EDTX & NDTX Monthly Wrap-Up — February 2021

This month, the Eastern District of Texas issued four opinions across two cases that considered motions to strike portions of expert reports that were based on allegedly untimely disclosures.

Wapp Tech Ltd. P'ship v. Seattle SpinCo, Inc., No. 4:18-CV-00469 (E.D. Tex.)

Plaintiff Wapp Tech moved to strike and exclude six new witnesses and 843 pages of documents that Defendants disclosed after the close of fact discovery. Defendants argued that their disclosure was timely considering that Plaintiff's late-served updated infringement contentions included new theories that required new rebuttal witnesses and documents.

Judge Mazzant agreed with Defendants that their disclosure of the new witnesses "was a proper supplement under Rule 26(e)(1)(A) because it was sent within two weeks of the updated infringement contentions, which is a timely written response to previously unknown information." The Court rejected Plaintiff's argument that the updated contentions did not contain new theories, reasoning that if "Plaintiffs' updated infringement contentions did not contain new information, they would not be updated at all."

Defendants also produced hundreds of pages of documents after the close of fact discovery, but the Court found this too was timely because they "were disclosed within thirty-days of receiving Plaintiffs' expert report on November 23, 2020, which itself relied on undisclosed documents." The Court favorably noted that Defendants offered to make the witnesses available for deposition, and reiterated that it is "flexible on discovery deadlines, even if that means eve-of-trial depositions." The Court denied Plaintiff's motions to strike and exclude the witnesses, documents, and portions of Defendants' expert report that relied on them. Id. at Dkt. Nos. 383, 385.

GREE, Inc. v. Supercell Oy, Nos. 2:19-cv-00310, -311 (E.D. Tex.)

GREE's Motion to Strike Portions of the Zagal Report

Plaintiff GREE sued Supercell in September 2019 alleging that various features in the Clash of Clans, Clash Royale, and Hay Day video game franchises infringed U.S. Patent Nos. 9,079,107 and 9,561,439. The asserted patents generally relate to systems and methods for controlling a computer-implemented "social game in which it is possible to constitute a group referred to as a guild by a plurality of users (players) who play the game." '107 patent at 1:57-59.

In preparing its invalidity defense, Supercell subpoenaed third party Electronic Arts ("EA") requesting source code for the Warhammer Online: Age of Reconning PC game. EA produced the source code to Supercell on a flash drive and Supercell's source code review expert began analyzing the code. Supercell waited until the close of fact discovery weeks later to notify GREE of the EA source code's existence.

GREE moved to strike portions of the Zagal invalidity report that relied on the EA source code, arguing that the late disclosure was a violation of the Discovery Order's requirement that "[a] party who receives documents from a third party pursuant to a subpoena will reproduce those documents to the other party within five (5) business days." Supercell defended its actions by stating that it believed that the source code flash drive "did not constitute 'documents' under the Discovery Order such that it was required to produce it to GREE within five business days."

Magistrate Judge Payne rejected Supercell's arguments, holding that its "late disclosure was not substantially justified or harmless and that GREE would be prejudiced if Dr. Zagal is allowed to rely on source code that Supercell had in its possession for weeks during fact discovery, but did not disclose to GREE until after fact discovery." The Court accordingly granted GREE's motion to strike portions of the Zagal report referring to the late-disclosed EA source code. No. 2:19-cv-00311 at Dkt. No. 193.

GREE's Motion to Strike Portions of the Friedman Report

In a separate but related case, GREE moved to strike portions of another invalidity expert's report based on multiple grounds, including allegedly late disclosure of invalidity theories and source code. As to the first ground, GREE alleged that Supercell's invalidity expert, Mr. Stacy Friedman, relied on features of a prior art Farmville game and the "Farmville for Dummies" book that were not disclosed in Supercell's invalidity contentions. Supercell responded that the subject features of the Farmville game were previously disclosed in its invalidity contentions, and that Supercell was simply providing additional examples to support its invalidity theories based on those features.

Magistrate Judge Payne agreed with Supercell, observing that "Supercell disclosed the Farmville for Dummies reference and noted that it may rely on additional citations from those listed in its Invalidity Contentions." The Court held that "Mr. Friedman is allowed, as an expert, to provide additional details and examples for a previously disclosed invalidity theory relating to a prior disclosed reference like Farmville for Dummies," and denied GREE's motion to strike portions of Mr. Friedman's report based on this material.

GREE also moved to strike portions of Mr. Friedman's report that relied on two additional sets of third party source code that were not produced during fact discovery. Like its handling of the EA source code, Supercell received source code for two Zynga games prior to alerting GREE of their existence on the last day of fact discovery. Supercell subsequently made available Zynga source code for the Farmville game two weeks later, but did not make available the Mafia Wars source code for five weeks after the close of fact discovery. Supercell defended that it took only seven business days after receiving the source code to alert GREE of its existence, and that Supercell's review was also delayed by confidentiality measures imposed by Zynga.

The Court determined that "[t]he process Supercell used to notify and produce documents it received from Zynga to GREE was not perfect," but found that, "at least in part, such failure was substantially justified or harmless." GREE received the Farmville source code in time to use it in its rebuttal expert report as well as for questioning Mr. Friedman at his deposition. The Court also held that "given the third-party constraints on gathering source code printouts and production," the late production of the Farmville source code was "substantially justified."

As to the Mafia Wars source code, the Court agreed with GREE that the delayed production was prejudicial to GREE. Supercell's late production of the Mafia Wars source code, although allegedly inadvertent, "prejudiced GREE significantly by removing GREE’s ability to both analyze the code prior to serving its rebuttal expert report and question Mr. Friedman regarding his opinions at his deposition." The Court granted GREE's motion on this point and struck the portions of the Friedman report related to the Mafia Wars source code. No. 2:19-cv-00310 at Dkt. No. 190.