2019-10-04 Response to Motion for Leavepdf
2019-10-04 Response to Motion for Leavepdf
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  1. IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS MARSHALL DIVISION SEMCON IP INC., Plaintiff, v. ASUSTEK COMPUTER, INC., Defendant. § § § § § § § § § § § Case No. 2:18-cv-00193-JRG-RSP (LEAD CASE) JURY TRIAL DEMANDED PLAINTIFF SEMCON IP INC.’S RESPONSE IN OPPOSITION TO ASUSTEK COMPUTER, INC.’S OPPOSED SEALED MOTION FOR LEAVE TO SERVE AMENDED INITIAL DISCLOSURES AND TO PRODUCE DISCOVERY OUT OF TIME (DKT. 108) Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 1 of 14 PageID #: 2618
  2. i TABLE OF CONTENTS Page(s)I.APPLICABLE LAW .......................................................................................................... 1II.ARGUMENT ...................................................................................................................... 1A.ASUSTeK’s New Witnesses and Initial Disclosures .............................................. 1B.ASUSTeK’s New Documents................................................................................. 3C.ASUSTeK Cannot Demonstrate Good Cause......................................................... 4III.CONCLUSION ................................................................................................................... 8Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 2 of 14 PageID #: 2619
  3. ii TABLE OF AUTHORITIES Page(s) Cases Allergan, Inc. v. Teva Pharm. USA, Inc., No. 2:15-CV-1455-WCB, 2017 WL 1512334 (E.D. Tex. Apr. 27, 2017) ................................1 Bey v. Hood, No. 6:19-cv-00227-JDK, 2019 WL 3997347 (E.D. Tex. Aug. 23, 2019) .................................5 Elbit Sys. Land and C4I Ltd. v. Hughes Network Sys., LLC, No. 2:15-CV-00037-RWS-RSP, 2017 WL 2651618 (E.D. Tex. June 20, 2017) ......................5 Moore v. Hernandez, No. 2:17-cv-531, 2018 WL 2670403 (E.D. Tex. Mar. 6, 2018) ................................................7 Reliance Ins. Co. v. La. Land & Exploration Co., 110 F.3d 253 (5th Cir. 1997) .....................................................................................................1 S&W Enters., L.L.C. v. Southtrust Bank of Ala., NA, 315 F.3d 533 (5th Cir. 2004) .....................................................................................................1 Slabisak v. Univ. of Tex. Health Sci. Ctr., No. 4:17-cv-597, 2018 WL 4842690 (E.D. Tex. Oct. 4, 2018) .................................................7 Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 3 of 14 PageID #: 2620
  4. Plaintiff Semcon IP Inc. (“Semcon” or “Plaintiff”) respectfully submits this response in opposition to Defendant ASUSTeK Computer, Inc.’s (“ASUSTeK” or “Defendant”) sealed Motion for Leave to Serve Amended Initial Disclosures and to Produce Discovery Out of Time (the “Motion”) (Dkt. 108). The Court should deny the Motion because ASUSTeK does not have good cause for serving Amended Initial Disclosures and to Produce Discovery Out of Time, a month after the close of fact discovery. I.APPLICABLE LAW This Court considers four factors when determining whether to excuse an untimely submission for good cause: (1) the explanation for the untimeliness; (2) the importance of the submission; (3) potential prejudice in allowing for the submission; and (4) the availability of a continuance to cure such prejudice. See S&W Enters., L.L.C. v. Southtrust Bank of Ala., NA, 315 F.3d 533, 536 (5th Cir. 2004) (citations omitted). “District judges have the power to control their dockets by refusing to give ineffective litigants a second chance to develop their case.” Reliance Ins. Co. v. La. Land & Exploration Co., 110 F.3d 253, 258 (5th Cir. 1997) (citation omitted). The burden to show good cause is on the movant. See Allergan, Inc. v. Teva Pharm. USA, Inc., No. 2:15-CV-1455-WCB, 2017 WL 1512334, at *2 (E.D. Tex. Apr. 27, 2017). II.ARGUMENT A.ASUSTeK’s New Witnesses and Initial Disclosures ASUSTeK moves to unilaterally re-open discovery to identify several new witnesses and produce a swath of new documents in order to resurrect a deficient non-infringement case. The Court should not endorse ASUSTeK’s dilatory conduct. The Court should deny ASUSTeK’s requests to introduce new witnesses to replace the sole knowledgeable witness identified by ASUSTeK during the eight month-long discovery period, Netty Lee. On July 18, 2019, ASUSTeK filed a motion for summary judgment of non-Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 4 of 14 PageID #: 2621
  5. 2 infringement (Dkt. 73) with an accompanying declaration purportedly on behalf of Ms. Lee (Dkt. 73-01, the “Lee Declaration”) which included numerous false statements. To accommodate ASUSTeK’s schedule, Semcon took the deposition of Ms. Lee from 9:00 PM ET on August 12, 2019 through 4:34 AM ET on August 13, 2019. During her deposition, Contrary to a one-off statement in the Lee Declaration, In addition to evidence to support its positions (Dkt. 92-01 through 92-03 and 92-05 through 92-18), Ms. Lee’s conflicting testimony revealed numerous questions of fact regarding ASUSTeK’s infringing conduct in the United States that would have precluded a finding of summary judgment of no direct infringement. Rather than file a reply brief, ASUSTeK withdrew its motion. Dkt. 96, 100. Without informing the Court of its true objectives, ASUSTeK now seeks to replace Ms. Lee with additional trial witnesses, including a previously-unidentified representative of Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 5 of 14 PageID #: 2622
  6. 3 ASUSTeK or its subsidiary, a to-be-determined representative, and a to-be-determined “witnesses designated by Amazon.com, Inc.” Ex. A. Amazon.com, Inc. and its unidentified “witnesses” have no relevance to this case, as Amazon.com, Inc. is not a consolidated party or third party to this case. B.ASUSTeK’s New Documents ASUSTeK seeks leave to produce 266 documents (ASUSTEK_0012437 through ASUSTEK_0013088). ASUSTeK misleads the Court as to the scope and content of the requested document supplementation. ASUSTeK attaches a single two-page document to its Motion and withholds from the Court the precise amount and Bates range of the documents. ASUSTeK broadly refers to the documents as CBP documents that were recently “submitted to the U.S. Department of Customs and Border Protection,” but the CBP documents marked ASUSTEK_0012437 through ASUSTEK_0013088 are each dated September 9, 2019 or September 12, 2019 (and robo-signed by third-party brokers) indicating that these documents were created in response to the fallout from ASUSTeK’s withdrawn motion for summary judgment. This is a transparent attempt to shoe-in manufactured discovery. Moreover, ASUSTeK withholds from this Court its intention to seek additional supplementation via unidentified documents from Semcon v. Amazon.com, Inc. Ex. B. ASUSTeK intends to rely on Amazon documents and Amazon’s expert reports which have not been produced in this case and which are subject to the Protective Order in the Amazon case. As noted above, the ASUSTeK and Amazon cases are not consolidated and are subject to their respective Protective Orders. To the extent that ASUSTeK or its new counsel, Chen Malin LLP, possess Amazon documents and Amazon’s expert reports designated under the Protective Order in the Amazon case, such unauthorized disclosures to ASUSTeK or Chen Malin LLP would constitute a serious violation of the Protective Order. Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 6 of 14 PageID #: 2623
  7. 4 C.ASUSTeK Cannot Demonstrate Good Cause ASUSTeK’s motion for leave to serve amended initial disclosures and to produce discovery out of time should be denied because the good-cause factors weigh against granting the motion. ASUSTeK concedes that the information contained in both the Amended Initial Disclosures and document production1 “should have been provided earlier in this case.” Dkt. 108 at 2. But ASUSTeK’s explanation for the late production after the exchange of expert reports is insufficient. ASUSTeK’s sole basis appears to be that it has retained new counsel. However, the relevance of any such documents has been apparent from the outset of this case, and ASUSTeK provides no explanation for its dilatory discovery production, particularly where ASUSTeK alleges it is relevant to its defenses. ASUSTeK seeks leave from this Court to serve its Amended Initial Disclosures and additional document productions after it has already served such documents to Semcon. Further, Semcon objects to the form of ASUSTeK’s motion, which has been filed seeking leave to serve additional discovery, but seeks to also modify the scheduling order. Dkt. 108 at 5. The first good-cause factor weighs against granting leave. ASUSTeK has not provided sufficient explanation for its discovery more than a month after the close of fact discovery. ASUSTeK cites no case law to support the proposition that it can obtain a do-over on its defenses simply by swapping counsel. Semcon has expended considerable resources litigating this case and reasonably relied on the discovery produced by ASUSTeK throughout the discovery and expert periods. Deadlines have passed for fact discovery, expert discovery, expert reports, motions to strike, dispositive motions, and the exchange of pre-trial materials. ASUSTeK’s explanation for its lack of diligence and failure to produce are insufficient. 1 Semcon timely objected to the service of the amended initial disclosures and document productions. See Ex. C-D. Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 7 of 14 PageID #: 2624
  8. 5 The second good-cause factor also weighs against granting leave. According to ASUSTeK, such discovery is relevant to ASUSTeK’s defenses and consequently, it had incentive to diligently seek discovery regarding its defense. See Elbit Sys. Land and C4I Ltd. v. Hughes Network Sys., LLC, No. 2:15-CV-00037-RWS-RSP, 2017 WL 2651618, at *11, 22 (E.D. Tex. June 20, 2017). However, merely averring to its importance is insufficient. ASUSTeK has already produced documents and witnesses related to this issue within the eight month-long fact discovery period and, accordingly, it was ASUSTeK’s burden to produce relevant discovery in accordance with the Court’s Scheduling Order.2 The alleged importance of the documentary evidence is undercut by the fact that ASUSTeK (or its subsidiary ACI) created this information on or around September 9, 2019 and September 12, 2019. Contrary to ASUSTeK’s contentions, liability does not turn on importation alone, as Semcon has shown that ASUSTeK sells and offers to sell the accused products within the United States and ASUSTeK induces infringement by its customers in the United States. The third and fourth good-cause factors also weigh against granting leave. First, ASUSTeK concedes that its defense “cannot reasonably be described as an unfair surprise” as such information was previously disclosed in ASUSTeK’s First Amended Initial Disclosures “served over two months ago, as well as in ASUSTeK’s answer and interrogatory responses.” Dkt. 108 at 3-4. ASUSTeK has not shown that the witnesses were unknown during the fact discovery period, and the documents marked ASUSTEK_0012437 through ASUSTEK_0013088 2ASUSTeK’s reliance on Bey v. Hood, No. 6:19-cv-00227-JDK, 2019 WL 3997347, at *2 (E.D. Tex. Aug. 23, 2019) is unpersuasive. In Bey, the Court did not grant plaintiff’s motion to strike where defendant’s answer was untimely due to “miscommunication and late retention of counsel” and found “the extreme remedy of default” was unwarranted under the circumstances. Here, ASUSTeK seeks to introduce discovery after the close of fact discovery, does not face the same extreme remedy, and does not provide any explanation for its failure to produce relevant discovery where there was no such “miscommunication” and it had retained counsel.Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 8 of 14 PageID #: 2625
  9. 6 concern “summary dates” and “entry dates” between 2013 and 2018. Accordingly, such information was within ASUSTeK’s possession well before the close of fact discovery and it was ASUSTeK’s burden to diligently seek and produce discovery pursuant to its defense. Moreover, ASUSTeK’s explanation that “Mariner IC and Semcon are sister corporations” is of no import to this case. Any matters between Mariner IC and Semcon are unrelated and subject to separate Protective Orders. ASUSTeK does not provide an explanation or case law to support the proposition that discovery between the two cases should be intermingled, particularly where it was the responsibility of Defendant to produce such discovery. As explained above, these CBP documents were manufactured in September 2019 after ASUSTeK withdrew its motion for summary judgment. The fact that ASUSTeK manufactured similar third-party documents in a separate case, for a different party, under a different Protective Order, does not make these documents legitimate. Semcon notes that ASUSTeK’s Motion has been postured as a motion for leave to introduce additional discovery, not as a motion for leave to amend the scheduling order. However, ASUSTeK’s Motion seeks not only to serve amended initial disclosures and documents, but makes available at least three witnesses for depositions. Although ASUSTeK states that it does not seek an amendment of the Docket Control Order or a continuance, it is apparent that ASUSTeK’s additional discovery would require substantial discovery beyond the three purported depositions. ASUSTeK attempts to “mitigate any perceived prejudice to Semcon” by offering depositions Semcon has not requested. Semcon has already deposed Ms. Lee, one of the witnesses, on topics for which she has been designated and does not seek an additional deposition. Further, ASUSTeK unilaterally states that the “three-month period before trial leaves ample time” to conduct the depositions, without considering that additional discovery Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 9 of 14 PageID #: 2626
  10. 7 or motion practice may be required following the documents and depositions. More importantly, ASUSTeK has not been forthcoming about its intentions to burden Semcon and the Court with additional requests to supplement its witness list and exhibits with Amazon witnesses, Amazon documents, and Amazon’s expert reports which are designated under the Protective Order in a separate, non-consolidated case. See Ex. C-D. With trial two months away, the complications posed by ASUSTeK’s request for a second bite at the apple weigh against good cause. The cases relied upon by ASUSTeK are unpersuasive. In Moore v. Hernandez, No. 2:17-cv-531, 2018 WL 2670403, at *1 (E.D. Tex. Mar. 6, 2018), the Court granted additional depositions where plaintiff sought leave to submit a supplemental expert report. Id. at *3. Further, the Court found that, “to the extent there is material prejudice to Defendants in allowing Mr. Brady to testify based on his supplemental report, such prejudice is, in part, of Defendants’own making.” Id. (emphasis added) (where Defendants did not produce relevant documents in response to Plaintiff’s request for documents). Here, ASUSTeK attempts to benefit from its own failure to produce documents by offering fact depositions in order to introduce new documents. In Slabisak v. Univ. of Tex. Health Sci. Ctr., No. 4:17-cv-597, 2018 WL 4842690, at *4 (E.D. Tex. Oct. 4, 2018), plaintiff filed a motion for sanctions resulting from defendant’s failure to produce relevant discovery. The Court denied sanctions and ordered the production of discovery, including an additional deposition. Id. Here, ASUSTeK, who has failed to produce documents, now alleges prejudice from its own discovery failures. The Court has already extended fact discovery once. See Dkt. 84. Fact and expert discovery have concluded, and expert reports have already been served in this case. The parties have already exchanged pre-trial disclosures and jury selection in this case has been set for December 2, 2019. Dkt. 84. Further, Semcon does not consent to or seek the modification of this Court’s scheduling order. Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 10 of 14 PageID #: 2627
  11. 8 ASUSTeK’s attempt to shoehorn additional documents and witnesses in order to mitigate its lack of diligence in producing relevant discovery in this case are highly prejudicial. ASUSTeK has not offered any justification for its failure to disclose such evidence. Such tactics are just one example of improper litigation behavior by ASUSTeK in this case. Semcon reserves its right to seek attorneys’ fees and costs in opposing ASUSTeK’s motion for leave to serve untimely discovery. III.CONCLUSION Semcon respectfully requests that the Court deny ASUSTeK’s Motion for Leave to Serve Amended Initial Disclosures and Produce Discovery Outside of Time. Semcon further respectfully requests that the Court deny any additional requests in ASUSTeK’s motion, such as the request to amend the Docket Control Order. Dated: October 2, 2019 BROWN RUDNICK LLP /s/ Alfred R. Fabricant Alfred R. Fabricant NY Bar No. 2219392 Email: afabricant@brownrudnick.com Peter Lambrianakos NY Bar No. 2894392 Email: plambrianakos@brownrudnick.com Vincent J. Rubino, III NY Bar No. 4557435 Email: vrubino@brownrudnick.com Shahar Harel NY Bar No. 4573192 Email: sharel@brownrudnick.com Enrique W. Iturralde NY Bar No. 5526280 Email: eiturralde@brownrudnick.com Daniel J. Shea NY Bar No. 5430558 Email: dshea@brownrudnick.com BROWN RUDNICK LLP 7 Times Square New York, NY 10036 Telephone: (212) 209-4800 Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 11 of 14 PageID #: 2628
  12. 9 Facsimile: (212) 209-4801 Justin Kurt Truelove Texas Bar No. 24013653 Email: kurt@truelovelawfirm.com TRUELOVE LAW FIRM, PLLC 100 West Houston Marshall, Texas 75670 Telephone: (903) 938-8321 Facsimile: (903) 215-8510 Case 2:18-cv-00193-JRG Document 118 Filed 10/04/19 Page 12 of 14 PageID #: 2629
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