Free Letter - District Court of Delaware - Delaware

Case 1:04-cv-00901-JJF Document 181 Filed 01/17/2006 Page 1 of 3
MORRIS, JAMES, HITCHENS & WILLIAMS LLP
222 Delaware Avenue, 10th Floor
Wilmington, Delaware 19801-1621
(302) 888-6800
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Richard K. Herrmann Mailing Address
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[email protected] Wilmington, DE 19899-2306
January 17, 2006
VIA ELECTRONIC FILING
The Honorable Joseph J. Faman, Jr.
United States District Court
District of Delaware
844 King Street
Wilmington, DE 19801
Re: Ajjznretrrlv, Inc. v. Illumina, Inc., D. Del., C.A. N0. 04-901-JJF
Your Honor:
Pursuant to this Court’s order at the January 12th hearing, the parties met and conferred
regarding Affymetrix’ requests for damages documents included in Exhibit 3 to Affymetrix’s
January 9 letter to the Court. Illumina has agreed to produce documents, to the extent that such
documents exist, identified in paragraphs 1-3; 7-13; 16-18 and 21-24. Affymetrix agreed that it
does not seek production of documents requested in Paragraphs 14 and 15. However, the parties
have not reached an agreement as to the remaining requests. More specifically, Illumina objects
to Affymetrix’s request for production of documents in Paragraphs 4-6 and 19-20, for the
reasons discussed below.
Illumina objects to producing additional documents in response to Paragraph 4. ln
Paragraph 4, Affymetrix seeks a finance department list allegedly identifying free products and
discounts provided to BeadStation customers. Affymetrix alleges that it needs this document
because it is purportedly relevant to Affyrnetrix's price erosion theory and Illumina's allegation
that Affymetrix has engaged in predatory pricing. As an initial matter, one relevant inquiry as to
whether Affymetrix is entitled to any price erosion damages is whether Affymetrix was forced to
reduce its pricing based on the presence of Illumina's alleged infringing products. In other
words, it is Affymetrix's sales activities, not Illumina's, that are a relevant inquiry for price
erosion. Similarly, with respect to Illumina's predatory pricing allegation, it is Affymetrix's sales
activities, not Illumina's, that are relevant to determining whether Affymetrix has engaged in
anti-competitive behavior regarding its pricing. However, to the extent that Illumina's purported
sales discounts are relevant to either price erosion or Affymetrix's predatory pricing, Illumina has
already provided both live data and documents from which this information could be derived.
Specifically, Illumina has produced MS Excel spreadsheets that provide detail regarding every
relevant Illumina sales transaction, including the actual revenue that each sale generated.
Illumina has also produced product catalogs and price lists to Affymetrix. Therefore, the
Dover (302) 678-8815 Broom Street (302) 655-2599 Newark (302) 368-4200

Case 1:04-cv-00901-JJF Document 181 Filed 01/17/2006 Page 2 of 3
MORRIS,JAMES, H1TcHENs & WILLIAMS LLP
The Hon. Joseph J. Faman, Jr.
January 17, 2006
Page 2
document that Affymetrix seeks, if it exists, would be duplicative of the comprehensive
information that Illumina has already provided Affymetrix.
Illumina further objects to producing additional documents in response to Paragraphs 5
and 6. In these paragraphs, Affymetrix requests Illumina's price quotes and documents from the
quotations database alleging that they are relevant to Affymetrix's price erosion and damages
theories and to Illumina's allegation that Affymetrix has engaged in anti-competitive behavior
through predatory pricing. As discussed above, one relevant inquiry for both price erosion and
Illumina's predatory pricing allegation is Affymetrix’ pricing to its customers, not I11umina’s
pricing. Nonetheless, even assuming that this information were relevant, Illumina has already
provided Affymetrix a complete sales transaction spreadsheet, discussed above, that identifies
whether Illumina has provided its customers a price discount for each sale. To the extent that
Illumina provided its customer a quotation that did not result in a sales transaction, this
information is not relevant, nor would it establish "industry practice," as Affymetrix alleges,
because these sales were never consummated. Accordingly, to the extent that Illumina's price
quotes and quotations database contain any relevant information regarding Affymetrix's price
erosion theory and Illumina's predatory pricing allegation, Illumina has already provided
Affymetrix this information.
Illumina objects to producing the document requested by Affymetrix in Paragraph 19.
More specifically, Affymetrix seeks a table that cross—references Illumina's J .D. Edwards part
numbers with Illumina's catalogue numbers. But Affymetrix fails to identify why it is necessary
to obtain the table that cross-references Illumina's J .D. Edwards part numbers and Illumina's
catalogue numbers. Indeed, in the MS Excel spreadsheets discussed above that Illumina has
produced to Affymetrix, all relevant information is provided regarding each sales transaction,
including, inter alia, invoice number, sales order number, customer, product description, invoice
date, order date, ship date, item number, unit price, quantity and unit cost. Furthermore, the
invoice numbers are common between both the spreadsheets provided and the J .D. Edwards
information. There is simply no compelling need for Affymetrix to obtain this information,
especially when it has all the relevant information for each sales transaction without any need to
reference the J .D. Edwards part number.
Finally, Illumina objects to producing the documents requested in Paragraph 20. In
Paragraph 20, Affymetrix seeks information relating to licenses for technology that Illumina has
yet to incorporate into a commercial product. Contrary to Affymetrix's allegation, these licenses
are not relevant to the reasonable royalty and damages analysis in this case. Illumina has not
paid any royalties under these licenses. Furthermore, this Court has precluded Affymetrix from
asking any questions regarding the technology at issue with these licenses (because they relate to
technology for future commercial products). Because Illumina has not paid any royalties under
these licenses, and the Court has precluded questioning regarding the technology at issue in these
licenses, they are simply not relevant and cannot provide any meaningful information regarding a
reasonable royalty rate for the patents at issue in this case. Indeed, to the extent that Affymetrix
is able to obtain these licenses and ask questions regarding the underlying technology, it

Case 1:04-cv-00901-JJF Document 181 Filed 01/17/2006 Page 3 of 3
MORRIS, JAMES, HITCHENS & WILLIAMS LLP
The Hon. Joseph J. Farnan, Jr.
January 17, 2006
Page 3
essentially vitiates and undermines the Courts Order that Affymetrix is precluded from seeking
discovery regarding Illumina's future products.
Respectfully, p N q
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Richard K. Herrmann, LD. No. 405
rherrman11@morrisjamescom
cc: Dr. Peter T. Dalleo, Clerk of the Court (via electronic filing)
MaryEllen Noreika, Esq. (via electronic filing)
Michael J. Malecek, Esq. (via facsimile)