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Ultratech, Inc. v. Tamarack Scientific Co.


April 14, 2005


The opinion of the court was delivered by: James Larson United States Magistrate Judge



Ultratech filed and submitted a letter to this Court asking the Court to "remedy an attempt by Defendant Tamarack Scientific Co., Inc.('Tamarack') to submit an untimely expert rebuttal report in violation of both F.R.C.P. Rule 26 and this Court's Scheduling Order." Ultratech also requests an order for evidentiary sanctions and an award of attorney fees and expenses. The parties met and conferred in person but were unable to resolve their dispute. All discovery in this case has been referred to this Court by the district court (Hon. Charles R. Breyer) as provided by 28 U.S.C. §636(b) and Civil Local Rule 72-1.

The Scheduling Order provides for exchange of expert reports. The parties stipulated to one-week extensions of each of the two dates: to January 21, 2005 for expert reports where the party has the burden of proof at trial and February 22, 2005 for "rebuttal expert reports."

On January 21, 2005, Ultratech served an expert report for Dr. William Oldham. Tamarack served an expert report for Mr. Robert Fischer.

On February 21, 2005, Tamarack served no rebuttal expert reports. Ultratech served the rebuttal reports of Dr. Oldham and Mr. Fairborz Rostami in response to the Fischer report.

On March 21, 2005, the date expert discovery closed, at 7 p.m., Tamarack served the expert report of Dr. Berthold Horn (the "Horn report"). Ultratech objected on March 22. Tamarack responded that Rule 26 allowed thirty days for service of rebuttal reports after any expert report, including rebuttal reports.

Ultratech's Position

Ultratech contends that Tamarack has unilaterally altered the schedule from a twotiered expert report exchange to a three-tiered expert report exchange. Ultratech contends that the holding in the Akeva case "dooms the position taken by Tamarack." Akeva, LLC v Mizuno, 212 F.R.D. 306, 309 (M.D.N.C. 2002) ( "Because there was a court approved discovery plan in this case, the Court looks to Rule 16(f) to determine violations for not disclosing expert reports at the time required under the scheduling order, and to determine sanctions. At this stage, the question is not whether the defendants have been prejudiced, but whether plaintiff has shown good cause for its failure to timely disclose.") Id. (internal citations omitted).

Ultratech predicts an endless ping-pong of expert reports, every thirty days, if the Court adopts Tamarack's logic. Ultratech also cries prejudice, that Tamarack's delay in producing the Horn report makes it impossible for Ultratech to take his deposition without leave of court. Ultratech also contends that the Horn report goes to the invalidity of the '813 patent, an issue on which Tamarack has the burden of proof, and that it should have been produced by the January deadline. Ultratech denies that the Horn report is really a response to one of Ultratech's experts, Mr. Rostami.

Ultratech asks the Court to strike the Horn report and exclude both the report itself and Dr. Horn's testimony from trial. Giladi v. Berish Strauch, 2001 U.S. Dist. LEXIS 4645, AT *8-*9 (S.D.N.Y. 2001). Ultratech urges this Court to use its authority under Rules 16 and 37 to issue evidence preclusion sanctions against Tamarack. Yeti by Molly, Ltd. v. Deckers Outdoor Corp, 259 F.3d 1101, 1106 (9th Cir. 2001). Ultratech also asks the Court to award its fees and expenses for traveling to Orange County to meet and confer with Tamarack over this dispute.

Tamarack's Position

Tamarack rejects Ultratech's objections for two reasons:

1. Judge Breyer did not override Rule 26(a)(2)(C) in his Scheduling Order, nor did he prohibit rebuttal reports; and

2. Tamarack had good cause for submitting the Horn report, to rebut Ultratech's new claim construction arguments, and arguments relying on that new claim construction "belatedly raised for the first time in Ultratech's experts' rebuttal reports that should have been presented in Ultratech's initial expert reports, if not more than a year ago, as part of the Patent Local Rule claim construction process." Tamarack claims the right to respond to Ultratech's new claim construction arguments, which Ultratech withheld until the last minute, to deny Tamarack any opportunity to respond.

Tamarack contends that the Oldham and Rostami expert reports for the first time advance a special interpretation of the "learning" and "storing" limitations of the '813 patent. Specifically, Mr. Rostami opined that "learning and storing" means: the rapid reconfiguration or memory relating to the pattern recognition system coupled with an algorithm that allows for the shape and location of a pattern to change in order to properly complete alignment.

This interpretation was not advanced in Ultratech's Preliminary and Final Infringement Contentions, in Ultratech's claim construction contentions or briefs, or in any of Ultratech's motions for summary judgment in this case. Mr. Rostami then went on to distinguish Tamarack's prior art based entirely on this new definition of "learning and storing." Dr. Oldham followed suit and adopted Mr. Rostami's opinions in distinguishing Tamarack's prior art.

Tamarack contends that Ultratech violated both the Patent Local Rules and Judge Breyer's claim construction scheduling order by asserting a belated claim construction, which necessarily upsets all the previous related rulings on summary judgment, which were predicated on Ultratech's claim construction as it was configured at the time those rulings were made. Only at this late stage of the proceeding does Ultratech, the patent holder, reveal a new meaning of two patent terms which "consist of an obvious attempt to read limitations into the claims."

Tamarack believes that Judge Breyer as well relied on Ultratech's omission of any preliminary proposed claim construction of the claim term "learning" in the Patent Local Rule 4-2 exchange when he addressed Ultratech's motion for summary judgment. Tamarack contends it would not have admitted infringement of the claims using the Court's Claim Construction, and partial summary judgment would not have been granted, if Tamarack had known that Ultratech "would attempt to insert improper limitations into the claims using the term 'learning,' in violation of its obligations under Patent Local Rule 4-2."

Tamarack believes the Court would not have granted summary judgment but for Ultratech's construing the broadest possible meaning of the '813 patent's claims. Only now does Ultratech attempt to "improperly and belatedly argue a far narrow[er] claim construction." Tamarack cites a decision by Judge Fern Smith, commenting on the purpose of the Patent Local Rules, as avoiding the "shifting sands" approach to claim construction. Amtel Corp. V. Information Storage Devices, Inc., No. C 95-1987 FMS, 1998 WL 775115 at *2 (N.D.Cal. Nov. 5, 1998). Tamarack also cites another Northern District decision, by Magistrate Judge Zimmerman, for the proposition that the intent of the new rules was to "require parties to crystallize their theories of the case early in the litigation and to adhere to those theories once they have been disclosed." Integrated Circuit Sys., Inc. V. Realtek Semiconductor Co.,Ltd., 308 F.Supp.2d 1106, 1107 (N.D.Cal.2004).

Tamarack rejects Ultratech's contention that Tamarack's rebuttal report should have been submitted with Tamarack's reports on issues where it bears the burden of proof. Tamarack contends that it is Ultratech who bears the burden to prove a claim construction is correct when it is other than the plain meaning of a term, in this instance "learning" and "storing." See K-2 Corp. V. Salomon S.A., 191 F.3d 1356, 1362-63 (Fed. Cir. 1999) ("a party wishing to alter the meaning of a clear claim term must overcome the presumption that the ordinary and accustomed meaning is the proper one."). Sunrace Roots Enterprise Co., Ltd. V. SRAM Corp., 336 F.3d 1298, 1303 (Fed. Cir. 2003) ("We next look to the specification to determine whether SunRace has satisfied its burden of showing that SRAM meant to define the term "shift actuator" more restrictively than is suggested by its ordinary meaning.")

Tamarack contends that Ultratech bears the burden to prove that its new definition of "learning and storing" is correct. If so, then Ultratech should have submitted the Oldham and Rostami reports on the new term meanings on January 21, rather than February 22. Had these reports been timely filed, then Tamarack would have had more time to depose Ultratech's experts and would have submitted its rebuttal report on February 22. Tamarack believes that Ultratech held back these reports for the purpose of foreclosing Tamarack from responding in any meaningful way.

Conclusion and Order

This Court finds that Tamarack shows good cause for submitting its rebuttal report of Dr. Horn later than the date provided by the Scheduling Order in this case. The good cause is Ultratech's belated introduction of its new construction of the claim terms "learning" and "storing." Accordingly, Ultratech's motion to strike the Horn report and its requests for sanctions are denied. The Court takes judicial notice of the parties' Stipulation and Order re Modifications to Scheduling Order, approved by Judge Breyer on April 11, inter alia continuing the hearing on motions for summary judgment to May 6, as well as Judge Breyer's notice to the parties that trial will not begin on May 16. Accordingly, this Court hereby extends the expert discovery cut-off in this case solely for the purpose of permitting further depositions of Dr. Oldham, Mr. Rostami and Dr. Horn, as soon as possible, on or before April 29, 2005.



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