United States District Court, S.D. New York
ORDER AND OPINION DENYING MOTION TO STRIKE INFRINGEMENT CONTENTIONS AND FOR TERMINATING SANCTION
ALVIN K. HELLERSTEIN, District Judge.
Intellectual Ventures II LLC ("Intellectual Ventures") sues JP Morgan Chase & Co. ("JPMC") for infringement of U.S. Patent No. 5, 745, 574 (the "574 Patent"), which claims a process for validating public keys used for encryption of information sent over unsecured networks. This motion is the latest in a long, tedious series of discovery disputes. In this episode, JPMC moves to strike Intellectual Ventures' infringement contentions because they purportedly fail to adequately disclose Intellectual Ventures' theory of infringement. JPMC additionally seeks a terminating sanction dismissing Intellectual Ventures' claims alleging infringement of the 574 Patent. Intellectual Ventures counters that JPMC's tardy document production prevented it from providing more detailed infringement contentions. For the following reasons, JPMC's motion is denied.
A. The 574 Patent
The 574 Patent claims a process and system for authenticating public keys used for the encryption and decryption of information sent over an unsecured network. In order to send encrypted messages securely, parties use a system of public and private keys. For example, a sender will encrypt a message using a recipient's public key, which, as its name suggests, is publically available. The recipient then uses its corresponding private key to decrypt the message. However, a problem arises when a third party creates a fake public key that appears to belong to the recipient, but in actuality corresponds to the third party's private key. An unwitting sender may use the fake public key allowing the third party to intercept and decrypt the message using its own private key. The 574 Patent purports to solve this problem through a hierarchy, or public key infrastructure ("PKI"), of certification authorities, which vouch for the authenticity of a public key. Various certification authorities maintain databases of authenticated, or trusted, public key certificates. The system allows senders and recipients, each of which may use different immediate certification authorities, to have the public key verified by a shared certification authority within the PKI (known as the "common point of trust"). See 574 Patent at 11:66-12:43 (describing Figure 4).
Intellectual Ventures alleges that JPMC infringes Claims 18-24 and 26-31 of the 574 Patent. Independent Claims 18 and 23 are largely representative of the allegedly infringed claims. Claim 18 recites:
In a certification system for secure communications containing computer processes arranged in a certification infrastructure, a method of requesting and issuing a public key certificate, comprising: (a) at a requesting computer process, generating a data structure containing the data items required for a public key certificate, including a public key, self-signing the data structure and sending the signed data structure as a certificate signature request to a computer process authorized as an issuing certification authority, and (b) at said computer process authorized as an issuing certification authority, verifying the authenticity of said request, and if authentic, certifying and returning the data structure in a certificate signature reply.
574 Patent at 19:47-61. Independent Claim 23 further claims a method, within a "global network with secure communications, " for "obtaining a public key certificate for every computer process in the infrastructure between the sender and a common point of trust in the infrastructure" and then "verifying the authenticity of signatures iteratively, beginning with the common point of trust." 574 Patent at 20:8-16.
B. Procedur 1 History
Following a Markman hearing held on March 5, 2014, JPMC requested at a March 16, 2014 status conference that the Court order Intellectual Ventures to file infringement contentions in order to clarify how Intellectual Ventures believed JPMC was infringing the 574 Patent. See Decl. Michael A. Feldman Supp. JPMC Mot. Strike ("Feldman Decl."), Exh. F at 113:7-14:7. Counsel for Intellectual Ventures expressed concern that, absent more extensive discovery, the contentions would be too broad and, therefore, not useful for narrowing discovery. See id., Exh. F at 113:1-5. Nonetheless, when asked by the Court whether Intellectual Ventures knew how the accused products infringed the 574 Patent, counsel for Intellectual Ventures responded, "We do, your Honor." Id., Exh. F at 113:20-114:7. Based upon that representation, the Court ordered that Intellectual Ventures "will, in good faith, identify each product or process of which Plaintiff is aware that infringes each identified claim. Plaintiff will identify each product or process by name if such name is known, or by a description of the technology alleged to infringe." Order Regarding March 24, 2014 Letter, No. 13 Civ. 3777, ECF No. 85 (S.D.N.Y. March 25, 2014). Intellectual Ventures filed its initial infringement contentions on April 11, 2014 ("First Set of Infringement Contentions"). See Feldman Decl., Exh. G.
The First Set of Infringement Contentions consisted of an 88-page chart listing the allegedly infringed claims in one column and explanations of JPMC's alleged infringement in a second column. See id., Exh. G. For example, in support of Intellectual Ventures' contention that JPMC infringed Claim 18(a) it writes: "As part of the certificate request process, JPMC generates at a requesting computer process, a data structure containing the data items required for a public key certificate, including a public key.... For example, JPMC obtains a public key certificate from [a third party vendor] by generating a data structure including a public key." Id. at 7-8. The explanation is followed by screenshots apparently from the third party vendor's policy describing a subscribers' use of the product. See id. at 9-10.
Unsatisfied with the First Set of Infringement Contentions, JPMC served an interrogatory ("Interrogatory # 1") on August 19, 2014, requesting that Intellectual Ventures "[i]dentify each accused instrumentality by patent and by asserted claim" and "[f]or each instrumentality, identify how each asserted claim is infringed." See Decl. Brent P. Ray Supp. JPMC Motion to Compel Plaintiff to Answer Interrogatory ("Ray Decl."), Exh. D at 5, No. 13 Civ. 3777, ECF No. 320 (S.D.N.Y. Dec. 8, 2014). On August 20, 2014, asserting that the First Set of Infringement Contentions failed to list all accused products, JPMC asked the Court to order Intellectual Ventures to revise it. See Feldman Decl., Exh. H at 16:13-15. In addition, JPMC asked the Court to order Intellectual Ventures to fully answer Interrogatory # 1. See id., Exh. H at 16:19-22. Intellectual Ventures explained that it needed JPMC to fully produce relevant technical documents in order to clarify the infringement contentions and list all accused products. The Court ordered all technical documents to be produced and for Intellectual Ventures to serve a revised interrogatory response and revised set of infringement contentions by September 30, 2014. See id., Exh. H at 16:13-15.
The Second Set of Infringement Contentions, served on September 30, 2014, expanded the number of accused products but largely retained the conclusory language and discursive quality of the First Set of Infringement Contentions. See id., Exh. I. On October 7, 2014, JPMC moved for an order compelling Intellectual Ventures to supplement its answer to Interrogatory # 1. See JPMC's Second Omnibus Mot. Compel, 13 Civ. 3777, ECF No. 204 (S.D.N.Y. Oct. 7, 2014). On October 14, 2014, JPMC moved to strike Intellectual Ventures' infringement contentions for allegedly adding new accused products. See Mot. Strike Pl's. Infringement Contentions, 13 Civ. 3777, ECF No. 231 (S.D.N.Y. Oct. 14, 2014). On November 4, 2014, the Court heard argument on the various discovery motions, at which time the parties represented that they had resolved their dispute with respect to Interrogatory # 1. However, the Court noted that the Second Set of Infringement Contentions were inadequate and warned that when fact discovery reached a sufficient point to command more specificity from Intellectual Ventures, the Court would require it. See Feldman Decl., Exh. B at 40:18-25. Following the argument, the Court denied JPMC's motion to strike the infringement contentions holding that "discovery with respect to IV's September 30, 2014 infringement contentions is appropriate at this time." Order Denying Defendants' Motion to Strike Plaintiffs' Infringement Contentions and Granting in Part and Denying in Part Plaintiffs' and Defendants' Motions to Compel, 13 Civ. 3777, ECF No. 296 (S.D.N.Y. Nov. 5, 2014).
On November 12, 2014, Intellectual Ventures supplemented its response to Interrogatory # 1 by listing each accused product and referring to their Second Set of Infringement Contentions for an explanation of how the products allegedly infringed the 574 Patent. See Ray Decl., Exh. F at 5-9. On December 8, 2014, JPMC again filed a motion to compel Intellectual Ventures to respond to Interrogatory # 1. See JPMC Mot. Compel Pl. Answer Interrogatory, No. 13 Civ. 3777, ECF No. 319 (S.D.N.Y. Dec. 8, 2014). JPMC argued that while Intellectual Ventures had identified each accused product, it had failed to explain how each accused product infringed the 574 Patent. Upon reviewing Intellectual Ventures' response to Interrogatory # 1, the Court ordered Intellectual Ventures to revise the response by January 5, 2015 ...