Free Declaration - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE NESSCAP CO., LTD., ) ) Plaintiff and ) Counterclaim Defendant, ) ) v. ) C.A. No. 06-00764-GMS ) MAXWELL TECHNOLOGIES, INC., ) ) Defendant and ) Counterclaim Plaintiff. ) __________________________________________) DECLARATION OF BRIAN M. KRAMER IN SUPPORT OF MAXWELL TECHNOLOGIES, INC.'S MOTION TO TRANSFER NESSCAP CO., LTD.'S COMPLAINT FOR PATENT INFRINGEMENT

I, Brian M. Kramer, hereby declare as follows: 1. I am a member of the state bar of California and am associated with the

law firm of Morrison & Foerster LLP, which represents Defendant Maxwell Technologies, Inc. ("Maxwell") in both this action and the first-filed lawsuit filed by Maxwell in the United States District Court for the Southern District of California entitled Maxwell Techs., Inc. v. NessCap, Inc. et al., No. 06-cv-2311 (S.D. Cal. Filed Oct. 17, 2006) ("the San Diego action"). I am admitted pro hac vice to practice before this Court. I have personal knowledge of the facts stated herein and, if called as a witness, I could and would testify competently as to them. 2. Attached hereto as Exhibit 1 is a true and correct copy of a press release

dated December 15, 2006, entitled "NessCap Files Patent Infringement Lawsuit Against Maxwell Technologies." I downloaded the press release on January 30, 2007, from NessCap's website, http://www.nesscap.com.

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3.

Attached hereto as Exhibit 2 is a true and correct copy of excerpts of

NessCap Co. Ltd.'s November 9, 2006 Memorandum of Points and Authorities in Support of Defendant NessCap Co., Ltd.'s Motion to Dismiss Plaintiff's First Amended Complaint For Insufficient Service of Process, D.I. 26-2 in the San Diego action. 4. Attached hereto as Exhibit 3 is a true and correct copy of excerpts of

Defendant NessCap Co., Ltd.'s December 21, 2006 Reply in Support of Motion to Dismiss First Amended Complaint For Insufficient Service of Process, D.I. 36-1 in the San Diego action. 5. Attached hereto as Exhibit 4 is a true and correct copy of excerpts of

Defendant Nesscap, Inc.'s December 21, 2006 Reply in Support of Motion to Dismiss First Amended Complaint for Lack of Personal Jurisdiction and Insufficient Service of Process, D.I. 37-1 in the San Diego action. 6. Attached hereto as Exhibit 5 is a true and correct copy of excerpts of

Maxwell Technologies, Inc.'s November 2, 2006, Memorandum of Points and Authorities In Support of Plaintiff Maxwell Technologies, Inc.'s Motion for Preliminary Injunction, D.I. 13 in the San Diego action. 7. Attached hereto as Exhibit 6 is a true and correct copy of pages printed

from the website of Interface Displays & Controls, Inc., a San Diego manufacturer of control and display devices for a variety of man-machine interfaces. I downloaded the pages from http://www.interfacedisplays.com/company/management.htm on February 5, 2007. Exhibit 7 is a true and correct copy of the company's management organization chart, which I downloaded at http://www.interfacedisplays.com/pdfs/form083_org_chart.pdf. 8. I spoke with Dr. Priya Bendale approximately four times during the past

month regarding her role as a possible witness in both this action and the first-filed action in the Southern District of California. Dr. Bendale is Maxwell's former Senior Director of Research and Development and is the first named inventor of one of two
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patents-in-suit in the San Diego action. That same patent has been called into issue by NessCap in its declaratory judgment action against Maxwell in this Court, C.A. No. 07035 ("the second Delaware action"). Dr. Bendale told me that she did not want to come to Delaware to testify for both personal and professional reasons. Specifically, she explained to me that her current position as Vice President of Engineering for Interface Displays & Controls, Inc. keeps her very busy and that traveling to Delaware to provide testimony would be inconvenient compared to providing the same testimony in San Diego. She further noted that her current employer would likely not allow her to travel to Delaware to testify for her former employer. 9. Attached hereto as Exhibit 8 is a true and correct copy of pages printed

from the website of Ionix Power Systems, LLC, a San Diego developer of products and tools designed to aid in the development of batteries, fuel cells, and advanced capacitors. I downloaded the "President's Message" on February 5, 2007 from http://www.ionixpower.com/pres_message.htm. 10. I spoke to Mr. C. Joseph Farahmandi approximately three times during

the past month regarding his role as a possible witness in this action and the San Diego litigation. Mr. Farahmandi is Maxwell's former Technical Director of Research and Development and is now the President of Ionix Power Systems, LLC, a San Diego based company. Mr. Farahmandi told me that he is too busy to be involved in this litigation and that he did not want to come to Delaware to testify. 11. Attached hereto as Exhibit 9 is a true and correct copy of the "Judicial

Caseload Profile" for the United States District Court for the District of Delaware. I downloaded the profile from the website of the Administrative Office of the United States Courts on January 16, 2007, at http://www.uscourts.gov/cgi-bin/cmsd2005.pl. 12. Attached hereto as Exhibit 10 is a true and correct copy of the "Judicial

Caseload Profile" for the United States District Court for the Southern District of California. I downloaded the profile from the website of the Administrative Office of
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CERTIFICATE OF SERVICE I, Karen E. Keller, Esquire, hereby certify that on February 6, 2007, the foregoing document was electronically filed with the Clerk of the Court using CM/ECF which will send notification that such filing is available for viewing and downloading to the following counsel of record: Denise Seastone Kraft, Esquire EDWARDS ANGELL PALMER & DODGE LLP 919 North Market Street Suite 1500 Wilmington, DE 19801 [email protected] I further certify that on February 6, 2007, the foregoing document was served by hand delivery on the above-listed counsel of record and on the following non-registered participants in the manner indicated below: BY E-MAIL ON FEBRUARY 6, 2007AND FEDERAL EXPRESS ON FEBRUARY 7, 2007 George W. Neuner, Esquire Brian M. Gaff, Esquire EDWARDS ANGELL PALMER & DODGE LLP 101 Federal Street Boston, MA 02110

YOUNG CONAWAY STARGATT & TAYLOR, LLP /s/ Karen E. Keller Karen E. Keller (No. 4489) The Brandywine Building, 17th Floor 1000 West Street Wilmington, DE 19801 302-571-6600 [email protected]

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New Energy Systems New Electroluminescent Systems Case 1:06-cv-00764-GMS Document 15-2

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HOME COMPANY INFO PRESS RELEASE







NessCap Files Patent Infringement Lawsuit Against Maxwell Technologies

Date 2006-12-15

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NessCap Files Patent Infringement Lawsuit Against Maxwell Technologies
SEOUL, SOUTH KOREA - NessCap Co. Ltd., a privately held company recognized as a global leader in ultracapacitor technology, product development, sales and manufacturing has filed a patent infringement lawsuit against Maxwell Technologies, (Nasdaq: MXWL) a San Diego, California based ultracapacitor manufacturer. The lawsuit alleges that Maxwell's products, including the D cell product line of Boostcap® ultracapacitors, infringe NessCap's patented intellectual property. NessCap filed the lawsuit in the United States District Court for the District of Delaware in Wilmington, Delaware. NessCap is represented in the lawsuit by Edwards Angell Palmer & Dodge LLP. "NessCap has invested significant capital, resource and effort in developing our own proprietary and patented technology and we will not allow Maxwell to infringe" said Dr. Sunwook Kim, NessCap's founder and chairman of the board. Dr. Kim further observed: "for whatever reason, after our merger discussions ended abruptly, Maxwell started the legal battle by filing a lawsuit against us for infringement in San Diego, which we will demonstrate has absolutely no merit. We and our legal team have conducted an extensive review of our patent estate and we have determined that NessCap ultracapacitors, which Maxwell accuses of infringement, are protected by NessCap patents that predate the Maxwell patents at issue in the San Diego lawsuit. We are convinced that we have a very strong position." NessCap is a global leader in technology innovation and product development of ultracapacitors. We feature the widest array of standard commercial products in the market from 3 farads to 5000 farads with industry recognized alternative organic electrolytes. Our NessCap products are available in both cells and modules for the transportation, power and consumer markets. Technical and sales information can be found at www.nesscap.com.




COPYRIGHT 2005 NESSCAP CO. LTD. ALL RIGHTS RESERVERD.



http://www.nesscap.com/companyinfo_pressrelease_view.php?uid=7

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Callie A. Bjurstrom, State Bar No. 137816 Email: [email protected] Michelle A. Herrera, State Bar No. 209842 Email: [email protected] LUCE, FORWARD, HAMILTON & SCRIPPS LLP 600 West Broadway, Suite 2600 San Diego, California 92101-3372 Telephone No.: 619.236.1414 Fax No.: 619.232.8311 Brian M. Gaff, State Bar No. 202896 Email: [email protected] EDWARDS ANGELL PALMER & DODGE LLP 101 Federal Street Boston, MA 02110-1810 Telephone: 617-439-4444 Facsimile: 617-439-4170 Attorneys for NessCap, Co., Ltd.

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

MAXWELL TECHNOLOGIES, INC., Plaintiff, v. NESSCAP, INC. and NESSCAP CO., LTD., Defendants.

Case No. 06CV2311-JAH(BLM) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT NESSCAP CO., LTD'S MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT FOR INSUFFICIENT SERVICE OF PROCESS [F.R.C.P. 12(b)(5)] Date: January 18, 2007 Time: 3:00 p.m. Crtrm: 11 Judge: The Hon. John A. Houston Complaint Filed: October 17, 2006

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I.

INTRODUCTION Defendant NessCap Co., Ltd. moves the Court to dismiss Maxwell Technologies, Inc.'s

("Maxwell") Complaint pursuant to Fed. R. Civ. P. 12(b)(5) because service of process on NessCap Co., Ltd. was insufficient. II. STATEMENT OF FACTS NessCap Co., Ltd. ("LIMITED") is a company located only in South Korea and organized under Korean law. It is engaged in the research, development, production, and sales of electrical energy storage products known as "ultracapacitors." LIMITED has no offices in the United States, is not registered to do business anywhere in the United States, and has no registered agents in the United States. Its parent company is NessCap, Inc., which is a Delaware corporation that is registered to do business in New York State. Declaration"), ¶¶ 2-4, filed concurrently herewith. Maxwell is a company located in San Diego, California, and incorporated in Delaware. Maxwell filed its Complaint for patent infringement on October 17, 2006. On October 18, 2006, Maxwell filed a Motion for a Preliminary Injunction (Dkt. No. 3). The Summons and Complaint were hand delivered to the receptionist at the office of NessCap, Inc.'s attorney in New York City on October 18, 2006. See Declaration of Huhnsik Chung ("Chung Declaration"), ¶ 3, filed in support of Nesscap, Inc.'s motion to dismiss. See also Return of Service, Dkt. No. 9. No request to waive service was provided. Chung Declaration, ¶ 3. On November 2, 2006, Maxwell filed a First Amended Complaint (Dkt. No.12) and a new Motion for a Preliminary Injunction (Dkt. No. 13), both of which again Maxwell hand delivered to the receptionist at the office of NessCap, Inc.'s attorney in New York City on the same day. Chung Declaration, ¶ 4. Again, no request to waive service was made. Id. at 4. Maxwell contends that certain LIMITED products ("the Accused Products"), infringe U.S. Pat. Nos. 6,525,924 and 6,631,074 ("the patents-in-suit"). Maxwell alleges that LIMITED is infringing the patents-in-suit by making, using, and/or selling or offering for sale in the United States the Accused Products. This allegation is unfounded. /// 1
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See Declaration of Myung Rae Cho ("Cho

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IV.

CONCLUSION For the reasons set forth above, NessCap Co., Ltd. respectfully requests that this Court

grant this Motion and dismiss the instant action. DATED: November 9, 2006 LUCE, FORWARD, HAMILTON & SCRIPPS LLP

By: s/Callie A. Bjurstrom Callie A. Bjurstrom Michelle A. Herrera Attorneys for Nesscap, Inc. and Nesscap Co., Ltd. DATED: November 9, 2006 EDWARDS ANGELL PALMER & DODGE LLP

By: s/Brian M. Gaff George W. Neuner Brian M. Gaff Attorneys for Nesscap, Inc. and Nesscap Co., Ltd.

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Callie A. Bjurstrom, State Bar No. 137816 Email: [email protected] Michelle A. Herrera, State Bar No. 209842 Email: [email protected] LUCE, FORWARD, HAMILTON & SCRIPPS LLP 600 West Broadway, Suite 2600 San Diego, California 92101-3372 Telephone No.: 619.236.1414 Fax No.: 619.232.8311 Brian M. Gaff, State Bar No. 202896 Email: [email protected] EDWARDS ANGELL PALMER & DODGE LLP 101 Federal Street Boston, MA 02110-1810 Telephone: 617-439-4444 Facsimile: 617-439-4170 Attorneys for NessCap Co., Ltd. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

MAXWELL TECHNOLOGIES, INC., Plaintiff, v. NESSCAP, INC. and NESSCAP CO., LTD., Defendants.

Case No. 06CV2311-JAH(BLM) DEFENDANT NESSCAP CO., LTD.'S REPLY IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR INSUFFICIENT SERVICE OF PROCESS Date: Time: Crtrm: Judge: January 18, 2007 3:00 PM 11 The Hon. John A. Houston

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B.

NessCap, Inc. And LIMITED Do Not Share An Alter Ego Relationship. Faced with the prospect of dismissal for insufficient service, Maxwell attempts to show

that LIMITED and NessCap, Inc. share an alter ego relationship and, in its Opposition (Dkt. No. 35), Maxwell repeats many of its earlier unsuccessful arguments in this regard. See Opposition To NessCap, Inc.'s Ex Parte Application (Dkt. No. 32). Maxwell fails to provide sufficient evidence to support its alter ego contention. Indeed, the thrust of Maxwell's argument is that documents that collectively mention LIMITED and NessCap, Inc. ­ or that refer to the co-defendants using a common shorthand term ­ demonstrate an alter ego relationship between LIMITED and NessCap, Inc. As set forth in co-defendant NessCap, Inc.'s separately filed reply, Maxwell clearly mischaracterizes its documentary evidence by selectively parsing the materials and ignoring other passages that distinguish LIMITED and NessCap, Inc. Also, Maxwell contends that LIMITED and NessCap, Inc. have a single management team. Opposition at 12. As discussed in NessCap, Inc.'s separately filed reply, this is simply not true. In the interest of brevity, LIMITED does not restate its arguments rebutting Maxwell's contention on the alter ego issue. Instead, LIMITED incorporates herein by reference NessCap, Inc.'s arguments as set forth in its separately filed reply regarding the lack of personal jurisdiction over NessCap, Inc. These arguments clearly show that Maxwell falls short of showing a basis to invoke the alter ego doctrine. C. Service on NessCap, Inc. is Not Tantamount to Service on LIMITED. Maxwell's argument that service on NessCap, Inc. is effective as service on LIMITED is based on Maxwell's contentions that (i) NessCap, Inc. and LIMITED are the same entity, and/or (ii) that NessCap, Inc. is LIMITED's agent. This argument is without merit. NessCap, Inc. and LIMITED have a parent-subsidiary relationship but operate independently and distinctly. As set forth in NessCap, Inc.'s separately filed reply, Maxwell fails to demonstrate that there is sufficient evidence to conclude that LIMITED is the alter ego of NessCap, Inc. for any purpose whatsoever. /// /// 2
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Maxwell contends that it effected service pursuant to Fed. R. Civ. P. 4(h)(1) by delivery of a copy of the summons and complaint to NessCap, Inc.'s registered agent in Delaware and then relies on Hickory1 to argue that its service is sufficient as to LIMITED. Opposition at 23. Maxwell's reliance on Hickory is misplaced. As an initial matter, the Hickory court ruled that, under the Federal Rules, service on subsidiaries was insufficient as to the parent holding company. The Hickory court reached this conclusion because, as in the instant case, there was no alter ego relationship between the parent and subsidiaries, so service on one entity was not effective as to service on the other. Hickory, 213 F.R.D. at 554. Maxwell also tries to justify its service by arguing that NessCap, Inc. is LIMITED's agent. Opposition at 22 n.9, 24. This argument is baseless. The Hickory court analyzed the agency argument and concluded that "for agency to exist, the subsidiary's activity must be integral to the parent's business." Id. at 553. Indeed, the Hickory court notes that "a holding company's investments weren't necessarily its agents, since the holding company could divest of those investments and still be a holding company." Id. (citing Gallagher v. Mazda Motor of America, 781 F. Supp. 1079, 1085 (E.D. Pa.1992).) Similarly, the parent holding company is not an agent for its investments. NessCap, Inc.'s activity is not an integral part of LIMITED's business. The facts of the instant case show that there is no evidence of an agency relationship between NessCap, Inc. and LIMITED. LIMITED operates independently from NessCap, Inc. and NessCap, Inc.'s sole executive has no role in the day-to-day activities of LIMITED. See

Declaration of Myung Rae Cho ("Cho Declaration"), Dkt. No. 26, ¶5. Like in Hickory, Maxwell has made no showing that NessCap, Inc. would be unable to function properly without LIMITED; so, as in Hickory, an agency relationship does not exist for service of process. Hickory, 213 F.R.D. at 554. Accordingly, proper service of process on NessCap, Inc. has no bearing or effect on LIMITED under the alter ego or agency theories on which Maxwell relies. /// /// Hickory Travel Systems, Inc. v. TUI AG et al., 213 F.R.D. 547 (N.D. Cal. 2003). 3
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III. CONCLUSION For the reasons set forth above, LIMITED respectfully requests that this Court grant its Motion to Dismiss.

DATED: December 21, 2006

LUCE, FORWARD, HAMILTON & SCRIPPS LLP

By: s/Callie A. Bjurstrom Callie A. Bjurstrom Michelle A. Herrera Attorneys for NessCap Co., Ltd. DATED: December 21, 2006 EDWARDS ANGELL PALMER & DODGE LLP

By: s/Brian M. Gaff George W. Neuner Brian M. Gaff Attorneys for NessCap Co., Ltd.

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CALENDARED MORRISON & FOERSTER DOCKET DEPT. SAN DIEGO

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Callie A. Bjurstrom, State Bar No. 137816 Email: [email protected] Michelle A. Herrera, State Bar No. 209842 Email: [email protected] LUCE, FORWARD, HAMILTON & SCRIPPS LLP 600 West Broadway, Suite 2600 San Diego, California 92101-3372 Telephone No.: 619.236.1414 Fax No.: 619.232.8311 Brian M. Gaff, State Bar No. 202896 Email: [email protected] EDWARDS ANGELL PALMER & DODGE LLP 101 Federal Street Boston, MA 02110-1810 Telephone: 617-439-4444 Facsimile: 617-439-4170 Attorneys for NessCap, Inc.

January 26, 2007 FOR DATE(S) BY: John Dukes

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

MAXWELL TECHNOLOGIES, INC., Plaintiff, v. NESSCAP, INC. and NESSCAP CO., LTD., Defendants.

Case No. 06CV2311-JAH(BLM) DEFENDANT NESSCAP, INC.'S REPLY IN SUPPORT OF MOTION TO DISMISS FIRST AMENDED COMPLAINT FOR LACK OF PERSONAL JURISDICTION AND INSUFFICIENT SERVICE OF PROCESS Date: Time: Crtrm: Judge: January 18, 2007 3:00 PM 11 The Hon. John A. Houston

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For example, NessCap, Inc. clearly distinguishes itself from LIMITED in the prospectus by revealing that LIMITED is the Korean subsidiary of NessCap, Inc. and clearly states that manufacturing is in Korea. Prospectus, Parker Declaration, Ex. A at2 1, 5 (Dkt. No. 35). Parker

According to Delaware corporate records, NessCap, Inc. was established in 2004.

Declaration, Ex. C (Dkt. No. 35). In contrast, LIMITED was formed in 2001. Prospectus, Parker Declaration, Ex. A at 1 (Dkt. No. 35). Clearly, then, LIMITED was engaged in the ultracapacitor business for approximately three years before the inception of NessCap, Inc. Accordingly, it is apparent that NessCap, Inc. and LIMITED are two distinct entities. NessCap, Inc. was formed to raise investment capital to expand business and establish a United States headquarters. See Declaration of Sunwook Kim ("Kim Declaration"), Dkt. No. 25, ¶5; NessCap, Inc. Prospectus, Parker Declaration, Ex. A at 1, 6 (Dkt. No. 35). Ardour issued NessCap, Inc.'s prospectus to communicate these goals to prospective investors. It is entirely appropriate that the prospectus include a discussion of the nature of the business of its wholly owned subsidiary LIMITED because that is where the investors' funds would be put to use. The use of "NessCap" as a shorthand reference to both NessCap, Inc. and LIMITED simply facilitates communication to prospective investors. Indeed, adopting Maxwell's argument would mean that any parent and subsidiary that ever refer to themselves using a common shorthand reference would blur the corporate distinctness that the law recognizes. Notwithstanding the above, with respect to statements in a prospectus, Maxwell ignores the case law on which it relies to support its Opposition. In Mirrow v. Club Med, Inc., 1986 WL 6549, *1 (E.D. Pa.), the court held that statements in a prospectus provide insufficient evidentiary support to conclude that one corporate entity is the alter ego of the other. Maxwell's argument ignores the common business practice of using a single name when referring to a family of companies and flies in the face of its own citation. In view of this unsound premise, Maxwell's argument must be disregarded. /// Page numbers are those of the Prospectus, not Exhibit A. 3
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Maxwell now requests discovery on this issue. Although the Court has the discretion to allow discovery to help determine whether it has personal jurisdiction, a refusal to allow such discovery "is not an abuse of discretion when it is clear that further discovery would not demonstrate facts sufficient to constitute a basis for jurisdiction." Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406, 430 (9th Cir. 1977). Here, there is no additional information that discovery would reveal that would contradict the facts set forth in the Kim Declaration and the Cho Declaration, or reveal any additional information regarding this issue relevant to the state of affairs at the time Maxwell filed its Complaint or Amended Complaint. Accordingly, NessCap, Inc. respectfully requests that the Court deny Maxwell's request for jurisdictional discovery and grant NessCap, Inc.'s motion and dismiss this action as to NessCap, Inc. for lack of personal jurisdiction. III. CONCLUSION For the reasons set forth above, NessCap, Inc. respectfully requests that this Court grant its Motion to Dismiss. DATED: December 21, 2006 LUCE, FORWARD, HAMILTON & SCRIPPS LLP

By: s/Callie A. Bjurstrom Callie A. Bjurstrom Michelle A. Herrera Attorneys for NessCap, Inc. DATED: December 21, 2006 EDWARDS ANGELL PALMER & DODGE LLP

By: s/Brian M. Gaff George W. Neuner Brian M. Gaff Attorneys for NessCap, Inc.

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DAVID C. DOYLE (CA SBN 70690) ERIC M. ACKER (CA SBN 135805) E. DALE BUXTON II (CA SBN 222580) KATHERINE L. PARKER (CA SBN 222629) MORRISON & FOERSTER LLP 12531 High Bluff Drive Suite 100 San Diego, California 92130-2040 Telephone: 858.720.5100 Attorneys for Plaintiff MAXWELL TECHNOLOGIES, INC. UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

MAXWELL TECHNOLOGIES, INC., Plaintiff, v. NESSCAP, INC. and NESSCAP CO., LTD., Defendants.

Case No.

06cv2311-JAH-BLM

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFF MAXWELL TECHNOLOGIES, INC.'S MOTION FOR PRELIMINARY INJUNCTION Date: November 30, 2006 Time: 3:00 P.M. Courtroom: 11 Judge John A. Houston

Case No. 06cv2311-JAH-BLM MPA ISO MAXWELL MOT FOR PRELIM INJ

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I.

INTRODUCTION

Ultracapacitors--advanced energy storage devices with applications including small electronics, hand tools, wind turbines, automobiles, trucks, and buses--are being incorporated across various industries to replace or complement conventional batteries. Over the past ten years, San Diego-based Maxwell Technologies has invested over $70 million developing innovations in ultracapacitor technology, securing intellectual property protection for these innovations, and creating market demand for ultracapacitors. Maxwell now faces the possibility of never being able to realize a return on that investment, because Defendant Nesscap is eroding prices and profit margins with below-market priced ultracapacitors that infringe Maxwell's intellectual property.1 Maxwell's U.S. Patent No. 6,525,924 ("the `924 patent") and U.S. Patent No. 6,631,074 ("the `074 patent") claim inventions that improve the efficiency and reliability of ultracapacitors. The `924 patent claims an invention that reduces an ultracapacitor's internal resistance, thereby increasing its effectiveness and life span. The invention achieves these advantages by replacing what was formerly a stapled junction between two separate metal parts with a single metal component, forming a pathway from the internal electrode to an external terminal. This continuous pathway facilitates the release of stored energy from the ultracapacitor, and avoids the increased resistance of a stapled junction between two components. Nesscap's entire line of prismatic ultracapacitors includes this patented feature of a continuous pathway on a single metal component. These products all infringe the `924 patent, as confirmed by Dr. John R. Miller, a Ph.D. physicist with over 20 years' experience researching and publishing in the field of advanced capacitor technology. The `074 patent claims an invention that increases the amount of energy a capacitor can store, and at the same time reduces the capacitor's internal resistance. These advantages are achieved with two aluminum collectors that are coated with two separate coatings of carbon--a All references to "Nesscap" or "Defendant" refer collectively to Nesscap, Inc., a Delaware Corporation, and Nesscap Co., Ltd., a Korean entity owned entirely by Nesscap, Inc.
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conductive carbon coating and an activated carbon coating. These two aluminum collectors coated with carbon are then separated by a porous separator. As Dr. Miller explains, all of Nesscap's electric double layer capacitors include electrodes that meet the limitations of the `074 patent, and therefore infringe. Nesscap's infringement of the `924 and `074 patents will have immediate, irreparable impact on Maxwell if not enjoined now. Nesscap has exhibited a consistent strategy of drastically undercutting Maxwell on price, and has expressly stated to a Maxwell customer that its goal is to "deliver at a lower price than Maxwell Technologies in all cases." Nesscap's pricing tactics have already eroded market prices, thereby reducing, and in some cases eliminating, Maxwell's profit margins. If Nesscap is enjoined only at the conclusion of this litigation, ultracapacitor prices will never return to current market levels, as customers will have built lower prices into their business models. Thus, if not enjoined now, Nesscap's pricing tactics will permanently depress or eliminate profit margins in the ultracapacitor industry, thereby preventing Maxwell, and any other ultracapacitor manufacturer, from making a reasonable return on investment. This infringing conduct, if not stopped, will stifle continued innovation of this cutting-edge technology and potentially drive Maxwell from the market it has pioneered. In light of the clear showing that Nesscap is infringing Maxwell's patents and that this infringement will irreparably harm Maxwell if not enjoined now, Maxwell requests that this Court enter a preliminary injunction to halt Nesscap's infringing U.S. activities.2 II. FACTS A. Ultracapacitors and Their Applications.

Maxwell's `924 patent covers a novel ultracapacitor with decreased internal resistance and methods for making that ultracapacitor. (A true and correct copy of the `924 Patent is attached as Exhibit M to the Declaration of John R. Miller in Support of Maxwell Technologies' Motion for This motion and the accompanying declarations and exhibits supersede the preliminary injunction motion filed by Maxwell on October 18, 2006. That pending motion was rendered moot by Maxwell's filing of the First Amended Complaint on November 2, 2006, which added Maxwell's claim for infringement of the `074 patent. This motion will be heard on the previously-noticed hearing date, November 30, 2006.
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G.

Nesscap's Competitive Tactics in the United States.

Nesscap recently has sought to substantially expand its presence and distribution of products in the U.S. Earlier this year, Nesscap entered a relationship with Digi-Key, a U.S.-based national electronics distributor. (Balanson Decl. ¶ 14.) Nesscap's ultracapacitors can be purchased in the U.S. on Digi-Key's website at http://dkc1.digikey.com/us/mkt/vendors/589.html. Nesscap also recently has engaged in efforts to raise capital with the express goal of establishing a U.S. headquarters. (See id. ¶ 15 and Ex. A.) In a prospectus issued regarding a $25 million offering from Nesscap earlier this year, Nesscap touts itself as "one of the four leading developers and manufacturers of ultracapacitors in the world," and states that "Nesscap's headquarters will be based in the New York City area with a world-class executive and sales team and will be responsible for the North America [sic] and European sales and marketing." (Id., Ex. A at 10-11.) In its recent U.S. marketing efforts, Nesscap is using the same below-market pricing it uses abroad to lure away customers with whom Maxwell has worked for years on marketing and development efforts. For example, as discussed above, Maxwell spent four years in marketing and development efforts with ISE Corp. before making a commercial sale to ISE. (Balanson Dec. ¶ 8.) Maxwell now recognizes approximately $1 million in revenue from ISE's business each year, with expectations of significant growth in the near future. (Id. ¶ 16.) However, Maxwell recently learned that Nesscap has repeatedly contacted ISE, and ISE procurement personnel are in the process of obtaining price quotes from Nesscap. (Id.) Similarly, Maxwell lost a contract with DIG Corp., a Vista-based manufacturer of irrigation systems, earlier this year. DIG's representatives recently explained to Maxwell that Nesscap won this business because it offered prices substantially lower than Maxwell's. (See Declaration of Scot Thompson in Support of Maxwell's Motion for Preliminary Injunction ["Thompson Dec."] at ¶¶ 3-4.) Also, Maxwell had to lower its prices by up to 25% to win business with Azure Dynamics, a Boston-based maker of hybrid-electric powertrains, in order to beat Nesscap for the account. (Balanson Dec. ¶ 18.) In addition to its below-market pricing, Nesscap also ignores government regulations and related costs by shipping its ultracapacitors without declaring them to be hazardous materials. 12
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(See Balanson Dec. ¶ 19 and Ex. B at 18 ["There are no hazardous materials fees on these parts."].) Maxwell does ship its ultracapacitors in accordance with regulations for hazardous materials, and for some products this can double the shipping cost that is passed along to the customer. (Id. ¶ 19.) III. LEGAL STANDARD

The Patent Act grants Federal Courts the power to enjoin activities which violate "any right secured by patent." 35 U.S.C. § 283. Because the grant of an injunction under Section 283 involves matters unique to patent law, Federal Circuit law governs. Hybritech v. Abbott Labs., 849 F.2d 1446, 1452 n.12 (Fed. Cir. 1988). The decision to grant or deny a preliminary injunction is based on the district court's assessment of four factors: "the likelihood of the patentee's success on the merits; (2) irreparable harm if the injunction is not granted; (3) the balance of hardships between the parties; and (4) the public interest." Oakley, Inc. v. Sunglass Hut Int'l, 316 F.3d 1331, 1338-39 (Fed. Cir. 2003) (affirming grant of preliminary injunction). No one of these factors is dispositive. Rather, the Court "must weigh and measure each factor against the other factors and against the form and magnitude of the relief requested." Hybritech, 849 F.2d at 1451. The grant or denial of a preliminary injunction is within the sound discretion of the district court. Atari Games Corp. v. Nintendo of America, Inc., 897 F.2d 1572, 1575 (Fed. Cir. 1990). IV. ARGUMENT A. Maxwell Has Demonstrated Likelihood of Success on the Merits of its Infringement Claims.

Maxwell has a strong likelihood of success on its infringement claims. First, the `924 and `074 patents are valid. A patent is entitled to a statutory presumption of validity, and the party 23 attacking validity has the burden of proving by clear and convincing evidence that the patent is 24 invalid. 35 U.S.C. § 282; see also Applied Materials, Inc. v. Advanced Semiconductor Materials 25 Am., Inc., 98 F.3d 1563, 1569 (Fed. Cir. 1996) ("When a patent has been examined and duly 26 granted, judicial review must give due weight to the presumption of validity."). This presumption 27 exists at every stage of the litigation. Canon Computer Sys., Inc. v. Nu-Kote Int'l, Inc., 134 F.3d 28 13
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V.

CONCLUSION

Given Maxwell's strong showing of likelihood of success and irreparable harm, the balance of hardships strongly favors Maxwell. A preliminary injunction preventing further infringement of the `924 and `074 patents is therefore necessary. Dated: November 2, 2006 MORRISON & FOERSTER LLP

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/s David C. Doyle Attorneys for Plaintiff MAXWELL TECHNOLOGIES, INC. Email: [email protected]

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Management Team
William J. Lang President, CEO Priya Bendale VP, Engineering Jim Root VP, Operations Brent R. Barker VP, Sales & Marketing Matthew K. Thomas Controller & CFO

President, CEO Mr. Lang is responsible for the growth and economic condition of the corporation and reports to the Board of Directors and Shareholders. Experience: Mr. Lang has over 40 years of experience designing and engineering illuminated displays, panels, switches, LCD, and LED modules. He introduced the first Integrated Control Panel, Programmable Display, and Liquid Crystal Dichroic Integrated Display Module. Mr. Lang was the founder of Symbolic Displays, Inc., an engineering development and manufacturing company specializing in illuminated displays. He developed and received patents in digital display interfaces and component technology. Education: Bachelor of Science, Business Administration and Advanced Management Memberships: Bill has had numerous professional accomplishments relative to holding positions of office in professional memberships with involvement in aviation as a pilot. Priya Bendale, Ph. D. Vice President, Engineering Dr. Bendale is responsible for managing the design, development, and integration of ruggedized display systems for both avionics and land-based military applications. Dr. Bendale reports directly to the president. Experience: Dr. Priya Bendale has over 18 years experience in advanced technology development. With a background in both program management and Materials Science and engineering, she has successfully organized and directed several research programs from concept to product, some of which have resulted in patents. She has a number of years of display research experience. Education: PhD in Chemistry/Materials Science Memberships: Priya is a member of the Materials Research Society (MRS), the Society for

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Information Displays (SID) and an active participant in the United States Display Consortium, Military Avionics Users Group (MAUG). Jim Root Vice President, Operations Mr. Root is responsible for manufacturing, procurement, manufacturing engineering test and facilities. Mr. Root reports directly to the president. Experience: Mr. Root was in the USAF specializing in ground Radar, ECCM and computer data systems. Jim has over thirty years experience in high technology procurement and manufacturing both domestic and international. He has worked as a consultant for several large firms to install and enhance their Manufacturing and Control Systems. Brent R. Barker Vice President, Sales & Marketing Mr. Barker is responsible for military and commercial strategy and business development, producing the corporate marketing plan, achieving the sales objectives, and managing the internal and external sales force. He reports directly to the president. Experience: Mr. Barker joined Interface as the Government Business Development Manager, having over 24 years experience in the aerospace industry business development and as a military operational and civilian test pilot (Northrop Corporation) in design, manufacturing, sales, and marketing within military aircraft markets. LTC Barker recently retired from the California Air National Guard as a command pilot for fighter and tanker aircraft. Education: Bachelor of Science, Business, Miami University, Oxford, Ohio Northrop Grumman Executive Marketing Program, UCLA, Anderson School USAF Armed Forces Staff College Matthew K. Thomas, CPA Controller & CFO Mr. Thomas is responsible for managing the accounting department and the overall financial condition of the company, and reports directly to the president. Experience: Matt has over 16 years experience in public accounting, specializing in individual and corporate income taxation and outsourced controller/CFO services. Education: Bachelor of Science, Business, University of San Diego Certified Public Accountant, State of California Memberships: Matt is an active member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants.

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INTERFACE DISPLAYS & CONTROLS ORGANIZATION
President & CEO

VP Engineering

QA Manager

Controller

VP Sales & Marketing Business Development Mgr-Eastern US Military Business Development Mgr Sales Administrator CS Contracts Administrator Sales Representatives

Mechanical Engineer Electrical Engineer Document Control Administrator Engineering Support Tech Design/Drafting Services Tech Research & Development Human Resources Manager

Quality Engineer Audit Group CAB/MRB Lead QA Tech Inspection & Test Personnel

Accounts Payable Clerk Accounts Receivable Clerk Receptionist

VP Operations

Service Manager

Manufacturing Manager

Network Administrator

Purchasing Manager

CS Supervisor Repair/Warranty Operators

Production Control Supervisor Manufacturing Engineer Test Engineer Assemblers/ Operators, Electrical & Mechanical Paint/Laser Etch Operators Machine Shop Operators

MIS Support Technician

Buyers Stockroom Clerk Shipping & Receiving Clerk

Interface Form# 083, Rev 03/03/05
4630 North Avenue ¡ Oceanside, CA 92056 ¡ 760.945.0230 ¡ www.interfacedisplays.com

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Enabling Tomorrow's Innovations Today

Dear Guest, Welcome to our website. The last thirty years has seen dramatic improvements in electronic and digital technology. In many ways energy technology has not kept pace with the remarkable developments in these evolving fields. Portable electronic devices have become increasingly smaller, while in many instances power demands have dramatically increased. These increased requirements are fueling a desire for more advanced energy technologies. At Ionix we are striving to develop advanced, innovative energy storage technologies that provide our customers the ability to develop next-generation products that enable tomorrows innovations today. The company has several core technologies that it is leveraging to create advanced system design. The core competencies include: 1. Design and development of advanced electrochemical energy storage systems 2. Computer modeling of component and system electrical and thermal performance 3. Software-based microcontroller design 4. System integration and packaging Today's advanced energy storage systems require not only advances in materials and processes but also requires full integration to create a complete system. Newly developed energy systems such as fuel cells, advanced batteries, or electrochemical capacitor are increasingly requiring sophisticated control systems to fully utilize the advanced technology. Pease feel free to contact me regarding questions about Ionix or this web site at [email protected]. Sincerely, C. Joseph Farahmandi President, Ionix Power Systems

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Copyright © 2006 Ionix Power Systems, LLC. Last modified: January 02, 2006

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Judicial Caseload Profile Report Case 1:06-cv-00764-GMS

U.S. DISTRICT COURT - JUDICIAL CASELOAD PROFILE
12-MONTH PERIOD ENDING SEPTEMBER 30

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DELAWARE
Filings* OVERALL CASELOAD STATISTICS Terminations Pending % Change in Total Filings Number of Judgeships Vacant Judgeship Months** Total Civil FILINGS ACTIONS PER JUDGESHIP Criminal Felony Supervised Release Hearings** Pending Cases Weighted Filings** Terminations Trials Completed MEDIAN TIMES (months) From Filing to Disposition Criminal Felony Civil** Number Percentage Over Last Year

2005 2004 2003 2002 2001 2000

Numerical Standing Circuit

1,190 1,797 1,362 2,028 1,004 1,303 U.S. 1,448 1,516 1,507 1,478 1,020 -33.8 -12.6 -41.3 18.5 4 .0 298 264 28 6 463 422 362 20 9.4 4 .0 449 414 29 6 521 534 379 19 9.1 4 1.9 340 306 25 9 459 424 377 23 8.3 4 3.1 507 462 38 7 500 516 370 18 9.8 4 .0 251 233 18 369 379 255 16 8.0 -8.7 4 .0 326 307 19 376 389 239 19 6.6 81 70 91 88 26 59 71 44 58 68 47 77 955 91 70 1,853 2,085 1,836 1,999 1,477 1,502

6 5

Over Earlier Years

5 5 6 4 3 4 4 2 1 5 2 5

10.9 14.0 11.2 156 9.1 1.2 65 3.4 1.2 66 3.9 1.3

8.2 12.6 10.9 99 5.4 1.1 77 5.5 1.3 70 4.9 1.2

From Filing to Trial** (Civil Only) Civil Cases Over 3 Years Old**

23.5 26.0 24.0 22.5 21.0 24.0

OTHER

Average Number of Felony Defendants Filed Per Case Avg. Present for Jury Selection Percent Not Selected or Challenged

39.82 38.50 34.98 33.84 32.68 35.75 22.8 20.9 24.0 24.4 19.9 28.5

Jurors

2005 CIVIL AND CRIMINAL FELONY FILINGS BY NATURE OF SUIT AND OFFENSE Type of Civil TOTAL 1055 A 28 B 5 C 252 D 7 E 3 F 36 G 92 H 50 I 149 J 149 K 63 L 221

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* Filings in the "Overall Caseload Statistics" section include criminal transfers, while filings "By Nature of Offense" do not. ** See "Explanation of Selected Terms."

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U.S. DISTRICT COURT - JUDICIAL CASELOAD PROFILE
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CALIFORNIA SOUTHERN
Filings* OVERALL CASELOAD STATISTICS Terminations Pending % Change in Total Filings Number of Judgeships Vacant Judgeship Months** Total Civil FILINGS ACTIONS PER JUDGESHIP Criminal Felony Supervised Release Hearings** Pending Cases Weighted Filings** Terminations Trials Completed MEDIAN TIMES (months) From Filing to Disposition Criminal Felony Civil** Number Percentage Over Last Year

2005 2004 2003 2002 2001 2000

Numerical Standing Circuit

6,566 7,964 8,202 8,360 6,442 6,686 U.S. 6,694 8,034 8,106 8,191 6,393 6,579 3,324 3,506 3,592 3,522 3,462 4,087 -17.6 -20.0 -21.5 13 12.0 504 208 193 103 256 387 515 29 4.2 6.3 138 7.1 1.1 13 612 219 262 131 270 481 618 25 3.3 6.9 97 4.7 1.1 13 8 .0 357 437 251 440 785 40 3.8 6.4 92 4.3 1.1 9.1 12.3 217 274 140 276 478 23 3.3 6.5 94 4.4 1.1 1.9 8 .0 805 327 478 433 724 799 44 4.0 6.9 68 3.5 1.1 -1.8 8 .8 836 348 488 511 726 822 55 3.7 7.5 38 2.0 1.1 66 30 78 6 2 83 67 30 13 2 4 56 87 56

14 10

Over Earlier Years

631 1,045

6 10 2 2 11 10 6 3 1 1 4 8

624 1,024

From Filing to Trial** (Civil Only) Civil Cases Over 3 Years Old**

25.4 30.0 23.5 21.0 24.0 26.0

OTHER

Average Number of Felony Defendants Filed Per Case Avg. Present for Jury Selection Percent Not Selected or Challenged

58.66 59.13 55.51 58.29 58.31 35.52 44.5 44.5 45.3 44.3 45.9 45.7

Jurors

2005 CIVIL AND CRIMINAL FELONY FILINGS BY NATURE OF SUIT AND OFFENSE Type of Civil TOTAL 2708 A 87 B 52 C D E F G 235 H 143 I 162 J 592 K 5 L 296 941 84 42 69

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Criminal* 2505

650

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