Cellulose Material Solutions, LLC v. SC Marketing Group, Inc.

Background

Cellulose alleged that SC Marketing infringed U.S. Patent No. 11,078,007, which concerns packaging insulation intended to preserve the temperature and freshness of perishable items without, or with reduced reliance on, refrigerant packs. Cellulose’s product is called InfinityCore, and SC Marketing’s competing product is called Renewliner.

According to the opinion, SC Marketing had previously approached Cellulose about its products, and Cellulose made a confidential disclosure during the parties’ relationship. SC Marketing alleged in its answer that the parties collaborated, discussed jointly filing to protect their inventions, and that SC Marketing President Sal Cardinale should have been named as an inventor on the patent. SC Marketing denied Cellulose’s allegations generally, admitted that it sells Renewliner, asserted patent invalidity as an affirmative defense, and brought counterclaims for declaratory relief and correction of inventorship.

Four Disputes

1. Amended Answer

SC Marketing sought leave under Federal Rule of Civil Procedure 15 to add counterclaims for conversion, unjust enrichment, unfair competition, and intentional interference with prospective economic advantage. Cellulose argued that the request came too late, would cause prejudice and additional discovery, and included futile claims.

The court granted SC Marketing leave to amend its answer. It noted that this was SC Marketing’s first request, that the request was filed before fact discovery closed and by the court’s amendment deadline, and that additional discovery would overlap with existing issues. The court also concluded that the proposed claims were not futile at this stage because they were based on alleged misuse of proprietary designs, rather than solely on Cellulose’s assertion of patent infringement. The court left open later challenges to the new counterclaims after fuller briefing.

2. Amended Invalidity Contentions

SC Marketing sought leave to amend its patent-invalidity contentions based on the court’s construction of the claim term “folded without the need for creases, grooves, or cut lines” and the patent’s prosecution history. Cellulose argued that SC Marketing could have raised the proposed contention earlier because the court had adopted what Cellulose viewed as the term’s ordinary meaning.

The court granted the amendment. It found that SC Marketing moved shortly after claim construction and that the court’s construction differed from SC Marketing’s proposed construction. Although the court discussed concerns about diligence, it found sufficient time remained in discovery and that the construction was important to SC Marketing’s proposed enablement contention. Enablement asks whether the patent specification provides enough information to practice the full scope of the claimed invention.

3. Scheduling Order

Cellulose sought a two-month extension of the fact-discovery deadline and other scheduling dates because SC Marketing’s document production and depositions were still in their early stages and Cellulose’s expert had a scheduled hospital stay. SC Marketing argued generally that Cellulose had not been diligent and had not shown good cause.

The court granted the requested schedule extension. It found the extension practically necessary in light of the amendments allowed by the order and stated that Cellulose had shown additional grounds for good cause and had been diligent. The court said it would issue an amended scheduling order separately.

4. Discovery Dispute

Cellulose moved to compel additional responses from SC Marketing concerning products other than Renewliner sold to Renewliner customers, SC Marketing’s counterclaims, and SC Marketing’s communications with the United States Patent and Trademark Office about its patent application. SC Marketing generally argued that the requests were overbroad and sought sensitive technical information.

The court ordered the discovery. It held that Cellulose’s fifth interrogatory, seeking identification of other products sold to Renewliner customers, was relevant and proportional because the information could bear on reasonable-royalty damages and potentially related sales. The court said Cellulose could use discovery to test SC Marketing’s position that those sales were not sufficiently related to the patented product.

The court also found that interrogatories nine through eleven, which concerned SC Marketing’s counterclaims, were relevant and proportional, while noting that SC Marketing said that dispute was moot because it had supplemented its responses. Finally, the court found that Cellulose’s sixth request for production, seeking documents exchanged with the Patent and Trademark Office regarding a related patent application, was relevant and proportional. The court stated that the protective order addressed SC Marketing’s confidentiality concerns.

Disposition

The court granted the pending requests as reasonable adjustments to the scope of the case. This resolved ECF Nos. 61, 63, 73, and 78. Judge Laurel Beeler did not decide in this order whether the patent was infringed or invalid; the order addressed amendments, scheduling, and discovery.