MyMedicalRecords Inc v. Walgreen Co, No. 2:2013cv00631 - Document 41 (C.D. Cal. 2013)
Court Description: ORDER GRANTING MOTION TO STRIKE INVALIDITY CONTENTIONS 28 AND DENYING CROSS-MOTION FOR LEAVE TO SUPPLEMENT INVALIDITY CONTENTIONS 34 by Judge Otis D. Wright, II (lc). Modified on 12/23/2013 .(lc).
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MyMedicalRecords Inc v. Walgreen Co Doc. 41 O 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 MYMEDICALRECORDS, INC., 12 v. 13 14 Plaintiff, ORDER GRANTING MOTION TO STRIKE INVALIDITY CONTENTIONS [28] AND DENYING CROSS-MOTION FOR LEAVE TO SUPPLEMENT INVALIDITY CONTENTIONS [34] WALGREEN CO., Defendant. 15 I. 16 Case No. 2:13-cv-00631-ODW(SHx) INTRODUCTION 17 Two wrongs don’t make a right. Yet when Plaintiff MyMedicalRecords, Inc. 18 blew past several deadlines contained in the Court’s Scheduling and Case 19 Management Order, Defendant Walgreen Co. did the same. Without seeking a Court 20 order as required by the Patent Local Rules, Walgreens filed an untimely and 21 unauthorized supplement to its invalidity contentions. MyMedicalRecords (“MMR”) 22 then moved to strike those additional contentions. Since Walgreens did not timely 23 seek a court order and has not demonstrated good cause for the amendment, the Court 24 GRANTS MMR’s Motion to Strike and DENIES Walgreens’ Motion for Leave to 25 Amend.1 26 /// 27 28 1 After carefully considering the papers filed with respect to these Motions, the Court deems the matters appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 7-15. Dockets.Justia.com II. 1 FACTUAL BACKGROUND 2 On January 29, 2013, MMR filed suit against Walgreens, alleging that 3 Walgreens infringed MMR’s U.S. Patent No. 8,301,466, titled “Method and System 4 for Providing Online Records.” (ECF No. 1.) The Court subsequently issued its 5 Patent Standing Order, which adopted and incorporated the Patent Local Rules from 6 the United States District Court for the Northern District of California. (ECF No. 6.) 7 On July 2, 2013, the Court issued the Scheduling and Case Management Order 8 as required by Federal Rule of Civil Procedure 16(b). (ECF No. 19.) This Order 9 contains a complete schedule of pretrial and trial dates. Specifically, the Court 10 ordered MMR to disclose its asserted claims and infringement contentions by July 22, 11 2013, and Walgreens to serve its invalidity contentions and related documents by 12 September 2, 2013. The Court also ordered the parties to submit a joint claim- 13 construction and prehearing statement by October 28, 2013. 14 Walgreens served its invalidity contentions on September 27, 2013, in which it 15 identified eight prior-art references that it contends anticipate or render claim 8 of the 16 ’466 Patent obvious. On October 28, 2013, the parties submitted their joint claim- 17 construction and prehearing statement. (ECF No. 26.) 18 Two days later—on October 30, 2013—Walgreens provided MMR with 19 “Supplemental Invalidity Contentions.” (Hatch Decl. ¶ 5, Ex. B.) The document 20 contains 46 new prior-art citations not present in the original invalidity contentions. 21 (Id. ¶ 6.) Walgreens also asserted seven new prior-art references: (1) Synchart, (2) 22 HeartRecord, (3) U.S. Patent Application No. 2004/0267572, (4) Personal MD, 23 (5) iHealthRecord.org, (6) U.S. Patent Application No. 2005/0209891, and (7) a 24 portion of the Walgreens.com website from 1999. Finally, Walgreens included new 25 invalidity arguments, including that the ’466 Patent is invalid under 35 U.S.C. § 101 26 for failure to meet the machine-or-transformation test and § 112 for lack of 27 enablement without undue experimentation. 28 /// 2 1 Walgreens never moved for a court order permitting it to amend its invalidity 2 contentions, nor did the parties file a stipulation to that effect. On November 18, 3 2013, MMR moved to strike these supplemental invalidity contentions. (ECF No. 4 28.) Walgreens timely opposed and ostensibly filed a cross-motion2 for leave to 5 amend its invalidity contentions. (ECF No. 34.) MMR’s Motion to Strike is now 6 before the Court for decision. III. 7 LEGAL STANDARD 8 The Patent Local Rules reflect a more conservative approach to amendment 9 than the liberal policy for amending pleadings under the Federal Rules of Civil 10 Procedure. Patent Local Rule 3-6 permits amendment of invalidity contentions “only 11 by order of the Court upon a timely showing of good cause.” Patent L.R. 3-6; but cf. 12 Fed. R. Civ. P. 15(a)(2) (permitting leave to amend “when justice so requires”). 13 To make a satisfactory showing of good cause, a party seeking to amend its 14 invalidity contentions must show that it “acted with diligence in promptly moving to 15 amend when new evidence is revealed.” See O2 Micro Int’l, Ltd. v. Monolithic Power 16 Sys., 467 F.3d 1355, 1363 (Fed. Cir. 2006) (affirming the district court’s denial of 17 leave to amend infringement contentions where the party seeking to amend had the 18 necessary discovery almost three months before moving for leave to amend). Even if 19 the moving party establishes its diligence, the Court then considers the potential 20 prejudice to the nonmoving party in determining whether to grant leave to amend. Id. 21 at 1368. Patent L.R. 3-6 includes a non-exhaustive list of scenarios that could support a 22 23 finding of good cause: (a) A claim construction by the Court different from that proposed by the 24 party seeking amendment; 25 26 27 28 2 Walgreens did not file its “motion” as a noticed motion in accordance with the Local Rules. But since the Court finds that the putative motion lacks merit, the Court denies it in substance rather than form. 3 (b) Recent discovery of material, prior art despite earlier diligent search; 1 and 2 3 (c) Recent discovery of nonpublic information about the Accused 4 Instrumentality which was not discovered, despite diligent efforts, 5 before the service of the Infringement Contentions. IV. 6 DISCUSSION 7 MMR moves to strike Walgreens’ second set of invalidity contentions, arguing 8 that Walgreens failed to seek a court order permitting amendment as required by 9 Patent Local Rule 3-6. MMR also argues that Walgreens has not demonstrated good 10 cause permitting amendment, and any amendment would unduly prejudice MMR. 11 But Walgreens asserts that it timely served its invalidity contentions 45 days after 12 MMR tardily served its infringement contentions and supporting documents. The 13 Court considers these arguments in turn. 14 A. Motion to Strike Invalidity Contentions 15 It is undisputed that Walgreens never moved the Court for an order permitting it 16 to amend its invalidity contentions. Patent Local Rule 3-6 specifically provides that 17 amendment of invalidity contentions “may be made only by order of the Court upon a 18 timely showing of good cause.” That Patent Local Rules and this Court’s Scheduling 19 and Case Management Order do not provide for a two-step procedure for disclosing 20 invalidity contentions. Rather, the defendant must disclose its invalidity contentions 21 in one fell swoop. See Patent L.R. 3-3. 22 The Scheduling Order requires Walgreens to serve its invalidity contentions by 23 September 2, 2013. (ECF No. 19.) Walgreens served its first round of invalidity 24 contentions on September 27, 2013—some 25 days late. Walgreens then purported to 25 supplement its invalidity contentions with additional theories and prior-art references 26 on October 30, 2013—past the schedule set by the Court and without a Court order. 27 Walgreens contends that it provided both its original and supplemental 28 invalidity contentions within 45 days of receiving MMR’s infringement-contention 4 1 document production required by Patent Local Rule 3-2. Walgreens thus argues that 2 its supplemental contentions were timely. But the supplemental contentions were not timely. 3 Patent Local Rule 3-3 4 provides that a party shall file its invalidity contentions “[n]ot later than 45 days after 5 service upon it of the ‘Disclosure of Asserted Claims and Infringement Contentions.’” 6 Walgreens misreads this Rule when it argues that it had 45 days from whenever MMR 7 served its infringement contentions and supporting documents. The 45-day deadline 8 begins to run from service of the infringement contentions under Patent Local Rule 3- 9 1—not the document production supporting this disclosure that is required by Patent 10 Local Rule 3-2. The 45-day limit is also the maximum time a party can wait to serve 11 invalidity contentions after receiving invalidity-contention disclosure. It does not 12 supplant the Court’s Scheduling and Case Management Order, which set a September 13 2, 2013 deadline for Walgreens to serve its invalidity contentions. 14 Walgreens also urges that the parties’ counsel stipulated that Walgreens would 15 not have to disclose its invalidity contentions until MMR completed its infringement 16 disclosures under Patent Local Rules 3-1 and 3-2. Walgreens contends that MMR’s 17 counsel orally responded that the proposal was “fair” and “reasonable.” 18 Walgreens’ stipulation argument fails for several reasons. First, the parties 19 never reduced the stipulation to written form or made it at a deposition or in open 20 court as required by Central District Local Rule 7-1. Second, no one ever filed a 21 stipulation to alter the deadlines with the Court. There was thus no Court order 22 accepting the stipulation. Local Rule 7-1 specifically provides that a stipulation “will 23 not be effective until approved by the judge.” Finally, if MMR failed to comply with 24 the Court’s Scheduling and Case Management Order, and if that failure impacted 25 Walgreens’ ability to comply as well, Walgreens should have moved to compel 26 MMR’s disclosures. The Court could have easily remedied the situation at that point. 27 /// 28 /// 5 1 The Court finds that Walgreens’ supplemental invalidity contentions were both 2 untimely and improperly amended without a court order. The Court consequently 3 GRANTS MMR’s Motion to Strike. 4 B. Motion for Leave to Amend Invalidity Contentions 5 In its Opposition to MMR’s Motion to Strike, Walgreens moves for leave to file 6 its supplemental invalidity contentions. Walgreens argues that it has presented good 7 cause for the amendment for several reasons. Walgreens points out that despite the 8 fact that the Court ordered MMR to disclose its infringement contentions and related 9 documents by July 22, 2013, MMR did not start producing these documents until 10 September 16, 2013. Walgreens contends that it provided its original and 11 supplemental invalidity contentions within 45 days of that date. Defendant asserts 12 that MMR put it in an “untenable situation” of having to review MMR’s late 13 disclosures before disclosing its own invalidity contentions. 14 argues that MMR will suffer no prejudice from the amendment. There is still ample 15 time to conduct discovery regarding these contentions, the ’466 Patent itself discloses 16 six of the seven new prior-art references, and MMR was already on notice of 17 Walgreens’ 46 prior-art citations from its original invalidity contentions. Finally, Walgreens 18 The Court is not persuaded that Walgreens has demonstrated good cause for 19 amending its invalidity contentions. While the Court is mindful that MMR failed to 20 comport with the Court’s Scheduling and Case Management Order, MMR’s failure 21 did not excuse Walgreens from timely providing its own invalidity contentions or 22 from seeking a court order permitting amendment. Walgreens could have easily 23 moved to compel MMR’s disclosures so that Walgreens could have avoided its 24 “untenable situation.” Walgreens would then have had this Court’s full panoply of 25 sanctions to ensure that MMR complied with the Scheduling Order and that 26 Walgreens would be able to meet its own deadlines. While the Court does in fact 27 “expect[] the parties to resolve discovery issues by themselves in a courteous, 28 reasonable, and professional manner’” (Opp’n 1 (quoting Patent Standing Order 4)), 6 1 the Court does not encourage wholesale abandonment of the Scheduling Order just 2 because one party breaches it. 3 As discussed above, Walgreens had to serve its invalidity contentions by 4 September 2, 2013—not simply 45 days after MMR’s infringement disclosures. 5 Walgreens’ argument to the contrary misapprehends Patent Local Rule 3-3’s clear 6 language. 7 It is also rather curious that Walgreens had to even supplement its invalidity 8 contentions in the first place. As MMR points out, six of the prior-art references are 9 cited in the very patent that is the heart of this litigation. And the seventh reference is 10 Walgreens’ own website. It is difficult to imagine that Walgreens “recently 11 discovered” its own former webpage and the patent that has been center stage in this 12 lawsuit for some 11 months. 13 While MMR may have been on notice of the prior-art references to which 14 Walgreens’ 46 new citations relate, Walgreens’ new citations do not comport with 15 Patent Local Rule 3-5. That Rule provides that when a party serves its invalidity 16 contentions, it must also serve a “chart identifying where specifically in each alleged 17 item of prior art each limitation of each asserted claim is found.” Patent L.R. 3-3(c) 18 (emphasis added). Although MMR had notice of the prior-art references, this notice is 19 not sufficient under Patent Local Rule 3-3(c) with respect to the 46 new citations. 20 Walgreens did not specifically identify where each alleged limitation of each asserted 21 claim is found in the prior-art citations. 22 Walgreens was also not diligent in coming up with its new invalidity arguments 23 under 35 U.S.C. §§ 101 and 112. As MMR points out, Walgreens included these 24 arguments in its Answer to MMR’s Complaint. 25 Defense”).) Since Walgreens was aware that it would raise these sections as invalidity 26 defenses in May 2013, it cannot claim it was diligent in asserting them in its second 27 round of invalidity contentions over five months later. 28 /// 7 (Answer 5 (“Third Affirmative 1 The Court understands that Walgreens wanted to be thorough in preparing its 2 invalidity contentions. But if Walgreens needed more time due to MMR’s failure to 3 comport with the case schedule, Walgreens should have addressed that issue first 4 instead of compounding the problem. V. 5 6 For the reasons CONCLUSION discussed above, the Court GRANTS Plaintiff 7 MyMedicalRecords, Inc.’s Motion to Strike Supplemental Invalidity Contentions 8 (ECF No. 28) and DENIES Defendant Walgreen Co.’s Motion for Leave to Amend 9 (ECF No. 34.) 10 IT IS SO ORDERED. 11 12 December 23, 2013 13 14 15 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 16 17 18 19 20 21 22 23 24 25 26 27 28 8
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