Free Joint Case Management Statement - District Court of California - California

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1 ROBERT J. YORIO (SBN 93178) [email protected] 2 COLBY B. SPRINGER (SBN 214868) [email protected] 3 CHRISTINE S. WATSON (SBN 218006) [email protected] 4 CARR & FERRELL LLP 2200 Geng Road 5 Palo Alto, California 94303 Telephone: (650) 812-3400 6 Facsimile: (650) 812-3444 7 Attorneys for Plaintiff ACTICON TECHNOLOGIES LLC 8 9 10 11 12 13 ACTICON TECHNOLOGIES LLC, 14 15 v. Plaintiff, JOINT CASE MANAGEMENT STATEMENT Date: Time: Judge: Courtroom: May 16, 2008 10:30 a.m. Honorable Jeremy Fogel 3 CASE NO. C 07-4507 JF (HRL) UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION

16 PRETEC ELECTRONICS CORPORATION, a dissolved California corporation; PTI 17 GLOBAL, INC., a California corporation; CHIU FENG CHEN, an individual; GORDON 18 YU, an individual; TOMMY HO, an individual; ROBERT WU, an individual; GRACE YU, an 19 individual; KUEI LU, an individual; and DOES 1 through 20, 20 Defendants. 21 22

Plaintiff Acticon Technologies LLC ("Acticon") and Defendants PTI Global, Inc. ("PTI

23 Global"), Chiu Feng Chen, Tommy Ho, Kuei Lu, Robert Wu, Gordon Yu and Grace Yu hereby 24 submit their Joint Case Management Statement in this action. 25 1. 26 JURISDICTION AND SERVICE Acticon submits that this Court has subject matter jurisdiction over this action. PTI Global

27 does not dispute that subject matter jurisdiction is appropriate in this Court. 28
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Defendants PTI Global, Chiu Feng Chen, Tommy Ho, Kuei Lu, Robert Wu, Gordon Yu and -1Joint Case Management Statement C 07-4507 JF (HRL)

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1 Grace Yu have been served and have each filed an Answer to the Complaint. 2 Acticon does not believe there are any issues regarding personal jurisdiction or venue over

3 any of the Defendants. 4 However, PTI Global believes these issues may be opened shortly if Acticon goes ahead

5 with the plan it announced last week to amend the complaint to add a Taiwanese entity named C6 One as a defendant. 7 2. 8 9 STATEMENT OF FACTS A. Plaintiff's Summary of Facts

The present case is related to an earlier patent infringement case brought by Plaintiff

10 Acticon Technologies LLC ("Acticon") entitled Acticon Technologies LLC v. Pretec Electronics 11 Corp., et al., Case No. C 06-4679 JF (HRL) (the "Prior Action"). The Defendants in this earlier 12 action included Pretec Electronics Corp., its parent, C-One Technology Corp., CNet Technology 13 Corp., CNet Technology, Inc., Mace Group, Inc., d/b/a Macally Peripherals, Inc., and Margi 14 Systems, Inc. Acticon reached settlements with all of the Defendants in that action except for 15 Pretec Electronics Corp. and C-One Technology Corp. 16 The Clerk entered the default of Pretec Electronics Corp. in the earlier action. Following

17 the entry of that default, Pretec Electronics Corp. commenced settlement discussions with Acticon 18 and filed a Motion to Continue the Case Management Conference for sixty (60) days which the 19 Court granted. Less than one month after this Court granted the Motion for Continuance in the 20 earlier action, Pretec Electronics Corp. filed a Certificate of Dissolution with the Secretary of State 21 of the State of California. The Dissolution Certificate falsely stated that all known liabilities of the 22 company had been actually paid. 23 The Certificate of Dissolution was filed without notification to Acticon, and no one from

24 Pretec Electronics Corp. appeared at the continued Case Management Conference in January 2007. 25 Subsequent investigation revealed that Defendant PTI Global, Inc. (formerly known as

26 Pretec Technology Inc.) commenced operation of the same business of Pretec Electronics Corp. in 27 early 2007, at the same facility, at the same address, with the same telephone numbers and using the 28 same website. Defendant PTI Global markets, distributes and sells the same accused products as its
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1 predecessor, Pretec Electronics Corp. Essentially, the Defendants have attempted to operate the 2 same business as Pretec Electronics Corp. and obtain the monetary benefits thereof, while at the 3 same time attempting to evade the financial obligations of the patent infringement claims in the 4 earlier action. 5 The Complaint in the present contains the following claims for relief: Count I - Successor

6 Liability for Patent Infringement against PTI Global; Count II - Patent Infringement on an Alter 7 Ego theory against the individual defendants; Count III - Vicarious Liability for Patent 8 Infringement against the individual Defendants; Count IV - Fraudulent Transfer under California 9 Civil Code § 3439 et seq. against all Defendants; Count V - A conspiracy to fraudulently transfer 10 assets under state law against all Defendants; and Count VI - improper dissolution under state law 11 against all Defendants. 12 The patents at issue in this case are: (1) U.S. Patent No. 4,603,320 ("`320 Patent"), which

13 relates to a connector interface for enabling communications between a first and second data 14 handling system; (2) U.S. Patent No. 4,543,450, which relates to an integrated connector and 15 modem with internal modem capability; (3) U.S. Patent No. 4,972,470 ("`470 Patent"), which 16 relates to a programmable connector that is configurable between two or more devices; and (4) U.S. 17 Patent No. 4,686,506, which relates to which relates to a multiple connector interface for enabling 18 multiple conversions between a first and a second data handling system. The patent infringement 19 disputes underlying this action arise from the manufacturing, using, selling, and/or offering to sell, 20 within the United States, and/or importing into the United States by Defendants of products which 21 Acticon contends employ an electronic connector that connects a computer and one or more 22 external device, whereby such electronic connector converts signals between the computer and 23 external device(s) in order to obtain a desired connecting configuration and/or function. 24 The `470 and `320 Patents enjoy a strong presumption of validity based on successful re-

25 examinations by the United States Patent & Trademark Office. In addition, the Court in Lantronix, 26 Inc. and Acticon Technologies LLC v. Digi International, Inc., Case No. 6:05 CV35 (E.D.TX), has 27 construed the claims of the `470 Patent in a Markman Opinion dated March 6, 2006. 28
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1 2

B.

Defendant PTI Global's Summary

Defendant PTI Global is a California corporation, and was formed in 2002 by defendant

3 Gordon Yu. At the time of its formation, this entity was named Pretec Technology, Inc. PTI 4 Global is a niche distributor of flash memory devices utilizing USB port and other connections to a 5 computer, such as a memory stick. Thus, PTI Global sells vanity memory sticks that might look 6 like a piece of sushi or other novelty item. Such products, like the vast majority of PTI Global's 7 sales (approximating the 95% range) do not implicate the patents at issue in this case. Rather, only 8 when PTI Global couples its flash memory device with another peripheral-type product, such as a 9 fax modem, are the connecting patents involved in this lawsuit implicated. 10 PTI Global is accused in this action of being the successor in interest to a company named

11 Pretec Electronics Corporation ("PEC"). PEC was a named defendant in the Prior Action. 12 Plaintiff's complaint alleges that, in effect, PEC shut down its business in response to the Prior 13 Action, and that PTI Global then took over the assets and business of PEC, rendering PTI Global 14 liable as the successor to PEC for what should have been the damage award against PEC in the 15 Prior Action. PTI Global denies this claim. PTI Global will show that at the time of the events in 16 question, it was owned and operated independently from PEC, and that PTI Global had already 17 gone into business distributing the flash memories that are accused of infringing the Patents-in-Suit. 18 In fact, PEC was in dire financial straits and was also the object of at least two other major pieces 19 of patent litigation at or around the time that it dissolved. Thus, it is unlikely that Acticon would 20 ever have obtained any recovery from PEC. 21 On November 29, 2007, while PTI Global was without counsel, a preliminary injunction

22 was entered in this action providing, among other things, that PTI Global could not transfer its 23 assets outside of the ordinary course of business. PTI Global will demonstrate during the course of 24 this action that much of the evidence submitted by Acticon in support of its application for 25 injunctive relief was incorrectly characterized in the moving papers and is generally irrelevant to 26 the claim that PTI Global succeeded to the business of PEC. 27 PTI Global believes that it will make a showing of the following facts herein in order to

28 defeat Acticon's claims: First, PTI Global will show that it did not succeed to the assets of nor
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1 "operate the same business" as PEC at anytime relevant to this action but with particular emphasis 2 on the late 2006 time frame when PEC apparently closed its doors and went out of business. 3 Further, PTI Global will show that neither it nor PEC was the flagship of the "Pretec"

4 franchise, as alleged repeatedly and incorrectly in the Acticon complaint and moving papers for 5 injunctive relief. Rather, "Pretec" is a mark placed on parts manufactured by C-One Technology 6 ("C-One"). C-One was one of the defendants in the Prior Action, although apparently it was never 7 served by Acticon in that action. Acticon announced last week during settlement negotiations that 8 it would attempt to add C-One as a defendant if the case did not settle immediately. 9 PTI Global will seek to prove that PEC and PTI Global were not players in a grand

10 conspiracy, but instead were each unrelated independent distributors of Pretec-branded products, 11 each individually following their own economic interest, and collectively constituting only two of 12 over eighty such entities existing in a worldwide distribution chain. This status is summarized in 13 the following facts that PTI Global will attempt to prove should this matter proceed to trial: In 14 2006, PTI Global obtained an agreement that allowed PTI Global to distribute certain Pretec15 branded flash memory products. Since that time, PTI Global has been selling Pretec-branded parts, 16 along with a modicum of other parts. However, far from taking over the business of PEC, PTI 17 Global has had only limited success since obtaining this authorization from PMT, selling less than 18 $300,000 in total of the accused products in 2006 and 2007. Thus, the scale of PTI Global's 19 operation is considerably smaller than both PEC's operation and what has been postulated by 20 plaintiff.1 21 22 23 24 25 26 27 28
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However, it would be untrue to claim that there were no connections between PEC and PTI Global, in that both were initiated by a single individual who was well-connected to C-One. PTI Global was initially owned 100% by defendant Gordon Yu. Mr. Yu was also a principle of COne, and owned a small percentage of PEC, which is far older than PTIG and had been in business since 1993. Mr. Yu and his wife were officers and directors of both PEC and PTI Global from 2002 through 2006. Beginning in 2002, Mr. Yu apparently caused both PTIG and PEC to list their headquarters at the same address, 40979 Encyclopedia Circle, in Fremont CA in filings with the California Secretary of State. This continued until 2004. Then in 2005, PEC moved from this address to the premises located at 46791 Fremont Boulevard in Fremont, California. PTI Global (then still known as Pretec Technology, Inc.) moved its registered address to 40087 Mission Boulevard, #162, also in Fremont, CA in 2005, which was the site of a post office box service run by United Parcel Service. The company did not engage in commercial transactions from this address, and instead performed rebate services for PEC from PEC's address in 2005, and commenced its own business distributing flash memories from this address in July of 2006. In -5Joint Case Management Statement C 07-4507 JF (HRL)

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1

In fact, PTI Global will prove that since Kuei Lu purchased PTI Global in 2006, there has

2 not been any overlap of management, of ownership, of members of the board of directors, or of 3 assets, between PTI Global and the dissolved corporation formerly existing under the name Pretec 4 Electronics Corp. With the exception of Kuei Lu, none of the individual defendants in this action 5 has any current connection with PTI Global, and Ms. Lu's involvement has been limited to 6 breaking the identity between PMT and PTI Global since she purchased the company. In short, PTI 7 Global believes that there will not be any evidence to support plaintiff's claims under currently 8 applicable California laws governing alter ego, fraudulent conveyance or successor liability. 9 10 11 C. Defendants Gordon Yu, Chiu Feng Chen, Tommy Ho, Robert Wu, and Kuei Lu's Supplemental Summary of Facts The above named individual defendants were sued on the basis that they were alter egos of

12 defendant corporations, fraudulently transferred assets between Pretec Electronics Corporation 13 (PEC) and PTI Global, and improperly dissolved PEC. 14 Defendants Gordon Yu, Chiu Feng Chen, Tommy Ho, and Robert Wu never held a majority

15 interest in PEC or PTI Global, nor have they exercised control over the same such that any 16 separateness between individuals and corporations have ceased. Additionally, Defendant Chen 17 denies improperly dissolving PEC. The certification of dissolution signed by Chen and filed with 18 the Secretary of State simply states that all existing debts have been disposed of--this statement 19 was absolutely true. At the time PEC was dissolved, there was no judgment against PEC. It follows 20 that there was no existing debt or liability to the plaintiff. 21 Furthermore, all defendants named above deny that there is a legally recognizable cause of

22 action for "improper dissolution." Plaintiff referenced Cal. Corp. Code § 1903(c) in support of its 23 24 November 2006, PTI Global moved again, from the Mission Boulevard address to its present address of 231 Whitney Place, Fremont CA. Despite the contentions of Acticon to the contrary, 25 PTI Global is unaware of any connection between this Whitney Place address and PEC. Also in 2006, Mr. Yu sold his interest in PTI Global to Ms. Kuei Lu, who is another named defendant in this action. Under Ms. Lu's ownership, PTI Global has attempted to move away from 26 sole identification with the Pretec brand. Thus, Pretec Technology Inc. changed its name to PTI 27 Global in a move dated October 27, 2006. Additionally, PTI Global began to sell non-Pretec branded products, which it continues to do to this date. This name change was undertaken to 28 disassociate from the name Pretec, both because of the then-pending litigation and because PTI Global would better be able to sell its non-Pretec product lines. {00310104v1} -6Joint Case Management Statement C 07-4507 JF (HRL)

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1 creative novel theory of liability. Nothing in § 1903(c) creates such civil liability. 2 Defendants believe that plaintiff will not be able to raise triable issues of material facts

3 related to the foregoing; defendants intends to move for summary judgment and/or summary 4 adjudication prior to trial. 5 6 D. a. The Principal Factual Issues Which The Parties Dispute: Whether Defendants have manufactured, used, sold, offered for sale and/or imported

7 products infringing the patents-in-suit in the United States; 8 b. If Defendants have manufactured, used, sold, offered for sale and/or imported

9 products infringing the patents-in-suit in the United States, what damages or other relief Acticon is 10 entitled to; 11 c. Whether any of the patents-in-suit is invalid under Title 35 of the United States

12 Code and/or under the applicable judicial precedents; 13 14 15 d. e. f. The amount of Acticon's damages for infringement; Whether Defendants alleged infringement is willful; Whether Defendant PTI Global is liable for the infringement of the patents-in-suit by

16 Pretec Electronics Corp. prior to the filing of the Complaint on a theory of successor liability; 17 g. Whether the individual Defendants are liable for the infringement of the patents-in-

18 suit by Pretec Electronics Corp. prior to the filing of the Complaint on an alter ego liability theory; 19 h. Whether the individual Defendants are liable for the infringement of the patents-in-

20 suit by Pretec Electronics Corp. prior to the filing of the Complaint on a vicarious liability theory; 21 22 assets; 23 24 j. k. Whether the Defendants are liable for conspiracy to fraudulently transfer assets; Whether the Defendants effectuated an improper dissolution of Pretec Electronics i. Whether the Defendants are liable for acts constituting a fraudulent transfer of

25 Corp.; and 26 27 3. 28
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Whether Acticon is entitled to an award of attorneys' fees.

LEGAL ISSUES The disputed points of law are anticipated to be: -7Joint Case Management Statement C 07-4507 JF (HRL)

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1 2

a. b.

The proper construction of the claims of the patents-in-suit; Whether the asserted claims are invalid or unenforceable for failure to comply with

3 one or more of 35 U.S.C. § 101, § 102, § 103, § 112 or the rules and regulations of the U.S. Patent 4 Office; 5 c. Whether Acticon's allegations relating to the Prior Action constitute a cognizable

6 claim against PTI Global; 7 8 9 d. e. f. Whether Acticon is entitled to attorneys' fees and costs pursuant to 35 U.S.C. § 285; Whether Acticon is entitled to treble damages pursuant to 35 U.S.C. § 284; Whether Acticon is entitled to a permanent injunction preventing the Defendants

10 from transferring assets of PTI Global or Pretec Electronics Corp. 11 g. Whether Count VI (Improper Dissolution) is a legally recognizable cause of action

12 entitling Acticon to relief 13 14 h. The effect of the Prior Action on this matter.

The parties reserve the right to raise additional factual or legal issues that may arise through

15 the course of this action. 16 4. 17 MOTIONS Acticon filed a Motion for a Preliminary Injunction prohibiting Defendants from

18 transferring assets of PTI Global other than in the ordinary course of business, and the Court 19 entered its Order Granting that Preliminary Injunction on November 13, 2007 (Docket No. 31). 20 PTI Global was not represented by counsel at the time that motion was granted and reserves the 21 right to challenge the continued existence of the injunction should this prove necessary to its 22 business. 23 Individual Defendant Grace Yu filed a Motion to Quash Service of Process and/or Dismiss

24 the Complaint, and Acticon opposed that Motion. The Motion was heard by this Court on January 25 25, 2008. The Court took the matter under submission and subsequently denied the Motion at the 26 Case Management Conference held on March 21, 2008, and authorized Acticon to effect service on 27 Grace Yu by alternative means. 28
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The remaining individual defendants intend to move for summary judgment and/or -8Joint Case Management Statement C 07-4507 JF (HRL)

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1 summary adjudication prior to trial. 2 The parties anticipate claim construction briefing under the Patent Local rules and various

3 summary judgment motions. 4 5. 5 AMENDMENT OF PLEADINGS Prior to the scheduled Case Management Conference, and upon the stipulation of the

6 parties, Acticon intends to file a First Amended Complaint which adds C-One Technology 7 Corporation as a defendant in the action. If the currently named defendants do not stipulate to the 8 amended complaint, Acticon intends to apply to the Court for leave to file a First Amended 9 Complaint. Acticon has not yet sent the proposed amended complaint to the defendants and so it is 10 not yet possible for defendants to determine if they will agree to permit an amended filing. 11 Acticon reserves the right to amend its pleadings to add additional defendants or additional

12 claims for relief following discovery in this action concerning the dissolution of Pretec Electronics 13 Corp., and the transfer of assets and the business of that company to Defendant PTI Global, and the 14 role of individuals and entities in that process. PTI Global similarly reserves the right to amend its 15 pleadings or to bring claims against Acticon or others based upon events in discovery or during the 16 process of the case. Individual defendants Chen, Ho, Wu, Yu, and Lu similarly reserve the right to 17 amend their pleadings or to bring claims against Acticon or others based upon events in discovery 18 or during the process of the case. 19 6. 20 EVIDENCE PRESERVATION In the earlier litigation involving the same technology, Acticon imposed a litigation hold on

21 documents related to this action, collected those documents and will produce them to Defendants. 22 Copies of those documents are maintained in the office of counsel. In addition, Acticon has 23 advised counsel for Defendant PTI Global to impose a litigation hold on documents and 24 electronically stored information reasonably related to his action, which includes active steps to 25 prevent erasure of emails, voicemails, and other electronically-recorded material. 26 7. 27 28
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DISCLOSURES With the exception of Defendant Grace Yu, the parties have exchanged Initial Disclosures.

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1 8. 2 3

DISCOVERY Plaintiff's Proposal: At this time, Acticon proposes altering the discovery limits imposed by the Federal Rules of

4 Civil Procedure and the Local Rules as follows: 5 a. Plaintiff Acticon may notice and take no more than fifteen (15) depositions lasting a

6 total of no more than one hundred (100) hours; 7 b. Defendants may notice and take no more than fifteen (15) depositions lasting a total

8 of no more than one hundred (100) hours, to be allocated between Defendants as they decide; 9 c. A testifying expert shall not be subject to discovery on any draft of the report in this

10 case that was written by the testifying expert or his or her staff and such draft reports, notes or 11 outlines for draft reports developed and drafted by the testifying expert and/or his or her staff are 12 also exempt from discovery; 13 d. Discovery of materials provided to testifying experts shall be limited to those

14 materials, facts, and other matters actually relied upon by the testifying expert in forming his final 15 report, trial or deposition testimony or any opinion in this case. No discovery can be taken from any 16 consulting expert. 17 e. No conversations or communications between counsel and any testifying or

18 consulting expert, including any communications or drafts of agreements created prior to the date 19 of the consulting agreement, will be subject to discovery unless the conversations or 20 communications are relied upon by such experts in formulating opinions that are presented in 21 reports or trial or deposition testimony in this case. 22 f. Materials, communications, and other information exempt from discovery under

23 paragraphs c through e shall be treated as attorney-work product for the purposes of this litigation. 24 Acticon proposes that all documents and electronically stored information ("ESI") produced

25 in discovery will be produced in a searchable format. 26 Acticon proposes that data integrity for the underlying native files for ESI produced in

27 discovery shall be preserved by performing a routine copy of the files and using reasonable 28 measures to prevent the files from being modified at the time or thereafter. If the content or the
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1 metadata of the files are intentionally modified, the producing party must inform the requesting 2 party by providing the date of modification, the reason for modification, the persons involved in the 3 modification; and a detailed and accurate description of the contents of the file prior to each 4 modification. 5 If the producing party redacts content of any document or ESI file before production in

6 discovery for privilege or other permissible purpose, then the producing party must indicate that the 7 file has been redacted, and an original, unmodified file must be retained at least during the 8 pendency of the case. 9 The costs of document production will be borne by the parties in accordance with Fed. R.

10 Civ. P. 26. 11 12 Defendant PTI Global's Proposal: PTI Global believes any proposal altering the Rules of Federal Civil Procedure is

13 unnecessary at this time, except possibly to restrain Acticon in light of the limited size of this case. 14 Discovery as to PTI Global has already been undertaken and substantially completed. PTI Global 15 has produced over 5,000 documents relating to the allegations of the complaint. Acticon has 16 already taken three depositions in this matter, including the Rule 30(b)(6) deposition of PTI Global, 17 during which deposition Acticon did not touch on the topics designated in its deposition notice. 18 The individual defendants have also responded to individualized document production requests. 19 PTI Global is a small company facing financial difficulties and will be substantially

20 burdened should extensive electronic discovery prove unduly expensive. Thus, ESI rules or rules 21 unique to this case will impose a substantial burden on PTI Global, and should not be imposed until 22 a need for such rules manifests itself. If specialized rules are adopted at Acticon's request, Acticon 23 should be required to bear the cost of any special procedures it requests, obviously subject to 24 possible reimbursement as a cost if properly incurred and if Acticon prevails at trial. 25 Similarly, PTI Global opposes Acticon's requests to change the structure of expert

26 discovery. 27 Individual defendants Chen, Ho, Lu, Yu, and Wu share PTI Global's concerns with respect

28 to costs of extensive electronic discovery and agree that rules unique to this case should not be
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1 imposed at this time. 2 9. 3 4 10. 5 CLASS ACTIONS Not applicable. RELATED CASES No related cases are pending before other Judges of this Court. This action is related to the

6 earlier case entitled Acticon Technologies LLC v. Pretec Electronics Corp., et al., Case No. C 067 4679 JF (HRL). 8 11. 9 RELIEF Plaintiff's Request: Acticon seeks damages, injunctive relief, a declaration that the patent-

10 in-suit is enforceable and that Defendants have willfully infringed, enhanced damages under 35 11 U.S.C. § 284, and costs and attorneys' fees including those awardable under 35 U.S.C. § 285. 12 Acticon expects that its damage computations will be based upon an adequate compensation for the 13 infringement of the patents-in-suit, including damages and a reasonable royalty on the 14 manufacturing, distribution, and sales of infringing products, enhanced damages for willful 15 infringement, and attorneys' fees and costs associated with conducting this suit. 16 At present, however, no actual computation of damages exists. To compute its damages,

17 Acticon expect to rely primarily on documents within the possession and control of Defendants 18 relating to sales and profits of the Accused Products, which have not yet been provided. Acticon 19 may also rely on expert assistance in performing the damages computation. 20 Acticon seeks to hold the corporate and individual Defendants liable for the pre-Complaint

21 patent infringement damages of Pretec Electronics Corp. for participating in the fraudulent transfer 22 of assets from Pretec Electronics Corp. to PTI Global and other entities or individuals. Acticon 23 also seeks an award of punitive damages based upon the state law tort claims asserted against 24 Defendants. 25 26 Defendants' Request: As the plaintiff does not manufacture products that embody the Patents-in-Suit, the only

27 damages possible are a reasonable royalty. Moreover, the Patents-in-Suit have all expired. Thus, 28 the field of damages has already been established. Within that field, defendants request only that
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1 judgment be entered in their favor and against plaintiff, and that plaintiff's Complaint be dismissed 2 with prejudice. Under any circumstances, it is now clear this is a very small matter for a patent 3 infringement case. Contrary to Acticon's statements regarding the lack of a damages calculation, 4 discovery has shown that PTI Global has sales accused of infringing of less than $300,000, while 5 the PEC sales from 2000 to 2006 are only alleged to range between $2 and $5 million. 6 12. 7 SETTLEMENT AND ADR An ADR Conference was held on January 23, 2008, with Acticon and PTI Global

8 participating. A further ADR Conference was held on March 17, 2008, with all defendants, except 9 Defendant Grace Yu, participating. 10 The parties participated in an Early Settlement Conference with the Hon. Richard Seeborg

11 on Friday, May 9, 2008. The parties did not reach a resolution of the case at that time and Judge 12 Seeborg has recommended that he preside over a second Settlement Conference with all parties 13 personally present. The parties are agreeable with this suggestion. However, as Acticon will now

14 attempt to join C-One in this matter, and C-One operates on a much bigger business scale than any 15 of the defendants currently involved in the action, it may be necessary for C-One's status to be 16 determined before additional conferences are beneficial. 17 13. 18 19 14. 20 21 15. 22 CONSENT TO MAGISTRATE JUDGE FOR ALL PURPOSES The parties declined the appointment of a Magistrate Judge for all purposes. OTHER REFERENCES Not applicable. NARROWING OF ISSUES The parties believe that it is premature to narrow the issues for trial other than to make the

23 identifications required by the Patent Local Rules. 24 16. 25 EXPEDITED SCHEDULE The parties do not believe that this is the type of case that can be handled on an expedited

26 schedule with streamlined procedures. 27 17. 28
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SCHEDULING Pursuant to this Court's Civil and Patent Local Rules, Acticon suggested the following -13Joint Case Management Statement C 07-4507 JF (HRL)

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1 schedule organization, and dates. 2 Deadline 3 March 28, 2008 4 May 23, 2008 5 6 July 10, 2008 7 8 9 10 11 12 13 August 1, 2008 14 August 15, 2008 15 16 August 29, 2008 August 1, 2008 July 25, 2008 Nature of Discovery/Event Rule 26 Initial Disclosures Acticon to serve Patent Initial Disclosures "Disclosure of Asserted Claims and Preliminary Infringement Contentions" with Document Production. Patent L.R. 3-1 & 3-2 (a-c) Defendants to serve "Preliminary Invalidity Contentions" with Document Production. Patent L.R. 3-3 & 3-4 Parties to simultaneously exchange list of proposed claim terms, and thereafter meet to prepare list of terms for Joint Claim Construction and Prehearing Statement setting forth stipulations and disagreements. Patent L.R. 4- 1 (Acticon is willing to stipulate to the use of the March 2006 Claim Construction Order in Lantronix, Inc. and Acticon Technologies LLC v. Digi International, Inc., Case No. 6:05 CV35 (E.D.TX) in this case). Deadline for parties to exchange proposed construction of all claim terms with extrinsic evidence to support the proposed constructions. Patent L.R. 4-2 (a & b) Mediation Deadline Parties file a Joint Claim Construction and Prehearing Statement. Patent L.R. 4-3 Acticon to File and Serve Opening Brief with supporting evidence re claim construction. Patent L.R. 4-5(a) Defendants to File and Serve Responsive Brief with supporting evidence regarding claim construction. Patent L.R. 4-5(b) Acticon to File and Serve Reply Brief with supporting evidence regarding claim construction. Patent L.R. 4-5(c) Claim Construction Hearing. Patent L.R. 4-6 Non-Expert Fact Discovery Completed Designation of Experts Expert Reports Exchanged (on any matter on which a party bears the burden of proof) Responsive Expert Reports Exchanged Expert Discovery Completed Last Day to Hear Dispositive Motions Pretrial Conference Proposed Trial Date (expected to last 4-7 court days) -14Joint Case Management Statement C 07-4507 JF (HRL)

17 September 12, 2008 18 19 September 19, 2008

20 September 2008 21 October 31, 2008 22 November 14, 2008 23 December 12, 2008 24 25 January 16, 2008 January 30, 2008

26 April 25, 2009 27 May 2009 28 June 2009
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1

PTI Global requests that if a schedule is set at this time, the August 15, 2008 Joint Claim

2 Construction and Prehearing Statement deadline be delayed one week to August 22, 2008 to 3 accommodate counsel's scheduled vacation. 4 In addition, PTI Global believes that if Acticon intends to move to add C-One (which was

5 well known to Acticon throughout both the Prior Action, to which it was a party, as well as the 6 present matter) as a party at this late date, that will bring a different complexion to the matter, and it 7 would not be appropriate to set a schedule at this time without the participation of C-One. 8 C-One is a much larger entity than the current defendants, would have quite a bit more

9 money at stake, and could take a more active role in litigating the matter than the current 10 defendants have to date. Thus, it may be appropriate to either (a) delay setting a schedule until C11 One can participate in that process, or (b) to move back the dates set in the current schedule to take 12 a more realistic view of the time needed (a) for issues regarding service of and jurisdiction over C13 One, which is a Taiwanese entity that likely will contend that it does not do business in the United 14 States, to be litigated and (b) for C-One to participate in discovery. 15 18. 16 TRIAL Acticon requests a trial date after April 2009. Acticon believes that the estimated length of

17 the trial in this case is 4-7 days. 18 19. 19 DISCLOSURE OF NON-PARTY INTERESTED ENTITIES OR PERSONS Acticon filed the Certification of Interested Entities or Persons with its Complaint, on

20 August 30, 2007. PTI Global also filed this certification, on January 14, 2008. As of the date of 21 this Case Management Conference Statement, pursuant to Civil L.R. 3-16, the undersigned certifies 22 that the following listed persons, associations of persons, firms, partnerships, corporations 23 (including parent corporations) or other entities (i) have a financial interest in the subject matter in 24 controversy or in a party to the proceeding, or (ii) have a non-financial interest in the subject matter 25 or in a party that could be substantially affected by the outcome of this proceeding: None, other 26 than the named parties in this action. 27 /// 28 ///
{00310104v1}

-15Joint Case Management Statement C 07-4507 JF (HRL)

Case 5:07-cv-04507-JF

Document 95

Filed 05/14/2008

Page 16 of 17

1 20. 2 3 4 5

OTHER MATTERS A. Protective Order

The parties have submitted a stipulated protective order to the Court. B. Claim Construction Hearing

The Patent Local Rules require the parties to meet and confer about the manner in which the

6 claim construction hearing will proceed. The parties believe that a determination of the manner in 7 which the hearing will proceed, other than the proposed scheduling as set forth below, is premature. 8 9 10 11 C. Jury Demand

All parties demand a trial by jury on those issues triable by right to a jury. D. Proposed Docket Control Deadlines

Acticon proposes to follow the Northern District's Patent Local Rules in their general

12 outline, with departures to accommodate the nature of this action and to reduce the need for 13 hearings before this Court. 14 15 14 16 Dated: May ____, 2008 17 18 19 20 21 22 14 23 Dated: May ____, 2008 24 25 26 27 28
{00310104v1}

The parties request a further Case Management Conference at this time.

CARR & FERRELL LLP

By:

/s/ Christine S. Watson ROBERT J. YORIO COLBY B. SPRINGER CHRISTINE S. WATSON Attorneys for Plaintiff ACTICON TECHNOLOGIES LLC

LAW OFFICES OF E & SASSEEN

By:

/s/ David J. Sasseen DAVID J. SASSEEN Attorneys for Defendant PTI GLOBAL, INC.

-16Joint Case Management Statement C 07-4507 JF (HRL)

Case 5:07-cv-04507-JF

Document 95

Filed 05/14/2008

Page 17 of 17

14 1 Dated: May ____, 2008 2 3 4 5 6 7 8 9 10 11 By:

LAW OFFICES OF RICHARD C. J. WAHNG

/s/ Richard C. J. Wahng RICHARD C. J. WAHNG Attorneys for Defendants CHIU FENG CHEN, GORDON YU, TOMMY HO, ROBERT WU, GRACE YU and KUEI LU

SIGNATURE ATTESTATION Pursuant to General Order No. 45(X)(B), I hereby attest that I have obtained the

12 concurrence in the filing of this document from all the signatories for whom a signature is indicated 13 by a "conformed" signature (/s/) within this efiled document. 14 14 15 Dated: May ____, 2008 16 17 18 19 20 21 22 23 24 25 26 27 28
{00310104v1}

/s/ Christine S. Watson CHRISTINE S. WATSON

-17Joint Case Management Statement C 07-4507 JF (HRL)