United States District Court, D. Delaware
before the Court are ADTRAN's Motion to Strike New
Infringement Contentions (D.I. 570) and TQ Delta's Motion to
Strike Portions of the Family 9 Invalidity Expert Reports
(D.I. 627). I have reviewed the parties' briefing
associated with the motions. (D.I. 571, 584, 602, 628, 677,
693). TQ Delta has also submitted a letter regarding
ADTRAN's § 282 Notice. (D.I. 806).
TQ Delta filed this lawsuit against Defendant ADTRAN on July
17, 2014 asserting infringement of one or more patents from
ten patent families. (D.I. 1). I have divided the case into
separate trials based on families of patents. (D.I. 369). The
motions at issue herein address the inclusion of purported
new infringement and invalidity contentions in the
parties' opening expert reports. Fact discovery closed on
October 1, 2018. TQ Delta served final infringement
contentions for Lantiq-based products on December 8, 2016.
(D.I. 91; see D.I. 584 at 4-5). ADTRAN served its
final invalidity contentions on August 15, 2018. (D.I. 472).
Opening expert reports were exchanged on April 15, 2019. The
pretrial conference is scheduled for September 27, 2019 and
trial is scheduled for October 7, 2019. (D.I. 369 at 9, 11).
Rule of Civil Procedure 37(c)(1) provides, "If a party
fails to provide information ... as required by Rule 26(a) or
(e), the party is not allowed to use that information ... to
supply evidence on a motion, at a hearing, or at a trial,
unless the failure was substantially justified or is
harmless." To determine whether a failure to disclose
was harmless, courts in the Third Circuit consider the
Pennypack factors: (1) the prejudice or surprise to
the party against whom the evidence is offered; (2) the
possibility of curing the prejudice; (3) the potential
disruption of an orderly and efficient trial; (4) the
presence of bad faith or willfulness in failing to disclose
the evidence; and (5) the importance of the information
withheld. Konstcmtopoulos v. Westvaco Corp., 112
F.3d 710, 719 (3d Cir. 1997) (citing Meyers v. Pennypack
Woods Home Ownership Ass 'n, 559 F.2d 894, 904-05
(3d Cir. 1977)). "[T]he exclusion of critical evidence
is an 'extreme' sanction, not normally to be imposed
absent a showing of willful deception or 'flagrant
disregard' of a court order by the proponent of the
evidence.'" Id. The determination of
whether to exclude evidence is within the discretion of the
district court. Id.
ADTRAN's Motion to Strike
moves to strike TQ Delta's new infringement contentions
in the expert report of Dr. Rudnick and the related portion
of Dr. Cooklev's report. (D.I. 571 at 1). These new
infringement contentions assert claim 31 of U.S. Patent No.
8, 335, 956 ("the '956 patent") against
ADTRAN's Lantiq-based products. (Id.). ADTRAN
asserts that these belated contentions are a prejudicial
untimely disclosure. (Id. at 2). TQ Delta argues
that a Pennypack analysis is not necessary as no
court order was violated (D.I. 584 at 1-3), and that the
Pennypack analysis does not warrant exclusion
(id. at 11).
address the first two Pennypack factors together.
There is significant surprise or prejudice to ADTRAN. The
Lantiq products were not accused of infringing the '956
patent before the service of the expert reports. TQ Delta had
previously provided a claim chart during discovery for the
asserted claim of the '956 patent. (D.I. 585-2). TQ Delta
also provided claim charts for other asserted claims that
were said to be representative of the '956 patent. (D.I.
585-6). These charts related to ADTRAN's Broadcom-based
products. (D.I. 571 at 2). TQ Delta's 2016 infringement
contentions accused the Lantiq products of infringing other
Family 9 patents but did not disclose a claim of infringement
under the '956 patent. The late disclosure of the
disputed infringement allegation deprived ADTRAN of "the
opportunity to investigate this claim with its supplier
Lantiq [and] to develop non-infringement theories for
Lantiq-based products prior to the service of TQ Delta's
expert report." (D.I. 571 at 5-6). Discovery taken from
third-party Lantiq in 2018 was limited to the source code
cited in TQ Delta's 2016 infringement contentions against
the Lantiq products under other Family 9 patents. ADTRAN has
had the opportunity to depose Dr. Rudnick and/or Dr. Cooklev
and to respond to TQ Delta's expert's opinions on
infringement with answering reports of their own experts.
This does not eliminate the prejudice to ADTRAN, however,
because ADTRAN did not have the opportunity to conduct
independent discovery. While the prejudice occurring from TQ
Delta's opening expert reports could theoretically have
been cured by further subpoena and supplemental expert
reports, there would not be sufficient time to cure the
prejudice before the trial date. ADTRAN's motion was
filed on May 6, 2019, and briefing concluded on June 19.
(D.I. 570; D.I. 602). I do not believe, even if immediate
steps had been taken at the time opening expert reports were
filed, that there was sufficient time to cure the prejudice
to ADTRAN. Nor is there sufficient time now. Thus, the first
two factors weigh in favor of exclusion.
third factor weighs in favor of exclusion. As noted above,
the necessary steps to cure the prejudice to ADTRAN would not
be able to be completed before the trial. To properly cure
the prejudice, the trial would need to be delayed.
fourth factor weighs against exclusion. I do not believe that
TQ Delta's omission of the '956 patent from their
final infringement contentions was done in bad faith or
willful disregard of a court order. The discovery in this
case was done in stages due to the volume of patents and
involvement of two third-parties (Broadcom and Lantiq). At
the time TQ Delta provided its final infringement contentions
for the Lantiq products in 2016, representative claims were
still permitted. (D.I. 91). On March 3, 2017, when discussing
infringement contentions for the Broadcom products, I
instructed the parties that representative claims would no
longer be appropriate. (D.I. 592, Ex 3 at 26:9-14). It was
ambiguous from my statements whether updated infringement
contentions were required for the Lantiq products.
the fifth factor weighs against exclusion. TQ Delta's
rights under the '956 patent are separate from its rights
under U.S. Patent No. 8, 468, 411. Additionally, the
testimony ADTRAN seeks to have struck will be offered
"to show how the accused devices infringe TQ Delta's
patented technology." (D.I. 584 at 16). Thus, it appears
that the information is critical to a fraction of TQ
as a whole, the Pennypack factors weigh in favor of
exclusion of the infringement contentions on the '956
patent in Dr. Rudnick's and Dr. Cooklev's reports.
See Galderma Labs., L.P v. Amneal Pharma., LLC, 2018
WL 508876, at *1 (D. Del. Jan. 22, 2018) (determining that
prejudice, lack of explanation for timing of new theory, and
inability to remedy prejudice without disrupting trial
supported striking late disclosed infringement contentions).
Opening expert reports are not the appropriate time to
disclose new infringement allegations. Cf. Id. at *2
(striking new infringement allegations disclosed two weeks
before opening expert reports were due); ASUS Comp.
Int'l v. Round Rock Research, LLC, 2014 WL 1463609,
at *1 (N.D. Cal. Apr. 11, 2014) (Under the Northern
District's local rules, a "party may not use an
expert report to introduce new infringement theories [or] new
infringing instrumentalities . . . not disclosed in the
part[y's] infringement contentions."). Thus, I will
grant ADTRAN's Motion to Strike.
TQ Delta's ...