MasterObjects, Inc. v. Meta Platforms, Inc.

Background

MasterObjects, Inc. brought this patent-infringement action against Meta Platforms, Inc. concerning autocomplete technology. Meta moved to strike portions of MasterObjects’ expert reports, arguing that the reports presented new infringement and damages theories that MasterObjects had not disclosed in its infringement or damages contentions. MasterObjects responded that Meta’s discovery conduct had contributed to the problem and moved for sanctions under the court’s inherent authority and Federal Rule of Civil Procedure 37.

The court explained that the Northern District of California’s patent local rules require parties to disclose their case theories early, while allowing amendments when new information emerges during discovery. The rules generally do not allow an expert report to introduce new infringement theories, accused instrumentalities, invalidity theories, or prior-art references that were not disclosed in the parties’ contentions.

Meta’s Motion to Strike Infringement Theories

Cache limitations. MasterObjects’ expert John Peck identified Meta’s “Base Index” and “Realtime Index” functions in the “Unicorn” backend as the claimed cache. Meta argued that MasterObjects had previously identified only a “memcached-based query cache” and had therefore introduced a new theory.

MasterObjects argued that Meta had concealed information about the relevant caches until a later deposition. The court found that Meta’s earlier interrogatory response had stated unconditionally that the backend collections contained no prior search information, even though later testimony showed that Unicorn used search-log information as a data source for Typeahead suggestions. The court concluded that Meta’s own system and discovery responses contributed to the issue and that striking the report would be too drastic. The court denied Meta’s motion to strike as to the cache limitations.

Source-code citations. Meta argued that MasterObjects’ infringement contentions cited source code for the web version of Facebook but not the iOS and Android applications. The court noted that the contentions accused Meta’s mobile applications and cited both mobile versions. It also concluded that Meta should have objected earlier or sought an order requiring a more specific interrogatory response, rather than waiting to move to strike the expert reports. The court denied Meta’s motion to strike as to the source-code citations.

Transmission-control-protocol port numbers and the usability test. Meta sought to strike portions of reply reports identifying transmission-control-protocol port numbers as providing information required for a claimed usability test. Meta acknowledged that MasterObjects’ reference to HTTP header information encompassed port numbers, but argued that the reference was too general.

The court found that Meta had agreed that MasterObjects’ infringement contentions were sufficient when the case was transferred to the Northern District of California. The court also found that the challenged reply material responded to positions taken by Meta’s expert and could not be determined to present new theories. The court denied Meta’s motion to strike as to this material.

Meta’s Motion to Strike Damages Theories

Patent Local Rule 3-8 governs damages disclosures and requires identification of the damages categories, recovery theories, supporting facts, and computations. MasterObjects’ preliminary damages contentions disclosed a reasonable-royalty theory, including a possible running royalty based on Meta’s revenues or a per-unit royalty based on use of the accused products.

Price-list royalty theory. MasterObjects’ damages expert William Latham calculated a “per query” royalty using a 2010 price list for MasterObjects’ QuestField product. Meta argued that this was an undisclosed theory. The court found that the earlier disclosure had identified a per-unit royalty theory and that Meta had reasonable opportunities to investigate the price list, related customers, and usage information. The court denied Meta’s motion to strike the royalty rate based on the price list.

Third-party patent-license theory. Latham also presented an alternative damages theory based on MasterObjects’ 2016 license with a third-party technology company. The court stated that MasterObjects would not be permitted to introduce this theory at trial. However, if Meta opened the door by raising the theory itself, MasterObjects would be entitled to present testimony about it. With that understanding, the court denied Meta’s motion to strike as to the patent-license theory.

MasterObjects’ Motion for Sanctions

MasterObjects sought sanctions under Rule 37 and the court’s inherent authority. It asserted that Meta violated a supplemental case-management order requiring counsel to promptly correct a prior discovery statement when later information showed that the statement was contradicted by unproduced material.

After reviewing complete deposition transcripts, the court found that some witnesses equivocated and that others sometimes appeared to feign incomprehension. Nevertheless, the court could not conclude that Meta’s conduct warranted sanctions. MasterObjects sought an order treating the accused system as proven to practice the cache limitations, instructing the jury accordingly, and barring contrary contentions. The court found that relief excessive. Although Meta’s conduct justified denying parts of Meta’s motion to strike, the court found that no further action was warranted and denied MasterObjects’ motion for sanctions.

Disposition

Judge William Alsup concluded that both parties’ motions were denied. The order did not determine the ultimate merits of the patent-infringement claims.