`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`
`IN RE NEO WIRELESS, LLC
`PATENT LITIG.
`
`Case No. 2:22-md-03034-TGB
`HON. TERRENCE G. BERG
`JURY TRIAL DEMANDED
`
`
`PLAINTIFF NEO WIRELESS, LLC’S MOTION TO STRIKE
`DEFENDANTS’ UNTIMELY PRIOR ART ELECTIONS
`
`Plaintiff Neo Wireless, LLC (“Plaintiff” or “Neo”) respectfully requests this
`
`
`
`Court to strike Defendants’ recently disclosed invalidity theories based on the
`
`“Project Angel” reference, including striking the Project Angel reference from
`
`Defendants’ final prior art elections and precluding Defendants from future
`
`reliance on the belatedly disclosed invalidity theories based on Project Angel. The
`
`complete bases for Plaintiff’s motion are set forth in the accompanying brief in
`
`support of this Motion to Strike.
`
`
`
`Counsel for Neo conferred with counsel for Ford (on behalf of Defendants)
`
`by telephone on December 28, 2023. Counsel explained the basis for this motion
`
`but was unable to obtain concurrence on the relief sought.
`
`A proposed order is being submitted herewith via email.
`
`
`
`
`
`
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11827 Filed 12/29/23 Page 2 of 18
`
`DATED: December 29, 2023
`
`Respectfully submitted,
`
`
`
`/s/ Jason D. Cassady
`Jason D. Cassady
`Texas State Bar No. 24045625
`Email: jcassady@caldwellcc.com
`Christopher S. Stewart
`Texas State Bar No. 24079399
`Email: cstewart@caldwellcc.com
`CALDWELL CASSADY CURRY P.C.
`2121 N. Pearl St., Suite 1200
`Dallas, Texas 75201
`Telephone: (214) 888-4848
`Facsimile: (214) 888-4849
`
`Jaye Quadrozzi (P71646)
`Email: quadrozzi@youngpc.com
`YOUNG, GARCIA & QUADROZZI, PC
`2775 Stansbury Blvd., Suite 125
`Farmington Hills, Michigan 48334
`Telephone: (248) 353-8620
`
`ATTORNEYS FOR PLAINTIFF
`NEO WIRELESS LLC
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies that on December 29, 2023, the foregoing document
`
`was filed electronically with the Clerk of Court using the CM/ECF system, which
`
`will send notification of such filing to all attorneys of record.
`
`
`
`
`
`
`/s/ Jason D. Cassady
`Jason D. Cassady
`
`
`
`
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11828 Filed 12/29/23 Page 3 of 18
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`
`IN RE NEO WIRELESS, LLC
`PATENT LITIG.
`
`Case No. 2:22-md-03034-TGB
`HON. TERRENCE G. BERG
`JURY TRIAL DEMANDED
`
`
`
`
`
`PLAINTIFF NEO WIRELESS, LLC’S BRIEF IN SUPPORT OF MOTION
`TO STRIKE DEFENDANTS’ UNTIMELY PRIOR ART ELECTIONS
`
`
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11829 Filed 12/29/23 Page 4 of 18
`
`TABLE OF CONTENTS
`
`
`
`INTRODUCTION ............................................................................................ 1
`I.
`II. BACKGROUND .............................................................................................. 2
`III. ARGUMENT .................................................................................................... 6
`IV. CONCLUSION ...............................................................................................10
`
`
`
`
`
`
`
`
`i
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11830 Filed 12/29/23 Page 5 of 18
`
`TABLE OF AUTHORITIES
`
`
`Cases
`
`ChemFree Corp. v. J. Walter, Inc.
` 250 F.R.D. 570 (N.D. Ga. 2007) .........................................................................8, 9
`
`Kimberly-Clark Worldwide, Inc. v. First Quality Baby Prods., LLC
` No. 09-C-0916, 2011 WL 13077073 (E.D. Wis. Aug. 26, 2011) ........................... 7
`
`O2 Micro Intern. Ltd. v. Monolithic Power Systems, Inc.
` 467 F.3d 1355 (Fed. Cir. 2006) .............................................................................10
`
`Webasto Thermo & Comfort N. Am., Inc. v. BesTop, Inc.
` No. 16-cv-13456, 2019 WL 2171262 (E.D. Mich. May 20, 2019) ..................7, 10
`
`
`
`
`
`
`
`ii
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11831 Filed 12/29/23 Page 6 of 18
`
`1.
`
`STATEMENTS OF ISSUES PRESENTED
`
`Should Defendants, having demanded that the Parties narrow claims and prior
`art on a fixed schedule (over Neo’s objection), be allowed to add new prior
`art references to their prior art elections with a month of discovery remaining,
`when they were meant to narrow the scope of prior art, and have shown no
`good cause to do otherwise?
`Answer: No.
`
`
`
`
`
`
`iii
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11832 Filed 12/29/23 Page 7 of 18
`
`MOST APPROPRIATE AND CONTROLLING AUTHORITIES
`
`Webasto Thermo & Comfort N. Am., Inc. v. BesTop, Inc., No. 16-cv-13456, 2019
`WL 2171262, at *3 (E.D. Mich. May 20, 2019)
`
`
`
`
`iv
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11833 Filed 12/29/23 Page 8 of 18
`
`I.
`
`INTRODUCTION
`Pursuant to the Court’s Order on Further Prior Art and Claim Narrowing,
`
`Defendants, having already elected 48 prior art references back in December 2022,
`
`were supposed to reduce those 48 prior art references to no more than 16 (4 per
`
`patent) by December 18, 2023.1 See Dkt. 102 at 4. But rather than choose from
`
`among the 48 prior art references they had previously elected, Defendants’ final
`
`elections included new references that had not been previously elected, and for
`
`which Defendants had not even produced invalidity contentions in the case.
`
`Defendants’ invalidity contentions were due on November 16, 2022—over a year
`
`prior to this final election of prior art. Defendants later provided invalidity
`
`contentions and claim charts for these new references, for the very first time, on
`
`December 20, 2023. Defendants at no point explained (1) why they could not have
`
`located this prior art and developed these contentions when they were due over a
`
`year ago; (2) why they failed to diligently pursue these new prior art references in
`
`the 13 months since (and seasonably amend their contentions per the Court’s
`
`rules); or (3) why they have good cause to elect these brand new references in
`
`contravention of the Court’s narrowing order.
`
`With one month of fact discovery remaining (and only two weeks until the
`
`
`1 At Defendants’ request, and to avoid a dispute, Neo agreed to allow Defendants
`to elect 18, rather than 16, per the stipulation submitted on December 15, 2023.
`1
`
`
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11834 Filed 12/29/23 Page 9 of 18
`
`Parties are scheduled to exchange responsive non-burden contentions), it is too late
`
`for Defendants to introduce brand new prior art over a year and a half into this
`
`case, particularly when they could and should have diligently pursued it months
`
`earlier. Requiring Neo to evaluate brand new art and pursue potential third-party
`
`discovery in the midst of the frenetic final days of fact discovery would severely
`
`prejudice Neo’s ability to defend against these new invalidity attacks. Neo
`
`therefore requests that the Court strike the “Project Angel” reference from
`
`Defendants’ final prior art elections and invalidity contentions. 2
`
`II. BACKGROUND
`The Court’s Order on Further Prior Art and Claim Narrowing (Dkt. 102) was
`
`ordered in response to Defendants’ motion (Dkt. 96) demanding—over Neo’s
`
`objection—that Neo narrow its claims as soon as possible. The Court ultimately
`
`agreed to impose claim narrowing, but made this narrowing reciprocal, requiring
`
`Defendants to narrow their prior art references as well. Dkt. 102 at 3.
`
`In demanding this scheduled narrowing, Defendants argued that, absent a
`
`requirement that Neo make a definite claim election at the outset of the case, Neo
`
`
`2 Defendants’ new references also include U.S. Patent No. 5,521,937 (“Kondo”).
`However, unlike with Project Angel, Defendants at least represent that their new
`election of Kondo is based on the Court’s November claim construction order. This
`basis is suspect, given that the relevant claim construction (relating to “direct
`sequence spread spectrum signals”)
`tracked Defendants’ own proposals.
`Nevertheless, in an effort to reduce disputes, this Motion does not seek to strike
`Defendants’ otherwise untimely election of Kondo.
`2
`
`
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11835 Filed 12/29/23 Page 10 of 18
`
`would wait for the Court’s claim construction order, and then pivot to entirely new
`
`claims to replace the originally asserted ones, requiring additional discovery and
`
`new claim construction proceedings. Dkt. 96 at 8. While Neo never had any
`
`intention of engaging in this tactic, this is exactly what Defendants have now done.
`
`They have waited for Neo to narrow its infringement case, for claim construction
`
`proceedings to conclude, for fact discovery to reach its end, and for their myriad of
`
`Patent Office actions to play out, only to now pivot to brand new prior art
`
`references in view of all of that information.
`
` In their Motion for aggressive narrowing, Defendants also downplayed the
`
`prejudice to Neo specifically because “Neo will already have received Defendants’
`
`invalidity contentions” and “Neo will have a full opportunity to evaluate the scope
`
`and strength of its triable case prior to engaging in the claim construction process.”
`
`Dkt. 96 at 13–14. Yet, as explained further below, those initial invalidity
`
`contentions did not contain charted theories based on the newly elected Project
`
`Angel reference. Allowing Defendants’ new theories would cause exactly the
`
`prejudice Defendants assured the Court would not befall Neo.
`
`While “Project Angel”—a wireless system/product allegedly operated by
`
`AT&T in the late 90s—was identified in Defendants’ initial invalidity contentions
`
`in November 2022, as one among hundreds in an indiscriminate laundry list of
`
`prior art, see Ex. A, it was not among the 63 claim charts provided by Defendants,
`
`
`
`3
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11836 Filed 12/29/23 Page 11 of 18
`
`wherein they set forth their actual invalidity contentions as required by the Court’s
`
`Discovery Order.3 Defendants will contend that they needed third-party discovery
`
`to be able to evaluate and chart this reference, but that excuse ignores the case
`
`schedule. Fact discovery opened on August 10, 2022. Defendants had over three
`
`months to conduct the necessary third-party discovery to complete their invalidity
`
`contentions by the November 16, 2022 deadline. Yet Defendants did not even
`
`serve a subpoena on AT&T in those three months.
`
`Accordingly, when Defendants narrowed their prior art to 48 references on
`
`December 16, 2022, see Ex. B, Defendants still did not provide a claim chart for
`
`Project Angel and did not elect it as one of their 48 references. Notably, at this
`
`same time, Defendants did concoct lengthy (and meritless) defenses of unclean
`
`hands and inequitable conduct premised on certain of the inventors of the patents-
`
`in-suit having worked on Project Angel years before they invented the patents-in-
`
`suit. See, e.g., Dkt. 104 (Tesla’s Am. Answer) at 32–46. Yet even while baselessly
`
`accusing these inventors of fraud, Defendants still had not bothered to serve a
`
`subpoena or develop any actual discovery supporting a connection between Project
`
`Angel and the patents in suit.4
`
`
`3 Dkt. 84 ¶ IV.E.d. (requiring “a chart identifying where specifically in each alleged
`item of prior art each limitation of each asserted claim is found . . . ”)
`4 While not the subject of this motion, it is worth noting that these defenses are very
`troubling. They contain charged accusations that the inventors essentially stole their
`inventions from their former employers, simply because they (like all engineers)
`4
`
`
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11837 Filed 12/29/23 Page 12 of 18
`
`More months went by, and Neo observed that, while Defendants had
`
`“reserved the right” to supplement their invalidity contentions or add additional
`
`prior art references to their claim elections, they still had not made any efforts
`
`toward pursuing any additional references through discovery. So, to make clear its
`
`position, Neo wrote Defendants on March 1st explaining that they had waived,
`
`through their utter lack of diligence, any ability to belatedly add new references.
`
`Ex. C at 3–4. Only then, a week after Neo’s letter and seven months into fact
`
`discovery, did Defendants first serve a subpoena relating to Project Angel. See Ex.
`
`D. Neo immediately objected, informing Defendants that it was too late to
`
`belatedly add new prior art references after months of failing to conduct timely
`
`discovery to seasonably amend their contentions. Ex. E.
`
`But Defendants’ delay did not end there. Over the course of the next several
`
`months, beginning in May, AT&T produced documents pursuant to Defendants’
`
`subpoena. The last such production occurred on September 13, 2023. Yet despite
`
`all of Neo’s prior warnings regarding Defendants’ delay, Defendants still failed to
`
`
`worked in the same technical field earlier in their career, and without even alleging
`that any material component of the inventions was found in the earlier system. The
`newly served contentions (which are largely conclusory and vague) do not change
`that, which likely explains their last-minute inclusion. Project Angel has almost no
`value for invalidity (being trivial and, at best, cumulative of other art). But
`Defendants may hope that, by providing even the most tenuous claim mapping at the
`last minute, they can at least avoid a clear summary judgment against their salacious
`fraud-based unenforceability theories.
`
`
`
`5
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11838 Filed 12/29/23 Page 13 of 18
`
`supplement their contentions, identify Project Angel as elected prior art, or provide
`
`any notice to Neo that Project Angel actually discloses or embodies any of the
`
`claim elements of the asserted patents. Neo assumed that Defendants had
`
`abandoned any (already waived) plans to assert Project Angel as prior art. Only
`
`another three months later, at the absolute last minute, did Defendants for the very
`
`first time elect Project Angel and chart it against the asserted claims the third-party
`
`discovery they had sluggishly obtained. See Ex. F. And those December 20, 2023
`
`charts rely (for the technical mapping of Project Angel to the asserted claims)
`
`heavily on documents obtained from AT&T in May—seven months before
`
`Defendants served the updated contentions.
`
`III. ARGUMENT
`The parties’ Joint Scheduling Order, consistent with this Court’s default
`
`rules, requires that
`
`[e]ach party shall seasonably amend any . . . invalidity contention . . .
`upon learning that the contention is incomplete or incorrect. The
`parties should conduct timely discovery so that these contentions can
`be updated as soon as possible. Any amendment to a party’s . . .
`invalidity contentions must be timely made but in no event later than
`one month after the Court’s claim construction ruling.
`
`Dkt. 84 ¶ F (emphases added). In other words, while December 20, 2023 (one
`
`month after the Court’s Markman order) was an absolute deadline, it did not
`
`absolve Defendants from seeking timely discovery and seasonably amending
`
`contentions in the many months beforehand.
`
`
`
`6
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11839 Filed 12/29/23 Page 14 of 18
`
`“Regardless of the rule invoked, the heart of the inquiry is whether a party
`
`should be barred from relying on certain theories first proffered late in the
`
`litigation, of which the opposing party has not fairly been apprised. The analysis
`
`invariably has both a good cause/diligence and a prejudice component.” Webasto
`
`Thermo & Comfort N. Am., Inc. v. BesTop, Inc., No. 16-cv-13456, 2019 WL
`
`2171262, at *3 (E.D. Mich. May 20, 2019). This good cause/diligence requirement
`
`applies to both “timely discovery” and “seasonable amendment.” See, e.g.,
`
`Kimberly-Clark Worldwide, Inc. v. First Quality Baby Prods., LLC, No. 09-C-
`
`0916, 2011 WL 13077073, at *1 (E.D. Wis. Aug. 26, 2011) (“Accused infringers
`
`must be ‘diligent’ in at least two respects with regard to their invalidity
`
`contentions: (1) in inquiring into potential invalidity evidence upon which to base
`
`their contentions, and (2) in amending their invalidity contentions to inform the
`
`patentee.”).5 Defendants have failed both prongs of this test with respect to the
`
`Project Angel reference.
`
`Defendants’ efforts to conduct third-party discovery on Project Angel have
`
`been anything but timely and diligent. This is not a case where Defendants blindly
`
`sought wide-ranging discovery on a host of potential prior art, and only happened
`
`
`5 See Webasto, 2019 WL 2171262, at *4 (“In the absence of local patent rules, as is
`the case in this District, the Court may look to case law in other districts that have
`adopted such rules that contain language similar to that adopted by the parties and
`the Court to govern the litigation[.]”)
`
`
`
`7
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11840 Filed 12/29/23 Page 15 of 18
`
`upon the Project Angel reference towards the end of discovery in an unanticipated
`
`way. On the contrary, Defendants knew about it from the outset of the case, made
`
`it a focal point of several charged unenforceability theories, but simply opted not to
`
`diligently seek any discovery to prove that it anticipated any of the asserted claim
`
`elements. They did not even begin “inquiring into potential invalidity evidence
`
`upon which to base their contentions” until seven months into fact discovery, and
`
`four months after their initial invalidity contentions were due. This alone justifies
`
`striking this belatedly investigated reference.
`
`Defendants continued their dilatory behavior once they finally decided to
`
`seek third-party discovery from AT&T (only after Neo’s letter prompted them to
`
`do so). Despite receiving the bulk of the technical discovery needed to set forth
`
`their theories in May, they waited seven months to provide any contentions based
`
`on that information, a length of time that is indisputably not seasonable. In
`
`ChemFree Corp. v. J. Walter, Inc., the court cited as an example of diligent
`
`amendment a case in which the defendant amended its contentions “four days after
`
`discovery of the additional information.” 250 F.R.D. 570, 573 (N.D. Ga. 2007)
`
`(emphasis in original). The court contrasted that with the case at hand, in which
`
`“Defendants waited at least six months from discovering the evidence before
`
`amending their invalidity contentions.” Id. (emphasis in original). The court struck
`
`the untimely contentions, and this Court should do the same here.
`
`
`
`8
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11841 Filed 12/29/23 Page 16 of 18
`
`Defendants will contend that, because they at least identified Project Angel
`
`by name in their November 2022 contentions, and provided claim charts by the
`
`December 2023 deadline, Neo has not been prejudiced. But in the words of the
`
`ChemFree court:
`
`Defendants overlook an important aspect of infringement and invalidity
`contentions. . . . [I]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.
`
` .
`
` . . The [Local] 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). This purpose is undermined when parties are permitted to make
`initial ‘place holder’ disclosures regarding infringement or invalidity,
`then makes substantial changes or additions to those contentions
`immediately prior to or after the close of fact discovery.
`
`ChemFree, 250 F.R.D. at 573 (emphasis in original). Indeed, the fact that
`
`Defendants have known of this reference for so long, but simply chose not to
`
`pursue it, is all the more reason to find a lack of diligence and strike it.
`
`This is compounded by the fact that Defendants did not even include the
`
`reference among their forty-eight December 2022 prior art elections (required
`
`pursuant to their own motion). It would defy reason to suggest that Neo had
`
`sufficient notice of Defendants’ contentions by these early disclosures when
`
`Defendants themselves were not even sufficiently on notice of Project Angel’s
`
`relevance to include it as one of their forty-eight elected references.
`
`Nor does the fact that Defendants served contentions by the December 20,
`9
`
`
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11842 Filed 12/29/23 Page 17 of 18
`
`2023 post-claim construction deadline save them. That deadline is intended to
`
`allow last-minute changes to contentions prompted by the Court’s claim
`
`construction. But Defendants can make no case that their belated Project Angel
`
`contentions have anything to do with any claim construction ruling. Courts in this
`
`district have demanded, consistent with the words of the Scheduling Order in this
`
`case, that parties must have good cause to make any post-claim construction
`
`amendment that is not expressly mandated by the Court’s claim construction itself.
`
`See Webasto, 2019 WL 2171262, at *5 (“Apart from amendments designed to take
`
`account of the district court’s claim construction, amendments are permitted only
`
`for ‘good cause’ even though the period allowed for discovery typically will not
`
`have expired.” (quoting O2 Micro Intern. Ltd. v. Monolithic Power Systems, Inc.,
`
`467 F.3d 1355, 1360 (Fed. Cir. 2006)). Defendants have no good cause for their
`
`dilatory discovery or their seven-month-late amendment.
`
`IV. CONCLUSION
`For the foregoing reasons, Neo requests the Court strike Defendants’ belated
`
`invalidity contentions for the Project Angel reference, strike Project Angel from
`
`Defendants’ final prior art elections, and prohibit Defendants from relying on these
`
`belated contentions in their case.
`
`
`
`10
`
`
`
`Case 2:22-md-03034-TGB ECF No. 209, PageID.11843 Filed 12/29/23 Page 18 of 18
`
`DATED: December 29, 2023
`
`Respectfully submitted,
`
`
`
`/s/ Jason D. Cassady
`Jason D. Cassady
`Texas State Bar No. 24045625
`Email: jcassady@caldwellcc.com
`Christopher S. Stewart
`Texas State Bar No. 24079399
`Email: cstewart@caldwellcc.com
`CALDWELL CASSADY CURRY P.C.
`2121 N. Pearl St., Suite 1200
`Dallas, Texas 75201
`Telephone: (214) 888-4848
`Facsimile: (214) 888-4849
`
`Jaye Quadrozzi (P71646)
`Email: quadrozzi@youngpc.com
`YOUNG, GARCIA & QUADROZZI, PC
`2775 Stansbury Blvd., Suite 125
`Farmington Hills, Michigan 48334
`Telephone: (248) 353-8620
`
`ATTORNEYS FOR PLAINTIFF
`NEO WIRELESS LLC
`
`
`
`
`
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies that on December 29, 2023, the foregoing
`
`document was filed electronically with the Clerk of Court using the CM/ECF
`
`system, which will send notification of such filing to all attorneys of record.
`
`
`
`
`
`/s/ Christopher S. Stewart
`Christopher S. Stewart
`
`
`
`
`
`