Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Digital Ally, Inc. v. Taser International, Inc.

United States District Court, D. Kansas

March 2, 2018

DIGITAL ALLY, INC., Plaintiff,
v.
TASER INTERNATIONAL, INC., Defendant.

          MEMORANDUM AND ORDER

          Teresa J. James U.S. Magistrate Judge.

         This matter is before the Court on Defendant TASER International, Inc.'s Motion for Leave to Amend Invalidity Contentions (ECF No. 152). Defendant requests leave to amend its invalidity contentions to add a single prior art reference that it recently discovered and which it claims is highly material. Defendant submits that it has shown good cause for the requested amendment by diligently searching for prior art since the inception of this case. Plaintiff Digital Ally, Inc. opposes the motion, arguing that Defendant was not diligent in searching for the prior art which is the basis for its amendment, and therefore has not shown good cause to amend its invalidity contentions at this stage of the case, after claim construction issues have been fully briefed and shortly prior to the claim construction hearing. The Court finds Defendant has shown good cause under D. Kan. Pat. Rule 3.5(b) to amend its invalidity contentions. Defendant's motion is granted.

         I. BACKGROUND

         Plaintiff filed this patent infringement case on January 14, 2016, alleging that body-worn camera products sold by Defendant infringe Plaintiff's patent, U.S. Patent Nos. 8, 781, 292 (“the ‘292 patent”). Plaintiff later amended its complaint on February 2, 2016 and March 18, 2016, to add another claim for patent infringement with respect to U.S. Patent Nos. 9, 253, 452 (“the ‘452 patent”) and claims alleging Defendant violated federal and state antitrust and unfair competition laws.[1]

         On May 9, 2016, the Court entered the Initial Patent Scheduling Order (ECF No. 40), which set May through August 2016 deadlines for the parties to serve infringement and invalidity contentions, claim terms requiring construction, preliminary claim construction, and their joint claim construction statement.

         Plaintiff served its infringement contentions on May 17, 2016.[2] Defendant served its invalidity contentions on July 5, 2016. Defendant's invalidity contentions identified 24 prior art publications, including patents, international patent applications, white papers, and product documents. It also provided over 800 pages of exemplary claim charting. The parties filed their Joint Claim Construction and Prehearing Statement on August 30, 2016.[3]

         A Second Patent Scheduling Order (ECF No. 73) was entered on September 16, 2016, moving the claim construction briefing deadlines to October and November 2016, and continuing the claim construction hearing. The claim construction proposals were fully briefed, including the filing of Defendant's Sur-reply Brief on Claim Construction (ECF No. 97), as of November 23, 2016. The deadline for completion of fact discovery was set 60 days after the Court's claim construction ruling.

         In December 2016 and January 2017, Defendant filed two petitions for inter partes review (“IPR”) of the ‘292 patent, [4] and two petitions for IPR of the ‘452 patent.[5] Defendant also filed a motion to stay this case pending decisions by the Patent Trial and Appeal Board of the U.S. Patent Office (“PTAB”) on the IPR petitions. On March 20, 2017, the Court stayed the case until the PTAB issued its initial decisions whether to institute an inter partes review of the ‘292 and ‘452 patents.[6]

         On August 31, 2017, Plaintiff filed a motion to dismiss its ‘292 patent infringement claims and the parties filed a joint report advising on the status of the pending IPR petitions. The parties advised that on June 6, 2017, the PTAB instituted review of several claims as to the ‘292 patent petition, but declined to institute an IPR of the second ‘292 patent IPR petition and both ‘452 patent IPR petitions.[7] The report also indicated that the parties disagreed regarding whether the case should remain stayed or should resume for the ‘452 patent. The parties filed their briefing on the stay issue on October 2 and October 12, 2017.

         On November 17, 2017, the Court denied Defendant's request to continue the stay with respect to the ‘452 patent.[8] On November 21, 2017, Defendant advised the Court it had provided a recently discovery prior art reference and corresponding claim charts to Plaintiff and, based upon this prior art, it intended to request leave to serve amended invalidity contentions. The Court thereafter held a telephone scheduling/status conference on December 19, 2017. The Court advised counsel that it intends to utilize the recently adopted District of Kansas Patent Rules, where applicable, going forward in this case.[9] The Court also stated that Defendant had met the D. Kan. Pat. Rule 3.5(c) conferring and telephone conference prerequisites for its proposed motion to amend its invalidity contentions and set a December 22, 2017 deadline for Defendant to file its motion.

         II. APPLICABLE LOCAL PATENT RULE

         District of Kansas Patent Local Rule 3.5 governs the amendment of infringement and invalidity contentions. Subsection (a) allows one amendment of invalidity contentions as a matter of right if amended infringement contentions have been served or the amending party has a good faith belief that amendment is required by the court's claim construction order.[10] “In all other situations, amendment of the . . . Invalidity Contentions may be made only by order of the court upon a timely showing of good cause.”[11] Defendant is requesting leave to amend under subsection (b), where it must show good cause for the requested amendment of its invalidity contentions.

         D. Kan. Pat. Rule 3.5(b) provides the following non-exhaustive examples of circumstances that typically will, absent undue prejudice to the non-moving party, support a finding of good cause:

(1) Recent discovery of material, prior art despite earlier diligent search; or
(2) Recent discovery of nonpublic information about the Accused Instrumentality that was not discovered, despite diligent efforts, before the service of the Infringement Contentions.

         Subsection (c) of D. Kan. Pat. Rule 3.5 requires two prerequisites before the court will entertain any motion seeking leave to amend invalidity contentions. First, counsel for the moving party must confer or make reasonable efforts to confer. Second, the moving party must arrange for and hold a telephone conference with the court before filing the motion. As the Court indicated at the December 19, 2017 status conference, Defendant has met both D. Kan. Pat. Rule 3.5(c) prerequisites for its motion.

         III. WHETHER DEFENDANT HAS SHOWN GOOD CAUSE TO AMEND ITS INVALIDITY CONTENTIONS

         Defendant submits that it has shown good cause to amend its invalidity contentions with respect to the ‘452 patent to add a prior art reference to World Intellectual Property Organization (“WIPO”) International Publication WO/2014/000161 A1 titled “Apparatus and Method for Cooperative Electronic Data Collection” (the “Xu reference”), which it discovered on September 20, 2017. Defendant argues that the Xu reference is highly relevant prior art because it invalidates the remaining claims of the ‘452 patent, whether considered by itself or in combination with other references. Defendant contends it has shown diligence in its efforts to search for prior art and in seeking leave to amend, and Plaintiff will suffer no prejudice by the proposed amendment.

         As an initial matter, the Court considers what law governs the validity and interpretation of its local patent rules, including the specific rule governing the amendment of infringement or invalidity contentions. As announced by the Federal Circuit, in O2 Micro International Ltd. v. Monolithic Power Systems, Inc., [12] issues concerning the validity and interpretation of local patent rules that are likely to directly affect the substantive patent law theories that may be presented at trial are “intimately involved in the substance of enforcement of the patent right” and must be governed by the law of the Federal circuit.[13] In the O2 Micro case, the Federal Circuit found that the Northern District of California's local patent rules regarding amendment of infringement contentions were unique to patent cases and had a close relationship to enforcement of substantive patent law, and therefore reviewed their validity and interpretation under Federal Circuit law.[14] The Court will therefore apply Federal Circuit law in determining whether Defendant has shown good cause under D. Kan. Pat. Rule 3.5(b) to amend its invalidity contentions in this case. In the absence of any controlling Federal Circuit law, the Court finds caselaw from the Northern District of California instructive based upon the similarity of its local patent rule governing amendment of contentions[15] to the rule recently adopted by the District of Kansas.

         District of Kansas Patent Rule 3.5(b)(1) provides the example of a party's “recent discovery of material, prior art despite its earlier diligent search” as a circumstance that will typically support a finding of good cause, absent undue prejudice to the non-moving party. Under Federal Circuit law, “good cause” for allowing amendments to infringement or invalidity contentions requires a showing of diligence by the party seeking to amend its contentions.[16] If the moving party is able to show diligence, the court may then consider the prejudice to the non-moving party.[17] In considering good cause, courts also examine other factors including “the relevance of the newly discovered prior art, the difficulty in obtaining such prior art, and whether the motion appears to be motivated by gamesmanship.”[18]

         A. Diligence in Discovering the Basis for the Amendment (Prior Art)

         Diligence is the critical issue in the good cause determination.[19] The burden is on the party seeking to amend its contentions to establish diligence rather than on the opposing party to show a lack of diligence.[20] “[T]he diligence required for a showing of good cause has two subparts: (1) diligence in discovering the basis for amendment; and (2) diligence in seeking amendment once the basis for amendment has been discovered.”[21]

         Defendant contends it was diligent in searching for the prior art serving as the basis for its request to amend its invalidity contentions. It attaches the Declaration of its counsel, John Garretson, who describes Defendant's efforts to search for prior art:

Beginning in January 2016, [Defendant] hired five professional search firms and consultants to search for prior art to the '292 and '452 patents-in-suit. Those firms spent more than 210 hours searching for and analyzing prior art, totaling eight separate searches. These searches included U.S., Europe, World Intellectual Property Organization (WIPO), China, Japan, Korea, Germany, Canada, Australia, France and UK patent/application databases. This searching also included non-patent literature searches of databases covering technical papers, trade journals, white papers, presentations and other publicly-available materials. During this time, [Defendant's] counsel further independently searched for and analyzed prior art, including enlisting the assistance of a technical expert.
[Defendant] continued in these efforts until it served its Invalidity Contentions for the '292 and '452 patents on July 5, 2016. [Defendant's] Invalidity Contentions identified 24 prior art publications, including patents, international patent applications, white papers, and product documentation. [Defendant] also provided 839 pages of exemplary claim charting.
After [Defendant] served its Invalidity Contentions, [Defendant's] counsel continued to perform additional prior art searches while continuing to analyze the many items collected to identify appropriate references to challenge the 30 claims then purportedly asserted by [Plaintiff]. In particular, [Defendant's] Seattle IPR counsel worked diligently with the technical expert to continue to analyze and research the prior art, and to prepare four IPR petitions addressing both the '292 and '452 patents in December 2016 and January 2017. These petitions and their supporting expert ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.