to Defendants as early as its preliminary infringement contentions on November 7, 2011 (Ex. 2);
and Google confirmed its understanding of it. D.I. 127, Ex. 22 at 40 and Ex. 23 at 10. Thus,
even under Defendants’ logic, Defendants have always been on notice that I/P Engine interpreted
the claims in a manner that required Defendants to consider I/P Engine’s infringement positions
and constructions for invalidity purposes. To say otherwise would mean that Defendants
blatantly ignored I/P Engine’s contentions when searching for prior art references – which is not
a sufficient excuse for violating Rule 26. Defendants had an obligation to consider prior art
(particularly that it was already aware of) that would allegedly fall within both sides
And Google understood this long ago – at least as early as March 30, 2012 – when it admitted
in its response to I/P Engine’s non-infringement interrogatories that “Plaintiff apparently asserts
that this limitation is met . . . by the use of historical clickthrough rate or CTR in the calculation
of Quality Score.” D.I. 127, Ex. 22 at 40 and Ex. 23 at 10.
Defendants’ excuse that this Court’s claim construction decision “expanded the field of
anticipatory art” is equally without merit. Because, even assuming the Defendants are correct
that “[t]he Court’s Markman Order  expanded the field of anticipatory art by eliminating the
filtering based on the ‘users with similar interests or needs’ limitation from the asserted patents”
(Opposition at 13), I/P Engine has always contended an interpretation of “collaborative feedback
data” that included its known infringement positions. Defendants cannot now claim the game
has changed simply because this Court rejected their unduly narrow constructions. Defendants’
newly asserted prior art references do not address any deficiencies in their invalidity argument
that were not already apparent well before claim construction.
b. I/P Engine’s supplemental infringement contentions relevant to
“collaborative feedback data” are exactly the same as its previous
contentions about this issue.
Defendants argue that they should be allowed to supplement their invalidity contentions
with new prior art because I/P Engine supplemented their infringement contentions that same
day with allegedly new infringement theories. This is a non sequitur. The relevant evidence
regarding the infringement contentions has not changed. As before, the supplemental
infringement contentions clearly state “Google AdWords receives feedback (in the form of
clickthrough data) about information, e.g., advertisements, considered by the other users.” This
is the exact same language used with respect to this feature in the prior version.2
Further, the newly accused functionalities in I/P Engine’s infringement contentions were
discovered through the depositions conducted throughout the month of June and thus newly
discovered information, whereas the prior art references at issue here were known prior art
references – not newly discovered information.
C. The Asserted Priority Date For the Patents-In-Suit has Been the Same
Throughout this Litigation
Defendants seem to argue that because I/P Engine supplemented its priority date-related
interrogatory response, that somehow excuses Defendants’ untimely disclosure of the three
newly identified references; that is not the case. In every response, the priority date has never
changed—it has always been December 3, 1998.
Specifically, I/P Engine identified December 3, 1998 as the effective date for the patentsin-suit on December 7, 2011 (Ex. 3); and again, on February 13, 2012 (Ex. 4); then again, on
May 11, 2012 (Ex. 5); and then again, on July 2, 2012 (Ex. 6). It is thus inexplicable as to how
Defendants have been prevented from focusing their prior art searches on references that predate December 3, 1998. The only difference between I/P Engine’s discovery responses is
semantic – the language was merely modified to accommodate and quell Defendants’ unjustified
concern that I/P Engine was somehow withholding information.
D. Whether Defendants Violated a Deadline or Court Order Is Not Dispositive
As discovery sanctions, district courts can exclude contentions from use at trial if the
party advancing that information fails to timely supplement that information, as required by the
Federal Rules, “unless the failure was substantially justified or is harmless.” Fed. R. Civ. P.
37(c)(1). As this Court is aware, Fed. R. Civ. P. 37(c)(1) does not require a violation of a
Deadline or Court Order. What the rule does require is Defendants to supplement their invalidity
contentions and response to I/P Engine’s Interrogatory No. 8 (as to Google) in a timely manner.
Fed. R. Civ. P. 26(e)(1). They failed to do so and had a duty to do so.
E. Contrary to Defendants’ Assertions, I/P Engine Has Been Prejudiced
Striking these untimely asserted references is the only meaningful remedy for
Defendants’ violation of the discovery rules. Any other remedy would only reward Defendants
for their obstructive conduct. I/P Engine is prejudiced by the pressing need to evaluate and
refute Defendants’ new prior art theories at the last minute in the midst of expert reports and the
close of fact and expert discovery when there is no justifiable reason for needing to do so.
Defendants attempt to excuse this prejudice by stating that these prior art theories “were served
several weeks before Defendants’ invalidity expert report issued, nine weeks before the close of
expert and fact discovery, and long before the first expert has even been deposed.” Opposition at
1. Based on that logic, it appears that Defendants’ position is: yes we violated Rule 26, so what;
Plaintiff still has enough time to prepare a response. This Court cannot condone such conduct.
Further, the prejudice that I/P Engine has suffered cannot be so easily corrected.
Defendants waited until after Markman to assert these three prior art references. Without
dispute, Defendants knew of the prior art references months before they asserted them. I/P
Engine structured its discovery based upon, inter alia, Defendants’ invalidity contentions and
their repeated confirmations that they were not going to rely on any prior art other than the six
references identified in their invalidity contentions. Defendants’ tactics created unjustifiable
prejudice to I/P Engine.
Defendants do not deny knowing about the prior art references for many months before
disclosing them. Instead, they say that I/P Engine’s infringement contentions, interrogatory
responses and this Court’s claim construction justified the delayed assertion of the already
known references. As discussed above, none of these events changed the facts or theories of this
case justifying Defendants’ failure to timely disclose their invalidity theories. They were
relevant to the same facts and theories before these events.
Defendants intentionally and strategically waited to place I/P Engine at a disadvantage.
Defendants intentional sandbagging is even more blatant considering that Defendants expressly
(and repeatedly) told I/P Engine that they were not going to rely upon any additional prior art or
withholding any additional invalidity theories, statements which I/P Engine relied upon to its
detriment. Defendants should not be permitted to add new invalidity references at this late
juncture, after repeatedly telling I/P Engine throughout discovery that they had no additional
prior art to disclose, after claim construction and so close to the end of fact discovery and trial.
For the foregoing reasons, I/P Engine respectfully requests that this Court strike and
exclude the three untimely asserted prior art references identified in Defendant Google Inc.’s
Third Supplemental Objections and Responses to Plaintiff I/P Engine, Inc.’s Interrogatories.
Dated: August 23, 2012
By: /s/ Jeffrey K. Sherwood
Donald C. Schultz (Virginia Bar No. 30531)
W. Ryan Snow (Virginia Bar No. 47423)
CRENSHAW, WARE & MARTIN PLC
150 West Main Street
Norfolk, VA 23510
Telephone: (757) 623-3000
Facsimile: (757) 623-5735
Jeffrey K. Sherwood (Virginia Bar No. 19222)
Frank C. Cimino, Jr.
Kenneth W. Brothers
Dawn Rudenko Albert
Charles J. Monterio, Jr.
DICKSTEIN SHAPIRO LLP
1825 Eye Street, NW
Washington, DC 20006
Telephone: (202) 420-2200
Facsimile: (202) 420-2201
Counsel for Plaintiff I/P Engine, Inc.
CERTIFICATE OF SERVICE
I hereby certify that on this 23rd day of August, 2012, the foregoing REPLY IN
SUPPORT OF PLAINTIFF I/P ENGINE’S MOTION FOR DISCOVERY SANCTIONS,
was served via the Court’s CM/ECF system, on the following:
Stephen Edward Noona
Kaufman & Canoles, P.C.
150 W Main St
Norfolk, VA 23510
Quinn Emanuel Urquhart & Sullivan LLP
50 California Street, 22nd Floor
San Francisco, CA 94111
Robert L. Burns
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
Two Freedom Square
11955 Freedom Drive
Reston, VA 20190
Cortney S. Alexander
Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
3500 SunTrust Plaza
303 Peachtree Street, NE
Atlanta, GA 94111
/s/ Jeffrey K. Sherwood
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