Free Letter - District Court of Delaware - Delaware

Case 1 :04-cv-01338-JJF Document 741 Filed O3/21/2007 Page 1 of 3
Yotmc CoNAwAY STARGATT & TAYLOR, LLP
THE Bmxoxwvim Buirnmc
1000 YVEST STREET, 17TH FLOOR
IQREN L» PASCALE W1Li~i1Noro:<, DELAWARE 19801 (3021571-6600
DIRECT D1.-xL: (302) 571-5001 (302) 571-1253 mx
nmtzr me (302) 576-3516 po Bax 391 (8001253-22% (DE ONLY)
1 March 21, 2007
BY E—FILING
The Honorable Mary Pat Thynge
United States District Court
844 King Street
Wilmington, DE 19801
Re: Honeywell Inremcztiozzal Inc., etal v. Apple Computer [nc., et al.
C.A. Nos. 04-1337, -1338, and -1536-***
Dear Judge Thynge:
I write on behalf of Optrex America, Inc. ("Optrex”) in advance of tomorrow afternoon’s
telephone conference scheduled at 3:30 p.m. EDT (see D.I. 736), and in response to Thomas C.
Grimm, Esquire’s March 19 letter brief (D.I. 739).
Optrex respectfully requests that the Court deny Plaintiffs Honeywell International lnc.’s,
and Honeywell Intellectual Properties Inc.’s ("Honeywell") request that Optrex produce
discovery identifying "all" worldwide sales of its accused modules. See D.I. 739. For the
reasons set forth below, Honeywell’s request should be denied because it is not reasonably
calculated to lead to admissible evidence that is not already of record, and the scope of the
request would unduly burden Optrex.
Before addressing the reasons for denying Honeywell’s requested relief, it is important to
clearly set forth the scope of the discovery sought. Honeywell asks for worldwide sales
information relating to thirty-twol modules accused of infringement, including an identification
of every customer (not just Customer Defendants) who has purchased an accused module
anywhere in the world. Moreover, Honeywell further requests that a witness be made available
to testify on such sales, requiring a witness from to be brought from Japan to the United States.
Neither of Honeywell’s asserted reasons for requesting production of Optrex’s worldwide
sales can withstand careful scrutiny. First, Optrex has already provided detailed information
about the extensive U.S. sales of its accused modules, including modules sold to both Customer
Defendants and non-Customer Defendants. To the extent Honeywell wishes to allege
commercial success based on the quantity of Optrex’s accused module sales (and ignoring the
lack of the required nexus between those sales and the claimed subject matter),2 Honeywell
I Optrex expects that Honeywell will accuse additional modules of infringing the *37 1 patent in the future.
2 See Customer Defendants’ and Manufacturing Defendants’ letters opposing commercial success discovery of
Customer Defendants. D.l. 732 and 733.
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Case 1 :04-cv—O1338-JJF Document 741 Filed O3/21/2007 Page 2 of 3
Youric CoNAwAY STARGATT & TAvLoR, LLP
The Honorable Mary Pat Thynge
March 21, 2007
Page 2
already possesses ample information. Moreover, despite taking extensive discovery from
Optrex, Honeywell has not suggested in its letter that it has any evidence that accused Optrex
modules sold outside of the U.S. subsequently enter this country. Stated differently, Honeywell
has not alleged any facts sufficient to hint at, let alone support, an inducement to infringe claim
and thus the requested discovery amounts to a classic fishing expedition.
A. Extensive Evidence Regarding the Quantity of Optrex’s Accused Modules
Is Already of Record and Worldwide Sales Information Has No Bearing on
the Missing Nexus Between the Accused Sales and the Claimed Invention
Honeywell argues that it is "faced with opposing Optrex’s obviousness arguments
without any information relating to commercial success of Optrex’s products." Grimm 3/19/07
Letter at 2. This premise is simply incorrect. Honeywell ignores the fact that it possesses an
extraordinary amount of information from Optrex, from other defendants, and from its licensees
about the sales of accused modules. Despite Honeywell’s protestations that it lacks "any"
information about commercial success of Optrex products, Optrex has in fact produced hundreds
of pages of summary level sales data identifying every transaction associated with the accused
modules sold through Optrex America (e. g., OAI001 8049 — OAI0018226 and OAl0053232 —
OAI005326l) and tens of thousands of pages relating to the sales and marketing of those
modules. Thus, the only fact even potentially relating to commercial success encompassed in the
requested discovery (that large quantities of accused module sales have occurred) is already
clearly established by the existing evidence. What Honeywell cannot prove in its effort to allege
commercial success is the existence of a nexus between the large quantity of accused module
sales and the subject matter of claim 3 of the ‘37l patent. See, e. g., Ormco Cmp. v. Align T ec/1,
[nc. 463 F.3d 1299, 1311-12 (Ped. Cir. 2006). Whether accused module sales have occurred
abroad has no bearing on the nexus requirement and is thus not likely to lead to the discovery of
admissible evidence.
While Honeywell’s requested discovery has marginal relevance at best, it would unduly
burden Optrex. Honeywell has requested that Optrex provide sales information identifying grgv
customer of any accused Optrex module purchased anvwlrere in the world. Honeywell has
further requested that Optrex provide a witness to testify about such sales. Such a witness would
need to be brought to the United States from Japan for deposition. The substantial burden of
providing this confidential information to simply repeat a point made time and again by evidence
already of record (large quantities of accused Optrex module sales have occurred) and which is
irrelevant to commercial success evidence absent from the record (nexus between the accused
sales and the patented subject matter) strongly supports a denial of Honeywell’s request. See
Fed. R. Civ. P. 26(b)(2)(c) (limiting discovery where the court determines that the discovery
sought is unreasonably cumulative or duplicative, or the burden or expense of the proposed
discovery outweighs its likely benefit).
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Case 1 :04-cv—O1338-JJF Document 741 Filed O3/21/2007 Page 3 of 3
Youuc CoNAwAv STARGATT & TAYLOR, LLP
The Honorable Mary Pat Thynge
March 21, 2007
Page 3
B. Honeywell Has Provided No Basis for Alleging that Optrex Induced
Infringement of the ‘371 Patent by Making Non-U.S. Module Sales
Drawing on its vaguely asserted inducement of infringement claim against Optrex,
Honeywell cites DS U Medical Corp. v. JMS C0., 471 F .3d 1293 (Fed. Cir. 2006) as allegedly
supporting its need for evidence of Optrex’s worldwide sales of accused modules. DSU
addresses the requisite intent needed to prove induced infringement. It does not address the more
fundamental question at issue here. Unless Optrex’s modules sold abroad reach the U.S., there
can be no claim for induced infringement. Therefore, there is no legal basis for extending
discovery to Optrex’s modules sold abroad unless Honeywell can articulate a good faith basis
that modules sold abroad reach the U.S. market. DSU does not overrule the well settled
proposition that parties should not be permitted to engage in fishing expeditions.
Honeywell exhaustively deposed Optrex witnesses for three days about the structure,
manufacturing, sales, and marketing of the accused modules. Honeywell has reviewed tens of
thousands of Optrex documents relating to the accused modules. Despite this thorough
examination, Honeywell has cited to no evidence in its letter of March 19, 2007 supporting its
hope of showing that accused modules sold outside the United States later enter into the United
States. As such, Honeywell’s second basis for the requested discovery is not likely to lead to the
discovery of admissible evidence}
For these reasons, Optrex respectfully requests that Honeywell’s requested relief be
denied.
Respectfully submitted,
/1 as ~e~ M /an/Wai
Karen L. Pascale
Delaware Bar No. 2903
cc: Dr. Peter T. Dalleo, Clerk (by hand)
CM/ECP list (by e—filing)
Thomas C. Grimm, Esquire (by hand)
Matthew L. Woods, Esquire (by e-mail)
Andrew M. Ollis, Esquire (by e—mail)
3 lf the Court should nonetheless deem it necessary to order limited discovery of Optrex’s worldwide sales, Optrex
requests that (1) such discovery be tightly confined to sales of accused modules sold to Customer Defendants and
(2) any Fed. R. Civ. P. 30(b)(6) deposition testimony provided by Optrex regarding those sales be made by Optrex
employees already present in the United States who have made a reasonable effort to educate themselves concemirrg
this topic. See Honeywell’s more limited assertion that it "seeks to determine whether those sales are made to a
Customer Defendant who incorporates the modules into end products that are then imported into the United States?
Grimm 3/19/07 Letter at 3.
DBO2:5S5S206.l 0650041001