A Forgiving Response To A Candidly Admitted Error But Still Costly

• Published date: 07 December 2021
• Subject Matter: Intellectual Property, Patent
• Law Firm: Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
• Author: Ms Yicong (Eve) Du, Adriana L. Burgy, Stacy Lewis and Thomas L. Irving

Holding

In Sorrell Holdings LLC v. Infinity Headwear & Apparel, LLC, a patent infringement dispute in the United States District Court for the Western District of Arkansas, the court denied defendant's motion to dismiss, reasoning that plaintiff's failure to disclose key evidence until three days before trial was inadvertent and a sanction tantamount to a dismissal would be too extreme. However, the court allowed defendant to seek, fees, and costs associated with a continuance and plaintiff's failure to comply with its initial discovery and disclosure obligations. 2021 U.S. Dist. LEXIS 221459 (W.D. Ark. Nov. 17, 2021).

Background

In 2016, Sorrell sued Infinity for infringement of a patent related to hand-held loofahs. The matter was set for jury trial for November 15, 2021. On the 12^th, three days prior to the trial date, the plaintiff moved to introduce new documents into evidence, including a patent assignment and several maintenance fee statements. Absent those documents, the plaintiff would be unable to meet its burden of showing it was the legal assignee of the patent and thus would lack standing to sue defendant for infringement. Id. at *3.

The court denied plaintiff's motion to introduce these belatedly disclosed documents, reasoning that plaintiff had no justification for the late disclosure and that allowing entry of the new evidence would harm defendant. On that same day, defendant filed a motion to dismiss the case. However, the court slammed on the brakes, denying defendant's motion to dismiss. Id. at *2.

District Court

There was no dispute that plaintiff failed to timely disclose the assignment documents. And there was no dispute that such failure was not harmless to defendant's trial preparation. Id. The issue for the district court was the appropriate sanction for such failure. The court analyzed the four factors set out in Wegener v. Johnson, 527 F.3d 687, 692 (8^thCir. 2008) to determine an appropriate sanction for failure to timely disclose information. Those four factors are:

1. the reason for noncompliance,
2. the surprise and prejudice to the opposing party,
3. the extent to which allowing the information or testimony would disrupt the order and efficiency of the trial, and
4. the importance of the information or testimony.

Id. at *4.

In its reasoning, the court focused on plaintiff counsel's candor with the court in admitting his failure to disclose and admitting that he had no excuse for the failure. This candor also convinced the court that...