United States District Court, D. Colorado
RECOMMENDATION OF UNITED STATES MAGISTRATE
JUDGE
NINA
Y. WANG, UNITED STATES MAGISTRATE JUDGE
This
matter comes before this court for recommendation on
Plaintiff FOX Factory, Inc.'s Motion for Order Permitting
Fox Factory to Amend Its Final Infringement Contentions
and/or Assert Infringement at Trial by SRAM's Brain
Product (“Motion to Amend Final Infringement
Contentions”), see [#187, filed December 7,
2018], which was referred to this Magistrate Judge pursuant
to 28 U.S.C. § 636(b), Fed.R.Civ.P. 72, and the
Memorandum dated December 12, 2018 [#192]. The court has
discussed the issue with the Parties [#183]; reviewed the
Parties' briefing, including Defendants' Response
[#200] and Plaintiff's Reply [#207]; and has determined
that further oral argument would not materially assist in
resolving this instant Motion. Having been advised of the
premises, this court respectfully RECOMMENDS
that Plaintiff's Motions to Amend Final Infringement
Contentions be DENIED.
BACKGROUND
On July
1, 2016, Plaintiff FOX Factory, Inc. (“Plaintiff”
or “FOX Factory”) initiated two separate actions
in the United States District Court for the Northern District
of California. The Parties thereafter stipulated to
consolidation. See [#1, #107]. In the operative
First Amended Complaint for this action, FOX Factory alleges
Defendants infringe U.S. Patent No. 6, 135, 434 (“the
'434 patent” or “the air shock
patent”). [#79]. Pursuant to the NDCA Patent Local
Rules, FOX Factory served its Infringement Contentions and
subsequently amended them in both cases with the court's
approval. See NDCA Patent L.R. 3-1, 3-4.
Specifically, Plaintiff contends that Defendants willfully
infringe Claims 2 and 9 of the '434 patent with the
Monarch R, Monarch RL, Monarch RT, Monarch RT3, Monarch XX,
Monarch Plus R, Monarch Plus RC3, Vivid Air RC2, Deluxe RT3,
Deluxe RT, Deluxe RL, Deluxe RL Remote, Deluxe R, Super
Deluxe RC3, Super Deluxe R, Super Deluxe RT, Super Deluxe
RCT, Super Deluxe RC World Cup, and Debon Air Upgrade Kit.
[#88-3 at 2].
The
court in the Northern District of California issued its claim
construction order on October 30, 2017. See [#105].
On January 3, 2018, FOX Factory sought to further amend its
Infringement Contentions. [#121-4]. FOX Factory sought to
supplement its Second Amended Infringement Contentions with
arguments arising from the court's claim construction of
the terms “bypass channel” and “whereby the
second gas chamber portion acts as an air negative spring to
automatically balance the force on the damping unit . . . so
the shock absorber is in an equilibrium condition, ” in
response to non-infringement arguments identified by
Defendants (“First Motion to
Amend”).[1] [#121-4 at 8]. As justification for the
proposed amendments to the '434 patent, FOX Factory
argued that it was diligent in soliciting any new
non-infringement arguments by Defendants, that Defendants did
not articulate those non-infringement arguments until six
weeks after the court's claim construction order, and
that it was diligent in seeking amendment after receiving
those new non-infringement arguments. [#121 at 5-6]. Five
days later, the Northern District of California transferred
both actions to this District. [#122].
This
court granted the First Motion to Amend on March 15, 2018,
and construed Plaintiff's Third Amended Infringement
Contentions as its Final Infringement Contentions under this
District's Local Patent Rules. [#147]. This court further
instructed the Parties to comply with this District's
Local Patent Rules moving forward. [Id.]. Defendants
then filed Final Invalidity Contentions on April 5, 2018.
[#156]. The Parties continued discovery, raising a number of
discovery disputes with the court. See, e.g., [#159;
#163; #164; #165]. On July 6, 2018, the Parties requested a
Status Conference with the court [#167], which was held on
July 11, 2018. [#171]. During the Status Conference, the
Parties indicated that they were contemplating a global
resolution and sought an extension of time to complete
discovery. [#170; #171]. The court granted an extension of
time, reset pretrial deadlines, and reset the Final Pretrial
Conference for May 3, 2019. [#173]. The Parties were unable
to resolve their disputes, and appeared before the court
again on September 7, 2019, and the deadlines for expert
discovery were subsequently extended upon joint motion.
[#174; #177].
The
Parties continued to have discovery issues that required
court intervention. E.g., [#184]. One such issue
raised during the November 14, 2018 discovery dispute
conference was whether FOX Factory would be permitted to
present evidence of infringement by Defendants' custom
products. [Id.]. Plaintiff argued that it should be
permitted to present evidence that the custom
“BRAIN” product infringed the '434 Patent
because SRAM had delayed in providing it information
regarding the BRAIN product. Defendants disagreed, arguing
that Plaintiff was well aware of the BRAIN product before the
deadline for amendment, and they had no obligation to craft
Plaintiff's infringement argument for it. Because the
record contained insufficient evidence as to what was
disclosed in discovery and more importantly, when it was
disclosed, the court ordered formal briefing, and this
instant Motion to Amend followed.
LEGAL
STANDARDS
I.
Standard for Amendment to Final Infringement
Contentions
While
the court has previously discussed the “good
cause” standard applicable to the amendment of
infringement and invalidity contentions between their Initial
and Final versions under this District's Local Patent
Rule 16(a)(3), (b)(3), see, e.g., [#147; Civil
Action No. 18-cv-0127-WJM-NYW [ECF No. 169]], the Local
Patent Rules do not expressly address amendments to Final
Infringement Contentions. At least one court in this District
has applied Local Patent Rule 16(b)(3)'s standard of good
cause. Brandt v. Von Honnecke, No.
1:15-CV-02785-RM-NYW, 2018 WL 4385284, at *1 (D. Colo. Sept.
14, 2018). Another has applied Rule 26(e) of the Federal
Rules of Civil Procedure, which requires a party to
supplement or correct its disclosure or response “in a
timely manner” if the party learns that in some
material respect the disclosure or response is incomplete or
incorrect. See, e.g., Teashot LLC v. Green
Mountain Coffee Roasters, Inc., No. 12-CV-0189-WJM-KMT,
2014 WL 485876, at *6 (D. Colo. Feb. 6, 2014),
aff'd, 595 Fed.Appx. 983 (Fed. Cir. 2015)
(affirming, inter alia, the district court's
exclusion of Teashot's doctrine of equivalents theory as
a discovery sanction).
Regardless
of the articulation as “good cause” or “in
a timely manner, ” it is clear to this court that it
should first consider FOX Factory's diligence in seeking
amendment to its Final Infringement Contentions. Indeed, this
concept is consistent with “good cause” as
construed by the United States Court of Appeals for the Tenth
Circuit (“Tenth Circuit”). When interpreting
“good cause” in the context of amendment to
pleadings, the Tenth Circuit has explained that the movant is
required to show that “scheduling deadlines cannot be
met despite the movant's diligent efforts.”
Gorsuch, Ltd., B.C. v. Wells Fargo Nat. Bank
Ass'n, 771 F.3d 1230, 1240 (10th Cir. 2014). In that
way, “good cause” does not focus on the bad faith
of the movant or prejudice to the opposing party in the first
instance. See Colorado Visionary Academy v. Medtronic,
Inc., 194 F.R.D. 684, 687 (D. Colo. 2000). It is also
consistent with our sister courts within the Tenth Circuit
that expressly incorporate “good cause, ” and in
some cases, “timely showing of good cause, ” into
their respective Patent Local Rules as the standard for
amendment to Final Infringement Contentions, see,
e.g., Corel Software, LLC v. Microsoft Corp.,
No. 2015-CV-00528-JNP-PMW, 2018 WL 5792323, at *2 (D. Utah
Nov. 5, 2018); Digital Ally, Inc. v. Taser Int'l,
Inc., No. 16-CV-2032-CM-TJJ, 2018 WL 1138283, at *2 (D.
Kan. Mar. 2, 2018), as well as courts outside of this Circuit
that require good cause for any amendment to infringement
contentions, including the United States District Court for
the Northern District of California, where this action
originated. See, e.g., [#147 at 5 (citing NDCA
Patent L.R. 3-6)].
II.
Discovery Sanctions for Failure to Disclose
At the
heart of Plaintiff's argument is its assertion that
Defendants failed to satisfy its discovery obligations as set
forth in the Federal Rules of Civil Procedure. It appears
undisputed that Defendants failed to identify the BRAIN
product expressly in their response to Interrogatory No. 9.
Compare [#187 at 6-7] with [#200]. Instead,
Defendants contend that information regarding the BRAIN shock
was publicly known as of July 2017; within FOX Factory's
own competitive analysis from September 2017; or through
Defendants' document production as of May 2018.
[Id. at 2-3]. Therefore, Defendants argue that they
were not required to supplement their response to
Interrogatory No. 9.
Rule
26(e) of the Federal Rules of Civil Procedure imposes a
self-executing duty on a party who has responded to an
interrogatory to supplement or correct its response in a
timely manner if the party learns that in some material
respect the response is incomplete, and if the additional
information has not otherwise been made known to the other
parties during the discovery process or in writing.
Fed.R.Civ.P. 26(e)(1)(A); Poitra v. Sch. Dist. No. 1 in
the Cty. of Denver, 311 F.R.D. 659, 664 (D. Colo. 2015).
Courts in this District and elsewhere have interpreted
“otherwise been made known” to require meaningful
disclosure. See Poitra, 311 F.R.D. at 666-67.
“To satisfy the ‘made known' requirement, a
party's collateral disclosure of the information that
would normally be contained in a supplemental discovery
response must in such a form and of such specificity as to be
the functional equivalent of a supplemental discovery
response; merely pointing to places in the discovery ...