Mere Employees of Adverse Parties Must Be Subpoenaed To Sit For Deposition

Magistrate Judge Horan’s decision in Jackson v. Stevens Transp., Inc., 3:14-CV-1416-M, 2015 WL 221087 (N.D. Tex. Jan. 15, 2015), notes the rule that, in general, employees of one’s opponent must be subpoenaed to sit for deposition, absent the opponent’s agreement to produce them voluntarily. Judge Horan wrote:

“A corporate employee who does not qualify as an officer, director, or managing agent is not subject to deposition by notice. Rather, the employee is treated as any other non-party; before being compelled to testify, he or she must be served with a subpoena pursuant to Federal Rule of Civil Procedure 45.” Karakis v. Foreva Jens Inc., No. 08–61470, 2009 WL 113456, at *1 (S.D. Fla. Jan.19, 2009) (citing authorities). “A party need not comply with Rule 45 and issue a subpoena if a non-party will consent to having his deposition taken by notice alone.” Morawski v. Farmers Tex. Cty. Mut. Ins. Co., No. 3:14–mc–21–D–BN, 2014 WL 717170, at *1 (N.D. Tex. Feb.25, 2014). “Absent such consent, however, to obtain an order compelling a non-party to appear for a deposition, the party seeking the deposition must not only notice the deposition, but must also properly serve the non-party with a deposition subpoena pursuant to Rule 45.” Id. (internal quotation marks omitted); see also McMahon v. Presidential Airways, Inc., No. 6:05–cv–1002–Orl–28JGG, 2006 WL 5359797, at *1 (M.D. Fla. Jan.18, 2006) (“Although most corporate litigants voluntarily produce subordinate employees, if the corporate party refuses to produce the person, the person must be subpoenaed.”).

In the case at hand, Judge Horan ruled that the relevant individual was not a “managing agent” of the opposing party such that he could not be compelled to sit for a deposition absent a subpoena:

Absent consent for Mr. Spratling to simply be noticed for deposition, which is lacking here, Plaintiff therefore must seek Mr. Spratling’s deposition through a Rule 45 subpoena. Plaintiff’s counsel admits that Plaintiff has not done so, and Plaintiff’s notice to Defendant’s counsel cannot qualify as a valid subpoena where there is no evidence that, among other requirements that Rule 45 imposes, Plaintiff personally served Mr. Spratling with a subpoena or tendered the required witness fees and mileage allowance.

Jackson, 2015 WL 221087, at *5.

I note that it typically costs less than $200 to serve someone with a subpoena (i.e., the required mileage and witness fee, plus the process server’s fee is not terribly expensive). This is presumably far less than it cost the parties to brief the motion-at-issue in Jackson, and attend and argue the Court’s hearing. A couple of things that could have justified the parties’ dispute (I have no idea, of course, what motivated the parties here)—the subpoenaing party thought the witness was a “managing agent” of the party (in which case a subpoena would not be necessary), the witness could not be located so that a subpoena could be served on him, unsettled (or relatively unsettled) law (i.e., whether non-N.D. Tex. case law would be found to control the situation at issue here), parties’ taking stands on principle (regardless of the cost), or the witness being located in a far-flung jurisdiction such that any enforcement proceedings would be relatively expensive (i.e., generally, if a subpoenaed witness is not within the Northern District of Texas, a motion to enforce the subpoena has to be filed in the court where compliance with the subpoena would take place).

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Generally, No Sur-Replies Are Permitted In The Northern District Of Texas

As Judge Means recently noted in Highmark v. Allcare (decision available here), sur-replies are generally not permitted in the Northern District of Texas:

Under the local rules, the movant is generally entitled to have the final word. See N.D. Tex. L. Civ. R. 7.1(e)-(f). Indeed, sur-replies are “highly disfavored” and are permitted only in “exceptional or extraordinary circumstances.” Lacher v. West, 147 F. Supp. 2d 538, 539 (N.D. Tex. 2001) (Lindsay, J.).

Because the plaintiff had not demonstrated that exceptional circumstances existed, its motion for leave to file a sur-reply was denied.

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The Supreme Court’s Kimble Opinion

I try to briefly summarize all Supreme Court opinions dealing with intellectual property law. I did not get around to summarizing last June’s Kimble opinion (available here) in a timely manner, but nevertheless now here it goes. In Kimble v. Marvel, the Supreme Court upheld—on stare decisis grounds—its 1964 decision in Brulotte v. Thys Co–Brulotte held that a patent license agreement cannot require the licensee to continue to pay royalties after the licensed patent (or the last of the licensed patents) expires.

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Judge Lynn Grants Motion For Leave To Amend Infringement Contentions

Judge Lynn issued an Order (available here) in RXPress Pharmacy v. Afgin Pharma allowing the amendment of infringement contentions. The Court set forth the applicable standard as follows:

Infringement contentions may be amended upon a showing of good cause. Am. Misc. Order 62, R. 3-7. Good cause may include newly discovered accused instrumentalities, newly discovered bases for claiming infringement, or newly discovered prior art references. Id. A party seeking amendment must state that the newly discovered accused instrumentalities, bases for claiming infringement, or prior art references were not known to that party prior to the motion despite diligence in seeking them. Id. In determining whether good cause exists, courts consider: (1) the reason for the delay and whether the party has been diligent; (2) the importance of what the court is excluding and the availability of lesser sanctions; (3) the danger of unfair prejudice; and (4) the availability of a continuance and the potential impact of a delay on judicial proceedings.

Applying this standard, Judge Lynn found that leave should be granted:

Here, Defendant requested leave to amend based on what Defendant contends are newly discovered prescription pads, prescriptions, and instructions. The amendments to Defendant’s infringement contentions are important, particularly to infringement and damages calculations, and Plaintiff will not be unfairly prejudiced because Plaintiff will have a fair opportunity to address the infringement contentions. Finally, the amendment should not delay judicial proceedings. Neither party argues that allowing Defendant to amend its infringement contentions will cause any delay in the case schedule.

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Judge McBryde Finds That An Amended Complaint Filed While Motion to Dismiss Is Pending Moots Motion to Dismiss

Judge McBryde made clear, in an November 10, 2015 Order (available here), that when a motion to dismiss is pending and the plaintiff amends its complaint, the motion to dismiss becomes moot: “So that there will be no confusion, i.e., no need for sur-replies to replies that will raise new grounds for dismissal, the court is ordering that the motions to dismiss, which address the original complaint, be denied as moot.”

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Judge Lynn Denies Defendants’ Motion for Leave to Join Acacia To Case As Defendant

On October 10, 2015, Judge Lynn issued an Order (available here) in In re Industrial Print Technologies, LLC Patent Litigation denying defendants’ motion for leave to amend their pleadings to add Acacia Research Group as a counter-defendant. Defendants argued that Acacia should be joined as a party because the plaintiff was Acacia’s “wholly-owned designated affiliate” and the plaintiff is “a grossly-undercapitizlied shell for [Acacia] to enforce patent rights” and simply the “alter ego” of Acacia. Judge Lynn rejected defendants’ arguments, and held that the proposed amendment would be futile as defendants could not assert any claims against Acacia.

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Judge Kinkeade Invalidates Two Global Tel*Link Patents Under Alice

On November 2, 2015, Judge Kinkeade issued an Order (available here) invalidating two of Global Tel*Link’s patents under the Supreme Court’s recent Alice decision on a motion for judgment on the pleadings filed by Securus. Judge Kinkeade found that both patents were directed toward an abstract idea and that the patents lacked an inventive concept. Accordingly, they were not patent eligible.

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Judge Lynn Transfers Case To District of Minnesota

On November 3, 2015, Judge Lynn entered an Order (available here) in Raz Imports v. Luminara Worldwide transferring the case to the District of Minnesota. The plaintiffs had filed a declaratory judgment lawsuit against the defendant one day after receiving the defendant’s cease and desist letter. Judge Lynn applied the Federal Circuit law on the “first-to-file” rule and found that the case was an anticipatory action. The Court then applied the Section 1404(a) transfer factors and ultimately decided that the case should be transferred to Minnesota.

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Federal Circuit Says Laches Defense Still Applicable To Patent Cases

On Friday, a fractured Federal Circuit issued its decision in SCA Hygiene v. First Quality Baby Products (available here). The Federal Circuit sat en banc and held that, notwithstanding the Supreme Court’s Petrella decision (which I discussed here), laches is still an available defense in patent infringement cases because, unlike in the Copyright Act, “Congress codified a laches defense in 35 U.S.C. § 282(b)(1) that may bar legal remedies.” Additionally, the Federal Circuit held that laches may also bar prospective relief (i.e., injunctive relief and ongoing royalties). A laches defense may affect ongoing royalties, but only “in extraordinary circumstances.”

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Facebook Patent Case Transferred to Northern District of California

Judge Kinkeade issued an Order (available here) transferring Word to Info’s (“WTI”) patent infringement lawsuit against Facebook to the Northern District of California. Notably, WTI is a Texas corporation with its principal place of business in Richardson, Texas, and the sole inventor of the seven patents-in-suit lives in Richardson, Texas.

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