Arendi S.A.R.L. has seen its long-running litigation campaign trimmed considerably in the past several years through a series of invalidity rulings, and now the Federal Circuit has foreclosed its attempt to avoid a further narrowing of its litigation against LG Electronics (LGE). In late 2020, the District of Delaware struck several portions of Arendi’s expert report on infringement after the plaintiff failed to provide claim charts for all but one of the many accused products as required under the district’s discovery rules. Rather than updating its infringement contentions accordingly, Arendi instead filed a second case against LGE targeting those same products with the same patent. On September 7, the Federal Circuit issued a precedential decision that affirmed the lower court’s dismissal of that second complaint as improperly duplicative.

Arendi began its campaign back in February 2009 with suits against Dell and Microsoft. Along with another case filed against Microsoft in March 2011, those first proceedings were dismissed with prejudice in November 2011 during discovery. The NPE then sued LGE as part of a wave of November 2012 cases also hitting Apple, BlackBerry, HTC, Motorola Mobility (then a Google subsidiary), Samsung, and Sony, filing separate complaints against Google and Yahoo (later Oath) in May 2013 as well. Five patents have collectively been asserted among those cases (6,323,853; 7,496,854; 7,917,843; 7,921,356; 8,306,993), with all but the ‘356 patent originally asserted in the suit against LGE (hereinafter Arendi I).

The invalidity rulings mentioned above ultimately knocked out all asserted claims apart from those from the patent that now remains in suit (the ‘843 patent). This began with a series of inter partes reviews (IPRs) filed against the patents-in-campaign starting in late 2013, leading to a stipulated stay of the district court litigation. The results of those Patent Trial and Appeal Board (PTAB) challenges were mixed. While the ‘993 patent emerged unscathed, with the PTAB denying institution as to any claims at issue, the Board invalidated all claims from the ‘853 patent, all asserted claims from the ‘854 patent, and a subset of the asserted claims from the ‘993 patent, decisions later affirmed by the Federal Circuit as to all but the IPR against the ‘993 patent (which was not appealed). Finally, although the PTAB invalidated all but three asserted claims from the ‘843 patent in June 2015, the Federal Circuit reversed, indicating that the PTAB improperly relied upon “common sense” to invalidate Arendi’s claims (as detailed in RPX’s coverage from August 2016), an outcome that the Supreme Court subsequently declined to revisit.

Litigation then resumed in the fall of 2018, and the following year, the defendants jointly filed a motion for judgment on the pleadings—attacking the surviving claims at issue from the ‘843, ‘854, ‘356, and ‘993 patents under Alice. In January 2020, Judge Stark granted the defendants’ Alice motion in part. While he denied the motion with respect to representative claim 1 of the ‘843 patent, ruling that it is “directed to an improvement in computer functionality”, he granted it with respect to representative claims 93 of the ‘854 patent, 2 of the ‘356 patent, and 1 of the ‘993 patent, which he concluded are directed to the abstract idea of “identifying information in a document, searching for related information in a separate source, and using [the] found information in some way”. Judge Stark also delayed ruling on the “arguably non-representative, dependent claims of the ‘854, ‘356, and ‘993 patents” and requested additional briefing. However, the parties jointly notified him shortly afterward that Arendi had “decided not to pursue separate responses and rulings on the remaining claims of the ‘993 and ‘356 patents”, and that it had agreed to have the court’s invalidity ruling on those representative claims apply to the rest of the patents’ claims as well.

Meanwhile, in November 2018, Arendi filed the supplemental infringement contentions here at issue, as disclosures brought under Section 4(a) of Delaware’s Default Standard for Discovery—which requires a plaintiff to “specifically identify the accused products and the asserted patent(s) they allegedly infringe”. The disclosure added over 100 new products to the more than 400 disclosed in its original infringement contentions, alleging the infringement of four claims from the ‘843 patent. After LGE provided initial discovery on those products, Arendi then filed a disclosure under Section 4(c), under which a plaintiff must “produce . . . an initial claim chart relating each accused product to the asserted claims each product allegedly infringes” (emphasis added by Federal Circuit).

Despite that requirement, “Arendi’s Section 4(c) Disclosure provided claim charts for only one of those products—LG’s Rebel 4 phone”, labeled as “exemplary”. Two months after the plaintiff filed that disclosure, LGE notified Arendi in a letter that its single-product claim chart was insufficient under Section 4(c), and that as a result it considered the plaintiff’s claims to be limited to the Rebel 4 unless it were to amend the disclosure. However, Arendi did not provide updated claim charts following that notice. The parties later came to agree on eight representative products for those named in the NPE’s contentions, seven of which were non-Rebel 4 products. LGE then argued in an interrogatory response that since Arendi’s infringement contentions covered only the Rebel 4, it fell to the plaintiff to prove that the Rebel 4 was representative of the other products. Yet Arendi again did not amend its infringement contentions.

As a result, when Arendi filed an expert report that, for the first time, included contentions for an additional five of the seven representative products, LGE moved to strike those portions of the report. District Judge Leonard Stark did so in October 2020, concluding that Arendi “did not timely disclose these infringement contentions having ‘failed to fulfill its discovery obligations’” and citing the plaintiff’s repeated failure to amend its contentions.

Rather than make such an amendment, though, Arendi filed a second case in the District of Delaware (hereinafter Arendi II) that accused LGE of infringing the ‘843 patent through the provision of the same non-Rebel 4 products as the first suit. This prompted LGE to file a motion to dismiss that complaint as improperly duplicative, which Judge Stark granted in April 2021. The following month, Arendi appealed to the Federal Circuit (2021-1967), moving that same day in the first case to “finally . . . supplement its Section 4(c) Disclosure”. Judge Stark denied that motion, and an LGE motion for summary judgment of noninfringement, in light of the pending appeal, though without prejudice to refiling after that appeal’s resolution.

Ruling on appeal on September 7, the Federal Circuit held that the question of whether the second complaint was duplicative was a procedural one under the circumstances. As a result, it applied the law of the Third Circuit (since the regional circuit’s law govern’s procedural issues), which bars plaintiffs from “maintain[ing] two separate actions involving the same subject matter at the same time in the same court . . . against the same defendant”. However, the court resolved the question of whether the complaints involve the “same subject matter” under Federal Circuit law (as is the court’s practice for patent-related substantive issues), which provides that a “cause of action is defined by the transactional facts from which it arises[] and the extent of the factual overlap”. As noted by the Federal Circuit in the present case, “[t]here are two primary ‘areas of factual overlap’ to consider in this analysis: (1) ‘the overlap of the product[s] . . . accused in the instant action with the product[s] . . . accused in the prior action’; and (2) the overlap of the patents in both suits”.

While Arendi did not dispute that the same patent is asserted in both suits, it argued that the same products are not at issue—asserting that as a result of Judge Stark’s order striking portions of its expert report, there is no overlap at all for the accused products in the two cases. “According to Arendi, the district court determined 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” in the second one (as summarized by the Federal Circuit).

Yet the Federal Circuit disagreed, agreeing with Judge Stark—who, in dismissing Arendi II, rejected that characterization as “not correct”. Rather, the Federal Circuit explained, the lower “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 allegations in its expert report were procedurally untimely” (emphasis added). The Federal Circuit further found it “hard to find any basis whatsoever for Arendi’s assertion that the non-Rebel 4 products were never ‘at issue’ or ‘litigated’ in Arendi I”—reaching the opposite conclusion because the plaintiff listed those products in its Section 4(a) disclosure, served interrogatories concerning them, received related discovery, and included them in its expert report.

The Federal Circuit then concluded by finding no error in Judge Stark’s dismissal of Arendi II as duplicative, finding that it was “[l]eft with the simple and obvious fact that the non-Rebel 4 products accused in Arendi II are identical to products accused in Arendi I”.

Arendi’s first case may soon move forward as to the accused products left over in the wake of the Federal Circuit’s appeal. However, the presiding judge will not be Judge Stark, who joined the Federal Circuit in March 2022 but did not serve on the panel that decided this appeal, which consisted of Circuit Judges Sharon Prost (the decision’s author), Raymond T. Chen, and Kara F. Stoll. The Delaware case was assigned on September 7 to Judge Stark’s replacement, District Judge Gregory B. Williams, who was confirmed on July 20 and took the bench on September 1.

For more background on Arendi and the earlier history of this campaign, see “After PTAB, Alice, and Other District Court Setbacks, Arendi Files Second Case Against LG Electronics” (November 2020).