A Texas Court recently granted a plaintiff's motion to strike the defendant's non-infringement theory based on the defendant's failure to previously disclose it. At trial, the defendant attempted to elicit testimony from the plaintiff's expert witness that the accused website did not infringe, in light of the way it operated. Because the defendant had not previously disclosed this theory of non-infringement at any time before trial, the plaintiff moved to strike this testimony. In granting the plaintiff's motion, the Texas court rejected the defendant's argument that it was not required to disclose its non-infringement theory because the plaintiff bears the burden of proving infringement.

In its opinion, the Court reiterated the long held liberal discovery policies in the Eastern District of Texas: "[t]he Eastern District of Texas is well known for it liberal discovery policies and its high expectations that the parties and their counsel be forthcoming in their discovery obligations. Under the Court's Discovery Order, requests for production are not required; parties are expected to produce all relevant documents without formal requests for production. These policies promote efficient dispute resolution and avoid trial by ambush."

In its opinion, the Court reiterated the long held liberal discovery policies in the Eastern District of Texas: "[t]he Eastern District of Texas is well known for it liberal discovery policies and its high expectations that the parties and their counsel be forthcoming in their discovery obligations. Under the Court's Discovery Order, requests for production are not required; parties are expected to produce all relevant documents without formal requests for production. These policies promote efficient dispute resolution and avoid trial by ambush." The Court went to state that the Court's standard Discovery Order expressly requires the disclosure a party's legal theories and their factual basis:

"The Court's standard Discovery Order and the Discovery Order entered in this case expressly require disclosure of 'the legal theories and, in general, the factual basis of the disclosing party's claims or defenses' without waiting for a discovery request. The Discovery Order also requires disclosure of any claim for relief or defensive matter other than those addressed in the Patent Rules,...and without awaiting a discovery request, a copy of all documents, data compilations and tangible things in the possession, custody, or control of the party that are relevant to those additionally pleaded claims or defenses involved in this action."

While the defendant admitted that it knew of the factual basis of its non-infringement contentions before the deposition of the plaintiff's expert, it asserted that since the plaintiff had the burden to prove infringement, it had no duty to disclose its non-infringement theories. While the Court acknowledged that the Patent Rules require only that the plaintiff disclose its infringement contentions and that the defendant disclose its invalidity contentions, the Court reiterated that its Discovery Order "expressly governs claims and defensive matters not addressed by the Patent Rules." And, as such, under the Court's standard Discovery Order and the one entered in the instant case, the defendant was required to disclose its non-infringement theories.

The Court further held that if the defendant "intended its non-infringement or damages experts to testify regarding this theory, it was obligated to disclose the theory in its experts' reports." And, the defendant was obligated to supplement its disclosures even if the deadline for the required disclosures had already passed.

In summing its opinion, the Court stated that the defendant's "failure to disclose prejudiced [the plaintiff's] ability to prepare and present cohesive infringement and damages models at trial." This failure also "deprived [plaintiff] of the opportunity to investigate [defendant's] claim, possibly agree with [defendant], and adjust its damages model accordingly." Instead, [the defendant] "chose to lay behind the log and attempt to ambush [the plaintiff] with this theory at trial." Such tactics and gamesmanship, the Court stated, would not be tolerated.

Clear with Computers, LLC v. Hyundai Motor America, Inc., Case No. 09-479 (E.D. Texas July 5, 2011) (J. Davis)