Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 1 of 29 PageID #: 10836
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF DELAWARE
`
`ST. CLAIR INTELLECTUAL PROPERTY
`CONSULTANTS, INC.,
`
`Plaintiff,
`
`v.
`
`C.A. No. 04-1436-LPS
`
`MATSUSHITA ELECTRIC INDUSTRIAL CO.,
`LTD; MATSUSHITA ELECTRIC
`CORPORATION OF AMERICA;
`JVC AMERICAS CORPORATION; NOKIA
`CORPORATION; NOKIA, INC.; HEWLETT(cid:173)
`PACKARD COMPANY,
`
`Defendants.
`
`ST. CLAIR INTELLECTUAL PROPERTY
`CONSULTANTS, INC.,
`
`Plaintiff,
`
`v.
`
`C.A. No. 06-404-LPS
`
`PALM, INC.; KYOCERA WIRELESS
`CORPORATION; KYOCERA
`COMMUNICATIONS, INC.; VNIT AR
`CORPORATION; PETTERS GROUP
`WORLDWIDE, L.L.C.; POLAROID CONSUMER :
`ELECTRONICS, L.L.C.; POLAROID HOLDING
`COMPANY; POLAROID CORP.; HTC
`CORPORATION; H.T.C. (B.V.I..) CORP.;
`HTC AMERICA, INC.,
`
`Defendants.
`
`

`
`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 2 of 29 PageID #: 10837
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`ST. CLAIR INTELLECTUAL PROPERTY
`CONSULTANTS, INC.,
`
`Plaintiff,
`
`v.
`
`RESEARCH IN MOTION LTD.;
`RESEARCH IN MOTION CORP.,
`Defendants.
`
`C.A. No. 08-371-LPS
`
`Frederick L. Cottrell, III, Chad M. Shandler, Laura D. Hatcher, RICHARDS LAYTON &
`FINGER P.A., Wilmington, DE; George H. Seitz, II, Jared Thomas Green, Patricia McGonigle,
`SEITZ VAN OGTROP & GREEN, P.A., Wilmington, DE; R. Terrance Rader, Charles W.
`Bradley, Glenn E. Forbis, RADER FISHMAN & GRAUER PLLC;
`Attorneys for Plaintiff.
`
`Jack B. Blumenfeld, Julia Heaney; MORRIS, NICHOLS, ARSHT & TUNNELL LLP,
`Wilmington, DE; Robert F. Perry, Alexas D. Skucas, Allison H. Altersohn, Susan A. Kim; KING
`AND SPALDING LLP, New York, NY,
`Attorneys for Defendants Nokia Corporation & Nokia, Inc.
`
`Richard L. Horwitz, David E. Moore, POTTER ANDERSON & CORROON LLP, Wilmington,
`DE; Charlene M. Morrow, FENWICK & WEST LLP, Mountain View, CA; Heather N. Mewes,
`David D. Schumann, Bryan A. Kohm, Jeffery V. Lasker, FENWICK & WEST LLP, San
`Francisco, CA,
`Attorneys for Defendant Hewlett-Packard Company.
`
`John W. Shaw, Karen E. Keller, SHAW KELLER LLP, Wilmington, DE; David C. Doyle, M.
`Andrew Woodmansee, Philip A. Morin, Greg Riley, Christian Andreu-von Euw, MORRISON &
`FOERSTER LLP, San Diego, CA,
`Attorneys for Defendant Kyocera Wireless Corp. & Kyocera Communications, Inc.
`
`John G. Day, Tiffany Geyer Lydon, Caroline Hong, ASHBY & GEDDES, Wilmington, DE;
`Thomas G. Pasternak, Huan-Yi Lin, STEPTOE & JOHNSON LLP, Los Angeles, CA,
`Attorneys for Defendants HTC Corporation, H.T.C. (B.V.I.) Corporation, and HTC America, Inc.
`
`Collins J. Seitz, Jr., SEITZ ROSS ARONSTAM & MORITZ LLP, Wilmington, DE; John G.
`Day, ASHBY & GEDDES, Wilmington, DE; Kevin F. Brady, CONNOLLY, BOVE, LODGE &
`HUTZ, Wilmington, DE; William F. Lee, Dominic E. Massa, Christopher R. Noyes, WILMER
`HALE, Boston, MA,
`Attorneys for Defendants Research In Motion Corp. and Research In Motion, Ltd.
`
`March 26, 2012
`Wilmington, Delaware
`
`MEMORANDUM OPINION
`
`

`
`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 3 of 29 PageID #: 10838
`
`t~P.~
`
`STARK, U.S. District Judge:
`
`Pending before the Court are Defendants' motions for summary judgment (C.A. No. 04-
`
`1436 D.I. 1071, 1072; C.A. No. 06-404 D.l. 775,778, 781; C.A. No. 08-371 D.l. 482) and St.
`
`Clair's motion to supplement expert reports (C.A. No. 04-1436 D.I. 1086; C.A. No. 06-404 D.I.
`
`792; C.A. No. 08-371 D.I. 487). For the reasons discussed below, the Court will grant
`
`Defendants' motions for summary judgment and deny St. Clair's motion to supplement.
`
`I.
`
`BACKGROUND
`
`A.
`
`Roberts Patents
`
`These related actions1 were filed by Plaintiff St. Clair Intellectual Property Consultants,
`
`Inc. ("St. Clair") alleging infringement of U.S. Patent Nos. 5,138,459 ('"459 patent"); 6,094,219
`
`("'219 patent"); 6,323,899 ('"899 patent"); 6,233,010 ("'010 patent") (collectively, the "Roberts
`
`patents") by Defendants Palm, Inc. ("Palm"), Kyocera Communications, Inc., Kyocera Wireless
`
`Corporation (together, "Kyocera"), Nokia Corporation, Nokia, Inc. (together, "Nokia"), Hewlett(cid:173)
`
`Packard Company ("HP"), HTC Corporation, H.T.C. (B.V.I.) Corporation, HTC America, Inc.
`
`(together, "HTC"), Research in Motion, Ltd. and Research in Motion Corporation (together,
`
`"RIM") (collectively, "Defendants"). The Roberts patents share a common specification that
`
`describes an "electronic still camera" that "selectively formats the compressed digital image to a
`
`compatible format for either the IBM Personal Computer and related architectures or the Apple
`
`Macintosh PC architecture as selected by the operator." ('459 Patent, Abstract) The common
`
`specification explains that the user "select[ s] the desired PC format (IBM PC/ Clone or Apple
`
`Macintosh, etc.)" and the image is "formatted into either an IBM PC/Clone (such as GIFF) or
`
`1The "related actions" are C.A. No. 04-1436, C.A. No. 06-404, and C.A. No. 08-371.
`
`1
`
`

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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 4 of 29 PageID #: 10839
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`Apple Macintosh (such as PICT II) image file format." ('459 patent col.4 11.168-col.5 11.4, col.6
`
`11.42-45)
`
`Each claim St. Clair asserts against Defendants includes a limitation requiring the ability
`
`to format an image in a plurality of what are referred to in the claims as "data formats," "file
`
`formats," or "computer formats" (herein, collectively referred to as "plurality of different data
`
`formats"). 2
`
`B.
`
`Related Proceedings and Federal Circuit Appeal
`
`Litigation over the Roberts patents has been ongoing for more than a decade. St. Clair
`
`filed suit in this Court against Sony in 2001, alleging infringement ofthe Roberts patents. In
`
`September 2002, Judge Farnan held that the "plurality of different data formats" terms did not
`
`require correspondence "with different manufacturers' computers" but, instead, covered any two
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`"arrangement[ s] of digital data in a file," provided that each format was read by different
`
`application software. See St. Clair Intellectual Property Consultants, Inc. v. Sony Corp., 2002
`
`WL 31051605, at *2-3 (D. Del. Sept. 3, 2002). The Sony case was eventually settled and,
`
`consequently, there was no appeal of the Sony claim construction order.
`
`In 2003, St. Clair sued Canon and Fujifilm, among others, alleging infringement ofthe
`
`Roberts patents. See St. Clair Intellectual Property Consultants, Inc. v. Canon, Inc., 2004 WL
`
`1941340, at * 1 (D. Del. Aug. 31, 2004 ). The parties disputed whether the claims were "limited
`
`to formats relating to different computer architectures (e.g. formats for IBM or Apple computers)
`
`2The exact terms used in the asserted claims are: (1) "plurality of different data formats
`for different types of computer apparatus" ('459 patent, claim 16); (2) "plurality of different data
`file formats for different types of computer apparatus" (' 219 patent, claim 1 0); (3) "plurality of
`computer formats ('010 patent, claim I); and (4) "plurality of computer image file formats" ('899
`patent, claim 3).
`
`2
`
`

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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 5 of 29 PageID #: 10840
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`or can also include formats relating to different computer software (e.g. formats for GIFF or
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`PICT software)." Id. at *2. The Court adopted the Sony construction, concluding that "the
`
`different formats ... may correspond to different architectures or different software." Id. at *3.
`
`A jury verdict of infringement against both Canon and Fuji film followed. See St. Clair
`
`Intellectual Property Consultants, Inc. v. Canon, inc., 412 Fed. Appx. 270, 272 (Fed. Cir. Jan.
`
`10, 2011) (hereinafter, "Fujifilm"). While entry of judgment against Fujifilm was stayed pending
`
`resolution of a state court dispute, and subsequently delayed pending resolution of St. Clair's
`
`motion for a new trial on damages, Canon settled. (C.A. No. 06-404 D.I. 776 at 5) Final
`
`judgment was entered against Fujifilm on November 19, 2010, from which Fujifilm immediately
`
`appealed. See Fujifi/m, 412 Fed. Appx. at 272.
`
`In the meantime, the Patent and Trademark Office ("PTO") undertook a reexamination of
`
`the Roberts patents, which included addressing the proper construction of the "plurality of
`
`different data formats" term. (C.A. No. 06-404 D.I. 779 at 5) "During reexamination, five
`
`different examiners, including three different Supervisory Patent Examiners, rejected the Sony
`
`court's interpretation of the claim language," instead construing the asserted claims of the
`
`Roberts patents as "limited to different data formats for different types of computer architecture."
`
`Fujifi/m, 412 Fed. Appx. at 276.
`
`On January 1 0, 2011, the Federal Circuit addressed the proper construction of the
`
`"plurality of different data formats" limitation. See id. at 278. The Federal Circuit construed
`
`"plurality of different data formats'' in the '459 and '219 patents to require that "'each data
`
`format' corresponds on a one-to-one basis to a different type of computer architecture (e.g., in the
`
`way that GIFF corresponds to IBM and PICT corresponds to Apple)" and that "the similar terms
`
`3
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`

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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 6 of 29 PageID #: 10841
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`in the '010 and '899 patents should be construed as limited to different computer architectures."
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`Id. at 273, 277. The Federal Circuit further concluded that the claims ofthe Roberts patents are
`
`limited to "still picture formats" and "that movie formats do not satisfy the 'plurality of data
`
`formats' limitation." Id. at 278. Applying these constructions, the Federal Circuit held that the
`
`Fujifilm products do not satisfy the "plurality of different data formats" limitation by virtue of
`
`having "both a still picture data format and a movie data format." Id. at 277. Based on its claim
`
`construction, the Federal Circuit further held that "judgment as a matter of law of non-
`
`infringement should have been granted." Id. at 278.
`
`The Federal Circuit did not alter this Court's construction of the term "data format,"
`
`which this Court had construed as "the arrangement of digital data in a file including image,
`
`audio, text or other data and includes, at least, MPEG, JPEG, GIF, TIFF, PICT, BMP, JFIF,
`
`DCF, TXT, DOC, WPD and WAV." Id. at 272.
`
`C.
`
`Procedural Posture of the Present Actions
`
`On November 9, 2004, St. Clair filed suit against Nokia and HP. (C.A. No. 04-1436 D.I.
`
`1) On June 26, 2006, St. Clair filed suit against Palm, Kyocera, and HTC. (C.A. No. 06-404 D.I.
`
`1) On June 20, 2008, St. Clair filed suit against RIM. (C.A. No. 08-371 D.I. 1) The Court
`
`coordinated these actions in 2008.3 (See C.A. No. 06-404 D.l. 52)
`
`The Court held a Markman hearing for the related actions on June 11, 2009. See St. Clair
`
`Intellectual Property Consultants, Inc. v. Matsushita Elec.Indus. Co., 2009 WL 3834541, at *2
`
`(D. Del. Nov. 13, 2009). Subsequently, on November 13, 2009, the Court issued its Report and
`
`3Each of these actions initially included other defendants who are no longer parties to the
`present proceedings.
`
`4
`
`

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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 7 of 29 PageID #: 10842
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`Recommendation Regarding Claim Construction ("R&R"). See id. at * 1. The R&R
`
`recommended that the "plurality of different data formats" term be given the same construction
`
`that had been adopted by this Court in the Fujifilm case. See id. at *5. Judge Farnan overruled
`
`Defendants' objections and adopted the R&R in full on February 24, 2010. See St. Clair
`
`Intellectual Property Consultants, Inc. v. Matsushita Elec. Indus. Co., 2010 WL 681686, at *2
`
`(D. Del. Feb. 24, 201 0).
`
`After the claim construction ruling, fact and expert discovery continued in the related
`
`actions in accordance with the Court's Scheduling Order for each action. 4 (See C.A. No. 04-
`
`1436 D.I. 166; C.A. No. 06-404 D.I. 71; C.A. No. 08-371 D.l. 44) Then, in July 2010, the Court
`
`stayed the related actions pending the Federal Circuit's decision in Fujifilm.
`
`The parties advised the Court of the Federal Circuit's Fujifilm decision by letters dated
`
`January 20 and 26,2011. (See C.A. 04-1436 D.l. 1055, 1056) In their letter, Defendants argued
`
`they were now entitled to judgment of non-infringement. (See C.A. No. 04-1436 D.I. 1056 at 3)
`
`Defendants suggested that "[i]f St. Clair will not concede that the Federal Circuit's claim
`
`construction is dispositive, the Court should consult with counsel for the parties to set a briefing
`
`schedule for Defendants' motions for summary judgment of non-infringement." (!d.)
`
`The Court held a scheduling conference on April19, 2011. (See C.A. 04-1436 D.I. 1068)
`
`At this conference, St. Clair recommended that it provide new technical expert reports in view of
`
`the Federal Circuit's decision on claim construction, with Defendants also having a chance to
`
`4Prior to the stay, the parties in all related actions exchanged infringement contentions,
`expert reports, and rebuttal expert reports. In two of the related actions, prior to granting a stay,
`the Court held a pre-trial conference and scheduled a trial. (See C.A. 06-404 D.I. 779 at 7; C.A.
`04-1436 D.I. 1076 at 4)
`
`5
`
`

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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 8 of 29 PageID #: 10843
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`submit new reports. (See id. at 12-13) Defendants responded that they preferred to submit
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`summary judgment papers. (See id. at 18-19)
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`Subsequently, Defendants filed motions for summary judgment of non-infringement.
`
`(See C.A. No. 04-1436 D.l. 1071, 1 072; C.A. No. 06-404 D.I. 775, 778, 781; C.A. No. 08-371
`
`D.I. 482) On July 15, 2011, St. Clair filed a motion to supplement expert reports. (See C.A. No.
`
`04-1436 D.l. 1086; C.A. No. 06-404 D.I. 792; C.A. No. 08-371 D.I. 487) The parties completed
`
`briefing on these motions on August 26, 2011. The Court held oral argument on October 31,
`
`2011. (See Motions Hr'g Tr., Oct. 31,2011 (C.A. No. 04-1436 D.T. 1111) (hereinafter "Tr."))
`
`II.
`
`LEGALSTANDARDS
`
`A.
`
`Failure to Disclose or Supplement
`
`Ru1e 37(c)(1) of the Federal Rules of Civil Procedure provides that "[i]f a party fails to
`
`provide information ... as required by Rule 26(a) or (e), the party is not allowed to use that
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`information ... to supply evidence on a motion, at a hearing, or at a trial, unless the failure was
`
`substantially justified or is harmless." In determining whether a party's failure was "substantially
`
`justified" or "harmless," courts consider various factors, including (1) the importance of the
`
`information withheld, (2) the prejudice or surprise to the party against whom the evidence is
`
`offered, (3) the likelihood of disruption of the trial, ( 4) the possibility of curing the prejudice,
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`(5) the explanation for the failure to disclose, and (6) the presence of bad faith or willfulness in
`
`not disclosing the evidence (the "Pennypack factors"). See Konstantopoulos v. Westvaco Corp.,
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`112 F .2d 710, 719 (3d Cir. 1997) (citing Meyers v. Pennypack Woods Home Ownership Ass 'n,
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`559 F.2d 894, 904-05 (3d Cir. 1977)).
`
`Excluding "critical evidence, such as an expert report," is an "extreme sanction, not
`
`6
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`

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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 9 of 29 PageID #: 10844
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`normally to be imposed absent a showing of wilful deception or flagrant disregard of a court
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`order." Abbott Labs v. Lupin Ltd., 2011 WL 1897322, at *3 (D. Del. May 19, 2011) (internal
`
`quotation marks omitted). The determination of whether to exclude evidence or defenses is
`
`committed to the discretion of the Court. I d.
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`B.
`
`Summary Judgment
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`"The court shall grant summary judgment if the movant shows that there is no genuine
`
`dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R.
`
`Civ. P. 56( a). The moving party bears the burden of demonstrating the absence of a genuine
`
`issue of material fact. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 415 U.S. 574, 586
`
`n.lO (1986). A party asserting that a fact cannot be- or, alternatively, is- genuinely disputed
`
`must support its contention either by citing to "particular parts of materials in the record,
`
`including depositions, documents, electronically stored information, affidavits or declarations,
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`stipulations (including those made for the purposes of the motions only), admissions,
`
`interrogatory answers, or other materials," or by "showing that the materials cited do not
`
`establish the absence or presence of a genuine dispute, or that an adverse party cannot produce
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`admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(l)(A) & (B). If the moving party
`
`has carried its burden, the nonmovant must then "come forward with specific facts showing that
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`there is a genuine issue for trial." Matsushita, 415 U.S. at 587 (internal quotation marks
`
`omitted). The Court will "draw all reasonable inferences in favor of the nonmoving party, and it
`
`may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing
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`Prods., Inc., 530 U.S. 133, 150 (2000).
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`To defeat a motion for summary judgment, the non-moving party must "do more than
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`7
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`

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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 10 of 29 PageID #: 10845
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`simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475
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`U.S. at 586-87; see also Podohnik v. US. Postal Service, 409 F .3d 584, 594 (3d Cir. 2005)
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`("[The nonmovant] must present more than just bare assertions, conclusory allegations or
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`suspicions to show the existence of a genuine issue.") (internal quotation marks omitted).
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`However, the "mere existence of some alleged factual dispute between the parties will not defeat
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`an otherwise properly supported motion for summary judgment;" a factual dispute is genuine
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`only where "the evidence is such that a reasonable jury could return a verdict for the nonmoving
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`party." Anderson v. Liberty Lobby, Inc., 411 U.S. 242, 247-48 (1986). "Ifthe evidence is merely
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`colorable, or is not significantly probative, summary judgment may be granted." !d. at 249-50
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`(internal citations omitted); see also Celotex Corp. v. Catrett, 411 U.S. 317, 322 (1986) (stating
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`entry of summary judgment is mandated "against a party who fails to make a showing sufficient
`
`to establish the existence of an element essential to that party's case, and on which that party will
`
`bear the burden of proof at trial"). Thus, the "mere existence of a scintilla of evidence" in
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`support of the non-moving party's position is insufficient to defeat a motion for summary
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`judgment; there must be "evidence on which the jury could reasonably find" for the non-moving
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`party. Anderson, 477 U.S. at 252.
`
`III.
`
`DISCUSSION
`
`A.
`
`Motion to Supplement
`
`Although styled as a motion to supplement, St. Clair's request to file supplemental expert
`
`reports is also a request to add additional infringement theories. St. Clair is seeking to add these
`
`new infringement theories to the case beyond the Scheduling Order's January 19, 2009 deadline
`
`for serving infringement contentions. (See C.A. No. 04-1436 D.I. 166 at 7; C.A. No. 06-404 D.I.
`
`8
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`

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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 11 of 29 PageID #: 10846
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`71 at 7; C.A. No. 08-371 D.I. 44 at 7) Thus, prior to reaching the merits of the motion to
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`supplement, the Court will first address whether St. Clair has demonstrated that amendment of its
`
`infringement contentions is appropriate under Federal Rule of Civil Procedure 16. See In re
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`Papst Licensing GmbH & Co. KG Litig., 767 F. Supp. 2d 1, 8 (D.D.C. 2011) ("The good cause
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`standard under Federal Rule of Civil Procedure 16(b) applies to a request to amend asserted
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`claims and infringement contentions."); Procter & Gamble Co. v. McNeil-PPC, Inc., 615 F.
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`Supp. 2d 832, 839 (W.D. Wis. 2009) (opining that "failure to address [defendant's claim
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`constructions and expert reports in support thereof] was plaintiffs choice [and} was not dictated
`
`by defendant or this court" and, therefore, "[p)laintiff cannot now seek to alter its strategy
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`without a showing of good cause").
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`1.
`
`Rule 16
`
`If a "party moves for leave to amend the pleadings after a deadline imposed by a
`
`Scheduling Order, Rule 16 ofthe Federal Rules of Civil Procedure is implicated." WebXchange
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`Inc. v. Dell Inc., 2010 WL 256547, at *2 (D. Del. Jan 20, 2010). Pursuant to Rule 16(b)(4), "[a}
`
`schedule may be modified only for good cause and with the judge's consent." "The good cause
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`element requires the movant to demonstrate that, despite diligence, the proposed claims could not
`
`have been reasonably sought in a timely manner." Venetec Int'l v. Nexus Med., 541 F. Supp. 2d
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`612,618 (D. Del. 2010). "[T)he good cause standard under Rule 16(b) hinges on the diligence of
`
`the movant, and not on prejudice to the non-moving party." Id.
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`The Court concludes that St. Clair has not demonstrated diligence in its assertion of its
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`infringement contentions. Specifically, at the time that St. Clair served its infringement
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`contentions and expert reports, claim construction in this case had not yet been resolved. When
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`9
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`

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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 12 of 29 PageID #: 10847
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`claim construction remains an open issue at the time the parties serve expert reports and
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`infringement contentions, the parties have an obligation "to prepare for the fact that the court
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`may adopt [the other party's claim] construction." Union Carbide Chems. & Plastics Tech.
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`Corp. v. Shell Oil Co., 270 F. Supp. 2d 519, 524 (D. Del. 2003); see also Xerox Corp. v. Google,
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`Inc., Claim Constr. Hr'g. Tr. (C.A. No. 10-136 D.l. 197 at 11) (observing that within District of
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`Delaware, parties "regularly" have to write expert reports addressing alternative constructions
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`when Court does not issue its final claim construction ruling until after expert reports are due);
`
`see generally Nike, Inc. v. Adidas Am., Inc., 479 F. Supp. 2d 664, 667-68 (E.D. Tex. 2007) ("A
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`party cannot argue that because its precise proposal for a construction of a claim term is not
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`adopted by the court, it is surprised and must prepare new infringement contentions."); Rambus,
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`Inc. v. Infineon Techs. AG, 145 F. Supp. 2d 721, 731-32 (E.D. Va. 2001) (recognizing that
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`because Markman hearing would be conducted after close of expert discovery, "it was incumbent
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`upon [the patentee] to have [its expert] examine [defendant's] claim construction and offer
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`alternative opinions on infringement and validity").
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`Here, St. Clair made a tactical decision to not assert its infringement theories under
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`Defendants' proposed claim constructions. St. Clair made this decision despite the fact that: (1)
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`in 2005, the PTO applied the Defendants' construction during the reexamination ofthe Roberts
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`patents; (2) St. Clair had notice at least twelve months before the close of fact discovery and
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`fourteen months before the deadline for expert disclosures that its preferred claim construction
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`was going to be appealed to the Federal Circuit; and (3) claim construction in these related cases
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`had not been resolved at the time expert reports were exchanged or infringement contentions
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`were served.
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`10
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`

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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 13 of 29 PageID #: 10848
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`Indeed, St. Clair opposed a stay of the case pending resolution of the Fujifilm appeal,
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`indicating that "[ e ]ven if the Federal Circuit were to modify the Court's claim construction, St.
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`Clair has never conceded that any defendant does not infringe the Roberts patents under ...
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`Defendants' proposed claim construction." (C.A. 06-404 D.l. 505 at 10) Thus, St. Clair was
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`keenly aware of the possibility that Fujifilm may impact this case, yet it chose to proceed under
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`its sole infringement theory and not address alternative theories of infringement based on
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`Defendants' proposed constructions. (See C.A. 06-404 D.I. 49 at 3 (St. Clair acknowledging that
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`"[p ]atent infringement cases can and often do involve competing claim construction" while
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`urging Court to allow case to proceed "independent of what happens with Fuji"))
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`A strategic mistake does not equate to a showing of good cause under Rule 16. See
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`Berger v. Rossignol SJ..i Co., 2006 WL 1095914, at *5 (N.D. Cal. Apr. 25, 2006) (denying motion
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`for leave to amend due to lack of good cause where "delay suggests that the omission of [certain
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`patent infringement] contentions ... were not "errors,' but were instead a deliberate strategic
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`course which plaintiffs now wish to change"). St. Clair relies on the fact that Defendants did not
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`move to compel St. Clair to serve alternative infringement contentions. (See C.A. No. 06-404
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`D.l. 793 at 11) However, Defendants were not required to move to compel alternative
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`infringement contentions from St. Clair, for reasons including that St. Clair had explicitly stated
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`that even if the Court were to adopt Defendants' proposed constructions, the products still
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`infringe for the reasons outlined in the claim charts. (See Tr. at 32) St. Clair also claims that it
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`failed to assert alternative infringement theories because it was relying on the Court's earlier
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`claim construction decisions and awaiting the Court's ruling on objections to the R&R, which
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`recommended adoption of St. Clair's proposed claim constructions. (See C.A. No. 08-371 D.l.
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`11
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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 14 of 29 PageID #: 10849
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`488 at 4; Tr. at 74) However, no claim construction order governed this case at the time
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`infringement contentions were served. Therefore, the Court finds St. Clair's explanation for its
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`failure to disclose all its infringement theories does not rise to the level of"good cause."
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`Further, at the time infringement contentions were served and expert discovery occurred,
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`the Defendants had filed objections to the pending R&R, which were being reviewed de novo, so
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`there was no guarantee that the District Judge would adopt the R&R. Moreover, at the time St.
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`Clair served its infringement contentions and expert reports, it already had access to documents
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`and information on which it now relies to prove its new theory of infringement (dealing with the
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`MMS message capabilities ofthe various accused devices). (See, e.g., C.A. No. 04-1436 D.I.
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`1076 at 12 (noting that Nokia made source code relating to MMS feature in accused product
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`available to St. Clair for months prior to close of fact and expert discovery); C.A. No. 04-1436
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`D.L 1073 at 5 (indicating HP produced various documents pertaining to MMS capability of its
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`accused products); id. at 9 (noting that, in his infringement report, St. Clair's expert relied on
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`numerous documents that discuss MMS capability of accused products); Tr. at 19-20 (discussing
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`documents given to St. Clair which dealt with MMS capability of accused products))
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`Accordingly, the Court finds that St. Clair has failed to demonstrate good cause to amend its
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`infringement contentions outside of the time limit imposed by the Court's Scheduling Orders.
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`2.
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`Rule 37
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`Having determined that there is not good cause to amend the Scheduling Orders, the
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`Court will now consider whether exclusion of the supplemental expert reports is appropriate
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`under Federal Rule of Civil Procedure 37. See Rowe v. E.I. duPont de Nemours & Co., 2010 WL
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`703210, at *4 (D.N.J. Feb. 24, 201 0) (noting that Pennypack factors should be evaluated if denial
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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 15 of 29 PageID #: 10850
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`of request to amend Scheduling Order would have "practical effect of excluding" expert
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`testimony).
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`Having considered the record and the pertinent factors, the Court concludes that
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`exclusion of St. Clair's supplemental expert reports is an appropriate sanction for St. Clair's
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`failure to comply with the Court's Scheduling Orders. On balance, the various Pennypack
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`factors weigh in favor of prohibiting St. Clair from supplementing its expert reports.
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`First, the Court recognizes that St. Clair's expert reports are extremely important to its
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`case, because without updated expert reports and infringement contentions this litigation cannot
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`go forward, as the Federal Circuit's holding in Fujifilm forecloses St. Clair's timely disclosed
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`infringement theories. However, the impact of exclusion in this case is lessened because the
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`Court has considered the expert declarations and new infringement theories that St. Clair seeks to
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`introduce (see infra). 5 See Allen v. Parkland Sch. Dist., 230 Fed. Appx. 189, 194 (3d Cir. 2007)
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`(concluding partial exclusion of expert testimony was "not too harsh of a sanction" and
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`emphasizing that "it should be noted that the District Court did not exclude all of [expert]' s
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`testimony"). Although the sanction here is, nonetheless, extreme, the fact remains that St. Clair
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`violated the Scheduling Orders when it failed to raise all of its infringement contentions at the
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`appropriate time. See United States v. 68.94 Acres of Land, 918 F.3d 389,396 (3d Cir. 1990)
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`("This Court has upheld the exclusion of expert witnesses as an appropriate sanction for a party's
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`violation of a discovery order or some other pre-trial order."); see also Union Carbide, 270 F.
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`Supp. 2d at 524 (excluding new expert reports, as Defendants "had adequate opportunity" at
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`5St. Clair admitted that its expert reports would be "substantively the same" as the expert
`declarations it submitted in opposition to summary judgment. (See Tr. at 82)
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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 16 of 29 PageID #: 10851
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`earlier point in litigation to address issues they now tried to raise, and Defendants "are not
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`prejudiced by being precluded from introducing [their] voluminous new discovery"). Therefore,
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`on balance, this factor is neutral.
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`Second, the Court finds that the Defendants will likely suffer prejudice if St. Clair is
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`allowed to supplement its expert reports because Defendants will have to spend additional time
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`and money to refute St. Clair's new theories. See Trilogy Commc 'ns. Inc. v. Times Fiber
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`Commc 'ns Inc., 109 F.3d 739, 745 (Fed. Cir. 1997) ("When scheduling orders are violated, an
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`opposing party is often prejudiced by the ensuing delay and resultant expense."); Smithkline
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`Beecham Corp. v. Ranbaxy Labs, Ltd., No. 03-2158 (MLC) (D.N.J. Feb. 22, 2006) (concluding
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`that "allowing additional expert reports on new opinions would unduly prejudice the parties and
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`would disrupt the orderly and efficient trial of the case"); see also Tr. at 35 (Defendants' counsel
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`discussing time and resources Defendants would need to expend on conducting new discovery if
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`Court were to allow supplementation). Thus, this factor disfavors supplementation.
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`Third, although no trial date is set in these related actions, two of these cases were set to
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`go to trial prior to the Court's grant of a stay.6 These two cases will suffer further delay and
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`prolonged disruption if the Court allows additional expert reports and discovery at this time.
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`Therefore, this factor disfavors supplementation.
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`Fourth, although the prejudice Defendants will suffer can be partially cured by allowing
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`Defendants to file rebuttal expert reports and, if warranted, new motions for summary judgment,
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`the Court finds that the prejudice Defendants face cannot be wholly cured. See Convolve, Inc. v.
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`6Specifically, a trial had been scheduled in C.A. No. 04-1436 and C.A. No. 06-404 for
`June 14,2010 (C.A. No. 04-1436 D.I. 166 at~ 21; C.A. No. 06-404 D.I. 71 at~ 21)
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`14
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`Case 1:08-cv-00371-LPS Document 520 Filed 03/23/12 Page 17 of 29 PageID #: 10852
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`Compaq Computer Corp., 2006 WL 2527773, at *6-7 (S.D.N.Y. Aug. 31, 2006) (observing that
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`long extension of deadlines cannot cure prejudice to other side when adversely affected party,
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`having already spent substantial time and expense of opposing one set of contentions, would be
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`forced to spend additional time and money to respond to newly disclosed infringement
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`contentions); see also Union Carbide, 270 F. Supp. 2d at 524 (agreeing with Plaintiffs
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`contention that it would "be severely prejudiced'' if parties were allowed to introduce voluminous
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`new discovery, even though there was time for response to new discovery prior to new trial date).
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`Thus, this factor disfavors supplementation.
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`Fifth, St. Clair fails to present a valid explanation for its failure to disclose its
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`infringement contentions and supporting expert reports in accordance with the deadline set by the
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`Scheduling Orders. St. Clair asserts that it was operating under the Court's claim construction
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`order in p