United States District Court, E.D. Texas, Marshall Division
PAYNE, UNITED STATES MAGISTRATE JUDGE
United Services Automobile Association (“USAA”)
filed an Opposed Motion for Leave to Amend Infringement
Contentions (the “Motion to Amend”), which is now
before the Court. (Dkt. No. 66.) In the Motion to Amend, USAA
seeks leave to serve its Fourth Amended Infringement
Contentions. After consideration, the Court
GRANTS the Motion to Amend.
before the Court is Defendant Wells Fargo Bank, N.A.'s
(“Wells Fargo”) Motion to Strike Portions of the
Conte Report (the “Motion to Strike”). (Dkt. No.
84.) In part II(b) of the Motion to Strike, Wells Fargo seeks
to exclude Dr. Conte's DOE opinions set forth in
paragraphs 799, 860, and 909 in his report as not properly
disclosed in USAA's infringement contentions. Because
these theories are properly disclosed in the Fourth Amended
Infringement Contentions, the Court DENIES
this portion of the Motion to Strike. The remainder of the
Motion to Strike is CARRIED.
THE MOTION TO AMEND
brought suit against Wells Fargo alleging that Wells
Fargo's Mobile Deposit system (the “Accused
Instrumentality”) infringes several of USAA's
patents. (Dkt. No. 1.) Pursuant to local Patent Rule
(“P.R.”) 3-4, Wells Fargo served USAA with source
code for the Accused Instrumentality. Service of this source
code was due by January 18, 2019. (Dkt. No. 29.) USAA
discovered that the source code produced by Wells Fargo was
not correct. According to USAA, it “had to repeatedly
ask Wells Fargo to supplement its code production, and when
new code has been produced it duly supplemented its
infringement contentions.” (Dkt. No. 66 at 2; see
also Dkt. Nos. 66-3-6.) Most recently, on August 13,
2019, Wells Fargo produced a new version of source code for
iOS 3.7.1, the version of the source code Wells Fargo asserts
it is currently using. (Dkt. No. 66 at 2; Dkt. No. 66-8.) In
response to this new source code, USAA served its Fourth
Amended Infringement Contentions. According to USAA, these
amended contentions added “a significant number of
citations from the recently produce[d] source code and some
additional DOE explanations based on this code.” (Dkt.
Fargo does not object to the added citations to the newly
produced source code. (Dkt. No. 69 at 2.) However, Wells
Fargo objects to the “new DOE arguments” because
they “are unrelated to the corrected” iOS 3.7.1
source code. (Id.) Accordingly, USAA moves for leave
to amend its Infringement Contentions to include these
amended DOE contentions. USAA moves pursuant to paragraph
3(a)(i) of the Discovery Order (Dkt. No. 30) as well as P.R.
3-6. (Dkt. No. 66 at 1.)
may request the Court to grant leave to supplement a filing
after the deadline in the scheduling order for “good
cause.” Fed.R.Civ.P. 16(b)(4). “In determining
whether ‘good cause' exists, the Court considers
the following four factors: ‘(1) the explanation for
the failure to timely move for leave to amend; (2) the
importance of the amendment; (3) potential prejudice in
allowing the amendment; and (4) the availability of a
continuance to cure such prejudice.'” Fractus,
S.A. v. AT&T Mobility LLC, No. 2:18-CV-00135-JRG,
2019 WL 5373197, at *1 (E.D. Tex. Aug. 20, 2019) (quoting
Sw. Bell Tel. Co. v. City of El Paso, 346 F.3d 541,
546-47 (5th Cir. 2003)).
rule contained in Paragraph 3(a)(i) of the Discovery Order is
a standard part of this Court's model discovery order.
This rule is such an integral part of patent practice before
this Court, it is colloquially referred to as P.R. 3-1(g).
See, e.g., Zix Corp. v. Echoworx Corp., No.
2:15-cv-1272-JRG, 2016 WL 3410367, at *1 (E.D. Tex. May 13,
2016). In its regular application, the rule contemplates that
relevant source code will be produced within 45 days of the
plaintiff's Infringement Contentions along with the
defendant's Invalidity Contentions, see P.R.
3-3, 3-4, not over 200 days after service of Infringement
Contentions and 10 days before the close of fact discovery
and the beginning of expert discovery. (See Dkt. No.
29.) Given the unique factual scenario presented here, the
Court hesitates to construe this rule in a manner that may
have unintended consequences for its application in other
cases. Because the Court finds that good cause exists for
USAA's amendment under P.R. 3-6(b), the Court declines to
consider whether the amendment would also be allowable under
3(a)(i) of the Discovery Order.
the four factors relevant to a showing of good cause under
P.R. 3-6(b), the Court finds that USAA has demonstrated good
cause to serve its Fourth Amended Infringement Contentions.
the first factor, the explanation for the failure to meet the
deadline, the Court notes that, while the Court declines to
address the argument on its merits, USAA has a reasonable
basis for its position that its amendment is appropriate
under 3(a)(i) of the Discovery Order because it was served
within 30 days of Wells Fargo serving its corrected source
code. As USAA also notes, it had previously amended its
contentions in response to receiving corrected source code
without objection. (Dkt. No. 66 at 2.) Therefore, the Court
concludes that USAA had a good faith, reasonable belief that
its amendment was timely.
the second factor, the importance of the thing that might be
excluded, USAA argues that the amendment is necessary to
address Wells Fargo's newly produced, corrected source
code. (Id. at 6.) While this is true as to the
updated citations to the corrected source code, the Court
does not find that the amended DOE contentions necessarily
relate to the corrected source code. USAA's argument for
importance is further undermined by USAA's assertion that
the amendment does not “introduce a new theory”
but “merely adds further clarification and explanation
of USAA's previously-disclosed infringement
theories.” (Dkt. No. 71 at 2.) “[I]nfringement
contentions merely serve a notice function.” Global
Sessions LP v. Travelocity.com LP, No.
6:10-cv-671-LED-JDL, 2012 WL 1903903, at *7 n.6 (E.D. Tex.
May 25, 2012) ...