Free Response in Opposition to Motion - District Court of Arizona - Arizona

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Sid Leach (#019519) Monica A. Limón-Wynn (#019174) SNELL & WILMER L.L.P. One Arizona Center 400 E. Van Buren Phoenix, AZ 85004-2202 Telephone: (602) 382-6372 Attorneys for Plaintiff Hypercom Corporation [email protected] [email protected] IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA Hypercom Corporation, Plaintiff, vs. Omron Corporation, Defendant. No. CV 04-0400 PHX PGR HYPERCOM CORPORATION'S RESPONSE IN OPPOSITION TO OMRON CORPORATION'S MOTION IN LIMINE NO. 4 TO EXCLUDE EVIDENCE INCONSISTENT WITH HYPERCOM'S PRIOR TESTIMONY

Hypercom Corporation opposes Omron Corporation's Motion in Limine No. 4 to Exclude Evidence Inconsistent with Hypercom's Prior Testimony. MEMORANDUM OF POINTS AND AUTHORITIES I. PERTINENT FACTS Omron's motion in limine rests upon a Rule 30(b)(6) deposition of a Hypercom representative taken on or about March 23, 2005. The notice of deposition had fourteen topics seeking a witness to testify as "[f]acts and circumstances relating to" various claims in the Amended Complaint, and three additional topics seeking "[a]ny other evidence of which Hypercom is aware" that supports Hypercom's claims. At the time when Omron took the Rule 30(b)(6) deposition of the Hypercom corporate representative about which it now complains in its motion in limine No. 4, there was a pending motion in which Omron had moved to dismiss Hypercom's Amended Complaint on grounds that the Court lacked subject matter jurisdiction. Doc. #31. The

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Court had entered an order on December 20, 2004, limiting discovery to issues of personal jurisdiction. Doc. #35. Thus, the parties were only engaged in limited discovery on the issue of whether this Court had jurisdiction over the claims asserted against Omron. On August 9, 2005, after the deposition was concluded, the Court denied Omron's motion to dismiss. Doc. #62. At the time that the deposition was taken in March 2005, there was no protective order for confidential information entered in this case. On March 4, 2005, before the deposition took place, Hypercom forwarded a draft stipulation and proposed form of protective order to counsel for both Omron and Verve for their review and approval. At that time, Hypercom had been seeking documents that Omron and Verve had withheld under a claim of confidentiality. No agreement was reached. The March 2005 deposition proceeded without any protective order for confidential information, and without any party producing confidential information to the other parties. In the investigation before the International Trade Commission, an administrative protective order for confidential information was entered by the administrative law judge that prohibited the lawyers for the parties from disclosing confidential business information to their clients. Only outside lawyers and independent experts had access to confidential information. Exhibit 1, at ¶3. At the time that the Rule 30(b)(6) deposition of the Hypercom corporate representative took place in March 2005, Verve had objected to Hypercom's use of any confidential information produced by Verve during the ITC proceeding. In a letter dated February 17, 2005, Verve only agreed to "Hypercom Corporation's use of any documents produced in the International trade Commission Action No. 337-TA-524 that were not designated confidential business information pursuant to the Administrative Protective Order." Exhibit 2, at 1 (emphasis added). Therefore, Hypercom could not tell the Rule 30(b)(6) corporate witness any information or educate the corporate witness on any documents that Verve had designated as confidential business information in the ITC proceeding. Hypercom's counsel objected to the use of a Rule 30(b)(6) deposition instead of
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serving contention interrogatories upon Hypercom to obtain discovery of the information, and attempted to meet and confer with Omron's counsel prior to, and during, the deposition about the use of a Rule 30(b)(6) deposition instead of contention interrogatories for this type of discovery. Reich Depo., at 9 (Exhibit 3). Hypercom's counsel also pointed out that the Rule 30(b)(6) witness could not testify about any information that Verve had designated as confidential in the ITC proceeding: MR. LEACH: Also there is something I should probably point out at this point that's really relevant to the nature of what you are asking him. In the International Trade Commission, a lot of information was produced and was designated as confidential business information by Verve, and under the terms of the protective order in that case, we were not allowed to disclose it to Mr. Reich or anyone at Hypercom. That's just the way they do their protective orders. To the extent that you are trying to seek information upon which some of the pleadings were based, unfortunately there is no way that he can answer that because at the time, he would not have been given access to it although his counsel would have known about it. Reich Depo., at 22-23 (Exhibit 3). Hypercom renewed its efforts to obtain a stipulation to an agreed-form of

15 protective order in March 2006. Unable to get either Omron's agreement to the form or 16 suggested changes to make it acceptable to Omron, Hypercom again wrote to Omron in 17 April 2006 seeking Omron's agreement to entry of a form of protective order. Hypercom 18 finally obtained Omron's agreement to the form for a protective order, and filed a 19 stipulation for entry of a protective order for confidential information on April 27, 2006. 20 Doc. #110. This was more than a year after the Rule 30(b)(6) deposition of Hypercom's 21 witness. The Court signed the protective order for confidential information on May 15, 22 2006. Doc. #119. 23 On November 21, 2005, the Court entered a Scheduling Order under which the 24 parties were to complete discovery by June 15, 2006. During the seven months between 25 entry of the Scheduling Order and the discovery deadline, Omron did not take one single 26 fact deposition. Not one. 27 On May 24, 2006, Omron served a Rule 30(b)(6) deposition notice upon Hypercom 28
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seeking to schedule the deposition on June 28, 2006 ­ about two weeks after the close of discovery. Omron moved to extend the discovery deadline, Doc #129, but because Omron failed to show good cause for such an extension, the Court denied the motion. Doc #134. At no time prior to the close of discovery did Omron file a motion to compel further answers to the questions asked at the Rule 30(b)(6) deposition taken in March 2005. At no time prior to filing the motion in limine, did Omron meet and confer with Hypercom to resolve any discovery dispute concerning the Rule 30(b)(6) deposition taken in March 2005. II. LEGAL ARGUMENT A. Omron's Use Of A Rule 30(b)(6) Deposition Instead Of Serving Contention Interrogatories Was Objectionable

During the deposition of Hypercom's Rule 30(b)(6) witness, Hypercom objected to the use of a Rule 30(b)(6) deposition instead of serving contention interrogatories upon 13 Hypercom. Exhibit 3, Reich Depo., at 9. A number of courts have disapproved of the use 14 of Rule 30(b)(6) depositions for this purpose, and have instead required a party to serve 15 contention interrogatories. 16 17 18 19 20 21 22 23 24 25 26 27 28 In a patent case like this, the bases for contentions do not consist exclusively of relatively straightforward facts or evidence, as might be true, by contrast, in a case arising out of a traffic accident. In other words, to set forth the bases for contentions in this case, it is not enough to describe real world facts and events, even in considerable detail. Rather, determining what the bases for contentions are in this environment involves complex judgments about the relationship between at least three kinds of things: (1) evidence/facts/events in the real world (outside litigation), (2) "claims" as particularly set forth in the patent in issue and in other patents or other material presented to the patent office, and (3) principles of intellectual property law set forth in statutes and in judicial opinions. A non-lawyer deponent might have great knowledge about the products in issue here, but be quite ill-equipped to reason reliably about the legal implications of the relationship between those products, or their components, and the various claims of the patent in suit or of other patents or prior art. Patent cases turn peculiarly on a conceptually dense dynamic between physical objects, words in claims, and principles of law. Understanding that dynamic, and describing the relationships that serve as the bases for a given parties' contentions, is something best done by patent lawyers, and best done after at least most other discovery has been completed. After all, in cases like these, a substantial part of "the bases for contentions" really consists of quasi-legal argument. McCormick-Morgan, Inc. v. Teledyne Industries, Inc., 134 F.R.D. 275, 287 (N.D. Cal.),
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aff'd in part, rev'd in part on other grounds, 765 F. Supp. 611 (N.D. Cal. 1991). If Omron had served contention interrogatories, Omron could have obtained discovery of Hypercom's contentions, and obtained information synthesized from all necessary sources. Smithkline Beecham Corp. v. Apotex Corp., No. 98 C 3952, 2000 U.S. Dist. LEXIS 667, at *31 (N.D. Ill. Jan. 21, 2000) ("[W]e believe a Rule 30(b)(6) deposition is an inefficient means of ascertaining the information sought. Instead, standard interrogatories would be a better method of discovering the particulars of SmithKline's investigation because SmithKline could synthesize the information from all of the necessary sources, which would then be presented to Defendants in a comprehensible manner."). Instead, Omron knew that Hypercom could not provide a complete disclosure of all of the facts and circumstances known to plaintiff, refused to agree to a protective order to resolve the problem prior to the deposition, and intentionally pursued discovery in such a limited fashion. Omron should not be rewarded for its lack of good faith efforts to work out a reasonable solution to the discovery issue. If the Court grants this motion in limine, the Court will send the message that it is to a party's advantage to be unreasonable during discovery, and then to take advantage later using a motion in limine. B. Omron's Motion In Limine Cannot Be Used As An Untimely Substitute For A Rule 37 Motion To Compel

Omron's motion in limine is in essence an untimely motion under Rule 37(a)(2)(B) of the Federal Rules of Civil Procedure to compel discovery. Even worse, the motion 21 seeks to jump to sanctions under Rule 37(b)(2)(B) of the Federal Rules of Civil Procedure 22 for an "order refusing to allow the disobedient party to support or oppose designated 23 claims or defenses, or prohibiting that party from introducing designated matters into 24 evidence," without having first obtained an order compelling discovery. 25 If Omron had made a motion to compel, Hypercom would have been entitled to 26 defend against the motion on appropriate grounds. For example, Omron's Rule 30(b)(6) 27 notice of deposition designated virtually every topic as "[f]acts and circumstances relating 28
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to" various claims in the Amended Complaint. Discovery requests seeking all facts "related to the subject matter of the lawsuit" have been held to be "overly broad and impermissibly vague." Builders Assoc. of Greater Chicago v. City of Chicago, No. 96 C 1122, 2001 U.S. Dist. LEXIS 14076, at *25-26 (N.D. Ill. Aug. 29, 2001) ("The witness should not be required to determine the precise contours of plaintiffs' requests and that is exactly what these requests would necessitate."), quoting from Alexander v. Federal Bureau of Investigation, 186 F.R.D. 21, 35 (D.D.C. 1998). "[T]he City seeks all documents `related to' the current lawsuit, notes taken at meetings `related to the subject matter raised in the instant lawsuit' and, a catchall category: `Any and all documents generated by any person or entity . . . related to the subject matter raised in the instant lawsuit.' These descriptions, which simply recite the language of Rule 26, are grossly overbroad and would be objectionable if sent to a party to a lawsuit, let alone non-parties." Builders Assoc. of Greater Chicago v. City of Chicago, No. 96 C 1122, 2001 U.S. Dist. LEXIS 14076, at *24-25 (N.D. Ill. Aug. 29, 2001) (citation omitted). In addition, Omron's use of a Rule 30(b)(6) deposition instead of serving contention interrogatories would have been a substantial basis for resisting a motion to compel, if Omron had followed the proper discovery procedure and filed such a motion. Again, this motion would set a precedent that it is tactically advantageous to ignore a party's responsibility to meet and confer during discovery, or to follow the local rules concerning discovery disputes, and merely wait and file a motion in limine prior to trial. III. CONCLUSION Omron should not be rewarded for its uncooperativeness during discovery, and should not be allowed to circumvent the discovery rules and Rule 37 using a motion in limine. For the foregoing reasons, Hypercom Corporation respectfully requests that the Court deny Omron's Motion in Limine to Exclude Evidence Inconsistent with Hypercom's Prior Testimony.

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RESPECTFULLY SUBMITTED this 30th day of April, 2007. SNELL & WILMER L.L.P.

By s/ Sid Leach Sid Leach Monica A. Limón-Wynn SNELL & WILMER L.L.P. One Arizona Center Phoenix, AZ 85004-2202 Attorneys for Plaintiff Hypercom Corporation

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CERTIFICATE OF SERVICE I hereby certify that on April 30, 2007, I electronically transmitted HYPERCOM CORPORATION'S RESPONSE TO OMRON CORPORATION'S MOTION IN LIMINE NO. 4 TO EXCLUDE EVIDENCE INCONSISTENT WITH HYPERCOM'S PRIOR TESTIMONY to the Clerk's Office using the ECF System for filing and transmittal of a Notice of Electronic Filing to the following ECF registrants: David P. Irmscher John K. Henning, IV BAKER & DANIELS 300 N. Meridian Street, Suite 2700 Indianapolis, IN 46204 Phone: 317-237-1317 Fax: 317-237-1000 [email protected] [email protected] Attorneys for Defendant Omron Corporation A. Colin Wexler Matthew A.C. Zapf GOLDBERG KOHN BELL BLACK ROSENBLOOM & MORITZ, LTD. 55 E. Monroe Street, Ste. 3300 Chicago, IL 60603 Ph. 312-201-4000 Fax: 312-332-2196 [email protected] [email protected] Attorneys for Defendant Omron Corporation s/ Sid Leach H. Michael Clyde Todd R. Kerr PERKINS COIE BROWN & BAIN P.A. 2901 N. Central Ave., Ste. 2000 Phoenix, AZ 85012-2788 Ph.: 602-351-8000 Fax: 602-648-7000 [email protected] [email protected] Attorneys for Defendant Omron Corporation

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