denying Toshiba's motion for a summary judgment of invalidity of the '485 patent). In that order, this court deferred the issue of the meaning of claims 7 and 8 pending an application for relief by Sony.
On December 22, 1995, Loral served a further discovery response on Sony updating its infringement contentions. See Ex. 12 to Sony's Memorandum (attaching Loral's supplemental update to its response to Sony's interrogatories). Loral's response points Sony to certain expert reports. Those report, in turn, provide analysis only of claims 1 and 3. None of the reports set forth separate infringement contentions for claim 7 or identify how claim 7 could describe the use of a different structure than in claim 1.
On December 29, 1995, Sony filed the current motion and notified all of the parties that the motion would be argued at the January 2, 1996, pretrial conference. During that proceeding, this court heard oral argument on Sony's motion and offered each party another opportunity to fully respond and exhaust their arguments on this issue.
Sony seeks an order precluding Loral from contesting that claims 7 and 8 are limited to methods of operating the structure of claim 1 in the '485 patent. Sony grounds its motion on the unfairness which would inure to Sony if Loral changes its theory of liability in light of the court's Markman Opinion construing claim 1 of the '485 patent.
Ramifications of Markman
This dispute highlights some of the ramifications for patent cases flowing from the United States Court of Appeals for the Federal Circuit's decision in Markman v. Westview Instr., Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc). After Markman, a trial judge must determine as questions of law the meaning of patent claims. The meaning of claim terms is the central issue of patent litigation. With most aspects of trial hinging on this determination -- now "strictly a question of law for the court". Id. at 977 -- a conscientious court will generally endeavor to make this ruling before trial. A trial court faced with conflicting views of technical terms may prudently enlist the aid of qualified experts to determine the meaning of the claim terms. As in this case, this proceeding to assist the court in ascertaining the law is likely to occur after discovery in which the parties have exchanged information relevant to their understanding of the claims.
Once the court resolves the meaning of the claims, this new pronouncement of the meaning of claim terms may, as in this case, generate more disputes. In essence the court has merely elaborated on "the normally terse" claim terms in an effort to resolve disputes. Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565, 1580 (Fed. Cir. 1991). However, the skillful lawyer finds ambiguity even in attempted precision. Unchecked, the parties' new interpretations of the claim language in light of the court's legal meaning may begin the trial process, including discovery and depositions, anew. Thus, a trial court -- in the wake of articulating a legal meaning of claim terms -- must carefully police the parties' new theories of liability or defenses to prevent prejudice after the close of discovery.
Under Loral's pre-Markman hearing theory of liability, claims 7 and 8 were methods of operating the structure of claim 1. Its statements and expert reports followed accordingly. Therefore, the parties focused their disputes and discovery on the structure in claim 1. Loral apparently foresaw no the need to urge alternative theories based on differences in the words of claims 1 and 7.
However, when this court interpreted claim 1 more narrowly than Loral had advocated, Loral discerned new meaning in the claim language of claim 7, a position it would have been unable to take had the court waited until just before it instructed the jury to construe the claims. In essence, Loral changed its theory of liability. Loral began to advocate a different meaning for the language in claim 7.
Sony's Motion for Sanctions
The Federal Rules of Civil Procedure are designed to eliminate surprise. Mawby v. United States, 999 F.2d 1252, 1254 (8th Cir. 1993). To facilitate that objective, Rule 26(e) requires a party to supplement responses to formal discovery requests whenever that party learns that its prior disclosures or responses are incomplete or incorrect. Thibeault v. Square D. Co., 960 F.2d 239, 244 (1st Cir. 1992). Where a party does not comply with the requirements of Rule 26(e), a trial court may fashion sanctions to provide a remedy for the unfairly surprised party. Outley v. City of New York, 837 F.2d 587, 589 (2d Cir. 1988); Meyers v. Pennypack Woods Home Ownership Assoc., 559 F.2d 894, 904-05 (3d Cir. 1977).
By changing its positions on claims 7 and 8 of the '485 patent. Loral has imposed a new theory of liability on Sony. Should a jury find that the structure in claim 1 does not describe Sony's CCDs, it could, nonetheless, find liability under claims 7 and 8. Throughout the litigation, Loral, however, had maintained that claims 7 and 8 merely describe methods of operating the structure described in claim 1. Thus, claims 7 and 8 could not be infringed absent infringement of claim 1. Loral's discovery responses followed this theory. To suddenly now assert potential liability of claims 7 and 8 in the absence of liability under claim 1 would be unfair to Sony particularly in light of the fact that Loral has not even attempted to update its expert reports or discovery responses in this regard. Holiday Inns, Inc. v. Robertshaw Controls, Co., 560 F.2d 856, 857-58 (7th Cir. 1977).
At the outset of this litigation, Loral could have proceeded under alternative theories. For example, it could have maintained that under a broad reading of claim 1, claims 7 and 8 merely described methods of operating the structure of claim 1. Alternatively, under a more narrow reading of claim 1, Loral could have maintained that claims 7 and 8 describe the operation of a different structure. Its experts may have so opined, and its discovery responses could have fairly represented this position. Loral chose not to follow this path. Instead, Loral and its experts consistently maintained infringement of claims 7 and 8 depended on infringement of claim 1.
Moreover, Loral has not supplemented its expert reports to focus on its new position with respect to claims 7 and 8. As late as December 22, 1995, eighteen days after Loral first raised its new theory and seventeen days before trial, Loral's discovery responses do not address claim 7 and 8 independent of claim 1. Loral continues to rely on infringement contentions with regard to claims 1 and 3, which depends from claim 1, for its position as to claims 7 and 8. Moreover, at oral argument on this motion, Loral made no effort to afford Sony proper discovery responses consistent with the Federal Rules of Civil Procedure. Lastly, the court has cautioned Loral in the past concerning its discovery responses and the content of its expert reports. Consequently this court finds Loral has not complied with Fed. R. Civ. P. 26(e). Sony would be substantially prejudiced by Loral's new theory' of liability particularly in the absence of proper notice as to the opinions of Loral's experts on the new theory. Consistent with its authority under the Federal Rules of Civil Procedure, the court will sanction Loral by precluding it from contesting that claims 7 and 8 are limited to methods of operating the structure of claim 1.
In the alternative, equitable principles of estoppel also bar Loral from altering its position at this stage of the proceedings. While the Federal Rules of Civil Procedure clearly contemplate shifting or alternative positions in a single actions, the court finds Loral judicially estopped under the unique facts and circumstances of this case. See 18 Charles A. Wright, et al., Federal Practice and Procedure 4477 (1981 & 1993 Supp.) (describing the principles of judicial estoppel).
Loral has pursued a single theory of liability for nearly four years. Discovery is closed and motions for a summary judgment have been decided. Moreover, before the court in connection with the Markman proceeding Loral made no effort to call attention to a possible alternative theory that claims 7 and 8 were broader than claim 1. In fact, as noted, faced with the argument that claims 1, 3, 7 and 8 required the charge sink structure to be "buried within" the substrate. Loral's only argument in its reply brief was that the claim language "says nothing about being buried within 'the substrate,' but which refers instead to being 'buried within said semi-conductor material ' and 'beneath the surface of said semiconductor material.' " One would have expected Loral to note, as they now do, that claims 7 and 8 do not contain the words "buried within" and thus could be broader in scope. However, Loral, consistent with its position throughout the trial, did not advance this theory. Consequently, the court finds Loral is estopped from changing its theory at this late date.
Lastly, the court notes Loral's own technical expert witness, Dr. Barbe, testified that claims 7 and 8 "just" describe a "method of operating the structure of claim 1." As claims are interpreted according to the understanding of those skilled in the art, this court -- exercising its obligation under Markman -- interprets claims 7 and 8 to incorporate the structure of claim 1. This court also notes, having extensively reviewed the specification and prosecution history of the '485 patent, that those sources support this interpretation as well.
For these reasons, the court grants Sony's motion for sanctions. Loral is precluded from contesting that claims 7 and 8 are limited to methods of operating the structure described in claim 1. The court will enter an Order in accordance with this Memorandum Opinion.
ORDER GRANTING SONY'S MOTION FOR SANCTIONS
For the reasons set forth in the accompanying Memorandum Opinion of this date, IT IS HEREBY ORDERED as follows:
1. Sony's motion for sanctions against Loral is granted.
2. Loral is precluded from contesting that claims 7 and 8 of the '485 patent are limited to methods of operating the structure described in claim 1 of that patent.
RANDALL R. RADER, CIRCUIT JUDGE
(Sitting by Designation)
Dated: January 5, 1996
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