CXT Systems, Inc. v. Academy, Ltd., d/b/a Academy Sports + Outdoors

CourtDistrict Court, E.D. Texas
DecidedJanuary 28, 2020
Docket2:18-cv-00171
StatusUnknown

This text of CXT Systems, Inc. v. Academy, Ltd., d/b/a Academy Sports + Outdoors (CXT Systems, Inc. v. Academy, Ltd., d/b/a Academy Sports + Outdoors) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CXT Systems, Inc. v. Academy, Ltd., d/b/a Academy Sports + Outdoors, (E.D. Tex. 2020).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION

CXT SYSTEMS, INC., § § Plaintiff, § v. § Case No. 2:18-CV-00171-RWS-RSP § ACADEMY, LTD., D/B/A ACADEMY LEAD CASE § SPORTS + OUTDOORS, § Defendant. § § CXT SYSTEMS, INC., § § Plaintiff, § v. § Case No. 2:18-CV-00233-RWS-RSP § CONSOLIDATED CASE J. C. PENNEY CORPORATION, INC., § Defendant. § §

MEMORANDUM ORDER Before the Court is Defendant J.C. Penney Corporation, Inc.’s (“JCP”) Motion to Exclude the Expert Testimony of Plaintiff CXT Systems, Inc.’s (“CXT”) Technical Expert Joseph C. McAlexander III (“Motion”). Dkt. No. 282.1 Within this Motion, JCP asserts that McAlexander’s opinions should be excluded in whole or in part because (1) McAlexander failed to sufficiently disclose opinions that the JCP Checkout infringed standing alone; (2) the methods underlying McAlexander’s opinions on infringement by the ATG implementation of the JCP Webstore cannot be replicated and are therefore unreliable; and (3) McAlexander’s opinions are inconsistent with the Court’s claim construction. JCP also argues, in the alternative, that the trial should be continued to share the same schedule as the other defendants in related cases and that CXT be permitted to

1 All citations within this Order refer to the page number provided within the original document unless otherwise noted. The Court will specifically identify where ECF page numbers are being used. cure any disclosure issues regarding its infringement theories not based on PayPal, so that JCP may respond to CXT’s allegedly new positions.2 After consideration, the Court DENIES JCP’s Motion. The Court concludes (1) that JCP has not shown that McAlexander failed to sufficiently disclose opinions that the JCP Checkout

infringed without need for any PayPal functionality; (2) that JCP has not sufficiently shown the need to continue the trial in this case; (3) that McAlexander is entitled to rely upon non-admissible evidence in forming his opinions and that his methodology is sufficiently reliable regarding the similarity of the ATG and microservices implementations; and (4) that JCP has not shown that McAlexander’s opinions are inconsistent with the Parties’ agreed claim construction.

I. ANALYSIS a. Argument that McAlexander failed to sufficiently disclose opinions that the JCP’s Systems infringed standing alone Here, CXT claims that it is asserting infringement against JCP for (1) JCP’s implementation of the PayPal checkout and (2) JCP’s own JCP Webstore checkout, which does not rely upon PayPal functionality. JCP argues that, “[p]rior to Mr. McAlexander’s deposition, CXT and Mr. McAlexander disclosed the infringement theories and opinions that JCPenney infringes through an ‘Accused Infrastructure’ which includes the PayPal website and the JCPenney website.” Dkt. No. 282 at 9. JCP asserts that, at his deposition, “Mr. McAlexander disclosed a new alleged opinion that, irrespective of any integration with the PayPal website, JCPenney’s Systems alone meet every element of the asserted claims and adds further new opinions to support his theory.” Id. at 9–10. Thus, the crux of JCP’s argument is that CXT failed to sufficiently disclose

2 JCP also argues that McAlexander’s opinions on the valuation of the asserted Steele patents were unreliable. However, the Court will address this argument in a separate order when the Court addresses JCP’s Motion to Exclude Expert Testimony of Damages Expert (Dkt. No. 283). a theory that the JCP Webstore checkout infringes standing alone, and the Court will focus on this issue. Rule 26(a)(2)(B) of the Federal Rules of Civil Procedure requires a written report from any witness that is “retained or specifically employed to provide expert testimony in the case or one

whose duties as the party’s employee regularly involve giving expert testimony.” That rule also provides that the expert report must comprise “a complete statement of all opinions the witness will express and the basis and reasons for them”; “the facts or data considered by the witness in forming them”; and “any exhibits that will be used to summarize or support them. . . .” The Court will deny JCP’s Motion with respect to the argument that McAlexander failed to sufficiently disclose opinions that the JCP’s Systems infringed standing alone. JCP has failed to provide persuasive examples showing that McAlexander’s report failed to disclose an infringement theory against these systems. CXT cites to statements by JCP’s expert during a deposition, and these statements are persuasive in showing that CXT did sufficiently disclose a theory that the JCP Systems infringed

standing alone: Q. Okay. So you reviewed Mr. McAlexander’s report and saw that he was accusing JCP Checkout and formulated a response to that, correct? A. That’s correct. Q. Okay. A. Actually, let me clarify that. Because I also looked at the infringement contentions. And these things were already discussed in the infringement contentions. So I was already thinking about a response well before his report.

Dkt. No. 315-2 at 79:22–80:6. The fact that JCP’s expert states that he saw that the JCP Checkout was being accused in both the contentions and in the reports provides relatively strong support against JCP’s argument. JCP asserts that “[t]he relationship between the PayPal website and the JCPenney website is used as support for the alleged infringement of multiple steps or limitations of every claim asserted by CXT” and states that “[a] word search count of Attachment A shows 134 text references to the PayPal website, web pages, and/or code base references to the integration between

the PayPal website and the JCPenney website. . . .” Dkt. No. 282 at 10–11. JCP also points to several places where PayPal functionality was discussed within the report. Even if the report references PayPal many times, this does not show that the report only includes an infringement theory involving PayPal—the report may discuss multiple infringement theories against different accused products in parallel as long as those theories are each adequately disclosed. After reviewing the portions of the expert report that were provided by the parties, the Court has noted that the JCP functionality was frequently discussed (see, e.g., Dkt. No. 315-5), and JCP has not persuasively shown that the disclosures were insufficient. While JCP contends that McAlexander’s report is “sketchy and vague” and that the infringement theory for the PayPal and JCP systems are intrinsically tied together, the Court will

not exclude any portion of the Report on this basis. McAlexander will be limited to the scope of his reports at trial. However, JCP has not sufficiently shown that McAlexander’s report does not comply with Rule 26. Furthermore, JCP asserts that McAlexander relies upon only PayPal’s system to satisfy the “subsequent website” element. Id. at 11–12 (citing Dkt. No. 282-1 at 126–27, 227, 283–84, 296 (using ECF page numbers)). However, McAlexander also provided other support for this element that was based upon the JCP systems standing alone. The Expert Report specifically shows that McAlexander claims the “subsequent website” limitation is satisfied without any PayPal functionality. Dkt. No. 282-1 at 39 (using ECF page number) (“I have further demonstrated that the JC Penney Accused Infrastructures meet the limitations of the term ‘website’ in the asserted claims 1, 4, 6, 17, and 22 of the ’875 Patent. For example, the JC Penney ‘checkout microsite’ with a URL of www.jcpenney.com/checkout is a subsequent website to the JC Penney shopping cart with a URL of www.jcpenney.com/cart, at least because the checkout microsite comprises a

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Bluebook (online)
CXT Systems, Inc. v. Academy, Ltd., d/b/a Academy Sports + Outdoors, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cxt-systems-inc-v-academy-ltd-dba-academy-sports-outdoors-txed-2020.