Case 6:15-cv-00907-RWS-KNM Document 109 Filed 07/19/16 Page 1 of 12 PageID #: 3145
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
`
`
`
`
`
`
`
`Civil Action No. 6:15-CV-907-RWS-KNM
`
`
`SIPCO LLC, and
`IP CO., LLC (d/b/a INTUS IQ)
`
`Plaintiffs,
`
`
`
`
`
`
`
`v.
`
`EMERSON ELECTRIC CO., EMERSON
`PROCESS MANAGEMENT LLLP,
`FISHER-ROSEMOUNT SYSTEMS, INC.,
`ROSEMOUNT INC., BP p.l.c., BP
`AMERICA, INC., and BP AMERICA
`PRODUCTION COMPANY
`
`
`Defendants.
`
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`
`
`
`DEFENDANTS’ MOTION FOR LEAVE TO SERVE
`AMENDED SUPPLEMENTAL INVALIDITY CONTENTIONS
`
`Pursuant to P.R. 3-6(b), Defendants Emerson Electric Co., Emerson Process Management
`
`LLLP, Fisher-Rosemount Systems, Inc., Rosemount Inc., BP p.l.c., BP America, Inc., and BP
`
`America Production Company (collectively “Defendants”) respectfully move for leave to amend
`
`their invalidity contentions to add and chart two newly discovered references (Machenbaum
`
`article and Humblet ‘536 Patent) and to chart two previously disclosed but uncharted prior art
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`references (Mills article and Jednacz ‘644 Patent). BP p.l.c. appears specially and only for the
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`limited purpose of preserving its rights, notwithstanding and without waiving its rights to
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`answer, obtain resolution of any Rule 12 motion, or otherwise plead in response to the Second
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`Amended Complaint served on July 14, 2016.
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`I.
`
`FACTUAL BACKGROUND
`
`In this patent infringement case, plaintiffs SIPCO LLC and IP CO., LLC (“SIPCO and
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`IPCO”) allege infringement of 180 claims of 11 patents in two patent families (the “Petite”
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`Case 6:15-cv-00907-RWS-KNM Document 109 Filed 07/19/16 Page 2 of 12 PageID #: 3146
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`family and the “Brownrigg” family). Defendants timely served invalidity contentions on May
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`16, 2016 (“Defendants’ May 16, 2016 Invalidity Contentions”) in compliance with the current
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`Amended Docket Control Order. Dkt. No. 73 at 6. Given the number of patents (11) and claims
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`(180) at issue, Defendants’ May 16, 2016 Invalidity Contentions included 77 references and,
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`with claim charts, totaled over 9,000 pages.
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`During the weeks following service of Defendants’ May 16, 2016 Invalidity Contentions,
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`Defendants discovered the following new relevant reference:
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`• United States Patent No. 4,987,536 to Humblet (Exh. B).
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`Also during the weeks following service of Defendants’ May 16, 2016 Invalidity
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`Contentions, Defendants discovered the applicability of two previously disclosed prior art
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`references whose relevance to certain of the 180 claims pending in this action was previously not
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`appreciated and therefore not charted:
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`• Mills, D.L., “An Experimental Multiple-Path Routing Algorithm,” RFC 981 (Exh.
`C)(disclosed in Defendants’ May 16, 2016 Invalidity Contentions, page 13); and
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`• United States Patent No. 5,726,644 to Jednacz (Exh. D)(disclosed in Defendants’
`May 16, 2016 Invalidity Contentions, pages 10 and 22).
`
`Defendants’ counsel also discovered the following reference in the context of a different legal
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`proceeding shortly before service of Defendants’ May 16, 2016 Invalidity Contentions, but did
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`not appreciate the relevance of the reference to this action until after service of the May 16th
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`Invalidity Contentions:
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`• Machenbaum, “Packet Radio Network for Volcano Monitoring,” Packet Status
`Register: Tucson Amateur Packet Radio Corporation, Winter 1995, Issue #57;
`(Exh. A)
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`Defendants disclosed these new references and contentions by serving proposed Supplemental
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`Joint Invalidity Contentions on June 13, 2016, less than one month after service of Defendants’
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`May 16, 2016 Invalidity Contentions.
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`SIPCO waited until June 24, 2016 to object to the proposed Supplemental Invalidity
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`Contentions (Exh. E). SIPCO further advised that it would oppose any motion for leave to serve
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`those supplemental contentions. In light of SIPCO’s objection and assertion that it will oppose a
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`motion for leave, Defendants have no choice but to file this Motion for Leave to Serve Amended
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`Invalidity Contentions as a contested motion.
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`II.
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`LEGAL STANDARD
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`The Local Rules for the Eastern District of Texas, Appendix B Patent Rules provide:
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`Amendment or supplementation any Infringement Contentions or
`Invalidity Contentions, other than as expressly permitted in P. R.
`3-6(a), may be made only by order of the Court, which shall be
`entered only upon a showing of good cause.
`
`P.R. 3-6(b). Under Federal Circuit precedent analyzing the “good cause” standard of local rules
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`for amending infringement and invalidity contentions, “‘good cause’ requires a showing of
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`diligence.” O2 Micro Intern. Ltd. v. Monolithic Power Systems, Inc., 467 F.3d 1355, 1366 (Fed.
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`Cir. 2006).
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`Courts in the Eastern District of Texas weigh multiple factors in determining whether
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`“good cause” exists, including, but not limited to:
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`1. The length of the delay and its potential impact on judicial
`proceedings;
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`2. The reason for the delay, including whether it was within the
`reasonable control of the movant;
`
`3. Whether the offending party was diligent in seeking an
`extension of time, or in supplementing discovery, after an
`alleged need to disclose the new matter became apparent;
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`4. The importance of the particular matter, and if vital to the case,
`whether a lesser sanction would adequately address the other
`factors to be considered and also deter future violations of the
`court’s scheduling orders, local rules, and the federal rules of
`civil procedure; and
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`5. The danger of unfair prejudice to the non-movant.
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`Allure Energy, Inc. v. Nest Labs, Inc., 84 F.Supp.3d 538, 540-41 (E.D. Tex. 2015) (quoting
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`Computer Acceleration Corp. v. Microsoft Corp., 481 F.Supp.2d 620, 625 (E.D. Tex. 2007)).
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`III. ARGUMENT
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`A.
`
`The Court Should Grant Leave to Serve Supplemental Invalidity
`Contentions
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`Defendants notified SIPCO and IPCO of their need to disclose amended invalidity
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`contentions (and in fact served the amended contentions) on June 13, 2016, less than a month
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`after Defendants’ May 16, 2016 Invalidity Contentions were served. The delay in notifying
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`SIPCO and IPCO has been minimal and will not adversely impact this proceeding. What
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`minimal delay there has been is justifiable. Defendants acted diligently in advising SIPCO and
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`IPCO of the new invalidity contentions. The new invalidity contentions are important to
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`Defendants’ defense and SIPCO and IPCO will suffer no real prejudice if Defendants are granted
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`leave to amend their invalidity contentions. As such, Defendants respectfully request that the
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`Court grant such leave.
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`1.
`
`Defendants’ Delay In Seeking Leave to Serve Amended Invalidity
`Contentions has been Minimal and Granting Leave Will Not
`Adversely Impact This Proceeding
`
`This is a large case with 11 patents and 180 patent claims at issue. Defendants’ May 16,
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`2016 Invalidity Contentions were comprised of some 77 references and over 9000 pages,
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`including extensive claim charts to comply with P.R. 3.3(c). In the weeks around May 16th,
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`Defendants found two new applicable references and also discovered the applicability of two
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`references they had listed in the invalidity contentions to specific claims at issue in the case. On
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`June 13, 2016 Defendants notified SIPCO and IPCO of the amended invalidity contentions by
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`serving Defendants’ Supplemental Joint Invalidity Contentions. The time period of less than a
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`Case 6:15-cv-00907-RWS-KNM Document 109 Filed 07/19/16 Page 5 of 12 PageID #: 3149
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`month between service of Defendants’ May 16, 2016 Invalidity Contentions and Defendants’
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`Supplemental Joint Invalidity Contentions is minimal. After some e-mail exchanges discussing
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`the reasons for the amendments, SIPCO objected to Defendants’ Supplemental Joint Invalidity
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`Contentions by e-mail dated Friday June 24, 2016 at 5:23 PM. Realizing that the Motion for
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`Leave would now be a contested motion, Defendants immediately began its preparation.1 The
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`time between SIPCO’s objection to Defendants’ Supplemental Joint Invalidity Contentions and
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`the filing of this motion has also been minimal.
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`If the Court grants Defendants leave to serve its amended invalidity contentions, there
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`will be no adverse impact on this proceeding. SIPCO and IPCO’s opening claim construction
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`brief is not due until August 11, 2016 (id.); the Markman Hearing is not scheduled until
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`September 22, 2016 (id. at 4); SIPCO and IPCO’s final election of asserted claims is not until
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`October 10, 2016 (id.); the fact discovery deadline is October 31, 2016 (id.); expert reports are
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`not due until October 31, 2016 (id.); and trial, scheduled for May 22, 2016 (id. at 1) is over 10
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`months away. Defendants do not anticipate that any dates should need to be extended if the
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`Court grants leave for Defendants to amend their invalidity contentions, so there should be no
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`adverse impact whatsoever on this proceeding or its schedule.
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`2.
`
`Defendants’ Delay is Justifiable, Even Though Arguably Within the
`Control of Defendants
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`Defendants’ delay in providing amended invalidity contentions is justifiable. The
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`Defendants could not disclose the two references they did not find earlier and could not provide
`
`
`1 Defendants were days away from filing the present motion when the Court entered its order on
`July 1, 2016 transferring this action to the Northern District of Georgia. (Dkt. 98). The Court
`subsequently stayed the remaining due dates in the DCO for about a week, and then reinstated
`the remaining due dates. (Dkt. 100, 103). This motion is being filed one week after the Court
`reinstated the due dates.
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`P.R. 3.3(c) claim charts for references whose applicability was not appreciated until after the
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`deadline. It is a stretch at best to ascribe the delay as a lack of diligence in a case with 11
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`patents, and 180 asserted claims with literally decades of relevant prosecution histories,
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`especially where, as here, Defendants invalidity contentions include some 77 references and
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`were over 9,000 pages.
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`Defendants did not even discover two of the references, the Machenbaum article and the
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`Humblet ‘536 Patent, until shortly before and shortly after the May 16, 2016 invalidity
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`contention deadline. Defense counsel discovered relevance of the Machenbaum “Volcano”
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`article reference after the submission of the invalidity contentions. Defendants promptly
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`prepared claim charts for each of the asserted claims to show where the Machenbaum prior art
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`disclosed the asserted claim limitations. The Humblet ‘536 Patent was discovered in a follow up
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`review of the prosecution history of the Brownrigg family patents.
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`Defendants knew of, and in fact disclosed in Defendants’ May 16, 2016 Invalidity
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`Contentions, the Jednacz ‘644 Patent and the Mills article. In fact the Jednacz ‘644 Patent and
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`Mills article were both cited as relevant prior art, and provided claim charts, in the first filed
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`declaratory judgment action pending in the Northern District of Georgia (Civil Action No. 1:15-
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`CV-00319-AT). In that case, the Jednacz ‘644 Patent was cited as prior art to a patent in the
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`Brownrigg family of patents, U.S. Patent No. 6,044,062. In preparing the invalidity contentions
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`for this case, the Jednacz ‘644 Patent was identified as relevant prior art, however it was only
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`after serving Defendants’ May 16, 2016 Invalidity Contentions that counsel for Defendants
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`realized that the Jednacz ‘644 Patent was also germane to the Petite family patents. Defendants
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`quickly prepared a set of detailed claim charts, identifying where specifically in the Jednacz ‘644
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`Patent the relevant disclosures were found to address the asserted Petite family patent claims.
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`The Mills article, while charted in the Georgia case, was not charted in Defendants’ May
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`16, 2016 Invalidity Contentions in an effort to pare down the scope of the contentions. Proving
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`the maxim that no good deed goes unpunished, Defendants did not appreciate at the time they
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`culled the Mills article from the charting process that the Mills article, though described using
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`different terminology, describes the same passive route optimization claimed by the Brownrigg
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`family of patents and should have been included.
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`SIPCO and IPCO were on notice of the Jednacz ‘644 Patent and Mills article by virtue of
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`Defendants’ May 16, 2016 Invalidity Contentions. In those contentions Defendants reserved
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`their rights to supplement the responses. Upon appreciating the importance of the Jednacz ‘644
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`Patent to the invalidity of the Petite family, the additional claim charts were provided quickly to
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`further detail Defendants’ contentions regarding that prior art. Likewise, the Mills article was
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`disclosed and charts provided quickly with respect to the Brownrigg route optimization claims.
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`In a case with 11 patents and 180 claims at issue, it is not surprising, and certainly not
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`indicative of a lack of diligence, that relevant references were found and the significance of other
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`references came to light after invalidity contentions were due. Courts in the Eastern District of
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`Texas have granted leave to amend invalidity contentions in circumstances where the delay was
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`longer and at a much later stage of the case. See Motio, Inc. v. Avnet, Inc., 2015 WL 5952530, at
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`*2 (E.D. Tex., 2015) (motion to amend filed “over two years after the deadline for invalidity
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`contentions and seventeen months after claim construction briefing closed.”)
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`3.
`
`Defendants Acted Diligently After the Need to Disclose the New
`Invalidity Contentions Became Apparent
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`Defendants acted diligently after discovering the need to disclose amended invalidity
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`contentions, advising SIPCO and IPCO of the situation and proffering the proposed amended
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`contentions on June 13, 2016, less than a month after the invalidity contention due date of May
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`16, 2016. Defendants also acted diligently in filing this motion quickly after it learned on Friday
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`June 24, 2016 at 5:23 PM that “SIPCO objects to the supplemental invalidity contentions, and
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`will oppose any motion for leave to serve same.” (See fn. 1, supra).
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`4.
`
`Adding the Additional References and Invalidity Contentions is
`Important to Defendants’ Defense
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`The additional references and invalidity contentions are important to the Defendants’
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`invalidity defense. While Defendants have identified a number of prior art references that render
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`the asserted patents invalid as anticipated or obvious, the additional references pinpoint key
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`information in the prior art.
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`For example the Jednacz ‘644 Patent is directed to use of packet radios for remote
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`sensing of various conditions (such as a building lighting or HVAC systems) and the control of
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`those conditions as early as June of 1995. The Jednacz ‘644 Patent demonstrates that those
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`skilled in the art recognized the usefulness of packet radio for such remote sensing and control
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`before the Petite family patents, whose earliest priority date is September 20, 1997.
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`The Mills article is important because it describes the same passive route optimization
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`claimed by the Brownrigg family of patents. Specifically, Mills discloses what the Brownrigg
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`family patents refer to as a “pooning” process where client radios listen to communications from
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`other client radios and initiate and select new routes to a server based on the client’s discovery of
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`new end-to-end paths to the server. (See Dkt. No. 10-9 (Brownrigg ‘471 Patent) at 74 of 80, col.
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`20, line 60 – col. 21, line 7 (“in the pooning process, the client listens to all packets to
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`continuously and dynamically update its link to the best possible path”)). Mills discloses the
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`same process. In Mills, nodes “eavesdrop” on communications in order to discover and use new
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`routes to other nodes. (Exh. C, Mills Article RFC 981 at 2 (“Wiretap uses passive monitoring of
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`frames transmitted on the channel in order to build a dynamic data base which can be used to
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`determine optimum routes. The algorithm operates in real time and generates a set of paths
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`ordered by increasing total distance, as determined by a shortest-path-first procedure similar to
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`that used now in the ARPANET and planned for use in the new Internet gateway system.”)).
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`The named inventor Brownrigg also considered Mills’s eavesdropping process important enough
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`to mention in a textbook he authored in 1987. (Exh. F, Brownrigg, Edwin B., et al., Packet
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`Radio Networks, Architectures, Protocols, Technologies and Applications, Pergamon Press
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`(1987) at Pages 127-28 (“Recently, Mills [1986] has proposed a novel approach to route finding
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`that is specifically tailored to a broadcast or semibroadcast channel environment, in contrast with
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`most earlier work, which has its roots in point-to-point packet switching technology. Mills’
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`approach, which actually defines a class of algorithms that he calls ‘wiretap algorithms,’ is
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`unusual in two regards. First of all, it relies on passive monitoring of the radio channel traffic to
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`obtain data; thus, information for the routing algorithms can be obtained at no cost in channel
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`capacity, and a route can be selected without searching through the network.”)). Yet, when filing
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`for his patent, Brownrigg did not credit Mills’ contributions to the self-coined “pooning” process
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`in the specification of the Brownrigg patent. Thus, Mills has importance to Defendants’
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`invalidity defense.
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`The Machenbaum article is particularly relevant prior art because it used packet radio
`
`transceivers to monitor a number of physical conditions around a remote Philippine volcano,
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`including the use of an actuator in response to sensed conditions, and connection via the Internet
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`to those outside the packet radio system at the volcano.
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`The Humblet ‘536 Patent is important because it was cited in an Office Action rejection
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`for showing end-to-end paths and applicant Brownrigg argued that Humblet was just like a
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`similar reference, an article written in 1987 by John Jubin (“Jubin”), to overcome the rejection.
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`The applicant, Mr, Brownrigg, overcame this rejection by asserting that Humblet and Jubin
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`disclosed the same information. That representation was accepted at face value by the USPTO
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`examiner who handled that application and, later, by Defendants in this action. However, during
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`subsequent review of Humblet, differences between the two references became apparent, and
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`those differences were enough to justify a separate claim chart (the Jubin reference had been
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`charted in Defendants’ invalidity contentions served on May 16, 2016). Thus the additional
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`invalidity bases are important to Defendants’ defenses in this case and Defendants will be
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`prejudiced if unable to avail themselves of the contentions on which the defenses are based.
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`5.
`
`There is no Danger of Unfair Prejudice to SIPCO and IPCO
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`There will be no unfair prejudice to SIPCO and IPCO if leave to amend is granted, given
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`that significant discovery, the claim construction hearing, and the exchange of expert reports
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`have all yet to occur. SIPCO and IPCO were given Defendants’ proposed amended contentions
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`less than a month after the original contentions were served, and nothing of significance occurred
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`in the case between the date the original contentions were served and the date SIPCO and IPCO
`
`received the amended contentions. Moreover, SIPCO and IPCO’s opening claim construction
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`brief is not due until August 11, 2016 (Dkt. No. 73 at 5); the Markman Hearing is not scheduled
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`until September 22, 2016 (id. at 4); SIPCO and IPCO’s final election of asserted claims is not
`
`until October 10, 2016 (id.); the fact discovery deadline is October 31, 2016 (id.); expert reports
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`are not due until October 31, 2016 (id.); and trial, scheduled for May 22, 2016 (id. at 1) is over
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`10 months away.
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`IV. CONCLUSION
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`For the foregoing reasons, Defendants respectfully request that this Court grant
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`Defendants leave to serve amended invalidity contentions.
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`Case 6:15-cv-00907-RWS-KNM Document 109 Filed 07/19/16 Page 11 of 12 PageID #: 3155
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`Dated: July 19, 2016
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`
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`Respectfully submitted,
`
`__/s/Donald L. Jackson
`Donald L. Jackson
`James D. Berquist
`J. Scott Davidson
`DAVIDSON BERQUIST JACKSON &
`GOWDEY, LLP
`8300 Greensboro Dr., Suite 500
`McLean, VA 22102
`
`Melissa R. Smith
`GILLAM & SMITH LLP
`303 South Washington Ave.
`Marshall, Texas 75670
`Telephone: (903) 934-8450
`Facsimile: (903) 934-9257
`Email: melissa@gillamsmithlaw.com
`
`
`Attorneys for Defendants Emerson Electric
`Co., Emerson Process Management LLLP,
`Fisher-Rosemount Systems, Inc., Rosemount
`Inc., BP p.l.c., BP America, Inc., and BP
`America Production Company
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`Case 6:15-cv-00907-RWS-KNM Document 109 Filed 07/19/16 Page 12 of 12 PageID #: 3156
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that on this 19th day of July, 2016, a true and correct
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`copy of the foregoing document has been served via the Court’s ECF system to all counsel of
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`record.
`
`/s/ Melissa R. Smith______________
`Melissa R. Smith
`
`
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`
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`CERTIFICATE OF CONFERENCE
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`
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`Pursuant to L.R. CV-7(i), the undersigned hereby certifies that counsel for Defendants
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`met and conferred and have complied with L.R. CV- 7(h). Plaintiffs oppose the motion,
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`conclusively leaving the parties at an impasse, and an open issue for the Court to resolve.
`
`/s/ Melissa Smith
`Melissa Smith
`
`
`-12-
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`