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Silver State Intellectual Technologies, Inc. v. Garmin International, Inc.

United States District Court, D. Nevada

July 24, 2014

SILVER STATE INTELLECTUAL TECHNOLOGIES, INC., Plaintiff,
v.
GARMIN INTERNATIONAL, INC. and GARMIN USA, INC., Defendants

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[Copyrighted Material Omitted]

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For Silver State Intellectual Technologies, Inc., Plaintiff, Counter Defendant: Brenton R. Babcock, LEAD ATTORNEY, Marko R. Zoretic, LEAD ATTORNEY, PRO HAC VICE, Knobbe, Martens, Olson & Bear LLP, Irvine, CA; Frederick S. Berretta, Loni Schutte, LEAD ATTORNEYS, PRO HAC VICE, Knobbe, Martens, Olson & Bear LLP, San Diego, CA; Jeffrey A Silvestri, LEAD ATTORNEY, McDonald Carano Wilson, Las Vegas, NV; Ioanna S. Bouris, PRO HAC VICE, Knobbe, Martens, Olson & Bear LLP, Los Angeles, CA.

For Garmin International, Inc., Garmin USA, Inc., Defendants, Counter Claimants: Paul R. Hart, LEAD ATTORNEY, Overland Park, KS; Abran J. Kean, Adam P. Seitz, Shook, Hardy & Bacon L.L.P., Kansas City, MO; Christopher R Miltenberger, Pisanelli Bice, PLLC, Las Vegas, NV; Jennifer L Braster, Naylor & Braster Attorneys at Law, PLLC, Las Vegas, NV.

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ORDER

PHILIP M. PRO, United States District Judge.

Presently before the Court is Plaintiff's Motion to Strike Portions of Defendants' First Amended Non-Infringement, Invalidity, and Unenforceability Contentions (Doc. #93), filed on October 25, 2013.

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Defendants Garmin International, Inc. and Garmin USA, Inc. filed an Opposition (Doc. #94) on November 8, 2013. Plaintiff Silver State Intellectual Technologies, Inc. filed a Reply (Doc. #97) on November 18, 2013. Plaintiff filed a Supplemental Memorandum (Doc. #108) with supporting Declaration (Doc. #109) and Exhibit (Doc. #110) on March 3, 2014. Defendants filed a Response to Plaintiffs' Supplemental Memorandum (Doc. #113) on March 10, 2014.

Also before the Court is Defendants' Motion for Partial Summary Judgment (Doc. #115), filed on March 21, 2014. Plaintiff filed an Opposition (Doc. #117) on April 18, 2014. Defendants filed a Reply (Doc. #123) on May 2, 2014.

I. BACKGROUND

Plaintiff Silver State Intellectual Technologies, Inc. (" Silver State" ) owns the legal rights to United States Patent Nos. 6,525,768 (the '768 Patent), 6,529,824 (the '824 Patent), 7,702,455 (the '455 Patent), 7,522,992 (the '992 Patent), 7,593,812 (the '3812 Patent), 7,739,039 (the '039 Patent), 7,650,234 (the '234 Patent), 7,343,165 (the '165 Patent), and 6,542,812 ('2812 Patent). Silver State's patents generally cover various navigation processes and devices.

Silver State filed a Complaint against Defendants Garmin International, Inc. and Garmin USA, Inc. (together, " Garmin" ), alleging Garmin sells navigation devices that infringe Silver State's patents. (Compl. (Doc. #1).) Garmin filed an Answer, asserting that it does not directly or indirectly infringe Silver State's patents, as well as various other defenses. (Garmin's Ans. to Silver State's Compl. & Countercl. (Doc. #21).) Garmin also asserted counterclaims seeking declarations that the asserted patent claims are invalid and that Garmin does not infringe any valid asserted patent claim. (Id.) Silver State filed an Answer to Garmin's counterclaims, denying that Garmin is entitled to a declaration of invalidity or non-infringement. (Pl.'s Reply to Countercls. of Garmin (Doc. #25).)

Prior to claim construction, the Court granted the parties' stipulations to dismiss all claims and counterclaims related to the '165 Patent and the '2812 Patent. (Order Granting Stip. (Doc. #49); Order Granting Stip. (Doc. #58).) On August 13, 2013, the Court entered a claim construction Order for the disputed patent claim terms. (Order (Doc. #83).) Following the Court's claim construction Order, the parties stipulated to dismiss all claims and counterclaims related to the '768, '824, and '234 Patents. (Order Granting Stip. (Doc. #92); Order Granting Stip. (Doc. #96).) The four Silver State patents that remain in this case are the '455 Patent, the '992 Patent, the '3812 Patent, and the '039 Patent.

Plaintiff Silver State now moves to strike portions of Garmin's First Amended Non-Infringement, Invalidity, and Unenforceability Contentions (" Amended Contentions" ). Silver State contends Garmin has not shown good cause for the amendments because Garmin was not diligent and Silver State would be prejudiced. Garmin responds that the amendments are highly relevant, Garmin exercised diligence following the Court's claim construction Order, and any prejudice to Silver State can be cured.

Garmin separately moves for partial summary judgment. Garmin contends the '992 Patent claims asserted in this case are invalid because Garmin's product, StreetPilot, and a third party product, DeLorme's Map'n'Go 4.0, anticipate the '992 Patent claims. Garmin also argues Garmin's accused products do not infringe the '455 Patent because the Court should construe the asserted claims to require two-way

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communication, but Garmin's accused products use only one-way broadcast technology. Silver State responds that neither StreetPilot nor Map'n'Go 4.0 anticipate the '992 Patent. Silver State also argues the Court's claim construction Order already found the '455 Patent encompasses one-way communications, Garmin has waived any arguments the '455 Patent is limited to two-way communications, and the evidence supports the finding that the '455 Patent covers one-way communications.

II. SILVER STATE'S MOTION TO STRIKE

Silver State moves to strike portions of Garmin's Amended Contentions, arguing Garmin served the Amended Contentions on the last day of fact discovery, and for the first time identified prior art which Garmin asserts renders Silver State's patents invalid. Silver State contends Garmin was not diligent in locating and identifying this prior art, which includes Garmin's own products (StreetPilot, 250XL, NavTalk, and their manuals), two third-party products (the 1998 Lexus GS400 and the Atlanta Traveler Information System), five patents, and the publication entitled " The Evolution of ADVANCE."

Silver State also objects to Garmin's addition of new legal arguments regarding alleged lack of enablement or written description with respect to the '455, '992, and '3812 Patents. Silver State contends that because these arguments are based on the disclosures in these patents, they have been available to Garmin since the inception of the case. Finally, Silver State objects to new invalidity arguments with respect to the '039 Patent based on references disclosed in Garmin's original contentions, and because Garmin has not been diligent in amending its contentions based on information it has had for a long time.

Silver State argues the Court should not allow late amendment because Garmin cannot show good cause to amend due to Garmin's lack of diligence. Additionally, Silver State contends allowing the amendments would prejudice Silver State because fact discovery is closed, and Silver State will not have an opportunity to investigate these amendments.

Garmin responds that good cause exists for the amendments based on the Court's claim construction Order, which Garmin asserts was adverse to Garmin and gave a broad construction in Silver State's favor. Garmin argues that the Local Rules contemplate amendments by accused infringers following an adverse claim construction ruling, and the Nevada Local Rules do not require Garmin to show prior art was newly discovered after a prior diligent search as Silver State contends. Garmin asserts each new prior art reference was located in response to the Court's claim construction of certain terms. Garmin argues that its new legal arguments arose out of the Court's claim construction as well.

As to the ADVANCE publication, Garmin asserts Silver State has been on notice about this prior art since Garmin's preliminary contentions and Silver State took no discovery related to this prior art. As to two of the patents, Garmin argues they are related to a minor dependent claim limitation in the '3812 patent, and Silver State does not identify any specific discovery it would take or any prejudice it would suffer in relation to these two patents being identified as prior art.

Finally, Garmin argues its newly added prior art is highly relevant to show invalidity, and any prejudice to Silver State can be remedied. Specifically, Garmin proposes to extend the discovery deadlines to allow Silver State to take discovery from Garmin and third parties related to the Amended Contentions. Garmin also asserts

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Silver State has passed up opportunities to conduct the discovery which Silver State now contends would be required.

Under the District of Nevada's adopted Local Rules for Patent Cases (" Local Patent Rules" ), a party claiming patent infringement must serve on the opposing party a disclosure of asserted claims and infringement contentions within fourteen days of the initial scheduling conference. LR 16.1-6. Within forty-five days of service of this disclosure, a party opposing a claim of patent infringement must disclose and serve its contentions regarding non-infringement, invalidity, and unenforceability. LR 16.1-8. These contentions must include " detailed description[s] of the factual and legal grounds" for contentions of non-infringement, invalidity, and unenforceability. LR 16.1-8(a)-(b), (f). The disclosures must identify any prior art on which the invalidity contentions rely. LR 16.1-8(b). A party may amend its disclosures " for good cause without leave of Court anytime before the discovery cut-off date." LR 16.1-12. However, once discovery closes, the disclosures may be amended " only by order of the Court upon a timely showing of good cause." Id.

As of June 29, 2012, the parties had served on each other their initial contentions and responses thereto. (Notice of Service of Contentions (Doc. #40).) On September 07, 2012, the parties produced their first claim construction chart to the Court, with each side's proposed construction of the disputed terms. (Jt. Claim Constr. & Prehearing Statement (Doc. #47).) By November 2012, the parties completed briefing on claim construction. (Opening Br. (Doc. #53); Ans. Br. (Doc. #54); Reply Br. (Doc. #55).) On December 17, 2012, the parties filed an amended claim construction chart. (Notice of Second Am. Jt. Claim Constr. Chart (Doc. #60).) The parties filed another amended claim construction chart on April 1, 2013. (Notice of Am. Disputed Claim Terms Summary Sheet & Proposed Order of Presentation (Doc. #73).) The Court held a claim construction hearing on April 5, 2013. (Mins. of Proceedings (Doc. #74).) The Court issued its claim construction Order on August 13, 2013. (Order (Doc. #83).) Garmin served Silver State with its First Amended Preliminary Non-Infringement, Invalidity, and Unenforceability Contentions on October 18, 2013, the last day of fact discovery in this case. (Pl.'s Mot. to Strike Portions of Defs.' First Am. Non-Infringement, Invalidity, & Unenforceability Contentions (Doc. #93), Ex. 4; Order on Stip. to Extend Fact & Expert Discovery Cutoff Dates (Doc. #86).)

A. Good Cause Standard

The parties dispute this District's good cause standard under the Local Patent Rules. Silver State contends that to establish good cause to amend contentions, Garmin must show it was diligent both in discovering the prior art or legal arguments, and in moving to amend its contentions. Garmin argues the good cause requirement is met if the Court construes claim terms differently than the proposed constructions offered by the amending party. Garmin contends " the amending party need not also demonstrate that the prior art was newly found despite an earlier diligent search." (Defs.' Resp. to Pl.'s Mot. to Strike (Doc. #94) [" Garmin Opp'n" ] at 2.)

The District of Nevada's Local Patent Rules, like the local patent rules for the Northern District of California, are designed to require the parties to provide " early notice of their infringement and invalidity contentions, and to proceed with diligence in ...


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