ChemFree Corp. v. J. Walter, Inc.

250 F.R.D. 570, 2007 U.S. Dist. LEXIS 97116, 2007 WL 5254888
CourtDistrict Court, N.D. Georgia
DecidedOctober 29, 2007
DocketCivil No. 1:04-CV-3711-JTC
StatusPublished
Cited by1 cases

This text of 250 F.R.D. 570 (ChemFree Corp. v. J. Walter, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ChemFree Corp. v. J. Walter, Inc., 250 F.R.D. 570, 2007 U.S. Dist. LEXIS 97116, 2007 WL 5254888 (N.D. Ga. 2007).

Opinion

ORDER

JACK T. CAMP, District Judge.

This matter is currently before the Court on Plaintiffs motion to preclude supplementation of Defendants’ invalidity contentions [#233] and Plaintiffs motion to strike Defendants’ Third Amended Invalidity Contentions [# 258].

I. Background

As with many patent cases, this case has a long and complex procedural history. The current issue involves the timeliness of Defendants Third Amended Invalidity Contentions [# 236]. Plaintiff filed its Complaint on December 20, 2004 and filed its First Disclosure of Infringement Contentions on August 26, 2005. Defendants filed their First Disclosure of Invalidity Contentions on September 28, 2005. Defendants amended their invalidity contentions once on October, 3, 2005 and a second time on October 19, 2005. On July 12, 2006, the Court closed the case to allow the parties to arbitrate an issue relating to Zymo and ChemFree’s co-ownership agreement.

After arbitration resolved the dispute between ChemFree and Zymo, the Court reopened the case on April 20, 2007 to continue litigation of the infringement issues. The Court held a Markman hearing on May 10, 2007, at which the Court construed the claims of the patents-in-suit without Plaintiff having the opportunity to know Defendants’ arguments disclosed in Defendants’ latest invalidity contentions. On July 17, 2007 the Court entered its Order construing the dis[572]*572puted terms of Plaintiffs patents. Pursuant to Local Patent Rule 6.7, the parties were entitled to an additional 45 days of discovery after the Order construing the claims of the patents. Thus, fact discovery ended on August 31, 2007.

On August 22, 2007, seven business days before the close of fact discovery, Defendants filed their Third Amended Invalidity Contentions. In these amended contentions, Defendants included references to four patents1 (the “Prior Art Patents”) and four individuals 2 (the “Declarants”) that were not cited in any of Defendants’ prior invalidity contentions.

II. Legal Standard

The Patent Local Rules for the Northern District of Georgia were adopted in order to “facilitate the speedy, fair and efficient resolution of patent disputes.” N.D. Ga. Patent L.R. 1.2(a). The Rules provide that parties may amend their invalidity contentions “pursuant to the rules for supplementation and amendment of discovery responses generally provided for under the Federal Rules of Civil Procedure.” N.D. Ga. Patent L.R. 4.5.

Under the Federal Rules of Civil Procedure, “[a] party is under a duty seasonably to amend [its discovery responses] if the party learns that the response is in some material respect incomplete or incorrect____” Fed. R.Civ.P. 26(e)(2) (emphasis added). If a party fails to “seasonably amend” their responses, that party may not use the information as evidence absent a showing of “substantial justification.” Fed.R.Civ.P. 37(c)(1).

Similarly, the Northern District of California’s 3 rules regarding amending contentions provide that “[a]mendment or modification of the ... Invalidity Contentions, other than as expressly permitted in Patent L.R. 3-6, may be made ... only upon a showing of good cause.” N.D. Cal. Patent L.R. 3-7. California courts interpret “good cause” to require “a showing that the party seeking leave to amend acted with diligence in promptly moving to amend when new evidence is revealed in discovery.” 02 Micro Int’l Ltd. v. Monolithic Power Systems, 467 F.3d 1355, 1363 (Fed.Cir.2006).

Therefore, parties must be diligent in amending their contentions after the discovery of new evidence. See Tillotson Corp. v. Shijiazhaung Hongray Plastic Prods., 4:05-CV-0118-RLV, 244 F.R.D. 683, 690-91 (N.D.Ga.2007) (Vining, Jr., J.) (noting that “the burden is on the [amending party] to show that it was diligent in amending its pleadings.”) (citing 02 Micro, 467 F.3d at 1367-68).

III. Discussion

In Defendants’ Third Amended Invalidity Contentions, Defendants argued for the first time that the four Prior Art Patents and the Declarants’ prior public use invalidate the patents-in-suit as previously construed by the Court. Plaintiff moves to strike these invalidity contentions on the grounds that they are untimely and, as such, prejudicial.

A. The Declarants’Prior Use

The untimely disclosures indicate for the first time how Defendants were using the Declarants’ alleged prior public use to invalidate the patents. This delay prejudiced Plaintiffs ability to prepare for trial and conduct discovery because Plaintiff was not aware how Defendants would use the Declar-ants’ testimony until seven business days before the close of discovery.

Defendants failed to show substantial justification for their delay. Defendants rely on Tillotson to support their claim that the [573]*573Court should not strike their latest contentions, but Tillotson is distinguishable from this case. In Tillotson, the Court declined to strike the plaintiffs amended infringement contentions because the plaintiff was diligent in discovering the new evidence and amending its contentions. Tillotson, 244 F.R.D. 683, 691. The plaintiff in Tillotson amended its invalidity contentions four days after discovering the additional information. Id. Furthermore, the court in Tillotson had not yet construed the claims of the patents in question when the plaintiff amended its infringement contentions.

In this case, however, Defendants waited at least six months from discovering the evidence before amending their invalidity contentions. Defendants actually admit that they were aware of the possible prior public use by Declarants “as early as mid-2006.” (Defs.’ Opp’n to Pl.’s Mot. to Preclude Supplementation of Invalidity Contentions 3.) Most importantly, unlike Tillotson, this Court had already construed the claims of the patents-in-suit when Defendants amended their invalidity contentions. Defendants could have amended their contentions well before the Markman hearing.

Defendants justify their delay by arguing that they provided the Declarants’ statements to Plaintiff in April, 2007, but Defendants overlook an important aspect of infringement and invalidity contentions. The Patent Local Rules require the disclosing party to include very specific information. See N.D. Ga. Patent L.R. 4.3. Thus, invalidity contentions serve a function far more important than the mere identity and disclosure of potentially relevant evidence: they explain exactly how the opposing party will use that evidence to invalidate the patents.

Lastly, allowing such tardy disclosures would go against the policy and purpose of the Patent Local Rules. The Rules were adopted in order to “facilitate the speedy, fair and efficient resolution of patent disputes.” N.D. Ga. Patent L.R. 1.2(a).

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250 F.R.D. 570, 2007 U.S. Dist. LEXIS 97116, 2007 WL 5254888, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chemfree-corp-v-j-walter-inc-gand-2007.