Free Reply to Opposition - District Court of California - California

Case 3:07-cv-02385-PJH

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Behrooz Shariati (State Bar No. 174436) [email protected] JONES DAY Silicon Valley Office 1755 Embarcadero Road Palo Alto, CA 94303 Telephone: 650-739-3939 Facsimile: 650-739-3900 Attorneys for Plaintiff NORDIC NATURALS, INC. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION

Case No. C-07-02385 PJH 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. Movant Nordic Naturals, Inc. briefly responds to Defendants' Opposition as follows. INTRODUCTION Defendants J.R. Carlson Laboratories, Inc.'s and Metagenics, Inc.'s arguments and strained reasoning for surprising Plaintiff Nordic Naturals, Inc. with Mr. Steele's declaration after the time provided by the Patent Local Rules for any such disclosure are unpersuasive and do not excuse Defendants' actions. II. ARGUMENT A. Plaintiff Did Not Have Notice of Mr. Steele as a Claim Construction Witness v. J.R. CARLSON LABORATORIES, INC. and METAGENICS, INC., Defendants. NORDIC NATURALS, INC., Plaintiff, PLAINTIFF NORDIC NATURALS, INC.'S REPLY TO DEFENDANTS' OPPOSITION TO PLAINTIFF'S MOTION TO STRIKE DEFENDANTS' DECLARATION OF DONALD R. STEELE Judge: The Honorable Phyllis J. Hamilton

Defendants' initial disclosures merely disclosed Mr. Steele as "having knowledge of soft gel manufacture" alongside other names of individuals who appear to be involved in actually
NORDIC'S REPLY RE: MOTION TO STRIKE STEELE DECLARATION Case No. C-07-02385 PJH

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manufacturing Carlson's products. The disclosure gave no indication of Defendants' intention regarding the use of Mr. Steele's testimony for claim construction. Likewise, Mr. Steele's October 2007 narrative was produced within a collection of documents from Carlson's thenmanufacturer Scherer Corp., and was not identified as claim construction evidence by Defendants. Given the number of individuals disclosed by Defendants, it would be impractical, to say the least, for Plaintiff to examine every single witness on Defendants' initial disclosures prior to claim construction on the possibility that one of them may be a claim construction witness. This would have been particularly challenging since Defendants did not produce the bulk of their responsive technical and manufacturing documents until March 2008, after the claim construction process was initially scheduled to be concluded. B. The Patent Local Rules Required the Disclosure of Mr. Steele

Patent Local Rule 4-2 requires the parties to "provide a preliminary identification of extrinsic evidence . . . they contend support their respective claim constructions." (Emphasis added). By their own admission, Defendants were aware of Mr. Steele and his opinions as early as August 2007, yet chose not to disclose them under Patent Local Rule 4-2. Patent Local Rule 4-3 similarly requires the parties to identify any extrinsic evidence "known to the party on which it intends to rely either to support its proposed constructions of the claim or to oppose any other party's proposed construction of the claim . . . ." (emphasis added). Defendants chose not to disclose Mr. Steele or his opinions under Patent Local Rule 4-3.1 The Patent Local Rules could not be clearer. They require clear and specific disclosure, not hidden and buried documents, and Defendants should not be permitted to rely on evidence submitted in violation of these rules. C. Defendants' Rationale for Delayed Disclosure is Unsustainable

Defendants claim that the Steele declaration is needed to address Nordic's lack of support for its discussion of one of ordinary skill in the art rings hollow for a number of reasons: During the process of drafting the Joint Statement, and afterwards, several discussions were held between parties in which Defendants repeatedly assured Plaintiff that they were not going to rely on expert testimony. -2NORDIC'S REPLY RE: MOTION TO STRIKE STEELE DECLARATION Case No. C-07-02385 PJH
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First, Defendants did not see a need to include Mr. Steele's declaration as part of their original arguments as laid out in their mistakenly-filed opening brief. Defendants' arguments nevertheless relied on the understanding of one of ordinary skill in the art.

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Second, if Defendants truly believed that Mr. Steele's testimony would be helpful on this issue, they could have easily included his declaration in their Patent Local Rules 4-2 and 4-3 disclosures, which they did not.

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Third, Mr. Steele's Declaration does not provide any evidence about the understanding of a person of ordinary skill in the art at the time the patent application was filed--instead, each statement is of his own present understanding.

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Fourth, Defendants' excuse that Mr. Steele's testimony was necessitated by a change of construction by the Plaintiff is without merit, and highlights Defendants' continuing inability to distinguish an example from the essential. Specifically, on page 12 of Plaintiff's Opening Brief, Plaintiff remarks With respect to the asserted claims, all that is required is that the proper materials are present in the proper proportions; there is no requirement that they be uniformly mixed or present throughout the capsule. The capsule may indeed be uniformly formed, but may just as easily by comprised of layers or sections of materials, provided that the proportions and percentages in the claims are met. Plaintiff has provided the "layers" commentary as an example, not as a modification to its proposed construction. Plaintiff's construction has been maintained since its Joint Claim Construction Submission.

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Finally, Steele's declaration provides only a summary statement of his personal opinion on this alleged issue. Defendants appear to conflate the meaning of "explain" with "state" in that Steele does nothing more than make isolated unsupported statements, which Defendants claim are explanations.

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D.

Plaintiff is Harmed by Defendants' Tactics

As a result of Defendants' last-minute submission of the Steele Declaration, Plaintiff has been prejudiced. Plaintiff has had to divert resources from preparing for the claim construction hearing to prepare its own expert declaration to address the deficiencies in the Steele declaration and, possibly, to provide an opposing declaration from its own expert. Defendants attempt to rely on the unusual circumstances of this case, which extended the claim construction briefing schedule, to argue that Plaintiff has had plenty of time to take discovery with respect to Steele's opinions. This argument also fails for a number of reasons. First, Defendants violated the Local Rules when it filed its opposition brief along with the Steele declaration. Defendants cannot now rely on an unforeseen event, the change of schedule, to justify the initial violation. Second, Plaintiff has indeed subpoenaed Mr. Steele's documents and has requested a deposition. However, even with the delay in the schedule, no documents have been produced and no deposition is currently scheduled. The Northern District and its Patent Local Rules, through its requirement of early disclosure of witnesses and the subsequent expiration of the claim construction discovery period, contemplate an orderly and structured approach to claim construction. Revealing surprise witnesses and evidence at the last minute, as has been done here, violate the letter and spirit of the local rules and should not be countenanced.

III.

CONCLUSION Defendants' violation of Patent Local Rules 4-2 and 4-3, especially given their previous

knowledge and apparent intent regarding Mr. Steele, should not be legitimized by allowing the Steele Declaration to stand. These types of last-minute surprise tactics are the exact opposite of

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what the Patent Local Rules require.2 At the very least, the Patent Local Rules have the same import as a order from the Court,3 and Plaintiff requests the Court exercise its discretion under Federal Rule of Civil Procedure 37(b)(2) to exclude this evidence.

Dated: March 27, 2008

Respectfully submitted, JONES DAY By: /s/ Behrooz Shariati Behrooz Shariati

Counsel for Plaintiff, Nordic Naturals, Inc.

See, e.g., Yodlee, Inc. v. Cashedge, Inc., No. C 05-01550 SI, 2007 U.S. Dist. LEXIS 58872, at *4-5 (N.D. Cal. Aug. 6, 2007) (noting in a discussion of Patent Local Rule 3 that "Unlike the liberal policy for amending pleadings, the philosophy behind amending claim charts is decidedly conservative, and designed to prevent the 'shifting sands' approach to claim construction." LG Electronics Inc. v. Q-Lity Computer Inc., 211 F.R.D. 360, 367 (N.D. Cal. 2002) (quoting case). The patent local rules were "designed to require parties to crystallize their theories of the case early in the litigation and to adhere to those theories once they have been disclosed." 02 Micro, 467 F.3d at 1366 n. 12 (quoting Nova Measuring Instruments Ltd. v. Nanometrics, Inc., 417 F. Supp. 2d 1121, 1123 (N.D. Cal. 2006)).
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See O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc., 467 F.3d 1355, 1363 (Fed. Cir. 2006). -5NORDIC'S REPLY RE: MOTION TO STRIKE STEELE DECLARATION Case No. C-07-02385 PJH