Court denies addition of single prior art reference to invalidity contentions

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.

Series: a deeper look at local patent rules and invalidity contentions (obviousness)

Today we'll take a look at the local patent rules across jurisdictions and the specificity required for obviousness contentions.  You can find an index of local patent rules here if you want to browse rules in different jurisdictions. Certain jurisdictions, like the Eastern District of Texas shown below, specify the following for  invalidity contentions relying on obviousness challenges.

L. Pat. R. 3-3(b) provides:

(b) Whether each item of prior art anticipates each asserted claim or renders it obvious. If a combination of items of prior art makes a claim obvious, each such combination, and the motivation to combine such items, must be identified;

Other jurisdictions, like the Northern District of California, do not recite the requirement to identify the motivation to combine prior art references when obviousness contentions are based on a combination of prior art.

L. Pat. R. 3-3(b) provides:

(b) Whether each item of prior art anticipates each asserted claim or renders it obvious. If obviousness is alleged, an explanation of why the prior art renders the asserted claim obvious, including an identification of any combinations of prior art showing obviousness;

In summary, certain jurisdictions specifically require a motivation to combine identification, while others do not.  We have summarized a list of the jurisdictions that include and do not include this requirement.  Certainly, for a given jurisdiction, Court decisions may indicate that motivations to combine must be included for obviousness-based contentions, even if not specifically recited in the local patent rules.

The following ten (10) jurisdictions recite that a motivation to combine prior art must be identified:  Northern District of Georgia; Northern District of Illinois; Eastern District of North Carolina; Western District of North Carolina; District of New Hampshire; Northern District of New York; Western District of Pennsylvania; Eastern District of Texas; Northern District of Texas; and District of Utah (J. Campbell).

The following thirteen (13) jurisdictions do not recite that a motivation to combine prior art must be identified:  Northern District of California; Southern District of California; District of Idaho; District of Maryland; Eastern District of Missouri; District of New Jersey; District of Nevada; Northern District of Ohio; Southern District of Ohio; Western District of Tennessee; Southern District of Texas; Eastern District of Washington; and Western District of Washington.

Let us know if you're aware of other differences of interest.

Third attempt to supplement invalidity contentions unsuccessful

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?

Some other thoughts on technology enhancements to the practice of law

Lithosphere is not alone in talking about applying technology to improve legal processes.  From the blog below, there's even a class at Georgetown Law School called "Technology, Innovation and Law Practice."  The blog observes that:

The technology is available now to improve some of the functions that lawyers typically perform.

from 3 Geeks and a Law Blog: The Next Generation of Computers Practicing Law.  Niki Black of MyCase also explains that

I truly believe that over the next few years, lawyers who embrace and utilize technology effectively–in particular Internet-based and mobile tools–will undoubtedly have an edge over their less tech-savvy colleagues.

from MyCaseInc blog:  Can you automate the practice of law?

Our belief is that by replacing a typical patent lawyer function (manually organizing/analyzing patent claims and prior art in a folder structure) with new technology-based tools (database environment providing an edge over standard patent claim chart analysis), a lawyer can have a better grasp on the analysis.  A deeper understanding of the more subtle issues can then be achieved.

We focus on developing tools that enhance the understanding of the boundaries of patent protection.  The tools can be applied to infringement and invalidity analysis, but the underlying principles are the same - what is the proper scope of the claims.  If the claims are too broad based on the prior art, then a challenge can be made.  Does the claim scope really reach an accused product or service?  All of this is shaped by the prosecution history of the patent, prior art considered during prosecution, any stated reasons for allowance, and prior art not considered during prosecution.  This is a lot of information to track, process and understand.

Give us a call and see how we can help you in your practice.

Invalidity contention decisions

We've updated our invalidity contention decisions to include recently reported ITC orders.

Andy Swan - The best reason to start a business (or Prototype, Pivot, Platform)

This sums up why we formed Lithosphere in the first place - to build out PatDek:

There are tons of reasons to start a new business.

Want to know the best one?  Here it is:

“Because I want to be its first customer”

via Andy Swan • The best reason to start a business (or Prototype, Pivot, Platform).

Since 2002 we looked for a solution to better understand technology innovations to map them to patents.  We couldn't find anything close to suit our needs.  We decided to "roll" our own solution to tackle these problems and became PatDek's first users.  Now we're sharing it with you.

Series: a deeper look at local patent rules and invalidity contentions (NDNY)

Today we'll take a look at the local patent rules for the Northern District of New York, specifically obviousness contentions.  You can find an index of local patent rules here if you want to browse rules in different jurisdictions. The Northern District of New York specifies the following for invalidity charts and invalidity contentions relying on obviousness challenges:

L. Pat. R. 3.3(b)(2) provides:

(2) Whether each item of prior art anticipates each asserted claim or renders it obvious. If obviousness is alleged, an explanation of why the prior art renders the asserted claim obvious, including an identification of any combinations of prior art showing obviousness, the reason why one of ordinary skill in the art would have combined the references at the time of the invention in issue in the case, and identification of what the accused considers to be the primary reference.

L. Pat. R. 3.3(b)(3) provides:

(3) A chart identifying where specifically in each alleged item of prior art each limitation or view of each asserted claim is found, and for utility patents, including for each limitation that such party contends is governed by 35 U.S.C. § 112 ¶ 6, the identity of the structure(s), act(s), or material(s) in each item of prior art that performs the claimed function;

{C}Unlike most local patent rules, the NDNY requires an "identification of what the accused considers to be the primary reference."  NDNY L. Pat. R. 3-3(b)(2).  Not only does a defendant need to identify "any combinations" to show obviousness, but the primary reference needs to be identified.  Most jurisdictions merely require an identification of obviousness combinations, but not the primary reference.  In this Series on local patent rules, we'll address other nuances in jurisdictions for your consideration.

Let us know if you're aware of other differences of interest.

Although a close call, Court allows supplement to invalidity contentions

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.

Request to supplement contentions denied where prior art was identified in related patents

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.

Twitter's Innovator's Patent Agreement

Taking a break from the typical contentions-driven posts, it was refreshing to see that Twitter is taking a stand about how it intends to use its patent portfolio.  The press release provides:

The IPA is a new way to do patent assignment that keeps control in the hands of engineers and designers. It is a commitment from Twitter to our employees that patents can only be used for defensive purposes. We will not use the patents from employees’ inventions in offensive litigation without their permission. What’s more, this control flows with the patents, so if we sold them to others, they could only use them as the inventor intended.

I found this interesting because it shows how that the company is trying to view its patents from an inventor's perspective.  If an inventor feels that his or her novel idea was plainly stolen, the inventor may be adamant about seeking redress.  This may play well for a jury as well.  Although the company has somewhat constrained how it could monetize its portfolio in the future, it has now aligned its interests with those of its inventors' desires for their patents.

Patent claim concepts applied in PatDek

Following up on our earlier post, below is a quick illustration to show you how PatDek organizes claim concepts and uses the concepts to analyze prior art for invalidity contentions.

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interface screenshots

As you can see, the concepts are defined using the Administration interface (left) and then used to analyze prior art references (right, top and bottom).  In this way, the Administration interface establishes the concept for a case to be considered by a user when analyzing prior art references for a case.

How to break down patent claims with PatDek

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claims understood as concepts

Here is a pictorial of the process that describes how to understand the idea of "concepts" as they relate to patent claims and prior art.  The main idea, as shown in the graphic below, is that patent claims can be represented concepts.  We utilize this process because patent claims often use the same or similar words to cover a particular feature.

As above, the color-highlighting generally indicates features recited in the claim language.  The different colors represent different features recited in the claim.  The user determines how a claim can be divided into different concepts.  In the next graphic, we show a group of concepts.  Once concepts are identified for one claim, the same concepts can be used for other claims.

As below, three claims can be represented by seven concepts.  Because certain concepts are repeated (as indicated by arrows), they are reused in different claims.

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concepts representing multiple patent claims

linking patent claims to concepts

In a final graphic (below), the concepts are shown to link the patent claims and the prior art.  By analyzing the prior art using concepts, the user does not need to repeatedly refer back to the claim language.  The concepts, not claim language, are used to analyze the prior art (another post on claim concepts here).  At this level of prior art review, different teachings of the references can be matched up together.  These mashups of the references form patent claim charts and invalidity contentions.  Using the PatDek interface, different prior art mixes can now be generated by the user.

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linking multiple patent claims to prior art using concepts

Failure to locate prior art earlier is not good cause

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.

Local patent rules by jurisdiction

We recently completed an update to our list of local patent rules.  You can now find a list of each jurisdiction that provides patent local rules, a corresponding link to the patent rules or PDF, and excerpts of the specific rules concerning invalidity contentions and invalidity charts. Take a look and let us know what you think.  We still need to add a couple of additional jurisdictions.

Court decisions involving invalidity contentions

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.

Different claim construction does not warrant invalidity contention supplement

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:

1. the reason for the delay and whether the party has been diligent;
2. the importance of what the court is excluding and the availability of lesser sanctions;
3. the danger of unfair prejudice; and
4. 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.

Despite four month delay, supplementing invalidity contentions warranted

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:

1. the reason for the delay and whether a party has been diligent;
2. the importance of what is to be excluded;
3. the danger of unfair prejudice; and
4. 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?

Delays preclude invalidity contention supplements

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.

Cited prior art was a due diligence factor in denying invalidity contention supplement

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.

PatDek handles newly asserted patent claims

Has this happened in your patent litigation practice before? Discovery is ongoing and you're working on finalizing your invalidity contentions against 20-30 claims from 2 patents with your invalidity expert.  Your case is well-organized, you've refined your invalidity positions, and selected the most relevant disclosures for your 102 and 103 contentions.

Everything is, for the most part, under control.  In litigation though, there's a reason why we expect the unexpected.  Suppose now that the plaintiff-patent owner attempts to seize an advantage and asserts 2 more patents against your client adding another 20 claims into the case.  If you weren't using PatDek, you would scramble a team of associates to extract portions of your existing invalidity contentions/charts and pull together another 50-60 charts against the newly asserted claims.

If you were using PatDek for your case, the solution is much simpler.

Step one - type in each patent number to add the newly asserted patents to your case.

Step two - link your existing concepts to the new claims of interest for each newly asserted patent.

Step three - select the claims and references you want in your charts.

It really was that simple for one of our clients.  In a couple of hours, the client had added in the new patents, linked existing concepts to 20 or so claims, and was generating invalidity charts against those new claims.  The new patent claims were closely related to the other claims in the case so no additional concepts were needed, nor was a re-review of the prior art for new concepts necessary.  If new concepts were required, the concepts could be added, linked to the relevant claim limitations, and a focused review of the prior art could be done looking just for the new concept(s).

PatDek can adapt to changes in your case.  Are you really prepared if you're not using PatDek?