Free Letter - District Court of Delaware - Delaware

Case 1 :04-cv-01338-JJF Document 953 Filed O1/O2/2008 Page 1 of 4 E
Potter j
¤:- Q i; CAHd€YSOn Philip A. Rovner
._-.. ij-P Partner l
[email protected]
1313NQ,,hM3,_k8tSu,ct (302) 984-6140 Direct Phone
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Wilmington, DE 19899-0951
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_: BY E-FILE
The Honorable Mary Pat Thynge
United States Magistrate Judge
U.S. Courthouse, 844 King Street
__* Wilmington, DE 19801
Re: Honeywell International, Inc. at ul. v. Apple Computer, Inc. et al.
D. Del., C.A. Nos. 04-1338, 04-1337, 04-1536
Dear Magistrate Judge Thynge:
_, We write on behalf of Defendants FUHFILM Corporation and FUJIFILM U.S.A., Inc.
j (collectively "Fuji") regarding Plaintiffs’ (1) admitted failure to produce to Fuji, documents and
;l transcripts responsive to Fuji Document Requests 2, 3 and 40-43 (see Exs. 1 and 2); and (2)
admitted destruction of documents that were not produced to Fuji during this action, but were
responsive to Fuji’s document requests. Plaintiffs excuse their conduct on the grounds that the
1 documents in question are the subject of confidentiality agreements with licensees or former
4 defendants and that Fuji should obtain the missing documents from the other defendants,
including those that have been dismissed from this action, leaving Fuji no practical way to obtain
l the missing documents or even know the extent of Plaintiff s discovery failures.
Fuji respectfully requests that the Court order Plaintiffs to produce to Fuji: (1) all documents
that they produced or otherwise communicated to any current, stayed or settled party in this
3. litigation, which (to the extent not already produced) are responsive to Fuji Document Requests
. 2 and 40-43; (2) all documents produced to or otherwise communicated to Honeywell in this
matter by anyone, which are responsive to Document Requests 3 and 40—43, including but not
{ limited to all current, stayed and settled defendants (excluding Fuji documents); and (3) produce
all transcripts from depositions in this matter and exhibits thereto, which are responsive to
E Document Request 3, aside from the transcripts of certain depositions of the remaining
_ defendants recently produced or where Fuji was in attendance. These requests include
exchanges between Plaintiffs and licensees and defendants under Fed. R. Evid. 408 that bear on
Q non-infringing alternatives, defenses asserted against Plaintiff`s’ claims and the nature and
· quantity of products to which the licenses apply. Fuji also requests that the Court appropriately
sanction Plaintiffs for their destruction of requested documents during the course of this
Y litigation.
y Fuji Doc. Request 2 seeks "All documents and things that you produce or make available for
-_ inspection to any party in the present litigation, .... " Ex. 1 at 4. On August 28, 2006, Plaintiffs

Case 1 :04-cv—O1338-JJF Document 953 Filed O1/O2/2008 Page 2 of 4 l
a
y The Honorable Mary Pat Thynge i
, January 2, 2008 i
Page 2
responded by refusing to produce documents “that relate to individual party-specific issues." Ex. 3
A at 3. However, Fuji has learned that Plaintiffs have taken an overly broad interpretation of this
exception, so as to withhold nom Fuji documents relevant to Fuji’s defenses.
i For example, Fuji learned by happenstance that Plaintiffs produced certain documents only to
i defendant Optrex. These documents were not purely Optrex specific documents, but related to
q Fuji’s laches defense because they evidence Plaintiffs’ decision to delay enforcing its patent. Ex. j
4. On September 24, 2007, Plaintiffs responded to F uji’s request for the documents by claiming ,
p that the documents "relate to an issue that only concerns Optrex” and that it is Fuji’s job to poll J
all of the defendants in this matter to determine the scope of Plaintiffs’ production to each
defendant to learn what is missing. Ex. 5 Plaintiffs eventually produced the documents in
J question and have selectively produced some Rule 408 documents largely devoted to the
‘ scheduling of meetings but Fuji has no way of knowing what else is withheld or destroyed. lt is
not F uji’s obligation to take discovery from all of the other defendants (current, stayed and
dismissed) to fmd out what documents Plaintiffs produced to them or they produced to Plaintiffs.
Q Plaintiffs can easily make production to the extent the documents were not destroyed. Plaintiffs
i raise as a red herring, the existence of a Joint Defense Agreement (“JDA") among the
I defendants. Regardless of its terms, a EDA does not remove Plaintiffs’ obligation to respond to
properly propounded discovery requests. It suffices to say that Fuji has not received the
requested documents from the other defendants.
Recently Plaintiffs refused to produce responsive communications with third parties,
RE licensees or other defendants relating to licensing (Document Request 40), alternative designs
- (Doc. Request 41), communications related to nondnfringing structures (Document Request 42)
` and communications related to non-asserted LCD models (Document Request 43) relying on
confidentiality agreements with such third parties. Ex. 6. These requests do not seek Plaintiffs’
intemal documents for which a privilege has been asserted (see undecided Fuji July l2, 2007
letter motion), aside from notes of conversations with such third parties, which, at best, are work
` product producible as containing facts not otherwise available without undue hardship. Fed. R.
_ Civ. P. 26(b) (3) (A). Specifically with regard to Fuji’s Document Requests 41-43, Fuji has the
E burden of proof with respect to laches, and documents responsive to these requests are directly
related to at least laches, and therefore are discoverable. These documents are also relevant to
the determination of damages including the calculation of a reasonable royalty for which non-
. infringing alternatives are relevant. See Order in Antor Medio Corp. v. Sony Ericsson, C.A. No.
- 5·06-CV-0239 (DF), E.D. Tx. (Dec. 18, 2007) (ordering production of confidential documents
F. from prior litigation pursuant to Protective Order). Ex. 7.
· Doc. Request 3 seeks "All documents that you receive from Third Parties in connection with
i this litigation." Ex. 1 at 4. Deposition transcripts and exhibits fall into this category. Initially,
‘ Plaintiffs refused to produce any such documents arguing that the request "calls for documents
that can be exchanged between the defendants pursuant to [the] joint defense agreement? Ex. 3
at 3-4. On September 24, 2007, after Fuji followed up, Plaintiffs contended that it was Fuji’s
I responsibility to request the documents from the other defendants. Ex. 5. On October 29, 2007,
Fuji pointed out that Plaintiffs’ experts had relied on documents produced by the other
defendants, which were not produced to Fuji, and that Fuji was entitled to review all of the
material produced by the other defendants including the documents on which Honeywell decided
not to rely. Ex. 8. Plaintiffs have since backpedaled from this position and indicated that it will

Case 1 :04-cv—O1338-JJF Document 953 Filed O1/O2/2008 Page 3 of 4
The Honorable Mary Pat Thynge (
January 2, 2008
Page 3
produce those productions that were made by electronic means, as a "courtesy," but not those
[ made by paper means. Ex. 9. Most recently, Plaintiffs have explained the selective retention and l
2 production of third party documents as being because only some documents were retained in the j
[ “ordinary course of business," and a claim to confidentiality by Sanyo. Ex. 10. lt is
} extraordinary that any relevant documents would be destroyed by a Plaintiff during the run up to [
and pendency of this litigation. Plaintiffs continue to attempt to shift the burden of production
{ to the defendants by requesting that the defendants "confer amongst [themselves] to arrange for
access" to the paper production. Ex. 9. Plaintiffs also suggest that permission of each defendant
is required to give its contidential information to other defendants. See, e. g. Ex. 10. Paragraph
3 .1 of the Stipulated Protective Order ("SPO") deals with how a defendant is to handle the
` documents of other defendants and contemplates the discovery requested here. Ex. 11 at 1[ 3.1.
Z More troubling is P1aintiffs’ admission that some of the requested documents that were
¤ produced to Honeywell by parties in this action have been destroyed. Ex. 5. Plaintiffs claim
g that they were obligated to destroy documents produced by those defendants that settled with
i Plaintiffs pursuant to the SPO. Rather, the SPO requires that documents be retained until "final
D termination of this action ..." while permitting destruction agreements with individual
defendants. Ex. 11 at jj 21. But it does not mandate the destruction of documents exchanged
gg with settled parties. Plaintiffs had an independent obligation to maintain the documents and to
Q not agree to their destruction until the end of the case, even if a dismissed defendant insisted on
such a term, especially considering that they were the subject of Fuji’s Document Request 3. In
re Wechsler, 121 F. Supp. 2d 404, 429 (D. Del. 2000). Honeywell’s suggestion that Fuji was
aware of such destruction is simply baseless. Ex. 12.
"This court has the inherent power to impose sanctions [including an adverse inference or
i even dismissal] against a party that has destroyed evidence which is relevant to a legal
3 proceeding? Wechsler, l2l F. Supp. 2d at 427. The Court may be guided by the following
_ factors in exercising its discretion: “(1) the degree of fault ofthe party who altered or destroyed
the evidence; (2) the degree of prejudice suffered by the opposing party; and (3) whether there is
a lesser sanction that will avoid substantial unfairness to the opposing party and, where the _
, offending party is seriously at fault, will serve to deter such conduct by others in the future."
Schmid v. Mlwuukee Elec. Tool Corp., 13 F.3d 76, 79 (3d. Cir. 1994). When evidence is
destroyed in bad faith (i.e., intentionally or willfully), as it was by Honeywell in this case, that
‘ fact alone is sufficient to demonstrate the relevance of the materials destroyed. Zubulake v. UBS
[ Warburg LLC, 229 F.R.D. 422, 431 (S.D.N.Y., 2004).
The destroyed documents likely included information regarding Plaintiffs’ claimed
commercial success, methods of avoiding infringement, independent development of the
{ invention, prior art, laches and reasonable royalty supporting Fuji’s position and contrary to
‘ Honeywell’s position. Accordingly, Fuji requests that the Court: a) issue a standing order that
l Honeywell refrain from destroying documents produced in this litigation until the action is
. terminated as to all remaining parties; b) impose the appropriate sanction of a negative inference
that the destroyed documents supported Fuji’s defenses in this action and refuted Plaintiffs’
claims of commercial success and reasonable royalty; and c) order Plaintiffs to make a good faith
_ effort to recover copies of destroyed documents from licensees and former defendants and report
_ to the Court on its efforts and results.

_ Case 1:04-cv-01338-JJF Document 953 Filed O1/O2/2008 Page 4 of 4 .
The Honorable Mary Pat Thynge
yi January 2, 2008
Page 4
l
n. Respectfully, i
-_ /s/ Philip A. Rovner
Philip A. Rovner
provner(@)Lpotteranderson.com
PAR/mes/836878
‘ cc: Thomas C. Grimm, Esq. (W/encls.) — by ECF and E—mail
_ Manufacmrer Defendants (w/encls.) —— by ECF and E-Mail