United States District Court, E.D. Michigan, Southern Division
WEBASTO THERMO & COMFORT NORTH AMERICA, INC. and WEBASTO-EDSCHA CABRIO USA, INC., Plaintiffs/Counter-Defendants,
BESTOP, INC., Defendant/Counter-Plaintiff.
Steven Whalen United States Magistrate Judge.
AND ORDER (1) OVERRULING BESTOP'S OBJECTIONS TO THE
SPECIAL MASTER'S REPORT AND RECOMMENDATION (ECF NO. 197),
(2) ADOPTING THE REPORT AND RECOMMENDATION (ECF NO. 186), (3)
GRANTING PLAINTIFFS' MOTION TO STRIKE DEFENDANT'S
SECOND AMENDED NON-INFRINGEMENT AND INVALIDITY CONTENTIONS
(ECF NO. 154); and (4) DENYING AS MOOT BESTOP'S MOTION TO
EXCLUDE THE EXPERT TESTIMONY OF JEFFREY L. STEIN (ECF NO.
D. Borman United States District Judge.
January 15, 2019, Plaintiffs Webasto Thermo & Comfort
North America, Inc. and Webasto-Edscha Cabrio USA, Inc.
(“Webasto”) filed a Motion to Strike
Defendant's Second Amended Non-Infringement and
Invalidity Contentions. (ECF No. 154.) Defendant BesTop, Inc.
(“BesTop”) filed a Response (ECF No. 155) and
Webasto filed a Reply (ECF No. 156). On January 31, 2019,
this Court referred the Motion to Strike to Special Master
Gaynell Methvin for a Report and
Recommendation. (ECF No. 157.) On March 8, 2019, Special
Master Methvin issued his Report and Recommendation to GRANT
Webasto's Motion to Strike. (ECF No. 186, Report.) BesTop
has now filed Objections to the Special Master's Report
(ECF No. 197, Objections.) Webasto has filed a Response in
Opposition to BesTop's Objections. (ECF No, 201.) For the
reasons that follow, the Court ADOPTS the Report and
Recommendation, OVERRULES BesTop's Objections, and GRANTS
Webasto's Motion to Strike.
STANDARD OF REVIEW
Civ. P. 53 sets forth the appropriate standard of review for
a district court in reviewing findings of fact and
conclusions of law made or recommended by a Special Master.
Rule 53(f)(3) provides as follows:
Reviewing Factual Findings. The court must decide de
novo all objections to findings of fact made or recommended
by a master, unless the parties, with the court's
approval, stipulate that:
(A) the findings will be reviewed for clear error; or
(B) the findings of a master appointed under Rule 53(a)(1)(A)
or (C) will be final.
Civ. P. 53(f)(4) provides as follows:
Reviewing Legal Conclusions. The court must decide
de novo all objections to conclusions of law made or
recommended by a master.
Fed. R. Civ. P. 53(f)(5) provides as follows:
Reviewing Procedural Matters. Unless the appointing
order establishes a different standard of review, the court
may set aside a master's ruling on a procedural matter
only for an abuse of discretion.
See also Hochstein v. Microsoft Corp., 730 F.Supp.2d
714, 717 (E.D. Mich. 2010), aff'd 430 Fed.Appx.
898 (Fed. Cir. 2011) (“The Court reviews de
novo factual findings and legal conclusions of the
Special Master to which a specific objection has been made.
See Fed.R.Civ.P. 53(f).”) The Court may “adopt or
affirm, modify, wholly or partly reject or reverse, or
resubmit to the master with instructions.” Fed.R.Civ.P.
December 28, 2018, thirty days after Special Master Methvin
issued his Report and Recommendation on claim construction
but before this Court adopted the recommendations of the
Special Master's Report, BesTop served amended
non-infringement and invalidity contentions (“Second
Amended Contentions”) on Webasto that differed markedly
from BesTop's First Amended Non-Infringement and
Invalidity Contentions that were served on Webasto on October
6, 2017 (“First Amended
Contentions”). Webasto has moved to strike BesTop's
Second Amended Contentions, and the Special Master has
recommended that the Court grant Webasto's motion. BesTop
files four objections to the Special Master's Report,
which are addressed in turn.
Objection Number One: “The Special Master Applied the
Wrong Legal Standard.”
parties dispute whether the Court should construe
Webasto's request to strike under Fed.R.Civ.P. 12, 16, or
37. BesTop is correct that Fed.R.Civ.P. 12(f) applies to
striking matters only from “pleadings.” As BesTop
points out, Fed.R.Civ.P. 7(a) defines “pleadings”
very specifically and non-infringement and invalidity
contentions are not “pleadings” as that term is
defined in Rule 7. Yet in the patent context, courts have
observed that “‘[i]nfringement contentions serve
as substitutes for interrogatories, [and] they also act as
forms of pleading that disclose the parties' theories of
their case and thereby shape discovery and the issues to be
determined at trial.'” Finjan, Inc. v. Blue
Coat Systems, Inc., No. 13-cv-03999, 2015 WL 3640694, at
*2 (N.D. Cal. June 11, 2015) (quoting Apple Inc. v.
Samsung Electronics Co., No. 12-cv-0630, at *3 (N.D.
Cal. June 26, 2013)). So invoking Rule 12(f) is not
illogical, even if literally the rule is inapplicable. More
commonly, however, motions to strike invalidity or
infringement contentions are analyzed by courts either (1)
under local patent rules or, where no such rules have been
adopted, as is the case here, under Fed.R.Civ.P. 16(b)'s
good cause standard for amending the court's case
management order, see, e.g., In re Papst Licensing GmbH
& Co. KG Litig., 767 F.Supp.2d 1, at *8 (D.D.C.
2011) (observing that the “good cause standard under
Federal Rule of Civil Procedure 16(b) applies to a request to
amend asserted claims and infringement contentions “),
or (2) under “Fed. R. Civ. P. 37 which governs
sanctions for failure to make disclosures or to otherwise
comply with discovery rules and orders, ” see,
e.g., Bestop v. Tuffy Security Products, Inc., No.
13-cv-10759, 2015 WL 5025892, at *3 (E.D. Mich. 2015).
of the rule invoked, the heart of the inquiry is whether a
party should be barred from relying on certain theories first
proffered late in the litigation, of which the opposing party
has not fairly been apprised. The analysis invariably has
both a good cause/diligence and a prejudice component.
Interpreting the Northern District of California Local Patent
Rules, the Federal Circuit summarized the following workable
standard, which incorporates the mandates of both Rule 16 and
This case primarily presents questions concerning the
interpretation and application of the Northern District of
California's local rules for patent cases. As noted, a
party claiming patent infringement in the Northern District
must serve preliminary infringement contentions within ten
days of the initial case management conference. See
U.S. Dist. Ct. N.D. Cal. Patent L.R. 3-1. Among other things,
these contentions must specify each claim of each patent that
is allegedly infringed, each product that allegedly
infringes, and the location in the product where each element
of each asserted claim is found. See Id. The
preliminary contentions generally become the final
contentions thirty days after the claim construction ruling
unless a party serves final infringement contentions. A party
may submit final infringement contentions that differ from
the preliminary contentions without leave of the court within
the thirty day period after the claim construction ruling
only if the amending party believes in good faith that
the claim construction ruling or the documents submitted with
the other party's invalidity contentions require a
change. See U.S. Dist. Ct. N.D. Cal. Patent L.R. 3-6.
Outside of this thirty day period, amendments or modification
to the contentions can only be made “by order of the
Court . . . upon a showing of good cause.” See
U.S. Dist. Ct. N.D. Cal. Patent L.R. 3-7. The district judges
in the Northern District of California, including the
district judge in this case, have understood the good cause
requirement in the local patent rules to require a showing
that the party seeking leave to amend acted with diligence in
promptly moving to amend when new evidence is revealed in
discovery. See J.A at 46 (noting that the plaintiff
unreasonably delayed in moving to amend); see also,
e.g., ZiLOG, Inc. v. Quicklogic Corp., No.
C03-03725 JW, 2006 WL 563057, at *1 (N.D.Cal. March 6, 2006)
(“This constitutes sufficient diligence to meet the
‘good cause' standard.”).
The local patent rules do not specify the actions that the
district court may or must take if there is non-compliance
with the requirements for disclosure of contentions. However,
the rules are essentially a series of case management orders,
and the deadlines for submission of contentions in this case
were explicitly included in a supplemental case management
order. The court may impose any “just” sanction
for the failure to obey a scheduling order, including
“refusing to allow the disobedient party to support or
oppose designated claims or defenses, or prohibiting that
party from introducing designated matters in evidence.”
Fed.R.Civ.P. 16(f); Fed.R.Civ.P. 37(b)(2)(B). District judges
in the Northern District of California have taken various
positions depending on the facts of the particular case as to
whether non-compliance with the rules for disclosure of
contentions should bar reliance on theories omitted from the
preliminary or final contentions.
O2 Micro Intern. Ltd. v. Monolithic Power Systems,
Inc., 467 F.3d 1355, 1362-63 (Fed. Cir. 2006) (emphasis
added) (footnote omitted).
absence of local patent rules, as is the case in this
District, the Court may look to case law in other districts
that have adopted such rules that contain language similar to
that adopted by the parties and the Court to govern the
The Eastern District of Michigan has not adopted patent local
rules. However, other districts, such as the Northern
District of California and the Eastern District of Texas,
have. Because the infringement and invalidity contention
language in the Proposed Scheduling Order is similar to the
language used in those districts' patent local rules,
this Court looks to case law interpreting those rules for
Magna Donnelly Corp. v. 3M Company, No. 07-cv-10688,
2012 WL 12930956, at *3 (E.D. Mich. Feb. 1, 2012) (Michelson,
MJ) (footnote omitted).
argues that because the Eastern District of Michigan has not
adopted local patent rules, and because this Court did not
enter an order specifying detailed time and content
directives for serving and amending of infringement and
invalidity contentions, there are no content or timing
restrictions governing what the parties to this patent
litigation must disclose or provide to the opposing party or
when. BesTop is wrong. The parties submitted a detailed Joint
Rule 26(f) Statement on July 17, 2017 (ECF No. 30), which
this Court implicitly adopted by reference when (having
received the parties' Joint Statement) it cancelled the
Scheduling Conference set for July 24, 2017, and entered its
Civil Case Management and Scheduling Order on July 26, 2017.
(ECF No. 32, 7/26/17 Scheduling Order) (“This civil
matter having come before the Court pursuant to Fed.R.Civ.P.
16, and the parties having submitted a proposed discovery
plan, the Court enters the following schedule to manage the
progress of the case.”). See Magna Donnelly,
2012 WL 12930956, at *3 (observing that the court's
scheduling order, which set forth dates and general case
management rules but no patent-specific directives,
“implicitly adopted the requirements” of the
parties' proposed joint scheduling order which did set
forth deadlines and requirements governing the content and
timing of patent-related submissions). There was no need for
this Court to reiterate in its Scheduling Order the detailed
content of the parties' Joint Statement, which was
implicitly incorporated into the Court's 7/26/17
Scheduling Order by reference and contains, inter
alia, detailed content and timing directives for the
filing of infringement, non-infringement, and invalidity
contentions and for amendments to contentions. (Joint
Statement 6-9, PgID 358-361.)
Joint Statement expressly addresses the amendment of
contentions post-claim construction, and allows for a
one-time amendment to contentions that are made within a
prescribed period (30 days) following the claim construction
decision by the Court. (Id. at 8, PgID 360.) Belying
its assertion that the Joint Statement is not an Order of
this Court and has no force and effect, BesTop invokes this
provision of the Joint Statement as the basis for filing the
Second Amended Contentions that are under challenge here,
which BesTop not coincidentally filed within 30 days of the
entry of the Special Master's Report on claim
construction. It is disingenuous (to say the least) for