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Tech Pharmacy Services, LLC v. Alixa Rx LLC

United States District Court, E.D. Texas, Sherman Division

August 2, 2017

TECH PHARMACY SERVICES, LLC
v.
ALIXA RX LLC, GOLDEN GATE NATIONAL SENIOR CARE LLC d/b/a GOLDEN LIVINGCENTERS, FILLMORE CAPITAL PARTNERS, LLC, FILLMORE STRATEGIC INVESTORS, LLC, and FILLMORE STRATEGIC MANAGEMENT, LLC

          MEMORANDUM OPINION AND ORDER

          AMOS L. MAZZANT UNITED STATES DISTRICT JUDGE.

         Pending before the Court is Defendants' Motion for Leave to Supplement Their Invalidity Contentions with Additional Information Concerning the Originally Disclosed Envoy Prior Art (Dkt. #244). After reviewing the relevant pleadings, the Court denies Defendants' motion.

         BACKGROUND

         On October 14, 2016, Defendants moved for leave to supplement their P.R. 3-3 invalidity contentions with two prior art references as well as evidence surrounding the design operation of a prior art automated dispensing cart (hereinafter “Envoy”) and related software (Dkt. #109). Defendants contended their supplement would include additional details regarding the Envoy machine, which was disclosed in their initial invalidity contentions served on May 27, 2016. On January 19, 2017, the magistrate judge, on referral, issued an order denying Defendants' motion for leave (Dkt. #146). The magistrate judge stated:

Defendants characterize much of their proposal as mere supplementation of detail that would not functionally impact their case or require Plaintiff to make alterations to its case. The Court encourages the parties to discuss the Proposed Amended Invalidity Contentions in this light. The Court, while denying leave regarding the Proposed Amended Invalidity Contentions, could, nonetheless, consider an agreed proposal from the parties to add additional detail to invalidity contentions.

(Dkt. #146 at p. 13). On February 2, 2017, Defendants filed a motion to reconsider the magistrate's order (Dkt. #158). The Court denied Defendants' motion to reconsider because “Defendants neither establish[ed] the magistrate judge committed any manifest errors of law in its prior decision nor demonstrate[ed] good cause to amend. Instead, Defendants request the Court to reconsider its decision without directly challenging the Court's analysis.” (Dkt. #236 at p. 5). The Court acknowledged “if Defendants' still believe a limited set of amendments adding detail would not functionally impact the case or require Plaintiff to alter its cause, then they should, by motion, present those proposed amendments to the Court and put forth good cause for leave to amend” (Dkt. #236 at pp. 5-6).

         On April 20, 2017, Defendants filed the present motion for leave to supplement their invalidity contentions (Dkt. #244). On May 4, 2017, Tech Pharmacy filed a response (Dkt. #254). On May 11, 2017, Defendants filed reply (Dkt. #259). On May 18, 2017, Tech Pharmacy filed a sur-reply (Dkt. #260).

         LEGAL STANDARD

         Under the Local Rules for the Eastern District of Texas, Appendix B Patent Rules, leave to amend invalidity contentions “may be made only by order of the court, which shall be entered only upon a showing of good cause.” P.R. 3-6(b). “Good cause, ” according to the Federal Circuit, “requires a showing of diligence.” O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1366 (Fed. Cir. 2006). “The burden is on the movant to establish diligence rather than on the opposing party to establish a lack of diligence.” Id.

         The Court weighs multiple factors in determining whether good cause exists, including, but not limited to:

1. The length of the delay and its potential impact on judicial proceedings;
2. The reason for the delay, including whether it was within the reasonable control of the movant;
3. Whether the offending party was diligent in seeking an extension of time, or in supplementing discovery, after an alleged need to disclose the new matter became apparent;
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 ...

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