United States: Costly Consequences To Limiting Discovery Scope

Last Updated: January 6 2016
Article by Monte Cooper and Johanna Jacob

Order Re: "Other Enplas Lenses", Enplas Display Device Corp., et al. v. Seoul Semiconductor Co., Ltd., Case No. 13-cv-05038 (U.S. Magistrate Judge Nathanael M. Cousins)

Sometimes, it works to a patent owner's advantage not to allege infringement by products other than those specifically identified in preliminary infringement contentions, even where discovery is not complete. This unusual procedural tactic led Magistrate Judge Nathanael Cousins to recently deny summary judgment of non-infringement.

In the underlying declaratory judgment action1, the Defendant, SSC accused the Plaintiff, Enplas, of manufacturing seven infringing lenses. In its infringement contentions, SSC accused these seven lenses by product number, and also identified "lenses having a shape similar to one or more of these lenses." Enplas moved for summary judgment as to these "other Enplas lenses" not specifically identified by product number in SSC's infringement contentions. Ultimately, Magistrate Judge Cousins denied Enplas's motion based on lack of jurisdiction to decide whether lenses not at issue in the case infringed the patents-in-suit, given that he had previously prohibited SSC from seeking discovery concerning "potentially infringing" lenses that had not been identified by product number.

In particular, prior to the cutoff of fact discovery, Magistrate Judge Cousins denied SSC's request for discovery on other potentially infringing Enplas lenses, while noting he "was not convinced that SSC had been diligent in seeking to ascertain the universe of potentially infringing products." Subsequently, SSC did not amend its infringement contentions to include additional lenses.

In support of its summary judgement motion, Enplas argued that SSC failed to present any evidence of infringement for the "other lenses." SSC responded by arguing that, in light of the Court's prior limiting discovery Order, the other lenses were not at issue in the case and there was "no basis for a case or controversy." Essentially, SSC claimed there was no declaratory judgment jurisdiction over such claims. SSC also pointed out that its expert did not opine as to these "other" products.

Siding with SSC, Magistrate Judge Cousins articulated the Court's lack of jurisdiction to rule on the other lenses as follows:

These lenses were never identified by SSC, and the Court excluded SSC from pursuing any discovery on the other lenses, finding that their addition to the current litigation would be untimely and prejudicial. As a result, these lenses are not in the case, and there was never a controversy over whether the other lenses infringe on SSC's patents. Even now, in the summary judgment briefing, the parties have not identified the additional lenses, but instead, refer to them as the "other Enplas lenses." This lack of specificity demonstrates that there is no concrete injury or adverse legal dispute about these unspecified other lenses.

Magistrate Judge Cousins contrasted this ruling with his previous grant of summary judgment in favor of Enplas on claims SSC originally listed in its infringement contentions but later dropped after fact discovery concluded. Despite the withdrawal and SSC's proffering of a covenant not to sue, a controversy still existed as to whether the identified and once-accused Enplas lenses infringed the patents-in-suit.

As this decision reflects, parties accused of infringement must be careful to balance the desire to limit discovery with the ability to conserve party and judicial resources by litigating all potentially infringing products in a single case. While there certainly can be strategic advantages to limiting discovery in a case to a specific set of products, it also can produce unforeseen consequences, such as the possibility of multiple litigations on the same underlying patent(s) to address different sets of products.

Footnote

1 The NorCal IP Blog previously reported on this case here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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