Free Letter - District Court of Delaware - Delaware

Case 1 :04-cv—00876-GIVIS Document 417 Filed 09/10/2007 Page 1 of 3
ASHBY 8. GEDDES
ATTORNEYS AND COUNSELLORS AT LAW ·rE|_EpH°N;
soo DELAWARE AVENUE °°Z`°°“"°°°
P. 0. Box uso Sogfzimffs,
WILMINGTON, DELAWARE i9899
September 10, 2007
The Honorable Gregory M. Sleet
Chief Judge
United States District Court
844 North King Street
Wilmington, DE 19801
Re: T elcordia Technologies, Inc. v. Cisco Systems, Inc.,
Civil Action No. 04-876-GMS
Dear Chief Judge Sleet:
Telcordia submits this letter pursuant to D. Del. L. R. 7.1.2 (b) to respond to Cisco’s
incorrect characterization of the Federal Circuit’s en banc Opinion in In re Seagate Tech., LLC,
2007 U.S. App. LEXIS 19768, Miscellaneous Docket No. 830 (F ed. Cir. Aug. 20, 2007) in its
August, 31, 2007, citation of subsequent authority. D.l. 416.
Cisco argues that Seagate confirms its Rule 59(a) position, in which Cisco claims that the
Federal Circuit’s Read v. Portec factors were improperly included in the jury instructions since
the willfulness inquiry is keyed to state of mind. But Seagate does not help Cisco since the
opinion confirms that willfulness deserves a broad inquiry that goes well beyond the infi·inger’s
state of mind.
Specifically, in Seagate the Federal Circuit sets forth a straightforward, two-part
willfulness inquiry:
Accordingly, to establish willfiil infringement, a patentee must
show by clear and convincing evidence that the infringer acted
despite an objectively high likelihood that its actions constituted
infringement of a valid patent .... The state of mind of the
accused infringer is not relevant to this objective inquiry. If this
threshold objective standard is satisfied, the patentee must also
demonstrate that this obj ectively-defined risk (determined by the
record developed in the infringement proceeding) was either
known or so obvious that it should have been known to the accused
infringer.

Case 1 :04-cv—OO876-GIVIS Document 417 Filed 09/10/2007 Page 2 of 3
The Honorable Gregory M. Sleet
September 10, 2007
Page 2
Id. at *22 - *23 (citation omitted). The willfulness inquiry, therefore, requires evaluation of (1)
objective recklessness and (2) knowing conduct. As such, a fact-finder may properly consider
matters going well beyond the infringer’s state of mind when performing the willfuhress inquiry.
To refresh Your Honor’s recollection concerning the issue so as to put this discussion in
the proper context, in its Rule 59(a) motion for a new trial on willfuhress Cisco contends that the
Court erred by instructing the jury to consider the Federal Circuit’s Read factors when evaluating
willfulness because:
• "Issues Unconnected To Defendant’s Mental State Have No Place In The Jury’s
Threshold Willfulness De1iberations" D.I. 372 at 4;
• "[I]t is clear that the jury should focus only on factors having some relation to state of
mind when deciding willfulness" D.I. 372 at 5;
• "[B]oth courts and commentators concur that the thrust of the willfulness inquiry is
defendant’s mental state, and the jury should not be asked to contemplate unrelated
factors when deciding willfulness" D.I. 372 at 6.
In response, Telcordia noted that Cisco’s position was out of line with prior Federal
Circuit precedent (namely the Federal Circuit’s en banc Knorr-Bremse decision), was
inconsistent with numerous district court cases (including decisions of this court), and required a
policy-based departure from the established practice of considering all Read factors when
determining willfulness. Telcordia also explained exactly how and why the Read factors
unrelated to state of mind were appropriate considerations in the willfulness inquiry. D.I. 388 at
9- 14.
Now, the Federal Circuit has again validated Telcordia’s position that there can be no
error by including the Read factors in a jury instruction simply because some of those factors are
unrelated to state of mind. Specifically, as to an entire prong of the willfulness inquiry, "[t]he
state of mind of the accused infringer is not relevant." Seagate at *23. As such, the Seagate
Opinion validates the Court’s use of the Read factors in the willfulness j1u·y instruction.
The Read factors that Cisco protests are more closely related to the objective aspect of
the willfulness inquiry, and are less closely related to state of mind (indeed, that is the very point
of Cisco’s argument in its Rule 59(a) motion). Those factors are:
• duration of the defendant’s misconduct;
• defendant’s size;
• defendant’s motivation for harm;
• whether defendant attempted to conceal its misconduct;
• remedial action of defendant;
• defendant’s behavior as a party to the litigation}
I In its citation to subsequent authority, Cisco continues to advance a repeated mischaracterization that the Court
instructed the jury to consider “litigation misconduct." D.I. 416. That is simply not true—and Telcordia again notes

Case 1 :04-cv—00876-GIVIS Document 417 Filed 09/10/2007 Page 3 of 3
The Honorable Gregory M. Sleet
September 10, 2007
Page 3
Certain of these supposedly offending factors are in fact particularly relevant to evaluation of the
objective aspect of the willfuhress analysis. For instance, the defendant’s size, the duration of
the infringing conduct, and an objective consideration of motivations, concealment, and remedial
actions, are all considerations that do not directly relate to Cisco’s state of mind, but that bear
upon the objective reasonableness or tmreasonableness of a party’s actions. See, e. g., D.I. 388 at
9-14. To the extent that some of these factors have subjective elements (e. g., subjective
motivation, concealment, remedial action, and behavior considerations), then those factors are
nevertheless appropriately considered as part ofthe state of mind prong of the analysis. Either
way, there is no error based on the inclusion of the Read factors in the jury instruction on
willfulness.
Finally, as Telcordia argued in response to Cisco’s Rule 59(a) motion, and for all of the
reasons noted in Telcordia’s post-trial briefs (most notably its motion for enhanced damages and
its motion for attorney fees), even if using the Read factors were somehow error (which it is not),
the facts of this case establish that under any appropriate jury instruction, any fact finder would
find willfulness due to Cisco’s highly culpable and objectively egregious conduct. Specifically,
the evidence at trial demonstrates that Cisco’s highly culpable behavior clearly meets any
willfuhress standard, including Seagate ’s "obj ectively reckless" prong. See, e.g., D.I. 370; D.I.
388 at 14-15. Against the overwhelming evidence of Cisco’s highly culpable and objectively
reckless behavior, any fact finder would have found willfuhress under any appropriate jury
instruction. As such, any supposed error committed by incorporating the Read factors into the
willfulness jury instruction was harmless because the supposed error would not have "affect[ed]
the outcome of the case." Hill v. Reederei F Laeisz G.MB.H, 435 F.3d 404, 411 (3d Cir. 2006).
ln sum, Cisco’s Rule 59(a) motion based upon supposed error due to the use ofthe Read
factors unrelated to state of mind was frivolous before Seagate and remains even more so now.
Respectfully,
/s/ Steven J Balick
Steven J. Balick
SJB:rbg
183955.1
cc: Jack B. Blumenfield, Esquire (via electronic mail)
Donald R. Dunner, Esquire, Esquire (via electronic mail)
Edward R. Reines, Esquire (via electronic mail)
Cisco’s curious failure to recount the COl1I't,S actual jury instructi0n—as opposed to repeated mischaracterizations of
the instruction—in its Rule 59(a) motion. Consistent (indeed verbatim) with Read, the Court instructed the jury to
consider Cisco’s "behavior as a party to the litigation.” D.I. 388 at ll. As Telcordia explained in its response to
Cisco’s Rule 59(a) motion, this instruction merely enabled the jury to evaluate Cisco’s witnesses’ behavior in
response to Telcordia’s questioning on facts related to the willfulness inquiry (e.g., how Cisco’s witnesses reacted
when confronted with fact regarding the decade-long licensing negotiations and notice letters). Id. Despite Cisco’s
unwarranted twist on the Cour·t’s actual instruction, the jury simply was never instructed to consider "litigation
misconduct."