1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

ORDER - 1

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT TACOMA

PACTOOL INTERNATIONAL LTD,

Plaintiff,

v.

KETT TOOL COMPANY, INC., et al.,

Defendants.

CASE NO. C06-5367 BHS

ORDER GRANTING 

PLAINTIFF’S MOTIONS TO 

SEAL AND IMPOSING 

SANCTIONS

This matter comes before the Court on the continuance of trial (Dkt. 325), the 

parties’ briefs regarding sanctions (Dkts. 327, 335, & 337), and Plaintiff PacTool 

International LTD’s (“PacTool”) motions to seal (Dkts. 329 & 334). The Court has 

considered the pleadings filed in support of and in opposition to the motion and the 

remainder of the file and hereby grants the motions to seal and imposes sanctions for the 

reasons stated herein.

I. PROCEDURAL HISTORY

On March 25, 2010, PacTool filed a motion for summary judgment on the issue of 

whether Defendant Kett Tool Company, Inc. (“Kett”) literally infringed the patents in 

Case 3:06-cv-05367-BHS Document 339 Filed 06/11/12 Page 1 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

ORDER - 2

suit. Dkt. 58. The motion was subsequently renoted, and, on September 23, 2010, the 

Court stayed consideration of the motion pending briefing on whether the Court should 

hold a claim construction hearing. Dkt. 106. On December 15, 2010, the Court renoted 

PacTool’s motion and requested a proposed schedule for a claim construction proceeding. 

Dkt. 129. Both Kett and Defendant Elizabeth Tu Hoffman (collectively “Defendants”) 

opposed the Court considering the summary judgment motion before claim construction. 

Dkt. 113. The Court, however, was persuaded by PacTool’s arguments in favor of early 

consideration of the motion. Dkts. 111 & 115. In particular, PacTool argued that, with 

regard to the claims at issue in the motion, Kett is only challenging the claims’ validity, 

which is an issue wholly separate from the issue of literal infringement. Dkt. 115 at 6–7. 

PacTool stated that the “Court should grant summary judgment for literal infringement of 

the three claims asserted in PacTool’s motion and then permit Kett to raise any claim 

construction issues it might have as to the invalidity issue.” Id. at 7.

On January 26, 2011, the Court issued a scheduling order setting the matter for 

trial on December 12, 2011. Dkt. 146. The Court also set the discovery deadline as 

August 15, 2011. Id. 

On March 4, 2011, the parties filed their opening claim construction briefs. As 

expected, Kett challenged the validity of numerous claims and, in particular, argued that 

the “words of degree” claims terms were invalid because the specification did not provide 

sufficient information to determine an objective standard for any of these unique terms. 

Dkt. 170 at 14–23. PacTool responded that the claims were definite because the 

specifications provided sufficient information. Dkt. 188 at 7–14. 

Case 3:06-cv-05367-BHS Document 339 Filed 06/11/12 Page 2 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

ORDER - 3

On October 27, 2011, the Court issued an order construing the claims of the 

patents in suit. Dkt. 263. In particular, the Court concluded that, although the patent 

claims used words of degree, the specifications provided objective standards for 

measuring the various degrees. Id. at 9–11. On October 28, 2011, the Court denied 

PacTool’s motion for summary judgment because, in part, 

There is no evidence in the record regarding either the failure rate of the 

prior art or objective evidence of a clean or even edge cut. Without 

providing evidence on these elements of their claims of infringement, 

PacTool has failed to meet its initial burden of proving that Kett’s devices 

either provide clean edge cuts or inhibit premature failure or wear.

Dkt. 265 at 4. After issuance of this order, PacTool immediately began testing the 

relevant products to determine an objective standard and to obtain evidence of 

infringement. See Dkt. 335 at 7. 

On December 20, 2011, the Court found that it was necessary to vacate its 

previous order granting PacTool summary judgment as to literal infringement (Dkt. 148) 

because PacTool had failed to submit evidence on every element of every claim. Dkt. 

304.

Due to a congested Court calendar, the parties filed a stipulation to reset the trial 

date to March 6, 2012. Dkt. 287. The Court granted the extension. Dkt. 290. PacTool 

failed to inform the Court that its testing was incomplete or that it was unprepared for 

trial at this time. It’s unclear whether Defendants were aware of this fact.

On December 5, 2011, PacTool filed a response to Kett’s motion in limine and 

stated that “PacTool is presently conducting testing to establish that the functional 

Case 3:06-cv-05367-BHS Document 339 Filed 06/11/12 Page 3 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

ORDER - 4

limitation of the claims is met. PacTool will permit, well before trial, a deposition of the 

person doing the testing if it intends to introduce this evidence at trial.” Dkt. 298 at 9.

On January 21, 2012, PacTool informed Kett that they intended to call the tester at 

trial and offered Kett the opportunity to conduct a deposition. Dkt. 310–4 at 2. Kett 

declined. Id.

On February 13, 2012, PacTool produced the supplemental report of its technical 

expert, Mr. R. Lee Rawls (“Rawls”). Dkt. 310–6.

At the pretrial conference, the Court continued the trial in lieu of excluding Rawls’ 

report. See Dkt. 325. The Court also set a briefing schedule on the issue of imposing 

sanctions on PacTool for the possible discovery violation. Id. On March 9, 2012, 

Defendants filed an opening brief. Dkt. 327. On March 16, 2012, PacTool responded. 

Dkt. 335. On March 21, 2012, Defendants replied. Dkt. 327.

II. DISCUSSION

A. Motions to Seal

There is a strong presumption of public access to the court’s files. With

regard to material submitted in support of nondispositive motions, this presumption may 

be overcome by a showing of good cause under Rule 26(c). Local Rule CR 5(g)(2). In 

this case, PacTool has shown that there is good cause to seal the requested material. 

Therefore, the Court grants PacTool’s motions to seal (Dkts. 329 & 334).

B. Sanctions

If a party fails to timely supplement an expert report, the party is not allowed to 

use that at trial. Fed. R. Civ. P. 37(c)(1). Instead of this sanction, the Court “may order 

Case 3:06-cv-05367-BHS Document 339 Filed 06/11/12 Page 4 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

ORDER - 5

payment of the reasonable expenses, including attorney’s fees, caused by the failure . . . 

and other appropriate sanctions.” Id. The Ninth Circuit reviews “every discovery 

sanction for an abuse of discretion [and gives] particularly wide latitude to the district 

court’s discretion to issue sanctions under Rule 37(c)(1).” Yeti by Molly, Ltd. v. Deckers 

Outdoor Corp., 259 F.3d 1101, 1106 (9th Cir. 2001) (citing Ortiz-Lopez v. Sociedad 

Espanola de Auxilio Mutuo Y Beneficiencia de Puerto Rico, 248 F.3d 29, 34 (1st Cir.

2001)). “[E]ven absent a showing in the record of bad faith or willfulness, exclusion is

an appropriate remedy for failing to fulfill the required disclosure requirements of Rule 

26(a).” Yeti, 259 F.3d at 1106.

In this case, the Court declined to impose the sanction of excluding PacTool’s 

expert report. During the pretrial conference, PacTool’s counsel conceded that exclusion 

of the report would be “devastating” to PacTool’s case. The Court reset trial and 

requested briefing on the issues of whether PacTool violated the discovery rules and 

whether other appropriate sanctions should be imposed. After review of the docket and 

the briefing on these issues, it is apparent that PacTool blatantly violated the rules of 

discovery without warning or request for leave to file a supplemental report. PacTool 

simply conducted its testing and served its expert’s report upon completion. Instead of 

addressing these facts, PacTool points the finger at Kett as well as the Court and argues 

that any violation was substantially justified. 

With regard to Kett, PacTool argues that additional discovery was justified 

because Kett drastically changed its position. Specifically, PacTool claims that 

Case 3:06-cv-05367-BHS Document 339 Filed 06/11/12 Page 5 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

ORDER - 6

Kett changed positions at the end of discovery in two fundamental ways. 

First, prior to fact discovery termination, Kett’s position was that 

“premature wear” inherently flowed from the “spacing distance.” Dkt. 249. 

Second, Kett argued that its own testing was protected as work product and 

refused to allow discovery.

Id. PacTool’s first argument is not supported by the record, and its second argument is 

irrelevant. Kett’s original position was that the claims were invalid and that the Court 

should not consider PacTool’s early dispositive motion. Dkt. 115. At the very latest, 

PacTool was on notice of Kett’s position with regard to the words of degree terms when 

Kett filed its opening claim construction brief on March 4, 2011. See Dkt. 170 at 14–23. 

The discovery deadline was five months later, which is ample time to complete the 

required testing. Therefore, PacTool has failed to show that any conduct by Kett 

substantially justifies the failure to follow the rules of discovery.

With regard to the Court’s order vacating its previous summary judgment order

(Dkt. 304), PacTool has also failed to show that this substantially justifies PacTool’s

conduct. PacTool claims that its

submission of evidence after the close of discovery was substantially 

justified because the Court did not change its prior position (which would 

not have required the testing evidence) until after discovery was terminated, 

and PacTool moved immediately, diligently, and continuously to develop 

that evidence and provided notice to both Kett and the Court of that testing.

Id. The Court was initially hesitant to rule on that summary judgment motion and sought 

each party’s input on whether the Court should consider the motion before a claim 

construction hearing. See Dkt. 106. On October 8, 2010, PacTool filed a brief requesting 

that the Court consider the motion before construing the claims of the patents in suit. 

Dkt. 111. In fact, PacTool stated that it “does not see a need for the Court to consider an 

Case 3:06-cv-05367-BHS Document 339 Filed 06/11/12 Page 6 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

ORDER - 7

additional claim construction proceeding in connection with its pending motion for 

summary judgment.” Id. at 8. On December 15, 2010, the Court agreed with PacTool 

and issued an order noting the motion for consideration. Dkt. 129. In that same order, 

the Court found that claim construction would be necessary and requested that the parties 

file a proposed schedule. Id. 

The fact that issues arose during claim construction that prompted the Court to 

vacate its previous order is not substantial justification for failing to follow the rules of 

discovery. Moreover, PacTool’s responsive claim construction brief specifically 

addressed the relevant issue of law. See Dkt. 188 at 7–14 (arguing that the claim terms 

are definite because the specifications provide an objective standard). PacTool was 

aware that it would have to prove this element of its claims in order to prove 

infringement. Therefore, the Court finds that PacTool has failed to show that its failure 

to follow the rules of discovery was substantially justified.

With regard to the imposition of sanctions under Rule 37(c)(1), the Court finds 

that appropriate sanctions are Defendants’ costs and fees that relate to the continuance of 

the March trial. This decision is based on the fact that, if PacTool had timely conducted 

the testing, Defendants would have had to conduct responsive discovery. It is not 

appropriate to hold PacTool responsible for the costs of discovery that should have 

occurred before the discovery deadline. 

Defendants have requested both monetary and non-monetary sanctions. Dkt. 327 

at 9–12. The Court imposes monetary sanctions consistent with Defendants’ requests in 

paragraphs 1 (the greater amount), 2, 3, 7, 8 (to the extent experts were prepared for the 

Case 3:06-cv-05367-BHS Document 339 Filed 06/11/12 Page 7 of 8
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

ORDER - 8

BENJAMIN H. SETTLE

United States District Judge

March trial), 10, and 11. Defendants may submit a fee schedule for approval when the 

extent of these expenses is known considering that travel plans may not be solidified for 

the August pretrial conference. The Court also imposes non-monetary sanctions 

consistent with Defendants’ requests in paragraphs 1, 2, 3, and 6 (if necessary). The 

Court declines to impose Defendants’ requests in paragraphs 4 and 5 because the 

discovery rules adequately protect Defendants if PacTool produces additional discovery.

III. ORDER

Therefore, it is hereby ORDERED that PacTool’s motions to seal (Dkts. 329 & 

334) are GRANTED and, pursuant to Fed. R. Civ. P. 37(c), the Court IMPOSES

appropriate sanctions as set forth herein.

Dated this 11th day of June, 2012.

A

Case 3:06-cv-05367-BHS Document 339 Filed 06/11/12 Page 8 of 8