Arendi S.A.R.L. v. Lg Electronics Inc.

Case: 21-1967 Document: 59 Page: 1 Filed: 09/07/2022 United States Court of Appeals for the Federal Circuit ______________________ ARENDI S.A.R.L., Plaintiff-Appellant v. LG ELECTRONICS INC., LG ELECTRONICS USA, INC., Defendants-Appellees ______________________ 2021-1967 ______________________ Appeal from the United States District Court for the District of Delaware in No. 1:20-cv-01483-LPS, Judge Leonard P. Stark. ______________________ Decided: September 7, 2022 ______________________ KEMPER DIEHL, Susman Godfrey LLP, Seattle, WA, ar- gued for plaintiff-appellant. Also represented by SETH ARD, MAX ISAAC STRAUS, New York, NY; JOHN PIERRE LAHAD, Houston, TX; KALPANA SRINIVASAN, Los Angeles, CA. ROBERT ANDREW SCHWENTKER, Fish & Richardson P.C., Washington, DC, argued for defendants-appellees. Also represented by STEVEN KATZ, Boston, MA. ______________________ Case: 21-1967 Document: 59 Page: 2 Filed: 09/07/2022 2 ARENDI S.A.R.L. v. LG ELECTRONICS INC. Before PROST, CHEN, and STOLL, Circuit Judges. PROST, Circuit Judge. Arendi S.A.R.L. (“Arendi”) alleged that various LG Electronics Inc. and LG Electronics USA, Inc. (collectively “LG”) products infringed its U.S. Patent No. 7,917,843 (“the ’843 patent”). First Am. Compl., Arendi S.A.R.L. v. LG Elecs. Inc. (“Arendi I”), No. 1:12-cv-01595 (D. Del. Oct. 3, 2013), ECF No. 34; see also J.A. 144–57 (original complaint). After the district court struck part of Arendi’s infringement expert report as beyond the scope of Arendi’s infringement contentions, Arendi filed a second patent-in- fringement suit against LG in the same court, again assert- ing the ’843 patent. Compl. for Patent Infringement, Arendi S.A.R.L. v. LG Elecs. Inc. (“Arendi II”), No. 1:20-cv- 01483 (D. Del. Nov. 3, 2020), ECF No. 1; J.A. 1583–91. The district court granted LG’s motion to dismiss the Ar- endi II complaint under the duplicative-litigation doctrine, determining that in both cases the same products were ac- cused of infringing the same patent. Arendi appeals from the dismissal. We affirm. BACKGROUND In Arendi I, Arendi sued LG (among others) in the U.S. District Court for the District of Delaware for infringing various Arendi patents. The District of Delaware, Arendi’s chosen forum, has specific rules governing initial discovery in patent cases. Section 4(a) of those rules required Arendi to “specifically identify the accused products and the as- serted patent(s) they allegedly infringe.” D. Del. Default Standard for Discovery § 4(a) (cleaned up). Then, under Section 4(c), Arendi had to “produce . . . an initial claim chart relating each accused product to the asserted claims each product allegedly infringes” after LG provided initial discovery on those products. Id. § 4(c) (emphasis added); see id. § 4(b). As explicitly outlined in the same local rules, “these disclosures are ‘initial,’ [and] each party shall be permitted to supplement.” Id. § 4 n.3. Case: 21-1967 Document: 59 Page: 3 Filed: 09/07/2022 ARENDI S.A.R.L. v. LG ELECTRONICS INC. 3 Arendi filed its Section 4(a) Disclosure in Novem- ber 2018 and listed hundreds of LG products as infringing four claims of the ’843 patent. J.A. 1121–37 (Section 4(a) Disclosure). Despite this lengthy 4(a) Disclosure and Sec- tion 4(c)’s instruction that Arendi “relat[e] each accused product to the asserted claims,” Arendi’s Section 4(c) Dis- closure provided claim charts for only one of those prod- ucts—LG’s Rebel 4 phone. These charts labeled the Rebel 4 as “exemplary.” J.A. 1167–262 (Section 4(c) Disclo- sure). In April 2019, two months after Arendi filed its Sec- tion 4(c) Disclosure, LG sent a letter to Arendi stating that the singular-product claim charts for the ’843 patent were insufficient under Section 4(c) and thus “LG underst[ood] Arendi’s infringement contentions [for the ’843 patent] to be limited to” the Rebel 4. J.A. 1469. LG remarked that, “[s]hould Arendi intend to accuse [non-Rebel 4] products, then Arendi must promptly provide claim charts demon- strating how these products infringe[] or explain why Ar- endi contends the current claim charts are representative of specific non-charted products.” J.A. 1469. Arendi did not respond to this letter or move to supplement its Sec- tion 4(c) Disclosure. As the litigation proceeded, Arendi and LG agreed on eight representative products to represent all accused products. Seven of the eight were non-Rebel 4 products. LG provided additional discovery on all eight representa- tive products, and Arendi still did not move to supplement its Section 4(c) Disclosure. So in October 2019, in response to an interrogatory relating to those eight products, LG re- iterated its “position that Arendi has only provided in- fringement contentions for [the Rebel 4]. . . . Arendi bears the burden to prove infringement and, if it so desires, to try to prove that” the Rebel 4 “is representative of one or more” of the non-Rebel 4 products. J.A. 1476. Without such a showing, LG continued, “Arendi has not provided suffi- ciently detailed contentions to know . . . its allegations of Case: 21-1967 Document: 59 Page: 4 Filed: 09/07/2022 4 ARENDI S.A.R.L. v. LG ELECTRONICS INC. infringement” for the ’843 patent. J.A. 1476–77. Still, Ar- endi did not move to supplement its Section 4(c) Disclosure. Arendi provided its expert report in August 2020 after the close of fact discovery in December 2019. LG moved to strike portions of that report because it allegedly “dis- closed—for the first time—infringement contentions for five of” the seven non-Rebel 4 representative products. J.A. 191 (emphasis omitted); see Arendi I, ECF No. 201. The district court orally granted that motion in Octo- ber 2020 under applicable Third Circuit law. The court de- termined that Arendi did not timely disclose these infringement contentions having “failed to fulfill its discov- ery obligations.” J.A. 1576–77 (citing Meyers v. Pennypack Woods Home Ownership Ass’n, 559 F.2d 894 (3d Cir. 1977)). In the court’s analysis, it repeated LG’s assertion that “LG understood Arendi was accusing only the Rebel 4” of infringing the asserted ’843 patent claims, J.A. 1577, since Arendi repeatedly failed to update its infringement contentions in the face of LG’s April 2019 letter and Octo- ber 2019 interrogatory response. Arendi still took no action to supplement its Section 4(c) Disclosure. Instead, Arendi filed its Arendi II complaint in Novem- ber 2020 in the District of Delaware. This complaint also asserted that LG’s non-Rebel 4 products infringed the ’843 patent. LG moved to dismiss the complaint as duplicative since all of the non-Rebel 4 products accused in Arendi II were also accused in Arendi I. The district court granted that motion without prejudice via an oral order in April 2021, J.A. 3, 50–64, and Arendi appealed on May 18, 2021. That same day, Arendi finally moved to supplement its Section 4(c) Disclosure in Arendi I. In March 2022, the dis- trict court denied that motion and a pending LG motion for summary judgment of noninfringement of the non-Rebel 4 products without prejudice “[i]n view of the potential im- pact of [this] pending appeal.” Arendi I, ECF No. 354. The Case: 21-1967 Document: 59 Page: 5 Filed: 09/07/2022 ARENDI S.A.R.L. v. LG ELECTRONICS INC. 5 court also noted that the motions were subject to renewal after a decision in this appeal. Id. We have jurisdiction under 28 U.S.C. § 1295(a)(1). DISCUSSION I For a “procedural question that is not unique to [our] exclusive jurisdiction,” this court applies and gives “defer- ence for regional circuit law on a concern for ‘consistency of future trial management.’” Eolas Techs., Inc. v. Microsoft Corp., 457 F.3d 1279, 1282 (Fed. Cir. 2006) (quoting Biodex Corp. v. Loredan Biomedical, Inc., 946 F.2d 850, 857–58 (Fed. Cir. 1991)). Under the circumstances of this case, the question of dismissing the Arendi II complaint as duplica- tive of the Arendi I complaint involves a procedural issue: a district court’s power to dismiss a case as duplicative is “part of [a district court’s] general power to administer its docket,” Fabics v. City of New Brunswick, 629 F. App’x 196, 198 (3d Cir. 2015) (nonprecedential), that supports “wise judicial administration,” Serline v. Arthur Andersen & Co., 3 F.3d 221, 223 (7th Cir. 1993), and “conservation of re- sources,” Adam v. Jacobs, 950 F.2d 89, 92 (2d Cir. 1991). We, therefore, apply the Third Circuit’s standard of review- ing dismissals of duplicative complaints for abuse of discre- tion. See Jenn-Ching Luo v. Owen J. Roberts Sch. Dist., 737 F. App’x 111, 115 n.4 (3d Cir. 2018) (nonprecedential); Fabics, 629 F. App’x at 198; Schneider v. United States, 301 F. App’x 187, 190 (3d Cir. 2008) (nonprecedential). A district court abuses its discretion when it reaches an er- rant conclusion of law, improperly applies law to fact, or makes a clearly erroneous finding of fact. Weitzner v. Sanofi Pasteur Inc., 909 F.3d 604, 613 (3d Cir. 2018). The duplicative-litigation doctrine prevents plaintiffs from “maintain[ing] two separate actions involving the same subject matter at the same time in the same court . . . against the same defendant.” Walton v. Eaton Corp., Case: 21-1967 Document: 59 Page: 6 Filed: 09/07/2022 6 ARENDI S.A.R.L. v. LG ELECTRONICS INC. 563 F.2d 66, 70 (3d Cir. 1977) (en banc). Whether the Ar- endi I and Arendi II patent-infringement complaints in- volve the same subject matter is determined under Federal Circuit law. Senju Pharm. Co. v. Apotex Inc., 746 F.3d 1344, 1348 (Fed. Cir. 2014). 1 “[A] cause of action is defined by the transactional facts from which it arises[] and the ex- tent of the factual overlap.” Id. at 1349. There are two primary “areas of factual overlap” to consider in this anal- ysis: (1) “the overlap of the product[s] . . . accused in the in- stant action with the product[s] . . . accused in the prior action”; and (2) the overlap of the patents in both suits. Id. 1 Senju Pharmaceutical involved an issue of claim preclusion—also known as res judicata—a doctrine that precludes later “repetitious suits involving the same cause of action” after a prior suit has reached a final judgment. Senju Pharm., 746 F.3d at 1348 (quoting C.I.R. v. Sunnen, 333 U.S. 591, 597 (1948)). The duplicative-litigation doc- trine does not require a final judgment to bar a later com- plaint, but it does involve a similar inquiry in that it also looks to whether the later complaint is, essentially, repeti- tious. See Adams v. Cal. Dep’t of Health Servs., 487 F.3d 684, 688–89 (9th Cir. 2007) (“To determine whether a suit is duplicative, we borrow from the test for claim preclu- sion.”); Hartsel Springs Ranch of Colo., Inc. v. Bluegreen Corp., 296 F.3d 982, 987 n.1 (10th Cir. 2002) (“[I]n the [du- plicative-litigation] context, the appropriate inquiry is whether, assuming that the first suit were already final, the second suit could be precluded pursuant to claim pre- clusion.”). Given the particular facts of this case, though, we also recognize an argument can be made that whether the Ar- endi II complaint is duplicative of the Arendi I complaint concerns an understanding of the case’s procedural history and the application of local rules rather than an issue pe- culiar to patent law. But we need not explore this further because the result would be the same either way. Case: 21-1967 Document: 59 Page: 7 Filed: 09/07/2022 ARENDI S.A.R.L. v. LG ELECTRONICS INC. 7 (emphasis omitted). The only issue in this appeal is whether the district court properly applied that law to the facts of this case. II The district court determined that Arendi II was “im- properly duplicative of Arendi I.” J.A. 50–51 (italics added) (citing Walton, 563 F.2d at 70). As the district court ex- plained, under applicable Federal Circuit law, cases in- volve the same subject matter “where the same patent is asserted and the accused products are at least essentially the same or identical.” J.A. 51–52 (citing Senju Pharm., 746 F.3d at 1348). The district court reasoned that, since “[i]t’s undisputed that . . . the same products . . . are al- leged to infringe the same patent” in both cases, “here, we’re in the identical[-product] situation.” J.A. 51–52. Arendi challenges the district court’s determination that Arendi I and Arendi II involve the same subject mat- ter. Arendi does not contest that it asserts the same patent in Arendi I and Arendi II, nor could it. Arendi does, how- ever, dispute that the products it accused in Arendi II are “identical” to products it accused in Arendi I. Arendi tries to argue that the products accused in Ar- endi I and Arendi II are not identical because there is no overlap between the accused products. Arendi asserts that this lack of overlap is a consequence of the district court’s grant of LG’s motion to strike parts of Arendi’s expert re- port in Arendi I. According to Arendi, the district court de- termined that Arendi had not sufficiently disclosed its intent to accuse the non-Rebel 4 products in Arendi I such that those products were effectively not at issue. See Oral Arg. at 2:13–3:40 (citing J.A. 1576–77). 2 And under this logic, Arendi maintains, there is no accused-product 2 No. 21-1967, https://oralarguments.cafc.uscourts.g ov/default.aspx?fl=21-1967_08012022.mp3. Case: 21-1967 Document: 59 Page: 8 Filed: 09/07/2022 8 ARENDI S.A.R.L. v. LG ELECTRONICS INC. overlap: the non-Rebel 4 products accused in Arendi II can- not be identical to products accused in Arendi I because Ar- endi I involves only LG’s Rebel 4 phone. See Appellant’s Br. 21–22, 27. But Arendi misunderstands (if not misrepresents) the district court’s Arendi I order. As the district court ex- plained when dismissing the Arendi II complaint, although Arendi insists the district court “ruled” that the non-Re- bel 4 products “had not been accused in Arendi I,” “[t]hat is not correct.” J.A. 54 (italics added). The court did not grant LG’s motion to strike parts of Arendi’s infringement expert report because Arendi failed to sufficiently accuse the non- Rebel 4 products. The court granted the motion to strike because Arendi “failed to fulfill its discovery obligations” with respect to those products, so Arendi’s infringement al- legations in its expert report were procedurally untimely. J.A. 1576–77. And it’s hard to find any basis whatsoever for Arendi’s assertion that the non-Rebel 4 products were never “at is- sue” or “litigated” in Arendi I. Appellant’s Br. 22, 25. Ar- endi listed the non-Rebel 4 products in its Section 4(a) Disclosure, served interrogatories about the non-Rebel 4 products after the parties agreed to seven non-Rebel 4 rep- resentative products, received discovery related to those products, and included non-Rebel 4 products in its expert report. See Oral Arg. 7:02–50 (Arendi admitting that it considered all products to be at issue when it served its ex- pert report). Indeed, those non-Rebel 4 products are the focus of Arendi and LG’s renewable motions in Arendi I. Under these circumstances, it is apparent that the non-Re- bel 4 products were “at issue” or “litigated” in Arendi I. So what’s left? It is Arendi’s argument that the non- Rebel 4 products are “materially different” than the Re- bel 4. Appellant’s Br. 21–22. But again, this argument fails because it does not pertain to the question at issue in this appeal: comparing the Rebel 4 with non-Rebel 4 Case: 21-1967 Document: 59 Page: 9 Filed: 09/07/2022 ARENDI S.A.R.L. v. LG ELECTRONICS INC. 9 products says nothing about the overlap between the non- Rebel 4 products accused in Arendi I and the non-Rebel 4 products accused in Arendi II. And it is this latter compar- ison that governs whether the Arendi II complaint is dupli- cative. 3 Senju Pharm., 746 F.3d at 1349. Left with the simple and obvious fact that the non-Re- bel 4 products accused in Arendi II are identical to products accused in Arendi I, we determine that the district court did not err in dismissing the Arendi II complaint as im- properly duplicative. CONCLUSION We have considered Arendi’s remaining arguments but find them unpersuasive. For the foregoing reasons, we af- firm the district court’s dismissal of the complaint. AFFIRMED 3 At oral argument, Arendi requested that this court at least opine on the former comparison to “give guidance to the district court” in Arendi I. Oral Arg. at 31:58–32:55. We consider this request unusual, to say the least, and un- surprisingly decline to comment on issues outside of this appeal.