EDTX & NDTX Monthly Wrap-Up — October 2019

This post summarizes some of the significant developments in the Northern District of Texas and the Eastern District of Texas for the month of October 2019.

Super-Sparkly Safety Stuff, LLC v. Skyline USA, Inc.: What facts must be asserted to survive a motion to dismiss a counterclaim?

In Super-Sparkly Safety Stuff, LLC v. Skyline USA, Inc., TXND-3-18-cv-00587 (N. D. Tex.), Super-Sparkly motioned to dismiss Skyline's counterclaims. Super-Sparkly, a manufacturer and distributor of personal protection devices, filed suit against Skyline, an importer and seller of such products, claiming that Skyline's pepper spray product infringed on Super-Sparkly's design patent. Judge Godbey addressed Super-Sparkly's motions to dismiss Skyline's counterclaims.

The Court granted Super-Sparkly's motion to dismiss Skyline's declaratory relief counterclaims. Skyline "simply recast as counterclaims the very arguments it pled in response to Super-Sparkly's claims." Skyline's "use of the declaratory judgment vehicle in this procedural context is unnecessary." The Court also granted Super-Sparkly's motion to dismiss tortious interference counterclaims. Skyline had merely recited the elements in the claim, without providing "the specificity required to survive a motion to dismiss."

The Court denied the remaining motions to dismiss, in which "Skyline pled facts sufficient to state a claim for each." The remaining counterclaims included: the Lanham Act ("false statements concerning Skyline's pepper spray products that tended to deceive its intended audience"); unfair competition ("an illegal act by the defendant which interfered with the plaintiff's ability to conduct its business"); and business disparagement ("Super-Sparkly published false claims that Skyline's products infringed on Super-Sparkly's design patents"). The remaining counterclaims went forward, and the Court provided leave to Skyline to replead the tortious interference counterclaim.

Traxcell Technologies, LLC v. AT&T, Inc. et al: What is required to successfully object to Markman Orders?

In Traxcell Technologies, LLC v. AT&T, Inc. et al, TXED-2-17-cv-00718 (E.D. Tex.), Judge Schroeder addressed objections to a Markman Order. Traxcell filed a Motion to Leave to file objections to a Markman Order. Defendants also filed objections to the Markman Order. The Court denied Traxell's Motion to Leave "because Traxcell failed to timely object to the Markman Order." Rule 72(a) of the Fed. R. of Civil Procedure provide 14 days to file objections, and Traxcell had filed "nearly three months later." The Court continued that even if the Court granted leave, the Court would overrule the objections. Traxcell had not shown that the Markman Order's construction was "clearly erroneous" or "contrary to the law." The Court found one claim indefinite because it did not provide "reasonable certainty of the invention's scope" (§ 112, ¶ 2) and another because it failed to disclose "adequate corresponding structure" in a means-plus-function claim (§ 112, ¶ 6). The Court explained that Claim 1 failed to "inform those skilled in the art about the scope of the invention with reasonable certainty." For the means-plus-function claim, the Court explained that Traxcell provided "nothing more than restatement of the function, as recited in the claim," and failed to disclose adequate corresponding structure to perform the claimed function.

Defendants' objections were timely filed, but overruled. Defendants argued that Claim 12 is indefinite for insufficient structure, indefinite for being directed to both an apparatus and a method, and objected to a construction for the term "a second process." The Court held that each argument failed to show that the "Markman Order was clearly erroneous or contrary to law." The Court adopted the Markman Order's conclusion that Claim 12 is not indefinite. The Court explained that there was no "clear and unmistakable disclaimer" resulting in insufficient structure, and Defendant arguments regarding prosecution history "are substantially the same arguments addressed and rejected in the Markman Order." The Court also agreed that active terms were directed to a machine, not a method. The Markman Order explained that the "preamble's reference to a machine and process' is concerning, but not limiting," and that the patentee "did not rely upon the preamble to provide antecedent basis for any term within the body of the claim." The Court adopted the constructions for the third objection, and held that the term held its plain and ordinary meaning. The Court overruled all objections to the Markman Order.

Network-1 Technologies, Inc. v. Hewlett Packard Company: What costs are recoverable for a prevailing party under 28 U.S.C. § 1920?

In Network-1 Technologies, Inc. v. Hewlett Packard Company, TXED-6-13-cv-00072 (E.D. Tex.), Judge Schroeder addressed costs recoverable by a prevailing party. HP was undisputedly the prevailing party, which entitled them to recover costs under 28 U.S.C. § 1920. The parties disagreed on the extent of the costs in the categories of deposition transcripts and witness costs, e-discovery fees, and trial technician fees.

The Court granted HP's request for deposition costs. The Court explained that Network-1 "has not forwarded a good reason' for denying HP's deposition costs." A prevailing party need not prevail "on every issue in the case," and deposing expert witnesses on issues raised at trial is "reasonably necessary." The Court denied both e-discovery and trial technician fees. The Court generally does not tax e-discovery and "sees no reason to deviate from its ordinary practice regarding e-discovery fees." HP's trial technician's preparation of graphics and other demonstratives "are not recoverable under § 1920, at least absent prior approval and a showing that those expenses were necessary." The Court therefore granted in part and denied in part HP's cost requests.

Uniloc 2017 LLC et al v. Google LLC: When can a party supplement invalidity contentions?

In Uniloc 2017 LLC et al v. Google LLC, TXED-2-18-cv-00497 (E.D. Tex.), Judge Payne addressed a Motion for Leave to supplement Google's invalidity contentions.

A party seeking to modify the Court's Docket Control order must show "good cause" (explanation, importance, potential prejudice, and availability of cure). The Court held that "that the prejudice factor weighs in favor of granting this Motion for Leave." "None of the other factors weigh strongly enough against granting this Motion for Leave to overcome the prejudice factor." Google explained specifically how the reference would show obviousness and "Uniloc has not otherwise shown why this reference is unimportant." Further, Google explained why the deadline was not met "'the critical issue is not what the party did after they discovered the prior art; rather, the critical issue is whether or not [the party seeking to amend] exercised diligence in discovering the prior art.'" The Court therefore granted Google's Motion for Leave.

Author: Adil Shaikh