DCG Systems, Inc v. Checkpoint Technologies, LLC
Filing
108
ORDER GRANTING DEFENDANT'S MOTION TO AMEND INVALIDITY CONTENTIONS; ORDER DENYING WITHOUT PREJUDICE PLAINTIFF'S CROSS-MOTION TO LIMIT THE NUMBER OF PRIOR ART REFERENCES by Judge Paul S. Grewal granting 96 Motion to Amend/Correct ; Checkpoint Technologies, LLC is required to E-FILE the amended document (psglc1, COURT STAFF) (Filed on 8/20/2012)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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United States District Court
For the Northern District of California
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SAN JOSE DIVISION
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DCG SYSTEMS, INC.,
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Plaintiff,
v.
CHECKPOINT TECHNOLOGIES, LLC,
Defendant.
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Case No.: C 11-03792 PSG
ORDER GRANTING DEFENDANT’S
MOTION TO AMEND INVALIDITY
CONTENTIONS; ORDER DENYING
WITHOUT PREJUDICE
PLAINTIFF’S CROSS-MOTION
(Re: Docket Nos. 96, 98)
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In this patent infringement suit, Defendant Checkpoint Technologies, LLC (“Checkpoint”)
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moves to amend its invalidity contentions. Plaintiff DCG Systems, Inc. (“DCG”) opposes the
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motion but only in part. DCG also cross-moves to limit the number of prior art references.
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Checkpoint opposes this cross-motion. On August 7, 2012, the parties appeared for hearing.
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Having reviewed the papers and considered the arguments of counsel,
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IT IS HEREBY ORDERED that Checkpoint’s motion to amend its invalidity contentions is
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GRANTED.
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Checkpoint contends that its motion should be granted on two grounds: (1) the recent
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discovery of prior art despite an earlier diligent search; and (2) the need to respond to DCG’s
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recently amended infringement contentions. In its complaint filed on August 2, 2011, DCG
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asserted seven patents and 172 claims. Checkpoint soon afterwards undertook a general search for
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prior art, including a comprehensive review of cited art and interviews of Checkpoint employees
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Case No.: C 11-03792 PSG
ORDER
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and third parties. In addition, Checkpoint solicited bids from prior art experts to conduct further
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searches and analyses. On November 4, 2011, DCG served infringement contentions asserting
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seven patents and 57 claims. Checkpoint then engaged a prior art expert to expand upon its existing
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search for prior art. Checkpoint also reviewed other sources of potential art, including industry
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groups, online sources, industry-related journals and publications. In late January 2012, Checkpoint
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discovered the Shiagawa and Mertin references and in early February 2012, the Tsang reference.
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Checkpoint also undertook a new search related to five new claims asserted by DCG and
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discovered still more art, including the Nataraj reference. Checkpoint now seeks to include all
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additional prior art that was not located until after its initial invalidity contentions were served.
United States District Court
For the Northern District of California
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DCG responds that it does not oppose inclusion of the Shinagawa, Mertin, Tsang, or
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Nataraj references. DCG objects, however, to the additional fifteen non-patent references that
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Checkpoint seeks to include. Checkpoint has not shown that these new references resulted from the
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searches launched as a result of DCG’s newly asserted claims or that these new references arose
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from Checkpoint’s ongoing searches for prior art despite Checkpoint’s diligence in pursuing the
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prior art at issue. 1 To date, Checkpoint has offered only vague statements as to how the new
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references were discovered. Checkpoint’s request that five additional patents be included in its
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amended contentions fails for largely the same reasons.
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The court is persuaded to allow Checkpoint to amend its invalidity contentions to the full
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extent it has requested. The record demonstrates that since the complaint was first filed,
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Checkpoint has exercised diligence in its efforts to locate relevant prior art. In addition, DCG’s
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amended infringement contentions warrant additional amendments to the invalidity contentions. To
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the extent Checkpoint has been less than clear as to the relationship between the amended
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infringement contentions and each of the prior references at issue, any prejudice to DCG is
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mitigated by the substantial time for further discovery permitted under the amended scheduling
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order.
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IT IS FURTHER ORDERED that DCG’s cross-motion to limit the number of prior art
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references is DENIED without prejudice.
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See, e.g., O2 Micro Int’l, Ltd. v. Monolithic Power Sys., 467 F.3d 1355, 1368 (Fed. Cir. 2006).
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Case No.: C 11-03792 PSG
ORDER
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DCG requests that 21 days after the case is narrowed to 25 claims, Checkpoint should be
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required to reduce the number of prior art references to 35. DCG contends that “[i]t would be
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simply impossible to present even half of Checkpoint’s proposed 78 prior art references during a
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seven-day trial.” DCG proposes that an average of five references per asserted patent is more than
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reasonable.
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Checkpoint responds that the cross-motion is flawed procedurally and substantively. As an
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initial matter, DCG did not properly notice the cross-motion. Turning to the merits, DCG’s
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suggestion that Checkpoint be required to reduce proportionately the number of prior art references
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as DCG has reduced its asserted claims is without precedent. While a reduction in the number of
United States District Court
For the Northern District of California
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claims provides obvious efficiencies to decide infringement and invalidity issues, similar
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efficiencies are not created by reducing the number of prior art references. In fact, it has little
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impact beyond the number of references considered in an expert report.
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While it may be appropriate at later point in the case to address whether a reduced number
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of claims warrants a corresponding reduction in a proportionate number of prior art references, the
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court finds that at this point limiting Checkpoint to an average of five prior art references per patent
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would be premature. Both parties should appreciate, however, that after expert discovery and
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dispositive motion practice, the court will not hesitate to impose limits that properly scope the case
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for any trial. 2
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IT IS SO ORDERED.
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Dated:
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8/20/2012
_________________________________
PAUL S. GREWAL
United States Magistrate Judge
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Cf. Rambus, Inc. v. Hynix Semiconductor Inc., No. C 05-00334 RMW, C05-2298 RMW, C 0600244 RMW, 2008 WL 4104116, at *6 (N.D. Cal. Aug. 27, 2008).
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Case No.: C 11-03792 PSG
ORDER
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