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I N T H E U N I T E D ST A T ES D IST R I C T C O U R T
E AST E R N D IST R I C T O F T E X AS
M A RSH A L L D I V ISI O N
INNOVATIVE DISPLAY
TECHNOLOGIES LLC,
Plaintiff,
v.
A C E R IN C. AND A C E R A M E RI C A
C O RP.,
Defendants.
C . A . No. 2:13-cv-522
(Consolidated L ead C ase)
JU R Y T R I A L D E M A N D E D
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I. B A C K G R O U N D O F T H E D ISPU T E
On October 15, 2014, Defendants served Amended Invalidity Contentions (the QHZ
cRQWHQWLRQV1 RQ3ODLQWLIIRU,'7This is the second time Defendants have attempted to amend
their invalidity contentions; the Court previously denied 'HIHQGDQWVILUVWDWWHPSW2
This time, mere days prior to the discovery deadline, 'HIHQGDQWVQHZFRQWHQWLRQVadd nine
new prior art patents RQWRSRIWKHSDWHQWVDQGSULQWHGSXEOLFDWLRQVOLVWHGLQ'HIHQGDQWVRULJLQDO
contentions.3 )XUWKHUPRUH'HIHQGDQWVQHZFRQWHQWLRQValso add nine alleged prior art products
WKDWZHUHQHYHUSUHYLRXVO\GLVFORVHGLQGHHG'HIHQGDQWVoriginal contentions contained no prior
at products at all.4 In total, this amendment attempts to introduce almost 140 new allegations that
asserted claims are anticipated anGDQXQWROGPDQ\PRUHFRPELQDWLRQVRISULRUDUWREYLRXVQHVV
combinations.5
Patent Rule 3-6 governs whether a party can amend its invalidity contentions in this
District, and that rule gives a party two options to amend: (1) after an unexpected claim
construction according to P.R. 3-6(a); or (2) after seeking leave and showing good cause to amend
under P.R. 3-6(b). 'HIHQGDQWV new contentions do not arise from an unexpected claim
construction, and Defendants did not seek leave to amend. Accordingly, Defendants should not be
permitted to amend their invalidity contentions at the eleventh hour. Such broad amendments on
the eve of the discovery deadline are antithetical to the rules and highly prejudicial to IDT.
P L A I N T I F F S M O T I O N T O S T R I K E A M E N D E D I N V A L I D I T Y C O N T E N T I O NS
P A G E 1
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I I.
A R G U M E N TS A N D A U T H O R I T Y
P L A I N T I F F S M O T I O N T O S T R I K E A M E N D E D I N V A L I D I T Y C O N T E N T I O NS
P A G E 2
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by the Court were somehow unexpected.12 Defendants amendments are almost exclusively
premised on the argument that, because Defendants lost their proposed constructions, that was
XQH[SHFWHGDQGthey should be allowed to amend their contentions.13 However, by losing their
claim constructions arguments, Defendants do not receive a consolation prize of carte blanche
authority to amend their invalidity contentions.14 6XFKDSROLF\ZRXOGHQFRXUDJHIXWXUHDFFXVHG
infringers to propose narrow constructions focused on non-infringement while sidelining potential
LQYDOLGLW\GHIHQVHVXQWLOWKH&RXUWLVVXHVLWVFODLPFRQVWUXFWLRQRSLQLRQ 15 Thus, the standard is
DQXQH[SHFWHGFRQVWUXFWLRQDQGQRQHRIWKHWHUPVLGHQWLILHGE\'HIHQGDQWVreceived unexpected
constructions that justify the sweeping amendments that Defendants seek.
See Claim Construction Memorandum and Order, August 26, 2014, Dkt. No. 101 (construing twelve groups of
terms).
13
See generally, Exhibit C (discussed in more detail below).
14
F inisarDW$SDUW\FDQQRWDUJXHWKDWEHFDXVHLWVSUHFLVHSURSRVDOIRUDFRQVWUXFWLRQRIDFODLPWHUPLVQRW
adopted by the court, it is surprised and must prepare new invalidity defenses to meet claims of infringement. In the
first place, courts seldom simply adopt the construction of one party or the other. Secondly, accepting such an
argument would encourage parties to file narrow proposed constructions with an eye towards hiding important prior
DUWXQWLOVKRUWO\EHIRUHWULDO
15
MASS Engineered Design, Inc. v. Ergotron, Inc. , 250 F.R.D. 284, 286 (E.D. Tex. 2008).
16
'NW1RDWDQGFRQVWUXLQJFRQWLQXRXVVLGHZDOOVWKHDLUJDSWHUPDQGWR>VXLWILW@DSDUWicular
DSSOLFDWLRQDVSODLQPHDQLQJ
17
See id. DWDQGVKRZLQJ3ODLQWLIIVSURSRVHGFRQVWUXFWLRQs).
12
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P A G E 3
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2. 7UDQVLWLRQ5HJLRQ
)RUWUDQVLWLRQUHJLRQ,WKH&RXUWFRQVWUXHGWKHWHUPDVa region configured to transmit
OLJKW21 'HIHQGDQWVRZQSURSRVHGFRQVWUXFWLRQZDVDUHJLRQWKDWVSUHDGVDQGWUDQVPLWVOLJKW
The differences between the two are minor, and cannot justify the substantial amendments that
Defendants seek. Judge Clark summarized this issue well in F inisar :
F inisar, at 901 (emphasis added); see also MASS Engineered Design, Inc. v. Ergotron, Inc. , 250 F.R.D. 284, 286
(E.D. Tex. 2008) (Davis, J.) GHQ\LQJDQDUJXPHQWIURPDQDOOHJHGLQIULQJHUWKDWLWGLGQRWDQWLFLSDWHWKHFRXUWVFODLP
FRQVWUXFWLRQV EHFDXVH WKH &RXUW DGRSWHG DOO RI >SDWHQW RZQHUV@ SURSRVHG FRQVWUXFWLRQV ZLWKRXW PDMRU
PRGLILFDWLRQ
19
Appendix &DWDUJXLQJWKDWWKHWHUPFRQWLQXRXVVLGHZDOOVZDVXQH[SHFWHGEHFDXVHWKH&RXUWUHIXVHGWRLPSRUW
the limitations that required the (1) uninterrupted walls; (2) that are free of breaks; and (3) on the side of the tray); see
also id. at 3-DUJXLQJWKDWWKHDLUJDSWHUPZDVXQH[SHFWHGEHFDXVHLWGRHVQRWLPSRUWWKHFRQWLQXRXVOD\HURIDLU
limitation that Defendants sought; note that Appendix C glosses over the full extent of the limitation sought by
Defendants, which required that, for air gap to exist between two things, they could never touch at any point D
continuous layer of air between the sheet, film, plate or substrate and the panel member such that they have no direct
SK\VLFDOFRQWDFW
20
MASS Engineered, at 286.
21
Dkt. No. 101 at 22.
18
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P A G E 4
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A party cannot argue that because its precise proposal for a construction of a claim
term is not adopted by the court, it is surprised and must prepare new invalidity
defenses to meet claims of infringement. In the first place, courts seldom simply
adopt the construction of one party or the other. Secondly, accepting such an
argument would encourage parties to file narrow proposed constructions with an
eye towards hiding important prior art until shortly before trial. Finally, one of the
goals of the Federal Rules of Procedure and the Local Patent Rules is to speed up
the litigation process and make it less expensive. A party simply cannot wait until
shortly before trial to prepare its case. Invalidity is an affirmative defense, and the
party which does not properly investigate applicable prior art early enough to timely
meet disclosure requirements risks exclusion of that evidence.22
Defendants cannot argue that, merely because their SUHFLVHSURSRVDOIRUWUDQVLWLRQUHJLRQZDV
not adopted, Defendants are surprised and must prepare new invalidity defenses.
F inisar, at 901-02.
Dkt No. 101 at 11.
24
Id. at 7.
25
Appendix C at 5.
26
See, e.g., Dkt. 101 at 7; Dkt. 86 at 3-4.
27
See Dkt 82 at 1-2.
22
23
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P A G E 5
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include; Defendants did not and could not refute that fact in their briefing; and those same patterns
ZHUHSDUWRI3ODLQWLIIVSURSRVHGFRQVWUXFWLRQV
4. 7KH/RZ/RVV7HUPV
The Court construed the term pass through a liquid crystal display with low loss as
DQDORJRXVWRDZKHUHE\FODXVH>WKDW@GRHVQRWOLPLWWKHFODLPVLQZKLFKLWDSSHDUV 28 For this
term, Defendants do not point to any particular art that they contend is now applicable because
that art previously did not previously PHHWWKHORZORssOLPLWDWLRQHere, the Court did not add
DQDGGLWLRQDOXQH[SHFWHGOLPLWDWLRQWRWKHSDUWLHVFRQVWUXFWLRQ$QG'HIHQGDQWVZKROO\IDLOWR
GHPRQVWUDWH KRZ DQ\ RI LWV H[LVWLQJ DUW PHW LWV FRQVWUXFWLRQ RI ORZ ORVV EXW QRZ PXVW EH
supplemented due to an unexpected construction. To the contrary, Defendants merely argued at
28
29
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P A G E 6
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30
Appendix C at 6.
Id.
32
MASS EngineeredDW:KLOHLQYDOLGLW\DUJXPHQWVPD\SURYHWREHDFRVWO\HQGHDYRU WKLV&RXUWVUXOHVREOLJH
>DQDFFXVHGLQIULQJHU@WRDVVHUWVXFKDGHIHQVHHDUO\LQWKHOLWLJDWLRQLILWLVJRLQJWRDVVHUWWKHGHIHQVHDWDOO
31
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P A G E 7
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P A G E 8
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To determine whether good cause exists, this Court has considered four factors: (1) the
H[SODQDWLRQIRUWKHSDUW\VIDLOXUHWRPHHWWKHGHDGOLQHWKHLPSRUWDQFHRIWKHDPHQGPHQW
potential prejudice from allowing the amendment; and (4) the availability of a continuance to cure
such prejudice.35 None of those factors weigh in favor of new contentions.
1. Defendants cannot explain why they failed to meet the original deadline to disclose
the alleged prior art to ID T.
Defendants cannot explain why they failed to disclose the new references and products
when their invalidity contentions were originally due. In the GeoTag case, when much less time
elapsed between service of invalidity contentions and a motion for leave to amend, this Court
denied the motion because the defendants did not adequately explain why they missed the
deadline.36 In GeoTag, the defendants served their invalidity contentions on August 17, 2012.37
Three months later, the defendants moved for leave to supplement their invalidity contentions.38
2QHRIWKHGHIHQGDQWVFRXQVHOhad gone through some old boxes of books while cleaning out his
garage and came across [an early AOL User Guide]ZKLFKEHFDPH one of the references the
defendants sought to add.39 7KHGHIHQGDQWVthereafter searched for earlier versions of the AOL
User Guide, as well as additional similar references relating to online Internet service providers
which became other references that the defendants sought to add.40 Ultimately, this Court held,
'HIHQGDQWV only explanation for its untimely invalidity contentions is that counsel
happened upon a reference while cleaning out his garage. Such happenstance
discovery in these circumstances does not demonstrate the diligence necessary to
support the late supplementatLRQ QRZ UHTXHVWHG ,Q WKH &RXUWs view, to hold
35
*HR7DJ,QFY)URQWLHU&RPPFQV&RUS, No. 2:10-CV-265, 2013 WL 2637141, at *1 (E.D. Tex. June 12, 2013)
(Gilstrap, J.) (citing S & W Enters., L.L.C. v. Southtrust Bank of Ala., NA , 315 F.3d 533, 536 (5th Cir. 2003)).
36
See GeoTag, 2013 WL 2637141, *1.
37
Id.
38
Id.
39
Id.
40
Id.
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P A G E 9
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Id.
Computer Acceleration Corp. v. Microsoft Corp. , 503 F. Supp. 2d 819, 822 (E.D. Tex. 2007) (Clark, J.) (citation
omitted).
43
See, e.g., MacroSolve, 2013 WL 3833079, *5 (stating in its discussion that defendants failed to show no prejudice,
+aving [plaintiff] contend with an additional seven references, which Defendants do not show to be noncumulative,
would needlessly detract from time spent on claim construction as well as the already disclosed referencessee also
Computer Acceleration Corp. v. Microsoft Corp. , 481 F. Supp. 2d 620, 623 (E.D. Tex. 2007) The patent holder
wants to know about every possible prior art reference that might invalidate its patent, so that it can carefully craft
proposed definitions that make its patenWFRYHUDJHDVEURDGDVSRVVLEOH without being so broad as to be invalidated
by soPHSULRUDUWUHIHUHQFH
41
42
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P A G E 10
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not be allowed the benefit of hindsight to bring new art into this case. Defendants could have
discovered the new patents and products within the reasonable time frame and sequence of
disclosure set forth by this Court and its Local Rules.
At this advanced stage of the litigation, IDT has developed its case in reliance on
'HIHQGDQWVLQYDOLGLW\FRQWHQWLRQV7KLVLQFOXGHV,'7VVWUDWHJLFGecisions to focus its efforts on
certain patents among the patents-in-suit and certain claims of those patents. For those claims, IDT
has spent substantial effort developing its positions on infringement, validity, and damages. An
amendment at this stage cRXOGQXOOLI\,'7VSULRUHIIRUWVDQGUHTXLUH,'7WRGHYHORSLWVFDVHDQHZ
'HIHQGDQWV DWWHPSW WR DPHQG WKHLU FRQWHQWLRQV LQ WKLV ODZVXLW RQO\ WZHOYH GD\V EHIRUH
opening expert reports is so late that the prejudice to Plaintiff is clear. In the Macrosolve case, the
motion to amend invalidity contentions was filed five months before the claim construction
hearing, and the court found prejudice.44 In GeoTag, this Court denied a motion to amend filed
three months before the claim construction hearing.45 In both of those cases, the defendants filed
motions amend much earlier than would occur here.
3. Defendants cannot offer any details explaining why the amendment they seek is
important.
Without any evidence to the contrary, the new contentions should be considered merely
cumulative of those in DefendantsSULRULQYDOLGLW\FRQWHQWLRQV. Thus, they should be considered
unimportant.46
44
2013 WL 3833079 (July 23, 2013), at *1-2, 5 (motion filed on April 16, 2013; claim construction hearing scheduled
for September 26, 2013, prejudice found).
45
2013 WL 2637141 (June 12, 2013), at *1 (motion filed on Nov. 17, 2012, motion denied) and Dkt. No. 417 (showing
Markman hearing occurring on Feb. 12, 2013).
46
See MacroSolve, Inc. v. Antenna Software, Inc. , No. 6:11-CV-287, 2013 WL 3833079, *3 (E.D. Tex. July 23, 2013)
(Love, M.J.) (in a discussion holding that defendants had failed to prove that prior art references were important,
GEICO fails to show the distinctive value of the recently discovered prior art references. In other words, GEICO
does not show the seven references are not cumulative in light of the other 250 prior art references already asserted
P L A I N T I F F S M O T I O N T O S T R I K E A M E N D E D I N V A L I D I T Y C O N T E N T I O NS
P A G E 11
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Macrosolve, a case that was much less progressed than this one, the court held that a continuance
would not alleviate the potential prejudice to plaintiff.47
I V.
C O N C L USI O N
Plaintiff respectfully asks this Court to strike the new contentions. Defendants cannot show
that the new contentions are proper amendments under P.R. 3-6. In their original contentions,
Defendants identified no products. Now Defendants seek to add nine alleged prior art products to
the case. These products were available for Defendants to find before this late stage of the case.
Similarly, the nine prior art patents were also available for Defendants to locate and identify well
before this late stage of the case. Defendants simply were not diligent in obtaining those references,
and they should not be allowed to add them under the pretense of unexpected claim constructions.
See :/
the Court is not persuaded that a continuance extending the deadlines prior to the
claim construction hearing would alleviate the potential prejudice to >SODLQWLII@0DFUR6ROYH
47
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P A G E 12
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Respectfully submitted,
D E F E N D A N T S M O T I O N T O S T R I K E A M E N D E D I N V A L I D I T Y C O N T E N T I O NS
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C E R T I F I C A T E O F SE R V I C E
The undersigned hereby certifies that all counsel of record who are deemed to have
consented to electronic service are being served this 3rd day of November, 2014, with a copy of
this document via electronic mail pursuant to Local Rule CV-5(d).
C ERTIFICAT E O F C ONFERENCE
I hereby certify that counsel for Plaintiff has conferred in good faith with counsel for
Defendants on the relief sought in this Motion at an in-person meet and confer between lead and
local counsel for all parties, held on October 24, 2014. The parties conferred for over two hours.
The conference was attended by the undersigned as counsel for IDT, Jamie Beaber as lead counsel
for Dell and HP, and Gil Gillam, as local counsel for HP, and Peter Kerr, as local counsel for Dell,
attended for Defendants. Despite these efforts, the parties have been unable to resolve the dispute,
and the parties are at impasse.
D E F E N D A N T S M O T I O N T O S T R I K E A M E N D E D I N V A L I D I T Y C O N T E N T I O NS