Case 2:19-cv-00209-JRG Document 212 Filed 10/23/20 Page 1 of 6 PageID #: 10326
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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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`v.
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`KEYME, LLC,
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`Plaintiff,
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`Defendant.
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`CIVIL ACTION NO. 2:19-CV-00209-JRG
`(LEAD CASE)
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`CIVIL ACTION NO. 2:20-CV-00070-JRG
`(MEMBER CASE)
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`ORDER
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`Before the Court is Plaintiff The Hillman Group, Inc.’s (“Plaintiff” or “Hillman”) Motion
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`for Leave to File Its Second Amended Complaint (the “Motion for Leave”). (Case No. 2:20-cv-
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`00070, Dkt. No. 55). Also before the Court is Defendant KeyMe, LLC’s (“Defendant” or
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`“KeyMe”) Motion to Consolidate This Action with Case No. 2:19-cv-00209-JRG (the “Motion to
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`Consolidate”). (Id. Dkt. No. 12). In the Motion for Leave, Hillman asks the Court for leave to
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`amend its complaint in Case No. 2:20-cv-00070 (the “-70 case”) to assert an additional patent. In
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`the Motion to Consolidate, KeyMe asks the Court to consolidate the -70 case with Case No. 2:19-
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`cv-00209 (the “-209 case”). For the reasons stated below, the Court GRANTS both motions.
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`I.
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`BACKGROUND
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`Hillman and KeyMe are competitors in the self-service key duplication business. Hillman
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`filed the -209 case in June of 2019, alleging that KeyMe infringes U.S. Patent No. 8,979,446 (the
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`“’446 Patent”) and U.S. Patent No. 9,914,179 (the “’179 Patent”). Hillman Grp. v. KeyMe, LLC,
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`Case No. 2:19-cv-00209 (E.D. Tex. 2019). Hillman later amended its complaint to assert U.S.
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`Patent No. 10,400,474 (the “’474 Patent”). (See -209 case, Dkt. No. 30). In February of 2020, the
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`Case 2:19-cv-00209-JRG Document 212 Filed 10/23/20 Page 2 of 6 PageID #: 10327
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`Court disqualified KeyMe’s counsel, Cooley LLP, and stayed the -209 case for 45 days to permit
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`KeyMe to retain new counsel. (See id., Dkt. No. 119).
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`While the -209 case was stayed, Hillman was issued U.S. Patent No. 10,577,830 (the “’830
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`Patent). (-70 case, Dkt. No. 26). The ’830 Patent issued from a continuation of the application that
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`issued the ‘446 Patent. (Id.). Shortly after the ’830 issued, Hillman filed the -70 case, asserting it
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`against KeyMe. Hillman Grp. v. KeyMe, LLC, Case No. 2:20-cv-00070 (E.D. Tex. 2020). The stay
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`in the -209 case was lifted on March 30, 2020. Approximately two weeks later, KeyMe filed its
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`Motion to Consolidate, asking the Court to consolidate the -70 case with the -209 case. (Id. Dkt.
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`No. 12).
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`On April 21, 2020, Hillman was issued U.S. Patent No. 10,628,813 (the “’813 Patent”).
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`The same day, Hillman amended its complaint in the -70 case to assert the ’813 Patent. Then, on
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`August 11, 2020, Hillman was issued U.S. Patent No. 10,737,336 (the “’336 Patent”). Shortly
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`thereafter, Hillman sought leave to amend its complaint a second time, that it may also assert the
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`’336 Patent. (Id. Dkt. No. 55).
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`II.
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`DISCUSSION
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`Hillman has asserted three patents in the -209 case (the ’446 Patent, the ’179 Patent, and
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`the ’474 Patent) and two patents in the -70 case (the ’830 Patent and the ’813 Patent). Hillman
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`seeks to add a third patent to the -70 case (the ’336 Patent). KeyMe seeks to consolidate the two
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`cases for a common trial in April 2021—postponing the -209 case’s trial date but expediting that
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`of the -70 case. Each party opposes the relief sought by the other. The Court ultimately finds that
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`granting both motions together—and setting all six patents for trial in April of 2021—will simplify
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`the issues before the Court, conserve party and judicial resources, and avoid repetitious litigation.
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`A.
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`Hillman Should Be Permitted to Amend Its Complaint in the -70 Case
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`In the Motion for Leave, Hillman requests leave to amend its complaint in the -70 case to
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`additionally assert the ’336 Patent. According to the Court’s Docket Control Order, “[i]t is not
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`necessary to seek leave of Court to amend pleadings prior to [November 6, 2020] unless the
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`amendment seeks to assert additional patents.” (-70 case, Dkt. No. 47). Since Hillman seeks to
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`assert an additional patent, leave of Court is required.
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`The parties dispute the standard that the Court should apply to determine whether Hillman
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`should be granted leave to amend. KeyMe contends that Rule 16(b)’s good-cause standard applies
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`because the deadline to comply with P.R. 3-1 and 3-2 expired on May 4, 2020 and “Rule 16(b)
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`governs amendment of pleadings after a scheduling order deadline has expired.” S&W Enters.,
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`L.L.C. v. SouthTrust Bank of Ala., NA, 315 F.3d 533, 536 (5th Cir. 2003). Hillman argues that the
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`relevant deadline under Rule 16(b) is the November 6, 2020 deadline to amend pleadings—which
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`has not passed—and that the Court may consider the Motion for Leave under the more liberal
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`standard of Rule 15(a).
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`Ultimately, the Court need not resolve this dispute because it concludes that either standard
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`would be met under these circumstances. Hillman filed its Motion for Leave shortly after the ’336
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`Patent issued; it could not have so moved any sooner. Since the Court also concludes that
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`consolidation is proper—thereby bringing all six patents together for a common trial date—any
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`potential prejudice to KeyMe is offset by the extension of time to litigate the patents asserted in
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`the -209 case, and by the overall simplification of issues and conservation of resources.
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`B.
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`The -70 and -209 Cases Should Be Consolidated
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`District courts have the power and discretion to consolidate actions if they involve a
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`common question of law or fact. FED. R. CIV. P. 42(a)(2); Dupont v. S. Pac. Co., 366 F.2d 193,
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`3
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`195–96 (5th Cir. 1966). Courts “are urged to make good use of Rule 42(a)” to “expedite the trial
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`and eliminate unnecessary repetition and confusion.” Id.
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`The -209 case is currently set for trial in December of 2020, and the -70 case is set for trial
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`in June of 2021. KeyMe proposes that the cases should be consolidated for a common trial date in
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`April of 2021. KeyMe argues that the cases contain common questions of law and fact because the
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`’830 Patent in the -70 case and the ’474 Patent in the -209 case issued from the same family.
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`KeyMe points out that both patents claim priority to the same application, have the same inventors,
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`have the same specification, and have similar claim scope. Therefore, KeyMe argues, the two cases
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`will involve overlapping witnesses and claim-construction issues.1
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`Hillman does not dispute that consolidation is permissible, but argues that the Court should
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`not exercise its discretion to do so. Hillman argues that the presence of other patents “separates
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`the paths” of the two cases. Hillman also argues—noting that it was KeyMe’s counsel being
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`disqualified that led to the stay of the -209 case in the first place—that it would be prejudiced by
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`a further delay of the -209 case.
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`After consideration, the Court is persuaded that -209 and -70 cases involve sufficiently
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`common questions of law and fact to justify consolidation. In addition to the commonalities
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`between the ’830 and ’474 Patents, both the -209 and -70 cases involve the same parties (Hillman
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`and KeyMe) and the same Accused Products (KeyMe’s self-service key duplication kiosks). The
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`Court finds that consolidating the -70 case with the -209 case will conserve party and judicial
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`resources by simplifying the issues before the Court and avoiding repetitious litigation. Although
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`1 KeyMe also argues that a failure to consolidate the cases would constitute impermissible
`“claim splitting,” citing Eubanks v. F.D.I.C., 977 F.2d 166 (5th Cir. 1992). As the Court finds that
`consolidation is proper as a matter of discretion, the Court does not address whether principles of
`preclusion would require this result.
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`Case 2:19-cv-00209-JRG Document 212 Filed 10/23/20 Page 5 of 6 PageID #: 10330
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`consolidation will delay resolution of the claims in the -209 case, this is offset by expediting
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`resolution of the claims in the -70 case. Accordingly, the Court concludes that the cases should be
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`consolidated, with a common trial date in April of 2021.
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`III. CONCLUSION
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`For the reasons stated above, the Court concludes that all six patents at issue—the three
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`asserted in the -209 case, the two asserted in the -70 case, and the one Hillman seeks leave to
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`assert—should properly be brought into one action before the Court. Accordingly, the Motion for
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`Leave and the Motion to Consolidate are both GRANTED.
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`It is ORDERED that Hillman has leave to amend its complaint in the -70 case. It is further
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`ORDERED that the -209 case and the -70 case are CONSOLIDATED for both pretrial and trial
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`purposes, with the -209 case designated the LEAD CASE. All parties are instructed to file any
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`future filings in the LEAD CASE.
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`Counsel who have not previously appeared the Lead Case should file a Notice of
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`Appearance in the Lead Case if they intend to be active in the consolidated case. Counsel who
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`have appeared pro hac vice in the member case may file a Notice of Appearance in the Lead Case
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`without filing an additional application to appear pro hac vice in the Lead Case.
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`The Parties are ORDERED to meet and confer and then submit a proposed Amended
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`Docket Control Order for the consolidated case within fourteen (14) days reflecting a jury
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`selection date of Monday, April 5, 2021 and a pretrial conference date of Monday, March 22,
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`2021. Any areas of disagreement should be set forth clearly within the parties jointly suggested
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`Docket Control Order.
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`____________________________________
`RODNEY GILSTRAP
`UNITED STATES DISTRICT JUDGE
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`So ORDERED and SIGNED this 23rd day of October, 2020.
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