Case 3:20-cv-05784-ZNQ-DEA Document 149 Filed 12/21/22 Page 1 of 8 PageID: 4882
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`Arnold B. Calmann
`(973) 645-4828
`abc@saiber.com
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`December 21, 2022
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`BY ECF
`Honorable Douglas E. Arpert, U.S.M.J.
`United States District Court for the District of New Jersey
`Clarkson S. Fisher Federal Courthouse
`402 East State Street
`Trenton, NJ 08608
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`Re: Oanda Corporation v. Gain Capital Holdings, Inc., et al.
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`Civil Action No. 20-05784-ZNQ-DEA
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`Dear Magistrate Judge Arpert:
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`We along with our co-counsel Wilson Sonsini Goodrich & Rosati P.C., represent Defendants
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`GAIN Capital Holdings, Inc. and GAIN Capital Group, LLC (collectively, “GAIN”) in the above
`matter. We write to respectfully reply to Plaintiff OANDA Corporation’s December 14, 2022
`response letter (D.I. 146) to GAIN’s letter (D.I. 145) requesting the Court preclude OANDA from
`asserting any theories of infringement that have not been disclosed in OANDA’s Local Patent Rule
`3.1 Disclosures of Asserted Claims, Infringement Contentions and Production (“Infringement
`Contentions”) served on July 20, 2021, that rely on source code or technical documents produced to
`date – which were produced over a year ago – or any theories that could have been raised based on
`such discovery.
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`OANDA makes three arguments in an effort to distract and divert the Court’s attention from
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`its complete failure to comply with Local Patent Rule 3.1 (“LPR 3.1”). None of the three arguments
`have any merit.
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` This dispute is ripe: First, OANDA argues that the issue is not ripe. OANDA’s violation of
`LPR 3.1, standing alone, makes the issue ripe for the Court to address at this time. It is
`axiomatic that a party has standing to assert a violation of a court rule—as GAIN has done
`here—which makes an application raising the rule violation ripe as a matter of law.1 If
`OANDA were correct, then parties could wait until the very end of a case to disclose
`contentions then there would be no diligence or good cause requirements to amend contentions.
`That is not the law in this district.
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`1 While a party in an appropriate case may argue that a violation has not actually occurred, it is
`gainsaid that issue is separate from the question of whether a movant has standing to bring a motion
`to assert such a violation, as occurred here. OANDA’s effort to conflate the two concepts cannot
`extinguish GAIN’s right to bring its motion under the applicable Rule.
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`Saiber LLC • One Gateway Center, 9th Floor, Suite 950 • Newark, New Jersey • 07102-5308 • Tel 973.622.3333 • Fax 973.622.3349 • www.saiber.com
`Florham Park • Newark • New York • Philadelphia
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`Case 3:20-cv-05784-ZNQ-DEA Document 149 Filed 12/21/22 Page 2 of 8 PageID: 4883
`Hon. Douglas E. Arpert, U.S.M.J.
`December 21, 2022
`Page 2
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` OANDA had sufficient information to timely seek amendment or was dilatory in seeking
`further discovery: Second, OANDA argues that it needed more discovery before it could
`amend and that GAIN has been “obstructing” discovery. Nothing could be further from the
`truth. Not only are OANDA’s arguments internally inconsistent, OANDA conveniently leaves
`out that the discovery it claims to have so desperately needed – OANDA elected to not take the
`discovery in some instances, did nothing with it once it had it, or OANDA was the one
`obstructing the discovery in the first place. But, more importantly, OANDA’s complaints are
`completely irrelevant: OANDA ignores that it could have still sought to amend based on the
`information it had (GAIN’s source code and technical documents were produced a year ago),
`which its contentions expressly stated it needed, and still made some reservation or caveat for
`what it believed it was missing just as it did in its first contentions. In the end, OANDA has
`no excuse. 
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` GAIN has already been prejudiced and the prejudice will only compound the longer OANDA
`hides its contentions: Third, OANDA argues that GAIN cannot possibly be prejudiced
`because there is no schedule set for the rest of discovery. This argument again ignores the
`discovery requirements of LPR 3.1 and the purpose for contentions in the district: “The rules
`are designed to require parties to crystallize their theories of the case early in the litigation….”
`King Pharms., Inc. v. Sandoz, Inc., No. 08-5974, 2010 U.S. Dist. LEXIS 50163, at *11 (D.N.J.
`May 20, 2010) (quoting Atmel Corp. v. v. Info. Storage Devices, Inc., No. C 95-1987, 1998
`U.S. Dist. LEXIS 17564, at *7, 1998 WL 775115, at *2 (N.D. Cal. Nov. 5, 1998); see also
`supra at Section III.
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`OANDA has completely failed to address the key issue: its failure to provide proper contentions.
`Even more specifically, the contentions it did serve expressly stated that it needed source code and
`technical documents to supplement its contentions, both of which GAIN produced over a year ago.
`See D.I. 145 at 2 (quoting OANDA’s Infringement Contentions). The time for OANDA to amend its
`contentions under the LPR has long since passed and OANDA should be precluded from using or
`relying on this information going forward.
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`I.
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`THE COURT HAS AUTHORITY TO RULE ON GAIN’S REQUEST BECAUSE
`OANDA’S FAILURE TO COMPLY WITH LPR 3.1 PRESENTS A RIPE ISSUE FOR
`THE COURT
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`OANDA’s argument that there is no ripe issue for this Court to address is wrong. The dispute
`is clear: OANDA has failed to meet the requirements of LPR 3.1 and the proper time for requesting
`leave to amend has passed. L. Pat. R. 3.1 (“Not later than 14 days after the initial Scheduling
`Conference, a party asserting patent infringement shall serve on all parties a “‘Disclosure of Asserted
`Claims and Infringement Contentions.’”); L. Pat. R. 3.7 (“Amendment of any contentions…may be
`made only by order of the Court upon a timely application and showing of good cause.”). “To establish
`timeliness, the movant must show that it acted promptly in seeking leave after discovering new
`information.” Antonious v. Nike, Inc., No. 2:11-CV-06327-KM-JBC, 2015 WL 6122457, at *4 (D.N.J.
`Oct. 15, 2015). Given that over a year has passed after GAIN’s production of source code and
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`Case 3:20-cv-05784-ZNQ-DEA Document 149 Filed 12/21/22 Page 3 of 8 PageID: 4884
`Hon. Douglas E. Arpert, U.S.M.J.
`December 21, 2022
`Page 3
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`technical documents, OANDA cannot show that it acted “promptly in seeking leave after discovering
`new information.” Id.
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`OANDA’s contentions are plainly deficient, an issue that OANDA completely failed to
`address. In fact, OANDA’s opposition letter clearly communicates that it intends to rely on additional
`contentions and evidence not included in its July 20, 2021 Infringement Contentions. And, given its
`vigorous opposition to GAIN’s request to preclude OANDA’s reliance on documents produced a year
`ago it is plain that OANDA intends to rely on such information which included a substantial document
`production served October 29-30, 2021, and production of 4,470 source code files made available for
`OANDA’s review by November 12, 2021. OANDA could have and should have diligently sought
`leave to amend its contentions, to the extent it had any, based on this source code and production many
`months ago. The time to be so diligent has long since passed.
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`While GAIN has cited cases confirming the diligence requirement, OANDA has noticeably
`failed to cite a single case from this district approving of the “rule” OANDA seems to espouse: that a
`party can wait until the very end of discovery to amend and only then provide fulsome contentions
`when it has had the information it expressly claimed to need in its possession for well over a year. See
`also Shire, LLC v. Amneal Pharms., LLC, No. CIV.A. 11-3781 SRC, 2014 WL 9913150, at *1 (D.N.J.
`May 12, 2014), aff'd, 802 F.3d 1301 (Fed. Cir. 2015) (affirming the magistrate judge’s ruling that an
`application to amend contentions was not timely when made just before fact discovery closed).
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`Finally, OANDA argues that Your Honor does not have the authority to rule on this request
`because it could potentially be “case dispositive.” But OANDA’s effort to spin GAIN’s application
`as “case dispositive” fails to acknowledge that magistrate judges in this court and others are frequently
`asked to strike evidence and theories from contentions that were not properly disclosed. See
`Boehringer Ingleheim Pharma Gmbh & Co. KG v. Teva Pharms. USA, Inc., No. CV 14-7811, 2017
`WL 11634702, at *6 (D.N.J. Oct. 18, 2017) (finding that the magistrate judge was within her discretion
`to exclude evidence in violation of Local Patent Rules regarding timely disclosure of infringement
`contentions). Moreover, if precluding use of the evidence GAIN produced over a year ago is truly
`case dispositive, that is all the more reason OANDA should have promptly and diligently sought leave
`to amend its contentions to fully and fairly disclose its infringement theories to GAIN, while reserving
`whatever rights it needed to otherwise further discovery (just as it did in its first set of contentions).
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`OANDA HAD SUFFICIENT INFORMATION TO TIMELY SEEK AMENDMENT OR
`WAS DILATORY IN SEEKING THE DISCOVERY NEEDED FOR ITS AMENDED
`CONTENTIONS
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`II.
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`OANDA argues that its lack of diligence in providing fulsome infringement contentions has
`been caused by GAIN’s “obstruction” in discovery. OANDA Response at 2-6. But this is pure fiction
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`Case 3:20-cv-05784-ZNQ-DEA Document 149 Filed 12/21/22 Page 4 of 8 PageID: 4885
`Hon. Douglas E. Arpert, U.S.M.J.
`December 21, 2022
`Page 4
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`OANDA Demanded Old Source Code It Then Never Inspected
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`and multiple excuse after excuse in an attempt to distract from its complete failure to follow the LPR.
`All of OANDA’s “complaints” are irrelevant because none of them prevented OANDA from seeking
`leave to amend diligently based on the discovery it already had and reserving rights for further
`discovery. But OANDA did not do that. Nevertheless, GAIN ever so briefly addresses each of the
`irrelevant disputes below.2
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`A.
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`OANDA asserts that it could not move to amend because GAIN delayed in providing
`additional code. Not true. What OANDA asked for following its December 2021 inspection of code
`was information regarding old, decommissioned or “legacy” source code that was not readily
`accessible. Some of that code dated back to at least 2014 and the inaccessibility of such older system
`information was made immediately clear to OANDA as well as GAIN’s good faith efforts to retrieve
`such information. Most importantly, after GAIN spent much effort to retrieve this old source code
`information, OANDA never sent a single expert to inspect such source code in the last year. Clearly,
`this code was not critical and cannot excuse OANDA’s lack of diligence.
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`B.
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`OANDA next complains that it was unable to obtain “basic” information about GAIN’s
`systems (OANDA Response at 3) from GAIN. Does OANDA identify an interrogatory it propounded
`seeking such information or a deposition topic a GAIN witness was allegedly unprepared for? No.
`OANDA was trying to obtain factual information outside of formal discovery tools and the normal
`discovery process. While GAIN, in the spirit of cooperation, provided some “free discovery”
`informally through counsel,3 OANDA has no basis to demand that GAIN do so or to complain that
`GAIN would not provide any and all such information freely in the absence of propounded discovery
`seeking such facts. If OANDA wanted such information, its experienced counsel plainly knows how
`to utilize discovery tools to obtain it: propound an interrogatory asking for such information or depose
`a person knowledgeable (which GAIN already identified). Thus, OANDA again alone bears any
`blame for its failure to follow applicable rules.
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`OANDA Bears the Blame for Failing to Use Proper Discovery Tools
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`2 GAIN has not attached discovery correspondence between counsel but will provide it at the Court’s
`request or direction.
`3 OANDA demanded through an email from counsel that GAIN identify by discrete file directory
`whether the source code contained in that directory is currently in use at GAIN or is from a legacy
`system. OANDA could have (and should have) sought such information through, for example, an
`interrogatory to which responses are due in 30 days.
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`Case 3:20-cv-05784-ZNQ-DEA Document 149 Filed 12/21/22 Page 5 of 8 PageID: 4886
`Hon. Douglas E. Arpert, U.S.M.J.
`December 21, 2022
`Page 5
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`C.
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`OANDA Ignores the Order of Party Contentions Under the Local Patent Rules
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`OANDA next blames GAIN’s contentions for its failure to amend – which completely ignores
`the timing of contentions under the Local Rules. OANDA asserts that once it read GAIN’s non-
`infringement contentions, it lacked the information it needed for its preliminary contentions. But this
`completely flips the timeline for disclosures on its head: under the Local Rules, plaintiff’s (OANDA’s)
`infringement contentions are served first, only then, second, defendant (GAIN) serves its non-
`infringement contentions responsive to plaintiff’s allegations. L. Pat. R. 3.2A (requiring non-
`infringement contentions be served “[n]ot later than 45 days after” service of infringement
`contentions). As is telling from OANDA’s failure to cite any authority, OANDA was not entitled to
`any, let alone fulsome, discovery regarding GAIN’s non-infringement positions before OANDA was
`required to provide its preliminary non-infringement contentions.
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`The Local Rules require that OANDA provide its contentions soon after the scheduling order,
`before most of discovery takes place. L. Pat. R. 3.1. Thus, long before completion of discovery and
`long before even knowing GAIN’s contentions, GAIN was and is entitled to know what OANDA’s
`infringement contentions are and whether OANDA contends that the connections and components it
`observes in GAIN’S systems allegedly infringe the asserted claims (and how they allegedly infringe)
`before GAIN must provide or prove its non-infringement defenses. To date, OANDA has still not
`provided such contentions, which are fundamental in a patent infringement matter under the Local
`Patent Rules.
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`D.
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`OANDA Had to Be Ordered to Negotiate an Email Protocol by This Court
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`OANDA then asserts that because it does not yet have an email production in response to its
`RFP Nos. 44-53, that it could not amend its contentions. Pure fiction again. As OANDA admits,
`these requests seek evidence relating to GAIN’s non-infringement theories (which come after
`OANDA’s infringement contentions), but OANDA waited six months to serve them. Clearly, they
`were not “critical”. Then, after receiving GAIN’s prompt responses to the RFPs which demand the
`production of electronic documents from particular identified custodians (and thus specifically seek
`emails), OANDA flatly refused to engage in any discussion to arrive at an agreement between counsel
`for a mutually agreeable protocol governing the search for and production of emails. When this
`dispute was brought to Your Honor, the Court ordered the parties to meet and confer as GAIN
`proposed regarding such a protocol. (DI 136.)
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`After many weeks of negotiations, the parties finally reached agreement. (DI 143.) GAIN is
`currently testing and proposing search terms pursuant to this protocol as promptly as possible given
`the closure of its client’s relevant offices for holidays and the unexpected illness of critical employees
`for this process. Thus, any delay in the production of emails was due to OANDA’s initial six-month
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`Case 3:20-cv-05784-ZNQ-DEA Document 149 Filed 12/21/22 Page 6 of 8 PageID: 4887
`Hon. Douglas E. Arpert, U.S.M.J.
`December 21, 2022
`Page 6
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`delay in seeking documents, and then OANDA’s refusal to engage in meaningful discussions
`regarding a protocol for and limits on email discovery.
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`E.
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`OANDA Reschedules, Cancels, and Then Re-Notices the Allegedly “Critical”
`Deposition of David Leach
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`OANDA’s conduct with respect to the deposition of David Leach contradicts the position it
`now takes: in short, GAIN offered Mr. Leach on the first day noticed, OANDA rescheduled, then
`withdrew the deposition notice (thereby cancelling it), and later re-noticed the deposition. This
`conduct flatly contradicts any argument that his deposition is important to understanding GAIN’s
`documents or systems. Furthermore, Mr. Leach is not one of the people GAIN identified as most
`knowledgeable about the accused products. The facts undercut the credibility of OANDA’s
`arguments.
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`Mr. Leach is not an employee of either named defendant but an employee of a related London-
`based company (i.e., outside the United States). OANDA first requested his deposition take place on
`March 3, 2022. GAIN accommodated that request and offered Mr. Leach on that date. OANDA’s
`counsel later requested that the deposition be rescheduled and then eventually withdrew the notice.4
`Thus, ultimately, it was OANDA that chose to cancel that deposition and withdraw its deposition
`notice. When OANDA later changed its mind and renewed its request in August for a deposition,
`GAIN accommodated and produced the witness on the requested date of September 21, 2022. Thus,
`OANDA “blaming” GAIN or Mr. Leach for the timing of his deposition rewrites history.
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`But more importantly, OANDA’s choice in deposing Mr. Leach, a London employee that
`works predominantly on a single discrete module within GAIN’s systems, shows that OANDA is not
`actually trying to understand the accused products. GAIN clearly disclosed the persons most
`knowledgeable about its systems in its initial disclosures and interrogatory responses seeking such
`information. Yet, OANDA chose not to depose any of those individuals. Moreover, despite claiming
`that it does not understand GAIN’s produced source code, OANDA did not ask Mr. Leach about any
`of the produced source code or the versioning thereof. Despite claiming that it does not understand
`some of what is described in GAIN’s non-infringement contentions (which cannot excuse OANDA’s
`failure to provide its contentions in any event as described above), OANDA did not ask Mr. Leach
`about any of the issues it complains of in its opposing letter brief. These failures undercut OANDA’s
`argument that its lack of such information prevented it from utilizing the source code and other
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`4 OANDA’s counsel stated that he had an unexpected family emergency and needed to reschedule.
`To accommodate, GAIN provided multiple dates around counsels’ trial schedule, the witness’s
`holiday schedule, and then eventually the witness’s unexpected medical leave.
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`Case 3:20-cv-05784-ZNQ-DEA Document 149 Filed 12/21/22 Page 7 of 8 PageID: 4888
`Hon. Douglas E. Arpert, U.S.M.J.
`December 21, 2022
`Page 7
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`technical information GAIN produced over a year ago to diligently amend its contentions. Again,
`OANDA has no valid excuse.
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`Accordingly, none of OANDA’s complaints about discovery justifies its failures to comply
`with the Local Rules. Further, none justifies its failure to disclose any contentions based on discovery
`provided well over a year ago.
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`III. GAIN HAS BEEN AND WILL CONTINUE TO BE PREJUDICED BY OANDA’S
`GAMESMANSHIP
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`The only gamesmanship here is OANDA’s continued refusal to provide GAIN with the
`disclosures to which it is entitled. GAIN has had to argue claim construction and dispute the
`boundaries of discovery without the benefit of knowing OANDA’s infringement theories, which the
`LPR requires disclosure of early in the case. And the lack of a scheduling order for the remainder of
`the case (which is already significantly underway) is irrelevant. “The rules are designed to require
`parties to crystallize their theories of the case early in the litigation….” King Pharms., Inc. v. Sandoz,
`Inc., No. 08-5974, 2010 U.S. Dist. LEXIS 50163, at *11 (D.N.J. May 20, 2010) (quoting Atmel Corp.
`v. Info. Storage Devices, Inc., No. C 95-1987, 1998 U.S. Dist. LEXIS 17564, at *7 (N.D. Cal. Nov. 5,
`1998) (emphasis added)); see also id. (quoting General Atomics v. Axis–Shield ASA, 2006 WL
`2329464, at *2 (N.D.Cal. Aug.9, 2006) (“Therefore, while ‘preliminary infringement contentions are
`still preliminary’ it is important to recognize that the Local Patent Rules strive to have the parties
`establish their contentions early on.”).
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`It is specifically because there is no end in sight to the discovery period that GAIN is
`prejudiced. For example, to this day, OANDA has not explicitly provided infringement contentions
`for the third party provided MetaTrader product it accuses on GAIN’s platform (which OANDA also
`licenses and hosts on its systems but inexplicably does not contend practices the patents)5, continues
`to make broad discovery demands beyond the bounds of the patents, and seeks access to proprietary
`details of its competitor’s systems. These problems exist because OANDA has not provided
`“crystalized” infringement contentions.
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`OANDA’s time for seeking amendment has long passed, and OANDA should be held to that
`choice to “game the system.” See L. Pat. R. 3.7; see also Wag Acquisition, LLC v. Gattyan Grp.
`S.a.r.l., No. CV 14-2832 (ES), 2020 WL 5105194, at *5 (D.N.J. Aug. 31, 2020) quoting Race Tires
`Am., Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 84 (3d Cir. 2010) (“[U]nlike Rule 15(a)(2) and
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`5 In other words, how can this software system infringe the patents on GAIN’s systems if it does not
`practice the patent on OANDA’s systems? OANDA has yet to explain this contradiction which
`should be explained (in part) in its contentions.
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`Case 3:20-cv-05784-ZNQ-DEA Document 149 Filed 12/21/22 Page 8 of 8 PageID: 4889
`Hon. Douglas E. Arpert, U.S.M.J.
`December 21, 2022
`Page 8
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`its focus on the question of prejudice to the non-moving party, Rule 16(b)(4) focuses on the moving
`party’s burden to show due diligence.”). In fact, nothing prevented OANDA from making multiple
`applications to the Court for permission to amend based on newly discovered information pursuant to
`LPR 3.7. If OANDA intended to rely on source code to demonstrate infringement, it should have
`already provided disclosures of citations to that source code and narrative descriptions of how they
`relate to the claim language. See Eagle View Techs., Inc. v. Xactware Sols., Inc., No. CV 15-7025
`(RBK/JS), 2017 WL 5886004, at *7 (D.N.J. Nov. 29, 2017) (granting defendant’s motion to strike
`plaintiffs’ reference to source code in second amended infringement contentions because Plaintiff
`failed to supplement its first amended infringement contentions with information it already had).
`Instead, OANDA has engaged in tactics to hide its contentions and make GAIN litigate this case in
`the dark with only barebones allegations of infringement. OANDA’s choice to use such tactics instead
`of promptly and diligently seeking leave to amend to provide fulsome early disclosures as this Court’s
`rules promote should have consequences.
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`CONCLUSION
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`For the foregoing reasons, the Court should grant GAIN’s motion to preclude OANDA from
`relying on any theories of infringement that have not been disclosed in OANDA’s July 20, 2021
`Infringement Contentions relying on source code or technical documents produced to date or any
`theories that could have been raised based on such discovery because OANDA has failed to timely
`make the required disclosures under Local Patent Rule 3.1.
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`Arnold B. Calmann
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`Cc: Counsel of record (by CM/ECF)
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