Medline Indus., Inc. v. C.R. Bard, Inc.

511 F.Supp.3d 883

MEDLINE INDUSTRIES, INC., Plaintiff,

v.C.R. BARD, INC., Defendant.

No. 17 C 7216

United States District Court, N.D. Illinois, Eastern Division.

Signed January 5, 2021

Allen E. Hoover, Nicole L. Little, Stanley Allen Schlitter, Fitch, Even, Tabin & Flannery, Andrew Charles Wood, Neal Gerber & Eisenberg LLP, Courtney Elizabeth Cronin, Gwen Hochman Stewart, Nathaniel Carrick Love, Stephanie Pauline Smith Koh, Thomas David Rein, Sidley Austin LLP, Joseph Frank Marinelli, Fitch, Even, Tabin & Flannery LLP, Chicago, IL, James P. Brogan, King and Spalding LLP, Palo Alto, CA, for Plaintiff.

Nicole M. Smith, Jonathan McNeal Smith, Pro Hac Vice, Vincent J. Belusko, John Raleigh O'Donnell, Pro Hac Vice, Dylan J. Raife, Pro Hac Vice, Morrison & Foerster LLP, Scott Watson, Pro Hac Vice, Quinn Emanuel Urquhart & Sullivan, LLP, Los Angeles, CA, Athena Diane Dalton, Marc Lawrence Kaplan, Quinn Emanuel Urquhart & Sullivan LLP, Todd H. Flaming, Todd Flaming LLC, Chicago, IL, Matthew A. Traupman, Pro Hac Vice, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, Steven Cherny, Pro Hac Vice, Quinn Emanuel Urquhart & Sullivan, LLP, Boston, MA, for Defendant.

OPINION AND ORDER

SARA L. ELLIS, United States District Judge

In this patent infringement lawsuit, Plaintiff Medline Industries, Inc. ("Medline") alleges that Defendant C.R. Bard, Inc. ("Bard") infringes claims of U.S. Patent Nos. 9,745,088 ("the ’088 patent"), 9,795,761 ("the ’761 patent"), and 9,808,596 ("the ’596 patent") (collectively, "the patents-in-suit")¹ that generally relate to the configuration of trays and kits used for catheterization. After Bard served an expert report opining on the invalidity of the asserted patent claims, Medline moved to strike certain portions of the expert report as violating this District's Local Patent Rules. Two days later, Bard responded in kind, moving to strike certain portions of Medline's expert report on infringement as violating the Local Patent Rules. Both motions are now fully briefed.² Because Medline has shown that Bard failed to previously disclose most, but not all, of the invalidity arguments contained in the challenged portions of Bard's expert report on invalidity, the Court grants in part and denies in part Medline's motion to strike [226]. And because Bard has shown that Medline failed to previously disclose the infringement arguments contained in the challenged portions of Medline's expert report on infringement, the Court grants Bard's motion to strike [228].

BACKGROUND

For more than a decade, this District has had Local Patent Rules. See Judge Matthew F. Kennelly & Edward D. Manzo, Northern District of Illinois Adopts Local Patent Rules , 9 J. Marshall Rev. Intell. Prop. L. 202, 202 (Winter 2010) (Local Patent Rules first took effect on October 1, 2009). "These Local Patent Rules provide a standard structure for patent cases" and "anticipate and address many of the procedural issues that commonly arise in patent cases." N.D. Ill. LPR preamble. Among other things, the Local Patent Rules require each party, "[a]fter a reasonable period for fact discovery, ... [to] provide a final statement of its contentions" regarding infringement and invalidity, which the "party may thereafter amend only ‘upon a showing of good cause and absence of unfair prejudice, made in timely fashion following discovery of the basis for the amendment.’ " Id. (quoting N.D. Ill. LPR 3.4); see N.D. Ill. LPR 3.1, 3.2.

In July 2018, the parties served their Final Infringement and Invalidity Contentions pursuant to Local Patent Rule 3.1. A few months later, this District amended that rule. See N.D. Ill. General Order 18-0022 (Oct. 26, 2018). The amendment requires the patentee to limit the number of patent claims it asserts in its Final Infringement Contentions and the accused patent infringer to limit the number of invalidity grounds it asserts in its Final Invalidity Contentions. Id. ; Medline Indus., Inc. v. C.R. Bard, Inc. ("Medline I" ), No. 14 C 3618, Doc. 480 at 2 (N.D. Ill. Jan. 8, 2020).³ In February 2019, on motion from the parties, the Court ordered Medline to narrow its asserted patent claims, as required by amended Local Patent Rule 3.1 (a), by February 22, 2019, and Bard to narrow its prior art and invalidity grounds, as required by amended Local Patent Rule 3.1 (b), by April 8, 2019.

Fact discovery closed on May 31, 2019. The Court then stayed the litigation from September 2019 through July 2020 while the Patent Trial and Appeal Board conducted inter partes reviews ("IPRs") on all the asserted claims in the patents-in-suit. The claims in the patents-in-suit survived the IPRs, and the Court thereafter set a schedule for expert discovery. Per this schedule, the parties were to exchange opening expert reports by October 12, 2020 and rebuttal reports by November 23, 2020, with expert discovery closing on February 15, 2021.

Medline served an opening expert report from Dr. John Abraham, who opined that Bard's SureStep "Bag" and "Meter" single-layer Foley catheter trays or kits infringe the asserted patent claims. Bard served an opening expert report from Karl Leinsing, who opined that two primary references— U.S. Patent No. 4,160,505 ("Rauschenberger") and Bard's Bardex® I.C. Catheter Package Assemblies ("Bardex")—combined with other references render the asserted claims obvious. After each party identified issues with the other party's expert report, the parties met and conferred but were unsuccessful, leading to the current motions.

LEGAL STANDARD

"The Court has broad discretion to manage discovery matters and enforce the Local Patent Rules." Oil-Dri Corp. of Am. v. Nestle Purina PetCare Co. ("Oil-Dri II "), No. 15 C 1067, 2018 WL 3130943, at *4 (N.D. Ill. June 26, 2018). Because this District's Local Patent Rules are "unique to patent cases" and "are likely to directly affect the substantive patent law theories that may be presented at trial, being designed specifically to require parties to crystallize their theories of the case early in the litigation so as to prevent the shifting sands approach to claim construction," Federal Circuit law governs the Court's interpretation of these rules. O2 Micro Int'l Ltd. v. Monolithic Power Sys., Inc. , 467 F.3d 1355, 1364 (Fed. Cir. 2006) (citation omitted) (internal quotation marks omitted); see Beckman Coulter, Inc. v. Sysmex Am., Inc. , No. 18-CV-6563, 2019 WL 1875356, at *2 (N.D. Ill. Apr. 26, 2019) (this District's "Local Patent Rules are meant to prevent a shifting sands approach to claim construction by forcing the parties to crystallize their theories of the case early in litigation" (citation omitted) (internal quotation marks omitted)).

The Local Patent Rules "do not specify the actions that the [Court] may or must take if there is non-compliance with the requirements for disclosure of contentions." O2 Micro , 467 F.3d at 1363. "However, the rules are essentially a series of case management orders," and under Rule 16(f), the Court "may impose any ‘just’ sanction for the failure to obey a scheduling order," such as "prohibiting the disobedient party from supporting or opposing designated claims or defenses" or "from introducing designated matters in evidence," as set forth in Rule 37(b)(2)(A)(ii). Id. (citations omitted); Fed. R. Civ. P. 16(f)(1)(C) (authorizing "any just orders, including those authorized by Rule 37(b)(2)(A)(ii)–(vii)"); Fed. R. Civ. P. 37(b)(2)(A)(ii) ; see Oil-Dri Corp. of Am. v. Nestlé Purina Petcare Co. ("Oil-Dri I "), No. 15 C 1067, 2018 WL 1071443, at *3 (N.D. Ill. Feb. 26, 2018).

"[T]he sanction selected must be one that a reasonable jurist, apprised of all the circumstances, would have chosen as proportionate to the infraction." Oil-Dri I , 2018 WL 1071443, at *3 (citation omitted). The Federal Circuit has "concluded that the exclusion of evidence is often an appropriate sanction for a party's failure to comply with the patent local rules," Phigenix, Inc. v. Genentech, Inc. , 783 F. App'x 1014, 1020 (Fed. Cir. 2019), as have courts from this District, see, e.g. , Avnet, Inc. v. Motio, Inc. , No. 12 C 2100, 2016 WL 3365430, at *3–7 (N.D. Ill. June 15, 2016) (striking portions of an expert's invalidity reports that contained material beyond the scope of the accused infringer's Final Invalidity Contentions); Pactiv Corp. v. Multisorb Techs., Inc. , No. 10 C 461, 2013 WL 2384249, at *1–4 (N.D. Ill. May 29, 2013) (same); Fujitsu Ltd. v. Tellabs, Inc. , No. 09 C 4530, 2013 WL 2300782, at *4–7 (N.D. Ill. May 24, 2013) (striking portions of an expert's infringement reports that analyzed products the patentee did not identify as being infringed in its infringement contentions). Unlike Rule 37(c)(1), which does not allow the exclusion of evidence as a sanction for a harmless failure to disclose or supplement information under Rule 26(a) or (e), Rules 16(f)(1)(C) and 37(b)(2)(A)(ii) do not prohibit the exclusion of evidence even where the violation at issue does not cause prejudice. Compare Fed. R. Civ. P. 16(f)(1)(C) and Fed. R. Civ. P. 37(b)(2)(A)(ii), with Fed. R. Civ. P. 37(c)(1) ; see also Mortg. Grader, Inc. v. First Choice Loan Servs. Inc. , 811 F.3d 1314, 1323 (Fed. Cir. 2016) (a district court does not "abuse its discretion by failing to consider prejudice when it applied a rule that does not require consideration of prejudice").

ANALYSIS

The Court begins with some initial observations that inform its analysis. Medline's expert had six weeks to draft and serve a report in response to Bard's opening expert report on invalidity; similarly, Bard's expert had six weeks to draft and serve a report in response to Medline's opening expert report on infringement. To the extent either opening expert report disclosed a particular infringement or invalidity theory for the first time, the Court questions whether the parties’ experts could have used this time to adequately respond to the new theory in their rebuttal expert reports, thereby dispelling any prejudice...