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SAP v. DataTern: Summary Judgment Granted Where Patent Holder Failed to Serve Infringement Contentions

SAP AG and SAP America (“SAP”) filed a motion for partial summary judgment against DataTern for failing to serve infringement contentions charting the patents-in-suit against SAP’s accused products. The district court’s order specified that the infringement contentions were required to be served on or before March 23, 2012.

In analyzing the motion for summary judgment, the district court noted that the deadline for DataTern to serve its infringement contentions was originally March 16, 2012 but was moved back to March 23, 2012 at the request of DataTern. DataTern admitted that it had not served infringement contentions in compliance with the district court’s order, but instead argued that the reason it had failed to do so was because SAP had failed to timely provide it with the source code necessary to create the contentions.

The district court did not find this excuse plausible, particularly because this excuse was offered for the first time in opposition to the motion for summary judgment. The district court pointed out that DataTern had never previously requested discovery assistance from the district court, even though it now asserted that such discovery was crucial to meeting its disclosure obligations that passed several months ago.

In opposition to the motion for summary judgment, DataTern also asserted that the Court’s Procedures for Patent Cases permitted it to amend its infringement contentions upon a showing of good cause. The district court found this argument unpersuasive as well: “DataTern is not actually requesting leave to amend infringement contentions previously served in compliance with this Court’s Order. Rather, it seeks to use this rule to avoid its obligations to have served infringement contentions regarding the ‘402 patent at all. This distorts the rule. If DataTern’s reading were correct, in multi-patent cases plaintiffs could use that rule to serve infringement contentions with regard to one patent and then later–whenever they chose perhaps–‘amend’ to assert contentions against other patents. This makes no sense.”

The district court went on to explain that this rule “permits patentees who specify which claims are allegedly infringed to later amend those contentions (with leave of the Court) as necessitated by developments in the case. The rule is not intended for those parties who knowingly disregard a Scheduling Order with the intention of later requesting to amend their infringement contention to wholesale add contentions related to one patent–such a request would not be timely or made with good cause (and may, in truth, be an attempt to ‘game the system’ in order to gain a tactical advantage that prejudices the other side).”

Accordingly, the district court granted the motion for summary judgment on SAP’s declaratory judgment claim for non-infringement.

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The failure to timely serve infringement contentions (or invalidity contentions) has significant consequences. Here, it would have been far better for DataTern to raise the discovery issue with the district court at the earliest possible time and to seek relief from the scheduling order at the same as well. The failure to take that step resulted in the granting of the summary judgment motion.

SAP AG and SAP America, Inc. v. Datatern, Inc., Case No. 11 Civ. 2648 (KBF) (S.D.N.Y. July 28, 2012)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or