8/14/2019 08 133b Discovery)

1/11

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF DELAWARE

WEBXCHANGE INC.,

P l a i n t i f fv.

FEDEX CORPORATION, FEDEX KINKO'SOFFICE & PRINT SERVICES, INC., andFEDEX CORPORATE SERVICES INC.,

Defendants .

C.A. No. 08-133-JJF

Lawrence B. Goodwin, E s q u i r e ; P e t e r J . Toren, E s q u i r e ; C h a r l o t t eA. P o n t i l l o , E s q u i r e ; Steven D. Chin, E sq ui r e ; S t e fa n R.Stoyanov, E s q u i r e ; and E r i c J . S t i e g l i t z , E s q u i r e o f KASOWITZ,BENSON, TORRES & FRIEDMAN LLP, New York, New York.Jack B. Blumenfeld, Esquire and J u l i a Heaney, E s q u i r e o f MORRIS,NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware.Attorneys f o r P l a i n t i f f .Kara F. S t o l l , E s q u i r e ; Joyce C r a i g , E s q u i r e ; and Jason W.Melvin, Esquire o f FINNEGAN HENDERSON FARABOW GARRETT & DUNNERLLP, New York, New York.J e f f r e y A. Berkowitz, Esquire o f FINNEGAN HENDERSON FARABOWGARRETT & DUNNER LLP, Reston, V i r g i n i a .F r e d e r i c k L. C o t t r e l l , I I I , Esquire and Anne Shea Gaza, Esquireo f RICHARDS, LAYTON & FINGER, P.A. , Wilm ington, Delawa re .Attorneys f o r Defendants .

MEMORANDUM OPINION

January dJ), 2010Wilmington, Delaware

8/14/2019 08 133b Discovery)

2/11

F a r ~ } = . ' OPending befo re the Court are Defendants FedEx Corporat ion ,

FedEx Kinko's Office & Pr in t Services Inc . , and FedEx Corpora teServices Inc . ' s (co l l ec t ive ly "FedEx") Motion To St r ikeP l a i n t i f f ' s Third Supplemental Response To FedEx's In ter rogatoryNo . 1 And For A Pro tec t ive Order (0 .1 . 172) and Motion For LeaveTo Fi le A Surreply In Opp ositio n To WebXchange I n c . ' s Motion ToCompel FedEx Deposi t ion Test imony. (0 .1 . 202.) And Pla in t i f fWebXchange Inc . ' s ("WebXchange") Motion To Compel FedExDeposi t ion Testimony. (0 .1 . 175.) For the reasons discussed ,Defendants ' Motions wi l l be denied and Pla in t i f f ' s Motion wi l l begranted in pa r t and denied in pa r t .

I . BACKGROUNDThis i s a pa ten t infr ingement act ion brought by Pla in t i f f

WebXchange aga ins t FedEx al leg ing in f r ingement of u .S . Pa tent No.5,778,178 (the " '178 pa ten t" ) , u.S. Patent No. 6,212,556 (the" '556 pa ten t" ) , and u.S. Patent No. 7,340,506 (the " '506 patent" )( co l l ec t ive ly , the "pa t en t s - i n - su i t " ) .

The i n s t an t motions r e l a t e to WebXchange's content ions ofinfr ingement , pa r t i cu l a r l y FedEx's "shipping" system. On January23, 2009, the Cour t i s sued a Scheduling Order (0 .1 . 99) di rec t ingthe pa r t i e s to f i l e amendments to pleadings by January 10, 2009,and ca l l ing fo r document product ion , content ion i n t e r roga to r i e s ,

2

8/14/2019 08 133b Discovery)

3/11

and i den t i f i c a t i on of fac t witnesses to be completed by February27, 2009. Of pa r t i cu l a r relevance to the i n s t an t motions, th e

Order required P l a i n t i f f to provide c l a r i f i c a t i on of i t sinfr ingement con ten t ions as reques ted by Defendants 'In te r roga tory No . 1 . On February 27, 2009, WebXchange servedFedEx with i t s supplementa l infr ingement con ten t ions ("SecondSupplement") . (0 .1 . 174 Ex. D.) WebXchange served i t s Rule30(b) (6) depos i t ion not ice on Apri l 16, 2009 (Id. a t Ex. F) andthe pa r t i e s agreed t h a t the deposi t ion would be l im ited to the"accused sys tems." However, the re has not been an agreement onwhat the accused sys tems cons t i tu t e . Both pa r t i e s include"Track ing ," "Address Ver i f i ca t ion , " and "P r i n t i ng , " but FedExcontends t h a t WebXchange's proposed for th sys tem, "Sh ipp ing ," i snot included.

Shipping i s disputed because th e pa r t i e s do not agree onwhether it was proper ly s t a t ed w ith in the in f r ingementcon ten t ions . FedEx contends t ha t "Shipping" was not d isc lo sed inthe Second Supplement, and was only l i s t ed in th e unt imely ThirdSupplement, served e igh t months too l a t e . (D. I . 174. ) Incon t ras t , WebXchange argues t ha t "Shipping" was d isc lo se d in theSecond Supplement and t h a t it was only c l a r i f i ed with in fo rmat iont h a t had previous ly been unavai l ab le , in the Third Supplement.

Within t h i s con tex t , both pa r t i e s have f i l ed a motionseeking to have t h i s mat te r decided in i t s favor .

3

8/14/2019 08 133b Discovery)

4/11

( 0 . 1 . 197.)

I I . DEFENDANTS' MOTION TO STRIKE AND FOR A PROTECTIVE ORDERA. Background and Parties ' ContentionsDefendants ' Motion To Str ike And For A Pro tec t ive Order

spec i f i ca l ly seeks to l im i t Pla in t i f f to th e in f r ingementcontent ions s t a t ed in the Second Supplement ( i . e . n ot sh ip pin g)and to rece ive a pro tec t ive order proh ib i t ing P l a i n t i f f fromr a i s ing the is su es o uts id e of the scope of the Second Supplementa t the Rule 30 (b) (6) depos i t ion . (D. I. 174. ) FedEx argues t ha tthe Second Supplement did not list " Sh ip pin g" as an asser tedsystem and t h a t th e Third Supplement i s unt imely and p re jud i c i a land thus should be s t ruck . (Id. )

Pla in t i f f responds t ha t no such l imi t a t ion i s proper becauseit did proper ly i den t i fy " Sh ip pin g" as an in f r ing ing system inthe Second Supplement and because th e Third Supplement wast imely . WebXchange looks to seve ra l sen tences in the SecondSupplement t h a t use th e word shipping to suppor t t h i s con ten t ion .(0 .1 . 183 a t 3-4. ) Last ly , Pla in t i f f contends t h a t FedEx fa i l edto de l iver the re l evan t source code in a t imely manner as wasrequired and t h a t delay i s what led to th e lack of spec i f i c i t y inthe Second Supple me nt a nd the need fo r a l a t e r , but still t imelyThird Supplement. ( Id . ) FedEx d isp utes the co nte ntio n t h a t thesource code was not disc losed in a t imely manner.

B. Legal StandardI f a pa r ty f a i l s to properly disc lose discovery mater ia l s ,

4

8/14/2019 08 133b Discovery)

5/11

as would be th e case in an un timely supplementa ti on to ani n t e r roga to ry , the ma te r ia ls in quest ion may be excluded.

Breaches of duty to supplement pursuan t to Rule 26 (e) a readdressed by Rule 37(c) (1) which prov ides , in pe r t i nen t par t :" I f a pa r ty f a i l s to provide in fo rmat ion or i den t i fy a witnessas requ i red by Rule 26(a) or (e) , th e par ty i s not al lowed touse t h a t in fo rmation un less the fa i lure wassubs tan t i a l ly j u s t i f i ed or i s harmless . " Fed. R. Civ. P.37(c ) (1 ) .

Lab. Skin C are, Inc . v. Ltd. Brands, Inc . , Civ. No. 06-601-JJF,2009 u.S. Dist . LEXIS 95868, *5-6 (D. Del. Oct. 14, 2009) .Addi t iona l ly :

In determining whether a fa i lu re to d isc lose i s harmlessc ou rts c on sid er such fac to rs as: (1) th e importance of thein fo rmat ion withhe ld ; (2) the pre j udice or su rp r i s e to thep ar ty a g ai ns t whom th e evidence i s of fe red ; (3) th e l i ke l ihoodof d is rup t ion of the t r i a l ; (4) th e poss ib i l i t y of curing thepre jud ice ; (5) th e e xp la na tio n fo r th e f a i l u r e to d isc lose ;and (6) th e presence of bad fa i th or wi l l f u lne s s in notdi sc los ing th e evidence (the "Pennypack f a c t o r s " ) .

Boehringer Ingelheim Int'l GMBH v. Barr Labs. Inc . , Civ. No. 05-700-JJF , 2008 u.S. Dist . LEXIS 53475, *4-5 (D. Del. July 15,2008) ( c i t ing Konstantopoulos v. Westvaco Corp. , 112 F.3d 710, 719(3d Cir . 1997); Meyers v. Pennypack Woods Home Ownership Ass 'n ,559 F.2d 894, 904-905 (3d Cir . 1977)) .

Last ly , " th e e xc lu sio n of c r i t i c a l evidence i s an ' ex t reme 'sanc t ion , not normal ly to be imposed absen t a showing of wil fu ldecept ion or ' f l ag r an t di s rega rd ' of a court o rder by th eproponent of th e e vid en ce ." Konstantopoulos, 112 F.3d a t 710(quoting Meyers, 559 F.2d a t 905) .

5

8/14/2019 08 133b Discovery)

6/11

C. DecisionI t i s debatable whether the Second Supplement l i s t ed

shipping as an as se r ted system; however, because th e Cour tconcludes t h a t any po t en t i a l unt imel iness by P l a i n t i f f insubmit t ing the Third Supplement was harmless e r ro r , th e SecondSupplement does not need to be addressed . Although th e i s sue ofshipping i s impor tan t , t he re i s minimal pre jud ice and su rp r i s ecaused by any delay in discuss ing it. The pa r t i e s have discussedth e is su e e xt en s iv e ly which e l imina tes any unfounded su rp r i se .Addi t iona l ly , there i s minimal p re ju dice to FedEx based on thecurrent schedule of the case which provides ample t ime fo rinves t iga t ion and discovery . There i s no ind ica t ion of bad fa i thto a l t e r th e ana lys i s . Last ly , the dispute between th e pa r t i e sregarding the d isc losure of the re levant source code provides al eg i t ima te reason fo r WebXchange's t ime- l ine .

Defendants do c i t e to seve ra l cases in which evidence wasexcluded. (See 0 .1 . 174 a t 9 ( c i t ing AMEX, LLC v. Mopex, Inc . ,215 F.R.D. 87 (S.D.N.Y. 2002); Astrazenca AB v. Mutual Pharm.Co., 278 F. Supp. 2d 491, 508 (E.D. Pa. 2003). ) These cases aredi s t ingu i shab le from th e p resen t case . In both cases c i t ed byDefendants , ' evidence was exc luded bec au se it was presen ted a f t e rth e c lose of discovery and t ha t t iming was th e source of thesubs t an t i a l pre jud ice . In t h i s case discovery has not yet c lo sedand the re i s subs t an t i a l t ime fo r inves t iga t ion , e l imina t ing

6

8/14/2019 08 133b Discovery)

7/11

pre jud ice .When t h i s eva lua t ion o f the case based on th e Pennypack

fac tors i s coupled with the gene ra l Third Ci r cu i t preceden thighly d is fa vo rin g th e ex clu sio n o f evidence , th e Court concludest h a t Defendants ' Motion To St r ike And For A Pro tec t ive ordershould be denied.

I I I . PLAINTIFF'S MOTION TO COMPEL AND DEFENDANTS' MOTION FORLEAVE TO FILE A SURREPLY

A. BackgroundThe i n s t an t Motions, to Compel and fo r Leave to Fi le a

Surrep ly , regard the inverse o f the motion discussed above, theyre l a t e to P l a i n t i f f seeking the Court to Compel Defendants top rovid e te stimony r eg ard in g th e shipping component. As th e Courthas al ready determined t h a t th e i s sue of "Shipping" has beenproper ly l i s t ed as an infr ingement content ion through th e Secondand Third Supplements, see supra, t h a t i s sue wi l l not be re -analyzed here . Thus, th e remaining i s sue i s whether FedEx shouldbe compelled to provide deposi t ion tes t imony regard ing i t s"shipping" system and whether P l a i n t i f f ' s r eques t fo r cos t s andfees i s appropr i a t e .

B. Motion To Fi l e A SurreplyDefendants f i l ed a Motion For Leave To Fi le A Surrep ly In

opposi t ion To WebXchange I n c . ' s Motion To Compel FedEx Deposi t ionTest imony. (0 .1 . 202.) After rev iewing th e proposed su r rep ly

7

8/14/2019 08 133b Discovery)

8/11

and the br ie f ings th e Court wi l l deny th e Motion to Fi le aSurreply . Because th e Cour t has determined t h a t th e i s sue of"Shipping" has been l i s t ed with the in f r ingement c on te ntio ns , th eproposed su r rep ly does not provide any c l a r i f i c a t i on or miss ingf ac t s t ha t would i l l umina te i ssues fo r the Court .

C. Motion To Compel TestimonyThe majo ri ty of th e pa r t i e s ' arguments re ga rd in g th e Motion

To Compel Test imony (0 .1 . 175) re la te to the di spu te aboutwhether the i s sue of shipping was proper ly i den t i f i ed in theinfr ingement con ten t ions . Because t ha t i s sue has a l ready beendetermined, those arguments do not need to be addressed .However, when those arguments are removed from th e i s sue , nos ign i f i can t i s sue remains. Outside of the now moot arguments ,Defendants do not presen t any subs t an t i a l argument why the Rule30(b) (6) depos i t ion should not address the i s sue o f s hip pin g.Because FedEx has not provided a reason fo r l imi t ing th ed is cu ss io n o f sh ipp ing in th e d ep os it io n, th e Cour t concludest ha t no such l imi t a t ion i s proper. T herefo re , th e Cour t wil lgran t P l a i n t i f f ' s motion as it r e l a t e s to th e motion to compel.

D. Motion For Costs And FeesWithin P la in t i f f ' s Motion To Compel, WebXchange inc luded a

Motion fo r Costs and Fees assoc ia ted with th e Motion To Compel.(0 .1 . 175.) P l a i n t i f f a sse r ts th at it i s e nt i t le d to "reasonab lecos t s and expenses incur red in making t h i s motion under Rule

8

8/14/2019 08 133b Discovery)

9/11

37(A)(5) ." (0.1. 177 a t 6.)Fed. R. Civ. P. 37(A) (5) s t a t e s t ha t if a motion to compel

discovery i s successfu l , the Court must r equ i re the par ty t ha tcrea ted th e need fo r th e motion to pay reasonable cos t s and feesunless , " ( i ) th e movant f i l ed the motion b ef or e a tt emp ti ng ingood f a i th to obta in the disc losure o r d isc ov ery without cour tac t ion ; ( i i ) the opposing pa r ty ' s nondisc losure , response , o robject ion was subs t an t i a l l y j u s t i f i ed ; or ( i i i ) o thercircumstances make an award of expenses un jus t . "

The Court concludes t ha t an award of damages and cos t s i snot j u s t i f i ed in th is s i tu at io n. Although P l a i n t i f f wassuccessfu l in i t s Motion To Compel, Defendants were subs t an t i a l l yj u s t i f i ed in tak ing the pos i t ion of oppos i t ion based upon theleg i t imate dispute on whether "Shipping" has been l i s t e d as aninfr ingement content ion . Thus, th e Court wi l l deny P l a i n t i f f ' sMotion For Costs and Fees. ( 0 .1 .175 . )

IV. CONCLUSIONFor the reasons discussed Defendants ' Motions, To St r ike

P l a i n t i f f ' s Third Supplemental Response To FedEx's In te r roga to ryNo . 1 And For A Pro tec t ive Order (0 .1 . 172) and For Leave To Fi leA Surreply In Opposi t ion To WebXchange I n c . ' s Motion To CompelFedEx Deposi t ion Test imony (0 .1 . 202) wi l l be denied; andP l a i n t i f f ' s Motion To Compel FedEx Deposi t ion Testimony (0.1.

9

8/14/2019 08 133b Discovery)

10/11

175) wi l l be gran ted in pa r t and denied in pa r t .An appropr ia te o rde r wi l l be en tered .

10

8/14/2019 08 133b Discovery)

11/11

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF DELAWARE

WEBXCHANGE INC.,P l a i n t i f f

v.FEDEX CORPORATION, FEDEX KINKO'SOFFICE & PRINT SERVICES, INC., andFEDEX CORPORATE SERVICES INC.,

Defendants.ORDER

C.A. No. 08-133-JJF

At Wilmington, t h i s ~ d a y of January 2010, fo r th e reasonsse t for th in the Memorandum Opinion i ssued t h i s date ;

NOW THEREFORE, IT IS HEREBY ORDERED t h a t :1. Defendants ' Motion To St r ike P l a i n t i f f ' s Third

Supplemental Response To FedEx's In t e r roga to ry No . 1 And For APro tec t ive Order (0 .1 . 172) i s DENIED;

2. Defendants ' Motion For Leave To File A Surreply InOpposi t ion To WebXchange I n c . ' s Motion To Compel FedEx Deposi t ionTestimony (0 .1 . 202) i s DENIED;

3. P l a i n t i f f ' s Motion To Compel FedEx Deposi t ion Test imony(0 .1 . 175) i s GRANTED IN PART, as it r e l a t e s to th e Motion ToCompel, and DENIED IN PART, as it r e l a t e s to the Motion For CostsAnd Fees.

DISTRICT