Case 2:19-cv-00209-JRG Document 135 Filed 04/30/20 Page 1 of 12 PageID #: 3631
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
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`THE HILLMAN GROUP, INC.
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`Plaintiff,
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`v.
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`KEYME, LLC
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`Defendant.
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`Civil Action No. 2:19-cv-00209-JRG
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`JOINT MOTION TO AMEND
`JOINT CLAIM CONSTRUCTION & PREHEARING STATEMENT AND
`KEYME’S MOTION FOR LEAVE TO ADD A CLAIM TERM FOR DISPUTE
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`Plaintiff The Hillman Group, Inc. (“Hillman”) and Defendant KeyMe, LLC (“KeyMe”)
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`respectfully and jointly move to amend the Patent Local Rule 4-3 Joint Claim Construction &
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`Prehearing Statement (Dkt. No. 116) (“Joint Statement”). As a result of the parties’ efforts to
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`negotiate a reduction in the number of claim construction issues to be presented to the Court, the
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`number of disputed terms to be presented for construction is now nine terms down from twenty
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`nine. Specifically, the parties have agreed to amend the Joint Statement to reflect the parties’
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`agreements, attached in Exhibits 1-4 of this motion. This portion of the motion is unopposed. In
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`the lone portion of this motion that is opposed, KeyMe seeks leave to propose an additional
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`claim term – “a key duplicating system within said kiosk configured to replicate the tooth pattern
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`of the blade of said key inserted in said key-receiving entry” – which is part of every asserted
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`claim of the ’446 Patent. Hillman opposes adding this claim term for construction. The parties’
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`joint statement regarding the agreed portions of this motion and respective statements regarding
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`the disputed portion of this motion are below.
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`1
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`I.
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`JOINT STATEMENT ON AGREED CHANGES
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`On December 20, 2019, the parties exchanged proposed terms for construction. (Dkt.
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`No. 96, 97). At the time, KeyMe was represented by prior primary counsel. On January 31,
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`2020, after exchanging proposed constructions and engaging in a meet and confer process, the
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`parties filed the Joint Claim Construction & Prehearing Statement (“Joint Statement”) pursuant
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`to Patent Local Rule 4-3. (Dkt. No. 116). That Joint Statement identified one agreed claim
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`construction and 29 disputed terms for construction. (Dkt. No. 116, Dkt. No. 116-1).
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`On February 14, 2020, the Court granted Hillman’s motion to disqualify prior primary
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`counsel and stayed this case. (Dkt. No. 119). KeyMe engaged current primary counsel, and the
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`parties submitted a joint status report with proposed schedule on March 25, 2020. (Dkt. No.
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`127). The Court issued its Second Amended Docket Control Order on March 26, 2020. (Dkt.
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`No. 128). The stay lifted March 30, 2020.
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`Since the stay was lifted, new primary counsel for KeyMe and counsel for Hillman have
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`engaged in further meet and confer discussions in an effort to narrow and focus the parties’ claim
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`construction disputes to be presented and resolved by the Court. Specifically, on the morning of
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`April 21, 2020, at the invitation of Hillman, KeyMe (a) proposed dropping a significant number
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`of claim terms, (b) agreed to two Hillman claim constructions, (c) proposed revisions to claim
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`term language to be construed for other terms, (d) proposed modified constructions for remaining
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`terms, and (e) identified additional evidence. Since then, the parties have agreed that 15 terms
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`(#2, 7-8, 10-12, 14-19, 23, 27 and 28)1 originally identified as disputed in Docket No. 116-1
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`(Appendix A of the Joint Statement) no longer require construction and need not be presented to
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`1 This motion uses the reference numbers used in Appendix A of the original Joint
`Statement (Dkt. No. 116-1) for claim terms originally presented as disputed.
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`2
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`the Court; the parties have agreed to the construction of five terms (#6, 9, 20, 21, 24)2 originally
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`identified as disputed (“Newly Agreed Terms”); the parties have agreed to modify the specific
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`claim language to be construed for three of the remaining disputed terms (#1, 13, 21); and the
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`parties have agreed to changes to the proposed constructions of KeyMe (and commensurate
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`proposed changes to Hillman’s proposed constructions) for certain disputed terms (#1, 3-5, 13,
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`21-22, 25-26). As a result, construction of nine of the original 29 terms remain disputed. The
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`agreed constructions, including the Newly Agreed Terms, are listed in Exhibit 1. The remaining
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`disputed terms are listed in Exhibit 2.
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`To the extent that good cause is required for the agreed portion of the Motion, the parties
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`respectfully state the following. This amendment is being made to focus and narrow
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`substantially the disputes to be presented to the Court for construction, reducing the disputes to
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`nine terms. Because of the February 14 order (Dkt. No. 119) disqualifying prior primary counsel
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`for defendant, the parties’ counsel were unable to confer on claim construction until after the
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`lifting of the stay on March 30. The parties have since engaged in mutual discussions to reduce
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`the burden on the Court to resolve those disputes and agree that the changes do not create
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`prejudice. These agreed proposed changes are important because they help focus the Court’s and
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`party resources on fewer disputes that affect the outcome of the case. Furthermore, these
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`changes do not add any positions that were not already disclosed in the prior Joint Statement. No
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`continuance is required. The parties respectfully request that the Court grant leave to the parties
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`to file an amended Joint Statement reflecting these changes, as attached in Exhibits 1 - 4.
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`2 Term #21 includes two similar terms to which Hillman and KeyMe have now agreed to
`the construction of one. As a result, part of Term #21 —“configured to . . . cut the determined
`bitting pattern into a key blank”—remains disputed.
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`3
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`II.
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`KEYME’S POSITION ON ADDING A CLAIM TERM TO BE CONSTRUED
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`As part of the discussion that to focus the disputes on claim construction, KeyMe
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`proposes adding a term from the ’446 Patent – “a key duplicating system within said kiosk
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`configured to replicate the tooth pattern of the blade of said key inserted in said key-receiving
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`entry” – that is related to two disputed terms previously presented (#1, #4).3 On April 22,
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`KeyMe disclosed its proposed construction and its supporting evidence to Hillman, who opposes
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`this addition.
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`Hillman should not be surprised nor prejudiced by presentation of this additional term. It
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`is a purely functional limitation that implicates 35 U.S.C. § 112, ¶ 6 (pre-AIA). This term is
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`related to two terms previously identified by prior primary counsel and disputed by the parties
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`(#1, 4) prior to the February 14 stay. Term #4, which KeyMe had already proposed as a means-
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`plus function limitation, shares the same defect with this new term4 – they are purely functional
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`claim limitations that recite no structure.5 Furthermore, the recited function for this term is
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`3 On April 21, 2020, KeyMe also disclosed an additional term for construction and
`provided its proposed construction and disclosed the intrinsic and extrinsic evidence for this
`additional term. See Exhibit 5. Hillman opposes adding this additional term for construction.
`4 Term #4 recites the following limitation from the claims of the ’446 Patent: “a key
`analysis system within said housing configured to analyze the blade of a key inserted in said key-
`receiving entry to determine whether the inserted key matches one of a group of preselected key
`types and, if so, which preselected key type is matched.”
`5 Hillman and its current counsel made this very argument in 2013 against a related
`Minute Key patent (U.S. Patent 8,532,809 (“the ’809 Patent,” attached as Exhibit 7) prior to
`acquiring Minute Key. See Exhibit 8 [Hillman Group, Inc. v. Minute Key Inc., 1:13-cv-00707-
`SJD, Dkt. No. 1-4 (S.D. Ohio Oct. 1, 2013)], at 8-9. Exhibit 8 includes correspondence from
`2013 by Hillman counsel to Minute Key and to its customer WalMart relating to construction of
`nearly identical terms as are at issue here. For example, the analogous ’809 Patent terms at issue
`are: “a key analysis system within said housing for analyzing the blade of a key inserted in said
`key-receiving entry to determine whether the inserted key matches one of a group of preselected
`key types and, if so, which preselected key type is matched” and “a key duplicating system
`within said kiosk for replicating the tooth pattern of the blade of said key inserted in said key-
`receiving entry, on the blade of said extracted key blank.”
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`4
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`already in dispute as term #1 (“configured to replicate the tooth pattern of the blade of said key
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`inserted in said key-receiving entry”) and shares the same intrinsic evidence as term #1. See
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`Exhibit 5, 6 (comparison chart of KeyMe proposed constructions and evidence for terms #1, 4
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`and the additional term proposed).
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`Good cause exists for adding this claim term for construction. See, e.g., Arbitron, Inc. v.
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`Int'l Demographics Inc., No. CIV A 206-CV-434 TJW, 2008 WL 4755761, at *1 (E.D. Tex. Oct.
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`29, 2008) (granting motion for leave to amend invalidity contentions primarily on the basis that
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`amendment would not result in undue prejudice to nonmovant). This additional term proposed
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`for construction results from KeyMe’s current primary counsel’s overall effort to focus the claim
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`construction disputes on issues that warrant the Court’s attention. Construction of this term is
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`important because KeyMe’s kiosks do not include the corresponding structure disclosed in the
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`’446 patent (or an equivalent thereof) that performs the recited function of “replicating the tooth
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`pattern” of a customer's key. (See also Exhibit 8, at 9).6 Because the recited function is already
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`a disputed term (#1), this additional term allows the Court to address construction of term #1 and
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`the new term in a way that allows the parties to focus on the important defense of non-
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`infringement. This term also presents the same legal issue as term #4 - whether a purely
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`functional “system” limitation should be construed pursuant to 35 U.S.C. § 112, ¶ 6. (See also
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`id. at 6-7 with 8-9 (addressing “key analysis system” and “key duplicating system” claim terms).
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`As a result, the question of the construction of this purely functional system claim limitation is
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`not really new to Hillman. Although Hillman has not disclosed its position on this new term and
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`6 Despite the fact that Hillman’s admissions in Exhibit 8 are clearly relevant to the
`issues in this case, including claim construction, infringement and invalidity, it did not
`accompany its Patent Rule 3-2 production, had not been produced by Hillman when the Joint
`Statement was filed at the end of January or by April 21. To date it has not yet been produced.
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`5
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`despite Hillman’s earlier positions on construing these terms in an earlier litigation (see Exhibit
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`8), KeyMe expects that Hillman will now oppose means-plus-function treatment (as it already
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`does for term #4) and argue that this term should be given its plain and ordinary meaning
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`consistent with its construction of the recited function (which is already a disputed term #1).
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`Because briefing on claim construction starts May 12, there is ample time for Hillman to
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`address its position on this term in its briefing, if not before, particularly given that Hillman no
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`longer needs to brief any of the 20 terms that KeyMe agreed to resolve without dispute. The
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`parties have already agreed not to object to use in briefing of non-testimonial evidence that is not
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`disclosed in the Joint Statement. KeyMe is also willing to agree to wait until the opening brief
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`for Hillman’s position on construction of this term. Although it is unnecessary, to the extent that
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`Hillman needs more time than May 12 to address this term, KeyMe is agreeable to a short
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`continuance in briefing. There is no undue prejudice to Hillman if this term is added as a
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`disputed term.
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`Finally, the reason for the delay in raising this term is that KeyMe was required to change
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`primary counsel as a result of the February 14 disqualification order. Prior primary counsel for
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`KeyMe, who proposed, negotiated and prepared the proposed constructions and the Joint
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`Statement on KeyMe’s behalf, were no longer allowed to participate in what would have been
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`further narrowing of claim construction disputes. The stay and the effort to focus the claim
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`construction disputes required time for new primary counsel to analyze and identify areas of
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`focus. This additional term is required to present a full picture to the Court of the parties’ claim
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`construction dispute.
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`KeyMe respectfully seeks leave for the parties to present an additional term for
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`construction.
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`6
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`III. HILLMAN’S POSITION OPPOSING ADDING A CLAIM TERM
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`P.R. 4-1 expressly dictates that a party must “identify any claim element which that party
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`contends should be governed by 35 U.S.C. § 112 (f)” by no later than 10 days after service of the
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`invalidity contentions. In this case, that deadline passed over four months ago, on December 20,
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`2019. Yet now, less than two weeks before Hillman’s claim construction brief is due on May 12,
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`KeyMe seeks leave to add a wholly new purported § 112, ¶ 6 dispute without good cause and in
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`a manner that unfairly prejudices Hillman. For the reasons noted below, KeyMe waived its
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`opportunity to identify new purported § 112, ¶ 6 disputes at this late stage.
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`KeyMe’s proffered excuse is that its new counsel recently thought of a new term they
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`would like to construe as a § 112, ¶ 6 term. And its proffered justification is that adding the new
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`dispute is “important” because KeyMe presumes it will win both the untimely new purported
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`claim construction dispute and even non-infringement (“[c]onstruction of this term is important
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`because KeyMe’s kiosks do not include the corresponding structure disclosed in the ’446 patent
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`(or an equivalent thereof) that performs the recited function” . . . construction would “allow the
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`parties to focus on the important defense of non-infringement”). None of this is good cause, and
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`all of it would be disputed.
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`But more importantly, KeyMe’s presumption that it will win the case, proffered as the
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`only reason for why this term should be added to the claim construction process at this late stage,
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`misses the point entirely. This is not the time to advocate who will win the claim construction
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`issue or, worse, who will win the case on the merits. The point here is that KeyMe failed to
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`comply with the disclosures required by P.R. 4-1 and it cannot establish good cause for its
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`deviation from the Rules.
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`7
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`KeyMe’s position that “Hillman should not be surprised nor prejudiced” by KeyMe’s
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`untimely addition of a new purported § 112, ¶ 6 issue is simply wrong. Hillman is surprised and
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`prejudiced for multiple reasons:
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` First, the claim element does not use “means for” language. So presumptively
`§112, ¶ 6 does not apply. Blitzsafe Tex., LLC v. Subaru Corp., 2018 WL
`6504174 (E.D. Tex., Dec. 11, 2018) citing Apex Inc. v. Raritan Comput., Inc.,
`325 F.3d 1364, 1371 (Fed. Cir. 2003).
` Second, in amending the claim element during prosecution the applicant
`expressly stated that “[t]hese amendments clarify the claims by making it more
`clear that the elements are not intended as means-plus-function limitations. To
`be clear, none of the elements of the pending claims are intended as means-plus-
`function limitations.” Exhibit 10 at p. 4, 24 [pages 70-95 of ’446 file history].
` Third, in its timely December 20, 2019, P.R. 4-1 disclosures, KeyMe proposed a
`standard construction for the term, never once raising a § 112, ¶ 6 position over
`the course of months of exchanges and negotiations. (P.R. 4-3, Dkt. No. 116,
`Appx. A at page 1, Ref. No. 1).7
`KeyMe’s representation that Hillman “should not be surprised” by KeyMe’s effort to
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`spring a new purported § 112, ¶ 6 position on Hillman mere weeks before Hillman’s brief is due
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`cannot be squared with this record. On the contrary, against an intrinsic record that so clearly
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`counsels against the application of § 112, ¶ 6 on its face, if KeyMe desired to pursue a § 112, ¶ 6
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`position then it was incumbent upon KeyMe to raise its position in a timely manner, as expressly
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`dictated by the straightforward language of P.R. 4-1.8
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`7 KeyMe engaged in a “bait and switch” tactic with this claim element. KeyMe’s
`position—that there’s no surprise to Hillman because the claim term was essentially already part
`of the timely P.R. 4-1 to 4-3 disclosures—is particularly troublesome. KeyMe proposed a
`standard construction for the term. It never once mentioned § 112, ¶ 6 as would have been
`required by P.R. 4-1. The surprise to Hillman is compounded, not alleviated, by the “bait and
`switch” nature of this record.
`8 This is particularly true where KeyMe did timely identify another claim term from the
`very same claim for § 112, ¶ 6 treatment. (P.R. 4-3, Dkt. No. 116, Appx. A at page 1, Ref. No.
`4). KeyMe knew the rules and staked out its positions accordingly. But KeyMe even turns these
`facts around now, suggesting that because it timely identified a different element for § 112, ¶ 6
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`8
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`The prejudice involved in springing a new purported § 112, ¶ 6 position on Hillman mere
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`weeks before its brief and technical tutorial are due is extreme. There is a good reason behind
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`P.R. 4-1’s express requirement that § 112, ¶ 6 positions be disclosed at the outset. Courts have
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`long acknowledged that the issues involved in analyzing and advocating a § 112, ¶ 6 position are
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`difficult and complex. See, e.g., Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 381, F.3d
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`1371, 1380 (Fed. Cir. 2004). It involves a searching and sophisticated analysis of the claim
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`language, the specification, the extensive file history, and the extrinsic evidence.9 In certain
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`circumstances it involves retention and consultation with experts. Lighting World, Inc. v.
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`Birchwood Lighting, Inc., 382 F.3d 1354, 1360-63 (Fed. Cir. 2004) (reviewing the written
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`description, technical dictionaries, and expert testimony to conclude that the defendant failed to
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`rebut the presumption that the claimed ‘connector assembly’ connoted sufficiently definite
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`structure). Because KeyMe did not timely raise the issue in accordance with P.R. 4-1, Hillman
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`has not been afforded a full and fair opportunity to prepare its position and address the issue in
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`accordance with the framework of P.R. 4-1 through 4-3.10
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`treatment, Hillman should not now be surprised or prejudiced by KeyMe’s untimely
`identification of additional elements for § 112, ¶ 6 treatment on the eve of Hillman’s briefing
`deadline. This argument lacks merit in every respect.  
`9 KeyMe’s advocacy proves the point—apparently KeyMe intends to rely on a letter
`Hillman wrote to a third party concerning a different patent, in a different lawsuit, involving
`different parties, different devices, and an entirely different context, to suggest that § 112, ¶ 6
`applies to the element at issue here. The letter is inapposite, but KeyMe’s advocacy shows just
`how extensively the injection of a new § 112, ¶ 6 dispute can alter and expand the applicable
`strategies and the record at issue in a dispute.
`10 KeyMe references the February 14, 2020 disqualification order as somehow justifying
`the timing of its new proposal. But the P.R. 4-1 disclosures were made a full eight weeks before
`the disqualification order issued. Those disclosures were followed by six weeks of negotiations
`that culminated in the P.R. 4-3 chart (Dkt. No. 116), which was finished and filed on January 31,
`2020. All of this happened well in advance of the February 14, 2020 disqualification order.
`Moreover, the Court mandated a joint status report following the appearance of KeyMe’s new
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`9
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`Finally, KeyMe suggests that the insertion of an untimely and new purported § 112, ¶ 6
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`dispute at this stage is merely a “further narrowing of claim construction disputes.” Hillman
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`disagrees. Three weeks before the deadline for Hillman’s claim construction brief, KeyMe
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`provided a “revised” P.R. 4-3 statement in which KeyMe, through its new counsel, changed the
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`language of all of KeyMe’s proposed constructions and changed the claim language to be
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`construed for all but four of the disputed claim terms. Exhibit 5. The reason that the disputes
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`have been “narrowed” at this stage is that Hillman, in the spirit of compromise, acquiesced to
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`nearly all of KeyMe’s dozens of untimely proposed changes to KeyMe’s constructions and the
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`new claim language in the P.R. 4-3 statement—in fact, Hillman acquiesced to all but one.
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`Exhibit 11.
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`Because of KeyMe’s redo, the revised P.R. 4-3 statement now bears almost no relation to
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`the original that was filed over four months ago (Dkt. No. 116). The extensive new changes
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`sought by KeyMe, and the negotiations over them, all occurred within three weeks of Hillman’s
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`deadline to file its brief on May 12. Hillman drew the line at the addition of a wholly new term
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`for § 112, ¶ 6 treatment at this late stage because KeyMe could not identify any good cause for
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`such a significant and untimely change. No good cause has been provided here. Hillman
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`respectfully requests that the Court deny KeyMe’s motion to amend the P.R. 4-3 chart to add a
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`new term for § 112, ¶ 6 treatment.
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`counsel, and nowhere in that report did KeyMe suggest that it would be asking to redo the
`longstanding P.R. 4-1 or 4-3 disclosures. See, Dkt. No. 127.
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`10
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`DATED: April 30, 2020
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`By:
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`FINDLAY CRAFT, P.C.
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`/s/ Eric H. Findlay
`Eric H. Findlay (Bar No. 00789886)
`102 North College Avenue, Suite 900
`Tyler, TX 75702
`(903) 534-1100
`(903) 534-1137 (fax)
`efindlay@findlaycraft.com
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`Attorney for Plaintiff
`The Hillman Group, Inc.
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`Of Counsel:
`Christopher P. Isaac (admitted pro hac vice)
`Ryan P. O’Quinn (admitted pro hac vice)
`FINNEGAN, HENDERSON, FARABOW, GARRETT
`& DUNNER, L.L.P.
`11955 Freedom Drive
`Reston, VA 20190
`(571) 203-2700
`(202) 208-4400 (fax)
`chris.isaac@finnegan.com
`oquinnr@finnegan.com
`
`Gerald F. Ivey (admitted pro hac vice)
`John M. Williamson (admitted pro hac vice)
`FINNEGAN, HENDERSON, FARABOW, GARRETT
`& DUNNER, L.L.P.
`901 New York Avenue, N.W.
`Washington, DC 20001
`(202) 408-4000
`(202) 408-4400 (fax)
`gerald.ivey@finnegan.com
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`
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`DATED: April 30, 2020
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`By: /s/ Deron R. Dacus
`
`Deron R. Dacus (Bar No. 00790553)
`The Dacus Firm, PC
`821 ESE Loop 323
`Suite 430
`Tyler, TX 75701
`Telephone: (903) 705-1177
`Facsimile: (903) 581-2543
`Email: ddacus@dacusfirm.com
`
`Sean S. Pak
`Jeffrey W. Nardinelli
`Zachary C. Flood
`QUINN EMANUEL URQUHART &
`SULLIVAN, LLP
`50 California Street, 22nd Floor
`San Francisco, CA 94111-4788
`Telephone: (415) 875-6600
`Facsimile: (415) 875-6700
`seanpak@quinnemanuel.com
`jeffnardinelli@quinnemanuel.com
`zackflood@quinnemanuel.com
`
`David A. Nelson
`QUINN EMANUEL URQUHART &
`SULLIVAN, LLP
`191 N. Wacker Drive, Suite 2700
`Chicago, IL 60606-1881
`Telephone: (312) 705-7400
`Facsimile: (312) 705-7401
`davenelson@quinnemanuel.com
`
`Eric Hui-chieh Huang
`QUINN EMANUEL URQUHART &
`SULLIVAN, LLP
`51 Madison Avenue, 22nd Floor
`New York, NY 10010-1601
`Telephone: (212) 849-7000
`Facsimile: (212) 849-7100
`erichuang@quinnemanuel.com
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`Attorneys for Defendant KeyMe, LLC
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`11
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`Case 2:19-cv-00209-JRG Document 135 Filed 04/30/20 Page 12 of 12 PageID #: 3642
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`CERTIFICATE OF SERVICE
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`I hereby certify that all counsel of record, who are deemed to have consented to
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`electronic service are being served on this 30th day of April, 2020, with a copy of this document
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`via electronic mail on this same date.
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`/s/ Deron R. Dacus
` Deron R. Dacus
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`12
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