Free Reply to Response to Motion - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE R.R. DONNELLEY & SONS COMPANY, Plaintiff, v. CREO, INC., NEXPRESS SOLUTIONS, INC., KODAK VERSAMARK, INC., EASTMAN KODAK COMPANY, and KODAK GRAPHIC COMMUNICATIONS COMPANY, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) )

C.A. No. 06-032 (JJF)

PLAINTIFF R.R. DONNELLEY & SONS COMPANY'S REPLY IN SUPPORT OF THEIR MOTION TO COMPEL DEFENDANTS' ANSWER TO PLAINTIFF'S INTERROGATORY NUMBER 21 1. In opposing R.R. Donnelley & Sons Company's ("RRD") motion to

compel Defendants Creo, Inc., NexPress Solutions, Inc., Kodak Versamark, Inc., Eastman Kodak Company, and Kodak Graphic Communications Company ("Defendants") to answer RRD's Interrogatory No. 21, Defendants fail to admit that they never answered the Interrogatory propounded to them. Defendants instead chose to stand on their objections to the terms

"marketed" and "promoted" as supposedly ambiguous terms and provided a response to a different question. 2. Rather than admit that they have not answered Interrogatory No. 21,

Defendants argue that (a) because RRD has not identified Third Party Software Products in this case and (b) because RRD succeeded in opposing a motion to compel production in a separate and unrelated case, Defendants should not have to respond to Interrogatory No. 21. Neither argument bears any relation to the issue pending in this motion or excuses the fact that Defendants still have not answered the question posed in Interrogatory No. 21. R.R. Donnelley

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is entitled to a responsive answer to this Interrogatory because it seeks information that is relevant to the case. Interrogatory No. 21 seeks information relevant to the case. 3. The information requested by Interrogatory No. 21 goes to a central

dispute between the parties with respect to the damages in this case. Damages in this case will be based on a reasonable royalty assessed against the infringing products. The seminal case setting forth the factors typically considered in such analysis is Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (D.C.N.Y. 1970). It is clear that there will be

significant disagreement between the parties concerning what that royalty should be, and what the royalty base will be for determining damages. To the extent that Defendants sell, or offer to sell, Third Party Software Products that infringe the patents in suit, those sales may impact the royalty base. 4. The evidence developed to date indicates that Defendants sell the accused

Software Products in connection with the accused Hardware Products. It is also clear, however, that Defendants sell some of the accused Hardware Products with compatible software made by third parties. The information requested by Interrogatory No. 21 is important to allow R.R. Donnelley to assess the extent to which Defendants sell their own software with the accused Hardware Products and if third party software is sold, what software is sold.1 This information is fundamental to understanding how defendants structure and implement the sale of these

1

Defendants response that certain software is "compatible" does not address the central question ­ is it actually sold by the defendants with the accused Hardware Products?

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products, and to analyzing the damages claims.2 At a basic level, it is important for allowing R.R. Donnelley to verify the percentage of sales where accused Software and Hardware Products are sold together. 5. In addition to the need to get the core information needed to analyze the

way in which defendants sell these products, the requested information goes to several of the Georgia-Pacific factors. For example, the requested information is relevant to Georgia-Pacific factor 8 ­ the commercial success and current popularity of the infringing product. (GeorgiaPacific, 318 F. Supp. at 1120.) Defendants will undoubtedly argue that sales of Hardware Products with Third Party Software Products is evidence that the accused Software Products are not popular, or does not drive sales of the Hardware Products, and thus this evidence should tend to decrease the royalty rate. R.R. Donnelley must be allowed discovery about which such Third Party Software Products are being used, and how Defendants market them. 6. The requested information is also relevant to Georgia-Pacific factor 9, the

existence of alternative technologies to the accused products. (Georgia-Pacific, 318 F. Supp. at 1120.) R.R. Donnelley is entitled to discover the other software products sold with the accused Hardware Products to assess the impact, if any, that these products might have on the royalty rate under this factor should Defendants attempt to present evidence that these software products do not infringe the patents in suit. 7. The requested discovery is also relevant to complete R.R. Donnelley's

investigation of the extent and nature of direct infringement by defendants. Selling, and offering for sale, infringing software can be acts of direct infringement. R.R. Donnelley is entitled to
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R.R. Donnelley is willing to withdraw the present Motion if Defendants agree that all of Defendants' sales of accused Hardware Products are properly part of the royalty base for determining damages.

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know which of these software products are actually being sold with the accused Hardware Products. The information is important not only to the damages case, as discussed above, but also to liability issues. Without knowing which of these Third Party Software Products are sold with the accused Hardware Products, it is difficult for R.R. Donnelley to plan for completing discovery on infringement. It is a waste of time and effort to develop information concerning Third Party Software Products that, while compatible, are not sold by Defendants. Defendants have not answered Interrogatory No. 21. 8. RRD asked Defendants in Interrogatory No. 21 to identify all "Third Party

Software Products" that Defendants have "offered, sold, marketed, or promoted for use..." (D.I. 199, Ex. A, at 7.) Despite the straightforward nature of the Interrogatory, Defendants objected to the terms "marketed" and "promoted" as "overly broad and ambiguous." (D.I. 199, Ex. B, at 4.) Yet Defendants themselves have used the terms "marketed" and "promoted" in discovery requests they have propounded to RRD. (D.I. 199 at 4.) As a result, they cannot plead ignorance as to the meaning of such plain, ordinary terms. 9. Furthermore, Defendants did not object to the terms "offered" or "sold."

In responding to Interrogatory No. 21, however, Defendants did not identify any Third Party Software Products that they offered or sold. Indeed, Defendants expressly stated that they "are not asserting that they sell, offer to sell, market or promote" the Third Party Software Products that they list. (D.I. 199, Ex. B, at 4.) 10. Defendants incorrectly state that they "identified those Third Party

Software Products that Defendants have sold or offered to sell." (D.I. 216 at 2.) Instead, Defendants identified those products which "may (or, depending on their configuration, may not) be compatible with Defendants' Hardware Products." (D.I. 199, Ex. B, at 4.) While Defendants 4

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contend that their "answer includes those Third Party Software Products that have been offered and sold," this does not mean that they have identified the Third Party Software Products that have been offered or sold. RRD cannot determine from Defendants' response which or how many Third Party Software Products on the list were offered or sold by Defendants, if any. 11. Instead of identifying Third Party Software Products that they "offered,

sold, marketed or promoted," Defendants' response appears to address a different Interrogatory. Defendants identified products that "may (or, depending on their configuration, may not) be compatible with Defendants' Hardware Products." (D.I. 199, Ex. B, at 4.) RRD did not ask Defendants to identify which products are compatible with Defendants' Hardware Products. RRD asked Defendants to identify which products they actually "offered, sold, marketed or promoted." The mere fact that a Third Party Software Product may be compatible with

Defendants' Hardware Products tells RRD nothing about whether Defendants actually "offered, sold, marketed, or promoted" the product for use with Defendants' Hardware Products. 12. Moreover, in their Response, Defendants did not even affirmatively

identify which Third Party Software Products actually are compatible with Defendants' Hardware Products. Instead, Defendants list products that "may or... may not" be compatible with Defendants' Hardware Products. (D.I. 199, Ex. B, at 4.) Thus, it could well be the case that none of the identified products are even compatible with Defendants' Hardware Products.3 13. In short, despite Defendants' assertions that they "went out of their way to

identify the compatible Third Party Software," Defendants did not answer the question that RRD

3

Defendants conveniently edit the language of their response in their opposition to RRD's Motion to Compel, stating that they provided a list of all Third Party Software Products "which Defendants may have offered, sold, marketed, or promoted for use." (D.I. 216 at 3.)

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asked. Defendants have not identified which Third Party Software Products they "offered, sold, marketed or promoted" for use with Defendants' Hardware Products. This is the question RRD asked, and this is the question to which Defendants should be required to respond. Unlike the requested discovery in Tesseron, Interrogatory No. 21 is not overly broad or unduly burdensome. 14. Defendants spend over two pages of their five page brief discussing a

discovery dispute in a different case. Defendants attempts to import a ruling in Tesseron, Ltd. v. R.R. Donnelley & Sons Co., 2007 WL 2034286 (N.D. Ohio Jul. 10, 2007), in which the plaintiff Tesseron sought to obtain discovery from R.R. Donnelley, the defendant in that case. Defendants assert that because the Tesseron court held that R.R. Donnelley need not respond to Tesseron's discovery requests, that Defendants need not respond to R.R. Donnelley's discovery requests in this case. 15. Yet Tesseron is completely different from this case. There is no "ironic

twist" that RRD is involved in both cases, as Defendants contend. (D.I. 216 at 3.) In Tesseron, the plaintiff requested all documents related to "Variable Data Printing Systems" ­ including design, development, operation, use, marketing, and sale of those systems. (Tesseron's First Set of Interrog. and Requests to Inspect, Ex. A.) Tesseron then defined "Variable Data Printing Systems" to include not just any system which did variable digital printing, but any system or component "capable by itself or in conjunction" with other devices of generating documents containing "some variable and/or personalized content." (Id. at 4.) 16. Were R.R. Donnelley forced to comply with these discovery requests, it

would have needed to produce each and every document related in any way to any system with the capability of generating some kind of variable content on a document, even if not used for

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variable digital printing. Judge Boyko agreed that Tesseron's requests "encompass[] a broad spectrum of technology and, as Donnelley points out, includes many systems that cannot conceivably infringe on any of Tesseron's patents." (Tesseron, 2007 WL 2034286 at *5.) As Judge Boyko determined, "[a]lthough Tesseron is not necessarily limited to discovery of the two accused systems identified, it must narrow the scope of the systems to be targeted." (Id.) 17. Conversely, Interrogatory No. 21 seeks narrowly focused information.

R.R. Donnelley has merely requested a list of all Third Party Software Products which Defendants have "offered, sold marketed or promoted." (D.I. 199, Ex. A, at 7.) This is a discrete, finite, specific and small set of information. 18. As such, the Interrogatory is not overly broad or unduly burdensome to

Defendants. It would not be difficult for Defendants to identify which Third Party Software Products they have "offered, sold, marketed or promoted" with their own Hardware Products. And Defendants would have records of any of the offers for sale, sales, marketing and promotion of any Third Party Software Products. 19. For the reasons stated above, Plaintiff's Motion to Compel Defendants'

Answer to Plaintiff's Interrogatory Number 21 (D.I. 199) should be granted. MORRIS, NICHOLS, ARSHT & TUNNELL LLP /s/ Rodger D. Smith II (#3778) Jack B. Blumenfeld (#1014) Rodger D. Smith II (#3778) 1201 North Market Street P.O. Box 1347 Wilmington, DE 19899 (302) 658-9200 [email protected] Attorneys for Plaintiff R.R. Donnelley & Sons Company

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OF COUNSEL: John G. Hutchinson SIDLEY AUSTIN LLP 787 Seventh Avenue New York, New York 10019 (212) 839-5398 Douglas I. Lewis Jamie L. Secord SIDLEY AUSTIN LLP One South Dearborn Street Chicago, Illinois 60603 (312) 853-7000 September 14, 2007
1234744

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CERTIFICATE OF SERVICE The undersigned hereby certifies that on September 14, 2007, he caused the foregoing to be electronically filed with the Clerk of the Court using CM/ECF, which will send notification of such filing(s) to the following: Frederick L. Cottrell III Richards Layton & Finger, P.A. I also certify that copies were caused to be served on September 14, 2007, upon the following in the manner indicated: BY EMAIL AND BY HAND Frederick L. Cottrell III Richards Layton & Finger, P.A. One Rodney Square 920 N. King Street Wilmington, DE 19801 [email protected] BY EMAIL Richard McMillan, Jr. Crowell & Moring LLP 1001 Pennsylvania Avenue, N.W. Washington, DC 20004-2595 [email protected]

/s/ Rodger D. Smith II (#3778) Morris, Nichols, Arsht & Tunnell LLP 1201 N. Market Street P.O. Box 1347 Wilmington, DE 19899 (302) 658-9200 [email protected]

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EXHIBIT A

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