PayRange, Inc. v. Kiosoft Technologies, LLC

United States District Court

for the

Southern District of Florida

PayRange, Inc., Plaintiff, )

)

v. )

Civil Action No. 20-24342-Civ-Scola

)

KioSoft Technologies, LLC, and )

TechTrex, Inc., Defendants. )

Order on Objections to

Magistrate Judge Goodman’s June 16, 2023, Order

This matter is before the Court on the Defendants KioSoft Technologies,

LLC and TechTrex, Inc.’ (collectively, “KioSoft”) objections to Magistrate Judge

Goodman’s June 16, 2023, order denying Kiosoft’s motion for leave to file a

revised claim construction brief. (Objs., ECF No. 183.) The Plaintiff PayRange

Inc. filed a response to KioSoft’s objections (ECF No. 184), to which KioSoft

filed a reply (ECF No. 185). This Court believes its inartfully drafted scheduling

order is mostly responsible for leading the magistrate judge astray. After

careful consideration of the parties’ written submissions, the record, and the

relevant legal authorities, and with apologies to the magistrate judge, the Court

sustains KioSoft’s objections (Objs., ECF No. 183), and grants its motion for

leave to file a revised claim construction brief (Mot., ECF No. 171).

1. Background

This action originates from KioSoft’s alleged infringement of PayRange’s

patents, namely, United States Patent Nos. 10,719,833; 10,891,608; and

10,891,614 (the “‘833 Patent,” “‘608 Patent,” and “‘614 Patent” respectively).

(Second Am. Compl. ¶ 3, ECF No. 142.) PayRange alleges that KioSoft has

infringed on its patent rights in mobile payment systems for non-networked

unattended retail machines by making and selling kiosks with built-in mobile

payment functionalities. (Id. ¶¶ 15–17, 24.)

In April, May, and June of 2021, KioSoft filed Post Grant Review (“PGR”)

Petitions before the Patent Trial and Appeal Board (“PTAB”) relating to the ‘833

Patent, ‘608 Patent, and ‘614 Patent, respectively. (ECF No. 89.) The PGR

Petitions seek to invalidate each of the three patents at issue in this action. On

March 18, 2022, the Court stayed the case pending the outcome of the PGR

petitions. (ECF No. 128.) In late December 2022 and January 2023, the parties

notified the Court that the PTAB had issued various substantive rulings and

submitted a joint proposed revised scheduling order lifting the stay in this

matter. (ECF Nos. 137, 138, 140.) The Court lifted the stay and entered an

amended scheduling order. (ECF No. 140.)

Although the parties had each filed their claim constructions briefs

before the case was stayed (see ECF Nos. 73, 75, 82, 108), the amended

scheduling order provided for April 14, 2023, as the “[d]eadline for any party

claiming patent infringement to move [to] file a revised opening claim

construction brief,” while specifying that “simultaneous opening briefs are not

permitted” and “[r]esponse and reply deadlines w[ould] proceed as provided for

in the Local Rules.” (ECF No. 140.) April 14, 2023, came around and PayRange,

the only party claiming patent infringement, did not request leave to file a

revised opening brief. However, on April 28, 2023, KioSoft filed its own motion

for leave to file a revised claim construction brief. (ECF No. 171.) Because the

Court had previously referred the parties’ claim construction briefing to Judge

Goodman for a report and recommendations (ECF No. 107), it also referred

KioSoft’s motion for leave to file a revised claim construction brief to Judge

Goodman (ECF No. 172). On June 16, 2023, Judge Goodman denied KioSoft’s

motion for leave to file a revised claim construction brief. (ECF No. 178.) The

instant order addresses KioSoft’s objections to that denial.

2. Legal Standard

A party may appeal a magistrate judge’s ruling to the district court

pursuant to Federal Rule of Civil Procedure 72(a) and 28 U.S.C. § 636(c)(1).

“When a party objects to a magistrate’s non-dispositive order, the district court

must consider those ‘objections and modify or set aside any part of the order

that is clearly erroneous or is contrary to law.’” Traylor v. Howard, 433 F. App’x

835, 836 (11th Cir. 2011) (quoting Fed. R. Civ. P. 72(a)). “An order is contrary

to law when it fails to apply or misapplies relevant statutes, case law or rules of

procedure.” Summit Towers Condo. Ass’n, Inc. v. QBE Ins. Corp., 2012 U.S.

Dist. LEXIS 59633, 2012 WL 1440894, at *1 (S.D. Fla. Apr. 4, 2012) (Seitz, J.)

(citation omitted). A magistrate judge’s ruling is deemed “clearly erroneous”

only when the district court “is left with the definite and firm conviction that a

mistake has been committed.” See Salazar v. Wells Fargo Bank, N.A., 2010 U.S.

Dist. LEXIS 140872, 2011 WL 379145, at *3 (S.D. Fla. Feb. 2, 2011) (Lenard,

J.) (citation omitted). “Clear error is a highly deferential standard of review.”

Holton v. City of Thomasville Sch. Dist., 425 F.3d 1325, 1350 (11th Cir. 2005).

The district court may not undo the magistrate judge’s determination “simply

because it is convinced that it would have decided the case differently.” See id.

at 1351. “This standard has been described as ‘a very difficult one to meet.’”

Thornton v. Mercantile Stores Co., 180 F.R.D. 437, 439 (M.D. Ala. 1998) (De

Ment, J.).

3. Analysis

Judge Goodman denied KioSoft’s motion for leave to file a revised claim

construction brief by relying on the language of the Court’s amended

scheduling order. Because the scheduling order set April 14, 2023, as the

deadline for “any party claiming patent infringement to [ ] file a revised

opening claim construction brief (simultaneous opening briefs are not

permitted),” and PayRange, the only party claiming patent infringement, chose

not to file a revised opening brief, Judge Goodman concluded that KioSoft was

precluded from filing a brief itself. (See Order 4, ECF No. 178.) “[I]t is illogical

and unnecessary,” Judge Goodman reasoned, “to allow a party to respond to

something that was never filed.” (Id.) Moreover, Judge Goodman explained that,

even if the scheduling order could be interpreted to allow KioSoft to file an

opening brief itself, because it waited until April 28, 2023, to file its motion,

KioSoft’s request was untimely. Though the Court now realizes that the

language of the amended scheduling order is not entirely clear, it ultimately

cannot agree with Judge Goodman’s conclusion.

The Court’s amended scheduling order was not intended to preclude

KioSoft from raising claim construction disputes independent of PayRange. The

amended scheduling order was modeled on the Court’s initial scheduling order,

which provided a “[d]eadline for any party claiming patent infringement to file

opening claim construction brief” with the expectation that the defending party

would present its position on claim construction in a “[r]esponse.” (See, e.g.,

ECF No. 30.) Many courts allow parties in patent cases to file simultaneous

opening briefs. See, e.g., Automatic Equip. Mfg. Co. v. Danko Mfg., No. 8:19-CV-

162, 2020 U.S. Dist. LEXIS 47350, at *2 (D. Neb. Mar. 12, 2020) (“[T]he parties

filed simultaneous opening claim construction briefs on January 24, 2020.”);

Source Search Techs., LLC v. Kayak Software Corp., Civil Action No. 11-3388

(FSH), 2014 U.S. Dist. LEXIS 1008, at *3-4 (D.N.J. Jan. 6, 2014) (same). As

indicated in its initial order, this Court has chosen to require staggered

submissions instead to promote clarity and efficiency. (See ECF No. 4.)

However, this procedural decision was never intended to allow a plaintiff to

unilaterally control the claim construction process. Thus, the language in the

Court’s amended scheduling order setting the “[d]eadline for any party claiming

patent infringement to move [to] file a revised opening claim construction brief

(simultaneous opening briefs are not permitted)” was meant to mirror that in

the Court’s initial scheduling orders, and not to circumscribe KioSoft to

PayRange’s decision on whether to file a revised opening brief.

In light of the admittedly unclear nature of the language in the amended

scheduling order, and its specification that “simultaneous opening briefs are

not permitted,” KioSoft’s decision to wait until April 28, 2023—the deadline for

it to “respond” had PayRange filed its own opening brief—is understandable.

Indeed, KioSoft informed PayRange and the Court of its intention to submit

revised proposed claim constructions at least as of April 14, 2023, when the

parties filed their amended joint claim construction and prehearing statement.

(See ECF No. 170.) In the statement, PayRange acknowledged that KioSoft

“ha[d] proposed additional terms for claim construction.” (Id. at 2). In addition,

KioSoft has explained that it “provided those proposed revised claim

constructions to [PayRange] two weeks prior to [PayRange’s] deadline to move

to file a revised claim construction brief[.]” (Mot. 3, ECF No. 171.) Moreover, the

Court notes that the stay in this case was lifted pursuant to the parties’

submission of a joint proposed revised scheduling order, which specifically

contemplated the parties “exchanging[ing] revised opening claim construction

briefs.” (See ECF No. 140.) And, while not dispositive of the parties’ obligations

pursuant to the scheduling order subsequently entered, their joint submission

clearly indicates that neither party expected KioSoft’s ability to seek revised

claim construction to depend on whether PayRange sought it first. Thus, for all

these reasons, the Court will not penalize KioSoft for requesting leave to file a

revised claim construction brief on April 28, 2023.

Having settled that KioSoft should not be precluded from moving for

leave to file a revised claim construction brief merely because it waited until the

response deadline contemplated in the amended scheduling order to do so, the

Court turns to the merits of KioSoft’s request for additional briefing. KioSoft

essentially argues that additional claim construction briefing is required

because the intervening PTAB proceedings have shed light on its positions with

regard to the meanings of disputed claim terms, and, as such, the parties’ April

14, 2023, joint claim construction and prehearing statement identified multiple

new disputes regarding the proper scope of claim terms. (See ECF No. 171;

ECF No. 175.) PayRange counters the KioSoft presents no valid basis for

seeking leave to amend the previously submitted claim construction briefing,

as the parties already addressed most of the disputed terms in earlier briefing,

and the Court need not construe all disputed claim terms. (ECF No. 174.) The

Court does not agree with PayRange.

Preliminarily, the Court acknowledges that a thorough comparison of the

parties’ initial and revised joint claim construction and prehearing statements

reveals that PayRange is correct in pointing out that the parties have previously

addressed the majority of the claim terms raised in KioSoft’s revised claim

construction brief. Moreover, although KioSoft mentions that the PTAB

proceedings played a significant role in shedding light on newly disputed claim

terms, it fails to explain why in concrete terms. Indeed, the Court’s review of

KioSoft’s amended statement of preliminary claim constructions and extrinsic

evidence (ECF No. 170-2), as well as of its proposed revised claim construction

brief (ECF No. 171-2) discloses that neither the PTAB proceedings, nor any

evidence arising therefrom play important roles in KioSoft’s proposed amended

submissions. Thus, this suggests that KioSoft may indeed be exaggerating the

significance of the PTAB proceedings in its efforts to seek a redo of its claim

construction briefing.

That being said, regardless of how much overlap there is between the

claim terms previously addressed by the parties and those raised in KioSoft’s

revised brief, the fact remains that KioSoft has now proposed additional and

modified terms for claim construction. As just one example, KioSoft now argues

that the term “status,” as it appears in the ‘614 patent, requires a particular

construction that PayRange disagrees with, and the parties did not address

this term previously. (Compare Joint State. 2–3, ECF No. 59, with Am. Joint

State. 4, ECF No. 170.) And PayRange is incorrect that the Court need not

construe all disputed claim terms. As explained by the Court of Appeals for the

Federal Circuit, “parties in patent cases frequently stipulate to a construction

or the court construes a term, only to have their dispute evolve to a point

where they realize that a further construction is necessary[,]” and “when a

determinative claim construction dispute arises, a district court must resolve

it.” TNS Media Research, LLC v. Tivo Research & Analytics, Inc., 629 F. App’x

916, 938 (Fed. Cir. 2015) (cleaned up); see also O2 Micro Int’l Ltd. v. Beyond

Innovation Tech. Co., 521 F.3d 1351, 1360 (Fed. Cir. 2008) (“When the parties

raise an actual dispute regarding the proper scope of these claims, the court,

not the jury, must resolve that dispute.”). In TNS Media Research, LLC, for

example, the parties agreed on the construction of a term during claim

construction, only to find at summary judgment that they were not actually on

the same page as to whether they agreed on the construction of the term. Id. at

938. The Federal Circuit found it was error for the district court to decide the

issue without affording the parties an opportunity to present their claim

construction arguments. Id. at 939.

Here, it appears to the Court that KioSoft has raised various issues not

previously addressed in the parties’ initial claim construction briefing.

Accordingly, in an abundance of causation, and to be in the best position to

address those issues, including their ultimate significance to the claims in

dispute, the Court deems is appropriate to grant KioSoft’s motion for leave to

file a revised claim construction brief. See, e.g., Finjan, Inc. v. Symantec Corp.,

No. 14-cv-02998-HSG, 2016 U.S. Dist. LEXIS 153584, at *3 (N.D. Cal. Nov. 4,

2016) (granting defendant’s motion for an order allowing the parties to submit

additional claim construction briefing and scheduling another Markman

hearing following the court’s decision to lift litigation stay that had been

instituted pending a decision by the PTAB). In so doing, the Court also notes

that the parties’ initial briefing is close to two years old at this point and that,

as touched on above, PayRange will not be prejudiced by KioSoft filing a revised

brief. In particular, not only has PayRange been aware, for some time now, of

KioSoft’s intention to move to file a revised brief, but the Court will also allow it

an opportunity to file its own revised claim construction brief in response.

4. Conclusion

For the reasons explained above, KioSoft’s objections to Judge

Goodman’s June 16, 2023, order are sustained (Objs., ECF No. 183), and its

motion for leave to file a revised claim construction brief is granted (Mot., ECF

No. 171). KioSoft must separately refile its revised claim construction brief by

September 1, 2023. PayRange has up to and including September 15, 2023,

to file a response brief.

Done and ordered at Miami, Florida, PR Ly 7

Robert N. Scola, Jr.

United States District Judge