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Ameranth, Inc. v. Pizza Hut, Inc.

United States District Court, Ninth Circuit

July 26, 2013

AMERANTH, INC., Plaintiff,
v.
PIZZA HUT, INC.; ET AL., Defendants. AND RELATED COUNTERCLAIMS

ORDER DETERMINING JOINT MOTION FOR DISCOVERY DISPUTE NO. 2 AND GRANTING DEFENDANTS' REQUEST THAT AMERANTH AMEND ITS INFRINGEMENT CONTENTIONS OR DROP THOSE CONTENTIONS [Doc. No. 402]

NITA L. STORMES, Magistrate Judge.

Plaintiff Ameranth, Inc. and defendants OpenTable, Inc., Wanderspot, LLC and Best Western International, Inc.[1] filed a joint motion for determination of discovery dispute regarding the sufficiency of Ameranth's infringement contentions (ICs). Ameranth asserts that the ICs meet the requirements of Patent Local Rule (PLR) 3.1, as the rule essentially requires identification rather than significant explanation or detail in the ICs. Defendants disagree. They argue that this court should follow the case law coming out of the Northern District of California, which requires more detailed and specific ICs, and ask that Ameranth amend the ICs before doing further discovery, or drop the specified contentions. After reviewing all papers filed in support of this joint motion, the court GRANTS Defendants' request that Ameranth amend certain aspects of its ICs or drop those contentions.

I. RELEVANT BACKGROUND

After the original case was filed in August 2011, and before it was consolidated for pretrial purposes with over 30 other cases, Ameranth served amended preliminary infringement contentions (PICs) on the original defendants on June 18, 2012.[2] Those PICs were implicated in motions for partial summary judgment filed by defendants Papa John's and GrubHub. The defendants moved for partial summary judgment of non-infringement of the 850 and 325 patents based on Ameranth's alleged failure to provide sufficient detail in its PICs. Judge Sammartino denied both motions on March 26, 2013. See Papa John's, 12cv729, Dkt. No. 55; GrubHub, 12cv739, Dkt. No. 57. In denying the motions, Judge Sammartino noted that while PICs must be sufficiently specific so as "to provide defendants with notice of infringement beyond that which is provided by the mere language of the patents themselves, " they "need not be so detailed as to transform the PICs into a forum for litigation of the substantive issues." See, e.g., 12cv739, Dkt. No. 57, pp.8, 10 (internal citation and quotations omitted).

On October 4, 2012, 30 cases were consolidated with the original case, 11cv1810. This court held an initial Case Management Conference (CMC) for all consolidated cases on November 14, 2012, and a second CMC on February 20, 2013. Following the second CMC, the court issued an order setting forth a schedule for Ameranth to serve infringement contentions and accompanying documents on a staggered schedule on the various defendant groups. Dkt. No. 345, p.3. According to the PLR, a party claiming patent infringement must serve separately on all opposing parties a "Disclosure of Asserted Claims and Infringement Contentions." PLR 3.1. The ICs served in the consolidated action on defendants OpenTable, Wanderspot and Best Western are the subject of this dispute.[3]

In the ICs, Ameranth asserts direct infringement claims against Defendants based on their make and use of online and mobile reservations systems. Alternatively, if the court determines that the direct infringers are actually the consumers who book reservations or the restaurants that accept such reservations on the systems, then Ameranth asserts that Defendants are indirect infringers because they provide and operate the system components described in the ICs to other persons and promote their use in a manner designed to infringe the patents.

II. LEGAL STANDARD

The issues in this discovery dispute concern the extent of specificity required by this district's PLR to adequately assert infringement contentions. While this court is aware that some judges here have addressed this issue either directly ( see, e.g., Case No. 10cv2618-H (KSC), Dkt. No. 175, Order Denying Defendants' Request to Strike Plaintiff's Preliminary Infringement Contentions), or peripherally ( see, e.g., Case No. 12cv739-JLS (NLS), Dkt. No. 57, Order Denying Motion for Partial Summary Judgment), it is not aware of any Southern District case that evaluates the persuasive authority of the case law from the Northern District of California concerning the required specificity for ICs.

The purpose of local patent rules is to streamline discovery and "provide structure to discovery and enable the parties to move efficiently toward claim construction and the eventual resolution of their dispute." Am. Video Graphics, L.P. v. Elec. Arts, Inc., 359 F.Supp.2d 558, 560 (E.D. Tex. 2005) (citing Network Caching Tech. v. Novell, Inc., 2002 U.S. Dist. LEXIS 26098, *12, 2002 WL 32126128, *5 (N.D. Cal. Aug. 13, 2002)). Such rules streamline discovery by "replac[ing] the series of interrogatories that accused infringers would likely have propounded in [their] absence." Solannex, Inc. v. MiaSole, Inc., 2013 U.S. Dist. LEXIS 56672, *5-*6, 2013 WL 1701062, *2 (N.D. Cal. April 18, 2013). Patent local rules are "designed specifically to require parties to crystallize their theories of the case early in the litigation so as to prevent the shifting sands approach to claim construction." O2 Micro Int'l, Ltd. v. Monolithic Power Sys., 467 F.3d 1355, 1364 (Fed. Cir. 2006) (internal quotations and citation omitted).

Infringement contentions have a specifically defined purpose:

Infringement contentions serve as substitutes for interrogatories, but they also act as forms of pleading that disclose the parties' theories of their case and thereby shape discovery and the issues to be determined at trial. Parties accordingly need not "prove up" their theories by providing evidence beyond the material they have at the time they make their contentions. On the other hand, parties should proffer all of the theories of infringement that they in good faith believe they can assert. As with other forms of pleadings, the infringement contentions should become more specific and fine-tuned as the case progresses, not more sprawling and encompassing. Nothing in this process, however, suggests that infringement contentions are intended to be a running dialogue between the parties, with additions of theories as one side asserts that a particular argument is unsustainable.

Apple Inc. v. Samsung Elecs. Co., 2013 U.S. Dist. LEXIS 91450, *35-*36, 2013 WL 3246094, *3 (N.D. Cal. June 26, 2013).

III. DISCUSSION

Ameranth argues that the court should deny Defendants' arguments for these reasons: (1) other Defendants already challenged the sufficiency of the ICs in the partial summary judgment motions and lost; (2) OpenTable's challenge is late because Ameranth served amended ICs on OpenTable on June 18, 2012 and OpenTable never challenged them; (3) the ICs are sufficiently detailed and comply with PLR 3.1; (4) Defendants cannot simultaneously fail to produce discovery relevant to the issues in the ICs and complain about the sufficiency of the ICs; and (5) its ICs meet the requirements of PLR 3.1.

A. Effect of Summary Judgment Rulings.

Ameranth argues that Defendants attempt to circumvent the district judge's denial of two partial motions for summary judgment concerning Ameranth's PICs as to the 325 and 850 patents. Defendants argue that the summary judgment rulings do not render this issue moot. They point out that Ameranth relied not only on its PICs but also an expert declaration and other citations to documents and source code. Ameranth counters that the court did not factor in the expert declaration or extrinsic evidence in ruling on the sufficiency of the PICs.

Second, Defendants argue that those summary judgment motions concerned only the 325 and 850 patents. Ameranth responds that the same level of detail already determined to be sufficient is used in ICs for the 077 claims.

Finally, Defendants argue that the additional disclosure obligations in this motion, including disclosures related to the doctrine of equivalents, the different versions of the accused systems, and alleged indirect infringement, do not render the issues in this motion moot. Particularly, disclosures regarding indirect infringement were added to the PLR on December 4, 2012, over two months after briefing for the summary judgment motions was complete.

In the orders, Judge Sammartino found that Ameranth's PICs were sufficient and that Defendants should not further challenge them until after claim construction. See, e.g., Case No. 12cv729, Dkt. No. 55, p.12. But she framed the issue as being one of claim construction rather than sufficiency of the of the PICs:

The Court finds that the parties' arguments, to the extent that they are based on the definition of claim terms prior to claim construction, are premature. The parties' arguments depend on claim construction rather than on the specificity of the PICs.

Case No. 12cv739, Dkt. No. 57, p.10; see Case No. 12cv729, Dkt. No. 55, p.12. Further, Judge Sammartino relied on expert evidence to make her decision:

Further, Ameranth's expert has specified "menus, customer order information, food ordering applications, restaurant locators, and frequency/favorite applications" as hospitality applications from Papa John's technical documents. (O'Hanlon Decl., ECF No. 42-2 at 3.) Papa John's arguments that Ameranth has not identified "hospitality applications" turns the issue into one of claim construction ...

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