Free Letter - District Court of Delaware - Delaware

Case 1 :04-cv—00876-GIVIS Document 282 Filed 1 1/22/2006 Page 1 of 3
Asn-nav 8. GEDDES
ATTORNEYS AND COUNSELLORS AT LAW TELEPHONE
222 DELAWARE AVENUE °°Z`°°°`°°°°
R. o. Box uso 3,_,';2::i$;'.:,,
WILMINGTON, DELAWARE 19899
November 22, 2006
The Honorable Gregory M. Sleet VIA ELECTRONIC FILING
United States District Court
844 North King Street
Wilmington, DE 19801
Re: T elcordia Technologies, Inc. v. Lucent Technologies, Inc.
Civil Action No. 04-875-GMS
T elcordia Technologies, Inc. v. Cisco Systems, Inc.,
Civil Action No. 04-876-GMS
Dear Judge Sleet:
On November 20 the defendants submitted a copy of the Federal Circuit’s opinion
in O2 Micro International Ltal v. Monolithic Power Systems, Inc., No. 06-1064 (Fed. Cir.
Nov. 15, 2006), and directed the Court to review 2 pages of the 28 page opinion that they
suggest "contirms the propriety of the exclusion of an expert report where a litigant fails
to meet the Court-ordered deadline." D.I.s 281 and 294. The O2 Micro opinion is
irrelevant to the case at hand, both on the law and the facts.
First, the Federal Circuit’s opinion in the O2 Micro case applies a Ninth Circuit
diligence standard when evaluating the district cou1t’s denial of leave to supplement an
expert report. But this case is govemed by Third Circuit law, not Ninth Circuit law.
Indeed, the O2 Micro opinion confirms that the Federal Circuit will apply Third Circuit
law when evaluating the Court’s evidentiary ruling in this case. Slip op. at 24, citing
Rhodia Chimie v. PPG Indus., Inc., 402 F.3d 1371, 1376 (Fed. Cir. 2005). Specifically,
in Rhodia Chimie, the court expressly applied Third Circuit law when evaluating a
Delaware District Court’s exclusion of evidence:
The Third Circuit typically considers four factors in
evaluating whether the district court properly exercised its
discretion. In re TMI Litig., 193 F.3d 613, 721 (3d Cir.
1999). Those factors are: (1) the prejudice or surprise in
fact of the party against whom the excluded evidence
would have been submitted, (2) the ability of that party to
cure the prejudice, (3) the extent to which waiver of the
discovery deadline would disrupt the orderly and efficient
trial of the case or of other cases in the court, and (4) bad

Case 1 :04-cv—00876-GIVIS Document 282 Filed 1 1/22/2006 Page 2 of 3
The Honorable Gregory M. Sleet
November 22, 2006
Page 2
faith or willfulness in failing to comply with the district
court’s order. See id. (citing Meyers v. Perirzypack Woods
Home Ownership Assoc., 559 F.2d 894, 904-05 (3d Cir.
1 977)).
Rhodia Chimie, 402 F.3d at 1381. This is precisely what Telcordia argued in its
summary judgment papers—that the Third Circuit requires consideration of an
established set of factors before a court may levy the "extreme sanction" of exclusion of
"critical evidence." In re Paoli RR. Yard PCB Litig., 35 F.3d 717, 791-92 (3d Cir.
1994). D.I.s 265 and 252 at 13. Nothing in the Federal Circuit’s O2 Micro opinion-
which applies far different Ninth Circuit standards and interprets specific Northern
District of California local patent rules that have no bearing on this case——detracts from
the unequivocal applicability of Third Circuit jurisprudence to the Court’s evidentiary
ruling in this case.
Moreover, the O2 Micro opinion deals with factual circumstances that are far
different from the facts of this case. First, O2 Micro, after receipt of a claim construction
that left it with a still-viable infringement case, sought leave to add untimely new
infringement theories in an effort to bolster its infringement claims before trial.
Telcordia, on the other hand, was faced with a claim construction decision that rendered
its ’306 patent infringement case un-provable, and has consistently sought to concede its
’306 patent infringement claim (not bolster its claim with new infringement theories).
Telcordia only sought leave to serve an out of time expert report so that it could develop
its side of the factual record during the summary judgment phase of the case; it did not
seek to revive or bolster its infringement claim.
Second, O2 Micro delayed for three months after it discovered the basis for its
new infringement theories before it fonnally sought leave to add the new theories to the
case. The court found—again under Ninth Circuit and Northern District of California
law—that this delay constituted a “lack of diligence" on O2 Micro’s part. Slip op. at 11.
There is no analogous “lack of diligence” on Telcordia’s part in this case. To the
contrary, Telcordia sought leave to initiate the expert report process the day after the
Court ruled that Telcordia would not be permitted to seek immediate judgment (against
itself) on its ’306 patent infringement claim and that the case instead would advance into
the summary judgment phase. D.l.s 203, 190. Under Telcordia’s proposal, Telcordia
would have filed its opening expert reports within two days, and all expert reports would
have been filed by the July 19, 2006, deadline in the Court’s Revised Scheduling Order.
Third, O2 Micro "never adequately explained why [its new theory] was not
included in the original expert report" and offered only what the court found to be an
"alleged (but non-existent) agreement" as its justification for missing the expert report
deadline. Slip op. at 24. Telcordia, on the other hand, explained that it did not submit an
opening expert report based on its good faith belief that it need not continue to litigate an
infringement claim that it had already conceded.

Case 1 :04-cv—00876-GIVIS Document 282 Filed 1 1/22/2006 Page 3 of 3
The Honorable Gregory M. Sleet
November 22, 2006
Page 3
In summary, the law and the facts involved in the Federal Circuit’s O2 Micro
opinion are far different from this case and simply do not support the defendants’ broad-
brush suggestion that the opinion governs the Court’s evidentiary rulings in this case.
Respectfully,
/s/ Steven J Balick
Steven J. Balick
SJ B/dmf
175436.1
c: Donald R. Dunner, Esquire (via electronic mail)
John W. Shaw, Esquire (by hand, and via electronic mail)
Steven C. Cherny, Esquire (via electronic mail)
David A. Nelson, Esquire (via electronic mail)
Jack B. Blumenfeld, Esquire (by hand, and via electronic mail)
Edward R. Reines, Esquire (via electronic mail)