Case 6:12-cv-00799-JRG Document 180 Filed 07/10/14 Page 1 of 8 PageID #: 5290
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`Plaintiff,
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`Case No. 6:12-cv-00799-LED
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`INVENSYS SYSTEMS, INC.,
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`vs.
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`EMERSON ELECTRIC CO. and
`MICRO MOTION INC., USA,
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`Defendants.
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`and
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`MICRO MOTION INC., USA,
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`Counterclaim-Plaintiff,
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`vs.
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`INVENSYS SYSTEMS, INC.,
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`Counterclaim-Defendant.
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`MICRO MOTION, INC.’S AND EMERSON ELECTRIC CO.’S REPLY IN SUPPORT
`OF THEIR MOTION FOR LEAVE TO SUPPLEMENT INVALIDITY CONTENTIONS
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`Case 6:12-cv-00799-JRG Document 180 Filed 07/10/14 Page 2 of 8 PageID #: 5291
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`I.
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`Defendants Acted in Good Faith and with Reasonable Diligence.
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`Invensys’s “lack of diligence” argument boils down to the notion that highly important
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`evidence—evidence that Micro Motion believes will invalidate all of Invensys’s asserted
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`claims—should be suppressed simply because a Micro Motion employee, Richard Maginnis,
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`failed to realize, when he was interviewed about whether he had potentially relevant documents,
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`that there might be relevant material originating before he was hired by Micro Motion in a paper
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`file in his file cabinet into which he had thrown general information about “digital signal
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`processing…not necessarily Coriolis specifically.” (Ex. D, Maginnis Dep. 11:12-25.)
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`Invensys does not contest that Micro Motion diligently brought the newly discovered
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`evidence of the prior art digital prototypes to Invensys’s attention as quickly as it was uncovered.
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`Nor could it. The initial information was provided to Invensys after it was uncovered and
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`proposed supplemental invalidity contentions were served immediately thereafter. Additional
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`documents, including documents from third parties’ files, have been produced on a rolling basis
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`as they have been uncovered. (Declaration of Richard S. Florsheim (“Florsheim Decl.”) ¶¶ 3-4.)
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`Invensys’s argument appears to be that “reasonable diligence” requires perfection. If “reasonable
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`diligence” could be demonstrated only in those instances where nothing was missed in the first
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`instance, no motion for leave to amend would ever be granted.
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`Mr. Maginnis was interviewed early on in this case as to whether he had paper or
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`electronic files that could contain relevant information. (Declaration of Kadie M. Jelenchick
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`(“Jelenchick Decl.”) ¶¶ 2-3.) With the assistance of counsel, he looked for and identified folders
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`that might contain such relevant information. (Id.; see also Ex. D, Maginnis Dep. 8:13-9:3.)
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`Those files were collected, and, except for any privileged or work product documents, the entire
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`contents of those folders were produced to Invensys’s counsel. (Jelenchick Decl. ¶ 4.)
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`4842-9073-0524
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`1
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`Case 6:12-cv-00799-JRG Document 180 Filed 07/10/14 Page 3 of 8 PageID #: 5292
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`As to the paper file where a key document was eventually located, it was simply “a folder
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`of miscellaneous signal processing” that related to “any technology that could be signal
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`processing related and not necessarily Coriolis specifically.” (Ex. D, Maginnis Dep. 11:12-25.)
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`Maginnis does not recall whether he looked through that particular folder for potentially relevant
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`information. (Id. at 12:1-3.) Regardless, he did not identify that key document—a schematic of a
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`prototype that predated Mr. Maginnis’s employment with Micro Motion1—as relevant to the
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`case at that time. Nor did he recall, until recently seeing the documents, that Mr. Pankratz (who
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`is a mechanical engineer, not an electrical engineer who more traditionally would work with
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`digital signal processing) had knowledge of digital work Mr. Derby had done prior to November
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`1997. (Declaration of Richard Maginnis ¶¶ 4-5.)
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`This is not a case where, as in most of the cases Invensys cites on page 8 of its brief, the
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`defendant knew of the documents revealing the prior art but failed to appreciate their
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`significance. Here, the documents in question had not been uncovered when Micro Motion
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`submitted its initial invalidity contentions. Mr. Maginnis did not recall the document or Mr.
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`Pankratz’s possible knowledge of relevant prior work until he was interviewed in late April
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`2014. (Id. ¶¶ 2-4.) Further, this is not a case where the defendant failed to show a reasonable
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`explanation for why the paper document was uncovered after its invalidity contentions were
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`served. Counsel interviewed Mr. Maginnis promptly and requested that he provide all of his
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`folders that might have relevant information. (Jelenchick Decl. ¶¶ 2-3.) The fact that Mr.
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`Maginnis did not identify an old hard copy folder into which he had thrown various papers
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`relating to “miscellaneous digital processing…not necessarily Coriolis specifically” should not
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`1 Even if Mr. Maginnis looked through the particular folder, upon an initial review it would have been reasonable to
`conclude the schematic was not relevant because it is entitled “Schem, Analog NGT.” The schematic of the
`prototype was filed (under seal) as Exhibit A to Defendants’ Motion. (See Dkt. No. 163, Ex. A.)
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`Case 6:12-cv-00799-JRG Document 180 Filed 07/10/14 Page 4 of 8 PageID #: 5293
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`result in the suppression of evidence that could advance the important public policy of
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`invalidating invalid patents.
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`In addition, Invensys contributed to this situation – by waiting more than six years to file
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`this lawsuit, Invensys ensured that important witnesses would no longer be employed by Micro
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`Motion and that the memories of remaining witnesses would fade. The testimony of Invensys’s
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`VP Bob Jones and its own privilege logs show that Invensys knew about, and contemplated
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`litigation against, Micro Motion’s accused products since at least mid-2006. (Florsheim Decl.
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`¶¶ 5-7 & Exs. G-I.) Yet, Invensys waited until 2012 to file this lawsuit.
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`The inter partes review (“IPR”) proceedings at the USPTO also do not justify the denial
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`of Defendants’ motion. Defendants could not have presented this evidence to the USPTO
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`because it is not a patent or a printed publication, the only prior art that IPR proceedings can
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`address. See 35 U.S.C. § 311(b). The IPRs will not estop Micro Motion from asserting any
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`ground of invalidity that could not have been presented in the IPR proceedings. See id.
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`§ 315(e)(2). Invensys is asking the Court to suppress evidence that the IPR statute permits
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`Defendants to present at trial.
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`II.
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`Invensys Is Not Prejudiced, Because It Had/Has Time to Take Fact Discovery
`on the Digital Prototype Prior Art.
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`Invensys does not deny that it has sufficient time to take fact discovery on the digital
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`prototype prior art. Mr. Pankratz’s deposition was taken on July 10, where Micro Motion asked
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`him about this issue. There, Mr. Pankratz testified that he successfully demonstrated one of the
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`digital prototypes at a customer site – Cooper Industries, in Ohio – on November 7, 1996, which
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`was more than one year before Invensys filed its first patent application. Mr. Derby’s deposition
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`is scheduled for July 11. (Jelenchick Decl. ¶ 5.) In any event, Invensys cannot argue that this
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`schedule is prejudicial because Invensys waited until the last few weeks of the fact discovery
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`3
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`Case 6:12-cv-00799-JRG Document 180 Filed 07/10/14 Page 5 of 8 PageID #: 5294
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`period to begin taking any depositions on any substantive issues. See Computer Acceleration
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`Corp. v. Microsoft Corp., 481 F. Supp. 2d 620, 626 (E.D. Tex. 2007).
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`Here, Defendants served their supplemental contentions seven weeks before discovery
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`closed, Invensys had already scheduled, but not yet taken, depositions of the witnesses with
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`knowledge of this prior art, and the prior art Defendants seek to add only recently surfaced.2 This
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`is not a case where, as in most of the cases Invensys cites on pages 10-11 of its brief, a defendant
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`sought leave after the close of fact discovery and sought to add prior art that was known to the
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`defendant early on. In Shire LLC v. Amneal Pharms., LLC, 2013 U.S. Dist. LEXIS 180920, at
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`*10-11, 15 (D.N.J. Dec. 23, 2013), defendants sought to amend their invalidity contentions after
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`the close of fact discovery by adding prior art that was referenced in the parties’ document
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`production and accessible to the defendants more than a year prior to the filing of their motion.
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`Similarly, the defendant in L.C. EldridgeSales Co. v. Azen Mfg. Pte, 2013 U.S. Dist. LEXIS
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`186309, at *3-4, 7, 15 (E.D. Tex. Oct. 11, 2013), waited until after expert reports were served to
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`seek to amend its invalidity contentions to add prior art that was listed on the face of the patent-
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`in-suit. In Nano-Second Tech. Co. v. Dynaflex Int’l, 2012 U.S. Dist. LEXIS 80035, at *4-5 (C.D.
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`Cal. June 6, 2012), defendants sought to add prior art reference depicted in a figure of the patent-
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`in-suit, which defendants clearly knew about when they served initial contentions.
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`Invensys’s argument that it would be “wasted discovery” to take depositions as to the
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`digital prototype prior art is premised on an incorrect statement of the law relating to
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`“abandonment, suppression, and concealment” under § 102(g) (Pre-AIA). Abandonment under
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`2 Invensys’s reliance on MacroSolve, Inc. v. Antenna Software, Inc., 2013 U.S. Dist. LEXIS 102954 (E.D. Tex. July
`23, 2013), is also misplaced. In that case, the defendants sought to add to its invalidity contentions (which contained
`250 other prior art references) seven prior art references that were already involved in a parallel reexamination
`proceeding of the patent-in-suit. Here, Defendants seek to add a single prior art reference—a prototype product that,
`by statute, cannot be involved in the parallel inter partes review proceedings of the Invensys patents-in-suit. See
`above at 3. Defendants’ invalidity charts add only three references to those in Defendants’ original P.R. 3.3
`invalidity contentions: (1) evidence relating to the digital prototypes; (2) Invensys inventor deposition testimony
`elicited after Defendants’ original invalidity contentions were served; and (3) a single reference to a passage in a
`prior art textbook. (See Dkt. No. 163-4.)
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`Case 6:12-cv-00799-JRG Document 180 Filed 07/10/14 Page 6 of 8 PageID #: 5295
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`35 U.S.C. § 102(g) is irrelevant unless it occurred before the patentee’s own date of invention.
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`See, e.g., Mgmt. Arts, Inc. v. Avesta Techs., Inc., 87 F. Supp. 2d 258, 265 (S.D.N.Y. 2000).
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`Defendants need not prove their entire case now; their supplemental invalidity contentions state
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`that improvements developed by Mr. Derby “were not abandoned, suppressed or concealed prior
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`to the dates of invention Invensys has alleged for its patents.” (Dkt. No. 163-4 at 10.) Further,
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`since the filing of this motion, counsel for Micro Motion obtained documents from an
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`independent third party, Southwest Research Institute (“SWRI”) that establish a prior art digital
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`prototype containing the improvements developed by Mr. Derby was used at SWRI in June,
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`1996—more than one year before Invensys’s first patent application was filed. (Florsheim Decl.
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`¶ 3 & Exs. E-F.) Invensys has had the ability to take depositions on the issue of “abandonment,
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`suppression, or concealment” after receiving Defendants’ supplemental contentions, and
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`depositions of the relevant witnesses have occurred or have been scheduled.
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`III.
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`Invensys’s Other Claims of Prejudice Are Without Merit.
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`Invensys’s prejudice claims are unsubstantiated and not supported by logic or facts.
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`Invensys has not explained how it will be impacted by the passage of “key deadlines,” including
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`claim construction deadlines. Invensys has not provided how any evaluation of prior art digital
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`prototypes before any claim construction proceedings could impact the Court’s construction,
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`which is an issue of law. Invensys’s motivation behind its claim construction position cannot
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`affect the outcome of the claim construction proceeding. Also, nowhere does Invensys explain
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`why allowing Defendants to add the contemplated prior art references to its invalidity
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`contentions would now require Invensys to “a complete do-over” of its infringement contentions
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`(which were served before Defendants served their invalidity contentions). Invensys does not
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`point to any unasserted claim that would be valid over the digital prototype prior art yet broad
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`enough to cover the accused products.
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`Case 6:12-cv-00799-JRG Document 180 Filed 07/10/14 Page 7 of 8 PageID #: 5296
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`Respectfully submitted,
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`/s/ Jason A. Berta
`Linda E.B. Hansen, WI Bar No. 1000660
`Richard S. Florsheim, WI Bar No. 1015905
`Jeffrey N. Costakos, WI Bar No. 1008225
`Kadie M. Jelenchick, WI Bar No. 1056506
`Matthew J. Shin, WI Bar No. 1090096
`Foley & Lardner LLP
`777 East Wisconsin Avenue
`Milwaukee, Wisconsin 53202
`Phone: (414) 271-2400
`Fax: (414) 297-4900
`Email: lhansen@foley.com
`rflorsheim@foley.com
`jcostakos@foley.com
`kjelenchick@foley.com
`mshin@foley.com
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`Jason A. Berta, IL Bar No. 6295888
`Foley & Lardner LLP
`321 North Clark Street, Suite 2800
`Chicago, Illinois 60654
`Phone: (312) 832-4500
`Fax: (312) 832-4700
`Email: jberta@foley.com
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`Attorneys for Defendant Emerson Electric
`Co. and Defendant and Counterclaim-
`Plaintiff Micro Motion, Inc.
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`Dated: July 10, 2014
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`Guy N. Harrison, State Bar No. 00000077
`Harrison Law Firm
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`217 N. Center Street
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`Longview, Texas 75601
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`Phone: (903) 758-7361
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`Fax: (903) 753-9557
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`Email: guy@gnhlaw.com
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`Case 6:12-cv-00799-JRG Document 180 Filed 07/10/14 Page 8 of 8 PageID #: 5297
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`CERTIFICATE OF SERVICE
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`I hereby certify that on July 10, 2014, I electronically filed the foregoing document with
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`the Clerk of Court using the CM/ECF system which will send notification of such filing via
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`electronic mail to all counsel of record. I also certify that on July 10, 2014 I served via
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`electronic mail to all counsel of record Exhibits D through I, which are to be filed under seal
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`with the foregoing document.
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`/s/ Jason A. Berta
`Jason A. Berta
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`7