On September 7, 2022, the Court of Appeals for the Federal Circuit issued a precedential opinion in Arendi S.A.R.L v. LG Electronics, Inc., offering an important reminder to patent litigators of the necessity of following the local rules of the jurisdiction in which a patent infringement suit is filed.¹ After Arendi S.A.R.L. (“Arendi”) failed to “produce . . . an initial claim chart relating each accused product to the asserted claims each product allegedly infringe[d]” under the local rules of the District of Delaware, the district court struck certain portions of Arendi’s expert report directed to those improperly accused products.² Instead of seeking to supplement its claim charts, as permitted under the local rules, Arendi filed a second suit alleging infringement of the products previously stricken in Arendi I.³ The district court dismissed the second suit and the Federal Circuit affirmed, holding that the “duplicative-litigation doctrine” barred a later-filed suit for patent infringement involving the same patents and products as an earlier-filed, co-pending suit. Arendi is a potent example of the perils that face those who fail to adhere to the local rules in the earlier stages of a case, and the consequences that may follow leading up to trial.

I. FACTUAL AND PROCEDURAL BACKGROUND

Arendi is the owner of U.S. Patent No. 7,917,843 (the “’843 patent”) relating to a “method, system and computer readable medium for name and address handling.”⁴ In Arendi I, Arendi sued LG Electronics Inc. and LG Electronics USA, Inc. (collectively, “LG”), alleging infringement of the ’843 patent by various LG products.⁵ Although Arendi listed “hundreds of LG products as infringing four claims of the ’843 patent” in its disclosures under the District of Delaware’s Default Standard for Discovery Section 4(a), Arendi “provided claim charts for only one of those products—LG’s Rebel 4 phone.”⁶ Two months later, “LG sent a letter to Arendi stating that the singular-product claim charts for the ’843 patent were insufficient” to satisfy Arendi’s discovery obligations under the District of Delaware’s Default Standard for Discovery Section 4(c).⁷ “Arendi did not respond to this letter or move to supplement” its disclosure.⁸

As the case continued, the parties ultimately agreed that “eight representative products,” including seven non-Rebel 4 products, would “represent all accused products.”⁹ Although LG provided discovery on all eight products, Arendi never moved to supplement its disclosures relating to those products.¹⁰ After Arendi served an interrogatory directed to all eight products, “LG reiterated its position that Arendi ha[d] only provided infringement contentions for [the Rebel 4]” product.¹¹ Nevertheless, Arendi still did not move to supplement its disclosures relating to the seven non-Rebel 4 products.¹²

Following the close of fact discovery and after Arendi served an expert report containing opinions directed to five of the seven non-Rebel 4 products, LG moved to strike the report on the grounds that it “allegedly disclosed—for the first time—infringement contentions” for those “non-Rebel 4 representative products.”¹³ The district court in Arendi I granted LG’s motion, finding that Arendi “failed to fulfill its discovery obligations.”¹⁴ Instead of seeking to supplement its disclosures, Arendi then filed a separate suit against LG, alleging infringement of the ’843 patent by the non-Rebel 4 products.¹⁵ LG moved to dismiss Arendi II as duplicative of Arendi I “since all of the non-Rebel 4 products accused in Arendi II were also accused in Arendi I.” The district court granted LG’s motion, and Arendi appealed.¹⁶

II. LEGAL ANALYSIS

In affirming the district court’s order granting LG’s motion to dismiss Arendi II, the Federal Circuit first held that, “[u]nder the circumstances of this case, the question of dismissing the Arendi II complaint as duplicative of the Arendi I complaint involve[d] a procedural issue,” necessitating application of regional circuit law.¹⁷ In the Third Circuit, “a district court’s power to dismiss a case as duplicative is ‘part of [a district court’s] general power to administer its docket.’”¹⁸ Accordingly, the district court’s order dismissing Arendi II could not be overturned absent an abuse of discretion.¹⁹

Turning next to the applicable substantive legal standard, the Federal Circuit observed that “[t]he duplicative litigation doctrine prevents plaintiffs from ‘maintain[ing] two separate actions involving the same subject matter at the same time in the same court . . . against the same defendant.”²⁰ The doctrine thus requires inquiry into two primary “areas of factual overlap,” including (i) the overlap of the products accused in the later action with the products accused in the prior action, and (ii) the overlap of the patents in both suits.²¹ This analysis, the Federal Circuit held, “is determined under Federal Circuit law.”²²

Turning to the question of whether Arendi II involved the same subject matter as Arendi I, the Federal Circuit observed that the district court properly held that “cases involve the same subject matter where the same patent is asserted and the accused products are at least essentially the same or identical.”²³ The dispute centered on whether the products Arendi accused in Arendi II were identical to those accused in Arendi I. Arendi argued that the accused products in Arendi II were not identical to those in Arendi I because, as “a consequence of the district court’s grant of LG’s motion to strike parts of Arendi’s expert report in Arendi I,” there was “no overlap between the accused products.”²⁴ But the Federal Circuit rejected this argument, noting that the district court in Arendi I “did not grant LG’s motion to strike parts of Arendi’s infringement expert report because Arendi failed to sufficiently accuse the non-Rebel 4 products,” but rather, “because Arendi failed to fulfill its discovery obligations.”²⁵ Indeed, under the District of Delaware’s Default Standard for Discovery Section 4(c), Arendi was required, but failed, to “produce . . . an initial claim chart relating each accused product to the asserted claims each product allegedly infringe[d],” and Arendi never made any effort to supplement its disclosures, as permitted by the local rules.²⁶

The Federal Circuit likewise rejected Arendi’s argument that the non-Rebel 4 products were not “at issue” or “litigated” in Arendi I at least in part because “Arendi listed the non-Rebel 4 products in its Section 4(a) Disclosure, served interrogatories about the non-Rebel 4 products after the parties agreed to seven non-Rebel 4 representative products, received discovery related to those products, and included non-Rebel 4 products in its expert report.”²⁷ Under those circumstances, the Court concluded that the non-Rebel 4 products were “at issue” or “litigated” in Arendi I.²⁸ The Federal Circuit thus affirmed the district court’s order dismissing Arendi II under the duplicative-litigation doctrine.

III. CONCLUSION

Arendi serves as an important reminder to practitioners and parties that the failure to adhere to the local rules of the jurisdiction in which a suit is filed, even if those rules are merely procedural, may have significant, substantive consequences. As Arendi makes plain, a party who fails to adhere to those rules may find itself precluded from enforcing earned patent rights with respect to certain potentially infringing products, thereby decreasing the monetary value of those rights. Parties engaged in litigation are thus well-advised to secure counsel with comprehensive knowledge of both the substantive and procedural areas of the law, to avoid this potential outcome.