Last Week in Texas with Michael Smith | Episode 24

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The Eastern District provides us with a side-by-side comparison of motions for amending contentions. Together, these decisions illustrate the important facts for both sides. Judge Gilstrap also provides us with a wonderful example of what it takes to win a 12(c) motion and strike down a patent under 101. Compare this outcome to Judge Albright’s “uphill scrabble” to win a Rule 12 motion on 101. Finally, Judge Albright gives updated guidance on alternative service and about modifying his model protective orders.

Episode Transcript


Wayne Stacy, Michael Smith


Wayne Stacy  00:00

Welcome, everyone to the Berkeley Center for Law and Technology’s Last week in Texas. We are here on April 27. And actually going to cover a couple of weeks because Michael has been on a wonderful voyage. So once again, we have the great Michael Smith with us. Fresh back from a transatlantic trip. So welcome, Michael.


Michael Smith  00:21

Thank you. It’s very good to be back.


Wayne Stacy  00:23

Well, well, first of all, the Transatlantic trip, without introduction, you have to tell us where you’ve been and how you got away from the law office?


Michael Smith  00:31

Well, we had I was in the last trial about a month ago, and I told my wife, I don’t think I can make it till July. I’ve had seven trials in federal court in the last year, which is a little heavy. So we decided to take a transatlantic and just relax for a couple of weeks. So we left out of Fort Lauderdale, went 60 days to the Azores, and then a couple of ports and France and then ended up in Copenhagen, Denmark, and had a very relaxing trip. It’s first trip, we’ve taken like that without the kids in 12 years. So that was very nice.


Wayne Stacy  01:04

Well, it’s a good way to get past seven trials.


Michael Smith  01:08

It is. My wife saw me sleep 16 hours the first night on the ship, and she thought something was wrong. I said, No, I’m just out of email range. That’s all.


Wayne Stacy  01:20

There’s there’s something to be said for that. I did enjoy my time with the federal government when somebody told me take all your vacations outside the United States, because you’re prohibited from taking any communication device US communication device across the border. So if you go to Mexico, and you respond, it’s actually a crime. 


Michael Smith  01:41

Gotta remember that. 


Wayne Stacy  01:43

I got it. I understand. And what I saw is people taking their vacations to Mexico or Canada or Europe, and I got it. I understand. So well with with that. I guess we get back to the practice of law. And let’s start with the the Eastern District of Texas. 


Michael Smith  02:02

Well, speaking of the practice of law, one of the things that happens after you try a case is there are post verdict rulings, and I had an interesting week, three weeks ago, on Wednesday, I had a judge set aside a verdict in a case. And then the next day on Thursday, I had a judge affirm the jury’s verdict in another case. So the first one was granting a new trial on the patent case and Marshall, where Judge Gillstrap granted the plaintiffs request for a new trial and assessed half the plaintiffs expenses preparing for the first trial on the defendant. And the order was based on the defendants discovery the night before the trial started, that the client had started selling a product with a new part. So the court determined that what would be appropriate in that case would be to set aside some rulings and have the party start over. And the parties have already submitted a schedule to conduct a retrial in September. That was the bad news. The good news came in the next day, when we got orders by Judge Mazanik. In a medical malpractice and Rico case that affirmed the jury’s findings in the face of a Motion for Judgment and matter of law on the RICO claims. It was a very complicated trial we had last summer with Judge Lezant. So the order is very detailed, goes into what what the case was about, what the jury did what the law required, and then applies the standards to that. So So a very good, very good couple of opinions from Judge Lezant there.


Wayne Stacy  03:27

Well, that’s that that first one from Judge Gillstrap the level brands case that the new trial was granted with half of the expenses. An interesting ruling, but a pretty good description of why that happens there. 


Michael Smith  03:42

The court does lay out his rationale. He lays out how he how he sees what happened. The parties had very, very strong opinions about what happened and what didn’t happen. And the court figures out what he thinks is the appropriate remedy in that case, and directs the parties to proceed accordingly.


Wayne Stacy  04:02

And I’m not sure if you can answer this, but it seemed to me the judge came up with what you said a remedy rather than the necessarily a sanction. He was just trying to make things right.


Michael Smith  04:13

Oh, no, no, that’s that. That was that was clear. I think from the order he was trying to figure out what do we do to get back to the point where the case that’s in front of the jury can include what what all the parties claim are the necessary facts, and he opted for, okay, just go back and retry it, add in this additional. And then the parties will go back, do additional discovery, and then we’ll see what the what actually happens at the new trial. But it’ll be an interesting case. I was I was fortunate earlier in my career that to have essentially three consecutive infringement cases with the same plaintiff against different defendants, but it was the same trial team. It was the same product. It was a supplier that was defending the cases. So I’ve been in a situation where we tried the same case back to back over and over and over. So this isn’t the first time I’ve been through this, it will be an interesting experience. But it’s kind of fun trying the same case, again, because the things that work the first time may not work the second time or, or vice versa. I mean, you realize, after you see your witnesses, how they do the first trial, you can make some decisions in the second trial about what you’re going to do. But the other nice thing about it is, and as hard fought as these cases are, is that what I’ve seen is when you try a case against the same lawyers, when you see them again, I mean, you really don’t like these people the first time, but by the time you’ve been through the fire with them, they end up being people that are good friends that you enjoy working with. So I can already tell we’re working together better, the longer things go on. So that’s that’s one of the one of the benefits. I may not be happy about having to try a case over. But there there are a few fringe benefits to it.


Wayne Stacy  06:02

Well, and for younger lawyers that are looking at this, it seems that one takeaway is there’s there’s a difference between sanctions for bad behavior, yes, and a remedy to fix something that was a mistake or less than optimal, just to get back to fair.


Michael Smith  06:19

Right. And this is a good example of lawyers finding out something and taking actions, and the court recognizing the actions that they took, and then acting accordingly. So it’s it’s I mean, there are things to be learned from it.


Wayne Stacy  06:34

Well, you know that some lawyers would be tempted to find something out and then promptly forget it the eve of trial and try to get by with it if they could. And that’s always the wrong choice.


Michael Smith  06:45

Right, exactly. Exactly the wrong choice. You mentioned that something cannot be a sanction. If that had been the action, you might have seen a different kind of order.


Wayne Stacy  06:55

Yes. Well, we could move on to some more Marshall work. A couple of verdicts here that are pretty interesting.


Michael Smith  07:07

Yeah, we had 2 since the last time we spoke, we’ve had two patent verdicts out of Marshall in one case and Judge Gillstrap’s court. The jury found that the defendant willfully infringed some patents having to do with the pharmaceutical and awarded 41.8 million. A couple of weeks later, a martial jury in Judge Gillstrap’s court found that the defendant had not infringed any of the asserted claims. And there weren’t any defenses that were submitted. Apparently there weren’t any invalidity claims. It’s just infringement. So it’s kind of what we what we’re used to it’s ping pong across the street, plaintiff will win one defendant win one plaintiff all in one defendant win one. So that’s, that’s kind of what we’ve seen over the last few weeks.


Wayne Stacy  07:48

Though, Michael, I would say that these two cases look different in the way they were set up, you know, the first one had your standard infringement and your willful infringement. So there was a lot of opportunity to, you know, as George Chandler used to say, back the dump truck up, right, you know, tell a better story. And then the that was the, the Samco case, but this Seguin case, that’s kind of an odd verdict form where it’s all infringement. How did that get there?


Michael Smith  08:18

Well, well, the that’s Judge Gillstrap’s typical verdict form, he submits a Do you find that any of the claims were infringed? In most cases as one question whether the parties want something different or not? He has a philosophy that that’s a better way of submitting it. So that was the normal question. What was unusual was that there then wasn’t a invalidity question after it. But the defendant simply may have decided that they didn’t have any invalidity arguments to make, and that the case was much more better suited for infringement. I remember a case and trial back in in Tyler back in 2007, where the local counsel finally convinced the defendant don’t contest infringement, just contest invalidity. And that ended up being the key decision that got a defense verdict in Judge Davis’s court because the defendant wasn’t getting whipsawed taking a bad infringement position and having that damage, their invalidity position, they may have decided here our invalidity positions are complicated. They’re not really great. Why don’t we just make this about infringement. So that may have been a deliberate tactical decision to not assert everything that you could assert?


Wayne Stacy  09:34

Well, and this is, I guess, an example of how it can, how it can work out. It also helps with your timing, you get a little more time to put on your non infringement case.


Michael Smith  09:46

Well, it does. And my recollection is I was as I said, I was on vacation when that came out, but I think the verdict came out on Thursday. So that was one of those four day patent trials, we normally if it’s a full boat, it takes five days. The one I had in February was a four day and that is a little unusual. So so it did look like it was a simpler case. It may also have been a case where the plaintiff just simply didn’t have a very strong case, the defendant felt like taking it to trial, and didn’t need that long to dispose of it. So I’m sure there’ll be 285 motions and, and J malls and things like that. And I’ll be interested to see what the court has to say about about the relative merits of the case. That’s always interesting.


Wayne Stacy  10:31

Well, the next case that maybe my favorite of the last two weeks is the the Longhorn case. And we all know that there’s constant wrangling over non infringing alternatives and expert opinions. But I love this case, you read the first half of it as the lawyer that filed for the motion, you’re excited, and then you get to the second half, and got so excited, right and whips on.


Michael Smith  10:57

And again, that’s the same case that we’ve just been talking about the patent verdicts, so that might have something to do with what got presented. But yeah, the plaintiff dropped a patent a product and the defendant realized, Oh, I just got a gift here. This is a non infringing alternative. And the judge says, Okay, that was sufficiently disclosed because of how late it came out. But you still have to go through the analysis. You just can’t say, oh, the plaintiff was asserting it. Now. They’re not, you have to go through the analysis. So that that is kind of a teaching moment to me that if I get something like that, I need to make sure that my experts still steps through the different requirements in order to express an opinion on it.


Wayne Stacy  11:35

Right, you it’s such a straightforward proposition, you can’t rely on non assertion of infringement as affirmative proof of infringement. Just build out your claim charts.


Michael Smith  11:47

Right. Right. Right, exactly. They could have done this, but didn’t but again, it worked out. Okay. For their sad, anyway.


Wayne Stacy  11:56

Well, it’s a it’s a really good lesson. And I would suspect that the rest of the courts will will follow that if they haven’t already. So well, then we move forward to the United States Automobile Association case, that’s got a good selection of pre trial motions to learn from,


Michael Smith  12:17

oh, yeah, it’s got a lot of good stuff in here. It’s got the the court telling the parties that you don’t need rulings on matter of law bars, the doctrine of equivalents. You don’t need to worry about that at trial, because I’m going to take that up after trial. The part that I found interesting was almost every dobbert motion in a patent case, you’re arguing that the expert is not following the courts can claim construction. And I almost can’t recall a case where a court accepted that the court says no, no. This is within the client courts claim construction. What’s interesting about this case, is that the court repeatedly finds that the expert is offering opinions that are in one case, he’s offering an opinion that’s inconsistent with the requirements of the controlling law for infringement, but in numerous examples, he’s saying no, what the expert is saying here is adding a restriction that isn’t in the claim construction opinion. So this is one that I would study, to give me an idea when I’m looking at whether to challenge an expert’s opinions as not complying with the Markman ruling. Here’s an example where a court found that an expert did that because that’s pretty rare.


Wayne Stacy  13:26

I was I was scratching my head trying to think when I’ve actually seen that when. And most lawyers will file them knowing that it’s either preserving or it’s a flyer.


Michael Smith  13:37

Well, yeah, and sometimes you might get some useful language from the court. Like, for example, I had a trial. I think back in February, where the court didn’t find that one side, one on the claim construction. But but but in ruling against some motion seeking summary judgment, you can kind of tell where the court was, and that gave you a better idea what the case was going to be about that? Yeah, no, I’m with you. I was very surprised to see the court say, Yes, this was outside of the claim construction.


Wayne Stacy  14:06

So we have a pair of cases from Judge Gill strap the era Gina technologies cases, I’m not sure how they want want their name pronounced there. But this pair of cases together, really, really informative. Individually, you know, they’re kind of run of the mill, but to see them back to back on the same set of facts really does tell us about the standard for amending contentions and what the facts need to look like.


Michael Smith  14:33

Yeah, this is a redness world we just live in it. They that this is a plaintiff that has cases in martial. They have cases in Waco. So we’ll be don’t be surprised when we start talking about the Western District and we’re still talking about the same plaintiff. But no, you’re absolutely right. We had two rulings on motions to elite for leave to amend contentions from the same judge in the same case with the same parties. And he granted it in one case finding that The Party had exercised sufficient diligence. He denied it on the other motion, saying you didn’t exercise sufficient diligence. This information was publicly available since 2003. So it gives you a chance to see a couple of examples of what’s required in terms of diligence, which I think is very important. We even have a third ruling from Judge Gill strap on contentions in the last three weeks. And that was in the in the right question case, where the defendants arguing that a plaintiff’s contentions are insufficient. So again, we have the judge looking at what I think is the key operative documents in a patent case, the plaintiffs infringement contentions and the defendants invalidity contentions.


Wayne Stacy  15:43

Well, in, in all of these really seems to come down to the facts, you know, it’s not necessarily the, you know, the tiny details in the charge that people want to quarrel about. But like, in the first case, it was third party discovery. And we all know how challenging third party discovery can be.


Michael Smith  16:05

Right, and we’re going to be talking about some judge Albright opinions later trying to figure out how to phase that in. And this case is dealing with the difficulties when that discovery comes in later in the case. At what point can you still use that to add arguments to your side of the case?


Wayne Stacy  16:22

What I love about those two cases is when you read them, my response to both of them was, yeah, that makes sense. It seems fair, which may be your best best measurement tool in dealing with these kinds of kinds of amendments.


Michael Smith  16:38

Right, right. There are a lot of these disputes that aren’t raised because you look at it, and you say, oh, yeah, well, of course, they did that within a reasonable amount of time. This was a case where it did get disputed. And and the motions in that case only had a 5050 chance of prevailing. The third motion is a little bit different. Well, it’s very different one, it’s a motion to strike the plaintiffs contentions, complaining that? Well, you’re saying this product is representative, and we think that’s insufficient. And Judge Gill strap said, No, the plaintiff had identified what they think is representative and why they think it’s representative that puts you on notice here. So that’s really as far as you need to do. But he also says one other thing. He says that you’re the defendants complaints about the sufficiency of the contentions are essentially non infringement arguments. Well, that’s not the place to raise those. So I mean, that I really don’t think I need to be spending my clients money. If I understand what the claims are, I don’t need to be moving to strike contentions because I think they’re factually insufficient. If I need additional detail, there are ways to get that but the wrong thing to do is to come in and say, well, they’re insufficient, because clearly they don’t infringe. That’s, that’s not the argument to make there.


Wayne Stacy  17:57

It least in judge Gill straps courts, you know, there are other other courts around that are a little bit more interested in almost the idea of summary judgment on these contentions. They’ll dig in and say, well, that doesn’t make sense. That couldn’t be I understand. But that doesn’t seem right.


Michael Smith  18:19

That’s a very good point. And I remember early on when we were in the Eastern District, shortly after the district started using the Northern District of California as rules, the issue came up of how detailed to your contentions need to be. And you see opinions out of the Northern District of Texas that require a certain level of detail. And then you start seeing opinions from the Eastern District of Texas saying this is really intended more as a discovery aid to identify the claims, identify the arguments not provide all the detail. So you’re absolutely right, you need to know which court you’re in and what that Judge requires. In terms of the details. This is a motion that might well have been granted in a different court that views the contentions is playing a different role.


Wayne Stacy  19:03

When as we move on to the 101 decisions, and judge Gill straps court, we have a nice pair of these. And I if you would have told me there was a 1212 C motion on a 101 judge Gill straps court, I would have bet my car that it was denied. Right. Just knee jerk reaction. And then this case comes along. In I would have I would have lost and it’s a really, we eat eats a decision that looks more like a Northern District of California.


Michael Smith  19:34

Right. And we do see these decisions. They’re not common and for reasons that Judge Albright employs the vernacular a little bit more explaining why they’re not granted early on. But these two opinions kind of show. As you said the first one the Miller Mandela case that’s really kind of shocked the exception that shows the rule. It’s hard to get judge Gill strap to say that subject matter of this patent is ineligible for patent protection. I’ve heard him say at seminars before, you’re not asking me to simply invalidate this patent, you’re asking me to hold that the subject matter of this patent is not eligible. So nobody can get a patent in this subject matter. So it’s it’s, it’s a little bit bigger lift for the court than I think people recognize at times. But But this obviously was an example where somebody brought it as a 12. C, relatively early in the case. And it worked well as


Wayne Stacy  20:34

a great example, and you’ll look through it, of how you know how judge Gilstrap views the thought flow to get to that. And I thought you get to the end of it, you’re like, Yeah, that’s absolutely right. But you could have taken his name off of it and put somebody from the Northern District, California, and I would have found it routine out here. Right. Unusual there.


Michael Smith  21:00

Well, in one thing that I’ve noticed is a lot. It seems to have a lot to do with how much federal circuit authority there is on the specific subject matter. It early on Judge Gill strap would deny a lot of these motions because there wasn’t anything indicating that this was abstract. Well, then is the case of start piling up from Lafayette Square, saying this is abstract. This is abstract. This is abstract. They’ve now got a roadmap. They know where the boundaries are. And this is my assumption was this was a case where a plaintiff has got a patent that’s right in the middle of an air of a thicket of Federal Circuit decisions that say this is not acceptable. So that that I think has a lot to do with it. They didn’t have those cases early on, they have it now.


Wayne Stacy  21:50

Well, the second case comes out the opposite way, though. It’s still without prejudice decision. But the the island intellectual property case, the Court turned to claim construction and said Not yet.


Michael Smith  22:05

Oh, absolutely. These are absolutely without prejudice. But in this case, the court could point to specific claim construction disputes that precluded getting to the patentable subject matter issue. And, again, the cases we’re going to talk about from Judge Albright address this as well. It’s just hard to get to that early on. If a plaintiff does a good job of identifying claim construction disputes that that really prevent the court from getting to the subject. And again, the judge, our judges in the Eastern District, we’ve had Federal Circuit judges come down and handle dockets as district judges. And they commonly are telling I recall seeing them say at seminars and events they were speaking it, wait until you’ve got a claim construction white until you’ve got your ducks in a row, then you can kind of tell where you are on this stuff. So it’s not surprise. This is the normal ruling here. And the reason why I think a lot of defendants defer putting the money into these until your pass claim construction


Wayne Stacy  23:10

was we we move away from the Eastern District. We will stop in the Northern District and talk about the Zilker technologies case. We talked so much about discretionary transfer. Sometimes we forget about just straight up improper venue.


Michael Smith  23:28

Exactly. And Zilker was a case where the plaintiff was making the argument we’ve seen a number of times in the Western District recently well with the defendants got a lot of employees in the district that work from home. They’ve got assets. They’ve got all this activity in the district and judge Schoeller said no, that’s not enough for a regular and established place of business. It’s not a difficult finding. It’s the sort of thing that Judge Albright has routinely rejected in similar facts situations. In the last year or two ever since we got in right Cray in 2017, we’ve had a pretty good idea that there’s a pretty high threshold to predicate your regular and established place of business on people working from home. And here these were just generic people work from their computers at home and that’s not enough.


Wayne Stacy  24:17

Yeah, it’s uh, seems to be a common theme popping up. Venues not going to be expanded just because maybe the world has changed a little bit to allow remote work.


Michael Smith  24:27

That’s that’s that’s very much the case.


Wayne Stacy  24:31

Well, then we have I like the way you you’ve labeled this it’s a sanction for failure to proofread. That’s terrifying to most lawyers. But the magnet cross case, gives a gives a wonderful example of Judge Lynn kind of maybe slapping somebody’s hand and warning others and George Lynch really not known for that. So this must have really irritated her.


Michael Smith  24:59

So We must be talking about a different slant. No, I thought this was I thought the same thing I knew the law. I know the lawyer, I’ve had cases against slavery that was called out here. And it was a brutal set of facts. They had filed a document that was copied and pasted from a prior case that involve the same patent, but different claims and different arguments. So it was just a horrible, horrible example of a lawyer at the hearing getting confronted with that what they had filed was not in the right in the right case. So it was pretty bad. It was interesting that Judge Lynn, even though there hadn’t been a separate motion under Rule 11, the court said, I’ve given you sufficient cause and sanction plaintiff in the council there. The other interesting thing about this is we just got through talking about how as a plaintiff, you defend against an early one on one motion by saying, look, we’ve got claim construction disputes, Judge, we’ve got these three terms, that we need to know what they say, in order to know if this patentable subject matter. Well, here the plaintiff doesn’t quite get that far. Judge Lynn, granted summary judgment of patent eligible subject matter. And when the plaintiff was saying, Oh, wait, we need to claim construction on this judge. Judge Lynn points out well, at the hearing, you only identified one term as requiring construction. And it’s not a term in the asserted claim. Well, I mean, I mean, you got to do a better job than that if you’re going to try to play rope a dope on a one on one issue. So but it was it was a there but for the grace of God go I mean, that rear reiterated what we all need to be aware of as far as our obligation to know what’s in our pleadings, and not rely too much on the cut and paste


Wayne Stacy  26:46

toolbar. Well, if you just close your eyes for a minute, you can feel the the bottom drop out of your stomach when when Judge land raise, raise that from the bench say, hey, that turns not in any of your asserted claims. Absolutely. It’s not a good feeling as a lawyer.


Michael Smith  27:02

Absolutely. I was reading a draft filing a few days after that closely. And I saw something that would have been a similar situation where someone was was making an assertion that was factually just I mean, it was a mistake. It was the same thing. It had come from a different pleading. And nobody had checked it. And fortunately, I checked it. It was like, wait a minute, wait a minute, wait a minute. Wait a minute. Is this correct? Oh, no, that was from another case. All right. Well, I’m very happy I checked on that. But that’s, that’s just a lesson to all of us. Check everything. Because there may be a good reason why something was in an early draft of the document. But before you put your name on it and file it, then stand up at a hearing on it, you got to make sure it’s like we talked about the other day, throw it out, throw your co counsel into the mess. Make sure it’s right in the first place.


Wayne Stacy  27:55

Well, I remember one of my first mentors told me pretty pretty sound advice, you sign it, you own it. Yes, yeah. And he would not sign documents alone. Interesting practice. He’d signed them with you. But if it was yours, they both names went there is a very junior lawyer. That’s that act of signing was nerve racking. And it should have been and that was the teaching lesson.


Michael Smith  28:24

Well, and that was something we saw several months ago, Judge Albright sanctioned all the lawyers that signed that we’re on a document all of them because of a representation in the document. So if your name was on the signature block, that you you were sanctioned, and you had to do the the training and the whatever, because he took that very seriously. And essentially reiterated the obligation you put when your name is on the pleading. And I took that to heart a month or so after that. I had a situation where a client was about to file something. And I had, I had to talk them out of some specific language. I never got to the point where I said, if you put that in there, my name isn’t going to be on the pleadings. But that’s what the result would have been. Because I’m taking guidance from what the judges are saying about I don’t want the judge pointing to me and say, Why did you think this was an appropriate thing to say? Well, I didn’t Well, then why did you sign it? Why did you let them put your name on it? Judge Gill strap said that at a bench bar in the last it may have been last year where he talked about the obligation that you have to keep your client from filing things that you know they shouldn’t be filing and when I was telling him and saying well, but Your Honor, we get a lot of way of pressure from from CO counsel. We have pressure from clients. He essentially said I don’t care, as he was polite enough not to say that’s why you get paid the big bucks, but essentially that was it. That’s your job. It’s your job to stop them from doing things that you You know, are going to not be well received and are going to damage their their position in the case.


Wayne Stacy  30:07

Well, it was we we looked at these ineligible in eligibility claims, we moved to the Southern District of Texas. And this is one that when I looked at it raised some eyebrows because the technology it issues. It’s a gasoline manufacturing methods. It’s a method for blending butane into gasoline, which struck down under why.


Michael Smith  30:29

Right you had you had a court that granted the motion, as to everything but patent misuse, not infringed. Not not eligible. I mean, summary judgment on everything except patent misuse. That that might be why only about eight plaintiffs a month fall in the Southern District. This is this is an example of the kind of case that some people would say this reflects a court viewing their role pretty expansively in terms of resolving factual disputes. So that it’s, it was an entry, it was an interesting case. But if it’s a case where the technology was not the most complicated in the world, and the court probably felt more comfortable with that type of technology than it might have with another one,


Wayne Stacy  31:19

though, compared to what you were saying earlier about having a thicket of similar cases, in a typical software case, this one didn’t necessarily have the thicket around it. So it should be a pause for anybody looking to file a case in the Southern District.


Michael Smith  31:34

Right? That Well, it may be an indication that judges in the Southern District are will have a more expansive reading of whether something is abstract or whether something is actually adding to something because one thing I’ve seen in the one on one context as we can all do a pretty good job of showing how something is obvious and how something is abstract and something’s whatever we can make some pretty good arguments like that. So it’s not surprising sometimes it may have just been a situation that the plaintiff didn’t respond sufficiently to a really well done motion. And the court didn’t have a lot. The court undoubtedly didn’t have by Eastern or Western District standards, the experience of patent cases that that other courts have, and it’s sort of like a 285 motion. If it’s your first patent case, it’s going to look pretty exceptional, no matter what happens. If it’s your 200th. You realize this isn’t exceptional. This is what happens in every case, exceptional. Is this additional level. So I wonder if that played into it as well?


Wayne Stacy  32:44

Well, as we’ll finish the week out in the western districts, what, what’s going on there procedurally these days? Well, the


Michael Smith  32:53

big news in the Western District is we got our new magistrate judge in Waco, Judge Derrick Gilliland on April 1. And I had the privilege of being in his first hearing a week later on Friday, he came out on the bench and I was appearing by zoom and the Waco lawyers were there live and welcomed him to the court. And he said this is actually my first hearing of any kind, but he had already put out claim construction rulings as preliminary rulings and got us out a written order actually yesterday. And then we had another hearing with him the next day on Monday on a discovery dispute. So he’s He He’s the second magistrate judge and the courthouse, Judge Mansky, is going to focus on criminal matters and half of the court civil docket, Judge Gill, and we’ll help on patent cases and the other half of the civil docket, but I think I’ve talked about him before we know him. Well, he’s a, he’s an East Texas lawyer from Longview, but has a background in Waco. And it’s it’s gonna be really nice having having him. The court is already sending him motions to deal with constantly, but it was a pleasure being before him in that first hearing. And he’s going to be real asset to the court there. I think what you’re going to see is more detailed, more substantive opinions on issues. There will be less need for the court to resort to shorter opinions that appear more conclusory because the court now has judge judge Gilliland plus his law clerks to share the docket here plus the filings in the western district have dropped some they’re equalizing with their resources a little better. So I think we’ll see some significant changes in the in the docket for the good as a result of Judge Gillen coming on board.


Wayne Stacy  34:49

We have one of the dentists this trial in a verdict that came back in it during your your voyage.


Michael Smith  34:57

Yes, we had the jury found a Both claims infringed and infringed under induced infringement and that the infringement was willful. It set the damages at not quite 12 million. And I asked, Well, what did the plaintiff asked for? What did the defendant say? And the plaintiff had asked for 22 million, and the defendant was had a range that centered on 1 million. So it’s closer to the plaintiff than the defendant, but it’s still not everything they were asking for. And that’s the only completed patent trial out of the Western District in the last few weeks. Well, and I


Wayne Stacy  35:33

like those numbers, they both seem seem reasonable. I’m always skeptical when a defendant comes in. And the one side’s asking for 50 million, and they say, well, the right number is 12,000. Right? Right. That’s a good way to make all your experts hated. Well,


Michael Smith  35:49

in and there’s there’s a couple of schools of thought on that. There’s the school of thought that you’re putting a anchor in the ground, and I’ve seen martial juries get pulled what I felt they were pulled down by that anchor, and they went closer. But you can also completely blow your credibility. And like a case that I saw out of the Beaumont Division A few years ago, they completely ignored the defendants argument, the defendants metrics, as far as the number of transactions that were relevant to infringement because they put out such a ridiculous number. So you have to figure out how to be a pig but not be a hog.


Wayne Stacy  36:26

Well, that takes us to the trial that shouldn’t be going on. And that’s the VLSI case that drew a lot of news because it was cancelled.


Michael Smith  36:35

Yeah, this is as as people watching this will know, this is the third VLSI versus Intel trial. The first one, the plaintiff got a verdict, a little over 2 billion and a trial and Waco the second trial, the defendant got a defense verdict. The Federal Circuit required this one to be held in Austin and I am of the school of thought that it’s it’s more difficult to have a trial in a large courtroom in a large courthouse in a large city. During COVID. We’ve had dozens of trials in Marshall and in Waco, and in Sherman, with only the one trial Chairman that had an outbreak. And by the second day, they already had multiple lawyers testing positive in Austin. So judge Albright canceled the trial, and he’ll reset it later in the year, I think you’re just going to have that happen. There’s a reason why the Austin courthouse has been shut down. And I think it’s going to be difficult to get through a trial. In a courthouse where you don’t have the court can’t control the protections for the jury and the trial team as well as as well as in a small town. Man, when you try a case in Waco, the only place you are is you’re on this, you’re in a little hotel, you’re meeting in the few rooms that you’re in, you take a car straight to the courthouse and you never go anywhere else. I suspect it’s a little different in Austin.


Wayne Stacy  38:01

Well, you know, one of the great things that you always bring to the table is an understanding of the procedures, you know, the sausage making, and that Dennis’s case got to trial. But we got to have some pre trial rulings. What? What could you pull out of what happened there?


Michael Smith  38:17

Oh, that was great. I sat through a pre trial conference in Waco in January. And that was very enlightening, because there’s stuff going every which way and you get a good feel for what the courts doing. The great thing about this dense disorder at the pre trial conference is it looked like what I saw happen in January, the judge required the parties to submit some limited supplemental briefing on a claim construction issue that came up and he was going to address that. Then he said, party, you can take a deposition on the subject and non infringing alternative, send me that and I’ll take that into consideration with an expert motion. We’ve still got disputes on what’s in the courts, preliminary construction, send me stuff on that. So that order is a good example, as you said of the sausage making that happens at a pretrial and judge all brides court, there are a lot of moving parts, things are not quite as buttoned down as practitioners in the Eastern District might be used to. So this is a good order to let you know, these are all things that you may have to do. If I’ve got a trial in front of Judge Albright, I already know I’m going to have submissions that are due between the pre trial conference and trial, I’m probably going to have depositions that have to be taken. So I know to have the trial team ready to go handle that and do it and to be prepared at the pretrial conference. So when the judge does that, I know Yeah, we can do that. So and so can handle a deposition either live or whatever. Because some courts that doesn’t happen. Some courts it does. This is a good warning that in this court, it does.


Wayne Stacy  39:49

Well, again, I think you said if this is an order to take a look at because it it is different than the Eastern District and it shows I think two things like you So, Mike one, what’s happening in to the types of things you better be raising or you may be waiving.


Michael Smith  40:06

Right? Well, for example, a lot of a number of the issues here had to do with, as I mentioned, the parties were directed to submit limited supplemental briefing on claim construction issues. Judge Albright has indicated a more of a willingness to look at claim construction issues on the eve of trial. I don’t think he likes it any better than any other judge does. But he’s more willing to look at that. And I’ve had a number of cases where that’s happened. So I know that that’s something to take advantage of to raise those issues. I know, it’s something that I may have to defend against at trial. But just be aware, that arrow is in the quiver in a way that it usually isn’t in an eastern district trial, it’s it’s much more rare to have a party raising claim construction issues during trial or on the eve of trial in the Eastern District.


Wayne Stacy  40:59

So there’s alright had a chance to do a one on one motion against one of the parties we’ve we’ve already talked about. So they’ve moved from the Eastern District to the Western District now. Tell us kind of what we can learn here. And what you see is the interplay between the eastern and western districts on these litigations?


Michael Smith  41:17

Well, we’ve got we’ve got a couple of one on one motions, orders from Judge Albright. And and they they do provide, we’ve got some very good. I mean, to me, I’m a former law clerk, boilerplate is not a bad word. We’ve got very good boilerplate here, telling you here’s what the standards are, here are the difficulties that I as a judge have in resolving these motions. At this stage of the case, here are the difficulties I see with the Federal Circuit authority with I can’t tell what I’m supposed to do in some cases. So in one of the cases, he’s able to go through and say, Nope, you don’t meet the test for this. These are not abstract. And these, you don’t get summary judgment on this. But in the other opinion, the income opinion, he puts the same stuff in there. But he talks about what he calls the uphill scramble that accused infringers are facing when you raise 101, and a 12, B six motion, it’s a very difficult procedural context to raise it in that motion. Now, you can raise it, then lose and raise it later. But he points out why that’s not a particularly favorable way of addressing it in these opinions taken, taken together. They tell you how this judge views this area of the law, and then I’ll go back and I’ll get my facts. And we’ll do I think I can get past what he’s saying on this. Three years ago, we didn’t have as much of a of a book on Judge Albright on what he thought of things. Now you’ve got these very well reasoned opinions to say, here’s what I think. So I can go back and decide if it’s worth my clients money to raise the issue at this point.


Wayne Stacy  42:54

So my case that seems inconsequential, but it’s just a great warning about how not to annoy a judge. Is that the cost case? And this this motion for sanctions, which again, should always be approach? Cautiously, this does not seem to be a good example of caution.


Michael Smith  43:15

Yeah, it’s, there was a The complaint was that the defendant didn’t timely provide a witness’s contact information. And the court said, Well, it looks like they didn’t have it. But in any event, the violation was harmless. I mean, I, I would never raise that. I might like to, but I would never raise that if I knew that the harm can be addressed. I mean, what’s the complaint? Well, I didn’t know they were there. Well, okay. Now, you know, what do you want a deposition? What? I mean, the violation was harmless under the facts of that case. That’s the sort of thing you really just don’t need to bother the court with. There have been some other recent opinions from Judge Albright that are along the same lines where he says don’t this is not this is not worth raising. We’re getting more detailed rulings from Judge Albright on Discovery issues as the docket slows a little bit and as he asked judge, Judge Gillen, so we’re getting better examples like this that we can put in front of our CO counsel and say, Come on, don’t take this to the judge. What is it that we need? Well, I really wanted to take that deposition. Okay. We’ll ask them for a deposition. If they stiff arm us, then we can go to the court. But if they fix the harm, then you’re not going to, you’re not going to piss off the judge at them. You’re gonna piss off the judge you? 


Wayne Stacy  44:32

Well, and that’s actually a good reminder to both sides, you know, mistakes, things happen. Witnesses pop up late. addresses were wrong things happen. Fix it among yourselves and then failure to fix it is a different sanctionable issue then the mistake that got


Michael Smith  44:50

you there, right, right.


Wayne Stacy  44:53

But this one, this one surprised me. I’m like, who wonder who was brave enough to file that?


Michael Smith  44:59

Well, one Hang on, I recall in the order that Judge Gill strap and judge Schrader put out a number of years ago about discovery issues. They recognized when changing up the eastern district or the rule that they applied on meet and converse and discovery issues to require late and local to be on at a certain point, and no one else they wanted, the middle lawyer dropped out, because what they had seen over and over and over is that there is a level of lawyer that works on these cases that has no authority to do anything, but say no. So their idea was make that lawyer educate lead counsel, and then the next meet and confer before you get in front of the judge. It’s lead and local. And that person’s out of the picture, because they felt that that would that would resolve more disputes. I’m not saying that’s that’s, that’s correct or not, but it does indicate that the court sees that there are there are lawyers who are not really looking at the big picture. And all they know to do is well, no, I’m entitled to that. So I want it.


Wayne Stacy  46:03

Right. Well, we move still through some of the other procedural issues, Judge Albright seems to have had many opportunities to struggle with the idea of alternative services, or alternative service. And the appraisal systems are another example of that. But it seems here, he’s updated his rationale a little bit to make clear what he’ll be doing going forward.


Michael Smith  46:29

Yeah, absolutely. He’s saying nevermind everything that I did before, because we’ve got a new case from the federal circuit that we have to comply with. And previously, he said he had some cases that seem to say that service under the Hague is more cumbersome. So therefore, you can do alternative methods. He says the Federal Circuit says that won’t work, or so you have to show that you made an attempt to service and to serve, and that it didn’t work, you got to you got to jump through some hoops to do it. And what’s interesting here is he provides some detailed comments on what the plaintiffs evidence was they were trying to serve a lawyer that represented the defendant, except that their proof didn’t show that they represented the defendant, it showed that they had represented the defendant in the past. And he was like, the quote is due to the relative ease of confirming attorneys represent its representation, the court expects evidence of representation to be clear. So we know now you can’t just throw in Oh, yeah. Judge, let me just let me serve somebody that I know represented, and five years ago. So anyway, it’s a very, it’s the current gold standard for what you’ve got to prove in order to get to alternate services court. And that’s why I thought it was it was worth addressing.


Wayne Stacy  47:48

Well, Michael, I wanted to finish the week with two more of the regular cases. And this is the the litigant that keeps on giving. It sure is, we’ve got a source code provision and a foreign discovery case. So what can we really see here about what they’re going to they’re going to litigate for us,


Michael Smith  48:11

these two cases are solid gold for practitioners the source code when we know now that judge, the judge Albright has a has a protective order. But what we don’t know is, well, how receptive is he to, to changing if one side comes in says, We want what’s in the order? And the other says, well, we want something different. What’s he going to do? Well, this gives us a data point, the plaintiff, I mean, the defendant didn’t want source code provisions at all, because they didn’t have source code. And they said, just lay that out. And the judge said, No, I’m gonna go ahead and put my language in. And the plaintiff said, Well, while you’re at it, can we have a provision for electronic transfer of source code, so we can get paper copies, we can get certain a physical media, but we can also transfer it electronically. And Judge Albright says, I generally default to my model protect folder, I deviate as little as possible. I don’t see any reason for that here. It looks like you’ve got the ability to do it otherwise, so I’m sticking with my default order. So that goes into my data bank, when I’m thinking well, can I get a change from his default order? That’s that’s a very useful opinion. Now on the other ruling, and that there’s actually two rulings on this one, there was a ruling by Judge guilt, Judge Albright a while back that set aside his moratorium on pre Markman discovery, for certain discovery trying to get going on some some Hague Convention service. So what happened in this case was the parties came in and said, well, oh, hey, we want to do some more. Some pre mortem and discovery here as well. And what’s important on this case is what the judge says at the end of the order, it’s got both sides arguments up front, but at the end, he says, this is domestic discovery. And this is dealing with infringement. You don’t get To do that before Markman, if it was foreign discovery, you would well, that was the same thing that Judge Gilliland said two weeks earlier in a hearing that we had with him and that Judge Albright later said the same thing. So the parties now have a pretty bright line rule that if you want to do foreign discovery before the Markman, you’ll probably get late for that. If it’s domestic discovery, you won’t. So that’s that’s a very useful thing to know when we’re fighting with the other side about well, can we get this discovery before Marmot? Can we start the clock early or not?


Wayne Stacy  50:32

Well, wonderful. Those are the kinds of things that should prevent lawyers from having to file motions and help clients save some some money on attorneys fees. Absolutely. Well, Michael, once again, thank you for joining us and welcome back.


Michael Smith  50:48

It’s good to be back. Take care. All right, you too. See you next week.