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IP Alert: Federal Circuit Rejects Patentee's Attempt to Skirt Local Patent Rules in Duplicative Litigation

September 12, 2022

On September 7, in Arendi S.A.R.L. v. LG Electronics Inc., a Federal Circuit panel affirmed the District of Delaware’s decision dismissing a patent infringement action as duplicative of a co-pending, earlier-filed action.

The patent owner, Arendi, filed a first suit against LG in the District of Delaware alleging that hundreds of LG products infringed certain claims of an Arendi patent. Under the district’s local rules governing patent cases, Arendi was required to “specifically identify the accused products” and to produce claim charts showing how “each accused product” infringes each asserted claim. The local rules permit supplementation of these initial disclosures.

Arendi served initial disclosures identifying hundreds of LG products, but only providing a single claim chart mapping one so-called exemplary accused product, the “Rebel 4” phone, to the asserted claims. LG complained that the single claim chart was insufficient to satisfy the local rules’ requirements and invited Arendi to provide additional claim charts or otherwise explain how the Rebel 4 claim chart was representative of all other accused products. Arendi did not do so.

As the case progressed, the parties agreed on a discovery protocol in which eight products would be considered representative of all accused products; seven of those products were non-Rebel 4 products. LG thereafter provided discovery on those products. Still, however, LG reiterated its position in an interrogatory response that Arendi had only provided sufficient infringement contentions for the Rebel 4 product, but no others. Arendi again did not update its initial disclosures.

After fact discovery closed, Arendi provided an expert report on infringement that, according to LG, for the first time disclosed infringement contentions for non-Rebel 4 products. The district court agreed with LG, finding that Arendi did not timely disclose any infringement contentions for non-Rebel 4 products, and struck those portions of Arendi’s expert report.

Rather than move to supplement its disclosures at that time, however, Arendi filed a second lawsuit in the District of Delaware in which it alleged that the non-Rebel 4 products excluded from the first case infringed the same Arendi patent. On LG’s motion, the district court dismissed the second case, finding that it was improper under the duplicative litigation doctrine. That doctrine precludes a plaintiff from “maintaining two separate actions involving the same subject matter at the same time in the same court . . . against the same defendant.” The “same subject matter” inquiry looks at any overlap in the products accused between the two actions and any overlap of patents. Since the same patent was asserted in both cases, the Federal Circuit focused upon whether the same products were “accused” in both cases.

The Federal Circuit agreed with the district court that identical products were accused in each action, rejecting Arendi’s arguments that non-Rebel 4 products were not “accused” in the first case and that the district court struck Arendi’s expert opinions on this basis. Instead, the Federal Circuit found it clear that the district court struck the opinions as a sanction for Arendi’s failure to follow the court’s disclosure requirements. The Federal Circuit also found it notable that both parties took discovery relating to the non-Rebel 4 products throughout the first case, and that Arendi thereafter provided expert opinions on those products, further undermining any claim by Arendi that it never accused them.

This decision reemphasizes the importance of following disclosure requirements mandated by district courts and of updating them as the case progresses. The Federal Circuit seemed to have little sympathy for Arendi, highlighting the points in the case where Arendi could have moved to supplement its disclosures, but chose not to do so. And while Arendi did eventually move for leave to supplement its disclosures after the district court dismissed its second action, the district court deferred ruling on that motion pending Arendi’s appeal of the dismissal of its second case. Thus, it remains unclear whether Arendi will be limited to the Rebel 4 products or be permitted to present its larger scope of accused products at trial.

For more information on this holding, please contact Fitch Even partner Nikki Little, author of this alert.

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