Case 3:10-cv-01199-PGS-DEA Document 181 Filed 02/27/13 Page 1 of 23 PageID: 3178
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`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
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`Civil Action No.: 10-1199 (PGS)
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`MEMORANDUM OPINION
`AND ORDER
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`MARLOWE PATENT HOLDINGS LLC,:
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`Plaintiff,
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`DICE ELECTRONICS, LLC, et al.,
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`Defendants.
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`____________________________________
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`ARPERT, U.S.M.J.
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`I.
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`INTRODUCTION
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`This matter comes before the Court on a Motion by Defendant LTI Enterprises, Inc. d/b/a
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`USA SPEC (“LTI”) for leave to file an Amended Counterclaim pursuant to FED. R. CIV. P. 15
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`[dkt. entry no. 171]. Plaintiff Marlowe Patent Holdings LLC (“Plaintiff”) has opposed this
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`Motion. See dkt. entry no. 175.
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`This matter also comes before the Court on a Motion by Plaintiff for leave to conduct
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`additional discovery, file Amended Claim Construction Briefs and for entry of an Amended
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`Scheduling Order [dkt. entry no. 172]. Defendants LTI and Precision Interface Electronics, Inc.
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`(“PIE”) (collectively, “Defendants”) have opposed this Motion. See dkt. entry nos. 174 & 179.
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`For the reasons stated below, LTI’s Motion is GRANTED and Plaintiff’s Motion is
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`DENIED.
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`II.
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`FACTUAL BACKGROUND AND PROCEDURAL HISTORY
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`On March 5, 2010, Plaintiff filed a Complaint against Defendants alleging infringement
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`of U.S. Patent No. 7,489,786 (“‘786 patent”), a patent issued to Mr. Ira Marlowe for an invention
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`entitled, “Audio Device Integration System” which Mr. Marlowe subsequently assigned to
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`Page 1 of 23
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`Daimler Exhibit 1015
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`Plaintiff. See Pl.’s Comp., dkt. entry no. 1 at 1-5; see also Pl.’s Amended Compl., dkt. entry no.
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`142 at 1-5. Plaintiff claims that the ‘786 patent pertains to a device that enables after-market
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`audio products such as a CD player to be connected to and controlled by an existing audio
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`system in an automobile. Id. at 2-3. Plaintiff alleges that Defendants sell devices that infringe
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`the claims of the ‘786 patent. Id. at 3-4.
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`On April 21, 2010, LTI filed an Answer denying Plaintiff’s allegations and a
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`Counterclaim seeking a declaratory judgment of non-infringement and invalidity. See LTI’s
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`Answer, dkt. entry no. 8 at 1-7. Likewise, on June 23, 2010, PIE filed an Answer and
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`Counterclaim. See PIE’s Answer, dkt. entry no. 45 at 1-10.
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` III. LTI’s Motion
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`A.
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`LTI’s Arguments in Support of its Motion to Amend
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`LTI seeks leave to file an Amended Counterclaim to add a claim for inequitable conduct
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`based on its recent discovery of certain prior art, evidence of which was allegedly deleted from
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`an internet archive site at the direction of Plaintiff’s owner, Mr. Marlowe. See Def.’s Br., dkt.
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`entry no. 171-1 at 1. LTI contends that because “[t]he instant action originally included an
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`affirmative defense that inequitable conduct in the procurement of the [patent-in-suit] rendered
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`the [patent] unenforceable”, Plaintiff “has been aware of this issue since LTI filed its Answer”.
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`Id.
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`LTI notes that Plaintiff “is wholly owned and controlled by [Mr.] Marlowe…[,] the sole
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`inventor listed on [the ‘786 patent]”, that Mr. Marlowe “assigned the rights [to] the ‘786 patent
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`to his company Blitzsafe of America, Inc. (“Blitzsafe”) on December 13, 2002”, that “Blitzsafe
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`assigned those rights back to [Mr.] Marlowe” on August 29, 2005, and that Mr. Marlowe
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`“assigned [his] right[s] [to] the ‘786 patent to Plaintiff on March 4, 2010, the day before this
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`lawsuit was filed”. Id. at 1. As a result, LTI claims, Mr. Marlowe “was intimately familiar with
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`the design of Blitzsafe products sold and offered for sale in the United States more than one year
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`before the filing date of the ‘786 patent”. Id. Claiming that it was not able to locate or “review
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`any Blitzsafe products from…the time the ‘786 patent was filed” until April 2012, LTI states that
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`it “acquired…a Blitzsafe audio interface bearing product number CHY/ALPDMXV.1A” from a
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`third party on April 4, 2012. Id. at 2. Thereafter, during his deposition on April 9, 2012, Mr.
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`Marlowe “opened the Blitzsafe CHY/ALPDMXV.1A audio interface and found that the circuit
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`board inside was dated 2001”. Id . After Mr. Marlowe’s deposition, LTI tested the Blitzsafe
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`product and ascertained that the Blitzsafe product produced a “device presence signal” and,
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`therefore, “anticipated all of the limitations of at least one claim of the ‘786 patent”. Id.
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`In addition, LTI maintains that during his deposition, Mr. Marlowe “confirmed
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`that…Blitzsafe asked archive.org to take down old Blitzsafe webpages” after the start of this
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`litigation despite previously claiming that “Blitzsafe had no paper records before 2005 due to a
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`flood and no computer records due to a file server problem”. Id. LTI “first learned that there
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`[was] a backup to archive.org” on April 24, 2012 and, thereafter, “was able to locate an old
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`Blitzsafe web page showing that a Blitzsafe CHY/ALPDMXV.1A audio interface was on sale in
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`the U.S. more than one year before the filing date of…[the ‘786 patent]”. Id. Based on this
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`information, on April 26, 2012, LTI informed Plaintiff’s counsel, then Jeffrey Kaplan, Esq.
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`(“Kaplan”), that it intended to move to amend its Counterclaim to add a claim for inequitable
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`conduct.
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`1.
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`Good cause exists to modify the Scheduling Order to permit the
`amendment.
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`LTI notes that FED. R. CIV. P. 16(b)(4) “provides that a scheduling order may be modified
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`only for good cause and with the judge’s consent” and contends that, in this instance, good cause
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`exists. Id. LTI further notes that it “should not be prejudiced because [Mr.] Marlowe deleted
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`evidence of Blitzsafe’s own prior art products and it took until after the Scheduling Order to
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`locate the evidence from third parties”. Id. Citing E. Minerals & Chems. Co. v. Mahan, 225
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`F.3d 330, 350 (3d Cir. 2000) and Dimensional Communications, Inc. v. OZ Optics, Ltd., 148
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`Fed. Appx. 82, 85 (3d Cir. 2005), LTI notes that “the Third Circuit requires a showing of good
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`cause in order to amend” after a pleading deadline has passed and maintains that “‘good cause’
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`exists when the ordered schedule cannot reasonably be met despite the diligence of the party
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`seeking the extension”. Id. at 4-5. Finally, citing Enzo Life Sci., Inc. v. Digene Corp., 270 F.
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`Supp. 2d 484, 487-89 (D. Del. 2003) and Roquette Freres v. SPI Pharma, Inc., 2009 WL
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`1444835, at *5 (D. Del. 2009), Plaintiff notes that FED. R. CIV. P. 9(b) “requires that claims of
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`inequitable conduct in patent cases be plead with particularity” and that “the pleading party is
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`possibly required to confirm the factual allegations through discovery”. Id. at 5. “LTI’s
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`proposed amendment is based on a new set of facts that could not be adequately confirmed prior
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`to the Scheduling Order’s deadline for amended pleadings”. Id.
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`LTI argues that it “acted diligently in pursuing the inequitable conduct claim and in
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`discovering facts necessary to plead it with particularity”. Id. “LTI first acquired a Blitzsafe
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`CHY/ALPDMXV.1A audio interface from a third party on or around April 4, 2012” because
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`“[p]rior to that time, despite diligent efforts, LTI had not been able to review any Blitzsafe
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`products from prior to the December 11, 2002 filing date of the ‘786 patent”. Id. Thereafter,
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`LTI “had
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`to depose [Mr.] Marlowe regarding
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`the characteristics of
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`the Blitzsafe
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`CHY/ALPDMXV.1A audio interface” and “[i]t then took LTI less than two weeks to locate a
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`radio to test the Blitzsafe CHY/ALPDMXV.1A audio interface and determine that the interface
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`produced a device presence signal and therefore anticipated all of the limitations of at least one
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`issued claim of the ‘786 patent”. Id. at 5-6. Notably, “LTI was not able to confirm that the
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`Blitzsafe CHY/ALPDMXV.1A audio interface was on sale more than one year prior to the filing
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`date of the ‘786 patent until April 24, 2012” because Plaintiff allegedly had no documents
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`regarding the sale of its products prior to 2005. Id. at 6. During his deposition, LTI maintains,
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`Mr. Marlowe “confirmed that after the start of this litigation, Blitzsafe asked archive.org to take
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`down old Blitzsafe webpages from prior to 2005 despite claiming that Blitzsafe had no paper
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`records before 2005 due to a flood and no computer records due to a file server problem”. Id.
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`“Within a week after having discovered the facts necessary to plead its inequitable
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`conduct claim with particularity, LTI sought to meet and confer with Plaintiff’s counsel”. Id.
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`Thereafter, LTI notes, “Plaintiff’s counsel immediately moved to withdraw” and, as a result,
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`“these proceedings were essentially frozen while Plaintiff sought and retained new counsel”. Id.
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`LTI points out that it informed the Court of its intention to file this motion during the Court’s
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`June 27, 2012 status conference. Id. As such, LTI argues that “any delay after LTI had
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`discovered the facts necessary to plead its inequitable conduct claim with particularity was
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`caused by the withdrawal of Plaintiff’s counsel….” Id. at 6-7.
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`2.
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`Leave to amend the Counterclaim should be granted.
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`LTI maintains that “[t]here has been no undue delay or bad faith and Plaintiff cannot
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`credibly argue any prejudice when inequitable conduct was raised as an affirmative defense in
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`LTI’s Answer and when a claim for inequitable conduct was pled by PIE in its Counterclaim”.
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`Id. LTI contends that “[t]he additional claim for inequitable conduct should not require Plaintiff
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`to conduct any additional discovery”, to “expend significant additional resources preparing for
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`trial”, or create “any delay to resolution of the dispute or prevent Plaintiff from bringing a timely
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`motion in another jurisdiction”. Id. Citing Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d
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`1312, 1327 (Fed. Cir. 2009), LTI maintains that its proposed Amended Counterclaim “contains a
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`claim for inequitable conduct that has been pled with the required particularity” pursuant to FED.
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`R. CIV. P. 9(b) by identifying “the specific who, what[,] when, where and how of the material
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`misrepresentation or omission committed before the USPTO” and that is “certainly not futile”.
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`Id. For these reasons, LTI claims that it “should be granted leave to amend its counterclaim to
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`add a claim for declaratory judgment of inequitable conduct”. Id. at 9.
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`B.
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`Plaintiff’s Arguments in Opposition to LTI’s Motion to Amend
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`Plaintiff contends that the Court should deny LTI’s Motion because it is seeking leave to
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`“assert a futile and frivolous claim”. See Pl.’s Opp’n Br., dkt. entry no. 175 at 1. Plaintiff notes
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`that its patent shall be “presumed valid” and that “[t]he party challenging the patent bears the
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`burden of proving by clear and convincing evidence the invalidity or unenforceability of the
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`claims of a patent”. Id. at 2.
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`Plaintiff further maintains that “[i]t is not enough to establish that the patent applicant had
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`a generalized intent to deceive or withhold” but rather, pursuant to Schering Corp. v. Mylan
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`Pharmaceuticals, Inc., 2012 WL 1473329, at *11 (D.N.J. 2012), “a ‘specific intent’ to deceive
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`must be proven by demonstrating by clear and convincing evidence ‘that the applicant knew of
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`the reference, knew that it was material, and made a deliberate decision to withhold it’”. Id. at 3.
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`In addition, Plaintiff contends “[t]he prosecution of the…[‘786 patent] application
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`required more than six (6) years and no less than 170 individual pieces of patent and non-patent
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`prior art were disclosed and/or submitted to the USPTO during the prosecution and examination
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`of the application”. See Decl. of Marlowe, dkt. entry no. 175-2 at 2. Mr. Marlowe references the
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`prior art cited in the patent and maintains that it demonstrates that he “undertook exhausting and
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`painstaking efforts to disclose all relevant art to the USPTO”. Id. at 3-12.
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`Mr. Marlowe also maintains that Blitzsafe “never sold any product that incorporated any
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`patented technology asserted in this litigation prior to the critical date” of December 11, 2001
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`(“Critical Date”). Id. Further, he maintains the patented technology was not publically revealed
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`until it was launched in joint venture with XM Satellite Radio at the 2002 Consumer Electronics
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`Show (“CES”) in Las Vegas, Nevada in January 2002”. Id. Mr. Marlowe contends that “[p]rior
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`to CES, there was no public disclosure of any kind of any technology covered by the patent
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`asserted in this litigation…including within any Blitzsafe product” and that “[i]t was only after
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`CES 2002…that Blitzsafe began working toward selling and eventually did sell interface
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`products that incorporated various technologies…[which are] the subject of the patent”. Id. at
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`14.
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`Mr. Marlowe asserts that LTI’s allegation of inequitable conduct is based on a single
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`Blitzsafe interface product identified as CHY/ALPDMXV.1A. Mr. Marlowe states that as
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`Blitzsafe designed various circuit boards for its products, it stamped those boards with a
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`copyright notice of the year in which the particular board was designed. Id. at 15. “The
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`CHY/ALPDMXV.1A product upon which LTI places all of its reliance in support of its
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`‘inequitable conduct’ allegation was apparently designed in or about 2001”; however, the
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`copyright stamp on the circuit board means nothing in terms of when the associated Blitzsafe
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`product was actually sold except that the product could not have been sold before the date
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`stamped on the circuit board. Id. at 15-16.
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`Mr. Marlowe also argues that “LTI produced photographs of the circuit board of the
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`CHY/ALPDMXV.1A Blitzsafe interface product” and, although “a cable blocks a full view of
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`the top of [the] microcontroller chip in that circuit board”, he contends “it is either a Microchip
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`Technology, Inc. (“MTI”) ‘PIC16F628’ or “PIC16F628A’” based on “the unique footprint of
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`that chip”. Id. at 17. Regardless of which MTI microcontroller chip is present in the Blitzsafe
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`product relied upon by LTI, Mr. Marlowe argues, “the date stamp on that chip shows that the
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`year that it was manufactured was 2002” which is further proof that the CHY/ALPDMXV.1A
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`Blitzsafe interface product relied upon by LTI was sold after, not before, December 11, 2001.
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`Id. at 18. Further, with respect to the circuit board used in the Blitzsafe product, Mr. Marlowe
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`maintains that it was not produced for Blitzsafe by the board manufacturer until 2002. Id. at 19.
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`Plaintiff claims that there is “absolutely no evidence whatsoever to support any claim of
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`‘inequitable conduct’” based upon Mr. Marlowe’s analysis of the Blitzsafe product. Rather,
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`Plaintiff contends, all available evidence demonstrates that the Blitzsafe product, and Blitzsafe’s
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`sale thereof, do not support an ‘inequitable conduct’ claim “as a matter of law” such that LTI’s
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`“futile and frivolous claim should not be allowed”. Id. at 4.
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`Finally, Mr. Marlowe claims that he “understand[s] that making [a request] to a web
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`archiving site to remove its archived files of Blitzsafe’s web site” during this litigation “was a
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`mistake”. Id. at 21. Nonetheless, Mr. Marlowe maintains that “the effect of [his] request has
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`caused no harm, foul or prejudice to LTI or any other party” because “there are other web
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`archives…[that] were not affected”. Id. Mr. Marlowe asserts that other “archived versions of
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`Blitzsafe’s internet web site have remained…throughout the entire pendency of this
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`litigation…freely and fully available to LTI…and anybody else who so desires to view those
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`sites”. Id. at 22. Mr. Marlowe believes that suggestions “by LTI that its discovery efforts have
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`been hampered by [Mr. Marlowe] are not entirely truthful” given that “LTI has accessed such
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`other sites throughout this litigation” and “[o]ld Blitzsafe internet web site pages were used at
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`[his] deposition”. Id.
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`C.
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`Legal Standards
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`1.
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`Leave to File an Amended Counterclaim
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`Pursuant to FED. R. CIV. P. 15(a)(2), the Court “should freely give leave [to amend] when
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`justice so requires” (see also Bjorgung v. Whitetail Resort, LP, 550 F.3d 263, 266 (3d Cir. 2008))
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`and that the decision to grant a motion to amend a pleading rests in the sound discretion of the
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`district court (see also Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330
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`(1970); see also Morton International, Inc. v. A.E. Staley Manuf. Co., 106 F. Supp. 2d 737, 744
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`(D.N.J. 2000)). Further, the Court notes that it “has discretion to deny the request only if the
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`party’s delay in seeking to amend is undue, motivated by bad faith, or prejudicial to the opposing
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`party”. Adams v. Gould, 739 F.2d 858, 864 (3d Cir. 1984); see also Foman v. Davis, 371 U.S.
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`178, 182 (1962); Arthur v. Maersk, Inc., 434 F.3d 196, 204 (3d Cir. 2006); Hill v. City of
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`Scranton, 411 F.3d 118, 134 (3d Cir. 2005). Delay becomes “undue”, and thereby creates
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`grounds for the district court to refuse to grant leave, when it places an unwarranted burden on
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`the Court, when the movant has had previous opportunities to amend, or when it becomes
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`prejudicial to the opposing party. See Adams, 739 F.2d at 868; see also Cureton v. NCAA, 252
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`F.3d 267, 273 (2001). “[T]he Third Circuit has consistently recognized that ‘prejudice to the
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`non-moving party is the touchstone for the denial of an amendment’”. Schindler Elevator Corp.
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`v. Otis Elevator Co., 2009 U.S. Dist. LEXIS 40994, at *9 (D.N.J. 2009); see also Arthur, 434
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`F.3d at 204 (quoting Cornell & Co., Inc. v. Occupational Safety & Health Review Comm’n, 573
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`F.2d 820, 823 (3d Cir. 1978)). “In determining what constitutes prejudice, the Second Circuit
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`considers ‘whether the assertion of the new claim would: (i) require the opponent to expend
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`significant additional resources to conduct discovery and prepare for trial; (ii) significantly delay
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`the resolution of the dispute; or (iii) prevent the plaintiff from bringing a timely action in another
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`jurisdiction”. Long v. Wilson, 393 F.3d 390, 400 (3d Circ. 2004); see also Block v. First Blood
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`Assocs., 988 F.2d 344, 350 (2d Cir. 1993). The Third Circuit has “endorse[d] the Second Circuit
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`approach”. Id.
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`The Court notes that “in determining the futility of an amendment, ...[it] applies the same
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`standard of legal sufficiency as applie[d] under Rule 12(b)(6)” and “accept[s] as true all factual
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`allegations contained in the proposed amended [pleading] and any reasonable inferences that can
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`be drawn from them”. Walls v. County of Camden, 2008 U.S. Dist. LEXIS 92940, at *6-7
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`(D.N.J. 2008); see also Medpointe Healthcare, Inc. v. Hi-Tech Pharm. Co., Inc., 380 F. Supp. 2d
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`457, 462 (D.N.J. 2005); Alvin v. Suzuki, 227 F.3d 107, 121 (3d Cir. 2000); Brown v. Phillip
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`Morris, Inc., 250 F.3d 789, 796 (3d Cir. 2001). “[I]f the proposed amendment is frivolous or
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`advances a claim or defense that is legally insufficient on its face, the court may deny leave to
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`amend” but where the “proposed amendment is not clearly futile, then denial of leave to amend
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`is improper”. Harrison Beverage Co. v. Dribeck Importers, Inc., 133 F.R.D. 463, 468-69 (D.N.J.
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`1990); see also Crete v. Resort Condos., Int’l, LLC, 2011 U.S. Dist. LEXIS 14719, at *31-32
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`(D.N.J. 2011); Lorenz v. CSX Corp., 1 F.3d 1406 (3d Cir. 1993). The Court “determines futility
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`by taking all pleaded allegations as true and viewing them in a light most favorable to [the
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`moving party]”. Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159,
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`175 (3d Cir. 2010).
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`2.
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`Inequitable Conduct
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`“[I]t is well established that patent applicants ‘have a duty to prosecute patent
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`applications in the Patent Office with candor, good faith, and honesty”. AstraZeneca Pharms.
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`LP v. Teva Pharms. USA, 567 F. Supp. 2d 683, 691 (D.N.J. 2008); see also Honeywell Int’l Inc.
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`v. Universal Avionics Sys. Corp., 488 F.3d 982, 999 (Fed Cir. 2007). “A breach of this duty
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`constitutes inequitable conduct and renders the entire patent unenforceable” and “can arise from
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`‘an affirmative misrepresentation of a material fact, failure to disclose material information, or
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`submission of false material information, coupled with an intent to deceive or mislead the
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`[USPTO]”. Id.; see also Purdue Pharma L.P. v. Endo Pharmaceuticals Inc., 438 F.3d 1123,
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`1128 (Fed. 2006).
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`The Court notes that “[t]he substantive elements of inequitable conduct are: (1) an
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`individual associated with the filing and prosecution of a patent application made an affirmative
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`misrepresentation of a material fact, failed to disclose material information, or submitted false
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`material information; and (2) the individual did so with a specific intent to deceive the
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`[US]PTO”. Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1327 n.3 (Fed. Cir. 2009);
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`see also Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365 (Fed. Cir. 2008);
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`Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178, 1181 (Fed. Cir. 1995); 37 C.F.R. § 1.56
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`(2008). Further, “[t]he relevant ‘conditions of mind’ for inequitable conduct include: (1)
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`knowledge of
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`the withheld material
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`information or of
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`the falsity of
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`the material
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`misrepresentation, and (2) specific intent to deceive the [US]PTO”. Id.; see also Hebert v. Lisle
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`Corp., 99 F.3d 1109, 1116 (Fed. Cir. 1996); Molins, 48 F.3d at 1181.
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`Pursuant to FED. R. CIV. P. 9(b), “[i]n alleging fraud or mistake, a party must state with
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`particularity the circumstances constituting fraud or mistake” although “[m]alice, intent,
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`knowledge, and other conditions of a person’s mind may be alleged generally”. “[I]nequitable
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`conduct, while a broader concept than fraud, must be pled with particularity under Rule 9(b)”
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`(Id. at 1326-27; see also Ferguson Beauregard/Logic Controls, Div. of Dover Resources, Inc. v.
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`Mega Sys., LLC, 350 F.3d 1327, 1344 (Fed. Cir. 2003)) such that “[a] pleading that simply avers
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`the substantive elements of inequitable conduct…without setting forth the particularized factual
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`bases for the allegation…does not satisfy Rule 9(b)” (Id.; see also King Auto., Inc. v. Speedy
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`Muffler King, Inc., 667 F.2d 1008, 1010 (C.C.P.A. 1981)). “In sum, to plead the ‘circumstances’
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`of inequitable conduct with the requisite ‘particularity’ under Rule 9(b), the pleading must
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`identify the specific who, what, when, where, and how of the material misrepresentation or
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`omission committed before the PTO”. Id. at 1328. “Moreover, although ‘knowledge’ and
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`‘intent’ may be averred generally, a pleading of inequitable conduct under Rule 9(b) must
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`include sufficient allegations of underlying facts from which a court may reasonably infer that a
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`specific individual (1) knew of the withheld material information or of the falsity of the material
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`misrepresentation, and (2) withheld or misrepresented this information with a specific intent to
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`deceive the [US]PTO”. Id. at 1328-29.
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`
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`
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`D.
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`Conclusion
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`In this case, LTI has demonstrated that good cause exists to permit the assertion of its
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`affirmative claim of inequitable conduct. Thus, the Court will grant its Motion.
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`First, LTI was diligent in moving to amend its Counterclaim following discovery of new
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`information to support its claim. The backup information, which LTI claims indicates Plaintiff’s
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`product was on sale for more than one year before the patent was filed, was not discovered until
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`April, 2012. Following discovery of this information, LTI sought to meet and confer with
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`Plaintiff’s counsel. Plaintiff’s counsel thereafter moved to withdraw from his representation in
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`this action. Thus, any delay in filing the instant Motion cannot be attributed to LTI.
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`Second, Plaintiff will not be prejudiced if LTI’s Motion is granted. Plaintiff has been
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`aware of such a claim since this action’s inception. LTI itself raised inequitable conduct as an
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`affirmative defense in its Answer and a similar counterclaim was plead by PIE. Therefore, the
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`proposed Counterclaim will not require Plaintiff to conduct any additional discovery or expend
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`Case 3:10-cv-01199-PGS-DEA Document 181 Filed 02/27/13 Page 13 of 23 PageID: 3190
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`significant additional resources beyond what would otherwise be required. Nor will it cause any
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`significant additional delay in the resolution this matter.
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`Finally, the proposed Counterclaim is not clearly futile. Taking the facts as pled, and
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`viewing them in the light most favorable to LTI, the Court cannot conclude that the proposed
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`Counterclaim is legally insufficient on its face. The existence of PIE’s parallel Counterclaim
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`further bolsters this point. “[I]n pleading inequitable conduct in patent cases, Rule 9(b) requires
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`identification of the specific who, what, when, where, and how of the material misrepresentation
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`or omission committed before the PTO.” Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312,
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`1327 (Fed. Cir. 2009). Here, LTI has adequately pled the ‘who’ (Plaintiff); ‘what’ (Plaintiff was
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`aware
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`of
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`the Blitzsafe CHY/ALPDMXV.1A);
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`‘when’
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`and
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`‘where’
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`(Blitzsafe
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`CHY/ALPDMXV.1A was on sale in the U.S. more than one year prior to the filing date of the
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`‘786 Patent ); and ‘how’ (Plaintiff misled the PTO by deleting evidence of prior art from
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`archive.org). For these reasons, LTI’s Motion is GRANTED.
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`IV.
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`Plaintiff’s Motion
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`
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`
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`A.
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`Plaintiff’s Arguments in Support of its Motion
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`Prior to the commencement of this suit, Mr. Marlowe retained Jean-Marc Zimmerman,
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`Esq. (“Zimmerman”) to represent his interests. On Mr. Zimmerman’s recommendation, Plaintiff
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`also retained Mr. Kaplan to serve as Zimmerman’s co-counsel. See Decl. of Marlowe, dkt. entry
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`no. 172-2 at 2. Mr. Marlowe asserts that he had no prior relationship with Mr. Kaplan and “his
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`relationship with Mr. Kaplan was “strained” due to lack of communication, failure to articulate
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`legal strategy, and his failure to include Mr. Marlowe in the litigation process. Id. More
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`specifically, Mr. Marlowe maintains that Mr. Kaplan did not consult with him, that he would
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`“prepare and file documents without [Mr. Marlowe’s] input or participation…including the
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`Case 3:10-cv-01199-PGS-DEA Document 181 Filed 02/27/13 Page 14 of 23 PageID: 3191
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`Markman briefs and other discovery issues and matters”, and that Mr. Marlowe’s “efforts to
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`participate in this litigation were futile”. Id. at 2-3. Mr. Marlowe believes that Mr. Kaplan’s
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`decisions have hampered Plaintiff’s ability to test LTI’s claims of invalidity and enforceability.
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`Id. He further contends that only after Mr. Kaplan withdrew and Plaintiff retained new counsel
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`did he “appreciate the magnitude of the inadequacy of the outstanding discovery issues and other
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`matters, including Plaintiff’s claim construction (Markman) submissions”. Id.
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`Plaintiff’s new counsel, Richard J. Catalina, Jr., Esq. (“Catalina”), states that “Plaintiff is
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`not asking to completely re-open discovery, amend pleadings or otherwise set this litigation back
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`in [any] significant manner”. See Decl. of Catalina, dkt. entry no. 172-1 at 2-3. Rather, Mr.
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`Catalina maintains, “Plaintiff is merely seeking to complete certain outstanding discovery,
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`follow-up on matters
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`that have only
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`recently been
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`revealed by…LTI,
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`file
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`Amended/Supplemental Claim Construction briefs on the grounds that Plaintiff’s principal…was
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`not permitted by Mr. Kaplan to participate in that process in any meaningful manner, and place
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`this litigation back on [a] sound track that would allow Plaintiff to fairly, rightly litigate its
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`infringement claims and be entitled [to] its day in Court”. Id. at 3-4. Mr. Catalina claims that
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`“granting Plaintiff the relief requested herein should refine the issues in this litigation – including
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`the issues to be determined at trial – and further streamline the issues and matters for the
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`Markman hearing and summary judgment motions, and – with hope – facilitate settlement”. Id.
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`at 4.
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`
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`Specifically, Plaintiff seeks the following:
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`(1) Discovery with respect to LTI:
`
`A. Deposition of Jimmy Zhang, Chief Engineer of LTI.
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`B.
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`Production for inspection, investigation and testing of
`certain Blitzsafe products upon which LTI bases
`its
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`
`
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`C.
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`
`
`
`
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`D.
`
`
`
`E.
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`
`
`F.
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`
`
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`claims of invalidity, unenforceability and/or other alleged
`inequitable conduct.
`
`Production for inspection, investigation and testing the
`LTI which were the subject of the video files identified
`“LTI-521” and “LTI- 522” which were created and
`produced by LTI and which LTI bases its claims of
`invalidity, unenforceability
`
`and/or other
`alleged
`inequitable conduct
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`Production of any other product upon which LTI claims
`invalidity, unenforceability and/or other alleged inequitable
`conduct.
`
`Production of the “third video” produced by LTI’s Chief
`Engineer, Jimmy Zhang, as testified to by Evan Trieu
`during his deposition on April 5, 2012.
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`Production of high resolution, color photographs of all
`products identified above, including all electronic circuitry
`and macro shots of the fronts and backs of all circuit boards
`of said products.
`
`(2) Discovery with respect to PIE:
`
`A.
`
`Deposition of PIE’s Rule 30(b)(6) representative.
`
`B.
`
`
`
`
`C.
`
`
`
`D.
`
`
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`Production of any Blitzsafe product and/or other prior
`art upon which PIE bases its claims of invalidity,
`unenforceability
`and/or
`other
`alleged
`inequitable
`conduct.
`
`Production of any PIE products upon which PIE bases any
`claims of invalidity, unenforceability and/or other alleged
`inequitable conduct by Plaintiff.
`
`Production of any other product upon which PIE bases
`any claim of invalidity, unenforceability and/or other
`alleged inequitable conduct.
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`(3) Markman briefing and Amended Scheduling Order:
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`A.
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`Following the completion of the additional discovery,
`Plaintiff seeks leave to file Supplemental and/or Amended
`Claim Construction Briefs.
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`B.
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`C.
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`Following completion of the Markman Hearing, allowing
`the Parties leave to file motions for summary judgment
`based on the Court’s claim construction rulings.
`
`the Markman Hearing
`the completion of
`Following
`Plaintiff seeks leave to conduct discovery as to its damages.
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`See Pl.’s Proposed Form of Order, dkt. entry no. 172-4.
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`
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`Here, Plaintiff argues that “ample good cause exists…to modify the pre-trial schedule
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`(which was already amended de facto upon the withdrawal of Plaintiff’s prior counsel…) and
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`grant the specific relief requested by Plaintiff in this application” given that “little
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`additional…delay will be caused” as a result thereof. Id. at 2. Plaintiff asserts that its request “is
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`not being made in bad faith”, that “any delay was [not] ‘willful’”, that “overwhelming good
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`cause exists…as set forth in [Plaintiff’s] supporting Declarations, and that Plaintiff “is pursuing
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`this request diligently”. Id. at