In Enfish v. Microsoft, the Federal Circuit ruled, under section 101 and in accordance with Alice, that "software can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route."
In Positive Technologies, Inc. v. Sony Electronics, Inc. (January 28, 2013), Judge Illston (Northern District of California) granted Defendants Amazon.com, Inc.'s and Barnes & Nobles, Inc.'s motion to amend their invalidity contentions to add "conforming amendments" and "new-art amendments". Both amendments are said to relate to the Court's claim construction order. The Court focuses on the two aspects of good cause for the proposed amendments, including diligence in discovery the new information and the passage of time in seeking to add the new information to the contentions once discovered. Defendants argue that the amendments, particularly the new prior art, relate to an expansive claim construction concerning two types of devices covered in the Court's claim construction order. Although six months elapsed between the claim construction order and when the Defendants located the new prior art, the detail surrounding Defendants' efforts appears to have persuaded the Court the allow the proposed amendments. In this case, the Court ruled that since fact discovery had not yet closed, and in light of Plaintiff failing to articulate whether the prior art was relevant, whether Defendants were engaging in "gamesmanship" for the amendments, and what type of prejudice would result to the Plaintiff, the Court permitted the proposed amendments.
Takeaways - it appears to be increasingly relevant to track the timing contention efforts once the initial contentions have been served. Details on these activities remain important to the Court when considering proposed amendments to invalidity contentions.
In Medtronic Corevalve LLC v. Edwards Lifesciences Corp. (June 25, 2012), Judge Selna (Central District of California) granted Defendant Edwards' request to supplement its invalidity contentions to add additional prior art references. The main basis for Defendant Edwards' request focused on a new search conducted by defendant after plaintiff asserted additional method claims in the litigation. The Court focused on Patent Local Rule 3-6 of the Central District of California to consider permitting the requested supplements. The Court explained that it
must first consider whether [Defendant] Edwards acted diligently in discovering the bases for the amendment and whether Edwards timely moved for leave to amend.
(Order at 3).
The Court analyzed when the references were first identified by the Defendant, and then how long thereafter that the motion for leave to amend was filed. As for prejudice, the Court noted that Plaintiff Medtronic has taken the position that is own infringement contentions are "preliminary," and thus it would be unfair for Medtronic to reserve its right to amend, while not granting that same benefit to Defendant.
In further analyzing potential prejudice, the Court summarized another argument raised by Plaintiff:
On the other hand, Medtronic contends that it will be prejudiced by the amendment because the parties will have exchanged their claim terms and proposed constructions by June 20, 2012, five days before this motion will be heard by the Court. (Opp'n Br. 11.) Therefore, Medtronic "will ... be forced to approach the early stages of claim construction without knowing whether the new references will be allowed into the case." (Id.) Furthermore, Medtronic worries that if good cause for the amendment is found her, Edwards will "almost certainly continue its 'search and analysis of relevant prior art'" and seek leave to amend the invalidity contentions again in the future. (Id. at 12.)
The Court rejected this argument reasoning that the claim construction briefing is not due for several months, the trial is more than a year away, and further requests to supplement will require additional motion practice. (Order at 6-7).
Takeaways - Diligence is the main focus of these types of motions. Again, however, we see the consideration of a "claim construction" impact when evaluating a proposed invalidity contention supplement. This prejudice to the claim construction process seems to be the main argument raised by a plaintiff when facing supplement requests.
In Baden Sports, Inc. v. Wilson Sporting Goods Co. (June 28, 2012), Judge Pechman (Western District of Washington) granted Defendant Wilson's request to supplement its invalidity contentions to add additional prior art references. The main basis for Defendant Wilson's request focused on the Court's adoption of Plaintiff's proposed constructions for each of the four disputed terms. In permitting the requested supplement, the Court focuses on Local Patent Rule W.D. Wash. 124 of the Western District of Washington and notes that amendments to contentions require a "showing of good cause ... absent undue prejudice to the non-moving party." (Order at 2). The Court identified five factors underlying a good cause analysis including:
"(1) the reasons proffered for the need to amend after the deadline for submitting contentions had passed, (2) the diligence of the moving party, (3) the importance of the proposed amendments, together with any prejudice to the moving party if amendment is denied, (4) potential prejudice to the non-moving party, and (5) the availability of a continuance to cure any prejudice." Convolve, Inc. v. Compaq Computer Corp., 2007 WL 700904 at *2 (S.D.N.Y Mar. 7, 2007).
In considering Defendant Wilson' request, the Court noted that it "adopted none of Wilson's proposed claim constructions." (Order at 2). Following the claim construction order, Wilson initiated an expanded search in light of the broader construction of the term "seam." The Court recognized that although "Wilson should have perhaps conducted that broader search earlier, it is reasonable to grant leave given the completely adverse outcome of the Markman hearing, which is the precise situation contemplated by LPR 124." (Order at 3).
As to diligence, Wilson conducted the search quickly, updated its contentions with the new information, and shortly thereafter moved to supplement. The Court dispensed with any claim of prejudice noting that "the amendments are relatively minor and there is still time to allow Baden to conduct discovery and expert analysis relating to the amended material." (Order at 3).
Takeaways - Diligence remains the main consideration for supplemental contentions. Although the Court noted that Wilson likely should not have been so limiting in its initial search, the Court balanced the factors and permitted the supplement. This process raises a question though - how was Wilson expected to know precisely the breadth of Plaintiff's proposed constructions when it served its invalidity contentions prior to the parties exchanging claim construction positions?
We're going through our invalidity contention decisions database to identify cases where a Court's decision considers the impact of supplemental invalidity contentions on the claim construction process under local patent rules. We previously identified the following cases in other blog posts:
- CardSoft, Inc. v. VeriFone Systems, Inc. (May 28, 2012), Judge Payne (Eastern District of Texas)
- Nano-Second Technology Co., Ltd. v. Dynaflex Int'l (June 6, 2012), Judge Lew (Central District of California)
- Bayer Cropscience AG v. Dow Agrosciences LLC (June 7, 2012), Judge Schneider (District of Delaware)
We'll review our database of 85+ cases and eventually identify all relevant cases for this topic.
To start things off, let's consider Play Visions, Inc. v. Dollar Tree Stores, Inc. (November 30, 2010), Judge Pechman (Western District of Washington).
In this case, Judge Pechman granted Defendants' request to amend their preliminary invalidity contentions finding good cause for the proposed amendment, relying on Local Patent Rule LR 124. The Court first determined that the Defendants had been diligent in searching for prior art, and that the contentions supplement were timely provided, with the motion to amend the contentions was filed roughly two months after the contention deadline.
The Court weighed the potential prejudice to the plaintiff and determined that
There is no evidence of prejudice given that the parties have yet to engage in claims [sic] construction and discovery does not end for months.
(Order at 4). Again we see a focus on the claim construction impact with respect to invalidity contentions supplement. Here, the Court was entirely focused on prejudice to a party under the guise of claim construction. From the outset, the Court frames the issue:
Restrictions on amendment to invalidity contentions are aimed at avoiding the "shifting sands" approach to claim construction. See Halo Elecs., Inc. v. Bel Fuse Inc., 2010 WL 3489593, at *1 (N.D. Cal. Sept. 3, 2010) (granting motion for leave to amend invalidity contentions where the defendants argued they search diligently over a broad spectrum of prior art).
(Order at 2). So again, the focus remains on whether allowing supplemental contentions will in some way impact claim construction discovery. We've already explained our viewpoint that Phillips is at odds with how the local patent rules are being applied when prior art supplements are linked to the claim construction process.
We'll continue to report our findings in subsequent posts.
In an earlier post, I discussed the following:
I don't believe the rules were intended to exclude prior art because a plaintiff lacked non-intrinsic prior art during the claim construction process. I continue to look at the evolution of the local rules for linkage between invalidity contentions and claim construction. It would be helpful if someone could point me to any local patent rule comments on this issue. I'm particularly interested in comments detailing why invalidity contentions must precede claim construction. Is it to allow the patent owner to craft proposed constructions in light of prior art (extrinsic evidence)? What principle of claim construction would that be based on?
Here are some further thoughts, after rereading and studying some cases. First, for a district court civil action, "[t]he role [of claim construction] is neither to limit nor broaden the claim, but to define, as a matter of law, the invention that has been patented." Netword, LLC v. Centraal Corp., 242 F.3d 1347, 1352 (Fed. Cir. 2001). Nothing controversial there.
Next, we have the following notion that the rules of claim construction state that claims may not be revised to ignore explicit claim language. See Generation II Orthotics Inc. v. Med. Tech. Inc., 263 F.3d 1356, 1365 (Fed. Cir. 2001) ("claims can only be construed to preserve their validity where the proposed claim construction is 'practicable,' is based on sound claim construction principles, and does not revise or ignore the explicit language of the claims."). Essentially, claims may not be redrafted.
Taking these ideas further, it's not a stretch to surmise that invalidity contentions may impact the validity of the claims subject to construction, but that should not matter for purposes of defining the scope of the invention. Lucent Technologies, Inc. v. Gateway, Inc., 525 F.3d 1200, 125-26 (Fed. Cir. 2008) ("This court has repeatedly held that courts may not redraft claims to cure a drafting error made by the patentee, whether to make them operable or to sustain their validity. To do so 'would unduly interfere with the function of claims in putting competitors on notice of the scope of the claimed invention.'")
So what to make of the "preserving claim validity" maxim? It would seem reasonable that the "preserving claim validity" maxim should only be invoked in such narrow circumstances where "'the court concludes, after applying all the available tools of claim construction, that the claim is still ambiguous.'" Phillips v. AWH Corp., 415 F.3d 1303, 1327 (Fed. Cir. 2005) (en banc) (citing Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 911 (Fed. Cir. 2004)).
If all this is accurate, why are invalidity contentions required before the claim construction process has even started under local patent rules? Are we presuming that claims will remain ambiguous after applying all available tools of claim construction? Certainly requiring contentions before claim construction may be expedient, but what is being accomplished. Moreover, prior art is applied to properly construed claims, so claim construction necessarily comes first. Consider that Phillips specifically states
[W]e have certainly not endorsed a regime in which validity analysis is a regular component of claim construction.
Phillips, 415 F.3d at 1327 (emphasis added); see also Rhine v. Casio, Inc., 183 F.3d 1342, 1345 (Fed. Cir. 1999) ("if the only claim construction that is consistent with the claim's language and the written description renders the claim invalid, then the axiom does not apply and the claim is simply invalid.").
If validity analysis is not a regular component of claim construction, should we consider a change to patent local rules where claim construction discovery precedes contentions, instead of the current practice?
In CardSoft, Inc. v. VeriFone Systems, Inc. (May 28, 2012), Judge Payne (Eastern District of Texas) denied Defendant VeriFone's request to supplement its invalidity contentions to add two additional prior art references. In denying the requested supplement, the Court focuses on Patent Local Rule 3-6(b) of the Eastern District of Texas and notes that amendments to contentions require a "showing of good cause." (Order at 1). The four standard factors underlying a good cause analysis included: (1) explanation for party's failure to timely move for leave to amend; (2) importance of the amendment; (3) potential prejudice resulting from amendment; and (4) availability of continuance to cure prejudice. The Court then determined that the defendant was not diligent because it should have investigated prior art processing terminals based on plaintiff's identification of alleged infringing products.
The Court explained:
The Court is not satisfied that VeriFone acted diligently to discover the Omni 300 and OTA prior art. These references are related to VeriFone's own products, which it should have uncovered even if CardSoft never accused the Omni 3200 payment terminals of infringement. Furthermore, it took VeriFone nearly eight months to produce the references, and then another four months to disclose its invalidity contentions based upon the references. The Court is not persuaded that this shows diligence on VeriFone's part. Verifone's lack of an adequate explanation to explain its delay weighs strongly against granting leave.
(Order at 3).
In the end, the Court was not persuaded that diligence was shown. We were surprised at how the Court resolved the other good cause prongs involving prejudice. As to prejudice, the Court explained:
The importance of these references are quite clear, which weighs in favor of granting VeriFone leave to amend. However, their importance only adds to the prejudice suffered by CardSoft because it was deprived of a meaningful opportunity to consider these references during the claim construction process. Because claim construction was nearly over by the time VeriFone disclosed its invalidity contentions based on the Omni 300 and OTA prior art, and claim construction is now complete, a continuance is not available to cure CardSoft's prejudice.
If the impact on claim construction was not an appropriate factor for invalidity contention supplements, there would be little, if any, prejudice to CardSoft. Maybe the supplement request would have been granted. As we previously suggested here and here, the link between invalidity contentions and claim construction prejudice is tenuous. In this case, the prior art is not part of the intrinsic evidence, and the court noted the importance of the prior art references, yet the supplement request was denied. Although claim construction was concluded, should that fact really impact the inclusion of additional invalidity contentions? The claims mean what they mean. If the claims encompass the prior art then it is what it is.
Takeaways - Diligence is the paramount consideration for supplemental contentions. This ruling indicates that although Defendant VeriFone continued its prior art investigation at a measured pace, the defendant did not move quick enough. Tough case, tough decision. I would prefer not to see the balance of a decision rest on how an invalidity contention supplement impacts claim construction as a reason for denying the supplement. I don't believe the rules were intended to exclude prior art because a plaintiff lacked non-intrinsic prior art during the claim construction process. I continue to look at the evolution of the local rules for linkage between invalidity contentions and claim construction. It would be helpful if someone could point me to any local patent rule comments on this issue. I'm particularly interested in comments detailing why invalidity contentions must precede claim construction. Is it to allow the patent owner to craft proposed constructions in light of prior art (extrinsic evidence)? What principle of claim construction would that be based on? These are somewhat rhetorical questions. Care to comment?
In Nano-Second Technology Co., Ltd. v. Dynaflex Int'l (June 6, 2012), Judge Lew (Central District of California) denied Defendants' request to supplement its invalidity contentions to add an additional prior art reference. In denying the requested supplement, the Court noted that pursuant to Patent Local Rule 3-6 of the Northern District of California, amendments to contentions require a "timely showing of good cause." (Order at 3). The Court determined that defendants were not diligent because they were presumably aware of the prior art reference as of the filing of the complaint. The underlying facts of this motion is where things get interesting.
Plaintiff's patent alleged to be infringed by the defendants is U.S. Patent No. 5,800,311 ("the '311 patent"). The plaintiff's '311 patent was identified to the defendants when the complaint was served in 2010. At some point after defendants served their invalidity contentions, they realized that the asserted '311 patent admitted the Figure 5 depiction of a "conventional wrist exerciser" was prior art. For this reason, defendants wanted to rely on the conceded prior art disclosed in Figure 5 and use the '311 patent as prior art. The Court determined that the defendants lacked the required diligence in identifying the '311 patent as prior art, explaining that:
Regarding the first prong of the good cause inquiry, the Court finds that Defendants cannot meet their burden to establish their diligence in seeking to amend their Preliminary Invalidity Contentions. Defendants have had in their possession a copy of the '311 Patent since the filing of the Complaint on November 30, 2010, and the language of the '311 Patent is clear that FIG. 5 is a depiction of the prior art.
(Order at 3).
It seems understandable how the Court can reach this conclusion as to lack of diligence. What's surprising about this decision is how the Court resolved the second good cause prong - prejudice. For the second prong, the Court explained:
In addition, in addressing the second prong of the good cause inquiry, the Court finds that Plaintiff will be prejudiced by allowing the requested amendment. Though expert reports are now not due until June 29, 2012, Plaintiff has stated that it prepared its claim construction briefing based in part on Defendants' original invalidity contentions. The Court finds that allowing the proposed amendment now in light of Defendants' lack of diligence in seeking [sic] amendment "would undercut one of the purpose [sic] of the patent local rules to provide the parties with certainty as to the opposing party's legal theories." Apple, Inc. v. Samsung Electronics Co. Ltd., 2012 WL 1067548, at *7 (N.D. Cal. Mar. 27, 2012) (citing 02 Micro, 467 F.3d at 1363).
As we suggested previously, the link between invalidity contentions and resulting prejudice in connection with claim construction preparation is fairly tenuous. Although the prior art reference here, the '311 patent, is actually part of the intrinsic record and not extrinsic evidence, is it accurate for plaintiff to suggest that inclusion of prior art admissions for its own patent somehow results in prejudice to its claim construction preparation and strategy? On the first prong of good cause, we take no issue with the Court's determination. On the second prong though, plaintiff has stretched a bit.
Takeaways - Diligence is the driving consideration for supplemental contentions. Organizing invalidity contentions at an early stage in the litigation is key to marshaling all information at the outset of the case, and managing information during the collection and review process. Maybe if the Defendants had a better coordination tool like PatDek (shameless plug), then they would have had more time to consider and appreciate the prior art concessions in the asserted '311 patent.
In Bayer Cropscience AG v. Dow Agrosciences LLC (June 7, 2012), Judge Schneider (District of Delaware) denied Defendant Dow's third request to supplement its invalidity contentions. In denying the requested supplement, the Court noted that the diligence of the moving party is the "key" fact that courts consider when assessing good cause for amendments to contentions. Relying on 02 Micro Intern. Ltd., 467 F.3d 1355, 1364-1367 (Fed. Cir. 2006), the Court explained:
Pursuant to the [02 Micro] decision, the key fact courts should look at to determine whether good cause exists to grant an amendment to a contention is the diligence of the moving party. Diligence has two aspects to it. One is whether the moving party acted diligently to discover that an amendment was appropriate. The second aspect is whether the moving party promptly moved to amend its contentions after it learned an amendment was necessary. The burden is on Dow to show diligence, rather than on Bayer to establish Down was not diligent. Dow has not satisfied its burden.
(Order at 3). Dow sought three sets of amendments. One amendment concerned supplementing its contentions to include arguments, not prior art, that respond to Plaintiff's amended contentions. This proposal was rejected. The second amendment sought to incorporate by reference past briefing by Dow. This proposal was also rejected. The third set of amendments sought to add two recently discovered prior art references. This third proposal was similarly rejected. The reasoning underlying the third proposal is explored below.
For the prior art supplement, Plaintiff Bayer noted the following:
DAS makes no showing whatsoever that it has been diligently searching for prior art; provides no explanation as to how or why the two new pinches of prior art eluded that search; and does not even attempt to explain the circumstances as to how this alleged new prior art came to light.
(Order at 6-7) (citing Bayer Answering Brief at 10-11). The Court essentially agreed with Bayer explaining that, as to the Perkins reference learned of by interviewing the reference's author, "Dow did not explain why it did not conduct its interview earlier" and as to the second Fraley reference, the Court rejected the premise that good cause exists when a reference is intended to rebut arguments by the opposing party. (Order at 7). The Court opined that if supplementing contentions to rebut arguments were permitted, "amended contentions would never cease." (Order at 7).
Takeaways - Good cause and diligence continue to control supplemental contentions. In future posts, I will comment on why invalidity contention supplements should continue to be governed by the good cause requirement, but that the stage of the litigation should be given minimal to no deference, unless expert discovery has commenced.
Judge Schneider in this case found it significant that
In view of the parties' efforts to date and the upcoming Markman hearing, Bayer will be prejudiced if it is now compelled to revise its prosecution and defense strategy to respond to Dow's 'shifting sands' defense. This is the scenario the patent rules were designed to prevent.
(Order at 8).
I respectfully disagree. Supplementing prior art, specifically prior art not of record for the challenged patent, should have no bearing on the Markman hearing, and is unlikely to require a response by the plaintiff that rises to the level of "prejudice." If the supplemented prior art is not compelling, the prior art will essentially be a non-issue. If the prior art is compelling, the prior art rises in importance and should be part of the litigated merits. Expert discovery has yet to begin, and the plaintiff can address the reference in due course with the aid of its expert. Further, because no claim construction order has issued, it would appear to be entirely premature to exclude merit-based evidence. Yes, the local patent rules specify disclosure time frames, but are those time frames justified or merely for expedience?
We've updated our invalidity contention decisions to include recently reported ITC orders.
In Sloan v. Zurn (April 12, 2012), Judge St. Eve (Northern District of Illinois) allowed Defendant Zurn to supplement its invalidity contentions, despite misgivings about Defendant's dilatory disclosures. In granting the requested supplement as to a flush valve alleged to be in public use, Judge St. Eve explained:
The Court agrees that Zurn failed to properly disclose its Community Center Worn Valve invalidity contention. Although the Court agrees that Zurn’s two invalidity contentions are not the same, as is discussed further below, they are based on the same theory such that Zurn should be allowed to assert the newly-articulated defense. It is a close call, however, and it is apparent from the facts in the record that Zurn unexplainably failed to produce the underlying documentation regarding the Community Center Worn Valve to Sloan despite certifying numerous times that its document production was complete. Accordingly, the Court orders Zurn to pay Sloan’s reasonable costs and attorney’s fees incurred in conducting discovery related to the newly-articulated Community Center Worn Valve defense as set forth in the Order.
(Order at 7). Despite the late identification of a new invalidity contention, the Court permitted the supplement. Judge St. Eve appears to have balanced other factors in this case because the new invalidity contention was determined to be belatedly disclosed. The Court was mindful to shift the costs of discovery for the new invalidity contention away from the Plaintiff and to the Defendant. Although not explicitly addressed in the opinion, another factor may have a recently issued Reexamination Certificate issued for the asserted patent, reciting amended and added claims.
Takeaways - There's not much to say about this one. The new contention was similar in theory to a previous contention, but relied on entirely different evidence (previous contention related to laboratory tests showing simulated valve wear while new contention based on valve wear over time at a public facility). The Court does not really address why the new contention was permitted, except that it was a "close call" and that the two contentions "are based on the same theory. (Order at 7). All other factors appear to have favored the Plaintiff in support of its motion to strike the new contention.
At the ITC, In the Matter of Certain Light-Emitting Diodes and Products Containing Same (April 4, 2012), Judge Pender (337-TA-785) denied Respondent's motion to supplement its invalidity contentions as to a single prior art reference. Respondent requested the supplement arguing that
it made diligent efforts to locate and identify prior art in advance of the February 6 deadline, provided timely notice of the prior art it identified, and incorporated by reference the prior art identified in the LG's Notice of Prior Art.
(Order at 1).
In denying the requested supplement to add the Miura prior art reference for "good cause", Judge Pender relied on Ground Rules 7 and 1.10.1:
"The Notice of Prior Art may be amended or supplemented only upon written motion showing good cause." Ground Rule 7 (Feb. 12, 2012). "Note that good cause will not be found absent a showing that the requesting party has taken active steps and made a good faith effort to meet the deadline for which the extension is sought. Also note that lack of prejudice does not equate to good cause." Ground Rule 1.10.1 (Feb. 12, 2012).
(Order at 2). Judge Pender, agreeing that the Miura reference is cited on the face of seven patents related to Respondent's inequitable conduct allegations, determined that Respondent
should have been able to identify the Miura reference before the deadline.
(Order at 3).
Takeaways - Late disclosures at the ITC are not tolerated without sufficient justification. Here, Judge Pender was not convinced that Respondent was diligent in locating the new prior art because the reference appeared in multiple patents related to a different defense theory. What if the Miura reference was cited on only one patent related to the inequitable conduct allegations, different result? Based on the Ground Rules at the ITC for a Notice of Prior Art, some compelling reason must be identified to show why the prior art was not identified by the stated deadline, or expect this type of result to be the norm.
At the ITC, In the Matter of Certain Coenzyme Q10 Products and Methods of Making Same (April 3, 2012), Judge Rogers (337-TA-790) denied Respondents' motion to supplement their invalidity contentions as to a single prior art reference. Respondents' requested supplementation to add the Kanazawa article based on the explanation that the article
was not uncovered until ... counsel ... reviewed the prosecution history of U.S. Patent No. 5,011,858.
In denying the requested supplement for the Kanazawa prior art for "good cause" under Ground Rule 5, governing notice of prior art, Judge Rogers repeated his guidance provided at an earlier hearing concerning Ground Rule 5:
[Ground] Rule 5 talks about notices of prior art. There is a date in the procedural schedule for filing the notice of prior art. That's a not later than date, and if you are late doing it, and you haven't filed it timely, then proof of the matters related to that prior art that's not timely will not be allowed in evidence at the trial, unless you show good cause by a written motion, and the fact that your expert couldn't find the references is not adequate for good cause.
(Order at 2). Judge Rogers reasoned that he warned the Respondents about this situation at the preliminary conference, and therefore denied the proposed amendment to their notices of prior art.
Takeaways - Judge Rogers focused on the fact that identifying prior art after the notice date would only be permitted for good cause, and failure to locate a reference does not constitute good cause. It was also noted that the Kanazawa prior art was a publicly-available reference. With such tight time frames in the ITC, it appears there was little the Respondents could due once the notice period expired, except identify some other rationale to support the "good cause" requirement, different from explaining why the reference could not be found earlier.
We have now posted links to over 70 district court decisions addressing supplementing invalidity contentions, motions to strike invalidity contentions, motions to amend invalidity contentions under local rules, late disclosure of invalidity contentions, and other nuances involving invalidity contentions (invalidity charts, section 103 contentions, differences between contentions and expert disclosures). The entire list of decisions is now arranged by jurisdiction. For now, each decision identifies the Judge, year of decision, and case name.
A list of decisions arranged by jurisdiction can be found here, or via a link in the right hand side bar. The decisions are also arranged by year at the right hand side bar. Using any of these links, the invalidity contention decisions can be downloaded individually or as groups of decisions.
In Patent Harbor, LLC v. Audiovox Corp., et al. (March 30, 2012), Judge Love (Eastern District of Texas) granted-in-part and denied-in-part Defendants' motion to supplement their invalidity contentions as to three prior art references. Defendants were permitted to supplement their invalidity contentions as to two prior art systems, but were denied their supplement request as to one prior art patent ("Mills patent"). Defendants' requested supplementation to add the Mills patent on two grounds related to a changed claim construction - "good faith" (P.R. 3-6(a)(2)) and for "good cause" (P.R. 3-6(b)).
In denying the requested supplement for the Mills prior art patent under the "good faith" standard of P.R. 3-6(a) on the basis of a changed construction, the Court explained:
[Patent Rule 3-6(a)] is intended to allow a party to respond to an unexpected claim construction by the court. This does not mean that after every claim construction order, new infringement [or invalidity] contentions may be filed. That would destroy the effectiveness of the local rules in balancing the discovery rights and responsibilities of the parties.
Nike, 479 F. Supp. 2d at 667. ... Thus, Defendants must show that the Court’s construction was so different from the parties’ proposed constructions that amending their ICs is necessary.
(Order at 5). The Court reasoned that it essentially adopted plaintiff's proposed construction for the term "content video image", except for replacing the word "visual" with "virtual." Because the claim construction for "content video image" was not so different from the plaintiff's proposed construction, the Court determined that the proposed amended invalidity contention was not warranted.
Next the Court turned to the standard "good cause" factors in evaluating the Mills patent:
- the reason for the delay and whether the party has been diligent;
- the importance of what the court is excluding and the availability of lesser sanctions;
- the danger of unfair prejudice; and
- the availability of a continuance and the potential impact of a delay on judicial proceedings.
(Order at 3) (relying on Cummins-Allison Corp. v. SBM Co., Ltd. (E.D. Tex. Mar. 19, 2009).
Under the "good cause" standard, the Court was unpersuaded that the "publicly available reference" could not have been located sooner. Because defendants did not sufficiently explain why the Mills patent was not included in the preliminary invalidity contentions, the diligence factor weighed against Defendants proposed amendment. The Court further determined that the other factors of importance and prejudice each weighed against the Defendants as well.
For the proposed prior art systems supplements, the Court permitted these proposed supplements, reasoning that
Defendants included some documents regarding these systems in their initial [invalidity contentions] ICs, thus providing Patent Harbor notice of the prior art systems.
(Order at 8). Further, the Court was not persuaded with plaintiff's attempt to show prejudice based on the proposed supplements as to these prior art systems.
Takeaways - this decision seems to follow the normal pattern. Unless there is a strong justification for not locating a prior art patent earlier, Courts seem reluctant to permit such a supplement, absent other nuances. The delay period in locating the prior art and requesting supplementation is often the overriding consideration in assessing diligence.
For the prior art systems, supplementing the contentions to include additional information about these prior art systems seemed to turn on the fact that these weren't newly identified systems, but merely additional documentation about systems identified in the preliminary contentions. This factored into the lack of prejudice to the plaintiff, and diligence was established because the additional information was uncovered during discovery.
In Oy Ajat, Ltd. v. Vatech America, Inc. [unpublished] (March 29, 2012), Judge Arpert (District of New Jersey) granted Defendant's motions to stay the case pending reexamination and also to supplement its invalidity contentions based on prior art in the reexamination request. Relying on Patent Local Rule 3-7, Defendant requested a supplement to its prior art disclosures, arguing:
the two new prior art references cited in [its] proposed supplemental contentions became truly material...to the issue of invalidity of the patents-in-suit...[for the first time] on August 23, 2011 when [Plaintiff]...made arguments in [the] reexamination proceedings to avoid invalidity findings by the assigned examiner. [Order at 18]
In a lengthy evaluation of the parties' arguments, the Court considered the prevailing "good cause" factors in evaluating the proposed supplements:
- the reason for the delay and whether a party has been diligent;
- the importance of what is to be excluded;
- the danger of unfair prejudice; and
- the availability of a continuance and the potential impact of a delay on judicial proceedings.
(Order at 36).
The Court ultimately granted the stay, noting that the reexamination had reached ACP (Action Closing Prosecution). With respect to Defendant's supplemental invalidity contentions, the Court explained:
the application itself comes approximately five (5) months after Plaintiff’s submissions to the USPTO, the Court finds that permitting Defendant to serve supplemental Invalidity Contentions at this time will not unduly prejudice Plaintiff given that Defendant presented the USPTO examiner and Plaintiff with the same additional prior art references in September 2011 ..., given that VAK’s recently filed Answer “asserted invalidity of the [patents-in-suit] on all art in the reexamination proceeding including the proposed supplemental prior art” ..., and given the imposition of a stay as set forth above. While noting that the parties may incur additional legal expenses, .... Fact discovery has yet to be completed and, although Markman briefs have been submitted, no hearing has been scheduled such that any additional discovery and/or revisions to Markman briefs may proceed when the stay is lifted. [Order at 40-41]
We earlier commented on a different result where the Court (NDCA) determined that a two month delay in seeking leave to supplement invalidity contentions precluded the request to supplement. In contrast, this New Jersey District Court decision was a bit surprising because there does not seem to be a sufficient justification by the Defendant in requesting a supplement when the relied on prior art was identified in a reexamination request filed months earlier. The Court did not really explain the first "good cause" factor - reason for the delay and diligence, but rather relied on lack of prejudice to the Plaintiff. See Order at 37-41. Defendant's main argument to explain away the delay was that Plaintiff
made arguments in [the] reexamination proceedings to avoid invalidity findings by the assigned examiner. [Order at 18]
This justification seems a bit weak. The art was known at least as of the time of the reexamination filing. Plaintiff's arguments in reexamination don't really explain why the request to supplement was delayed for four to five months. The prior art was either relevant, or it wasn't relevant, despite Plaintiff's reexamination arguments.
Takeaways - this is a bit perplexing. Defendant could have neutralized the delay issue if it would have filed a request to supplement its contentions when it was was drafting the reexamination request, or when it ultimately filed the reexamination request. This seemed to be a close call and the Court's decision is understandable - let the PTO decide the validity issues by imposing a stay. But if the PTO and BPAI are to decide the validity issues, why was it important to allow the supplement when defendant's delay/diligence justification was so thin?
In Apple v. Samsung (March 27, 2012), Judge Koh (Northern District of California) denied Samsung's request to supplement invalidity contentions. Relying on Patent Local Rule 3-6, the Court noted that for amending prior art disclosures, good cause determination factors in the Northern District of California include:
Nonexhaustive examples of circumstances that may, absent undue prejudice to the non-moving party, support a finding of good cause include: (a) [a] claim construction order by the Court different from that proposed by the party seeking amendment; [or] (b) [r]ecent discovery of material, prior art despite earlier diligent search.
The Court further noted that prejudice only becomes a factor after diligence is first established. Samsung unsuccessfully sought to amend its contentions for five prior art references.
For the Mac OS X 10.0 reference, diligence was not shown because "Samsung admittedly knew about the reference shortly after filing its initial invalidity contentions in October 2011." Order at 3. The Court rejected Samsung's argument that discovery delays by Apple excuse Samsung's delay in seeking an earlier supplement, based on Samsung's "acknowledgement" that it had good cause to supplement two and a half months earlier.
For the SuperClock reference, Samsung provided a proposed supplemental invalidity chart months earlier. Diligence was again lacking because Samsung did not move to supplement the contention until several months after providing the invalidity chart for SuperClock. Order at 5.
For the Glimpse prior art, Samsung admitted that it first became aware of the prior art, months before the requested supplement, during a deposition of an Apple employee. Samsung, however, had difficulty utilizing a function version of the underlying source code. Again the Court focused on the timeline of events, determining that the delay in moving to supplement negated the predicate diligence for the proposed supplement. Order at 6-8.
For the Cirque GlidePoint reference, Samsung provided timely invalidity contentions that incorporated a patent directed to GlidePoint. Samsung then sought discovery from Cirque for additional documentation about GlidePoint. The Court focused on purported delays in seeking additional GlidePoint information through third party discovery, determining that Samsung had not established diligence in pursuing the additional discovery. The Court therefore denied Samsung's request as to GlidePoint. Order at 8-9.
For the Synaptics patent, the Court explained the different ways that Samsung was aware of the Synaptics patent. Because Samsung did not provide an invalidity chart for this patent, the Court again determined Samsung failed to show diligence pursuing contentions involving the Synaptics patent. Samsung relied on discovery issues involving third party discovery of Synaptics, but the Court focused on the requested supplement as to the patent itself, which Samsung was aware of earlier in the discovery period. Order at 9-10.
Takeaways - this is a difficult case to reconcile. It is understandable why Samsung did not seek immediate supplement for some of the prior art. It lacked documentation to provide a compliant proposed supplement in support of its motion. To avoid this problem in the future, it may be advisable to pursue a supplement once a party becomes aware of relevant prior art. In other words, seek to amend contentions even without complete information to support the contentions, and be prepared to aggressively pursue discovery to obtain the missing information. Although the proposed supplements will not necessarily include the actual contentions because of missing information, there will not be a time lag between first knowledge of the prior art and the underlying motion seeking to supplement your contentions, while you pursue the supporting documentation.
In Nomadix, Inc. v. Hewlett-Packard Company et al. (March 22, 2012), Judge Pregerson (Central District of California) denied defendants' request to supplement their invalidity contentions. The Court noted that for amending prior art disclosures, good cause determination factors include:
the relevance of the newly-discovered prior art, whether the request to amend is motivated by gamesmanship, the difficulty of locating the prior art, and whether the opposing party will be prejudiced by the amendment.
(quoting Acco Brands, 2008 WL 2168379, at *1 (N.D. Cal. May 22, 2008)).
The decision appears to suggest that the new prior art (the Vos article) is relevant and that the amendment request is not motivated by gamesmanship. Although these factors may have favored the defendants, the Court seemed troubled that the defendants did not identify the Vos article sooner, noting that:
Defendants fail to adequately explain their delay in discovering the Vos article, when it was one of only eleven references cited in the 1997 SPINACH paper upon which they based their initial invalidity contentions. (p. 7).
As for prejudice to Plaintiff Nomadix, the supplemental contentions extend beyond the Vos article.
Defendants argue that there is no prejudice here, because they are not shifting or adding theories, but simply developing "the same theory set forth in the preliminary invalidity contentions in July 2010 and first supplemental invalidity contentions in July 2011." (Reply at 8.) Specifically, those contentions alleged that the '118 Patent and the SPINACH system rendered invalid Novadix's '894 and '716 Patents, respectively. As Nomadix explains, however, Defendants seek to go well beyond developing these prior art theories. Defendants now contend that the '118 Patent and SPINACH system invalidate several additional Nomadix patents. Likewise, Defendants contend that three other patents are invalidated by a new reference - the Vos article. In short, Defendants now theorize that prior art invalidates seven Nomadix patents, instead of only two. Nomadix therefore reasonably argues that responding to these new contentions would require additional fact discovery, which is now closed.
Takeaways - allege invalidity against all asserted patents for each of your prior art references in your preliminary invalidity contentions, and, be sure to consider references to other prior art in your main prior documents because that may be a factor against you when requesting an invalidity contention supplement.
In Gen-Probe Incorporated v. Becton Dickinson And Company (February 22, 2012), Judge Benitez (Southern District of California) declined plaintiff's suggestion to limit the number of invalidity references applied against the asserted claims. Plaintiff Gen-Probe reasoned that if it is required to limit the asserted claims:
it should be required to limit its claims only after the Final Invalidity Contentions are served. In the alternative, Gen-Probe suggests the Court require it to limit its claims to sixty at this time, and further require it to limit the number to thirty after [Defendant] BD's Final Invalidity Contentions are served. If the Court accepts this suggestion, Gen-Probe also seeks an order requiring BD to limit its Final Invalidity Contentions to no more than one anticipatory reference and one obviousness combination consisting of three or fewer references per asserted claim.
Order at 3. The Court ultimately ordered Gen-Probe to limit its asserted claims to no more than 30 claims, and further ordered BD to serve Final Invalidity Contentions against the reduced set of 30 claims. The Court also provided a mechanism for Gen-Probe to assert additional claims beyond the set of 30 claims, and left open the issue for Gen-Probe to seek limitations on the number of references that could be asserted against the reduced claim set. This last issue - limiting the number of prior art references - seems to be gaining traction.
Patent owners faced with limiting asserted claims are now trying to turn the tables on defendants by seeking to link a reduction in the number of asserted claims with a corresponding limit on the number of applied prior art references. We've now seen this strategy in at least two other cases. In an earlier post, we noted that Judge Folsom limited the number of Defendants' prior art references (limit of 18) that could be maintained against the Plaintiff's reduced set of claims. We also saw a tiered prior art reduction procedure established in Oracle v. Google.
If this trend continues, certain factors should be considered before establishing an arbitrary limit on prior art references.
First let's consider whether any efficiency is gained by limiting the number of asserted claims. Then let's consider whether the same concepts hold true when limiting the number of prior art references. When limiting asserted claims, an efficiency is gained in that the number of claim construction issues/terms/disputes is likely to be lower with a smaller set of claims. A further benefit is that less analysis is required by lawyers and experts for at least infringement, non-infringement, invalidity and validity grounds because of the claim number reduction.
What are the benefits to limiting the number of prior art references? When compared with limiting asserted claims, generally speaking, a limit on the number of prior art references has little impact on reducing claim construction issues. Further, the number of prior art references does not have an impact on infringement/non-infringement issues. The best that can be said for limiting the number of prior art references is that invalidity/validity expert reports might be reduced in scope with less references. More importantly for patent owners, though, limits on references would mean less prior art would need to be considered when assessing the relative strength of remaining claims claims or when reducing the set of claims.
We've seen that at least one party, Gen-Probe, tried to secure a large advantage when it proposed that defendant's Final Invalidity Contentions be limited
to no more than one anticipatory reference and one obviousness combination consisting of three or fewer references per asserted claim.
At the very least, any proposed reductions should consider: (1) the complexity of the claims (number of limitations and length of the claim); (2) what constitutes a reference for counting purposes (do multiple documents about the same prior art product count as multiple references); (3) the breadth of the claims (do the claims read broadly and implicate different technologies across multiple industries rendering more relevant prior art available); and (4) different limits for dependent and independent claims.
More issues to consider: should limits be linked to the number of asserted claims? should the limits be in the aggregate or on a claim-by-claim basis? how to assess the complexity of a claim when imposing limits? should the reduced number of references be linked as a percentage of the initial number of references applied against the asserted claims?
More as this issue evolves.