United Construction Products, Inc. v. Tile Tech, Inc.

         Appeal from the United States District Court for the Central District of California in No. 2:14-CV-08570-R-VBK, Judge Manuel L. Real.

          David von Gunten, von Gunten Law LLC, Denver, CO, argued for plaintiff-appellee. Also represented by Michelle Correll, Smith Correll LLP, Los Angeles, CA.

          Kelly W. Cunningham, Cislo & Thomas LLP, Los Angeles, CA, argued for defendant-appellant.

          Before Moore, Wallach, and Stoll, Circuit Judges.

          Wallach, Circuit Judge

         Tile Tech, Inc. ('Tile Tech") appeals the decision of the U.S. District Court for the Central District of California ("District Court") granting default judgment and a permanent injunction to United Construction Products, Inc., doing business as Bison Innovative Products ("United"), on claims of patent infringement and unfair competition. See United Constr. Prods., Inc. v. Tile Tech, Inc., No. 2:14-cv-08570-R-VBK, 2015 WL 7776795, at *6-8 (C.D. Cal. Dec. 1, 2015). We affirm.

         Background

         This case comes to our court following a series of delays, missed deadlines, and other procedural missteps by Tile Tech that are necessary to describe in full. United brought suit against Tile Tech claiming infringement of U.S. Patent No. 8, 302, 356 ("the '356 patent"), which is entitled "Support Pedestal Having an Anchoring Washer for Securing Elevated Surface Tiles." '356 patent col. 1 ll. 1-3. Following transfer of the case to the District Court, United, 2015 WL 7776795, at *1, United served Tile Tech with its first set of discovery requests, including interrogatories, requests for admission, and requests for production, J.A. 140, 149, 282. Tile Tech missed the deadline to respond to the discovery requests, and when contacted by United, it claimed that it had not received the requests. United, 2015 WL 7776795, at *2. Although service of the requests was valid, United granted Tile Tech twenty additional days to respond. Id. Tile Tech then requested two additional extensions and finally served initial responses to United nearly one month after the original response deadline. Id.

         Tile Tech's responses to United's discovery requests were deficient. Id. United requested a conference regarding the responses and Tile Tech agreed, but two hours before the scheduled conference, Tile Tech requested that it be rescheduled. Id. United agreed and provided a five hour time frame on Tile Tech's proposed date; Tile Tech responded on the proposed rescheduled date and again asked to postpone. Id. The conference was postponed a third time, and eventually occurred following United's warning to Tile Tech that it would file a motion to compel if Tile Tech did not commit to a time for the conference. Id. At the conference, Tile Tech agreed to "supplement virtually every response to [United]'s Discovery Re-quest[s] and to produce all responsive documents" by an agreed-upon date. Id.

         The agreed-upon date passed with no response from Tile Tech. Id. United offered to give Tile Tech ten additional days beyond the agreed-upon date to adequately respond. Id. at *3. When Tile Tech again failed to respond to the discovery requests, United filed a Motion to Compel Further Responses to Written Discovery and Production of Documents and for Sanctions ("Motion to Compel"). Id.; J.A. 221. Tile Tech never responded to the Motion to Compel. United, 2015 WL 7776795, at *3. It instead served supplemental responses to the discovery requests, which were still deficient, including unverified responses to the interrogatories. Id. The District Court took the Motion to Compel under submission, and Tile Tech proceeded to provide a third set of deficient supplemental responses. Id.

         The District Court issued an Order to Compel on October 5, 2015. J.A. 421-23. It found that, inter alia, Tile Tech had "failed to produce a single document in response to [United]'s document requests and ha[d] failed to supplement its deficient discovery responses, " and such actions "create . . . a waste of this [c]ourt's time." J.A. 421, 422. The District Court ordered Tile Tech to respond to the discovery requests, imposed monetary sanctions, and warned that it would enter default judgment if Tile Tech did not comply with the Order by October 12, 2015. J.A. 422. United's attorney stated in his declaration, and the District Court found, that he informed Tile Tech's attorney during a deposition on October 9, 2015, that the Order to Compel had issued and that it included sanctions. J.A. 918; United, 2015 WL 7776795, at *4.

         Tile Tech failed to respond to the Order.^[1] On October 12, 2015, United filed its Motion for Entry of Default Judgment. J.A. 756-65. Tile Tech responded and claimed that it had not known of the Order's response deadline; that it had produced a set of supplemental responses to the discovery requests; and that it required an expert opinion to fully respond to part of the discovery requests, which would be forthcoming. J.A. 813-14. The District Court found that Tile Tech's claim of producing additional responses was a "misrepresentation to the [c]ourt" because no responses had been served as of the filing of Tile Tech's Opposition to Motion for Default Judgment. United, 2015 WL 7776795, at *4. In addition, the District Court held Tile Tech's claim that it would provide an expert witness was "facially insufficient and unjustified" because the time to designate an expert witness had "long passed." Id. Moreover, although Tile Tech had produced only two documents during the prolonged discovery period, both of which were non-responsive, and had not disclosed any persons with relevant knowledge in response to interrogatories pursuant to Federal Rule of Civil Procedure 26(a)(1), ^[2] it nonetheless listed over a dozen exhibits and over a dozen potential trial witnesses in its Joint Exhibit and Witness Lists disclosed at the end of the discovery period. Id.

         On November 2, 2015, Tile Tech finally served another set of supplemental responses, which contained information disclosing its destruction of a previously undisclosed mold used to make one key component of the disputed support pedestal. Id. at *5. United filed a Motion for Spoliation Sanctions, J.A. 1090-97, and filed an unopposed Amended Complaint adding a claim for unfair competition, to which Tile Tech never responded, J.A. 404-11 (Amended Complaint); United, 2015 WL 7776795, at *5 (finding that Tile Tech never responded to the Amended Complaint). The District Court later entered default judgment, granted relief for all of United's claims, and entered a permanent injunction. United, 2015 WL 7776795, at *6-8.

         Tile Tech timely appealed. This court has jurisdiction pursuant to 28 U.S.C. § 1295(a)(1) (2012).

         Discussion

         Tile Tech raises two principal arguments on appeal, one concerning the entry of default judgment and the other related to the scope of the District Court's permanent injunction. Appellant's Br. 14-28, 29-33. "A decision to sanction a litigant [by ordering default judgment] pursuant to Fed[eral] R[ule of] Civ[il] P[rocedure] 37^[3] is one that is not unique to patent law . . . and we therefore apply regional circuit law to that issue . . . ." ClearValue, Inc. v. Pearl River Polymers, Inc., 560 F.3d 1291, 1304 (Fed. Cir. 2009) (internal quotation marks and citation omitted); see also Drone Techs., Inc. v. Parrot S.A., 838 F.3d 1283, 1297 (Fed. Cir. 2016) (considering an appellant's challenge to the imposition of default judgment and stating that "[w]e are guided by regional circuit law when reviewing discovery rulings . . . and the imposition of sanctions" (internal citations omitted)). In this case, we look to Ninth Circuit precedent, and the relevant standard is articulated below. Because the injunction "enjoins the violation of a[] right secured by a patent . . . [it] involves substantive matters unique to patent law and, therefore, is governed by the law of this court." Hybritech Inc. v. ...