Total Rebuild Inc v. P H C Fluid Power L L C

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAFAYETTE DIVISION

TOTAL REBUILD, INC. CASE NO. 6:15-CV-1855

VERSUS JUDGE TERRY A. DOUGHTY

PHC FLUID POWER, L.L.C. MAG. JUDGE CAROL B.

WHITEHURST

RULING

This is a patent infringement case in which Plaintiff Total Rebuild (“Plaintiff”) contends

systems and/or methods utilized by or through Defendant PHC (“Defendant”) infringe claims of

United States Patent No. 8,146,428 (“the ’428 Patent”). The ’428 Patent is directed to systems

and methods for safely testing devices and components under high-pressure.

Pending before the Court is Defendant’s “Motion in Limine regarding Accused Systems

Not Identified in Infringement Contentions” [Doc. No. 296]. Plaintiff responded to the motion.

[Doc. No. 331].

For the following reasons, the motion is GRANTED IN PART and DENIED IN PART.

I. PERTINENT FACTS AND PROCEDURAL HISTORY

Defendant moves the Court to enforce the Patent Rules for the Eastern District of Texas

(“Patent Rules”) in this case. Defendant argues that the Joint Scheduling Order set a due date of

August 8, 2016, for Plaintiff to comply with Patent Rule 3-1. [Doc. No. 296-1 at 5] (citing Doc.

No. 50 at 1).1 Patent Rule 3-1 requires Plaintiff to serve infringement contentions that identify the

“Accused Instrumentality,” and includes “[a] chart identifying specifically where each element of

each asserted claim is found within each Accused Instrumentality.” [Doc. No. 51-1 at 6-7].

1 Citations to the parties’ filings are to the filing’s number in the docket [Doc. No.] and pin cites

are to the page numbers assigned through ECF.

On August 23, 2016, Plaintiff served its Disclosure of Asserted Claims and Preliminary

Infringement Contentions (“Original Infringement Contentions”) on Defendant. [Doc. No. 296-1

at 5). Defendant argues that the Original Infringement Contentions include only generic names

without any reference to any specific device or process as required by Patent Rule 3-1(b). Id. at 6.

On January 23, 2017, Plaintiff served its Supplemental Disclosure of Asserted Claims and

Preliminary Infringement Contentions (“First Supplemental Contentions”) on Defendant. Id.

Defendant contends that the First Supplemental Contentions include the identical Patent Rule 3-

1(b) disclosure found in the Original Infringement Contentions. Id. Defendant further contends

that Plaintiff’s counsel “spent over 20 hours at PHC’s Houston, Texas facility reviewing,

inspecting, and scanning design documents, drawings, and other related documents for pressure

testing systems sold by PHC,” on June 7-9, 2017. Id. at 7.

On August 27, 2018, over a year after the on-site review, Plaintiff served its Second

Supplemental Disclosure of Asserted Claims and Preliminary Infringement Contentions (“Second

Supplemental Contentions”) on Defendant. Id. at 8. Defendant argues that the Second

Supplemental Contentions include only generic names without any reference to any specific

device or process as required by Patent Rule 3-1(b). Id. at 9. On November 30, 2018, Plaintiff’s

counsel sent the following email to Defendant regarding infringement contentions for specific

units. Id. at 10.

Sam,

I'm still working on it. May not be done tonight though. The chart is taking too long. I'm going to be working on it over

the weekend to get to you as soon as | can. But, in the meantime, | can at least identify the specific units we allege are

infringing:

PHC-TB-15-W-ATV4-GSF100-ASF150-AGT62-152-RC sold to Baker Hughes Emmott Rd., □□□□□□□□□□□□□□□□□□□□□□□□

ASF150-DL-1 sold to Baker Hughes in Oklahoma, PHC-TB-23-WATV4-HSF202-RV-RC to Cameron Dnilling and

Production Houston, PHC-TB-15-W-ASFB22-H$F202-RC and PHC-TB-30-W-ASF100-HSF302-RC sold to Cameron Tanner

Rd, PHC-TB-20-W-ATV4-HSF202-RC sold te GE in Canton Ohio, PHC-TB-23-W-ATV4-HSF202-4RC sold to GE in

Sugarland Texas, and PHC's Systems sold from PHC's Broussard, LA business location evidenced in PHC's production

bates numbered PHC0003114-PHC0003130.

Thank you,

Chase Manuel

[Doc. No. 296-2 at 2]. On December 6, 2018, Plaintiff's counsel sent the following email stating

that its Third Supplemental Infringement Contentions would be “accurate and sufficiently detailed

regarding each unit.”

Sam,

We are coordinating with our expert to ensure that the supplement is accurate and sufficiently detailed regarding each

unit. But it is taking some time to complete. It is to all our benefit to make sure they are as complete as possible. We

believe it will be done by Monday. We denve no benefit fram waiting as PHC's supplemental non-infringement

contentions will be similarly postponed, but these contentions need to be done nght.

In the meantime, we have previously provided you with a list of the units we are alleging infringe the ‘428 Patent so that

you are not kept in the dark as to what units our contentions will be directed.

Sincerely,

Chase

[Doc. No. 296-3 at 2]. On December 10, 2018, over three and a half years after this case began,

Plaintiff served its Third Supplemental Infringement Contentions on Defendant. [Doc. No. 296-1

at 11). On February 28, 2019, Defendant moved to strike Plaintiff's Third Supplemental

Infringement Contentions (“Motion to Strike”). [Dkt. No. 243]. Defendant argued in the Motion

to Strike that Plaintiff was attempting to vastly expand its infringement theories, and that the Third

Infringement Contentions were untimely because they were served over 2 years after the deadline,

and after fact discovery had closed. /d. at 1.

Page 2 anf 10

On March 28, 2019, the Court granted the Motion to Strike and found that Plaintiff was

improperly trying to expand its infringement contention by taking the new position that “using

pumps or pump systems outside an explosion-safety housing can infringe its patent.” [Doc. No.

263 at 2] (emphasis in original). The Court noted that Plaintiff “does not dispute that its latest

contentions ‘vastly expand’ its claims or that it failed to serve the contentions until December

2018.” Id. Instead, Plaintiff argued that its supplementation was timely because the Court has not

adopted the proposed scheduling order (Doc. No. 162-1) and local rules allow it to amend its

contentions as late as 30 days after a claim-construction ruling. Id.

The Court found that “[b]ecause the Court has not made a claim-construction ruling, Local

Patent Rule 3-6(a) does not apply.” Id. at 3. The Court further found that the factors courts

consider when evaluating motions to strike all weighed in favor of striking the contentions. Id. at

4-5. The Court then granted Defendant’s Motion to Strike Infringement Contentions (Doc. 243),

and further ordered that Plaintiff “is PRECLUDED from proceeding on any infringement theory

not identified with sufficient specificity in its original infringement contentions, first supplemental

infringement contentions, or second supplemental infringement contentions. A boilerplate

allegation of infringement under a doctrine-of-equivalents theory is insufficient.” Id. at 6.

On April 1, 2019, Plaintiff’s counsel stated in an email that it was asserting infringement

by “one additional system attached as a pdf to this email,” which is identified in the email as

“PHC-TB-15-W-ASFB10-ASF150-RV-CR-SPCL” to Wells Dynamics. [Doc. No. 296-1 at 12].

Per the April 1, 2019 email, the eight systems Plaintiff identified as infringing are as follows:

1. PHC-TB-30-W-ASF100-HSF302-RC to Cameron (hereinafter “Cameron

Black”)

2. PHC-TB-23-W-ATV4-HSF202-RV-RC to Cameron (hereinafter “Cameron

North Dakota”);

3. PHC-TB-15-W-ASFB10-ASF150-RC-CR-SPCL to Well Dynamics (hereinafter

“Well Dynamics”);

4. PHC-TB-23-W-ATV4-HSF202-4RC to GE (hereinafter “GE Oil”);

5. PHC-TB-15-W-ATV4-GSF100-ASF150-AGT62-152-RC to Baker Hughes

(hereinafter “Baker Hughes Emmott”);

6. PHC-TB-15-W-ASFB22-HSF202-RC to Cameron (hereinafter “Cameron

Brown”);

7. PHC-TB-20-W-ATV4-HSF202-RC to GE (hereinafter “GE Canton”); and

8. PHC-TB-15-W-ATV4-GSF100-ASF150-DL-1 to Baker Hughes (hereinafter

“Baker Ok Long”).

Id. at 12. On July 19, 2019, Plaintiff served its proposed pretrial order on Defendant. Id. (citing

Doc. No. 290-2). Defendant argues that in its proposed pretrial order, Plaintiff attempts to include

place holders that do not identify specific systems. [Doc. No. 296-1 at 12]. Defendant also argues

that Plaintiff identifies two more systems of infringement. Id. The systems or categories of

systems that Plaintiff accuses of infringement in its draft pretrial order are as follows:

1. “PHC products and services identified as PHC Bunker Test Systems, also

identified as ‘Test Bench’, ‘Test Bunker’, ‘High/Low Pump System’, and denoted

with the model no. prefix ‘PHC-TB…’”;

2. “PHC’s products and services identified as Remote Control, Multiple Outlet Test

System, also identified as ‘High/Low Pump Skid’ and denoted with the model no.

prefix ‘PHC-PS…’”;

3. Cameron North Dakota (PHC-TB-23-W-ATV4-HSF202-RV-RC to Cameron

a/k/a PHC-PS-23-W-ATV4-HSF202-RV-RC);

4. Cameron Black (PHC-TB-30-W-ASF100-HSF302-RC to Cameron);

5. GE Oil (PHC-TB-23-W-ATV4-HSF202-4RC to GE a/k/a PHC-PS-23-W-

ATV4-HSF202-RC);

6. Cameron Brown (PHC-TB-15-W-ASFB22-HSF202-RC to Cameron);

7. Baker Hughes Emmott (PHC-TB-15-W-ATV4-GSF100-AGT62-152-RC to

Baker Hughes);

8. Baker Ok Long (PHC-TB-15-W-ATV4-GSF100-ASF150-DL-1 to Baker

Hughes Oklahoma);

9. PHC-TB-10-W-ATV-GSF100-DL-1 to Baker Hughes Oklahoma (hereinafter

“Baker Ok Short”);

10. GE Canton (PHC-TB-20-W-ATV4-HSF202-RC to GE); and

11. “an additional infringing system at the Cameron North Dakota facility.”

[Doc. No. 290-2 at 5-7]. Defendant argues that the Court should “exclude and preclude Plaintiff

from asserting infringement by the systems and categories of systems identified at 1-4 and 11

above because (1) none of the systems were identified in an infringement contention ‘by name and

model number,’ as required by Patent Rules 3-1(b); (2) claim charts are not provided for any

system identifying ‘specifically where each element of each asserted claim is found within each

[accused system],’ as required by Patent Rule 3-1(c); and (3) Total’s assertion of the systems is

already precluded by the Ruling and Order because infringement theories for each system are not

identified with ‘sufficient specificity’ in the Original, First Supplemental, or Second Supplemental

Infringement Contentions.” [Doc. No. 296-1 at 13-14].2

Plaintiff responds that Defendant does not point to evidence demonstrating lack of

“adequate notice and information” by which Plaintiff might “practice litigation by ambush.” [Doc.

No. 331 at 2] (citing Computer Acceleration Corp. v. Microsoft Corp., 503 F.Supp.2d 819, 822

(E.D. Tex., 2007)). Plaintiff argues that there is no credible assertion that Defendant lacks the

actual knowledge, which is the overriding purpose of the procedural rule it seeks enforced. Id.

2 In its motion, Defendant includes a footnote stating that “[t]he systems identified in #5-10 above

have their pump and pumps systems outside of the explosion proof housing. The Court has already

ruled Total may not assert infringement by systems with pumps and pumps systems outside of the

explosion proof housing because Total did not timely disclose that theory of infringement. Ruling

and Order at 2, 6 (Dkt. 263). PHC has filed a separate motion in limine to exclude those systems.”

[Doc. No. 296-1 at 14 n.5]

II. ANALYSIS

Patent Rule 3-1 requires Plaintiff to serve infringement contention on Defendant that

include the following information:

(b) Separately for each asserted claim, each accused apparatus, product, device,

process, method, act, or other instrumentality (“Accused Instrumentality”) of each

opposing party of which the party is aware. This identification shall be as specific

as possible. Each product, device, and apparatus must be identified by name or

model number, if known. Each method or process must be identified by name, if

know, or by any product, device, or apparatus which, when used, allegedly results

in the practice of the claimed method or process:

(c) A chart identifying specifically where each element of each asserted claim is

found within each Accused Instrumentality, including for each element that such

party contends is governed by 35 U.S.C. § 112(6), the identity of the structure(s),

act(s) or material(s) in the Accused Instrumentality that performs the claimed

function.

[Doc. No. 51-1 at 6-7]. “The overriding principle of the Patent Local Rules is that they are

designed [to] make the parties more efficient, to streamline the litigation process, and to articulate

with specificity the claims and theory of a plaintiff’s infringement claims.” Geovector Corp. v.

Samsung Elecs. Co., No. 16-cv-02463-WHO, 2017 U.S. Dist. LEXIS 3626, at *8 (N.D. Cal. Jan.

9, 2017) (citation omitted). Here, Defendant does not contend that Plaintiff has failed to identify

specific systems. Indeed, the evidence before the Court indicates that Plaintiff has identified

specific systems, whether it be through emails or infringement contentions. “[A]ll courts agree

that the degree of specificity under Local Rule 3-1 must be sufficient to provide reasonable notice

to the defendant why the plaintiff believes it has a ‘reasonable chance of proving infringement.’”

Id. (citation omitted). Moreover, “the local rules do not ‘require the disclosure of specific evidence

nor do they require a plaintiff to prove its infringement case.’” Id. (citation omitted).

However, the Local Rules do require identifying the Accused Instrumentality “as specific

as possible.” The evidence indicates that Plaintiff had the opportunity to conduct an on-site review

and was able to identify specific systems. Indeed, Plaintiff’s counsel was able to identify seven

specific systems in the November 30, 2018 email, and Plaintiff’s counsel further confirmed these

units as the Accused Instrumentality “so that [Defendant’s counsel] are not kept in the dark as to

what units our contentions will be directed.” [Doc. Nos. 296-2 and 296-3]. Thus, Plaintiff has

provided Defendant with adequate notice as it relates to specific units previously identified by

Plaintiff.

That said, the evidence before the Court also indicates that Plaintiff is attempting to insert

place holders to allow it to accuse previously unidentified systems. The Court finds that this is

“litigation by ambush.” Comp. Acceleration Corp. v. Microsoft Corp., 503 F.Supp.2d 819, 822

(E.D. Tex. 2007). To the extent that a system was not specifically identified by Plaintiff, Plaintiff

is precluded and excluded from accusing a newly identified system under the guise that it includes

the prefix “PHC-TB” or “PHC-PS”, or that it was “an additional infringing system at the Cameron

North Dakota facility.” See, e.g., Doc. No. 260-2 at 5-6, 7. This case has labored on for more than

four years. The undersigned is the third district court judge assigned to this case. There has been

multiple Scheduling Orders, and the trial date was continued multiple times, at the request of both

Defendant and Plaintiff.3 The parties have had more than ample to prepare the case for trial. Any

prejudice that results is due that parties’ lack of diligence or attempt at last minute gamesmanship.4

3 For a detailed summary of the procedural history of this case see the Court’s Ruling on

Defendant’s Motion to Exclude the Royston Report and Preclude the Testimony of John W.

Royston. [Doc. No. 359 1-4].

4 In deciding this motion, the Court has considered the following non-exclusive list of factors:

1. The danger of unfair prejudice;

2. The length of the delay and its potential impact on judicial proceedings;

3. The reason for the delay, including whether it was within the reasonable control of the

party responsible for the delay;

4. The importance of the particular matter, and if vital to the case, whether a lesser

sanction would adequately address the other factors to be considered and also deter future

violations of the court's scheduling orders, local rules, and the federal rules of procedure;

and

5. Whether the offending party was diligent in seeking an extension of time, or in

In summary, to the extent that Plaintiff previously identified a specific system, the motion

is denied. Specifically, Plaintiff is not precluded or excluded form accusing the following systems:

1. Cameron Black (PHC-TB-30-W-ASF100-HSF302-RC to Cameron);

2. Cameron North Dakota (PHC-TB-23-W-ATV4-HSF202-RV-RC to Cameron a/k/a

PHC-PS-23-W-ATV4-HSF202-RV-RC);

3. Well Dynamics (PHC-TB-15-W-ASFB10-ASF150-RC-CR-SPCL);

4. GE Oil (PHC-TB-23-W-ATV4-HSF202-4RC to GE a/k/a PHC-PS-23-W-ATV4-

HSF202-RC);

5. Baker Hughes Emmott (PHC-TB-15-W-ATV4-GSF100-AGT62-152-RC to Baker

Hughes);

6. Cameron Brown (PHC-TB-15-W-ASFB22-HSF202-RC to Cameron);

7. GE Canton (PHC-TB-20-W-ATV4-HSF202-RC to GE);

8. Baker Ok Long (PHC-TB-15-W-ATV4-GSF100-ASF150-DL-1 to Baker Hughes

Oklahoma); and

9. Baker Ok Short (PHC-TB-10-W-ATV-GSF100-DL-1 to Baker Hughes Oklahoma).

To be clear, inclusion of a system on this list does not mean that Plaintiff is now allowed

to assert new infringement theories that were previously struck by the Court. In other words, this

Ruling and Order does not supersede or revoke the Court’s previous Rulings and Orders regarding

Plaintiff’s Third Infringement Contentions, and Systems with Testing Equipment Outside of the

Housing. See, e.g., Doc. Nos. 263, 282, 283, 327, 328.5

III. CONCLUSION

For the foregoing reasons, Defendant’s Motion in Limine [Doc. No. 296] is DENIED IN

supplementing contentions, after an alleged need to disclose the new matter became

apparent.

See, e.g., Betzel v. State Farm Lloyds, 480 F.3d 704, 2007 WL 603036, *2 (5th Cir. 2006)(listing

factors to consider for exclusion of evidence)

5 It is the Court’s understanding that the parties agree on which systems on the list have been

previously excluded by the Court. See, e.g., Doc. No. 296-1 at 14 n.5, Doc. No. 331 at 1 n.1.

PART and GRANTED IN PART.

Monroe, Louisiana, this 9" day of September, 2019.

le. ea

TERRY A. DOUGHTY

UNITED STATES DISTRICT JU

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