Case 2:17-cv-00514-JRG Document 108 Filed 01/25/19 Page 1 of 9 PageID #: 4423
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`AGIS SOFTWARE DEVELOPMENT LLC,
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`Plaintiff,
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`v.
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`HTC CORPORATION,
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`Defendant.
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`LG ELECTRONICS INC.,
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`Defendant.
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`Case No. 2:17-CV-0514-JRG
`(LEAD CASE)
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`JURY TRIAL DEMANDED
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`Case No. 2:17-CV-0515-JRG
`(CONSOLIDATED CASE)
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`JURY TRIAL DEMANDED
`
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
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`§
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`§
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`PLAINTIFF AGIS SOFTWARE DEVELOPMENT LLC’S OPPOSED MOTION
`TO STRIKE THE EXPERT REPORT OF DR. SCOTT ANDREWS FOR
`UNDISCLOSED OBVIOUSNESS COMBINATIONS AND FAILURE TO ADHERE
`TO DEFENDANTS’ FINAL ELECTION OF PRIOR ART REFERENCES
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`Case 2:17-cv-00514-JRG Document 108 Filed 01/25/19 Page 2 of 9 PageID #: 4424
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`I.
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`INTRODUCTION
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`Plaintiff AGIS Software Development LLC (“AGIS”) submits this Motion to Strike
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`Portions of the December 14, 2018 Expert Report of Scott Andrews (“Andrews Report”) based
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`on Defendants HTC Corporation (“HTC”) and LG Electronics, Inc.’s (“LG”) (collectively,
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`“Defendants”) failure to timely disclose invalidity theories and obviousness combinations based
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`on non-elected prior art references. The Andrews Report advances untimely invalidity theories
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`based on U.S. Patent No. 7,630,724 (“the ’724 Patent”) which is not identified in Defendants’
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`final election of prior art. Defendants never identified the ’724 Patent as anticipatory or
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`obviousness-type prior art references in their amended invalidity contentions. Ex. A, LG’s
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`Amended Invalidity Contentions, dated January 17, 2019; Ex. B, HTC’s Invalidity Contentions,
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`dated March 15, 2018; Ex. C, Expert Report of Scott Andrews.1. The Andrews Report thus
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`exceeds the scope of Defendants’ amended invalidity contentions and its final election of prior
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`art references. Because Defendants failed to put AGIS on notice of these undisclosed invalidity
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`theories in accordance with the local patent rules and this Court’s orders, AGIS respectfully
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`moves the Court to strike portions of the Andrews Report that rely on the non-elected prior art
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`reference as improperly based on previously-undisclosed invalidity theories.
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`II.
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`FACTUAL BACKGROUND
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`LG served invalidity contentions on February 6, 2018 and amended its invalidity
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`contentions on January 17, 2019. Ex. A. HTC served invalidity contentions on March 15, 2018.
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`Ex. B. Neither LG nor HTC’s invalidity contentions identified the ’724 Patent as anticipatory or
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`an obviousness-type prior art reference, or disclosed obviousness combinations based on the
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`1 References to Exhibits A-K refer to the exhibits submitted with the Declaration of Alfred R. Fabricant in
`support of this Motion and attached hereto.
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`Case 2:17-cv-00514-JRG Document 108 Filed 01/25/19 Page 3 of 9 PageID #: 4425
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`’724 Patent. Defendants provided no charts identifying citations and evidence to support the
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`’724 Patent as anticipatory and/or obviousness references.
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`The Parties negotiated a date for the final election of claims and prior art, as reflected in
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`the Docket Control Order. See Ex. D, AGIS Software Development LLC v. HTC Corporation,
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`2:17-cv-00514-JRG, Dkt. 39 Docket Control Order, dated February 20, 2018 (ordering parties to
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`serve a Final Election of Asserted Claims identifying no more than 15 claims per asserted patent,
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`no more than 38 claims total; and Defendants to elect no more than 15 prior art references
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`against each patent and no more than 40 references total); Ex. E, AGIS Software Development
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`LLC v. Huawei Device USA Inc., et al., 2:17-cv-00513-JRG, Dkt. 85 Docket Control Order,
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`dated February 2, 2018. AGIS substantially narrowed its claims to a final election of 38 claims
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`across 4 patents. See Ex. F, AGIS’s Final Election of Asserted Claims against HTC; Ex. G,
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`AGIS’s Final Election of Asserted Claims against LG. Defendants were each required to make a
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`final election of fifteen (15) prior art references on August 29, 2018. See Ex. H, LG’s Final
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`Election of Prior Art, dated August 29, 2018; Ex. I, HTC’s Final Election of Prior Art, dated
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`August 29, 2018. Defendants’ final election of prior art references did not identify the ’724
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`Patent. Ex. D; Ex. E.
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`On December 14, 2018, Defendants served the Andrews Report which included, for the
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`first time, anticipation and obviousness arguments based on the non-elected ‘724 Patent. Ex. C,
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`Andrews Report at 144-148, 370-463, 754-792, 971-1003.2
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`III. LEGAL STANDARD
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`Invalidity contentions are intended to put the party alleging infringement on notice of the
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`alleged infringer’s arguments as to “[w]hether each item of prior art anticipates each asserted
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`2 AGIS notes that the Andrews Report contains a paragraph numbering error. On page 267 of the
`Andrews Report, the numbering of paragraphs ends at ¶ 592 and the next paragraph begins at ¶ 351.
`To avoid confusion, AGIS refers to the Andrews Report by page number.
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`2
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`Case 2:17-cv-00514-JRG Document 108 Filed 01/25/19 Page 4 of 9 PageID #: 4426
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`claim or renders it obvious. If a combination of items of prior art makes a claim obvious, each
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`such combination, and the motivation to combine such items, must be identified.” P.R. 3-3.
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`These rules are intended to “require parties to crystallize their theories of the case early in the
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`litigation so as to prevent the ‘shifting sands’ approach” to litigation. Keranos, LLC v. Silicon
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`Storage Tech., Inc., 797 F.3d 1025, 1035 (Fed. Cir. 2015) (citations omitted); see also Tyco
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`Healthcare Group LP v. Applied Medical Resources Corp., 2009 WL 5842062, at *1 (E.D. Tex.
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`Mar. 30, 2009) (explaining that the purpose of the rules is to “further the goal of full, timely
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`discovery and provide all parties with adequate notice and information with which to litigate
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`their cases, not to create supposed loopholes through which parties may practice litigation by
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`ambush.”). Parties must seek leave to amend their invalidity contentions with a showing of good
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`cause, if the need arises. P.R. 3-6.
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`In determining whether to strike an expert report for failure to comply with local P.R.
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`3-3, courts in this District have considered a list of five non-exclusive factors: (1) the danger of
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`unfair prejudice to the non-movant; (2) the length of the delay and its potential impact on judicial
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`proceedings; (3) the reason for the delay, including whether it was within the reasonable control
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`of the movant; (4) the importance of the particular matter and, if vital to the case, whether a
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`lesser sanction would adequately address the other factors to be considered and also deter future
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`violations of the court’s Scheduling Orders, Local Rules, and the Federal Rules of Civil
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`Procedure; and (5) whether the offending party was diligent in seeking an extension of time, or
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`in supplementing discovery, after an alleged need to disclose the new matter became apparent.
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`LML Patent Corp. v. JPMorgan Chase & Co., 2011 WL 5158285, at *4 (E.D. Tex., Aug. 11,
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`2011); Tyco , 2009 WL 5842062, at *2 -; see also Betzel v. State Farm Lloyds, 480 F.3d 704, 707
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`(5th Cir. 2007).
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`3
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`Case 2:17-cv-00514-JRG Document 108 Filed 01/25/19 Page 5 of 9 PageID #: 4427
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`IV. ARGUMENT
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`Defendants should not be permitted to rely on undisclosed invalidity theories based on
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`non-elected references raised for the first time in the Andrews Report. In their failure to comply
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`with P.R. 3-3, Defendants did not identify the ’724 Patent as anticipatory or an obviousness-type
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`prior art reference, and did not identify the ’724 Patent as part of any combination of prior art
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`references rendering the asserted claims obvious. The ’724 Patent was not charted with citations
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`or evidence identifying where specifically in each ’724 Patent each element of each asserted
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`claim is found. Defendants add a single line to their election of prior art, stating that they
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`“further reserve[] the right to assert at trial . . . U.S. Patent No. 7,630,724 would also render the
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`claims invalid under at least AIA 35 U.S.C. § 102.” Ex. I at 3; Ex. I at 2. A reservation of rights
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`is not an election, and therefore, Defendants cannot argue that this disclosure was sufficient to
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`elect the ’724 Patent as a prior art reference. The Andrews Report departs from Defendants’
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`representations designed to mutually narrow the issues. Mr. Andrews attempts to resurrect non-
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`elected prior art references and submits undisclosed invalidity theories and combinations based
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`on the ’724 Patent. Ex. C at 144-148, 370-463, 754-792, 971-1003.
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`Courts in this District have held that expert reports may not introduce theories not
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`previously set forth in infringement contentions. Cardsoft, Inc. v. Verifone Holdings, Inc., No.
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`2:08-cv-98-RSP, Dkt. 371 (E.D. Tex. 2012) (“To the extent that Defendants’ expert offers
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`previously undisclosed non-infringement positions . . . such testimony or opinions will be
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`excluded upon proper motion or objection at trial.”); Tyco , 2009 WL 5842062, at *3 (“The
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`Local Patent Rules and this court’s Scheduling Order are clear: [the alleged infringer] was
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`required to disclose any combination of, or motivation to combine, prior art it was asserting
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`against a particular claim in its Invalidity Contentions. Failure to do so, unless substantially
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`justified or harmless, means the evidence will be excluded.”); DataQuill Ltd. v. Huawei Techs.
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`Case 2:17-cv-00514-JRG Document 108 Filed 01/25/19 Page 6 of 9 PageID #: 4428
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`Co. Ltd., No. 2:13-CV-633, 2015 WL 9450821, at *3 (E.D. Tex. 2015) (striking portions of an
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`expert report that exceeded the disclosure of the invalidity contentions, explaining “Because
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`Plaintiff is entitled to rely on the dates disclosed in Defendant’s invalidity contentions when
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`preparing its defense, Defendant’s contentions did not provide Plaintiff with adequate
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`opportunity to prepare its defense in light of this omission”).
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`The Andrews Report discloses obviousness combinations based on the non-elected ’724
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`Patent. Mr. Andrews concedes that the ’724 Patent is referenced in the priority chain of the
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`Patents-in-Suit and AGIS has pointed to the ’724 Patent for written description support. See e.g.,
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`Ex. C at 44. Defendants had ample notice of the existence of the ’724 Patent, which is publicly
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`available, and therefore, provides no justification for their untimely disclosure as an anticipatory
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`or obviousness-type reference.
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`Defendants’ untimely disclosure of these new invalidity theories prejudices AGIS
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`because it provides Defendants with an unfair advantage. AGIS justifiably relied on the Court’s
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`docket control order and P.R. 3-3 in determining the scope and substance of Defendants’
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`invalidity positions. More specifically, AGIS built its case around the reliance on Defendants’
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`final election of prior art which did not include the ’724 Patent. Defendants cannot argue that the
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`delay in asserting these invalidity theories was outside of Defendants’ control because LG
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`disclosed Mr. Andrews as an expert on August 21, 2018, HTC disclosed Mr. Andrews on
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`November 20, 2018, and the patents were public documents in Defendants’ possession since at
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`least this time. See Ex. J, Email from B. Phan to AGIS, dated August 20, 2018; Ex. K, Email
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`from M. Bombach to AGIS, dated November 20, 2018. Defendants have had sufficient time to
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`amend their invalidity contentions since invalidity contentions were served in February and
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`March of 2018. See Ex. A; Ex. B. HTC did not seek to submit second amended contentions in
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`Case 2:17-cv-00514-JRG Document 108 Filed 01/25/19 Page 7 of 9 PageID #: 4429
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`this case. LG submitted amended contentions on January 17, 2019, but still does not disclose
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`any of the references. Tyco, 2009 WL 5842062, at *1 (“[the non-movant] had plenty of time to
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`comply with the disclosure requirements of P.R. 3-3(b), and there is no evidence that [defendant]
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`did not have sufficient information to provide the appropriate disclosures in a timely manner.”).
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`Rather than providing a showing of good cause, Defendants attempt to introduce the new
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`invalidity theories into the case through the Andrews Report which improperly shifts the burden
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`to AGIS to exclude the new theories. Moreover, striking these theories will not unduly prejudice
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`Defendants because it would return Defendants to the same position they held when serving their
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`final election of prior art.
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`V.
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`CONCLUSION
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`For the foregoing reasons, AGIS respectfully requests that the Court grant AGIS’s
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`motion to strike the untimely invalidity theories in the Andrews Report based on the non-elected
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`’724 Patent.
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`Dated: January 25, 2019
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`BROWN RUDNICK LLP
`
` /s/ Alfred R. Fabricant
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`
`
`Alfred R. Fabricant
`NY Bar No. 2219392
`Email: afabricant@brownrudnick.com
`Lawrence C. Drucker
`NY Bar No. 2303089
`Email: ldrucker@brownrudnick.com
`Peter Lambrianakos
`NY Bar No. 2894392
`Email: plambrianakos@brownrudnick.com
`Vincent J. Rubino, III
`NY Bar No. 4557435
`Email: vrubino@brownrudnick.com
`Alessandra C. Messing
`NY Bar No. 5040019
`Email: amessing@brownrudnick.com
`Shahar Harel
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`6
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`Case 2:17-cv-00514-JRG Document 108 Filed 01/25/19 Page 8 of 9 PageID #: 4430
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`NY Bar No. 4573192
`Email: sharel@brownrudnick.com
`John A. Rubino
`NY Bar No. 5020797
`Email: jrubino@brownrudnick.com
`Enrique W. Iturralde
`NY Bar No. 5526280
`Email: eiturralde@brownrudnick.com
`Timothy J. Rousseau
`NY Bar No. 4698742
`Email: trousseau@brownrudnick.com
`Daniel J. Shea, Jr.
`NY Bar No. 5430558
`Email: dshea@brownrudnick.com
`Justine Minseon Park
`NY Bar No. 5604483
`Email: apark@brownrudnick.com
`BROWN RUDNICK LLP
`7 Times Square
`New York, NY 10036
`Telephone: 212-209-4800
`Facsimile: 212-209-4801
`
`Samuel F. Baxter
`Texas State Bar No. 01938000
`Email: sbaxter@mckoolsmith.com
`Jennifer L. Truelove
`Texas State Bar No. 24012906
`Email: jtruelove@mckoolsmith.com
`McKOOL SMITH, P.C.
`104 East Houston Street, Suite 300
`Marshall, Texas 75670
`Telephone: 903-923-9000
`Facsimile: 903-923-9099
`
`ATTORNEYS FOR PLAINTIFF, AGIS
`SOFTWARE DEVELOPMENT LLC
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`Case 2:17-cv-00514-JRG Document 108 Filed 01/25/19 Page 9 of 9 PageID #: 4431
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that, on January 25, 2019, all counsel of record who are
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`deemed to have consented to electronic service are being served with a copy of this document via
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`the Court’s CM/ECF system per Local Rule CV-5(a)(3).
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`/s/ Alfred R. Fabricant
` Alfred R. Fabricant
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