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Arctic Cat, Inc. v. Polaris Industries, Inc.

United States District Court, D. Minnesota

May 18, 2015

Arctic Cat, Inc. et al., Plaintiffs,
v.
Polaris Industries Inc. et al., Defendants.

Joseph Herriges, John Adkisson, and Michael Okerlund for Arctic Cat, Inc., et al.

William Bullard, Alan Carlson, and John Zwier for Polaris Industries Inc., et al.

REPORT AND RECOMMENDATION

FRANKLIN L. NOEL, Magistrate Judge.

THIS MATTER came before the undersigned United States Magistrate Judge on May 1, 2015 on Arctic Cat's motion to compel Polaris to reduce its asserted claims (ECF No. 77). The matter was referred to the undersigned for a report and recommendation pursuant to 28 U.S.C. § 636 and Local Rule 72.1. See Order, ECF No. 89. For the reasons set forth below, the Court recommends that Arctic Cat's motion be DENIED without prejudice.

I. FINDINGS OF FACT

Arctic Cat, Inc. ("Arctic Cat") is a Minnesota corporation that manufacturers and sells recreational vehicles. Am. Compl. ¶ 1, ECF No. 10. Polaris Industries, Inc. ("Polaris") is also a Minnesota-based company engaged in the manufacture and sale of recreational vehicles. Id. ¶ 3. Both Arctic Cat and Polaris manufacture side-by-side all-terrain-vehicles ("ATVs"). The current action involves three patent cases that this Court has recommended be consolidated for pretrial purposes: (1) Arctic Cat Inc. et al. v. Polaris Industries Inc. et al., Case No. 13-cv-3579 (JRT/FLN); (2) Polaris Industries Inc. et al. v. Arctic Cat Inc. et al., Case No. 14-cv-3386 (JRT/FLN); and (3) Polaris Industries Inc. et al. v. Arctic Cat Inc. et al., Case No. 14-cv-3412 (JRT/FLN). See Report and Recommendation, ECF No. 68.

Polaris owns the three patents-in-suit in the consolidated cases: U.S. Patent Nos. 8, 596, 405 ("the 405 patent"), 8, 827, 028 ("the 028 patent"), and 8, 746, 719 ("the 719 patent"). Opp'n Mem. 3, ECF No. 93. These patents pertain to side-by-side ATVs. See generally Herriges Decl. Exs. 1-3, ECF No. 80. Polaris alleges that certain Arctic Cat "Wildcat, " "Trail, " and "Sport" ATVs infringe on the patents-in-suit. ECF No. 93 at 4.

On February 11, 2015, this Court issued a Joint Scheduling Order for the consolidated cases. See Order, ECF No. 69. The Scheduling Order outlined the following deadlines: (1) Polaris's claim chart due on April 1, 2015; (2) Arctic Cat's claim chart due on May 22, 2015; (3) Arctic Cat's prior art due on June 1, 2015; (4) Polaris's response to Arctic Cat's prior art due on July 1, 2015; (5) claim construction hearing to be held on or before November 1, 2015; and (6) fact discovery due on March 1, 2016. Id.

Arctic Cat now seeks an Order from this Court compelling Polaris to reduce the number of patent claims asserted against Arctic Cat to a total of twelve across all three patents-in-suit. ECF No. 77. Arctic Cat claims that Polaris is asserting 167 patent claims across the three patents-in-suit. Mem. in Supp. 2, ECF No. 79. Polaris states, however, that it has reduced the number of asserted claims to 117. ECF No. 93 at 6. Specifically, Polaris is asserting 32 claims for the 405 patent, 32 claims for the 719 patent, and 53 claims for the 028 patent. Id. Nonetheless, Arctic Cat contends that claim reduction is still necessary because the number of claims asserted by Polaris is "far beyond the number that any reasonable litigant could argue can practically be tried." ECF No. 79 at 2. According to Arctic Cat, many of the asserted claims overlap and subjecting Arctic Cat and this Court to the number of claims asserted by Polaris would be an undue burden. Id. at 3, 5-6. Thus, Arctic Cat argues that Polaris should be ordered to reduce the number of claims it is asserting to twelve. Id. at 19.

Conversely, Polaris contends that claim reduction should not "come too early in the discovery process" and thus claim reduction is premature at this time. ECF No. 93 at 2. Specifically, Polaris believes that claim reduction should not occur until after Arctic Cat has revealed its contentions, claim construction positions, and key documents. Id. The Court addresses each argument in turn.

II. CONCLUSIONS OF LAW

Patent holders have separate property rights in each claim of a patent. See Leeds & Catlin Co. v. Victor Talking Mach. Co., 213 U.S. 301, 319 (1909) ("Claims are independent inventions.... One claim may be valid, all the rest invalid.... But what is good remains and is unaffected by its illegal associates."); see also 35 U.S.C. § 282 ("Each claim of a patent (whether in independent, dependent, or multiple dependent form) shall be presumed valid independently of the validity of other claims...."). Patent holders can, however, abuse these rights by claiming that a competitor's product infringes on an unnecessary and unreasonable number of patent claims, forcing the competitor to spend significant resources litigating the infringement issues.

To combat this potential abuse, and to effectively manage complicated patent cases, district courts possess the authority and discretion to reasonably limit the number of claims asserted in patent infringement actions. See In re Katz Interactive Call Processing Patent Litig., 639 F.3d 1303, 1311-13 (Fed. Cir. 2011); see also Stamps.com Inc. v. Endicia, Inc., 437 Fed.Appx. 897, 902-03 (Fed. Cir. 2011). While these limits can streamline cases and enhance judicial efficiency, claim reduction seems to serve as a kind of "meat ax" in patent cases for handling case management issues. Regardless, neither party disputes that courts can order claim reduction. Indeed, Polaris admitted at the hearing that it has no intention of trying all 117 claims it has asserted. The dispute in the present case, therefore, revolves around when in the patent litigation process such reduction should take place.

Arctic Cat argues that the proper time to order Polaris to reduce the number of asserted claims is now, prior to Arctic Cat serving its non-infringement and invalidity contentions. ECF No. 79 at 15. Arctic Cat claims that reduction at the present time is necessary to avoid an undue burden as "Arctic Cat's invalidity analysis would require thousands of pages." Id. Conversely, Polaris claims that a reduction of claims at this point in the litigation is premature, because it cannot be sure which of its claims present unique issues of validity or infringement prior to Arctic Cat revealing its invalidity and non-infringement defenses. ECF No. 93 at 17. Polaris asserts that the proper time for claim reduction is after claim construction. Id. at 23. Both parties have provided examples of cases throughout the country that support their respective positions. See, e.g., Medtronic Minimed, 2013 WL 3322248 (ordering reduction before non-infringement and invalidity contentions); Joao Control & Monitoring Systems LLC v. Ford Motor Co., No. 13-cv-13615, 2014 WL 645246 (E.D. Mich. Feb. 19, 2014) ...


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