Central District of California Court Grants Motions to Strike Previously Undisclosed Infringement and Invalidity Opinions and Exclude a Belated Rebuttal Expert Report

In Guangzhou Yucheng Trading Co., Ltd. v. Dbest Products, Inc., a patent infringement action in which the plaintiff, Guangzhou Yucheng Trading Co., Ltd.’s (“GYT”), sought a declaratory judgment that its “stair climber” portable shopping cart product does not infringe U.S. Patent No. 9,233,700 (“the ’700 Patent”), the court recently ruled on three motions relating to GYT’s expert witness, David G. Smith (“Smith”). In two of the motions, the defendant, Dbest Products, Inc. (“Dbest”), moved to exclude certain infringement and invalidity opinions offered by Smith, and in the third motion Dbest moved to exclude Smith’s rebuttal expert report. The court granted all three motions.

With respect to infringement, Dbest argued that some of Smith’s opinions should be excluded because the opinions were based on claim construction arguments that were inconsistent with the court’s Claim Construction Order. The court agreed with Dbest and excluded Mr. Smith’s opinions as to four claim terms, because his opinions provided “narrowing constructions” that were inconsistent with the court’s construction of those terms. Id. at *10 (“An expert opinion that is contrary to or ignores a court’s claim construction is irrelevant and unhelpful to the trier of fact, and as such, is inadmissible and must be excluded.” (citations omitted)). The court did note that “experts ‘may introduce evidence as to the plain [and] ordinary meaning of terms not construed by the Court’” id. at 11 (citing Apple, Inc. v. Samsung Elec. Co., Ltd., No. 12-cv-00630-LHK, 2014 WL 600857, at *3-5 (N.D. Cal. Feb. 20, 2014)), but in this case Smith was providing “conclusory testimony on his preferred construction” of certain limitations. Id. at *11; see id. at *10 (citing Phillips v. AWH Corp., 415 F.3d 1303, 1318-19 (Fed. Cir. 2005) (“Further, ‘conclusory, unsupported assertions by experts as to the definition of a claim term are not useful . . .”)).

With respect to invalidity, Dbest argued that an obviousness opinion based on an undisclosed patent and an indefiniteness opinion related to one claim term were improper, because they were raised for the first time in Smith’s opening expert report and were not included in GYT’s invalidity contentions. GYT argued that Dbest was on notice of the obviousness opinion because the patent forming the basis for that opinion was cited in the prosecution history of the ’700 Patent, and GYT stated in its invalidity contentions that it “‘also intends to rely upon prior art cited during the prosecution of the ’700 Patent as invalidating references or to show the state of the art.’” Id. at *15-16.  GYT argued that Dbest was on notice of the indefiniteness opinion because the term on which it was based appears in a claim of the ’700 Patent and that claim was cited in its entirety in GYT’s invalidity contentions.

In granting Dbest’s motion, the court cited the “early notice” requirements for contentions mandated by the Northern District of California’s Patent Local Rules as well as the “diligence” a party must show to amend its contentions.  The court also highlighted that the rules prohibit a party from using an expert report to introduce new infringement or invalidity opinions. Notably, the District of New Jersey “adopted verbatim [its] Local Patent Rules from the Northern District of California.” TFH Publ’n, Inc. v. Doskocill Mfg. Co., 705 F. Supp. 2d 361, 365 (D.N.J. 2010).

The court found GYT’s arguments in opposition to Dbest’s motion to be “borderline frivolous.” Id. at *17. It noted that “[a] blanket disclaimer that cited prior art may later be relied upon complies with neither the letter nor spirit of the Patent Local Rules.” Id. And, that “citing the entirety of the claim in invalidity contentions does not provide a basis for later asserting that a specific portion is invalid for a specific reason.” Thus, pursuant to the Local Patent Rules, GYT should have sought leave to amend its invalidity contentions as soon as it became aware of the new invalidity theories, rather than attempting to assert them for the first time in an expert report.

Finally, with respect to the Smith rebuttal report, Dbest argued that it was filed two days after the scheduling order deadline and that Dbest was prejudiced by the belated submission because it did not have “any meaningful opportunity to review, consider, and/or challenge any rebuttal expert opinions.” Id. at *18. GYT made numerous arguments in response, including that Dbest should not have been surprised by the report and was not prejudiced by it. GYT also argued that the deadline for the report should have been extended to the next business day (under the scheduling order, rebuttal reports were due on a Saturday). In granting Dbest’s motion, the court acknowledged the prejudice Dbest suffered and that allowing the report would disrupt the case schedule. The court also noted that Fed. R. Civ. P. 6, which extends deadlines “until the end of the next day that is not a Saturday, Sunday, or legal holiday” when “the [time] period [for the deadline] is stated in days or a longer unit of time,” did not extend the rebuttal report deadline to the next business day, because the rebuttal report deadline in the scheduling order was a date certain – thus, clarifying for other federal litigants, the need to adhere to certain deadlines in scheduling orders, including those on weekends and holidays.

Gibbons will continue to monitor and report developments in local patent rules.