Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_03-cv-01329/USCOURTS-caed-2_03-cv-01329-2/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:145 Patent Infringement

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

TECHNOLOGY LICENSING

CORPORATION, a California

corporation,

NO. CIV. S-03-1329 WBS PAN

Plaintiff, 

v. MEMORANDUM AND ORDER RE:

MOTION TO SUPPLEMENT REBUTTAL

EXPERT REPORTS & MOTION TO

SUBSTITUTE A PARTY

THOMPSON, INC., a Delaware

corporation,

Defendant.

----oo0oo----

Plaintiff’s complaint alleges that defendant infringed

four patents. The four patents alleged to be infringed were

issued to J. Carl Cooper, who assigned his rights under those

patents to plaintiff. (Compl.) The infringement claims regarding

two of those patents were stayed by court order on September 20,

2004. The claims regarding patents 4,573,070 (“the ‘070 patent”)

and 5,459,524 have not been stayed.

The first issue is whether defendant’s rebuttal experts

will be allowed to supplement their reports after defendant has

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had a chance to depose plaintiff’s experts. Defendant is

scheduled to depose one of plaintiff’s experts on May 10, 2005. 

(Pl.’s Opp’n to Def.’s Mot. for Leave to Supplement Expert

Witness Reports at 2). Defendant seeks to be permitted 10 days

after the last deposition of any of plaintiff’s expert witnesses

to supplement its rebuttal expert reports. (Def.’s Proposed

Order at 1). Defendant claims that its rebuttal experts’ reports

will necessarily be incomplete, and therefore it will be

prejudiced, if the court does not grant defendant’s motion.

In its response to defendant’s emergency motion for an

expedited hearing, plaintiff first stated that it did not oppose

defendant’s motion so long as any amendment is submitted before

the close of discovery on May 16, 2005. However, in plaintiff’s

response to defendant’s motion to submit expert reports, and at

oral argument on the motion, plaintiff now argues for denial of

the motion in its entirety. 

Under Federal Rule of Civil Procedure 26(e), a party

has a duty to supplement disclosures, including expert witness

rebuttal reports, if those disclosures are incomplete or

incorrect. Although a party is not entitled to amend expert

rebuttal disclosures under Rule 26(e), defendant anticipates that

its prior disclosures will be incomplete. Plaintiff’s initial

reaction to this motion suggests that plaintiff would not suffer

prejudice from any amendments defendant might make to its expert

witness rebuttal reports before the close of discovery on May 16,

2005. Accordingly, the court will permit such amendments, but in

the interest of fairness will also allow plaintiff to amend its

expert witness reports before the close of discovery. 

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1 In case of any transfer of interest, the action may be 

continued by or against the original party, unless the

court upon motion directs the person to whom the

interest is transferred to be substituted in the action

or joined with the original party. . . .

Fed. R. Civ. P. 25(c).

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The second issue concerns plaintiff’s motion to

substitute a party pursuant to Federal Rule of Civil Procedure

25(c) (“Rule 25(c)”)1 due to a transfer of interest in one of the

patents. In his declaration, plaintiff’s counsel Joseph Hosteny

states that he has reviewed an exclusive license agreement

between plaintiff, Cooper, and Pixel Instruments Corporation on

one side and AV Technologies LLC (“AVT”) on the other. The

agreement is dated November 12, 2004, well after the inception of

this litigation. Hosteny claims that this agreement is

confidential. A copy has not been provided the court. The

agreement grants AVT the right to sue for past, present, and

future infringement of the ‘070 patent. (Hosteny Decl. ¶ 3). 

Finally, Hosteny claims that AVT “has consented to being

substituted in this case for TLC with respect to the ‘070

patent.” (Id. ¶ 4). Defendant does not oppose the substitution

of AVT.

Rule 25(c) leaves the substitution decision to the

trial court’s sound discretion. In re Bernal, 207 F.3d 595, 598

(9th Cir. 2000). The court does not need to substitute a

successor in interest for that successor to be bound by any

judgment issued against the original party in interest. Id. “An

order of joinder [under Rule 25(c)] is merely a discretionary

determination by the trial court that the transferee’s presence

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would facilitate the conduct of the litigation.” Id.(citing 7C

Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal

Practice and Procedure § 1958)(2d ed. 1986)).

The court sees no compelling reason to allow

substitution of AVT as a plaintiff inasmuch as AVT will already

benefit from any judgment in favor of plaintiff, will be bound by

any judgment against plaintiff, and is completely free to take

over or assist in the representation of plaintiff in connection

with the ‘070 patent even if no formal substitution is made. In

order for AVT to join as a plaintiff, it will be necessary for an

amended complaint to be filed, making it clear which claims are

asserted by Technology Licensing Corporation, and which claims

are asserted by AVT. After AVT is joined, particularly if it has

different counsel, AVT may seek to reopen discovery or change the

scheduling dates. For those reasons, the court would not be

inclined to exercise its discretion to permit substitution of

plaintiffs. But since that is what all of the parties want, that

is what they will get.

IT IS THEREFORE ORDERED that:

(1) defendant’s motion to amend its rebuttal experts’

reports after the date those reports are due be, and the same

hereby is, GRANTED, provided that any amendments to the rebuttal

expert reports be submitted by May 16, 2005;

(2) plaintiff may amend its experts’ reports, provided

that any amendment to those reports be submitted by May 16, 2005;

 (3) plaintiff’s motion to substitute AV Technologies

LLC with respect to the ‘070 patent be, and the same hereby is,

GRANTED. Existing plaintiff Technology Licensing Corporation and

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new plaintiff AV Technologies LLC shall file an Amended Complaint

consistent with this order within 10 days from the date of this

order. Defendant shall file its response to the Amended

Complaint within 14 days from service of the Amended Complaint.

DATED: May 5, 2005

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