United States District Court, D. Maryland
CHANGZHOU KAIDI ELECTRICAL CO., LTD., et al.
OKIN AMERICA, INC., et al.
CATHERINE C. BLAKE, District Judge.
Changzhou Kaidi Electrical Co. and Kaidi, LLC (together, "Kaidi") seek a declaratory judgment that the KDPT005 linear actuator does not infringe United States Patent Number 5, 927, 144 ("the 144 patent"), which Dewert Okin GmbH owns by assignment and which it and Okin America, Inc. (together, "Okin") practice via manufacture of the Okin Betadrive linear actuator. Okin, in turn, alleges that the KDPT005 infringes that patent. Okin now moves to exclude evidence, testimony, or argument concerning invalidity opinions not contained both in Kaidi's initial invalidity contentions and in the invalidity report of Kaidi's expert, Dr. William Howard. The parties argued that motion at a hearing on May 6, 2015. It will be granted.
Okin's motion challenges theories contained in Howard's report but not disclosed in Kaidi's initial invalidity contentions, as well that report's incorporation by reference of theories described in Kaidi's initial disclosure but not specifically discussed in the report. The court addresses each challenge in turn.
I. Kaidi's theories not disclosed in its invalidity contentions
Okin contends that Kaidi may not present invalidity theories articulated in Howard's report but not previously disclosed in the invalidity contentions that this court's local rules required it to serve. The court concludes that Kaidi has not complied with the local rules and that its violation should be sanctioned by excluding its expert's new theories.
A. Kaidi's compliance with the local rules
Like many other federal district courts, this court has adopted local rules to govern patent litigation. Where, as here, a party opposes a claim of patent infringement on the basis of invalidity, the local rules require that party to serve certain invalidity contentions within 60 days of the scheduling order. See Local Rule 804.1(c) (D. Md. 2014). Among other things, those contentions must disclose "[t]he identity of each item of prior art that allegedly anticipates each asserted claim or renders it obvious." Local Rule 804.1(c)(i). As to each item of prior art, the contentions must specify "[w]hether [that] item of prior art anticipates each asserted claim or renders it obvious. If obviousness is alleged, [the contention must include] an explanation of why the prior art renders the asserted claim obvious, including an identification of any combinations of prior art showing obviousness." Local Rule 804.1(c)(ii). And those contentions must be accompanied by "[a] chart identifying where specifically in each alleged item of prior art each limitation of each asserted claim is found...." Local Rule 804.1(c)(iii).
Local patent rules such as these recognize the practical difficulty of using "traditional discovery mechanisms" to force patent litigants "to pin down" their theories of infringement and invalidity early enough to permit adequate preparation for trial. O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1365-66 (Fed. Cir. 2006) (explaining the theory informing the Northern District of California's substantively similar local patent rules). Accordingly, "[l]ocal patent rules are designed to require the parties to crystallize their theories of the case early in the litigation so as to prevent the shifting sands approach to'" legal argument. Paice LLC v. Hyundai Motor Corp., Civil No. WDQ-12-499, 2014 WL 3725652, at *3 (D. Md. July 24, 2014) (quoting O2 Micro, 467 F.3d at 1364)).
The local rules do not, however, shackle a defendant to its initial validity contentions by preventing all future modifications of those theories. To do so "might well conflict with the spirit, if not the letter, of the notice pleading and broad discovery regime created by the Federal Rules." O2 Micro, 467 F.3d at 1366. Instead, the local rules permit a party to amend its contentions "upon written consent of all parties, or, for good cause shown, upon leave of the Court." Local Rule 804.6. With that provision, "[t]he patent rules seek to balance the right to develop new information in discovery with the need for certainty as to legal theories.'" Paice, 2014 WL 3725652, at *3 (quoting O2 Micro, 467 F.3d at 1366)).
Here, Okin contends that Howard's expert invalidity report contained novel theories not disclosed in Kaidi's invalidity contentions. Kaidi served those invalidity contentions on October 14, 2013. ( See Mot. In Limine Concerning Invalidity Opinions 3, ECF No. 135.) Kaidi never sought leave to amend its initial contentions, and Okin has not consented to any such amendment. Fact discovery closed on January 9, 2015. ( See Order, ECF No. 103. See also Joint Proposed Modifications to Schedule, ECF No. 101.) Kaidi served Howard's invalidity report on January 12, 2015. ( See Mot. In Limine Concerning Invalidity Opinions 3.) That report articulates a number of theories of anticipation and obviousness that Kaidi did not include in its initial invalidity contentions. Some of those theories are premised on entirely new prior art not discussed in Kaidi's initial invalidity contentions. Others are premised on the prior art Kaidi previously disclosed, but rely on novel references or novel combinations of references within that prior art. Trial is set for May 11, 2015. ( See Order, ECF No. 119.)
In its opposition, Kaidi stipulates that it will not rely on those claim charts included in Howard's invalidity report that refer to entirely new prior art. (Opp. Mot. In Limine Concerning Invalidity Opinions 1, ECF No. 159.) That concession, Kaidi explains, seeks "to streamline the issues to be tried." (Id. ) As to its remaining novel theories, Kaidi does not now seek to amend its initial invalidity contentions or otherwise assert good cause to do so. Instead, it claims that their disclosure for the first time in Howard's expert report is consistent with the local rules. That position is premised on several related arguments, none persuasive.
Kaidi first contends that its initial invalidity contentions contained omnibus language broad enough to include the new theories Howard now advances. Specifically, Kaidi's invalidity contentions stated that, "[i]n addition to the specific combinations and modifications described" in its obviousness charts, certain prior art references contained teachings "applicable to each element of the asserted claims." (Invalidity Contentions 9.) The contentions list certain exemplary items of prior art that allegedly describe a particular limitation of each claim, then assert that a person of ordinary skill in the art might combine those exemplary items of prior art "with the devices disclosed in some of the prior art items identified herein to arrive at the alleged invention." (Id. ) Kaidi asserts that such omnibus language "put Okin on notice that these references could be combined with the primary references to render the claims obvious." (Opp. Mot. In Limine Concerning Invalidity Opinions 3.)
The local rules, however, require a greater measure of specificity than that. As noted, they require patent defendants to identify expressly "any combinations of prior art showing obviousness, " along with "[a] chart identifying where specifically in each alleged item of prior art each limitation of each asserted claim is found." Local Rules 804.1(c)(ii)-(iii) (emphasis added). The rules thus do not permit the conclusory assertion that the ...