Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 1 of 13
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF GEORGIA
`ATLANTA DIVISION
`
`SIPCO, LLC, et al.,
`
`v.
`
`Plaintiffs,
`
`EMERSON ELECTRIC CO., et al.,
`
`Defendants.
`
`Civil Action No: 1:16-cv-02690-AT
`
`PLAINTIFFS’ OPPOSITION TO
`DEFENDANTS’ MOTION FOR LEAVE TO SERVE
`AMENDED SUPPLEMENTAL INVALIDITY CONTENTIONS
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`Plaintiffs SIPCO, LLC and IP CO, LLC (collectively, “SIPCO”) respectfully
`
`oppose the Defendants’ Motion for Leave to Serve Amended Supplemental
`
`Invalidity Contentions (“Defendants’ Motion”) filed by Defendants Emerson
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`Electric Co., Fisher-Rosemount Systems,
`
`Inc., Rosemount
`
`Inc.
`
`(collectively
`
`“Emerson”), and BP p.l.c., BP America, Inc., and BP America Production
`
`Company (collectively “BP”).
`
`(D.I. No. 109). Defendants’ request for leave to
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`amend and supplement their invalidity contentions should be denied because (1)
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`Defendants have failed to show that they were diligent in identifying and charting
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`alleged “newly discovered” prior art, and (2) Defendants have failed to show that
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`the untimely disclosed references and contentions are important
`
`to the case.
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF GEORGIA
`ATLANTA DIVISION
`
`SIPCO, LLC, et al.,
`
`v.
`
`Plaintiffs,
`
`EMERSON ELECTRIC CO., et al.,
`
`Defendants.
`
`Civil Action No: 1:16-cv-02690-AT
`
`PLAINTIFFS’ OPPOSITION TO
`DEFENDANTS’ MOTION FOR LEAVE TO SERVE
`AMENDED SUPPLEMENTAL INVALIDITY CONTENTIONS
`
`Plaintiffs SIPCO, LLC and IP CO, LLC (collectively, “SIPCO”) respectfully
`
`oppose the Defendants’ Motion for Leave to Serve Amended Supplemental
`
`Invalidity Contentions (“Defendants’ Motion”) filed by Defendants Emerson
`
`Electric Co., Fisher-Rosemount Systems,
`
`Inc., Rosemount
`
`Inc.
`
`(collectively
`
`“Emerson”), and BP p.l.c., BP America, Inc., and BP America Production
`
`Company (collectively “BP”).
`
`(D.I. No. 109). Defendants’ request for leave to
`
`amend and supplement their invalidity contentions should be denied because (1)
`
`Defendants have failed to show that they were diligent in identifying and charting
`
`alleged “newly discovered” prior art, and (2) Defendants have failed to show that
`
`the untimely disclosed references and contentions are important
`
`to the case.
`
`
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 2 of 13
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`Additionally, allowing Defendants to amend and supplement
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`their invalidity
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`contentions in the midst of the claim construction process would unfairly prejudice
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`SIPCO.
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`I.
`
`Background
`
`Emerson began this litigation on July 31, 2013, when it filed a declaratory
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`judgment
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`action in this Court
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`against
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`eight SIPCO patents,
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`alleging
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`noninfringement and invalidity against all of them. See Declaration of James C.
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`Hall in Support of Plaintiffs’ Opposition to Defendants’ Motion for Leave to Serve
`
`Amended Supplemental
`
`Invalidity Contentions (“Hall Decl.”), Ex. A (First
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`Declaratory Judgment Complaint). Emerson withdrew that complaint and filed a
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`second one on January 30, 2015. See Hall Decl., Ex. B (Second Declaratory
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`Judgment Complaint
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`(C.A. No. 1:15-cv-00319-AT)).
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`Emerson’s Second
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`Complaint (“the Declaratory Judgment Action”) challenged the validity and
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`infringement of only two of the original eight patents, U.S. Patent Nos. 6,044,062
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`(“the ‘062 patent”) and 7,103,511 (“the ‘511 patent”), which Emerson has stated
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`are “representative” of all eight of the patents Emerson originally challenged. See
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`Motion of Emerson Electric Co., Fisher-Rosemount Systems, Inc., and Rosemount
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`Inc. to Dismiss or Transfer this Action (“Emerson’s Motion to Dismiss”) (D.I. No.
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`10, at p. 3).
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`2
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 3 of 13
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`On October 26, 2015, Emerson served its first set of invalidity contentions in
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`the Declaratory Judgment Action, asserting no less than 53 prior art references
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`against the ‘062 and ‘511 patents. See Hall Decl., Ex. C (Plaintiffs’ First Set of
`
`Joint Invalidity Contentions) at pp. 6-13. The first set of invalidity contentions,
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`totaling over 500 pages, included two references that Emerson now seeks to add to
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`its invalidity contentions in the present case. These references include U.S. Patent
`
`No. 5,726,644 (“Jednacz”) and an article Emerson identified as “RFC 981,” and
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`now calls “the Mills article.” See id. at pp. 8, 11. The first set of invalidity
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`contentions in the Declaratory Judgment Action also included claim charts
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`purporting to map Jednacz and RFC 981 to various claims of the ‘062 patent. See
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`id. at pp. 477 (Exhibit AC) and 529 (Exhibit AL).
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`On December 23, 2015, Emerson served a supplemental set of invalidity
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`contentions,
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`totaling almost 2500 pages, and including an additional eight
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`references and numerous pages of claim charts. See Hall Decl., Ex. D (Plaintiffs’
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`Joint Invalidity Contentions). Jednacz and RFC 981 were again both identified as
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`prior art references and charted against the ‘062 patent. See id. at pp. 8, 11, 1871,
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`and 2171.
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`In the instant action, Defendants served their invalidity contentions on May
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`16, 2016. See Hall Decl., Ex. E (Defendants’ Invalidity Contentions). Those
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`3
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 4 of 13
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`contentions total over three times as many pages as was served in the Declaratory
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`Judgment Action.
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`See id. The Jednacz and RFC 981 references are again
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`disclosed, but neither is charted against any claim of any asserted patent. See id.
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`On June 13, Defendants attempted to serve a supplemental set of invalidity
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`contentions containing two previously undisclosed references, U.S. Patent No.
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`4,987,536 (“Humblet”) and an article titled “Packet Radio Network for Volcano
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`Monitoring” by Machenbaum, as well as two claim charts mapping Jednacz and
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`RFC 981 against SIPCO patents. See Hall Decl., Ex. F (Proposed Amended
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`Contentions) at pp. 11, 17, Exhibit B14 and Exhibit P15. The parties met and
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`conferred regarding the Proposed Amended Contentions, but because Defendants’
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`claim of diligence was unsupported, the parties were unable to resolve their
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`differences.
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`II.
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`Argument
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`A.
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`The Defendants’ Failure to Show That They Were Diligent
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`Defendants assert that they were diligent in belatedly disclosing two new
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`prior art
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`references and claim charts because their “applicability was not
`
`appreciated until after the deadline.” Defendants’ Motion at p. 6. They also
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`complain that the number of asserted claims (and the massive volume of their own
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`4
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 5 of 13
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`invalidity contentions) were causes of the delay. See id. But the facts of the case
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`belie these assertions.
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`Defendants seek to justify the belated disclosure of two new prior art
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`references (“the Machenbaum article” and “the Humblet ‘536 Patent”) because
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`they were discovered “shortly before and shortly after the May 16, 2016 invalidity
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`contention deadline.” Defendants’ Motion at p. 6. As noted above, Defendants
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`partially blame their tardiness on the size and complexity of this litigation, but this
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`is not an acceptable excuse for delay. See, e.g., Hall Decl., Ex. G, Imperium IP
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`Holdings (Cayman), Ltd. v. Samsung Electronics Co., Ltd., No. 4:14-cv-371, 2016
`
`WL 3854700 (E.D. Texas March 28, 2016), at *2 (finding lack of diligence despite
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`the defendants’ excuse regarding the “complex and crowded” technology space of
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`the patents-in-suit causing delay); Hall Decl., Ex. H, Patent Harbor, LLC v.
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`Audiovox Corp., No. 6:10-cv-00361 LED-JDL, No. 6:10-cv-00436 LED-JDL, No.
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`6:10-cv-00607 LED JDL, 2012 WL 12840341 (E.D. Texas, March 30, 2012), at *3
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`(finding lack of diligence despite the alleged infringers’ argument that they had
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`only six months to identify and locate prior art). Unlike the defendants in the
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`Patent Harbor case, Emerson has had about three years to identify prior art in this
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`5
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 6 of 13
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`case.1
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`In the interim, Emerson has served two sets of invalidity contentions
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`identifying dozens of prior art references and totaling more than 3000 pages in the
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`Declaratory Judgment Action against patent claims it has declared to be
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`“substantially similar” to those asserted in this action. See Emerson’s Transfer
`
`Motion (D.I. 10, at p. 7). It thus strains credulity that Defendants were unable to
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`discover these publicly available references by the court-imposed deadline in this
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`case. Accordingly, Defendants’ claim of diligence in discovering and disclosing
`
`the Machenbaum article and the Humblet ‘536 Patent should be rejected.
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`Defendants admit to having long known about two other references, “the
`
`Jednacz ‘644 Patent and the Mills article,” but seek to excuse the belated
`
`contentions regarding them on the basis that Defendants’ counsel failed to
`
`appreciate their relevance to the asserted claims in this case. See Defendants’
`
`Motion at pp. 6-7. These assertions are contradicted, however, by Defendants’
`
`own statements in Emerson’s Transfer Motion,
`
`in which Emerson argued
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`strenuously that, “[b]ecause the patents from each of the two patent families at
`
`issue in the two competing actions [i.e., this action and the Declaratory Judgment
`
`1
`
`As mentioned supra, Emerson filed its first declaratory judgment complaint
`on July 31, 2013. That complaint contained allegations of anticipation and
`obviousness of eight SIPCO and IP CO patents under 35 U.S.C. §§ 102 and 103
`(inter alia) respectively. See Hall Decl., Ex. A at ¶¶ 45, 48, 51, 54, 57, 60, 63,
`and 66.
`In order to satisfy Fed. R. Civ. P. 11, counsel for Emerson must have
`been aware of at least some allegedly invalidating prior art at that time.
`
`6
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`
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 7 of 13
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`Action] share common prosecution histories, the same prosecution files and prior
`
`art will be at issue in both cases.” Emerson’s Transfer Motion (D.I. 10, at p. 6
`
`[emphasis added]). Emerson then reiterated that message: “[t]he parties to the two
`
`actions are identical and the patents in both actions are substantially similar.” Id.
`
`at p. 7 (emphasis added). And Emerson did not let the matter rest there, arguing
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`further that “[t]he patents are so related that many of the same claim elements are
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`present in multiple patents.” Id. (emphasis added).
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`Now, seeking to excuse their attempt
`
`to circumvent a court-ordered
`
`deadline, Defendants are singing a different tune, claiming suddenly to find such
`
`substantial differences between the claims in the two actions that they were
`
`unaware of the applicability of “the same prior art” to the asserted claims in this
`
`action. See Defendants’ Motion at pp. 6-7. This defies belief. Defendants at the
`
`very least should have known of the applicability of the previously identified
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`Jednacz and Mills references to at least some of the asserted claims in this case
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`well in advance of serving their invalidity contentions. Thus, the Court should
`
`reject Defendants’ self-contradicting excuse and find that they were not diligent in
`
`asserting the Jednacz ‘644 Patent and the Mills article as they had in the
`
`Declaratory Judgment Action.
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`7
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 8 of 13
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`B.
`
`The Defendants Have Not Shown That The Belatedly Disclosed
`Prior Art Is Important To The Case
`
`Defendants assert
`
`that
`
`the additional
`
`references and contentions are
`
`important to this case, yet they also state that they have “identified a number of
`
`prior art references that render the asserted patents invalid as anticipated or
`
`obvious.” Defendants’ Motion at p. 8. Defendants fail to state, however, that any
`
`alleged information contained in the additional references and contentions is not
`
`cumulative of the dozens of prior art references already contained in their timely
`
`served invalidity contentions. More importantly, Defendants have failed to show
`
`how the newly disclosed prior art is “vital to the case.” See Hall Decl., Ex. I (LML
`
`Patent Corp. v. JPMorgan Chase & Co., No. 2:08-cv-448, 2011 WL 5158285
`
`(E.D. Texas, August 11, 2011), Order at *6 (“As to importance, Defendants argue
`
`that the new combinations are ‘highly relevant’ [] but have not shown that the new
`
`combinations are ‘vital to the case.’”) (citing Tyco Healthcare Group LP v.
`
`Applied Med. Res. Corp., No. 9:06-cv-151, 2009 WL 5842062 (E.D. Tex. Mar. 30,
`
`2009)). Accordingly, Defendants have failed to prove that the belated prior art
`
`references and combinations are important to their case.
`
`8
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 9 of 13
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`C.
`
`SIPCO Will Be Unfairly Prejudiced If The Defendants Are
`Allowed To Amend and Supplement Their Invalidity Contentions
`
`Defendants baldly assert that their delay will not prejudice SIPCO. This is
`
`untrue, not least because “no experienced practitioner would argue that the sudden
`
`introduction of a new prior art reference is not prejudicial.” Allure Energy, Inc. v.
`
`Nest Labs, Inc., 84 F. Supp. 3d 538, 542 (E.D. Texas, March 24, 2015).
`
`In
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`addition, Defendants served their belated supplement 10 days after the start of the
`
`claim construction process, which began on June 3, 2016. (See D.I. 73 at p. 6). By
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`that time, the parties had already exchanged proposed terms and claim elements for
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`construction.
`
`See id. Obviously, Plaintiffs had already taken Defendants’
`
`invalidity contentions into consideration while crafting proposed constructions and
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`arguments. Plaintiffs should have the right to rely on Defendants’ timely-served
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`invalidity contentions, and not have to anticipate sudden changes to them during
`
`this process.
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`Indeed, that is the very reason why the deadline for invalidity
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`contentions was set well before the deadline for exchanging proposed terms for
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`construction.
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`In addition, on the date Defendants’ proposed amended and supplemental
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`invalidity contentions were served, there were only 11 days until the parties had to
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`exchange preliminary claim constructions and extrinsic evidence. See id. That
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`simply was not enough time for Plaintiffs to (1) identify the differences between
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`9
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 10 of 13
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`Defendants’
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`invalidity contentions
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`and proposed supplemental
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`invalidity
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`contentions, (2) analyze the newly disclosed prior art and newly manufactured
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`invalidity contentions, and the relative strengths and weaknesses of
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`those
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`contentions, and (3) reanalyze the 180 asserted claims to determine what, if any,
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`changes to Plaintiffs’ preliminary claim constructions and extrinsic evidence would
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`have to be made. Thus, although “all” crucial pre-Markman deadlines had not yet
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`passed, one had passed and others were fast approaching. Thus the delay
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`nonetheless makes Defendants’ untimely service unfairly prejudicial to Plaintiffs.
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`See Allure Energy, 84 F. Supp. 3d at 542. “This dispute brings into sharp focus the
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`tension between the necessity for orderly and complete discovery on the one hand,
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`and the natural desire of litigants to attain important
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`tactical advantages by
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`delaying disclosure of key elements of their case.” Finisar Corp. v. DirecTV Grp.,
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`Inc., 424 F. Supp. 2d 896, 898 (E.D. Tex. 2006). Accordingly, Defendants’
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`unexcused tardy service of their amended and supplemental invalidity contentions
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`unfairly prejudices Plaintiffs.
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`III. Conclusion
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`For the reasons set forth above, SIPCO respectfully requests that the Court
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`deny Defendants’ Motion for Leave to Serve Amended Supplemental Invalidity
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`Contentions.
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`10
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`
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 11 of 13
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`This 5th day of August, 2016.
`
`/s/ J. Christopher Fox, II
`J. Christopher Fox, II
`Georgia Bar No. 272527
`Michael Coleman
`Georgia Bar No. 177635
`Thompson Hine LLP
`Two Alliance Center, Suite 1600
`3560 Lenox Road
`Atlanta, Georgia 30326
`Telephone: 404-541-2900
`Facsimile: 404-541-2905
`Chris.Fox@ThompsonHine.com
`Michael.Coleman@ThompsonHine.com
`
`Paul J. Cronin, Pro hac vice
`James C. Hall, Pro hac vice
`Nutter, McClennen & Fish LLP
`155 Seaport Boulevard
`Boston, Massachusetts 02210-2604
`Telephone: 617-439-2000
`Facsimile: 617-310-9000
`pcronin@nutter.com
`jhall@nutter.com
`
`Counsel for SIPCO, LLC and IP CO, LLC
`
`11
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`
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 12 of 13
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`CERTIFICATE OF COMPLIANCE WITH LOCAL RULE 7.1
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`The undersigned hereby certifies that this filing was prepared using one of
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`the font and point selections approved by this Court in Local Rule 5.1C.
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`Specifically, Times New Roman font was used in 14 point.
`
`/s/ J. Christopher Fox, II
`J. Christopher Fox, II
`Georgia Bar No. 272527
`
`12
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`
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`Case 1:16-cv-02690-AT Document 121 Filed 08/05/16 Page 13 of 13
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`CERTIFICATE OF SERVICE
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`This is to certify that I have this day served all counsel of record with a
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`copy of the within and foregoing Plaintiffs’ Opposition to Defendants’ Motion
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`for Leave to Serve Amended Supplemental Invalidity Contentions using the
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`Court’s ECF filing system which will automatically send a copy to all
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`counsel of record registered to receive service thereby.
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`This 5th day of August, 2016.
`
`J. Christopher Fox, II
`/s/
`J. Christopher Fox, II
`
`13
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`
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